Products & Their RisksQuestion 104 of 398
In a direct participation program organized as a limited partnership, the limited partners:
a.Manage the day-to-day operations of the program
b.Have liability limited to the amount of their investment
c.Are personally liable for all partnership debts
d.Guarantee the general partner's obligations
Explanation
Limited partners are passive investors whose liability is limited to their invested capital, and they do not take part in day-to-day management. The general partner runs the business and bears unlimited liability. This limited liability, combined with pass-through taxation, defines the limited partnership structure of most DPPs.
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