Question

A general partner: Multiple Choice

1. is personally responsible for all partnership debts.
2. has no say over a firm's daily operations.
3. faces double taxation whereas a limited partner does not.
4. has a maximum loss equal to his or her equity investment.
5. receives a salary in lieu of a portion of the profits.

Answer 1

A general partner is personally responsible for all partnership debts, involves sharing of profits, and faces potential unlimited personal liability. Contrarily, a limited liability partnership limits a partner's liability to their investment in the company.

Step-by-step explanation:

The correct answer to the student's question about a general partner's role in a partnership is that a general partner is personally responsible for all partnership debts. This means that in a general partnership, each partner has unlimited personal liability for the debts and obligations of the business. If the business cannot pay its debts, creditors can go after the personal assets of the general partners. This differs from a limited partner in a limited liability partnership (LLP), where the liability of the partners is limited to their investment in the company, protecting personal assets from business failures.

General partnerships also involve sharing profits among the partners, and the partnership has to be re-evaluated if one of the partners leaves or dies. It's important to note that partnerships pass through taxation, meaning the partners pay taxes on their share of the income, avoiding the double taxation faced by corporations.

Answer 2

1. is personally responsible for all partnership debts.

Step-by-step explanation:

A general partner has :

1. Unlimited liabilities- 1. is personally responsible for all partnership debts.

2. a say in the general running of the business

3. a share of the profit.

A limited partner has :

1. a maximum loss equal to his or her equity investment.

2. no say over a firm's daily operations.

I hope my answer helps you