NBE Funeral Service Director

Answer: A - A limited partnership is a type of business organization that limits the liability of its partners to their pro rata ownership in the business.

Limited partnerships are business entities formed by two or more partners whose ownership interest in the business determines their pro rata share. A partner’s pro-rata investment in the business determines their liability (which is only limited to their investment interest in the partnership). Corporations are formed as legal entities that issue shares to individual owners known as shareholders. The purpose therefore of a corporation is to meet the needs of their owners, which are the shareholders. A general partnership is one where the partners share in the day-to-day management and whose liability is not limited. A proprietorship is an unincorporated business form under which the owner, an individual, assumes all legal liabilities.