Alchorn, Black, and Chan formed a limited partnership with Chan becoming the only limited partner. Capital contributions from these partners were $20,000, $40,000, and $50,000, respectively. Chan, however, helped in the management of the partnership and Ham, who had several contracts with the partnership, thought Chan was a general partner. Ham won several breach of contract actions against the partnership and the partnership does not have sufficient funds to pay these claims. What is the potential liability for Alchorn, Black, and Chan?
- Unlimited liability for all three partners.
- Unlimited liability for Alchorn and Black; $50,000 for Chan.
- Up to each partner’s capital contribution.
- None of the above.