CFA Practice Question

There are 139 practice questions for this study session.

CFA Practice Question

Which is false? Typically the general partner in a partnership:

A. is an unlimited liability company.
B. bears limited liability.
C. receives a management fee.
Correct Answer: A

It is usually a limited liability company itself, but bears unlimited liability in the partnership.

User Contributed Comments 7

User Comment
nabada0419 Isn't A correct?
myron A is incorrect. The GP is usually a limited liability corporation. It theoretically bears unlimited liability for anything that might go wrong in the partnership. Very tricky.
greenasha i thought answer was B, because GP bears unlimited liability
cfakhubi answer of option B also looks correct, because the general partner bears an unlimited liability in the partnership and it says it bears a limited liability which is wrong.
zriddle They could make their money from a performance based incentive, so they might not receive a management fee.
Unicorny I don't quite understand why not A and C. Quote from the study notes "The general partner manages the business, assumes unlimited liability, and receives a management fee and an incentive fee"
joeclark It is a negative question so pick for the false statement
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