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1 What is the effect of having a corporation as the general partner of a limited partnership? Each shareholder of the corporation will be treated as a general partner of the limited partnership. The liability of the corporate general partner will be limited to the amount of its assets. The limited liability of the corporation will result in the limited partners having greater liability than they would otherwise. Each shareholder of the corporation will be treated as a limited partner of the limited partnership.

2 There are two general partners, each of whom contributes $5,000 in capital to a limited partnership. There are two limited partners, each of whom contributes $20,000. The total amount of capital contributed is $50,000. The limited


partnership agreement does not stipulate how profits and losses are to be allocated. Assume that the limited partnership makes $300,000 in profits. Under the Revised Uniform Limited Partnership Act (RULPA), how much would each partner receive?

Each general partner would receive $30,000, and each limited partner would receive $120,000. Each general partner would receive $120,000, and each limited partner would receive $30,000. All partners would receive $75,000, regardless of whether he or she is a general or limited partner.


Law 531 week 1 quiz (knowledge check)