Partnership Liability

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Discussion Participation Scoring Guide.

A client of the CPA firm of Smith and Wesson is a medical practice of seven local doctors. One doctor has been sued for several million dollars as the result of a recent operation. Because of what appears to be this doctor's poor judgment, a patient died. Although that doctor was solely involved with the patient in question, the lawsuit names the entire practice as a defendant. Originally, four of these doctors formed this business as a general partnership. However, five years ago, the partners converted the business to a limited liability partnership based on the laws of the state in which they operate.

Explain what liability the other six partners in this medical practice have in connection with this lawsuit, and what factors will be important in determining the exact liability, if any, of these six doctors.