Other Types of Partnerships

Question 1

Limited Liability Partnership (LLP)

Answer 1

• partner’s personal liability is eliminated
• must file with the state
• Authorized in TX
• Name must include LLP (or write out)

Question 2

Liabilities of LLP

Answer 2

• limited partner is not personally liable for obligations of the LLP, whether in tort or K
• partner is personally responsible for his own personal misconduct
• Texas=partner is not liable for negligent supervision (partnership pays)

Question 3

Terminate LLP Status

Answer 3

• partners can voluntary cancel LLP status

- the state can revoke LLP status

Question 4

Limited Partnership (LP)

Answer 4

• a partnership formed by 2 or more persons that has at last one general partner and one limited partner
• limited partners have limited liability (usually the amount of investment)
• general partner typically runs the business and limited are investors
• general partners can be a corp

Question 5

Formation of LP

Answer 5

• file a certificate of formation with the state that contains:
  1) name of LP (including letters LP)
  2) name and address of in-state agent for service of process
  3) name and address of each general partner
  4) address of principal office where the records are to be kept
  5) signed by all general partners

Comes into existence upon filing the certificate

Question 6

LP– Limited Partners

Answer 6

• admitted when partnership is created or by subsequent vote by the partners
• voting is allowed under terms of agreement only
• has right to access records and demand information from the general partners
• not personally liable
• withdrawal allowed only under terms of agreement

Question 7

Limited Partners- Liability to 3P

Answer 7

• not personally liable for the obligations of the partnership unless:
  1) serves as a GP
  2) becomes involved in the management of the business

Question 8

LP- General Partners

Answer 8

• admitted when partnership is created or by subsequent vote by the partners
• same rights and powers as in general partnership
• liable to other partners
• GPs are typically structured like corps to protect from liabiity
• personally liable for LP obligations

Question 9

Limited Liability Companies (LLC)

Answer 9

-neither a corp or a partnership- it’s a hybrid

Question 10

Members of a LLC

Answer 10

• similar to partners in partnership or stockholders
• not personally liable for the obligations of the LLC
• must have at least one member, no upper limit

Question 11

Organizer of a LLC

Answer 11

• starts the LLC-pulls parties together
• Similar to an incorporator in corp context
• person who fills out the paperwork to form an LLC
• can be any natural person or at lest 18 years of age

Question 12

LLC- CoF

Answer 12

• name must include limited company, limited liability company or an abbreviation
• default is unlimited duration (can set more limited)
• purpose=”any lawful purpose” is most common
• address and registered office of agent
• name and address of organizers
• manager name if you have one
• optional provisions

Question 13

Management Structure of LLC

Answer 13

• may or may not have a manager

- if has one, manager’s name must be on the CoF

Question 14

LLC- Company Agreement

Answer 14

• similar to a corp’s bylaws
• default rules that can be changed by the company
• cant change the rule regarding access to books/records

Question 15

S Corp

Answer 15

• small corp that follows pass through taxation (only taxed once)
• limited liability
• has lots of restrictions on number of stockholders, who can be a shareholder, cannot issue different classes of stock

Question 16

Partnership v LLC

Answer 16

• both have pass through taxation

- LLC has limited liab unlike a general partnership

Question 17

Limited Partnership

Answer 17

• a partnership that has one or more general partners and one or more limited partners.
• distinguished from a general partnership in that it is created under specific statutory authority.
• to form a limited partnership, a certificate of formation must be filed with the Secretary of State

Question 18

LLP

Answer 18

• a partnership in which a partner’s personal liability for obligations of the partnership is limited or eliminated
• a statement must be filed with the state.
• In other respects, an LLP is governed by the same rules as a partnership