Which of the following is true of general and limited partners in a limited partnership?
Limited partners are not liable for partnership debts
. General and limited partners are jointly responsible for partnership debt. General partners are not liable for partnership debts.
Which of the following is an advantage of a limited partnership quizlet?
Which of the following is an advantage of a limited partnership?
It has the ability to attract large amounts of capital
. In a limited partnership, general partners: … are entitled to income of the partnership, which must be reported on their individual federal income tax returns.
Which one of the following is an advantage of being a limited partner?
The main advantage for limited partners is that
their personal liability for business debts is
limited. A limited partner can only be held personally responsible up to the amount he or she invested. Limited partners enjoy a protected investment, knowing they cannot lose more money than they’ve contributed.
What is the advantage of being a limited partner as opposed to being a general partner?
The benefit of being a general partner vs. a limited partner is
the ability to make business decisions
. A limited partner benefits because he or she reduces his or her personal liability.
Which of the following is are advantages of the corporate form of organization?
Advantages of a corporation include
personal liability protection, business security and continuity, and easier access to capital
. Disadvantages of a corporation include it being time-consuming and subject to double taxation, as well as having rigid formalities and protocols to follow.
What is a positive feature of carrying on business as a limited partnership?
One of the major advantages of running a limited partnership business is
the sharing of responsibility among partners
. Also, limited partners are not personally liable for the debts that the business runs into. They cannot be held liable beyond the amount they contribute to the business.
Which business is the best example of a limited partnership?
A few examples of businesses where limited partnership works best are the
real estate industry
, small and medium scale business, professional knowledge ones like a lawyer and so on.
What are four advantages of incorporating?
Advantages of incorporating a business include:
Limited liability, ability to raise more money for investment, size, perpetual life, ease of ownership change, ease of attracting talented employees
, separation of ownership from management.
What are three advantages of forming a partnership?
- Bridging the Gap in Expertise and Knowledge. …
- More Cash. …
- Cost Savings. …
- More Business Opportunities. …
- Better Work/Life Balance. …
- Moral Support. …
- New Perspective. …
- Potential Tax Benefits.
When two firms join together to form one new company it is called a n?
A merger
occurs when two companies combine to form a new company. An acquisition is the purchase of one company by another.
How do limited partners get paid?
When you are a general partner in a limited partnership you by default are like an employee of the company, and therefore, all your income is considered earned income. … Throughout the year, you may get paid by
the business with guaranteed payments as a way of compensating you
as the general partner.
Can a limited partner be active?
Limited partners cannot incur obligations on behalf of the partnership, participate in daily operations, or manage the operation. … A limited partner
may become personally liable only if they are proved to have assumed an active role in the business
, taking on the duties of a general partner.
What are the disadvantages of a limited partnership?
- Extensive Documentation Required.
- Lack of Legal Distinction for General Partners.
- General Partners’ Personal Assets Unprotected.
- General Partners Liable for Each Others’ Actions.
- Less Protection from Excessive Taxation.
What are the advantages of forming an organization?
- Advantages of Company form of Organisation:
- Some of the merits of company form of organization are discussed below:
- Accumulation of Large Resources:
- Limited Liability:
- Continuity of Existence:
- Efficient Management:
- Economies of Large Scale Production:
Why is it easier for a corporation to raise money than other types of business organizations?
b.
The owners of the corporation have limited liability for the corporation’s debts
. … It is easier for a corporation to raise capital than other forms of businesses.
What is a corporation owned by?
A corporation is a business entity that is owned by
its shareholder(s)
, who elect a board of directors to oversee the organization’s activities. The corporation is liable for the actions and finances of the business – the shareholders are not.
