Eight limited partners filed a lawsuit in the Lucas County Court of Common Pleas, alleging that the general partners in 10 different limited partnerships had engaged in an extensive pattern of self-dealing that had involved converting partnership property for their own personal use. Also named in the lawsuit was the accounting firm of Donald J. Goldstein, CPA, a resident of Florida, and Goldstein, Lewis, and Company, a professional corporation located in Florida. The plaintiffs claimed that the accountant and the accounting firm had known of the general partners’ misconduct and were therefore liable to the plaintiff for that malpractice. The accountant and the accounting firm decided to end the Page 91suit as quickly as possible. Consequently, they filed a motion for dismissal. The motion stated that the courts of Ohio lacked personal jurisdiction over them because they were from Florida. They further stated that they did not solicit business in Ohio, maintained no place of business in Ohio, had no license to act as accountants in Ohio, owned no property in Ohio, provided all services from Florida, and filed no documents with the state of Ohio. Thus, they concluded that they fell outside the power of Ohio’s long-arm statute. Conversely, the plaintiffs argued that the defendants transacted business in the state of Ohio on a continuing and ongoing basis by regularly submitting financial statements to the limited partners in Ohio and by being actively involved in the decisions of the general partnership. Did the activities of the accountant and the accounting firm place them under the jurisdiction of the Ohio court, according to the state “long-arm” statute? Explain. [See: Goldstein v. Christiansen, 638 N.E.2d 541 (OH).]
Partnership Accounting
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings, admission of a new partner, etc.
Partner Admission and Withdrawal
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings of a partner, etc.
Eight limited partners filed a lawsuit in the Lucas County Court of Common Pleas, alleging that the general partners in 10 different limited partnerships had engaged in an extensive pattern of self-dealing that had involved converting
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