A partnership that has two classes of partners, general and limited, where the limited partners have no personal liability beyond the amounts they invest in the partnership, and no active role in the partnership, except as specified in the partnership agreement is a:
A) Mutual agency partnership.
B) Limited partnership.
C) Limited liability partnership.
D) General partnership.
E) Limited liability company.

Question

Quizplus · Accepted Answer

A limited partnership is a type of partnership where there are both general partners (who have unlimited personal liability for the partnership's debts and obligations) and limited partners (who have no personal liability beyond their investment in the partnership). Limited partners are not involved in the day-to-day operations of the partnership, but have a passive role and limited control as specified in the partnership agreement.

A Partnership That Has Two Classes of Partners, General and Limited