Chapter 23 - Limited Partnerships

Question 1

Formation

Answer 1

1. Must be at least one general partner and one limited partner
2. Need to file documents with the state ( a certificate of limited partnership.

Question 2

Operation

Answer 2

1. General partners manage, limited partners don’t manage.

2. Partnership agreement is important (about rights, admitting partners, authority, management, etc.)

Question 3

Taxation

Answer 3

1 - Treated as a general partnership

2. Flow through entity
3. Partners subject to tax, business not.

Question 4

Owner liability

Answer 4

1. Limited partners have liability protection
2. General partners are liable for the partnership debs.
   - Can get insurance

Question 5

Shimko v. Guenther

Answer 5

• Shimko is a lawyer sueing client because he didn’t get paid.
• Guenther is a limited partner but was basically running the LP.
• Limited partnership didn’t pay the $359668 bills.
• Guenther is not liable for the debts so he won.