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BLP > 1. LLP, LP and Partnership > Flashcards

1. LLP, LP and Partnership Flashcards

1
Q

Pros of LLP

A

LL, separate entity, tax transparent, financing easier, no AoA

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2
Q

What two kinds of business media make their own contracts

A

Companies and LLPs

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3
Q

Minimum number of partners for an LLP

A

2 or more formally appointed, and 2 must be designated Ms at all times

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4
Q

Example of event which causes automatic dissolution of TP

A

Bankruptcy of one P

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5
Q

Cons of ST

A

Unlimited personal liability + difficult financing

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6
Q

Main legislation for LP

A

Limited Partnerships Act 2007

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7
Q

Main legislation for partnership

A

Partnership Act 1890

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8
Q

Cons of TP

A

Outdated legislation, financing difficult, at least 2 to set up, unlimited liability, N/A salary under PA, and leaving = dissolution w/o PA

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9
Q

Minimum number of persons for ST

A

1

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10
Q

Example of archaic fall-back provisions of Partnership Act 1890

A

Equal profit sharing + no entitlement to remuneration

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11
Q

What rules are there under 2001 Regs for decision-making under LLP

A

Ordinary decisions by majority, and changes to nature by unanimity

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12
Q

What type of business media is split into LPs and GPs

A

LP

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13
Q

What business media can issue shares to the public

A

PubC

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14
Q

How do TPs hold property

A

Shared between the partners

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15
Q

What kind of security can LLPs grant

A

fixed + floating charges

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16
Q

What form is used for LLP to register at CH

A

Form LL IN01

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17
Q

What Act applies in modified form to LLPs (from companies)

A

Insolvency Act

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18
Q

Which kind of partnership has continuing reg requirements

A

LLP - to file changes at CH, accounts and keep in-house records

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19
Q

What three business media demand at least 2 members

A

Partnership, LP and LLP

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20
Q

What two kinds of business media have to print company stationery

A

Companies and LLPs

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21
Q

Why is a Partnership Agreement used for TP

A

To avoid archaic fall-back provisions of PA

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22
Q

What partners cannot participate in management of LP

A

LPs

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23
Q

What happens if P enters into C w/o authority of TP, but TP wants the benefit?

A

Can ratify and adopt

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24
Q

How does a company enter into contracts

A

On its own behalf

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25
Q

What three business media need not file annual accounts/confirmation statements

A

LP, partnership and ST

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26
Q

Three ways to finance a company

A

Issue shares, borrow and shareholder investment.

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27
Q

Minimum number of partners in a LP

A

2 - 1 must be GP, and 1 LP

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28
Q

ST needs to register with CH?

A

No

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29
Q

What specific kind of company has continuing obligations

A

Listed

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30
Q

What happens if a limited partner in LP participates in management

A

loses limited liability status

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31
Q

Liability of partners in a partnership

A

Individually liable; jointly liable in contract; J&S liable in tort

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32
Q

What happens if LP does not register at CH

A

Loses limited status

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33
Q

What is it preferable to draw up in a partnership, which then raises the 0 expenses for start up

A

Partnership Deed

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34
Q

What two kinds of business media have a separate legal personality

A

LLPs and companies

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35
Q

Cons of company

A

Not private, expensive, corporation/double tax, likely to ask for personal guarantee

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36
Q

What is prima facie evidence of existence of partnership

A

Profit sharing

37
Q

Is intention relevant for TP

A

No

38
Q

What happens if PA for LP does not provide for dissolution

A

Ordinary law of TP applies

39
Q

Definition of TP

A

Minimum 2 people carrying on common business w/ view to profit

40
Q

What two business media need not be registered at CH

A

ST and partnership

41
Q

Definition for LLP

A

Minimum 2 people carrying on commercial activity w/ view to making profit

42
Q

Cons of LLP

A

Not private, continuing reg, minimum 2 and likely to ask for personal guarantee

43
Q

What must LPs do regarding information held at CH

A

Update info

44
Q

Example of provision in Partnership Act that is archaic

A

Equal distribution of profits, regardless of investment

45
Q

Which partner in LP manages LP day-to-day

A

General partner

46
Q

When might TP still be bound if TP does not ratify and adopt P’s unauthorised action

