Question

Kraft is a limited partner of Johnson Enterprises, a limited partnership. As provided in the limited partnership agreement, Kraft decided to leave the partnership and demanded that her capital contribution of $20,000 be returned. At this time, the partnership assets were $150,000 and liabilities to all creditors totaled $140,000. The partnership returned to Kraft her capital contribution of $20,000.What liability, if any, does Kraft have to the creditors of Johnson Enterprises?

Answer 1

Answer:

Kraft is left without any liability to the creditors of Johnson Enterprises.

Explanation:

There are three statements or conditions given that free Kraft from any responsibility with the creditors of Johnson Enterprises. These are:

(1) Kraft is a limited partner of Johnson Enterprises. This means that it also has limits of responsibilities.

(2) As provided in the limited partnership agreement, Kraft decided to leave the company. There was an agreement that allowed Kraft to make the decision to leave society.

(3) The company returned to Kraft its capital contribution of $ 20,000. In proceeding to return the capital contribution, Kraft was released from any responsibility with the creditors that were left to Johnson Enterprises.

Kraft's responsibility to Johnson Enterprise creditors is based on the operating agreement of the limited liability company (LLC) that determines how partners allocate profits and losses. If the LLC's operating agreement does not establish such a provision, gains and losses are generally allocated based on the value of member contributions.

In conclusion, Kraft is left without any liability to the creditors of the previous company to which it belonged.

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