Which statement is true regarding James' entitlement to share in profits?

A) During the first year of business, a limited partner is not legally entitled to a share of the profits.
B) During the first year of business, a limited partner is only entitled to a share of the profits at the discretion of the general partners.
C) A limited partner is generally entitled to a share of the profits, but during the first year of business, a limited partner is only entitled to one-half of whatever the share would normally have been.
D) During the first year of business and also in subsequent years, a limited partner has a right to share in the profits.
E) A new limited partner is only entitled share in the profits after a partnership has been successful for three consecutive years.

Question

Maddy Miller · Accepted Answer

Final Answer : D, Explanation :  Limited partners are entitled to share in the profits of the partnership according to the terms of the partnership agreement, regardless of their limited status or the duration of the business.

Definitions

Learning Objectives

Learning Objectives

Related questions