Which one of the following best describes the primary advantage of being a limited partner instead of a general partner?
A)tax-free income
B)active participation in the firm's activities
C)no potential financial loss
D)greater control over the business affairs of the partnership
E)maximum loss limited to the capital invested

Question

Quizplus · Accepted Answer

The primary advantage of being a limited partner rather than a general partner is that the maximum loss is limited to the capital invested. This means that if the partnership incurs debts or other financial losses beyond the amount of capital invested by a limited partner, they will not be responsible for covering those losses. In contrast, general partners can be held personally liable for any financial losses incurred by the partnership, even if those losses exceed their initial investment.

Which One of the Following Best Describes the Primary Advantage