Question

Brad is a general partner, and Carlos and Dora are limited partners, in Eastside Physicians, a medical clinic and limited partnership. Carlos's assignment of his interest in Eastside to Good Credit Corporation results in?

1) nothing with respect to Eastside's existence.
2) the maturity of Eastside's debts.
3) the suspension of Eastside's business.
4) the termination of Eastside's legal existence.

Answer 1

The correct option is 1. When Carlos assigns his interest in Eastside to Good Credit Corporation, it does not result in any changes to Eastside's existence. The transfer simply changes the ownership structure of the partnership.

Step-by-step explanation:

When Carlos assigns his interest in Eastside to Good Credit Corporation, it means that Carlos transfers his ownership stake in the partnership to the corporation. This transfer does not result in any changes to Eastside's existence or the termination of its legal existence.

Eastside Physicians, being a limited partnership, consists of general partners and limited partners. While Brad is a general partner with unlimited liability, Carlos and Dora are limited partners with limited liability. The transfer of Carlos's interest to Good Credit Corporation simply changes the ownership structure of the partnership.

Good Credit Corporation now becomes a limited partner in Eastside Physicians, and Carlos no longer holds a direct interest in the partnership. However, the transfer does not affect Eastside's business operations or its debts.

In summary, the correct option is 1) nothing with respect to Eastside's existence. The transfer of Carlos's interest to Good Credit Corporation does not result in any changes to Eastside's legal existence, business operations, or debts.