A partner who contributes capital but does not take an active part in managing the business is commonly called a:
Correct answer: B. Sleeping partner
- A. Nominal partner
- B. Sleeping partner
- C. Minor partner
- D. Holding partner
Explanation
A sleeping partner contributes capital and shares in profits but remains inactive in daily management. A nominal partner, by contrast, lends the use of their name without necessarily contributing capital.
Report an error
The more specific you are, the faster it gets fixed. A source beats an opinion.
Prefer email? support@testustad.com
About Nature and Forms of Business Organisation
Business organisation combines people, capital, materials and entrepreneurship to produce goods or services and earn profit, while also meeting customer and social needs. Coverage includes sole proprietorships, partnerships, companies and cooperatives, with comparisons of ownership, liability, control, profit sharing, continuity and legal status.
Practise Nature and Forms of Business Organisation
30 free Nature and Forms of Business Organisation MCQs from Introduction to Business, each with the correct answer and an explanation. Unlimited attempts, no account needed.
Exams that ask Introduction to Business questions like this
Introduction to Business is on this paper prepared for on TestUstad, and all of them draw the same bank, so this question is worth knowing for it.
More Nature and Forms of Business Organisation questions
Which factor most directly influences the choice between a partnership and a company?
When a business is owned by two or more persons who agree to contribute resources and share profits, it is most commonly classified as a:
A cooperative society is primarily established to:
A partnership with no fixed period and no specific undertaking is generally known as a:
In a limited partnership, the liability of a limited partner is normally restricted to the amount:
The capital of a joint stock company is ordinarily divided into: