Changes & Termination

Question 1

How can a partnership be converted into a limited partnership?

Answer 1

Unless partnership agreement specifies otherwise:

(1) Conversion must be approved by all partners; and
(2) Articles of conversion must be filed with state.

Effective Date: upon filing, unless a later date is specified

Question 2

What is the liability of a former general partner?

Answer 2

A general partner who becomes a limited partner as a consequence of a conversion remains liable for any obligation incurred by the partnership before the conversion.

Question 3

How can a limited partnership be converted into a partnership?

Answer 3

Unless limited partnership agreement specifies otherwise:

(1) Conversion must be approved by all limited partners; and
(2) Partnership must cancel its certificate of limited partnership.

Effective Date: upon cancellation of certificate

Question 4

What is the liability of a former limited partner?

Answer 4

A limited partner who becomes a general partner as a consequence of a conversion remains liable only as a limited partner for any obligation incurred by the limited partnership before the conversion. As a general partner, such a partner is liable for any obligation of the partnership incurred after the conversion.

Question 5

What does a plan of merger require?

Answer 5

(i) name of each partnership or LP that is a party,
(ii) name of the surviving entity,
(iii) the type of entity the surviving entity will be, (iv) any terms and conditions of the merger,
(v) the manner of converting interests to surviving entity, and
(vi) the street address of the surviving entity’s executive office

Question 6

How is a merger approved by:
A Partnership?
A Limited Partnership?

Answer 6

Partnership: approval by all partners (unless otherwise specified)

LP: either by (1) vote required by law under which LP is organized or (2) all partners or by whatever number of partners is specified in agreement

Question 7

What is the effect of a merger?

Answer 7

All parties that merge, other than the surviving entity, cease to exist. All property and obligations of the entities that merge become part of the surviving entity.

Question 8

What is a partner of the a surviving entity after merger liable for?

Answer 8

(i) all obligations for which he was personally liable before the merger,
(ii) all of the surviving entity’s obligations that were incurred by a party to the merger before the merger (although those obligations must be satisfied by the entity’s property), and
(iii) all obligations incurred by the surviving entity after the merger takes effect, unless otherwise provided by law.