Regarding JEWEL Company, Ltd., which statement about Edith is incorrect?

In partnership law, the extent of liability for partners concerning partnership debts can vary based on their status as general partners or limited partners. In this case, focusing on Edith's status is essential for understanding the liability implications.

The correct answer states that Edith may not be held liable with her separate property for partnership debts after the exhaustion of partnership assets, which is true if she is a limited partner. Limited partners typically have limited liability, meaning they are not personally liable for the debts and obligations of the partnership beyond their investment in the partnership, protecting their separate property from being used to satisfy those debts once partnership assets are exhausted.

Meanwhile, the other statements reflect standard principles of partnership liability. If Josephine, Ellen, and Wilma are general partners, they can indeed be held liable with their separate property for any debts of the partnership, which makes the first statement correct. The second statement is also correct in that a general partner, such as Edith, can participate in the management of the partnership. Lastly, if Lydia were a limited partner, she would similarly be shielded from liability for partnership debts beyond her investment, making the fourth statement correct.

Ultimately, the statement regarding Edith's potential liability with her separate property is incorrect in the context given, particularly reflecting