ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Limited partners do not have any personal liability. Business liability is limited to the amount contributed by the limited partner. Also, they have no say in the management of the company. The limited partners’ profit share and ownership stake are predetermined-as documented in the partnership agreement.

Detailed explanation-2: -Limited Partnership (LP) Other contributors, known as limited (or silent) partners, provide capital but cannot make managerial decisions and are not responsible for any debts beyond their initial investment. Limited partners can become personally liable if they take a more active role in the LP.

Detailed explanation-3: -A limited partner is in charge of contributing financially to the company, and in exchange, they get part of the profits of the partnership. The partner can’t have obligations on the partnership’s behalf or participate in daily management or operations.

Detailed explanation-4: -A limited partnership (LP) is a business entity with at least one general partner (who has unlimited personal liability) and one limited partner (whose liability is limited to their investment in the company).

Detailed explanation-5: -Key Takeaways. A limited partner, also known as a silent partner, is an investor and not a day-to-day manager of the business. The limited partner’s liability cannot exceed the amount that they invested in the business. A limited partnership by definition has at least one general partner and one limited partner.