- 1 Marks
Question
A limited partner must:
A. Take part in the management of the partnership business
B. Not take part in the management of the partnership business
C. Have the power to bind the partnership firm
D. Have power to sign cheques and other documents
E. Have power to introduce a new general partner
Answer
B. Not take part in the management of the partnership business
Explanation:
A limited partner’s liability is restricted to the amount of their investment in the partnership, but they are not permitted to take part in the management of the business. If they do, they risk losing their limited liability status.
- Tags: Legal Authority, Limited Partner, Partnership Rights
- Level: Level 1
- Topic: Partnership Law
- Series: MAY 2014
- Uploader: Theophilus