question 2and 3

The general partners accept limited partners losses are limited to their projects BOSSES divided among the partners, and ribe how a partner may leave the partnership as well as any other restrictions that might apply to the agreement. Table 4.3 lists some of the issues and provisions that should be included in articles of partnership ARIZONA TEA: THE CHALLENGES OF PARTNER Pousine tips there business-related advant vantages. One important concentrate ignored, however, is the personas clement. What happens if partners later develop irrec oncilable differences? In the early 1990s, John Ferolito and Don Voltaggio were close friends and had already been business partners for over two decades, distributing beer and malt liquor in New York. Seeking a more lucrative opportunity. and noting Snapple's success in the bottled tea and fruit juice industry, the pair founded Arizona Iced Tea in 1992. Their unique, afford- able 24-ounce cans of tea were a hit, and the company grew to become the market leader in the sector. By 1977. however, the long-time partners for more than six years. The partnership volationships hod folien apart. This was espe challenges faced by the owners of Arizona Coly problematic because, with each partner demonstrate how important it is for partners holding a 50 percent share, both had equal to plan for potential future disagreements in voting power. Ferollo prevented an inevi their articles of partnership table deadlock" by agreeing to withdraw from involvement in day-to-day operations. Discussion Questions However, when he later sought in 2005 to 1. What could the Arizona Iced Tea founders sell his share of the company, he was blocked have done to avoid this drawn-out conflict by a provision of their agreement prevent from occurring? Ing the sale of either partner's share without 2. Why do partners often fall to consider, and both partners' consent. Vultaggio eventually plan for, the possibility of later personal agreed to buy Ferolito's share and take full fallout? control. Yet instead of fixing the problem, 3. What are some ways that the partnership this sparked a drawn-out legal battle over the agreement could be structured to avoid valuation of the company (and how much Vul- major disadvantages that often come with taggio should pay Ferolito), which continued this organizational form? CHAPTER 4 | Options for Organizing Business join together in A limited partnership has at dere geral partor, who assumes unlimited liability med partner whose liability is limited to his or in the busi- ness. Limited partnerships exist for projects where the chance of loss is grea. et accept the risk of loss; the limited partner vited to their that set forth the ben partners. Most states require articles partnership, but even if they are not required, it makes good sense for partners to draw them up. Articles of partners ally list the money or assets that cach partner (called partnership capital), state management role or duty, specif of the partnership will be divi describe how a partner may leav other restrictions that might apr lists some of the issues and prov in articles of partnership SUPPLEMENT vitamin bai ZARA ded ARIZONA TEA: THE CHALLENGES OF PARTNER chap 4 cores artnerships have their share of legal and By 1997, however, the long-time partners' for more than six years. The partnership relationship had fallen apart. This was espe. vantages. One important concern that is often challenges faced by the owners of Arizona cially problematic because, with each partner demonstrate how important it is for partners ignored, however, is the personal element: holding a 50 percent share, both had equal What happens if partners later develop irrec to plan for potential future disagreements in voting power. Ferolito prevented an "inevi their articles of partnership oncilable differences? table deadlock" by agreeing to withdraw In the early 1990s, John Ferolito and Don from involvement in day-to-day operations. Discussion Questions Vultaggio were close friends and had already However, when he later sought in 2005 to 1. What could the Arizona Iced Tea founders been business partners for over two decades, sell his share of the company, he was blocked have done to avoid this drawn-out conflict distributing beer and malt liquor in New by a provision of their agreement prevent from occurring? York. Seeking a more lucrative opportunity, ing the sale of either partner's share without 2. Why do partners often fail to consider, and and noting Snapple's success in the bottled both partners' consent. Voltaggio eventually plan for the possibility of later personal tea and fruit juice industry, the pair founded agreed to buy Ferolito's share and take full fallout? Arizona Iced Tea in 1992. Their unique, afford control. Yet instead of fixing the problem, 3. What are some ways that the partnership able 24-ounce cans of tea were a hit, and the this sparked a drawn-out legal battle over the agreement could be structured to avoid company grew to become the market leader valuation of the company (and how much Vul- major disadvantages that often come with in the sector. taggio should pay Ferolito), which continued this organizational form