Gerald and Tanji are general partners in a partnership with Mafasa and Rolf,who are also partners but with narrowly defined rights.Which of the following accurately reflects the disadvantage Mafasa and Rolf share?

Question

Quizplus · Accepted Answer

Mafasa and Rolf, as limited partners, have narrowly defined rights and are restricted from participating in management activities. However, if they do participate in management activities, they risk losing their limited liability status and may become personally liable for any partnership obligations or debts. This is a significant disadvantage compared to general partners like Gerald and Tanji, whose unlimited liability is already a given fact.

Therefore, option C correctly reflects the disadvantage that Mafasa and Rolf share. Option A is incorrect because limited partners are, by definition, liable only up to the amount of their capital contributions. Option B is incorrect because the partnership agreement should define what constitutes management activities. Finally, option D is also incorrect because public notification is primarily required for corporations, not partnerships.

Gerald and Tanji Are General Partners in a Partnership with Mafasa