Thom Georges wants to open a store to sell antique architectural features that he can salvage from old houses being torn down.He has an eye for the kind of doors,windows,mantels,and so forth that decorators want,but he does not have all the funding he needs.He has invited his parents to invest $40,000 in the enterprise.He has told them that if they do invest,they would have liabilities in the company equal to but no greater than their investment.Georges is trying to get them to form which of the following?
A) a limited partnership
B) a joint venture
C) a cooperative
D) a general partnership

Question

Quizplus · Accepted Answer

A limited partnership is a partnership that has one or more general partners who manage the business and have unlimited personal liability for the partnership's debts, and one or more limited partners who do not participate in the management of the business and whose liability is limited to the amount of their investment. In this scenario, Thom Georges is the general partner who will manage the business, and his parents will be limited partners who will invest $40,000 and have their liability limited to the amount of their investment. Therefore, forming a limited partnership is the best choice for this situation.

Thom Georges Wants to Open a Store to Sell Antique