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QuizMultiple Choice

Business Structures

Question 1 • 2414VA Career Explorations Sem A

Which of the following is not an attribute of a Limited Partnership?

Answer
A
Limited partnerships do not share in the risk of the company beyond the amount of their investment.
B
The limited partner is authorized to make business decisions on behalf of the general partners.
C
Limited Partners are paid a dividend on profits earned by the company.
D
Limited Partners cannot sell their interest in the business without notifying the general partners.

Explanation

A limited partner generally invests in the business but does not manage it or make business decisions on behalf of the general partners. Management decisions are the responsibility of the general partner, so authorizing the limited partner to make those decisions is not an attribute of a limited partnership. Limited partners generally have liability limited to their investment and may receive a share of profits.

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