Series A Limited Partner means Limited Partner that is the holder of Series A Preferred Units, including any Substituted Series A Limited Partner, in its capacity as such. Sample 1 Sample 2 Sample 3 Based on 11 documents Remove Advertising
What does a limited partnership require?
What Does A Limited Partnership Require? Although a limited partnership offers liability protection, it’s no different from an overall partnership. In your firm, at least one partner must be general partner with unlimited liability, and your liability must be capped in some part at the amount of the investment made by the partner.
Is a limited partnership the same as a LLC?
The difference between a limited partnership and an LLC is the type of organization and liability protection. While LLCs are managed by members, LPs are divided into general partners and limited partners. In terms of liability, assets of LP partners could be at risk upon creditor disputes, whereas LLC members’ assets are secured.
Does a partnership have limited or unlimited liability?
The general partners of a limited partnership (LP) are responsible for unlimited liabilities—at least one partner is. Other partners, on the other hand, have limited liability, meaning their assets will not normally be able to satisfy business debt. do partnerships have limited or unlimited liability? do limited partners have any liability?
Which is true of a limited partnership?
Limited partnerships provide a significant advantage in that their debts can be limited in personal liability. There is no cap on how much a limited partner can be held personally responsible for. Unlike individuals, limited partners do not incur greater losses than they have committed.
What is the difference between a LLC and a series LLC?
What Is a Series LLC? A Series LLC gives you all the same benefits as a regular LLC, but it serves as a sort of "umbrella company" with additional flexibility and protections for multiple companies or lines of business within your overall operation.
What is the purpose of series LLC?
A series LLC is a unique form of limited liability company ("LLC") in which the articles of formation specifically allow for unlimited segregation of membership interests, assets, and operations into independent series.
What is an example of a series LLC?
This uniformity of ownership of each protected series causes the profits and losses of each protected series to flow to members directly and not through the mothership LLC. To use a simple example, ABC Capital LLC can be a single-member Delaware Series LLC with Abel Adams as a member.
Is a series LLC a separate legal entity?
The instructions to Form 313 states: "A series limited liability company that is treated as a single legal entity under the laws of its jurisdiction of organization is treated as a single legal entity for purposes of registration.
Are series LLCs worth it?
Benefits of Series LLC's Reduced startup cost. Only one filing fee is required, and an attorney can set up the parent and cells at less cost than setting up multiple LLCs. There are still some additional documents that must be filed for the individual LLCs in the series. Protection of Assets.
Does each series LLC need its own EIN?
Organizations Other Than the IRS May Require Separate EINs It's not just the IRS that may require you to have different EINs for each business under your Series LLC. You will be required to have a separate business bank account for each business and banks typically require an EIN to open a business account.
How is a series LLC taxed?
A series organization is not treated as the owner for federal tax purposes of a series or of the assets associated with a series merely because the series organization holds legal title to the assets associated with the series.
Which states do not recognize series LLC?
As of this writing, the only state that doesn't allow the formation of an in-state Series LLC is California. California has specific and strict regulations governing business in general, and there is currently no such thing as a California Series LLC.
How do you name a series LLC?
The name of the series must begin or end with the name of the parent LLC, including any word or abbreviation required by the applicable LLC name statute; and. The name of the series must contain the phrase “Protected Series” or “protected series” or the abbreviation “P.S.” or “PS.”
Does the IRS recognize series LLC?
Since a series LLC is a pass-through entity and isn't a federally recognized business designation, it is treated as a traditional LLC. Currently, the IRS taxes a series LLC as a single entity that files one tax return.
How is a series LLC structured?
A Series LLC consists of the “parent” or “umbrella” LLC with one or more series that are established under the parent. Each series has characteristics that are separate from the Series LLC itself and every other series. Each series can have its own assets, members, managers, purpose, and investment objectives.
Is a series LLC the same as a holding company?
A holding company doesn't actively operate businesses—it simply exists and owns. As a series LLC, the holding company would own all of the individual series beneath its umbrella. Real estate investors with multiple properties sometimes form series LLCs to isolate liability.
How is a series LLC taxed?
A series organization is not treated as the owner for federal tax purposes of a series or of the assets associated with a series merely because the series organization holds legal title to the assets associated with the series.
How is a series LLC structured?
A Series LLC consists of the “parent” or “umbrella” LLC with one or more series that are established under the parent. Each series has characteristics that are separate from the Series LLC itself and every other series. Each series can have its own assets, members, managers, purpose, and investment objectives.
Is a series LLC the same as a holding company?
A holding company doesn't actively operate businesses—it simply exists and owns. As a series LLC, the holding company would own all of the individual series beneath its umbrella. Real estate investors with multiple properties sometimes form series LLCs to isolate liability.
What states have a series LLC?
The series LLC is different from a traditional Limited Liability Company (LLC). In fact, the series LLC is not not available in all states and has only been adopted in Delaware, Nevada, Illinois, Iowa, Oklahoma, Tennessee, Texas and Utah.
Examples of Series A Limited Partner in a sentence
Each Series A Limited Partner or other Holder of Series A Preferred Units covenants and agrees with the General Partner that all Partnership Units delivered for redemption shall be delivered to the Partnership free and clear of all liens and, notwithstanding anything herein contained to the contrary, the Partnership shall not be under any obligation to acquire Partnership Units which are or may be subject to any liens..
