Chapter 43 LPs, LLCs, and LLPs – Flashcards
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general partner
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partnership in which the partners conduct as co- owners a business for profit, and each partner has a right to take part in the management of the business and has unlimited liability; general partners publicly and actively engage in the transaction of firm business.
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limited partner
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partner who neither takes part in the management of the partnership nor appears to the public to be a general partner.
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limited partnership
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partnership that can be formed by "one or more general partners and one or more limited partners."
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Capital Contributions
Firm Name
Management and Control of the Firm
Right to Sue
Dissolution
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Characteristics of LPs
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No Federal tax
Personal income tax
Owners and managers not personally liable for debts
Need formal filling of articles of organization with the secretary of state
Capital contributions
Operating agreement
Distributions
Holds property in its own name
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Characteristics of Limited Liability Companies
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True
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The issue in American National Insurance v. Gilroy Associates was whether the limited partners were personally liable for the general partnership's obligations.
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True
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In a limited partnership, the partners who manage the business are personally liable for firm debts.
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False
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The owners and managers of a limited liability company are personally liable for the debts of the company.
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False
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A limited liability company is a corporate form of business.
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True
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Some LLC statutes provide that courts may disregard the LLC entirely and hold the owners personally liable.
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d. the limited partner consults with and advised a general concerning partnership business.
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A limited partner probably will not lose the protection of limited liability when:
a. the limited partner manages the partnership
b. the limited partner's name is used in the name of the partnership.
c. no certificate of limited partnership is properly filed.
d. the limited partner consults with and advised a general concerning partnership business.
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c. No filing is necessary to form a limited liability company.
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Which is not a correct statement concerning limited liability companies?
a. No federal income tax is due on its income as an entity.
b. Income flows through to the members based on their proportionate interests in the company.
c. No filing is necessary to form a limited liability company.
d. All members (owners) may enjoy limited liability.
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b. Partner contributions are limited to either cash or property.
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Which of the following is not a characteristic of a limited partnership?
a. A limited partner's name cannot appear in the firm name.
b. Partner contributions are limited to either cash or property.
c. A limited partner can bring a derivative suit on behalf of the partnership.
d. General partners are personally liable for firm debts.
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c. The owners of an LLC are called shareholders
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Which of the following is not a characteristic of a limited liability company?
a. An assignment in an LLC is personal property and is assignable.
b. An LLC dissolves upon the death of a member.
c. The owners of an LLC are called shareholders.
d. The LLC holds property in its own name.
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a. limited partnerships
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Which form of business allows for limited liability for only some of the owners?
a. limited partnerships
b. limited liability companies
c. limited liability partnerships
d. general partnerships
