What act should NOT be performed by unauthorized general partners without consent from all limited partners?

Prepare for your Partnership and Corporation Exam with engaging flashcards and multiple-choice questions. Each question comes with hints and detailed explanations. Boost your confidence and ace the exam!

In the context of partnerships, limited partners have restricted roles and limited liability, while general partners are responsible for managing the business and making decisions. A core principle is that general partners cannot unilaterally perform acts that significantly affect the interests of limited partners without consent.

The choice indicating that unauthorized general partners having all rights and powers in a partnership without the input of limited partners is incorrect because it misrepresents the limited partners' rights. Limited partners exist to provide capital without being involved in the day-to-day operations. By granting all rights and powers to general partners without the consent of limited partners, it undermines the essential understanding of their limited role and protection.

Acts like confessing a judgment, actions that make it impossible to conduct business, and acting against the partnership's certificate all require careful consideration and typically need consent to ensure all parties are aligned and protected. This is what distinguishes the relationship dynamics in a limited partnership and emphasizes that certain actions must be agreed upon collectively to maintain a balance of interests between general and limited partners.

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