Which one of these characteristics 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)Day-to-day management control of the business
C)Profits free of any income taxation
D)Overall control of the partnership
E)Personal financial liability 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 personal financial liability is limited to the capital invested. Limited partners are not personally responsible for the partnership's debts and obligations beyond their contribution to the partnership's capital. This protection from liability is not available to general partners who have unlimited liability for the partnership's debts and obligations. Therefore, choice E is the best option.

Which One of These Characteristics Best Describes the Primary Advantage