Limited liability Companies

Question 1

What is a limited liability company “LLC”?

Answer 1

• where the operating of a LLC is silent, it will be governed by the default rules in the NY statute
• owners are called members

Question 2

How is the management & ownership pf an LLC handled?

Answer 2

• members entitled to equal participation in management unless the operating agreement desgnates itself as managed by managers
  
  • MANAGER MANAGED
    
    • Members are treated as limited partners & have no say in management
  • MEMBER MANAGED

Question 3

What are the liabilities of the mebers of an LLC?

Answer 3

• there is no vicarious liablity

EXAMPLE:

Z is a member of XYZ, LLC. If Z commits a tort to C, then C can sue Z and XYZ, but could not sue X or Y because they had no personal misconduct to justify this suit.

Question 4

How is an lLC formed?

Answer 4

• with only one member
• can be formed for any lawful purpose: profit or non-profit
• filing of Articles of Organization with the SOS
  
  • include name & location of the organization
  • agent for service of process

Question 5

Recap: 1. When does a partner have a right to a formal accounting as to partnership affairs?

Question 6

Recap: 2. When a person is admitted as a new partner into an existing partnership, describe the new partner’s liability with regards to partnership obligations incurred before he/she joined and the new partner’s liability for partnership obligations incurred after he/she joined:

Question 7

Recap: 3. What is the dissolution of the partnership?

Question 8

4. What factors lead to the dissolution of a partnership?

Question 9

5. When a partnership winds up, the partnership liabilities shall be paid in what order?