Amanda and Sally are close friends who form a limited partnership to open a salon.They refuse to put a buyout clause for withdrawing partners in the limited partnership agreement,assuming that their friendship and business will last forever.Amanda,as a general partner,contributes $100,000 and Sally,as a limited partner,contributes $125,000.Two years later,Sally accuses Amanda of falsifying the data and withdraws from the limited partnership.How much will Sally receive from the limited partnership?

Question

Quizplus · Accepted Answer

Under the ULPA,partners have the power but not the right to withdraw from a limited partnership.This means that if there is no buyout clause for withdrawing partners in the limited partnership agreement,a withdrawing partner will receive nothing.Since Amanda and Sally's limited partnership agreement did not have any buyout clause for withdrawing partners,Sally will receive nothing.

Amanda and Sally Are Close Friends Who Form a Limited