Andre invested $100,000 in a partnership with Erik and Louis. Andre's contract with the partnership states he will receive a portion of partnership profits, but he will be liable for partnership's debts only to the extent of the $100,000 he invested. Andre is:
A) a subpartner.
B) a dormant partner.
C) a limited partner.
D) an aggregate partner.

Question

Quizplus · Accepted Answer

Andre is a limited partner. As per the terms of the partnership agreement, he has limited liability and is only responsible for the debts of the partnership to the extent of his investment. This is characteristic of a limited partner, who is not involved in the day-to-day management of the business and is only liable for the partnership's debts to the extent of their investment.

Andre Invested $100,000 in a Partnership with Erik and Louis