Question

Julius, Kayla, and Larry are each college students majoring in Business. As they prepare for graduation,...

Julius, Kayla, and Larry are each college students majoring in Business. As they prepare for graduation, they begin to talk about starting their own business. Julius and Larry both worked for some time at a local deli, and are familiar with the responsibility involved in running a sandwich shop. All three get together and decide that they want to start their own sub shop and delivery business. Julius and Kayla agree to be limited partners in a limited partnership, each contributing $10,000 to open the restaurant and owning one fifth each. Larry, the general partner, agrees to contribute $30,000 to the limited partnership, and he will own three fifths of it. In addition, Larry will be the one responsible for the day-to-day operations and management of the sub shop.

1. In this scenario, what amount of liability does each of the partners face?

2. Suppose that Julius is a control freak. He senses the sub shop is facing some setbacks, and he decides to put his business degree to good use to make sure the limited partnership prospers. As a result, he participates in the management and control of the business. What could happen to Julius as a result? Why?

3. Suppose that after five successful years in business, all three partners vote to dissolve the partnership because they wish to sell the shop and make a hefty profit. In terms of debt, they have none. There are no longer any creditors the partnership owes. After the partners are paid according to their investments in the partnership, there is $345,000 in profits left to be divided. How much would each partner get?

Homework Answers

Answer #1

1- The question is clear about the Liability of each partner. Limited Partnership means where the liability of the partners is limited to their capital contribution. Partners are not personally liable for losses or debts.

2- As per the partnership agreement, Larry is the one who is responsible for the day-to-day operations and management of the sub shop. Julius acts or any agreement he made on behalf of the business isn’t valid since he has no authority to act as such

Personal behaviour or the experience Julius has with a sandwich shop does not qualify him to run the place, unless Larry (General partner) approves it by the power majority he has.

3- Profit share of each partner.
Julius (1/5) = $69000
Kayla (1/5) = $69000
Larry (3/5) = $207000  
Kindly get back if more clarification is needed.

Happy Learning.

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Please provide a reasoning paragraph serving as a narrative. Jumbo Subs, L.P., is a limited partnership....
Please provide a reasoning paragraph serving as a narrative. Jumbo Subs, L.P., is a limited partnership. It has two general partners, Albert and Brian, who contributed capital to the partnership of $100,000 and $50,000, respectively. There are three limited partners who each contributed $50,000 to purchase their limited partnership interests. Business has gone badly for the partnership and the general partners decide to dissolve the partnership and wind up its affairs. The remaining assets of the business are worth $300,00...
1.) The basic rules governing how a corporation is organized and how it conducts its business...
1.) The basic rules governing how a corporation is organized and how it conducts its business are known as _____. a. certificates of organization b. corporate bylaws c. prospectuses d. articles of incorporation 2.) A _____ is a legal business entity that offers limited liability to all of its owners. a. Limited partnership b. General partnership c. Sole proprietorship d. C corporation 3.) How is the formation of limited liability companies (LLCs) similar to the formation of corporations? a. Similar...
Organizing Organizing is an important task of managers. Once the organization’s goals and plans are in...
Organizing Organizing is an important task of managers. Once the organization’s goals and plans are in place, the organizing function sets in motion the process of seeing that those goals and plans are pursued. When managers organize, they’re defining what work needs to get done and creating a structure that enables work activities to be completed efficiently and effectively by organizational members hired to do that work. As Starbucks continues its global expansion and pursues innovative strategic initiatives, managers must...
In a bizarre twist to a bizarre story, on October 22, 2013, Deloitte agreed to pay...
In a bizarre twist to a bizarre story, on October 22, 2013, Deloitte agreed to pay a $2 million penalty to settle civil charges—brought by the PCAOB—that the firm violated federal audit rules by allowing its former partner to continue participating in the firm’s public company audit practice, even though he had been suspended over other rule violations. The former partner, Christopher Anderson, settled with the PCAOB in 2008 by agreeing to a $25,000 fine and a one-year suspension for...
Asia’s e-commerce landscape has been booming in recent years. The swift adoption of smartphones and greater...
Asia’s e-commerce landscape has been booming in recent years. The swift adoption of smartphones and greater access to the internet has allowed consumers in the region to be a major force in the global digital economy. The expansion looks set to continue at a rapid pace. According to a November 2018 report by Fitch Solutions, e-commerce sales in the region are forecast to increase by 14.2% this year, with an estimated average annual increase of 14% over the medium term...
Read the case study. Identify three (3) problems and recommendations to solve the problems. Each problem...
Read the case study. Identify three (3) problems and recommendations to solve the problems. Each problem will require a justified recommended solution at least a page each. Zappos CEO Asks Employees to Commit to Teal, or Leave Zappos had modest beginnings. In 1999, shoesite.com was started by Nick Swinmurn to capture online shoe sales. Swinmurn reached out to Tony Hsieh (pronounced “shay”) and Alfred Lin, who were running Venture Frogs, a kind of venture capital group, for advice and funding....
What role could the governance of ethics have played if it had been in existence in...
What role could the governance of ethics have played if it had been in existence in the organization? Assess the leadership of Enron from an ethical perspective. THE FALL OF ENRON: A STAKEHOLDER FAILURE Once upon a time, there was a gleaming headquarters office tower in Houston, with a giant tilted "£"' in front, slowly revolving in the Texas sun. The Enron Corporation, which once ranked among the top Fortune 500 companies, collapsed in 2001 under a mountain of debt...
      MK Restaurant: Branding of Thai-Style Hotpot The restaurant industry is one of the most...
      MK Restaurant: Branding of Thai-Style Hotpot The restaurant industry is one of the most competitive in Thailand. With a large number of players ranging from restaurants in five-star hotels, global fast-food chains to small stalls along the streets and everything in between, the Thais are spoiled for choice. In addition, as the world becomes globalized, consumers are familiar with international dishes and would not hesitate to try new offerings from the other side of the globe. As a...
QUESTION: Why do governments typically take an unsupportive stance on countertrade arrangements? Article Below: The Bell...
QUESTION: Why do governments typically take an unsupportive stance on countertrade arrangements? Article Below: The Bell Boeing V-22 Program, a strategic alliance between Bell Helicopter, a Textron Company, and the Boeing Company,1,2 announced the V-22 Osprey tiltrotor will be featured at the Dubai International Air Show in the United Arab Emirates (UAE) from November 13 to 17, 2011. The Air Show, held biennially, is organized in cooperation with the government of Dubai, the Department of Civil Aviation, and Dubai International...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT