Future Business Leaders of America (FBLA) Agribusiness Practice Test

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What role do general partners have in a partnership?

  1. They invest capital but are not involved in management

  2. They manage the business and take personal liability for debts

  3. They act only as legal advisors to the partnership

  4. They are immune from losses incurred by the partnership

The correct answer is: They manage the business and take personal liability for debts

General partners in a partnership are essential in the management of the business and have a significant degree of responsibility. They not only take part in the decision-making and operational practices but also bear personal liability for the debts and obligations incurred by the partnership. This means that if the business faces financial difficulties or legal issues, general partners can be held personally accountable, impacting their personal assets. This dual role of management and financial liability is a defining characteristic of general partners, distinguishing them from limited partners who typically have limited involvement in operations and reduced liability. Understanding the responsibilities and risks associated with being a general partner is crucial for anyone involved in or considering a partnership structure.

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