Definition
Combines many of the beneficial attributes of pships & corps.
It insulates the pship from personal liability from the debts & obligations of the pship arising from the following in the course of business committed by another partner:
- Errors
- Omissions
- Negligence
- Incompetence
- Malfeasance
Formation
Convert from existing partnership; must file with SOS and renew annually.
Registration must include:
- Name of pship;
- Address of principal office;
- # of partners
- Brief statement about business engaged in
- Pay a fee
Name
Must include the words “Registered Limited Liability Partnership” or “L.L.P.”
Decision Making & Voting
Unanimity to amend, admit, terminate, withdraw w/o just cause if for term.
Majority for management ordinary course
Contribution/Participation
Must contribute; need not be money;
All participate equally in profit, losses, asset distribution (alter one alter all).
Immovables
Need writing to own.
Each partner owns in indivision until written agreement.;
Retroactive ownership Ok, but cannot affect 3P rights in the interim.
Limitation of Liability
Partners not liable for errors, omissions, negligence; malpractice; etc., of other partners;
BUT
Remain liable for their own virile share for all other obligations (e.g. K) and/or own negligence.
Fiduciary Status
Each partner owes fiduciary duties to pship & partners.
No prejudicial activity;
Can be a creditor
Representation & Mandate
All partners are mandataries in ordinary course;
- Exception:
- Alienation, lease or encumbrance of immovables.
Cessation
A partner ceases to be a member of the partnership upon:
- Death
- Interdiction
- Bankruptcy
- Seizure of his interest
- Expulsion from the pship
- Withdrawal
Withdrawal
For a term = a partner may withdraw w/out consent of his partners:
- prior to the exp of term
- w/ just cause
- arising out of the failure of another partner
- to perform an obligation.
W/out term = a partner may withdraw from the pship w/the consent of his partners at any time, provided he
- gives reasonable notice
- in GF
- at a time that is not unfavorable to the pship
Expulsion
A partnership may expel a partner for just cause
Unless otherwise provided in the PA, a majority of the partners must agree on the expulsion
Termination
A pship terminates by:
- Unanimous consent
- Judgment of termination
- Reduction of membership to one
- Expiration of its term
- Attaining or impossibility of attaining the object of the pship
- According to the pship agreement
Dissolution
The creditors of the pship must be paid in preference to the creditors of the partners. The creditors of a pship shall be paid in the following order of priority:
- Secured creditors in accordance with their security rights
- Unsecured creditors who are not partners
- Unsecured creditors who are partners
If any assets remain after the payment of all secured and unsecured creditors, the capital contributions shall be restored to the partners
Finally, any surplus shall be divided among the partners proportionally based on their respective interests in the partnership.
