Bussiness Law Amount of Liabilities & Control of Business Questions

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?