Answered: Which of the following is likely to be…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter15: Partnership Accounting

Section: Chapter Questions

Problem 7MC: Which one of the following would not be considered in the development of a partnership agreement? A....

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Related questions

Question

Which of the following is likely to be included in the restrictive covenants in the limited partnership agreement?

Group of answer choices

a. Max % to be invested in any one portfolio firm.

b. Taking debt

c. Co-investment by GPs

d. Raising another fund

e. all the above.

Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, and drawings of a partner.

Expert Solution

Restrictive covenants in a limited partnership agreement:

Restrictive covenants in a limited partnership agreement are clauses that limit the actions of the general partner (GP) or limited partners (LPs) to protect the interests of the fund and its investors.