Other Partnership Entities Flashcards
What is an LLP?
Limited Liability Partnership
Partnership in which a partner’s personal liability is eliminated. Must file with state.
To transfer a general praetorship into an LLP, must vote authorizing transformation.
The name must always end with either, “registered LLP” or “LLP”
limited partners are not personally liable for LLP obligations but are liable for own personal misconduct or negligence.
State can revoke license or partners can voluntarily cancel.
What is an LP?
Limited Partnership
Must have one general and one limited partner.
Limited partners have limited liability
General partners have no liability.
File a certificate of limited partnership containing
- Name of LP (with LP in name)
- in state address
- Name of agent in that state
- names and addresses of all general partners
- statement of duration
- signed by the general partner
Comes into existence when filed. Substantial compliance is enough.
What is a Limited Partner?
May join partnership at creation or by agreement of all partners.
Default rule: limited partners no right to vote, but can be changed in agreement
Can access books and records.
Not personally liable for obligations of partnership, unless it serves as a general partner or participates in partnership. Can do the following without being incurring liability
- Can be an officer, director, or shareholder or general partner
- consult general partner on partnership affairs
- Act as a surety of partnership
- Wind up partnership
- propose or approve partnership matters.
Must give 6 months notice to withdraw.
What is a general partner?
May join partnership at creation or by agreement of all partners.
Personally liable to third parties for obligations.
Many general partnerships are corporations to limit liability.
A general partner may voluntarily withdraw. If he tries to assign the partnership interest, the general partner may be removed. If goes bankrupt, or dies, or becomes incapacitated, can be removed. If business entity, an it terminates, can be removed as general partner.
