Other Partnership Entities

Question 1

When is an LLP created?

Answer 1

The date the statement of qualification is filed w/ the state.

Question 2

What are the liabilities of partners in an LLP?

Answer 2

LIMITED PARTNER - not liable for obligation of an LLP only liable for own personal misconduct.

LLP’s assets may be reached to satisfy an LLP obligation.

Question 3

How is an LLP terminated?

Answer 3

• Cancellation of a statement of qualification turns LLP into regular partnership.

Question 4

May a state turn an LLP into a regular partnership?

Answer 4

Yes, for failure to file an annual report.

Question 5

What law governs Limited Partnerships?

Answer 5

RULPA

Question 6

What is a limited partnership?

Answer 6

• partnership
• at least one general partner and at least one limited partner.
• limited partner’s liability for partnership debts is limited to their capital contribution.

Question 7

How is a limited partnership formed?

Answer 7

• Certificate of limited partnership with in-state address, name and address of its in state agent for service of process, name and address of each general partner, statement of duration

Question 8

When is a limited partnership created?

Answer 8

Upon the filing of the certificate unless the certificate specifies a later date.

Question 9

What happens if a certificate of limited partnership is incomplete?

Answer 9

• it need only substantially comply w/ statutory requirement

Question 10

May limited partners vote as a separate class?

Answer 10

No.

Question 11

When is a limited partner liable to a 3rd Party?

Answer 11

1) for his own actions
2) when serving as a general partner, or,
3) when participating in the control of the business

Question 12

When a limited partner allows its name to be used, to whom may it be personally liable?

Answer 12

To creditor who extends credit unless the creditor has actual knowledge that the limited partner is not a general partner.

Question 13

How may a limited partner withdraw?

Answer 13

Unless the partnership agreement provides otherwise, must provide 6 mos. advance notice to the general partner.

Question 14

What is a general partner’s liability to third parties?

Answer 14

The general partner is generally personally liable to third parties for the obligations of the partnership. The general partner also has obligations to limited partners and partnership as described in the partnership agreement.

General partner is often a limited liability entity.

Question 15

How does a general partner withdraw?

Answer 15

• written notice

- if sole general partner, then limited partners have 90 days to appoint new general partner

Question 16

Who generally winds up a limited partnership?

Answer 16

The general partners who have not wrongfully dissolved the limited partnership.