Limited Liability Partnerships and Limited Partnerships

Question 1

What is a limited liability partnership?

Answer 1

A partnership that eliminates a partner’s personal liability for the malpractice of her partners.

Question 2

How do you create an LLP?

Answer 2

By filing a statement of qualifications with the Department of State.

Question 3

What must the name of an LLP have in it?

Answer 3

• Limited Liability Partnership
• Limited
• Company
• Any abbreviation thereof.

Question 4

To what extent is a limited partners’ liability eliminated?

Answer 4

They are not personally liable for malpractice obligations of the LLP.

Question 5

What are limited partners personally liable for?

Answer 5

Their own personal misconduct or negligence AND that of those under their direct supervision.

Question 6

Is a limited partner liable for business debts besides malpractice-related liabilities?

Answer 6

Yes.

Question 7

How do you terminate the LLP status?

Answer 7

By voluntarily transforming and canceling the status OR by state revocation.

Question 8

What is a limited partnership?

Answer 8

A partnership that has at least one general partner and one limited partner.

Question 9

How do you create a limited partnership?

Answer 9

By filing a certificate of limited partnership.

Question 10

What must a certificate of limited partnership include?

Answer 10

1. Name of the partnership
2. In-state address
3. In-state agent’s name
4. Names and addresses of all general partners
5. Statement of duration
6. General partners’ signatures
7. Effective date of limited partnership

Question 11

Can limited partners vote?

Answer 11

Only as provided under the partnership agreement.

Question 12

Do limited partners have the right to access records?

Answer 12

Yes, unlimitedly.

Question 13

Is a limited partner personally liable for the obligations of the partnership?

Answer 13

No, UNLESS the partnership transacts with a third party before the certificate of limited partnership is filed AND the third party actually and reasonably believed that the person was in fact a general partner.

Question 14

How do you become a general partner?

Answer 14

Either by starting out as one or by being admitted with all partners’ consent.

Question 15

What rights and powers do general partners have?

Answer 15

The same as in a general partnership OR as suggested in the partnership agreement.

Question 16

Are general partners personally liable for the obligations of the partnership?

Answer 16

Yes, though you can limit this by making a partner a corporation!

Question 17

How do you terminate your status as a general partner?

Answer 17

1. Voluntarily withdraw
2. By trying to assign your partnership interest, in which case it may be removed
3. By going bankrupt or becoming insolvent
4. By death or incapacity
5. If you are a business entity and you are terminated.