Limited Partnerships by Shares Overview

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Questions and Answers

In a limited partnership by shares (LPS), how can a shareholder become a director?

By acquiring shares from a general partner, automatically becoming a director.

By being appointed by the extraordinary shareholders' meeting, after approval by all the existing directors. (correct)

By being elected by the shareholders at an extraordinary shareholders' meeting.

By being appointed by the general partners, regardless of their share ownership.

What is the impact of a general partner's consent on the amendment of the limited partnership's instrument of incorporation?

It triggers the automatic dismissal of the general partner, requiring a new appointment by the shareholders' meeting.

It grants general partners a veto power, hindering the decision-making of the shareholders' meeting. (correct)

It is required only for specific amendments, mainly those concerning the appointment of new partners.

It is not required for the amendment, which is solely decided by the shareholders' meeting.

Which of these statements accurately describes the liability of partners in a limited partnership by shares (LPS)?

General partners have unlimited liability, with limited partners' liability exceeding their contributed shares in certain cases.

General partners have unlimited liability, while limited partners' liability is limited to their contributed shares. (correct)

All partners are liable for the LPS's obligations, with limited partners being primarily responsible.

Both general and limited partners are liable for the LPS's obligations, to a degree defined by their shareholding percentage.

A shareholder who purchases shares from a general partner in an LPS:

<p>Does not automatically become a director, and their director position requires separate appointment. (B)</p> Signup and view all the answers

What is the significance of the rule stating that the name of the LPS must include the name of at least one general partner?

<p>It provides a direct link between the LPS's identity and the responsibility of a specific general partner. (A)</p> Signup and view all the answers

Flashcards

Limited Partnership by Shares

A business structure with general and limited partners, where shares represent partners' quotas.

General Partners

Partners who have unlimited liability and are considered directors of the limited partnership by shares.

Limited Partners

Partners who are liable only up to the amount of their investment in shares.

Director Appointment

General partners are directors by law; they do not need a separate appointment.

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Extraordinary Shareholders' Meeting

A special meeting required for significant decisions like appointing directors and amending incorporation documents.

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Study Notes

Limited Partnerships by Shares

Two types of partners:
- General partners: Jointly and unlimitedly liable for corporate obligations; are directors by law.
- Limited partners: Limited liability; their liability is restricted to the amount they have invested.
Partnership structure:
- The link between general partner status, director position, and liability for corporate obligations is inseparable.
- The incorporation document must specify who the general partners are.
- Directors' appointments are not mandatory.
- The partnership name must include at least one general partner's name and explicitly state it's a limited partnership by shares.
- Unlimited liability rules for limited partners from traditional partnerships don't apply here.

General partner's shares do not grant automatic director status.
Obtaining director status requires a separate appointment.
Share transfer of general partners is generally allowed, unless restrictions exist in the bylaws.

Approval of Amendments

Extraordinary shareholders' meetings are needed to alter the partnership's governing documents.
A majority vote by shareholders and consent of all general partners are required.

Shareholders' Meeting

General partners have a veto power over actions taken in shareholders' meetings.
Appointments and removals of directors require approval from all current directors.
Directors are primarily shareholders designated by legal instrument, with indefinite terms.
Directors can be removed without cause, but they are entitled to compensation if removed improperly.

Liability

General partners remain liable for all corporate obligations even if their director status changes or ceases.
A general partner who leaves the firm is not liable for new obligations arising after the termination is recorded.
Newly appointed directors are liable only for obligations from the appointment date onwards.

Limited Partners

Limited partners cannot vote on director appointments or removals of statutory auditors.
This aspect contributes to the independence of oversight organizations.

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Description

This quiz explores the fundamentals of limited partnerships by shares, focusing on the roles of general and limited partners. It discusses their liabilities, share structures, and the requirements for partnership naming. Test your knowledge on partnership regulations and director appointments.