Exam 35: Limited Partnerships and Limited Liability Limited Partnerships

Hank is a limited partner in a limited partnership.Hank has considerable expertise in the partnership's business,thus Hank has been hired as a consultant for the limited partnership.Hank noticed several problems with the management of the business.Hank then made several recommendations,including removing one of the general partners,expanding into an additional line of business,and borrowing substantial money to finance the expansion.At a partnership meeting to discuss Hank's recommendations,Hank voted in favor of removing the partner,expanding the business,and borrowing the money to do so.In order to get the loan on more favorable terms,Hank executed a personal guarantee on the indebtedness.The partnership expanded but could not generate sales to support the expansion.Upon dissolution,the partnership's debts exceed its assets.Numerous creditors claim that Hank should be considered a general partner.Discuss Hank's liability.

The limited partnership is formed when the certificate of limited partnership is filed.

A limited partner who takes an active part in managing a limited partnership:

A limited partnership is required to have at least:

Limited partnerships have both general partners and limited partners.

A limited partnership must keep the copies of the following records at its principal office except:

Limited partners are liable for partnership debts.

Can a limited partnership agreement provide for a different distribution priority than set out in the Revised Uniform Limited Partnership Act?

Which types of partners in a limited partnership should participate in management?

A limited partner may be an agent of the limited partnership.

Which of the following is not required to be included in a certificate of limited partnership?

Cindy was a limited partner in the JKL Limited Partnership.Because of her expertise in this type of business,Cindy was asked to take care of the day-to-day operations of the partnership.JKL had two primary creditors,Smith Supply Co.and Jones Discount.Smith knew that Cindy was a limited partner,but Jones thought that Cindy was a general partner.Due to unforeseen economic conditions,JKL went bankrupt owing both Smith and Jones large amounts of money.Both Smith and Jones sue Cindy as a general partner.To what extent is Cindy liable to them under the Revised Uniform Limited Partnership Act?

A limited partner may not act as a consultant or advisor to a general partner regarding the limited partnership,or he or she will lose his or her limited liability.

Joel is a limited partner in the Snow Bird Limited Partnership.He invested $5,000 to buy his interest.Joel is one of 10 partners,two of whom are general partners.Snow Bird is now insolvent,with debts exceeding assets by $96,000.The partnership creditors sue all the partners for these debts.How much additional money must Joel contribute?

In a limited partnership,the partners can agree that all partners have limited liability.

Mary was a limited partner in a limited partnership that had four other limited partners and one general partner.Mary and one other limited partner invested $40,000 each in the partnership,the other two limited partners invested $60,000 each,and the general partner invested $800,000.The partnership agreement made no mention as to the sharing of profits and losses.In the first year of operations the partnership had a net income of $100,000.How much should be allocated to Mary?

Limited partnerships properly registered in one state are generally free to operate in all states without further filing or registration requirements.

Where a partner who erroneously believed she was a limited partner dealt with a third party who believed in good faith that she was a general partner,the partner will be treated as a general partner.

Under the Revised Uniform Limited Partnership Act,two or more persons must execute and sign a certificate of limited partnership.

Which of the following is not one of the activities that is permissible under the Revised Uniform Partnership Act for a limited partner?