Asked by Grecia Macias on Jun 19, 2024
Verified
Andy invests $5,000 as a limited partner in FastHorses, LP. When all of the horses owned by FastHorses fail to win races and the limited partnership goes bankrupt, Andy loses
A) $5,000.
B) $2,500.
C) $5,000 plus his house.
D) nothing.
Limited Partner
An investor in a partnership who has limited liability to the extent of their investment in the partnership and does not participate in day-to-day management.
Bankruptcy Loss
Financial losses incurred due to the declaration of bankruptcy, affecting creditors, investors, and the bankrupt entity itself.
- Distinguish among different forms of partnerships, outlining their unique features.
Verified Answer
VB
vanessa bravoJun 21, 2024
Final Answer :
A
Explanation :
As a limited partner, Andy's liability is limited to the amount of his investment in the partnership, which is $5,000. He does not lose more than what he invested, even if the partnership goes bankrupt.
Learning Objectives
- Distinguish among different forms of partnerships, outlining their unique features.
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