The 's Case, Shania 's Husband, The Formation Of A Limited Partnership Is Best

895 Words Aug 21st, 2015 4 Pages
The benefit of Shania setting up her business as a limited partnership is that she, being the only general partner and liable for all debt, will be the one who manages the daily operations and executive decisions for the business. Limited partners, since they are only liable for the capital the contribute, they possess no authority in regards to making important decisions for the business and other managerial responsibilities solely designated for general partners. For Marvin’s case, Shania’s husband, the formation of a limited partnership is best. Marvin only wanted to contribute to Shania’s dream, not take a great role in managing her affairs.
General partners manage the business and are subjected to unlimited personal liability as they would be in a general or full partnership. Limited partners have no liability beyond their investment, provided they remain as limited partners. Limited partners may not participate in the management of the business (P. 609). (Rothenberg & Melnikova, 2003)
With this being understood, if Shania has the discipline to not be led astray, she may benefit taking Carlos on as a limited partner. Even though Carlos is known to be a non-believer and his purpose for helping Shania is purely for self-interest, Shania could still benefit, herself, by taking Carlos on as another capital contributor. Since, Shania is the general partner, she holds the power of making key decisions into which direction the business goes. Carlos, on the other hand, is only…

More about The 's Case, Shania 's Husband, The Formation Of A Limited Partnership Is Best

Open Document