UNINCORPORATED BUSINESSES
1) Limited Partnerships
A limited partnership requires the following. Firstly, there must be at least one general partner and
at least one limited partner. Secondly, a certificate of limited partnership must include the name and
address of the limited partnership (and its representative agents if any), its acknowledgment as an
LP, and signed by all of the general partners (not limited partners). Thirdly, the partnership must
include ‘LP’ or ‘limited partnership’ at the end of its name. Lastly, the certificate must be filed with
the secretary of state, which is when the limited partnership comes into effect.
In a limited partnership, only the general partners or limited partners with dual capacity as general
partners are liable for the partnership’s obligations, whereas the limited partners are only liable for
their own wrongful torts.
General partners owe the same duties to the partnership as partners do in a general partnership, such
as the duty of care and loyalty.
General partners may dissociate from the partnership at any time, but not limited partners.
2) Limited Liability Partnerships (RUPA)
Under the Revised Uniform Partnership Act (RUPA), a limited liability partnership requires the
following. Firstly, a statement of qualification must include the name and address of the limited
partnership and signed by at least two partners. Secondly, it must include ‘LLP’ or ‘RLLP’ at the
end of its name. Lastly, the statement must be filed with the secretary of state, which is when the
limited liability partnership comes into effect.
In a limited liability partnership, there are only partners, not general nor limited partners. The
advantage is that none of the partners are liable for the partnership’s obligations. However, they
may receive indemnification from the partnership if required to pay damages to any third parties
injured by the partnership. If indemnification is not sufficient, they can request relief from any
partners who are personally liable to the third parties, but not contributions because partners are not
liable for the partnership’s actions.
Partners owe duties of care and loyalty to the partnership.
Partners may dissociate from the partnership in the same manner as general partnerships.
3) Limited Liability Company (ULLCA)
Under the Uniform Limited Liability Company Act (ULLCA), a limited liability company requires
the following. Firstly, there must be at least one member or manager, depending on how the
company will be run. Members are designated by their contributions towards the LLC, whether in
the form of cash or property, for their ownership in the LLC. Whereas managers are appointed by
the members. Secondly, a certificate of organization must include the name and address of the
company. Third, the name of the company must end with ‘limited liability company’ or ‘LLC’.
Lastly, the certificate must be filed with the secretary of state, which is when the company comes
into effect.
1) Limited Partnerships
A limited partnership requires the following. Firstly, there must be at least one general partner and
at least one limited partner. Secondly, a certificate of limited partnership must include the name and
address of the limited partnership (and its representative agents if any), its acknowledgment as an
LP, and signed by all of the general partners (not limited partners). Thirdly, the partnership must
include ‘LP’ or ‘limited partnership’ at the end of its name. Lastly, the certificate must be filed with
the secretary of state, which is when the limited partnership comes into effect.
In a limited partnership, only the general partners or limited partners with dual capacity as general
partners are liable for the partnership’s obligations, whereas the limited partners are only liable for
their own wrongful torts.
General partners owe the same duties to the partnership as partners do in a general partnership, such
as the duty of care and loyalty.
General partners may dissociate from the partnership at any time, but not limited partners.
2) Limited Liability Partnerships (RUPA)
Under the Revised Uniform Partnership Act (RUPA), a limited liability partnership requires the
following. Firstly, a statement of qualification must include the name and address of the limited
partnership and signed by at least two partners. Secondly, it must include ‘LLP’ or ‘RLLP’ at the
end of its name. Lastly, the statement must be filed with the secretary of state, which is when the
limited liability partnership comes into effect.
In a limited liability partnership, there are only partners, not general nor limited partners. The
advantage is that none of the partners are liable for the partnership’s obligations. However, they
may receive indemnification from the partnership if required to pay damages to any third parties
injured by the partnership. If indemnification is not sufficient, they can request relief from any
partners who are personally liable to the third parties, but not contributions because partners are not
liable for the partnership’s actions.
Partners owe duties of care and loyalty to the partnership.
Partners may dissociate from the partnership in the same manner as general partnerships.
3) Limited Liability Company (ULLCA)
Under the Uniform Limited Liability Company Act (ULLCA), a limited liability company requires
the following. Firstly, there must be at least one member or manager, depending on how the
company will be run. Members are designated by their contributions towards the LLC, whether in
the form of cash or property, for their ownership in the LLC. Whereas managers are appointed by
the members. Secondly, a certificate of organization must include the name and address of the
company. Third, the name of the company must end with ‘limited liability company’ or ‘LLC’.
Lastly, the certificate must be filed with the secretary of state, which is when the company comes
into effect.
