International Experts, LP
Final Exam Part 1
Question 2: International Experts, L.P.
Legal Issues in the Workplace
Summary of Case International Exports, L.P., is a limited partnership with $100,000 in declared but unpaid profits. International Exports L. P.’s creditors include Friendly Credit Corporation who has an interest in the partnership of $5,000 and Gwen, who is also a limited partner, has an interest in the partnership of $5,000. Harry, one of the general partners of International Exports, L.P. has decided to retire. The other general partners, without asking the limited partners opinion, vote to liquidate and dissolve the firm. The limited partners however, want the partnership to continue in business and they file a law suit against the general partners to compel the result. Can the court order International to continue? If not, what is the priority of the distribution of international Exports assets on its dissolution? Before answering the questions posed it is important to get a better understanding of limited partnerships, their rights and duties, and what is required for dissolution.
Limited Partnerships defined According to Free Advice.com, a limited partnership (LP) is defined as “an association of one or more general partners together with one or more limited partners to conduct business for profit as co-owners.” A general partner(s) assumes full responsibility and management of the partnership and limited partners are basically investors who are liable only to the extent of their capital contributions. This is an important and perhaps the most attractive feature in a limited partnership in that a limited partner gets to enjoy the limited liability aspect of the partnership as long as he or she does not take part in any managerial responsibilities. The general partners are the ones responsible for the debts, obligations, and responsibilities of managing the limited partnership. However, if a limited partner takes over any part of managing the LP he or she will
Question 2: International Experts, L.P.
Legal Issues in the Workplace
Summary of Case International Exports, L.P., is a limited partnership with $100,000 in declared but unpaid profits. International Exports L. P.’s creditors include Friendly Credit Corporation who has an interest in the partnership of $5,000 and Gwen, who is also a limited partner, has an interest in the partnership of $5,000. Harry, one of the general partners of International Exports, L.P. has decided to retire. The other general partners, without asking the limited partners opinion, vote to liquidate and dissolve the firm. The limited partners however, want the partnership to continue in business and they file a law suit against the general partners to compel the result. Can the court order International to continue? If not, what is the priority of the distribution of international Exports assets on its dissolution? Before answering the questions posed it is important to get a better understanding of limited partnerships, their rights and duties, and what is required for dissolution.
Limited Partnerships defined According to Free Advice.com, a limited partnership (LP) is defined as “an association of one or more general partners together with one or more limited partners to conduct business for profit as co-owners.” A general partner(s) assumes full responsibility and management of the partnership and limited partners are basically investors who are liable only to the extent of their capital contributions. This is an important and perhaps the most attractive feature in a limited partnership in that a limited partner gets to enjoy the limited liability aspect of the partnership as long as he or she does not take part in any managerial responsibilities. The general partners are the ones responsible for the debts, obligations, and responsibilities of managing the limited partnership. However, if a limited partner takes over any part of managing the LP he or she will
References: Cross, F.B., Miller, R.L.(2012). The Legal Environment of Business Text and Case. (8th ed.) Free Advice. Limited Partnerships. Retrieved March 18, 2013 from http://business-law.freeadvice.com/business-law/starting_a_business/limited-partnership-2.htm