What are the characteristics of a limited partner 1 Formed by compliance with

What are the characteristics of a limited partner 1

This preview shows page 7 - 8 out of 8 pages.

1. What are the characteristics of a limited partner? (1) Formed by compliance with the statutory requirements (2) One or more general partners control the business and are personally liable to creditors (3) One or more limited partners contribute to the capital and share in the profits but do not participate in the management of the business and are not personally liable for partnership obligations beyond their capital contributions (4) Limited partners may ask for the return of their capital contributions under the conditions prescribed by law 2. Give the cases when a limited partner is liable as a general partner. A limited partner is liable as a general partner for the firm’s obligations if he becomes involved in the management of the firm’s business.
3. Give at least four differences between a general partner and limited partner. Liability GP – Personally liable for partnership obligations LP – Extends only to his capital contribution Management GP – Equal right in the management of the business Whether or not has made any capital contribution LP – Has no share in the management Rights limited to Article 1851 Contribution GP – Money, property, industry LP – Cash or property not services Prohibition GP – Prohibited from engaging in the same kind of partnership business if he is a capitalist partner or any business for himself if an industrialist partner LP – No prohibition who is considered as a mere contribution to the partnership 4. What conditions must exist before the contribution of a limited partner may be returned to him? 5. Give at least four specific rights of a limited partner. (1) To require that the partnership books be kept at the principal place of business of the partnership (2) To inspect and copy at a reasonable hour partnership books or any of them (3) To demand true and full info of all things affecting the partnership (4) To demand a formal account of partnership affairs whenever circumstances render it just and reasonable (5) To ask for dissolution and winding up by decree of court (6) To receive a share of the profits or other compensation by way of income (7) To receive the return of his contribution, provided the partnership assets in excess of all its liabilities.

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture