ACCA LW · Chapter 7 · Question 9 of 10
In a limited partnership under the Limited Partnerships Act 1907, what happens if a limited partner takes part in managing the partnership business?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) The limited partner becomes liable as a general partner for debts incurred while participating in management
Explanation
A limited partner's liability is restricted to the amount contributed, provided they do not take part in management. If they do, they lose that protection and become liable as a general partner for debts and obligations incurred during that period. Limited partnerships remain distinct from LLPs, and there is no automatic conversion or expulsion.
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