Laura is an investor and a limited partner in a limited partnership.Two years after she becomes a limited partner,Laura believes that the general partners are not doing a very good job of managing the affairs of the limited partnership,and she accordingly participates in its management.While she was managing the business,a bank loans $1 million to the limited partnership,believing that Laura is a general partner.If the limited partnership defaults on the $1 million loan,which of the following will be true?

Question

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Laura's actions of participating in the management of the limited partnership may result in her being deemed a general partner, which would make her personally liable for the partnership's debts. Therefore, if the partnership defaults on the loan, Laura will be treated as a general partner and held personally liable for the loan. Option A is incorrect because limited partners are generally not personally liable for the debts of the partnership. Option C is incorrect because liability is not based on the proportionate share of the loan, but on the type of partnership interest held. Option D is incorrect because Laura's liability is not restricted to the value of her capital investment if she is deemed a general partner.

Laura Is an Investor and a Limited Partner in a Limited