[Parental Involvement] Lexie and Fernando, Both Artists, Discussed Forming a Partnership

question 57

Multiple Choice

[Parental Involvement] Lexie and Fernando, both artists, discussed forming a partnership to paint portraits. Fernando's parents were interested in investing in the partnership, but they wanted to avoid any liability. Fernando suggested forming a limited partnership. He told Lexie and his parents that they could do it very informally, that an oral agreement was sufficient, and that the parents would be protected from liability. However, Lexie insisted that a certificate of limited partnership be filed with the secretary of state, over Fernando's objection that it was a waste of money. After a few months, Lexie and Fernando decided that they wanted to add a new partner, Melissa, to the partnership as a general partner. Melissa had some expertise in the portrait field but she had also had some scrapes with local law enforcement. Fernando's parents objected strenuously to the admission of Melissa. Lexie and Fernando took the position that the parents, as limited partners, had no say in the admission of a new partner. Fernando's father, who had an interest in painting and was concerned that the partnership was not making very much money, decided to start coming to the partnership studio to manage the business and attempt to bring it into profitability.
-Was Fernando's belief that a limited partnership may be created informally through an oral agreement correct?

• A) Yes, an oral agreement will suffice.
• B) Fernando was partially correct. A written agreement is required, but only the general partners are required to sign it. Limited partners may agree orally.
• C) Fernando was partially correct. A written agreement is required, but only the limited partners are required to sign it. General partners may agree orally.
• D) Fernando was incorrect because partners must sign a certificate of limited partnership and file the certificate with the secretary of state.
• E) Fernando was incorrect, and both general and limited partners must sign a document of partnership limitation that is kept on file in the primary business office of the limited liability partnership.

---

Definitions:

Perfectionism

The pursuit of flawlessness, setting excessively high performance standards, accompanied by overly critical self-evaluations and concerns regarding others' evaluations.

High Self-Esteem

Refers to a positive and confident perception of oneself, marked by respect for and acceptance of one's self.

Binge Eating Disorder

A serious eating disorder characterized by recurrent episodes of eating large quantities of food, often quickly and to the point of discomfort.

Anorexia Nervosa

An eating disorder characterized by an intense fear of gaining weight and a distorted body image, leading to severe restriction of food intake.