PARTNERSHIP Creditor must first go afterthe partnership assets and then they can go after the partners assets.
PARTNERSHIP Can the creditor goafter just one partner for the debt?
PARTNERSHIP The debts arejoint and several. This means that the creditor can go after one person.
PARTNERSHIP A change in the partnersterminates the partnership.
PARTNERSHIP Termination is a two-step process:dissolution and winding up.
PARTNERSHIP A dissolutionis when a partner ceases to be associated with the venture.
PARTNERSHIP A winding up involves thecollecting of the assets and distribution of the assets.
LIMITED PARTNERSHIP A limited partnerships consist of one or more general partners and one or more limited partners.
LIMITED PARTNERSHIP This form of business is generally used to raise revenue since the liability of the limited partners is limited to the persons’ investment as long as they have no say in the operation of the business.
LIMITED PARTNERSHIP Must file a Certificate of Limited Partnership with the state which certificate must state that the business is a limited partnership.
LIMITED PARTNERSHIP The business must be run by the general partners without the active participation of the limited partners.
LIMITED PARTNERSHIP The liability of the limited partner is restricted to the investment but the general partners have unlimited liability.
LIMITED PARTNERSHIP A limited partnership is dissolved the same way as a general partnership. However, the death of a limited partner does not dissolve the business.
LIMITED LIABILTY PARTNERSHIP Business uses the initials “LLP”
LIMITED LIABILTY PARTNERSHIP This is a hybrid between a partnership and corporation. It is used by professionals like lawyers and doctors to avoid personal liability.
LIMITED LIABILTY PARTNERSHIP It must be registered with the state as an LLP and the business must file a certificate of annual registration each year.
LIMITED LIABILTY PARTNERSHIP The partners are not personally liable for the malpractice claims against the other partners.
CORPORATIONIt is a separate entity created by state charter.
CORPORATION• Owners get stock in the corporation• Owners liability is usually limited to the value of the stock.
CORPORATION A corporation is aseparate entity so itsstatus does not changewith the death or sale of stock by a shareholder.
Think of Macy’s Department Store. Astockholder may die but the business goes on.
CORPORATION• Shareholders elect the board of directors• Directors set policy and appoint officers• Officers run business ona daily basis
CORPORATION• Owners liability is usually limited to capital contribution• Owner can be liable if he or she guarantees corporate debt• Pierce corporate veil• Owners always liable for payroll taxes of coproation
Can the officers of a corporation ever bepersonally liable for the actions of the business?
CORPORATION Officers may be liable for the criminal actsof the corporation.