Question

Question 32 3 pe Abbott is the general partner, and Trudy is the limited partner in a real estate development business. In the beginning, Abbott performed all the work necessary to build the Grand Ole Shopping Mall. After the mall was built, Abbott asked Trudy to manage the partnership office, which also functioned as the Mall's management office. Trudy went to the office twice a week to check the mail and pay the bills. As the months passed, Trudy took on more responsibilities. She began answering questions about the mall over the phone and in-person for new investors, lenders offering the partnership credit and potential tenants. Occasionally, Trudy would show empty units to potential tenants and collect rent from current tenants. Three years after the Mall opened, one of the investors sued the partnership, Abbott, as an individual and general partner, and Trudy, as an individual and alleged general partner, for breach of contract and misrepresentation. Discuss Trudy's liability for the partnership's alleged breach of contractor misrepresentation. HTML Editore В Ig A A. TE 3. I x x DNV GV TT 1: 12pt HH Paragra

Answer 1

Introduction:

Partnership is a business agreement between two or more persons called partners. Partners have the interest in their business for which they are associated

Partnerships have flexibility to be structured as they choose under their own agreement according to which each partner is governed

The partnership can have general partners as well as limited partners. General partners pledge their personal assets where as limited partners have limited liabilities

Thus, general partners have unlimited liabilities for all partnership debts whereas limited partners are only limited to the amount they invest.

General partners have full management control whereas limited partners have only some involvement in management and just interest in return. Thus, limited partner is generally a slient partner

Limited liability partner has limited liability of company’s liabilities and debts upto his contributed capital. He also has restricted responsibilities regarding the daily operation. Hence, a limited partner cannot be personally liable to partnership’s debts and obligation to creditors, legal suits or any other financial obligations.

If someone brings a legal suit against the partnership only the general partners will be the defendants in the suit. If the court finds partnership guilty only general partners will be held financially responsible for the outcome of the suit

Fact:

Turdy is a limited partner in the partnership between Abott and Turdy

Turdy is a silent partner whose liabilities are limited to contributed capital only. She only had restricted involvement in daily operations. As a helping hand to Abott she started involving more in the daily operations for the growth of their partnership. This involvement does not increase her liability towards the firm. The liabilities are limited upto the partnership agreement between the two.

In the even of breach or misconduct Abott would be generally and personally liable whereas Turdy’s liabilitiy would be limited only

Conclusion:

Hence, if the investors sue the partnership Turdy would be liable only upto her contributed capital and not personally. Only Abott being general partner will be personally liable