Ted Anderson and Arnie Lee Began Working Together to Write

question 129

Multiple Choice

Ted Anderson and Arnie Lee began working together to write some computer programs for companies that needed to adapt standard programs to their particular needs.Ted's father,an employee for B.C.Telephone,would often hear about businesses with such needs,and would solicit clients for Ted and Arnie or advise Ted and Arnie on how to approach potential clients.One job followed another.Ted and Arnie now want to set up business formally and they need money.Ted's father will give them $9000 but doesn't want his liability to ever go beyond that amount.Given these facts,which of the following is true?

• A) Because Ted's father does not do the programming, the main business of the firm, he can continue to provide services to the partnership, such as finding clients, and still be a limited partner.
• B) Ted's father cannot be a limited partner, because it takes three or more general partners before a firm can have a limited partner.
• C) If Ted's father does not follow the statutory provisions governing limited partnerships, he could be deemed a general partner.
• D) Ted's father can only be a limited partner if Ted and Arnie are also both limited partners.
• E) The only way to limit one's liability is to incorporate.

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