What Is the Effect of a Limited Partner Making a Personal

question 29

Multiple Choice

What is the effect of a limited partner making a personal guarantee on behalf of the limited partnership?

• A) The limited partner will be considered a general partner for liability purposes.
• B) The guarantee is void, because it contradicts the concept of limited liability.
• C) The guarantee will create liability for the general partners, because they have unlimited liability.
• D) The limited partner will be held liable on the guarantee up to the amount of his investment in the limited partnership.
• E) The limited partner will be liable under the terms of the guarantee, but will otherwise continue to be treated as a limited partner.

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Definitions:

Jurisdiction

The official power to make legal decisions and judgments, often defined by geographical area or specific types of legal cases.

Long-Arm Statute

A law that allows for the service of process beyond a state's borders if a connection to the state through business or personal actions is established.

Nonresident Defendants

Individuals or entities that are sued in a court outside of their jurisdiction or residence.

Compliance

The action or state of being in accordance with established guidelines, regulations, or legislation.