Which of the following statements is correct with respect to limited partnerships?
A)There can be no limited partnerships in Canada.If limited liability is desired,a corporation must be created.
B)A limited partner can lose his status as a limited partner if he participates in the management of the business.
C)There can only be one limited partner in any partnership,no matter how many partners are involved.
D)A limited partner is totally protected and can lose no money.
E)A limited partnership is created where all partners state in the partnership agreement that they will not be responsible for debts arising out of the partnership business and register as such with the government.

Question

Quizplus · Accepted Answer

A limited partner can lose his status as a limited partner if he participates in the management of the business. This is because limited partners are only liable for the amount of their investment and do not have a say in the management of the business. If they do participate in management, they can be at risk of being held liable for the partnership's debts and losses like a general partner. The other statements are incorrect: A - Limited partnerships are allowed in Canada, B - more than one limited partner can exist in a partnership, D - limited partners can lose money if the business fails, and E - a limited partnership must register as such with the government, but the agreement alone is not sufficient to create one.

Which of the Following Statements Is Correct with Respect to Limited