LPs, LLPs, and LLCs Flashcards
LP
Partnership that has at least one general partner and at least one limited partner. A limited partner is liable for the obligations of the partnership up to his capital contribution and general partners are liable as a partner in a general partnership
Formation of Limited Partnership
- File a certificate of formation with secretary of state
- Identify name of partnership
- Provide names and addresses of each general partner
- Maintain records for 3 years
Limited Partner Duties
No Right to Act on behalf of partnership and owe no fiduciary duties to the partenrship
LP Dissolves
- At time specified
- Upon written consent of all GPs and all LPs holding majority interest
- Upon dissociation of GP unless agreement provides otherwise or new GP appointed within 90 days
- After 90 days upon dissociation of last LP
- Upon Judicial Decree
LLP
A form of partnership where thee partners are not personally liable for obligations of the partnerships
LLP Formation
- Statement of qualification with secretary of state
- Identify names and addressed of partners
- Have partnership name ending in LLP
LLP Fiduciary Obligations
Duty of Care
Duty of Loyalty
LLC Definition
A business entity that has the limited liability of a corporation combined with the tax advantages of a partnership
LLC Formation
- File articles of Organization
- Identify name of LLC
LLC Management
Can be either member-managed (equal right of members to control and manage –> default) OR manager-managed where manager selected by members and has management control
Transferability of LLC Interests
Financial Interests ARE transferable –> member still effectively a member
Management interests are NOT transferrable
Liability of LLC Members
Not personally liable beyond own capital contribution unless Court pierces the LLC veil
Dissolution of LLC
Traditional Rule: Dissociatoin of any member
Modern Rule: Only by:
1. Event specified
2. Consent of all members
3. 90 days with no members
4. Judicial/Administrative Decree
LLC Profits and Losses
-RULLCA follows equal share
-CA Default Rule: Based on contribution``
LP Rights and Liability
Limited Partner: no personal liability and no duties owed beyond those specified in general partnership
General Partner: Jointly and Severally liable for all partnership obligations (typical fiduciary duties)
-no violation of duty of loyalty merely from furthering his own interest
LLP Liability
Partners are not personally liable for partnership obligations but remain personally liable for own wrongful acts
LLC Liability
