Limited Liability Partnerships and Limited Partnerships

Question 1

Limited Liability Partnerships (LLPs)

Answer 1

Partnerships in which a partner’s personal liability for obligations of the partnership is eliminated. Partners are still liable for their own personal wrongdoing

Question 2

T or F: You must file the appropriate paper work with the SOS to become a LLP

Answer 2

True

Question 3

Vote needed to transform a general partnership into an LLP

Answer 3

The same vote you would need to make an amendment to the partnership agreement. If the agreement is silent, the default requires a unanimous decision

Question 4

What must an LLP name end with?

Answer 4

1. Registered Limited Liability Partnership
2. Limited Liability Partnership
3. LLP
4. RLLP

Question 5

Purpose of having LLP designation at the end of partnership name

Answer 5

They serve as a warning to creditors that the partners of the LLP have limited personal liability

Question 6

Terminating LLP status

Answer 6

1. Partners can voluntarily cancel their LLP status (do not have to dissolve to do so)
2. The state can revoke LLP status for failure to follow formalities

Question 7

Limited Partnership (LP)

Answer 7

A partnership formed by two or more persons that has at least one general partner and at least one limited partner

Question 8

Limited Partner

Answer 8

Liability is limited to the amount they contributed to the partnership

Question 9

What must the mandatory certificate of limited partnership contain?

Answer 9

1. Name of the LP
2. In-state address
3. Name of agent
4. All names and addresses of general partners
5. Statement of duration
6. Executed by general partner
7. Effective date

*Substantial compliance is sufficient

Question 10

How do you become a LP?

Answer 10

By signing on at the beginning or by the consent of all the partners, unless the PA states otherwise

Question 11

Voting rights of LP

Answer 11

Only to the extent allowed under the PA

Question 12

A LP is not personally liable for the obligations of the partnership UNLESS the limited partner:

Answer 12

1. Chooses to serve as the general partner
2. Participates in the control of the partnership

Question 13

Things LPs are allowed to do without running the business:

Answer 13

1. Be an officer, director, or shareholder of general partner
2. Consult and advise the general partner on the partnership affairs
3. Act as a surety of the partnership
4. Request to or attend meetings of the partnership
5. Wind up the partnership
6. Propose or approve of partnership matters

Question 14

How much time must a LP give to withdraw

Answer 14

6 months’ notice

Question 15

How to become a general partner?

Answer 15

By signing on at the beginning or by the consent of all the partners, unless the partnership agreement states otherwise

Question 16

T or F: General partners have the same rights, powers, and liabilities as a partner in a general partnership

Answer 16

True

Question 17

Terminating status of general partners:

Answer 17

1. Voluntarily withdraw
2. GP gives away his partnership interest
3. Act according to the partnership agreement
4. The general partner is an entity who goes bankrupt or becomes insolvent
5. The GP is a natural person who dies or becomes inompetent