Bridgitte and Carlotta have started a business together; Carlotta put up half the money, but she is not involved in the management of the company. Bridgitte does all the hiring and supervising, as well as the general operation of the company. They share in the profits. This scenario represents a?

Question

Business

Annabelle Potter

18 January, 06:26

Bridgitte and Carlotta have started a business together; Carlotta put up half the money, but she is not involved in the management of the company. Bridgitte does all the hiring and supervising, as well as the general operation of the company. They share in the profits. This scenario represents a?

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Arthur Marks · Answer 1

Limited partnership.

Explanation:

Limited partnership is a business that is set up by people who want to run a partnership together but where one or more of the partner is only interested in investing in the partnership without the desire to be involved in the day to day running as well as the right to take decision concerning the partnership, such an arrangement is called Limited partnership. The liability of the Limited partner is limited to the amount of capital contributed.

The other type of partner is general partner who is involved in the day to day running of the firm and has unlimited liability for the debt of the partnership.,