Oregon Construction Contractors (CCB) Practice Test

Which statement is false about a "Limited Partnership" compared to a regular "Partnership"?

1. Death of a limited partner has no effect on partnership

2. Limited partners enjoy some personal liability protections

3. Limited partners take part in daily operations

4. The number of partners involved

The correct answer is: Limited partners take part in daily operations

The statement that limited partners take part in daily operations is false. In a limited partnership, limited partners are primarily investors who provide capital but do not engage in the management or day-to-day operations of the business. This arrangement allows limited partners to benefit from liability protection, as their losses are typically limited to their investment in the partnership. In contrast, general partners in a limited partnership are responsible for managing the business and making decisions. If limited partners were to take an active role in management, they risk losing their limited liability protection and could be considered general partners, which would expose them to personal liability for the partnership's debts and obligations. The other statements are accurate regarding the nature of limited partnerships: the death of a limited partner does not dissolve the partnership, limited partners indeed enjoy personal liability protections up to their investment, and the structure of limited partnerships can vary in terms of the number of partners involved.