Question

Greg’s band wants to form a partnership. General partners will include the drummer, two guitarists, one keyboardist, and one singer. Greg’s great-uncle, a musician in his own right plans to provide $30,000, but does not plan to participate in the gigs, only inthe profits. The band will form a _______________.A) Sole Proprietorship B) General Partnership C) Limited Liability Company D) Limited Partnership

Answer 1

The correct answer is D) Limited Partnership

Step-by-step explanation:

A limited partnership is a type of partnership that consists of at least one general partner and at least one limited partner. In a limited company, the general partner is responsible for managing the daily activities of the company. The limited partner in a limited company does not participate in making management decisions for the business. In a limited partnership, the limited partner is more like a silent partner who has invested in the company.

When operating a limited partnership, the general partner has unlimited liability for the losses and debts of the company, while a limited partner has limited liability protection against the debts of the company and losses. This means that the general partner may lose his home and other personal property due to losses and obligations that occur as a result of the business operation. Limited partners have personal protection of their assets against the obligations and debts of the company.