Question

Metic Limited Partnership ("Metic") is a business structured as a limited partnership. Helot Company Limited ("Helot") is the general partner. Giovanni and Juan are the limited partners. Metic goes bankrupt, owing $100,000 to its creditors. From a legal perspective, who is liable for the $100,000?

Answer 1

Helot Company Limited, as the general partner in Metic Limited Partnership, is fully liable for the $100,000 debt owed to creditors, while the limited partners, Giovanni and Juan, have their liability limited to their investment in the partnership.

Step-by-step explanation:

The question concerns the liability of partners in a limited partnership when the business goes bankrupt. In a limited partnership, there are two types of partners: general and limited. The general partner, in this case Helot Company Limited, is responsible for the day-to-day management of the partnership and is fully liable for the debts of the business. Therefore, Helot would be liable for the $100,000 owed to creditors. On the other hand, the limited partners, Giovanni and Juan, have their liability limited to the extent of their investment in the partnership; they are not personally responsible for debts beyond their contributions to the partnership.