This is Business Law. Please answer the LLC & Limited Partnership Situation Exer

Question

This is Business Law.

Please answer the LLC & Limited Partnership Situation Exercise questions in bullet-style (not essay style). Please include the question you are answering and your answers must be in complete sentences. While there is no page length requirement, each question must be answered fully.

7. In a limited partnership how are management decisions made?

8. In a limited partnership what can partners contribute other than money as their capital contribution?

9. Do all partners in a limited partnership have to work in the business to get a share of the profits and losses?

10. Do all members in a limited liability company have to work in the business to get a share of the profits and losses?

11. Who is responsible for paying the taxes for profits in a limited liability company? In a limited partnership?

12. Do you need to register with a state or states if you are a limited partnership? If you are in a limited liability company?

13. What happens to a limited partnership if the only general partner dies?

14. What happens in a limited liability company if one of the members dies?

15. What happens if one of the partners wants to leave the limited partnership or LLC business – can they, and do they need the permission/agreement of the remaining partners?

Explanation / Answer

LLC:- LLC stands for Limited Liability Company, which means an organization where the members of the org cannot be held personal liable for company’s debts or liabilities. It is a business structure that combines the partnership or sole proprietorship with the limited liability of a corporation.

Please find the my findings on below questions:-

7. In a limited partnership how are management decisions made?

There is flexibility in management. Management decisions are usually made by the having a conference & eventually leading to mutual decision agreed by almost all or most of the partners.

8. In a limited partnership what can partners contribute other than money as their capital contribution?

Money can be one of the major contributions in the limited partnership. Others are services can be offered which can help in advancement of LLC. Experience & Knowledge sharing is another key factor.

9. Do all partners in a limited partnership have to work in the business to get a share of the profits and losses?

No, so there are two types of partners, one who maintain active participation in management of business, the way & structure, handling, growth & other factors and the another one who majorly just invests money in the org & play a very little role in management. So basically partners who are active in management will have to work more towards the growth of the org.

10. Do all members in a limited liability company have to work in the business to get a share of the profits and losses?

Yes, all members have to actively work in progression of the business by giving worthy ideas, strategic management ideas, customer centric approach.

11. Who is responsible for paying the taxes for profits in a limited liability company? In a limited partnership?

Taxation process is a pass-through in LLC, which means taxes are not paid at business level, Taxes are paid on individual level. Profit/losses incurred would be reported to personal tax return & not on org level.

12. Do you need to register with a state or states if you are a limited partnership? If you are in a limited liability company?

If you are thinking of widening your business & wants to do to business new states other than wherein the LLC was formed, then yes you would have to make your LLC/business register in that states.

13. What happens to a limited partnership if the only general partner dies?

The LLC/ business might now die in case any partner dies. But the re-distribution of the assets might be done as stated/ agreed while forming the LLC. One should sell of the business, liquidating all the assets & distributing them as accordingly as agreed. The portion of the dead person’s goes to the person who is assigned a legal heir to his assets.

14. What happens in a limited liability company if one of the members dies?

Management might shake-up. Responsibilities need to be reassigned to another accountable member. Decisions need to be made on assets liquidation as well.

15. What happens if one of the partners wants to leave the limited partnership or LLC business – can they, and do they need the permission/agreement of the remaining partners?

This criteria needs more information, as to if the partnership which was started had a documented base or an agreement stating the facts & the terms & conditions regarding the maintenance of partners & partnerships. If there is legal document signed in between all the partners then partnership can be dissolved only if any event happens which is denied in the agreement otherwise the partnership will continues if the remaining partner agrees to do so.

Another scenario wherein there is no legal document, any partner can express the interest to leave the partnership due to any reason & may leave.

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