Shelly wishes to invest in Mark and Rhonda's partnership, but she has no desire to take part in its management. Furthermore, she prefers to limit her liability to her investment. Which of the following organizational forms would accommodate Shelly's wishes?

Question

Quizplus · Accepted Answer

A limited partnership is the best choice to accommodate Shelly's wishes. As a limited partner, Shelly would have no management responsibilities, and her liability would be limited to the amount of her investment. This would provide her with the desired level of involvement and protection. A general partnership with Shelly as a limited partner is also an option, but it is not as preferable as a limited partnership because it would still expose her to unlimited liability if the partnership were to face legal or financial issues.

Shelly Wishes to Invest in Mark and Rhonda's Partnership, but She