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29 August, 09:30

In a partnership, loans taken out by the general partners

Question options:

are binding on the limited partners.

aren't a liability of either the general or limited partners

aren't binding on the limited partners.

are null and void.

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  1. 29 August, 10:13
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    aren't binding on the limited partners.

    Explanation:

    A partnership is a form of business ownership where two or more individuals come together to establish a business venture. A partnership may consist of generals and limited partners.

    General partners are actively involved in business operations. They manage the day to day activities of the business. Generals partners act on behalf of the business and have unlimited liabilities to the debt of the enterprise.

    Limited partners are silent partners. They do not participate in managing the business. A limited partner, as the name suggests, has limited liability to the obligations of the business. Should a general partner take out a loan, a limited partner will be liable to the extent of his or her capital contribution.
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