Check Your Understanding Answers
- In a limited partnership, what is the liability difference between a general partner and a limited partner?
Limited partners are liable only to the extent of their investment.
General partners have unlimited liability.
- List four key things about corporations. (See page 73 for other correct answers.)
- Corporations can own property in the corporate name.
- Shareholders of a corporation have limited liability and do not participate directly in managing the corporation.
- Shareholders elect directors, who are the ones responsible for setting corporate policy.
- The directors hire corporate officers, who operate the corporation.
- What is a limited liability company (LLC)?
A hybrid business entity having characteristics of both a corporation and a partnership.
- What is the major benefit of Real Estate Investment Trusts (REITs)?
Profits are not taxed.