A

If P = A under Partnership Act, or if CL rules on agency apply

47
Q

What happens if LPs in an LP participatee in management

A

They lose their limited liability status

48
Q

What business media has no formalities required to start up (2)

A

ST and partnership

49
Q

Minimum number of partners in a partnership

A

2

50
Q

Start up expenses/steps for a LP

A

Register at CH + PD

51
Q

Minimum number of shareholders for a company

A

1 per 7(1) CA

52
Q

Main legislation for LLP

A

Limited Liability Partnerships Act, supplemented by various other Regs + Acts

53
Q

Two kinds of Ps in a limited partnership

A

Limited partner and general partner

54
Q

What section of CA limits shareholder liability to amount unpaid on shares

A

S.3(2) CA ‘06

55
Q

what kind of business media is frequently accidentally set up (as no formalities required)

A

partnership

56
Q

What business media has a continuing registration regime

A

LLP

57
Q

4 steps to set up LLP

A

Incorporation docs, register at CH, Members Agreement + print stationery

58
Q

Three steps before a company can be set up (generally)

A

Incorporation documents (MoA; AoA), register at CH, and print company stationery

59
Q

Is there any specific legislation applicable to sole traders

A

No

60
Q

For what three business media is financing difficult, and why

A

Partnership, LP and ST, as not separate legal entities

61
Q

What is the main legislation for companies

A

CA ‘06

62
Q

What two business media have to deliver confirmation statements and file changes at CH

A

LLP and company

63
Q

What is the effect of one P leaving under TP w/o PA

A

Dissolution of TP

64
Q

Liability of company

A

Shareholders limited to amount unpaid on their shares

65
Q

Pros of ST

A

Privacy, control, low set-up + ongoing costs, and quck

66
Q

What rules are there under 2001 Regs for M rights under LLP

A

Equal profit + capital share, LLP indemnifies M, and all participate in management

67
Q

Pros of company

A

Can issue shares, likely to have security, limited liability, cheap if MA + shelf, flexibility in structure

68
Q

Pros of TP

A

Few formalities, privacy, tax transparent, no ongoing disclosure

69
Q

Liability of partners in an LLP

A

Limited to their contribution, and not jointly and severally liable (although they are individually liable for their own negligence)

70
Q

What does the continuing reg regime of LLP mean

A

Must file changes + confirmation statement at CH, and keep in-house records.

71
Q

What duties do partners owe in a partnership

A

Fiduciary duties, similar to those owed by Ts to Bs

72
Q

What do companies have to continue to do once set up

A

Deliver confirmation statements, annual accounts, and file changes at CH

73
Q

Three ways TP can be dissolved

A

By court, automatically on certain events or at will by notice from any P

74
Q

Liability of ST

A

Personally liable + unlimited

75
Q

How are TPs dissolved as a last resort

A

By the court

76
Q

Liability of partners in a LP

A

LPs limited to contribution, but GPs unlimited

77
Q

When is P an A under s.5 PA 1890?

A

If act is kind carried on by firm and carried on in the usual way and 3rd not aware P unauthorised.

78
Q

What two kinds of business media shelter their shareholders/partners/members from liability

A

LLPs and companies

79
Q

What business media are tax transparent

A

Partnerships and LLPs

80
Q

What is a major draw back of the Partnership Act

A

It is very old, so a lot of the provisions make no sense

81
Q

What business media can borrow in their own capacity

A

LLP and company

82
Q

Why would a Members Agreement be entered into in an LLP

A

To avoid the default provisions in Regs 7 and 8 2001 Regs

83
Q

Example of a law firm that is a partnership

A

Slaughter & May

84
Q

What is an ST

A

Individual carries on business by themselves

85
Q

Two business media that must declare PSCs to CH

A

LLP and company

86
Q

Which partner in an LP cannot bind LP

A

A limited partner

87
Q

What does LLP NOT have to file at CH - confirmation statement or AA?

A

AA

88
Q

What business media can issue shares in general

A

Company

BLP (18 decks)

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