Paralegal Advanced Competency Exam (PACE) Practice Exam

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Prepare for the Paralegal Advanced Competency Exam with confidence. Enhance your knowledge with a range of quizzes, multiple choice questions, and detailed explanations. Equip yourself with the skills necessary to excel in your paralegal career!

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

Practice this question and more.

Among the following, which is a key characteristic of a Limited Partnership?

General partners must have limited liability
Limited partners can participate in management
General partners manage the business operations
All partners share equal liability

The correct answer is: General partners manage the business operations

In a Limited Partnership, a key characteristic is that general partners manage the business operations. General partners are responsible for the day-to-day management and decision-making of the partnership. They have unlimited personal liability for the debts and obligations of the business, which contrasts with limited partners, who typically invest in the partnership but do not engage in management and have limited liability. This structure allows for investors to contribute capital while limiting their personal risk, as they are not involved in management decisions. Meanwhile, the active management role is explicitly designated to general partners, who assume the risks associated with running the business. Understanding this relationship between general and limited partners is essential for recognizing the dynamics of a Limited Partnership and how it may align with business strategy and risk management.