AICPA Exam CPA-Business Topic 2 Question 110 Discussion

Actual exam question for AICPA's CPA-Business exam

Question #: 110
Topic #: 2

Lisa is a limited partner in a limited partnership. Jen, one of the other limited partners, is seeking to sell her interest in the partnership to Karen and allow Karen to become a new limited partner. Which of the following statements is true?

ALisa may engage in the management of the limited partnership without losing her limited liability.

BJen may transfer her interest and make Karen a new limited partner without the approval of the other partners.

CJen may withdraw from the limited partnership without giving notice to the partnership.

DLisa has a right to vote on the transferring of interest to and admission of Karen as a limited partner.

Show Suggested Answer

Suggested Answer: D

Choice 'd' is correct. Limited partners have the right to vote on the transfer of interest and admission of a new partner. Admission of a new partner requires unanimous consent.

Choice 'a' is incorrect. A limited partner who acts as a general partner loses her limited liability status to those she acted as a general partner towards.

Choice 'b' is incorrect. Partners can freely transfer their interests in profits and losses to third parties, but the third party cannot become a limited partner without the unanimous consent of the other partners.

Choice 'c' is incorrect. Limited partners must give 6 months notice of withdrawal in absence of an agreement to the contrary.

by Broderick at Apr 07, 2025, 05:27 PM

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Hubert

29 days ago

D is the way to go. Lisa's got to have a vote on this, otherwise it's not a fair process.

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Helene

1 days ago

D) Lisa has a right to vote on the transferring of interest to and admission of Karen as a limited partner.

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Leonida

15 days ago

B) Jen may transfer her interest and make Karen a new limited partner without the approval of the other partners.

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Reta

17 days ago

A) Lisa may engage in the management of the limited partnership without losing her limited liability.

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Thea

1 months ago

Haha, imagine Lisa trying to manage the partnership and still keep her limited liability. What a joke!

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Joanna

15 days ago

D) Lisa has a right to vote on the transferring of interest to and admission of Karen as a limited partner.

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Gianna

16 days ago

B) No way, that's not how it works. Lisa can't manage and keep her limited liability.

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Mireya

24 days ago

A) Lisa may engage in the management of the limited partnership without losing her limited liability.

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Gerald

2 months ago

I think C is a trick question. Limited partners can't just withdraw without notice.

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Felix

8 days ago

I agree, C is definitely a trick question. Limited partners can't just withdraw without notice.

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Georgeanna

25 days ago

B) Jen may transfer her interest and make Karen a new limited partner without the approval of the other partners.

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Lea

1 months ago

A) Lisa may engage in the management of the limited partnership without losing her limited liability.

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Jettie

2 months ago

B is definitely not true. You can't just transfer your interest without approval.

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Effie

1 months ago

B is definitely not true. You can't just transfer your interest without approval.

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Wenona

1 months ago

D) Lisa has a right to vote on the transferring of interest to and admission of Karen as a limited partner.

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Nakisha

1 months ago

A) Lisa may engage in the management of the limited partnership without losing her limited liability.

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Vi

2 months ago

D seems like the right answer. Lisa should have a say in who becomes a new partner.

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Marta

1 months ago

Yes, it's important for all partners to have a say in such decisions. Lisa's rights should be protected.

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Fausto

1 months ago

I agree, D is the correct answer. Lisa should definitely have a say in the admission of a new partner.

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Goldie

2 months ago

But if Lisa engages in management, wouldn't she lose her limited liability?

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Rosalyn

2 months ago

I disagree, I believe the answer is A.

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Goldie

3 months ago

I think the answer is D.

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