Introduction and Formation

Question 1

What is the purpose of forming a Limited Liability Partnership?

Answer 1

Partners are NOT personally liable for LLP’s obligations

Question 2

In general, what are the two requirements for formation of an LLP?

Answer 2

1. voting

2. filing

Question 3

What is the rule re: LLP formation and voting?

Answer 3

The terms and conditions on which a partnership becomes an LLP must be approved by whatever vote is necessary to AMEND THE PARTNERSHIP AGREEMENT, or, if specified, the vote necessary to amend the contribution obligations of the partners.

If partnership agreement is SILENT as to how it may be amended, ALL partners must approve the terms and conditions of the partnership becoming and LLP

Question 4

With regards to an LLP, what is the filing requirement?

Answer 4

To become an LLP, a partnership must file a “statement of qualification” with the secretary of state.

The statement must:

1. be executed by at least two partners; AND
2. Contain the following info:
   (i) name and address of partnership;
   (ii) a statement that the partnership elects to become an LLP;
   (iii) a deferred effective date, if any

Question 5

With regards to an LLP, when does a partnership become an LLP?

Answer 5

At the time of the filing of the statement of qualification, or on the date specified in the statements, whichever is later

Question 6

What is the rule regarding the name of an LLP?

Answer 6

must END with the works “Registered Limited Liability Partnership” or “Limited Liability Partnership” (or with the abbreviation)

Question 7

What is the liability of a partner in an LLP?

Answer 7

A partner in an LLP is NOT PERSONALLY LIABLE (directly, indirectly, or by way of contribution) for obligations of the partnerships, whether arising in contract, tort, or otherwise.

HOWEVER –> a partner remains liable for her OWN WRONGFUL ACTS, and if partnership assets are insufficient to indemnify her for an obligation she incurred on behalf of the LLP, she forfeits the right to receive contributions from other partners in exchange for being relieved of the obligation to contribute to their personal liability

Question 8

What is a limited partnership?

Answer 8

A limited partnership is comprised of one or more general partners, and one or more limited partners.

Question 9

In a limited partnership, what is the liability of general and limited partners?

Answer 9

General partner –> personally liable for partnership obligations

Limited partner –> generally doesn’t have any liability beyond the liability to make agreed upon contributions

Question 10

How does a limited partnership differ from a general partnership?

Answer 10

A limited partnership can only be created by filing a certificate of formation with the state.’

HOWEVER –> like a general partnership, a limited partnership is an entity district from its partners and has a perpetual duration unless otherwise provided

Question 11

How is a limited partnership formed?

Answer 11

1. A “certificate of limited partnership” must be filed with the secretary of state
2. Certificate must be signed by all general partners, and set forth:
   (i) the name of the partnership,
   (ii) the names and addresses for service of process and of each GENERAL partner, and
   (iii) whether the limited partnership is a limited liability limited partnership.

Question 12

With regards to a limited partnership, what is records office requirement?

Answer 12

A limited partnership must maintain in its state of organization an office with records of the certificate, any partnership agreements, the partnership’s tax returns for the three most current years.

The partnership agreement or some other record must contain the amount of and description of each partner’s contribution, special rights of partner’s regarding distributions etc

Question 13

With regards to a limited partnership, what is the requirement re: an agent?

Answer 13

A limited partnership must maintain in the state an agent for the service of process

Question 14

What is the rule re: name of the partnership?

Answer 14

The partnership MAY contain the name of ANY partner (general or limited) and MMUST contain the works limited partnership or the abbreviation LP, UNLESS the limited partnership is a limited liability limited partnership, in which that must be reflected in the name (e.g. LLLP)

Question 15

How may additional general or limited partners be added to a limited partnership?

Answer 15

1. as provided in partnership agreement, OR
2. as a result of merger or conversion, or
3. on the consent of all parties

Question 16

In a limited partnership, what is the rule re: partner’s contributions?

Answer 16

A partner has no rights to distributions UNLESS the partner makes a contribution to the partnership.

Question 17

In a limited partnership, what form may a contribution take?

Answer 17

A contribution may be in the form of ANY BENEFIT to the partnership (money, property, services, and promises to make such contributions)

Question 18

In a limited partnership, is a contribution excused by death or other disability?

Answer 18

No. A partner’s contribution may be excused ONLY upon the consent of all partners.

Question 19

In a limited partnership, what is the consequence if a partner fails to make an agreed upon non monetary contribution (ie..fails to provide promised property or services) ?

(stopped at p 14)

Answer 19

The limited partnership has the right to seek cash in lieu of the agreed upon contribution.