March 11, 2021

Limited Liability Partnerships

Limited Liability Partnerships

Limited Liability Partnerships: The Next Step in the Evolution of the Unincorporated Business Organization
      Robert R. Keatinge, George W. Coleman, Allan G. Donn, and Elizabeth G. Hester, 51(1): 147–207 (Nov. 1995)
Limited liability partnerships have been added to the growing number of unincorporated business organizations available to businesses. An LLP is a general partnership in which the vicarious liability of the partners for the obligations of the partnership has been limited. From this simple definition, a wide variety of statutes have evolved, differing with respect to degree of vicarious liability protection provided, the obligations of partners to contribute to partnership obligations, and the types of business that may use LLPs. Although the LLP was originally used as a vehicle for legal and accounting practices, the flexibility of the partnership structure and the introduction of the limited liability limited partnership may make LLPs and LLLPs an appropriate choice in many business transactions. This Article considers the current legislation allowing for LLPs and LLLPs and discusses several of the business, tax, and intangible issues raised by these new entities.

The Limited Liability Partnership Amendments to the Uniform Partnership Act (1994)
      Carter G. Bishop, 53(1): 101–38 (Nov. 1997)
Since 1991, every state has either adopted or is considering limited liability partnership amendments to state general and limited partnership laws to permit those partnerships to erect special partner liability shields by filing a simple form with a central filing authority. The new laws are generally made as amendments to the state's version of the 1914 Uniform Partnership Act. Although these new partner liability shields alter historical notions regarding the joint and several liability of general partners for general partnership obligations, the state laws are far from uniform. State variation is significant concerning important matters such as the scope and duration of the liability shields, the required and permissive contents of the filing form, respect for partnerships formed in other jurisdictions, applicability to limited partnerships, and the required vote to erect and terminate the special liability shield. To address these important matters of variation, NCCUSL adopted Limited Liability Partnership Amendments (ULLPA) to RUPA in 1995. A number of states have adopted RUPA, and a few have already adopted the ULLPA. The Article explores the major and important features of the ULLPA.

Prototype Partnership Agreement for a Limited Liability Partnership formed under the Uniform Partnership Act (1997)
     The Working Group on the Prototype Limited Liability Partnership Agreement formed under the Uniform Partnership Act (1997), committee on Partnerships and Unincorporated Business Organizations, Section of Business Law American Bar Association , 58(2): 689 (Feb. 2003)

Changed Circumstances: Eliminating the Williamson Presumption that General Partnership Interests Are Not Securities
By J. William Callison, 58(4): 1373-84 (Aug. 2003)
The last decade has witnessed vast changes in unincorporated business organization law with the advent of limited liability partnerships, limited liability limited partnerships, and limited liability companies and the adoption of new statutes, including the Revised Uniform Partnership Act, in numerous states. This Article analyzes the effect of these developments on the Williamson presumption that general partnership interests are not securities and concludes that the presumption has outlived its usefulness and should be abandoned in favor of a facts-and-circumstances approach.

Delaware Alternative Entities and the Implied Contractual Covenant of Good Faith and Fair Dealing Under Delaware Law
      Paul M. Altman and Srinivas M. Raju, 60(4): 1469—1486 (August 2005)
The Delaware Alternative Entity Statutes (i.e., the Delaware Revised Uniform Limited Partnership Act and the Delaware Limited Liability Company Act) are based upon a policy of favoring freedom of contract. Consistent with this policy, the statutes have always permitted wide latitude to the parties to an alternative entity agreement to modify the fiduciary duties of persons controlling alternative entities. In 2002, the Delaware Supreme Court in Gotham Partners L.P. v. Hallwood Realty Partners, L.P. , 817 A.2d 160 (Del. 2002), noted that the Delaware Revised Uniform Limited Partnership Act does not state that fiduciary duties can be completely eliminated. The Gotham decision created uncertainty regarding the extent to which fiduciary duties could be modified. Recent amendments to the Alternative Entity Statutes clarified that the default fiduciary duties may be expanded, restricted or eliminated by provisions in a limited partnership agreement or limited liability company agreement, provided, however, that the implied contractual covenant of good faith and fair dealing may not be eliminated. Given that the implied contractual covenant of good faith and fair dealing is now a "floor" below which a partner's or member's duties cannot be contractually eliminated, the scope of the implied covenant is of great significance to the drafters of alternative entity agreements. This article discusses the parameters of implied contractual covenant of good faith and fair dealing and its anticipated application and impact in the alternative entity arena.

