Bob,Carol and Ted Have Decided to Go into Businesses as a Limited

question 14

Multiple Choice

Bob,Carol and Ted have decided to go into businesses as a limited partnership importing and selling exotic spices.Bob and Carol will manage the business and Ted will have no role in the day to day operations.Bob and Carol contributed have each invested $500,000 and Ted has contributed the building and land that the business will be operated from.Alice,a customer,contracts a rare disease from a contaminated spice sold by the company and sues.Alice is awarded a judgment for $5 million.After she exhausts the assets of the partnership,having the property and building sold and seizing all other property,$3 million remains unpaid.

• A) Bob, Carol and Ted each owe $1 million and Alice must sue each for their part
• B) Bob, Carol and Ted each owe $3 million jointly and severally so Alice may sue one, two or all three for the $3 million balance
• C) Bob and Carol each owe $1.5 million and Alice must sue each for their part; Ted has no additional liability
• D) Bob and Carol each owe $3 million jointly and severally so Alice may sue one or both of them; Ted has no additional liability

---

Definitions:

Unfair Situation

A circumstance or condition that lacks justice, equity, or impartiality, often resulting in disadvantage or harm to individuals or groups.

Authority Figure

An individual who holds power or influence, often in a specific context like a parent, teacher, or leader, which enables them to guide or control others.

Financial

Pertaining to money or how money is managed, including activities related to banking, investment, credit, and budgeting.

American Dream

The idea that people can achieve personal success, no matter their origin or socioeconomic status, in a society that enables upward mobility for all its members.