Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

agency/partnership part 2 > LPs, LLPs, LLLPs, LLC > Flashcards

LPs, LLPs, LLLPs, LLC Flashcards

1
Q

limited partnership defined

A

comprised of one or more general partners and one or more limited partners.
the general partner is personally liable for partnership obligations. (after he joins, that is)

the limited partner is not liable beyond being required to make agreed-upon contribution

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

when is an LP available?

A

when a statute provides

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

how is an LP formed?

A

must file certificate of LP

  • must give name of partnership (must incl. LP)
  • all GPs must sign and must give name and add. of each GP
    -must include an agent for service of process in the state
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

how are distributions made in an LP?

A

in proportion to the value of each partners’ contribution
Contributions can be money, services, real property

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

when is a distribution improper in an LP?

A

when it would make the LP unable to pay debts as they become due or
total assets less than liabilities

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

document to form an LLC

A 
articles of organization
must state
-name (incl. LLC)
-statement that the entity is LLC
-registered office and registered agent's addresses
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

management of LLCs

A

by all members, majority vote

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

LLC members’ liability for obligation

A

they are not personally liable. they can only be liable up to their investment in the LLC.

UNLESS it’s a member’s own wrongful act

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

how to form an LLP

A

statement of qualification. must be signed by 2 partners and have the name and address of the partnership and a statement that it elects to be an LLP

name must include LLP

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

management rights in an LP

A

only the GP has management rights and they all have equal voting rights. decisions made by majority vote if more than 1.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

liability of partners in LLP

A

not personally liable for partnership debts. only partnership assets can be reached

UNLESS it’s a partner’s own wrongful act

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

liability of partners in LLLP

management rights

A

all partners are not liable (similar to LP/LLP)

the lim. partners just may not have mgmt rights

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

if an LP wants to convert to LLLP how many partners need to agree?

A

ALL partners must agree

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

things requiring unanimous consent in an LP

A
  • amend p’ship agreement
  • dispose of all/subs. all assets outside usual course of the business
  • admit a new partner
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Liability of limited partners

A

Only up to the value of their investment. they are not personally liable.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Fiduciary duties in an LP

A

Only the general partners owe fiduciary duties to the partners and the partnership
Limited partners can compete with the business

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Operating agreement

A

agreement detailing how the LLC operates and is governed

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

LLC management

A

Presumed member managed where all members have right to vote in making decisions and most decisions are made by a majority vote, unless it’s an extraordinary event where unanimity is required

Manager managed is another option where certain people are designated managers and then Decisions are made by majority of managers or unanimous vote of managers for extraordinary events

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

LLC member or manager liability

A

Not personally liable for LLC debts and obligations

20
Q

Distributions in LLC

A

Most states say they are made in proportion to the contributions of the members

21
Q

Liability of LLC members

A

Not personally liable for LLC obligations

22
Q

Fiduciary duties in an LLC

A

The members or managers as applicable have:

Duty of care - duty to act with the care a person in a similar position would use under the circumstances. Because of business judgment rule they’re only liable for gross negligence in decisions

Duty of loyalty- duty not to compete with the business, duty not to deal with the LLC as someone with an adverse interest, and duty to account for any benefit received from the LLC business or appropriating an LLC opportunity

23
Q

Right to transfer LLC membership interest

A

Only the right to receive distributions can be transferred
Management rights cannot be and the person cannot become a member without unanimous vote of the members

24
Q

LLC dissolution without court order

A

Happens automatically when there are no members for 90 days
LLC can also be dissolved with consent of all members, or on the happening of an event stated in the operating agreement

25
Q

Taxation of LLC

A

No entity level tax
Income is imputed and taxed to each member (if income is earned but not paid to the members, they are treated as if they had received it and must report on their personal income tax returns)

26
Q

LLC member right to info

A

If member managed can inspect and copy any financial or other company records that are material to the member duties. Must automatically furnish docs to other members that are material to the member’s duties and rights

If manager managed managers have the right to inspect and copy any financial or other company records that are material to the manager duties. Must automatically furnish docs to members that are material to the member’s duties and rights.

