LAW 3102 Lecture Notes - Lecture 14: Piercing The Corporate Veil, Tax Advisor, Professional Negligence In English Law

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29 Mar 2018
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LLC’s, LLP’s & LPS
General Partnerships: Major Issues
Personal Liability: Unlimited personal exposure for business liabilities
Control: Absent an agreement to the contrary, every partner has an equal right to
manage or control the business
Taxation: Pass through taxation. Losses and profits are taken on the partners’
personal tax returns, regardless of whether or not income is actually distributed.
Limited Partnerships V. General partnerships
LPs have at least one limited partner and at least one general partner
LPs must file a form with the state to begin operation
General partner liability v LP liability: Limited partners can only lose up to what they
invested
LP management rights? Only general partners can manage; limited partners
excluded from it
S Corps
Prior to LLC, S corp was best business
Offered limited liability for owners historically had been taxed like pship
Limitations
No more than 100 shareholders
S. Corp. shareholders must be US citizens or resident aliens
S Corp must only have one class of stock
Shareholders have limited liability except in special “veil piercing” circumstances
Structure and management typically like a regular C corp.
Formation like a regular C corp
C Corps
Any corporation that, under U.S. Federal income tax law, is taxed separately from its
owners
Most major companies ( and many small) are treated as C Corps for US Federal
income tax purposes
LLC:
Must file “Articles of Organization” with the Secretary of State
Name must include LLC
Must publish notice of registration in two newspapers once a week for 6
consecutive weeks and file affidavits to that effect
Foreign: LLCs and LLPs that wish to carry on or conduct business in NYS must also
register w/ Dept of State
Ownership broken down into “membership” interests
No restrictions on identity of members
Can have a single member LLC in NY
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