Paralegal Advanced Competency Exam (PACE) Practice Exam 2025 – The Comprehensive All-in-One Guide to Exam Success!

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Question: 1 / 555

Among the following, which is a key characteristic of a Limited Partnership?

General partners must have limited liability

Limited partners can participate in management

General partners manage the business operations

In a Limited Partnership, a key characteristic is that general partners manage the business operations. General partners are responsible for the day-to-day management and decision-making of the partnership. They have unlimited personal liability for the debts and obligations of the business, which contrasts with limited partners, who typically invest in the partnership but do not engage in management and have limited liability.

This structure allows for investors to contribute capital while limiting their personal risk, as they are not involved in management decisions. Meanwhile, the active management role is explicitly designated to general partners, who assume the risks associated with running the business. Understanding this relationship between general and limited partners is essential for recognizing the dynamics of a Limited Partnership and how it may align with business strategy and risk management.

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All partners share equal liability

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