In a manager managed LLC the members must make a request for docs regarding LLC activities and finances as is reasonable if it is
1 requested for a purpose related to members interest as a member
2 info sought is described with reasonable particularity
3 info sought directly connected to member’s purpose

27
Q

actions that limited partners have the right to vote on in a LP

A

admitting a new partner
amending the certificate of LP
selling substantially all the assets
converting to a limited liability limited partnership
amending a partnership agreement
compromise a partner’s obligation to make a contribution
compromise a partner’s obligation to return an improper distribution

28
Q

right to transfer LP interest

A

can only transfer the financial component (right to receive distributions)
if the whole partnership interest is transferred it is a ground for expulsion

29
Q

right to distribution in an LP

A

a partner is only entitled to distribution if he made a contribution to the LP

30
Q

contribution obligation in an LP

A

if a partner makes an agreement to make a contribution, the obligation is not excused by death or disability

can only be compromised by consent of all partners

any benefit (money, property, services) to the partnership counts as contribution

31
Q

liability for improper distributions in an LP

A

general partners who consent to it are liable for the difference between what was distributed and what the LP could have properly distributed

32
Q

liability of general partner in an LP

A

jointly and severally liable for all LP obligations, personally liable like a partner in a regular partnership

not liable for LP acts taken before they became a partner

33
Q

rights of all partners in an LP

A

all partners, even GPs who have duty of loyalty:

can transact business with the LP
can loan the LP money
can apply for a decree of dissolution if it’s not reasonably practicable to carry on the business as provided in the LP agreement

34
Q

rights of LP partners to file lawsuits

A

direct lawsuits to protect their own rights

derivative lawsuits to enforce LP rights after giving general partners a demand to file a lawsuit, unless it would be futile

35
Q

rights of LP partners to dissociate

A

GPs can dissociate at any time (unless the partnership is for a term)

LPs cannot dissociate before termination

36
Q

LP dissociation events

A

same as in a partnership

37
Q

LP dissolution

A

happening of event specified in partnership agreement

consent of all GPs and LPs holding majority of the right to receive distributions

consent of remaining partners owning a majority in interest after 1 of several general partners dissociates

90 days after dissociation of the only general partner if a new GP is not admitted

38
Q

partner power to bind an LP after dissolution

A

only GPs can, and generally for acts appropriate to wind up. if the third party did not have notice of dissolution then the GP can bind the LP to a contract with that party

39
Q

LP winding up

A

marshal assets and liquidate them
pay creditors (including loans from limited partners)
pay surplus as a distribution

if the assets are insufficient, the GPs must contribute to the losses

40
Q

can you pierce the veil in an LLC?

A

yes in a way similar to corporations

41
Q

in an LLC who is an agent able to bind the LLC?

A

in member-managed, any member

in manager-managed, only the managers

42
Q

in an LLC who owes fiduciary duties?

A

whoever has the management rights- members or managers

43
Q

LLC dissociation of members

A

same events trigger dissociation as in a partnership, but the LLC members have the right at any time

44
Q

LLC dissolution with court order on application from a member

A

LLC controlling members have acted or will act illegally or fraudulently

Conduct of all / substantially all LLC activities is unlawful

Not reasonably practicable to carry on company’s activities and conform with the operating agreement

Controlling members are acting or have acted oppressively in a way that is directly harmful to the member seeking dissolution

45
Q

LLC creditor claims

A

can give creditors notice with a deadline at least 120 days from the date of notice

can publish notice of dissolution and this will bar claims from unknown creditors made 5 years after the publication

46
Q

indemnity of LLC managers/members

A

in member managed, members have the right to be indemnified for costs and claims incurred in the course of their activities on behalf of LLC

in manager managed, managers entitled to indemnification

agency/partnership part 2 (3 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions