Limited Liability Partnership & Limited Liability Company

Question 1

Limited liability partnership requirements

Answer 1

Requires a statement of qualification (registration) filed with the Secretary of State containing the name and address of partnership, and statement of election as LLP

Question 2

LLP liability

Answer 2

Partners are not personally liable for the obligations of the partnership but remain personally liable for their own wrongful acts

Question 3

LLP Rights and Obligations

Answer 3

1. Participate in management and control of the partnership absent agreement providing otherwise
2. Share in profits and losses
3. Receive distributions
4. Inspect books and records

Question 4

What happens when partnership assets are insufficient to indemnify a partner for an LLP obligation?

Answer 4

Each partner forfeits a right to receive contributions in exchange for being relieved of the obligation to contribute to the personal liability of other partners.

Question 5

Limited liability company features

Answer 5

Taxed like a partnership but members enjoy limited liability like shareholders in a corporation

Question 6

Management of an LLC

Answer 6

All members participate in management expect as otherwise agreed to in operating agreement

Each member has authority to bind the company to contracts

Question 7

Member managed llc duties

Answer 7

Care & loyalty to each other and the LLC; discharge their duties consistently with contractual obligation of good faith and fair dealing

Question 8

Manager managed llc duties

Answer 8

Only managers have duty of care and loyalty; only members may authorize or ratify an act by a manager that would otherwise violate duty of loyalty