Nick is investing $25,000 in a partnership with his sister and brother. Nick does not want to be an active part of the partnership and can only afford to risk the $25,000 he is investing. His brother and sister agree to let him share a proportionate amount of the profits. Nick is a ________ in this partnership.

Question

Quizplus · Accepted Answer

Nick's desire to not be an active part of the partnership and only invest a certain amount of money makes him a limited partner. Limited partners are typically not involved in the day-to-day operations of the partnership and often have limitations on their liability and control over the business.

Nick Is Investing $25,000 in a Partnership with His Sister