Future Business Leaders of America (FBLA) Business Law Practice Exam

Which of the following characters is typically involved in a limited partnership?

1. The general partner

2. The silent partner

3. The active partner

4. The sole proprietor

The correct answer is: The general partner

In a limited partnership, one of the key roles is that of the general partner. The general partner is responsible for managing the business and has unlimited liability for the debts and obligations of the partnership. This means that the general partner can be held personally accountable for any financial losses or legal issues that arise, which is a critical aspect of this type of business structure. In contrast, a limited partner, often referred to as a silent partner, contributes capital to the partnership but does not actively participate in the management of the business. Their liability is limited to the extent of their investment in the partnership, which protects their personal assets from the business's liabilities. The concept of an active partner typically refers to someone who is involved in the day-to-day operations of the business, which is generally not the case in a limited partnership structure where the general partner has that role. A sole proprietor, on the other hand, is a single individual who owns and operates a business independently, thus not fitting into the framework of a partnership at all. Understanding these roles and their implications is essential when exploring the dynamics of limited partnerships.