In Which of the Following,if Any,may Investors Share in Profits

question 43

Multiple Choice

In which of the following,if any,may investors share in profits but not in management responsibilities while avoiding personal liability?

• A) Limited partnership
• B) General partnership
• C) Limited liability partnership
• D) Limited liability company
• E) There is no such entity

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Definitions:

Debt/Equity Ratio

A gauge for comparing the mix of a company's funding through shareholders' equity versus debt, frequently applied to understand the company's use of financial leverage.

Retained Earnings

Retained earnings represent the portion of net income left after dividends have been paid to shareholders, which is then reinvested in the business.

Static Theory

A concept in economic theory that assumes conditions remain constant over time.

Capital Structure

The mix of debt and equity financing that a company uses to fund its operations and growth.