What is the correct order of payment of liabilities of a dissolved limited partnership?

In a dissolved limited partnership, the order of payment of liabilities is critically important for determining how remaining assets are distributed among various parties involved in the partnership. The correct order starts with liabilities owed to general partners, as they typically take on the most risk and have primary responsibility in the operation of the partnership. Following that, any owing to limited partners that pertains to their share of profits is addressed. Lastly, debts related to capital contributions by limited partners are settled.

This prioritization reflects the legal structure of limited partnerships where general partners have unlimited liability and are accountable for the obligations of the partnership, while limited partners have liability limited to their capital contributions, with a priority placed on recovering profits they are entitled to first before focusing on capital input.

The other choices do not align with this structure. For instance, some options incorrectly prioritize payments to limited partners that may not respect the order delineated by partnership law, which clearly distinguishes between categories of debts and the respective liabilities owed to different parties. Thus, adhering to the appropriate order ensures fairness and compliance with established legal standards regarding the dissolution of limited partnerships.