Question

Dorothy has a chance to go into a partnership with Sam starting a candle business. She would make the fruit scented candles, while Sam would make the meat scented candles. Dorothy thinks it’s a great opportunity, but sometimes worries that Sam isn’t following FDA rules when making his candles. What type of partnership should Dorothy pick?
(1 point)
a. General Partnership
b. Limited Partnership
c. Limited Liability Partnership
d. A ship of partners called the “Love Boat,” which aired on ABC from 1977 until 1986.

Answer 1

c. Limited Liability Partnership

An LLP lets partners participate in management while protecting each partner from personal liability for another partner’s negligence or regulatory misconduct. (A general partnership would expose Dorothy to Sam’s actions; a limited partnership would limit liability only if she were a passive limited partner.)