Which of the following activities will cause a limited partner to lose his limited liability status?
A)being employed by the general partner as an employee
B)managing the firm with the general partner
C)consulting with or advising the general partner
D)All of the above will result in the loss of limited liability status.

Question

Quizplus · Accepted Answer

Limited partners are passive investors who invest in a partnership but do not take part in the day-to-day management of the business. If a limited partner becomes actively involved in managing the business, they may lose their limited liability status and be held liable for the partnership's debts and obligations like the general partner. Therefore, activities such as managing the firm with the general partner or being employed by the general partner as an employee can cause the limited partner to lose their limited liability status. Consulting with or advising the general partner, on its own, does not necessarily lead to the loss of limited liability.

Which of the Following Activities Will Cause a Limited Partner