Birated Products Exports, L.P., is a limited partnership, with $235,000 in decla

Question

Birated Products Exports, L.P., is a limited partnership, with $235,000 in declared but unpaid profits. Birated Products’s creditors include Garner Credit Inc. for $5,000 and Sarah, one of Birated Products’s limited partners, also for $5,000. When Bill, one of Birated Products’s general partners, decides to retire, the other general partners vote to liquidate and dissolve the firm. The limited partners, who are not asked their opinions, want Birated Products to continue in business and file a suit against the general partners to compel this result. Can the court order Birated Products to continue? If not, what is the priority of the distribution of Birated Products’s assets on its dissolution?

Explanation / Answer

In limited partnership, general partner takes part in day to day operation and they have higher voting rights in operation of a partnership but limited partner do not take part in day to day operation but have limited voting rights in operation of the partnership. For liquidation of a partnership, the voting rights of general partner and limited partner are generally equal unless stated in the partnership deed.In this case the general partners have not asked limited partner to give their opinion, so the general partner cannot liquidate the partnership by themselves. The court should order  Birated Products to continue.

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