Alabama Real Estate Practice Exam

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Prepare for the Alabama Real Estate Exam. Utilize flashcards and multiple-choice questions, each coupled with hints and explanations. Ace your upcoming test!

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What liability do partners face in a limited partnership?

  1. Unlimited liability

  2. Liability up to the amount of their interest

  3. No liability

  4. Full responsibility for management

The correct answer is: Liability up to the amount of their interest

Partners in a limited partnership face liability up to the amount of their interest in the partnership. This means that if the partnership incurs debts or legal liabilities, partners are only responsible to the extent of their investment in the partnership. Option A is incorrect because unlimited liability refers to the liability that individual partners have in general partnerships. Option C is incorrect because partners in a limited partnership do have some liability. Option D is incorrect because while partners in a limited partnership do have some management responsibilities, they are not solely responsible for management.

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