Limited Partnerships Flashcards
Limited Partnership
a partnership comprised of one or more general partners and one or more limited partners.
General Partner
a partner who is personally liable for partnership obligations.
Limited Partners
a partner who has no personal liability beyond agreed-upon contributions to the partnership.
Is a limited partnership an entity separate from the partners?
yes
How is a limited partnership created?
by filing a certificate of limited partnership with the secretary of state.
In addition to filing the statement of limited partnership, what else must a limited partnership do in order to be valid?
it must have an office in the state it operates where its files are kept, and have an agent in that state for service of process.
What is the result of a partnership not meeting the statutory requirements for a limited partnership?
there is no limited partnership created and the partners are all personally liable for the obligations of the partnership.
What must a limited partnership’s name include?
it can include the name of any partner, but must have the letters LP or LLLP at the end if it is a limited liability limited partnership.
How can a person be added as a partner to a limited partnership?
by the terms of the partnership agreement, by merger, or by consent of all the partners.
What must a partner do in order to be entitled to a distribution from the partnership?
make a contribution to the partnership.
Must a contribution be in cash?
no, it can be any benefit to the partnership, including money, property, services, and promises to make such contributions.
Does death or incapacity nullify a partner’s requirement to make a contribution?
no, this must still be done unless the rest of the partners agree to nullify it.
What is the result of a partner promising to make a nonmonetary contribution to the partnership, but ends up not making said contribution?
the partners can seek cash in lieu of the nonmonetary contribution.
For what is a general partner liable in a limited partnership?
general partners are jointly and severally liable for all obligations of the limited partnership.
Can a general partner also be a limited partner?
yes, but that means they assume the duties of both general and limited partners.
A person who becomes a general partner of an existing limited partnership is only liable for what?
obligations that begin after he becomes a limited partner.
Are general partners liable for obligations that were incurred when the partnership was a limited liability limited partnership?
no, those obligations belong to the partnership alone.
Are limited partners personally liable for obligations of the limited partnership?
no
What duties do general partners owe to the limited partnership?
fiduciary duties of care and loyalty.
What duties do limited partners owe to the limited partnership?
none
Can a limited partner compete with the partnership they are a limited partner in?
yes, since they have no duty of loyalty
Distributions in a limited partnership are determined by what?
the contribution of each partner
When may a limited partner not take a distribution from a limited partnership?
where, if the distribution were made, the partnership would not be able to pay its debts or where its remaining assets would be less than the outstanding liabilities and obligations.
A partner’s right to a distribution from the limited partnership is considered what kind of property?
personal property
Can a partner’s right to a distribution be transferred to someone else?
yes
Where a partner transfers their right to a distribution to another, does that make the third party a partner, too?
no
Can a partner lend money or transact business with a limited partnership?
yes
If it is not reasonably practicable to carry on the business in conformity with the partnership agreement, what may a partner do?
the partner can apply for a decree of dissolution of the limited partnership.
Can a partner sue a limited partnership to enforce his rights?
yes
General partners have ____________ rights over the management of the limited partnership.
equal
Matters relating to the activities of the limited partnership may be decided by what?
a majority of the general partners.
When is unanimous consent of the general partners and all limited partners required?
where the structure of the partnership is being changed, such as adding a partner, converting the partnership, amending the partnership agreement, etc.
A general partner cannot seek remuneration of services performed for the partnership, but may seek indemnification for . . .
liabilities she incurs in the ordinary course of the activities of the partnership.
When does a limited partner have a right to participate in the management of the partnership?
where the partnership agreement allows it.
Can a limited partner dissociate from the limited partnership before the termination of the partnership?
no
After a dissociation, a limited partner is treated as what?
a transferee of the limited partner’s transferable interest.
A limited partnership is still in existence after dissolution until . . .
it is wound up.
Can a limited partnership merge with another form of business?
yes
