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Question
Laura is an investor and a limited partner in a limited partnership. Two years after she becomes a limited partner, Laura believes that the general partners are not doing a very good job of managing the affairs of the limited partnership, and she accordingly participates in its management. While she was managing the business, a bank loans $1 million to the limited partnership, believing that Laura is a general partner. If the limited partnership defaults on the $1 million loan, which of the following will be true?A) Laura will not be held personally liable, as she is technically a limited partner.
B) Laura will be treated as a general partner and will be held personally liable for the loan.
C) Laura will be held liable for her proportionate share of the $1 million, depending on the total number of general and limited partners in the limited partnership.
D) Laura's liability will be restricted to the value of her capital investment in the limited partnership.
Answer
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