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 natural gas, including real estate and equipment leasing