12. Sam Muller and Geoffrey Robinson enter into a limited partnership in which Sam is the general partner and Geoffrey is the limited partner. They borrow $50,000 to start a business. Keeping all rules of naming their businesses in mind, they start a law firm named Robinson-Muller Legal Associates. Martin Humphrey joins them after eleven months as a general partner but does not include his surname in the name of the business. If the business fails, which of the following holds well?

A. Only Sam, being the sole general partner is liable to the creditor.

B. Martin has unlimited personal liability for not including his surname in the name of the business.

C. Geoffrey is liable as a general partner as he included his surname in the business with full knowledge.

D. All three partners are equally liable to the creditor, irrespective of including their surname in the title of the business.

13. How are profits and losses shared in the absence of a limited partnership agreement?

A. Profits and losses are shared equally among all partners.

B. Profits and losses are shared equally among general partners and unequally among limited partners.

C. Profits are shared equally among all partners, losses are shared based on the value of each partners capital contribution.

D. Both profits and losses are shared on the basis of the value of each partners capital contribution.

14. Laura is an investor limited partner in a limited partnership. Two years after she becomes a limited partner, Laura thinks that the general partners are not doing a very good job managing the affairs of the limited partnership and participates in the management of the limited partnership. While she is doing so, a bank loans $1 million to the limited partnership, believing that Laura is a general partner. If the limited partnership defaults on the $1 million loan, which of the following holds well?

A. Laura is not personally liable as she is a limited partner on paper.

B. Laura is personally liable as the bank, in good faith, thought she is a general partner.

C. Laura has unlimited personal liability as a limited partner.

D. Lauras liability is restricted to the value of her capital investment in the partnership.