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

Question

Quizplus · Accepted Answer

Limited partners have limited liability for the debts of the partnership, meaning their personal assets cannot be seized to satisfy the partnership's debts beyond the amount of capital they have invested. General partners, on the other hand, can be held personally liable for the debts of the partnership. While limited partners do not have as much control or decision-making power as general partners, they still have the potential to receive a share of the partnership's profits. However, this entitlement to the partnership's income is not necessarily a primary advantage over being a general partner.

Which One of the Following Best Describes the Primary Advantage