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Rob, Sue, and Tim agree to form a computer peripherals mail-order business. Rob agrees to manage the business and to assume full personal liability. Sue and Tim agree to invest in the firm but to be liable only to that extent. These three have formed:

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Answer: These three have formed: A LIMITED PARTNERSHIP.

Explanation: A LIMITED PARTNERSHIP refers to a type of association of two or more people in business whereby, there is at least one general partner who manages the business and has unlimited personal liability for the debts and obligations and one limited partner who also has limited liability but cannot participate in management.

In this question, Rob who agrees to manage the business and to assume full personal liability is the general partner, while Sue and Tim who agree to invest in the firm but to be liable only to that extent are the limited partner.

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