Model Limited Liability Company Membership Interest Redemption Agreement
      By the Subcommittee on Limited Liability Companies of the committee on Partnerships and Unincorporated Business Organizations, ABA Section of Business Law, 61(3):1197—1234 (May 2006)

Model Real Estate Development Operating Agreement with Commentary
      Joint Task Force of committee on LLCs, Partnerships and Unincorporated Entities and committee on Taxation, ABA Section of Business Law, 63(2): 385–510 (February 2008)

New Developments in Master Limited Partnership Governance
     John Goodgame,68(1): 81 - 102 (November 2012)
In February 2005, The Business Lawyer published an article describing the state of master limited partnership ("MLP") governance, which at that time had become relatively standardized. However, since that time, a number of MLPs have been formed or have restructured in ways significantly different from the previously standard MLP governance model. This article describes the changes that have occurred in the MLP marketplace and discusses these "new" MLP governance models.

Judicial Dissolution: Are the Courts of the State that Brought You In the Only Courts that Can Take You Out?
     Peter B. Ladig and Kyle Evans Gay; 70(4): 1059-1082 (Fall 2015)
In early 2014, the then-managing members of the limited liability company (“LLC”) that owned The Philadelphia Inquirer, the Philadelphia Daily News, and filed nearly simultaneous petitions for judicial dissolution of the LLC in the Court of Common Pleas in Philadelphia and the Delaware Court of Chancery. The dual petitions created the anomaly that everyone agreed on dissolution, but no one could agree where it should take place. Both courts were asked to address a unique question: could a Pennsylvania court judicially dissolve a Delaware LLC? According to existing precedent, the answer was not so clear. This article proposes that the answer should be clear: a court cannot judicially dissolve an entity formed under the laws of another jurisdiction because dissolution is different than other judicial remedies. This approach gives full faith and credit to the legislative acts of the state of formation, but also permits the forum state to protect its own citizens by granting the remedies it feels necessary, short of dissolution.

The Post Dodd-Frank Act Evolution of the Private Fund Industry: Comparative Evidence from 2012 and 2015
     Wulf A. Kaal, 71(4): 1151-1206 (Fall 2016)
This comparative survey study examines the private fund industry’s reactions and adjustments to a rapidly evolving regulatory framework, three years after the first application of mandatory registration and disclosure rules for private fund advisers under the Dodd-Frank Act. Using two datasets (2012: N = 94; 2015: N = 69) for a population of 1267 registered investment advisers to add an historical time series perspective, the author analyzes and compares survey respondents’ short- and long-term estimations of industry effects. The data suggest that immediate and short-term concerns have given way to adaptation to the changes.

Third-Party Closing Opinions: Limited Partnerships
     TriBar Opinion Committee, 73(4) 1107-1132 (Fall 2018)

LLC Default Rules Are Hazardous to Member Liquidity
     Donald J. Weidner, 76(1): 151-182 (Winter 2020-2021)
Simply by forming LLCs, entrepreneurs now unwittingly lock themselves in to perpetual entities that offer them no liquidity and present them with costly procedural obstacles to enforcing both their agreement among themselves and their statutory rights. Even in atwill LLCs that are member-managed, recent LLC acts deny members both a right to dissolve and a right to be bought out. While thus locking members in, these acts deny them standing to bring many if not most of their claims among themselves or against the firm.