Bailey Nix is a limited partner in his company. A general partner in his company is going on an extended vacation and has asked Bailey to run the company while he is gone. If Bailey agrees to do so, he will no longer qualify as a limited partner.

Question

Quizplus · Accepted Answer

As a limited partner, Bailey has limited liability and is not involved in the day-to-day operations of the company. By assuming the responsibilities of a general partner, Bailey will be actively involved in running the company and therefore will lose limited liability protection, making him a general partner.

Bailey Nix Is a Limited Partner in His Company