Question

Brian, Kirk, and Jim established a partnership with equal capital contributions. However, Kirk provided an additional contribution in the form of a loan to the company. Which of the following is true?
A) Brian can withdraw capital advances from the partnership
B) Jim and Brian can prevent Kirk from withdrawing advances from the partnership.
C) Kirk and Brian can prevent Jim from withdrawing advances from the partnership.
D) Jim can withdraw capital advances from the partnership.

Answer 1

Answer:

B)

Explanation:

In this specific scenario, the term that is true is that Jim and Brian can legally prevent Kirk from withdrawing advances from the partnership. This is because all three of them entered into a partnership with equal contributions meaning that they all own the same percentage of the company and must all agree on things before they are done. Even though Kirk provided an additional contribution, this was a loan which will be paid back eventually but does not give kirk any extra power in the company and must discuss decisions with Brian and Jim before it can be done.