Question

Which of the following is correct with respect to limited partnerships?

A) Limited partnership refers to the fact that no more than five people are allowed to be partners in such partnerships.
B) Limited partnership refers to the fact that the partnership can only issue common shares.
C) Limited partnership refers to the fact that some partners have limited liability.
D) Limited partnership refers to the fact that some partnerships are only created for a limited period of time.

Answer 1

A limited partnership refers to the fact that some partners have limited liability.

Step-by-step explanation:

A limited partnership refers to the fact that some partners have limited liability.

In a limited partnership, there are two types of partners: general partners and limited partners. General partners have unlimited liability, which means they are personally responsible for the debts and obligations of the partnership. On the other hand, limited partners have limited liability, which means they are only liable for the amount they have invested in the partnership.

For example, if a limited partner invests $10,000 in a limited partnership and the partnership incurs debts of $100,000, the limited partner is only liable for the $10,000 they invested.