Cindy is one of 50 limited partners in a real estate investment limited partnership.The general partner is Evergreen Corporation.Evergreen Corporation invested $500,000 in the partnership and each of the limited partners all of whom are natural persons,invested $10,000.Evergreen has four shareholders.If the real estate partnership is dissolved at a time when it has debts exceeding assets,which of the following is true?

Question

Quizplus · Accepted Answer

The limited partners in a limited partnership are not personally liable for the debts of the partnership beyond their initial investment. In this case, each limited partner invested $10,000. The general partner, Evergreen Corporation, is also not personally liable for the debts of the partnership since it is a separate legal entity. However, the assets of the partnership, including the $500,000 investment by Evergreen Corporation, would be used to satisfy any unpaid obligations.

Since the question states that the partnership has debts exceeding assets at the time of dissolution, it implies that there are not enough assets to cover all the debts. In such a scenario, the limited partners would not need to contribute any additional amounts beyond their initial investment, but the assets of the corporation would be available for this purpose. Thus, option D is the correct choice.

Cindy Is One of 50 Limited Partners in a Real