QUESTION 8 Your cousin Tommy is planning to open a restaurant. He has 15 years\'

Question

QUESTION 8

Your cousin Tommy is planning to open a restaurant. He has 15 years' experience at all levels of restaurant work, and most recently worked as head chef for a busy casual dining restaurant. You are confident that Tommy will be a great restaurant owner. Tommy asks if you would like to be involved in his new venture. You are happy to provide startup funding, with the understanding that you will share in the profits of the restaurant once it starts making money. Your only experience is serving as a restaurant greeter for one month during college, but you have enough business experience that you would like to be able to take a look at the restaurant's financial books every now and then. You are hesitant about becoming so involved in the operation that you put your personal assets at risk. Of the choices below, which is the most appropriate role for you to take in the business?

Tommy's limited partner

Tommy's joint venturer

Tommy's franchisee

Tommy's sole proprietor

Tommy's limited partner

Tommy's joint venturer

Tommy's franchisee

Tommy's sole proprietor

Explanation / Answer

Ans: A - Tommy's Limited Partener

In limited partnership company the limited partener contribute financially in business to have some part of profits for his contribution and this limited partner cannot participate in regular day to daty activies and operation of business or management.

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