Logan Nettles approached Kevin Lang about becoming a partner in a firm that destroys environmental waste.While Logan would like to become a partner in the firm,he is concerned about his liability because he has recently inherited a lot of money.In this situation,Logan should become a
A) general partner with a majority ownership interest in the business.
B) general partner with a minority ownership interest in the business.
C) limited partner.
D) joint venturist.
E) sole proprietor.

Question

Quizplus · Accepted Answer

As a limited partner, Logan's liability would be limited to the amount of his investment in the firm. This means that his personal assets (including his recently inherited money) would not be at risk in case of any lawsuit or debt against the firm. Being a general partner carries unlimited liability, which would not be an optimal choice for Logan given his concerns. Joint venturist and sole proprietor options are not applicable in this scenario as Logan wants to become a partner in an existing firm, not create a new one. Finally, Logan can have a minority ownership interest as a limited partner and still be involved in the business decisions, but without the same level of exposure to risk.

Logan Nettles Approached Kevin Lang About Becoming a Partner in a Firm