Final answer:
When James, Rob, and Charles have pooled their resources for investment purposes, with potentially some partners not actively involved in management but sharing in profits and losses this is called limited partnership. So, the option is C.
Step-by-step explanation:
Limited partnership refers to a business structure where partners share in the profits and losses, but silent or limited partners are only liable for the amount they contributed. This is the correct answer as it describes James, Rob, and Charles's arrangement. Now, let's explain each option:
- A. A syndicate is a group of individuals or organizations that come together to finance a particular project, typically one that is too large or too risky for a single entity to undertake alone. This is not the correct answer.
- B. Commercial venture is a broad term that describes any type of business operation or enterprise. This doesn't specifically describe pooled resources for investment purposes.
- D. Illegal in many states is not accurate concerning limited partnerships, which are legal business structures in the United States.
General partnerships involve sharing profits among stakeholders and often include shared responsibility in running the business. Partnerships are commonly used by professionals like doctors and lawyers. In a limited partnership, some partners may simply provide financial support without direct involvement in daily operations.
Therefore, C is the correct option.