Oil and Gas Limited Partnership

### What is the main responsibility of a general partner in an oil and gas limited partnership? - [x] Managing operations and making strategic decisions - [ ] Providing financial investment and remaining passive - [ ] Regulating market prices of oil and gas - [ ] Marketing and sale of extracted resources > **Explanation:** The general partner in an oil and gas limited partnership is primarily responsible for managing the operations and making key strategic decisions. ### What is the liability of a limited partner in an oil and gas limited partnership? - [ ] Unlimited liability - [x] Limited to the amount of their investment - [ ] Liable for the partnership's debts - [ ] Responsible for daily management operations > **Explanation:** A limited partner’s liability is restricted to the amount they have invested, meaning they cannot lose more than their initial investment. ### Who is responsible for covering debts and obligations in an oil and gas limited partnership? - [ ] Limited partners equally - [x] General partners - [ ] External contractors - [ ] Government subsidies > **Explanation:** General partners are responsible for covering debts and obligations in an oil and gas limited partnership. ### What kind of structure does an oil and gas limited partnership involve? - [x] One or more general partners and limited partners - [ ] Only general partners - [ ] Only limited partners - [ ] A single entity responsible for all operations > **Explanation:** An oil and gas limited partnership involves a structure where there are one or more general partners and limited partners. ### Can the limited partners control day-to-day operations of the partnership? - [ ] Yes, all partners manage daily operations - [x] No, they only provide capital investment - [ ] Sometimes, depending on their capital investment - [ ] Yes, but only after obtaining special permission > **Explanation:** Limited partners provide capital investment but do not involve themselves in day-to-day operations, which is the responsibility of the general partners. ### What deductions may apply to the income from an oil and gas partnership? - [ ] Salary and wage deductions - [ ] Mortgage interest deductions - [x] Depletion and drilling expenses - [ ] Unrelated business income deductions > **Explanation:** Specific tax deductions such as depletion and drilling expenses typically apply to the income from an oil and gas partnership. ### What is often a primary risk factor in oil and gas limited partnerships? - [ ] Low initial investment requirements - [ ] Unlimited liability for partner investments - [x] Market volatility and exploration costs - [ ] Simple regulatory compliance > **Explanation:** Market volatility and the high costs associated with exploration and extraction are primary risk factors in oil and gas limited partnerships. ### What is explored in an oil and gas limited partnership? - [ ] Renewable energy sources - [x] Oil and natural gas reserves - [ ] Agricultural commodities - [ ] Residential real estate markets > **Explanation:** Oil and gas limited partnerships are focused on exploring and extracting oil and natural gas reserves for commercial purposes. ### What is 'revenue sharing' in the context of oil and gas partnerships? - [x] Distribution of profits between general and limited partners - [ ] Commitment to reinvesting all profits into the business - [ ] Fixed salary payouts to partners - [ ] Exclusive distribution method for general partners only > **Explanation:** Revenue sharing refers to the distribution of profits between the general and limited partners in an oil and gas limited partnership. ### Which type of partner in an oil and gas limited partnership is primarily involved in capital investment? - [ ] General partners - [x] Limited partners - [ ] Partnership advisors - [ ] External financiers > **Explanation:** Limited partners are primarily involved in providing capital investment while general partners handle the operations and management.