Quiz 17: Sources of Commercial Debt and Equity Capital

Business

General partners have unlimited liability and are liable for all debts of the partnership. This includes contractual debts and debts resulting from tort actions against the partnership. General partners are also jointly and severally liable for wrongful acts committed by other partners in the course of the partnership's business. Therefore, the personal assets of the general partners are subject to the claims of the partnership's creditors.

We are asked to choose the appropriate solution from the given options to complete the given statement. The correct answer is option C. C Corporation. A C corporation is considered to be an independent legal person distinguishable from the directors and shareholders. Because it is a separate person, the corporation can be taxed twice for corporate income as well as an individual's income. For example: income tax has been paid on dividends from profits before being disbursed to the shareholders. These same dividends qualify as taxable income to the shareholder who receives them.

Pension funds have historically viewed real estate as too risky, difficult to manage, and illiquid. Addtionally, the lack of available information for performing quantitative investment analysis has also contributed to the reluctance of pension funds to invest in real estate.