Free SERIES 7 Exam Braindumps (page: 43)

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Which of the following is not in the subscription agreement for a limited partnership offering?

  1. identification of the limited partners
  2. qualification of the limited partners for the subscription
  3. granting of power of attorney to the limited partners
  4. a record of sales of the partnership interests

Answer(s): C

Explanation:

granting of power of attorney to the limited partners. The other three choices are in the subscription agreement. Power of attorney is granted to the general partner, not the limited partners.



Which of the following is available both to owners of stock and owners of limited partnership participations?

  1. deduction of business expenses from income
  2. a share in the profits from earnings
  3. tax credits
  4. deductions for losses in excess of income earned

Answer(s): B

Explanation:

a share in the profits from earnings. Both shareholders and limited partners share in the profits from earnings.



Which of the following activities by a limited partner may subject the partner to unlimited liability?

  1. participating in management of the partnership
  2. committing the partnership in any manner
  3. making loans beyond those specified in the partnership agreement
  4. all of the above

Answer(s): D

Explanation:

all of the above. Each of these actions by a limited partner causes the loss of limited liability.



Partnership democracy is:

  1. a prohibition against control by a single partner
  2. the sharing of management by all partners
  3. permission granted to the general partner to act outside the partnership agreement
  4. a synonym for silent partner

Answer(s): C

Explanation:

permission granted to the general partner to act outside the partnership agreement. The limited partners may approve of the general partner pursuing an act that is contrary to the partnership agreement.






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