Future Business Leaders of America (FBLA) Agribusiness Practice Test

What type of partnership includes both general and limited partners?

1. General partnership

2. Limited partnership

3. Joint venture

4. Professional corporation

The correct answer is: Limited partnership

A limited partnership is the correct answer because it is specifically defined as a type of partnership that includes both general and limited partners. In this arrangement, general partners manage the business and are personally liable for the debts of the partnership, while limited partners contribute capital and share in the profits but have limited liability and do not participate in day-to-day management. This structure allows for investment from limited partners without exposing them to the same level of risk as general partners. In contrast, a general partnership consists solely of general partners who share management responsibilities and liability. A joint venture is typically a temporary partnership established for a specific project and does not necessarily fit the definition of having both general and limited partners. A professional corporation, on the other hand, is a specific type of corporate structure used by professionals such as doctors or lawyers, which does not involve a partnership of the type described. Thus, the limited partnership is distinguished by its unique combination of partner types, making it the correct choice.