Justin and Michael form a limited partnership and start a car dealership. Justin is the general partner and Michael is the limited partner. Seven months after the commencement of the business, Pedro makes an investment and wishes to become a general partner. A week later, Michaels mother wishes to join the partnership as a limited partner.

1. Which of the following is true in this scenario?

O Pedro cannot be a general or limited partner

O Pedro cannot be admitted as a general partner to the partnership as a limited partnership can only have one general partner.

O Michael's mother cannot be admitted as a limited partner to the partnership as a limited partnership can only have one limited

partner.

O Both Pedro and Michael's mother can choose to be admitted as either general or limited partners to the partnership.

Question

Business

Colin Hendricks

17 February, 13:21

Justin and Michael form a limited partnership and start a car dealership. Justin is the general partner and Michael is the limited partner. Seven months after the commencement of the business, Pedro makes an investment and wishes to become a general partner. A week later, Michaels mother wishes to join the partnership as a limited partner.

1. Which of the following is true in this scenario?

O Pedro cannot be a general or limited partner

O Pedro cannot be admitted as a general partner to the partnership as a limited partnership can only have one general partner.

O Michael's mother cannot be admitted as a limited partner to the partnership as a limited partnership can only have one limited

partner.

O Both Pedro and Michael's mother can choose to be admitted as either general or limited partners to the partnership.

+1

Answers (1)

Know the Answer?

Peyton Levine · Answer 1

Option D is correct one.

Both Pedro and Michael's mother can choose to be admitted as either general or limited partners to the partnership.

Explanation:

In a limited partnership, there is at least one general partner (Micheal) who deals with the business and has boundless obligation in running the organisation and at least one limited partner (Justin) who has restricted risk and can't maintain the business.

For this situation, both mother and Pedro can decide to be conceded as either GP or LP in the business as there are no limitations all things considered.