Which one of the following best describes the primary advantage of being a limited partner rather than a general partner?
A) Entitlement to a larger portion of the partnership's income.
B) Ability to manage the day-to-day affairs of the business.
C) No potential ﬁnancial loss.
D) Greater management responsibility.
E) Liability for ﬁrm debts limited to the capital invested.

Question

Quizplus · Accepted Answer

The primary advantage of being a limited partner rather than a general partner is that the liability for firm debts is limited to the capital invested. Limited partners are not personally liable for the debts and obligations of the partnership beyond the amount of their investment. This limited liability protects the personal assets of individual partners from the actions of the partnership and other partners. However, limited partners typically have limited control and decision-making power in the partnership.

Which One of the Following Best Describes the Primary Advantage