A limited partnership differs from an ordinary partnership by
A)including some partners whose liability is restricted to the amount that they invested in the firm.
B)having a limited number of partners,each with limited liability.
C)having limited liability of all partners.
D)having a limited number of partners.
E)having unlimited liability for all partners.

Question

Quizplus · Accepted Answer

A limited partnership includes both general partners who have unlimited liability and limited partners whose liability is restricted to the amount they invested in the firm. This is different from an ordinary partnership where all partners have unlimited liability. Choice B is incorrect because there can be a large number of limited partners in a limited partnership, and choice C is incorrect because all partners do not have limited liability in a limited partnership. Choice D is partially correct, but it is not the defining difference between a limited partnership and an ordinary partnership. Choice E is incorrect because not all partners have unlimited liability in a limited partnership.

A Limited Partnership Differs from an Ordinary Partnership by