Limited Partnerships Flashcards
If a partner’s rights to distribution are not specified in a limited partnership’s agreement, then a partner
DOES NOT have a right to receive a distribution before withdrawal or dissolution of the partnership. [Upon withdrawal or dissolution, the partner has the right to receive a distribution of the fair value of his interest, as measured on the date of withdrawal.]
To convert a limited partnership into a partnership,
All of the general and limited partners must approve the conversion.
Once approved, the limited partnership must cancel its limited partnership certificate.
The conversion takes effect upon the cancellation of that certificate.
What must a certificate of limited partnership contain?
A certificate of limited partnership must contain the following:
- Name of the limited partnership
- In-state address
- Name and address of in-state agent for service of process
- Name and business address of each general partner
- Statement about the duration of the limited partnership
- Signatures of all general partners
In a limited partnership, a general or limited partner may contribute a promise to pay cash, to provide property, or to perform services.
What happens when a partner is unable to perform an enforceable promise for this kind of future contribution?
Generally, a partner is obligated to the limited partnership with respect to any written, enforceable promise of a future contribution. When a partner is unable to perform the promise due to death or disability, the partner or his estate must pay the cash value of the promise.
A limited partner is generally not personally liable for the obligations of a limited partnership unless the limited partner (3):
(i) also serves as a general partner;
(ii) participates in the control of the business; or
(iii) allows their name to be used in the name of the limited partnership
(liable then to a creditor who extends credit, unless the creditor had actual knowledge that the limited partner was not a general partner)
