Question

In a limited partnership, general partners:

1) take an active part in management, but have unlimited liability for the firm's debts.
2) take an active part in management, but have no liability for the firm's debts.
3) take an active part in management, but are nonparticipating investors.
4) take no part in management, but contribute cash or property.

Answer 1

In a limited partnership, the general partners take an active part in management but have unlimited liability for the firm's debts. Limited partners, on the other hand, do not participate in management and have no personal liability for the firm's debts.

Step-by-step explanation:

In a limited partnership, the general partners take an active part in management but have unlimited liability for the firm's debts. This means that if the business fails and the debts cannot be paid, the general partners may have to use their personal assets to cover the outstanding debts. However, it's important to note that limited partnerships also have limited partners who do not participate in the management of the business and have no personal liability for the firm's debts. They are merely financial partners who benefit from the success of the business but are not personally liable for its debts.