Partners

Question 1

Admission of limited partners

Answer 1

May join at CREATION of partnership OR with AGREEMENT of all partners

Question 2

May limited partners vote?

Answer 2

Default rule: NO VOTE

But agreement can permit it

Question 3

Do limited partners have right to access records?

Answer 3

YES

Question 4

Are limited partners personally liable to third parties?

Answer 4

NO, not personally liable UNLESS serves as GENERAL PARTNER or begins to PARTICIPATE IN PARTNERSHIP/RUN BUSINESS

Question 5

What activities do NOT reach threshold of running business?

Answer 5

-being officer/director/shareholder of general partner
-consult general partner on affairs
-act as surety of partnership
-attend meetings of partnership
-wind up partnership
-propose/approve partnership matters

Question 6

Notice for limited partner withdrawal?

Answer 6

Must give 6 MONTHS WRITTEN notice

Question 7

How to become general partner

Answer 7

Join at BEGINNING or with CONSENT of ALL partners

Question 8

Rights and powers of general partners

Answer 8

Same as general partnership without limited partners, or as specified in agreement

Question 9

General Partners’ Liability to third parties

Answer 9

PERSONALLY liable to third parties for obligations of partnership

Question 10

How to protect general partners from personal liability?

Answer 10

CORPORATIONS can serve as general partners

Question 11

When may general partner terminate?

Answer 11

-voluntarily withdraw
-if he tries to assign interest, may be removed
-bankruptcy/insolvency
-death/incapacitation
-business entity partner terminated