Alternative Unincorp. Organisation

Question 1

What is an LLP?

Answer 1

A limited partnership has at least one GENERAL partner and at least one LIMITED PARTNER

Question 2

What are the formalities to become a limited partner in an LLP?

Answer 2

You must file a limited partnership certificate with the state

This includes the name of the partnership and the names of the general partners

Question 3

What rights and liabilities do General partners have in an LLP?

Answer 3

General partners are still liable for all limited partnership obligations

They also have the right to manage the business

Question 4

What rights and liabilities do Limited partners have in an LLP?

Answer 4

Limited partners aren’t liable for the obligations of the partnership

In most states limited partners may not manage the business without foregoing their status.

However, under the newly revised Uniform Limited Partnership Act, limited partners may manage without giving up the limited partner status.

Question 5

What do you have to do to create a registered LLP?

Answer 5

For a registered limited liability partnership, you must register a statement of qualification and annual reports by filing them with the state

Question 6

Which of the partners is liable for the debts/obligations of the partnership in a Registered LLP

And what is the exception to this rule?

Answer 6

None of the partners are liable.

But you can still sue an individual partner for the torts

Question 7

Broadly speaking what is the position of a limited liability corporation (LLC)?

Answer 7

1. It’s a hybrid between a company and a partnership
2. Members have the same rights and liabilities of shareholders in corporation
3. But treated like a partnership for tax purposes

Question 8

What are the formalities to forming an LLC?

Answer 8

You MUST for the articles of association with the state

And you MAY adopt an operating agreement.

Question 9

Who manages the LLC?

Answer 9

The members may manage the company or they can delegate this to a team of managers, which have the same rights and liabilities as Board members.

Question 10

Can LLC members transfer their interest to another person?

Answer 10

Absent a written agreement, not without a unanimous consent of the other members

Question 11

When might the LLC dissolved?

Answer 11

Upon unanimous consent of the members

Or upon the happening of an event stated in the operating agreement