Which is the proper order for distribution of assets upon dissolution of a limited partnership?
A)outside creditors; distributions owed to partners; capital contributions; remainder split according to distribution agreement
B)outside creditors; limited partners' profits; limited partners' capital; general partners' advances; general partners' profit; general partners' capital
C)limited partners' capital; outside creditors; limited partners' advances; general partners' capital and profits
D)none of the above

Question

Quizplus · Accepted Answer

This is the typical order for distribution of assets upon dissolution of a limited partnership. Outside creditors are first in line to be paid, followed by distributions owed to partners. Capital contributions are then paid, and any remaining assets are split according to the distribution agreement among the partners. This is consistent with the principles of limited liability and partnership agreements. Option B includes general partners' advances and profits before limited partners' capital, which is not correct. Option C puts limited partners' capital before outside creditors, which is incorrect. Therefore, A is the correct answer.

Which Is the Proper Order for Distribution of Assets Upon