Exercise
Answer the following questions.
- 1. Limited partnerships are defined primarily by having:
- A. Multiple general partners and at least one limited partner
- B. Investment in oil and natural gas wells
- C. Income/loss that flows through to the partners
- D. High risk potential and short life
- 2. A DPP general partner:
- A. Manages the business day-to-day
- B. Has the authority to buy property for the DPP
- C. Is personally liable in case of a bankruptcy
- D. All of the above
- 3. Which of the following features is almost always true of a DPP?
- A. Continuity of life
- B. Freely transferable assets
- C. Limited liability for all owners
- D. Centralized management
Answer true or false.
- 4. _____ The DPP general partner’s scope of authority is defined in the certificate of limited partnership.
- 5. _____ The primary defining document of a DPP, the certificate of limited partnership, is filed with the state in which the DPP does business and cannot be amended.
Answers
- 1. C. The defining quality of a DPP is its “flow-through tax consequences.” A DPP may or may not have multiple general partners. There are various types of DPP businesses, more than just oil and natura
