Question

Which of the following statements is correct with respect to a limited partnership?

a.A limited partner may not be an unsecured creditor of the limited partnership.
b.A general partner may not also be a limited partner at the same time.
c.A general partner may be a secured creditor of the limited partnership.
d.A limited partnership can be formed with limited liability for all partners.

Answer 1

Answer: option D

Explanation: A Limited liability partnership is an ownership style which exhibits characteristics of both partnership and corporations. This was implemented for the benefit of business entities and for the ease of owners.

a. In a limited liability a limited partner will never be personally liable for the debts.

b. A general partner can be a limited partner as long as there are two legal partners.

c. A general partner cannot be a secured creditor as he will always have unlimited liability.

d. A Limited liability partnership is the form of partnership in which some or all of the partners have limited liability.