What type of structure would the founders of a new alternative investment fund use to avoid the requirement to register with the SEC?
A)S-Corp
B)C-Corp
C)general partnership
D)limited partnership
E)sole proprietorship

Question

Quizplus · Accepted Answer

Limited partnerships are often used for alternative investment funds because they allow for a separation of management and ownership. The general partner is responsible for making investment decisions and managing the fund, while limited partners provide capital but have limited liability. This structure allows the fund to avoid SEC registration because it falls under the exemption for private placements to sophisticated investors.

What Type of Structure Would the Founders of a New