Cindy was a limited partner in the JKL Limited Partnership.Because of her expertise in this type of business,Cindy was asked to take care of the day-to-day operations of the partnership.JKL had two primary creditors,Smith Supply Co.and Jones Discount.Smith knew that Cindy was a limited partner,but Jones thought that Cindy was a general partner.Due to unforeseen economic conditions,JKL went bankrupt owing both Smith and Jones large amounts of money.Both Smith and Jones sue Cindy as a general partner.To what extent is Cindy liable to them under the Revised Uniform Limited Partnership Act?

Question

Quizplus · Accepted Answer

Under the Revised Uniform Limited Partnership Act, a limited partner who participates in the control of the business may be liable as a general partner to third parties who reasonably believe, based on the limited partner's conduct, that the limited partner is a general partner. Since Jones believed Cindy was a general partner, she is liable to Jones as a general partner. However, Smith knew Cindy was a limited partner, so she is not liable to Smith as a general partner.

Cindy Was a Limited Partner in the JKL Limited Partnership