Which one of the following best describes the primary advantage of being a limited partner rather than a general partner?
A) Entitlement to a larger portion of the partnership's income
B) Ability to manage the day-to-day affairs of the business
C) No potential financial loss
D) Greater management responsibility
E) Liability for firm debts limited to the capital invested

Question

Quizplus · Accepted Answer

The primary advantage of being a limited partner rather than a general partner is that a limited partner's liability for firm debts is limited to the capital they have invested. Limited partners are not responsible for the day-to-day management of the business and do not face potential financial losses beyond their initial investment. General partners, on the other hand, have unlimited liability for the partnership's debts and are responsible for managing the business.

Which One of the Following Best Describes the Primary Advantage