Other Types of Partnerships Flashcards
Define:
limited liability partnership (LLP)
A partnership in which a partner’s personal liability is eliminated
Do LLPs need to be filed with the state?
Yes
How do you transform a general partnership into an LLP?
Vote to authorize the transformation
What must an LLP’s name end with?
- Registered Limited Liability Partnership (RLLP)
- Limited Liability Partnership (LLP)
Are limited partners personally liable for the LLP’s obligations?
No
What are limited partners personally responsible for?
Their own personal misconduct or negligence
How can LLP status be terminated?
- Partners voluntarily cancel LLP status
- The state revokes LLP status
What is a limited partnership (LP)?
A partnership formed by two or more persons that has at least one general partner and one limited partner
What liability do partners in a limited partnership have?
- Limited partners have limited liability
- General partners have personal liability
How is a limited partnership formed?
By filing a certificate of limited partnership
What must a certificate of limited partnership contain?
- Name of the LP (including “LP”)
- In-state address
- Name of an agent in that state
- Names and addresses of all general partners
- Statement of duration
- Signature of general partner
When does a limited partnership come into existence?
When filed or at the effective date (if included)
What is sufficient for a limited partnership to be effective?
Substantial compliance
How may a limited partner join a limited partnership?
- At the creation of the partnership
- With the agreement of all partners
In a limited partnership, what is the default rule for limited partners and voting?
A limited partner does not vote
In a limited partnership, when is a limited partner allowed to vote?
Only when the partnership agreement allows for it
In a limited partnership, when is a limited partner personally liable for the obligations of the partnership?
When they serve as a general partner or start to participate in the partnership
In a limited partnership, what can a limited partner do without running the business?
- Be an officer, director, or shareholder of the general partner
- Consult the general partner on partnership affairs
- Act as a surety of the partnership
- Request to attend meetings of the partnership
- Wind up the partnership
- Propose or approve of partnership matters
How much notice must a limited partner give before withdrawing from a limited partnership?
6 months
Does notice of a limited partner’s withdrawal from a limited partnership have to be in writing?
Yes
How may a general partner join a limited partnership?
- At the creation of the partnership
- With the agreement of all partners
What are the rights and powers of a general partner in a limited partnership?
Same as in a general partnership
In a limited partnership, is the general partner personally liable to third parties for partnership obligations?
Yes
In a limited partnership, how can a general partner lose their status?
- Voluntarily withdraw
- Removal after trying to assign their partnership interest
- Removal after bankruptcy or insolvency
- Death or incapacitation
- Termination of a business-entity partner
