Other Partnership Entities Flashcards
What is a limited liability partnership (LLP)?
An LLP partner is not personally liable for an LLP obligation.
When is a partner liable under an LLP?
He is only personally liable for his own personal misconduct.
How does revocation of the LLP”s status impact an LLP?
Revocation of the state’s qualification of LLP status will have sam effect as cancellation of the status but doesn’t dissolve the P.
By who must a limited partnership be formed by?
What filing is required?
Must be formed by at least one general partner and one limited partner.
A limited P is not formed if a certificate of limited P is not filed.
What is the limit on limited partner’s liability for P debts?
Limited partner’s liability for P debts is limited to her capital contribution to the P.
Who is a limited partner?
What rights does he have?
What power does he have that general partners don’t have?
An investor who contributes capital in exchange for a proportionate share of the LP’s profits.
Has the right to vote as permitted under the PA and the right to inspect business and financial records.
Can lend money and transact business like a non-partner with the LP.
Is a limited parter liable for the LP’s obligations?
Is generally not personally liable for LP obligations unless the limited partner is also a general partner OR participates in the control of the business.
When can a limited partner be admitted into an LP?
Can only be admitted by written consent of all partners after creation.
When can a general partner be admitted into an LP?
Can only be admitted by written consent of all partners after creation.
What rights and powers does a general partner have?
Has the rights and powers of a partner in a P without limited partners.
May contribute to LP, share in its losses and profits, and receive distributions.
Is a general partner liable to third parties for the obligations of an LP?
Yes.
Different for limited partners.
What can cause a termination of status of a general partner in an LP?
Can withdraw from the LP by giving written notice to the other partners.
Other events may cause a general partner’s termination.
How do contributions work in a limited partnership?
Partners can contribute cash, property, or services, AND are obligated to the LLP with respect to any written, enforceable promise of future contribution.
How are profits and losses allocated in an LP?
May be allocated on any basis if in writing, OTHERWISE based on each partner’s P contribution.
How are distributions allocated in an LP?
May be allocated on any basis if in writing; otherwise based on how profits/losses are shared.
