Formation of Entity

Question 1

General Partnership

Answer 1

Two or more persons associated to carry on as CO OWNERS, a business for PROFIT

No subjective intent required. NO state filing or other formalities required.

Question 2

Sharing Profits

Answer 2

Sharing profits is number one factor of partnership.

Presumption to be a partner unless profits received in (1) payment of a debt, (2) wages or other compensation, (3) rent, or (4) interest on a loan

Question 3

Factors for Partnerhsip

Answer 3

(1) profits is number one factor. Creates presumption

Following do not raise presumption but are evidence of partnership:

(2) person’s right to participate in the control of the business, even if no control actually existed
(3) designation as partnership
(4) sharing of RETURNS
(5) Title held in joint tenancy or in common

Question 4

Writing for partnership

Answer 4

Not required. May need one if SoF requires it though. (e.g. partnership to last for two years)

Question 5

Partnership by Estoppel

Answer 5

Parties may be held liable as if partners to protect reasonable reliance by third parties

Question 6

Partnership Agreement

Answer 6

None required, but can bypass almost all statutory provisions via agreement.

Can be written, oral, or implied

Question 7

Limited Partnership definition

Answer 7

partnership with at least one general parter and at least one limited partner

Question 8

Required Filing

Answer 8

certificate of limited partnership with secreatry of state

Must include (1) name of LP; (2) name and address of agent for service of process; and (3) name and address of EACH general partnership

NOTE: If fail to meet formality, become general partnership

NOTE: name must include LP L.P. or limited partnership

Question 9

Limited Liability Partnership

Answer 9

General partnership where all partners have limited liability

Question 10

Limited Liability Limited Partnership

Answer 10

General and Limited partners have limited liability

Question 11

LLP Formation

Answer 11

Must file a statement of qualification with the secretary of state. Must at least include (1) name and address of partnership; (2) statement that partnership elects to be LLP; and (3) deferred effective date, if any

NOTE: name must include RLLP, LLP, or spelt out

Question 12

LLC Definition

Answer 12

Hybrid between corporation and a partnership in which MEMBERS have limited liability, as well as partnership tax treatment

Question 13

LLC Formation

Answer 13

Must file ARTICLES/CERTIFICATE OF ORGANIZATION with the secretary of state. Must include (1) name of LLC; (2) address of its registered office; and (3) name and address of registered agreement

Question 14

Operating Agreement

Answer 14

LLC name for the partnership agreement. May displace almost all statutory provisions

Not required