More Definitions of Series A Limited Partner
Series A Limited Partner. BELAIR CAPITAL FUND LLC By: Eaton Vance Management, as its Manager By: /s/ Thomas Otis -------------------------------- Name: Thomas Otis Title: Vice President SERIES C LIMITED PARTNERS: BELCREST REALTY CORPORATION By: /s/ Thomas E. Faust, Jr. -------------------------------- Name: Thomas E. Faust, Jr.
Related to Series A Limited Partner
Class B Limited Partner means any Person executing (by power of attorney or otherwise) this Agreement as of the date hereof as a Class B Limited Partner or hereafter admitted to the Partnership as a Class B Limited Partner as herein provided, but shall not include any Person who has ceased to be a Class B Limited Partner in the Partnership.
What Is a Limited Partnership (LP)?
A limited partnership (LP)—not to be confused with a limited liability partnership (LLP)—is a partnership made up of two or more partners. The general partner oversees and runs the business while limited partners do not partake in managing the business. However, the general partner of a limited partnership has unlimited liability for the debt, and any limited partners have limited liability up to the amount of their investment.
How to form a limited partnership?
To form a limited partnership, partners must register the venture in the applicable state, typically through the office of the local Secretary of State. It is important to obtain all relevant business permits and licenses, which vary based on locality, state, or industry. The U.S. Small Business Administration (SBA) lists all local, state, and federal permits and licenses necessary to start a business. 3
What are the advantages and disadvantages of a limited partnership?
Advantages and Disadvantages of a Limited Partnership (LP) 1 Personal liability protection for limited partners 2 Pass-through entity for taxation (i.e. only taxed once unlike C-corp) 3 Ease of creation and reporting (e.g. no required annual meetings) 4 Less formal structure 5 No self-employment taxes for limited partners
What is an LP?
An LP is defined as having limited partners and a general partner, which has unlimited liability. LPs are pass-through entities that offer little to no reporting requirements. There are three types of partnerships: limited partnership, general partnership, and limited liability partnership.
Why is an LLC structured as an LLC?
Often, the general partner of an LP will be structured as an LLC to help provide personal liability protection, as LLC managers are typically not held personally responsible for the businesses’ liabilities.
What are the different types of partnerships?
Generally, a partnership is a business where two or more individuals have ownership. There are three forms of partnerships: limited partnership, general partnership, and limited liability partnership. The three forms differ in various aspects, but also share similar features. In all forms of partnerships, each partner must ...
What is the purpose of a partnership agreement?
All partnerships should have an agreement that specifies how to make business decisions. These decisions include how to split profits or losses, resolve conflicts, and alter ownership structure, and how to close the business, if necessary.
How would a series LLC be used?
How would a series LLC be used? Let's take a privately held company that’s a large volume manufacturer. It has its own retail stores to sell its goods and has its own fleet of trucks to provide transportation from the warehouses it owns to stores. If all operations were in a single entity, any liability arising from a trucking accident would expose all the company’s assets to potential liability.
What is series LLC?
A series LLC is essential ly a group of separate LLCs contained within one master LLC entity. The Delaware Code describes it as follows: "A limited liability company agreement may establish or provide for the establishment of 1 or more designated series of members, managers, limited liability company interests or assets.
Why is the series LLC so slow?
Since 1996, only 7 other states have adopted statutes permitting the formation of a series LLC. The reason for its slow acceptance is for much the same as it was for the regular LLC: the entity type is new and tax regulations and case law decisions interpreting the series LLC statutes have lagged behind the enabling legislation. This uncertainty has discouraged widespread acceptance of the new entity type. Once the IRS adopted specific regulations for the tax treatment for an LLC, its popularity skyrocketed and is now a popular entity type in all 50 states.
What is a Delaware series LLC?
A Delaware series LLC has "the power and capacity to, in its own name, contract, hold title to assets (including real, personal and intangible property), grant liens and security interests, and sue and be sued." (Title 6 §18-215 (c))
What is the governing document for a series LLC?
The main governing document is always the written operating agreement describing the master LLC and the characteristics of each series, but this is not filed with any government agency and is not a public record.
How to confirm ownership of real property by series?
To confirm ownership of real property by a specific series, must a deed specify the series by name or is it sufficient for title to be in the name of the master LLC only and have the books and records of the LLC specify the series that owns the property?
What is the purpose of a series?
Each series may have its own completely diverse business purpose or investment objective. One series could own one or more real estate assets while another may operate a retail business while a third series may have a portfolio of passive investments such as stocks and bonds. The only prohibited business purposes are typically for banking or insurance company operations. Additional series may be added from time to time to accomplish different objectives, each with its own set of members or classes of members and assets.
What is a Series LLC?
An LLC ( limited liability company) is a form of business ownership recognized by all U.S. states . An LLC is not a corporation, but it does provide the same liability protection as a corporation since it is separate from its owners (called "members" ). An LLC with several members may be taxed as a partnership, with the profits passing through to the partners/members according to their share of the business. LLC's are popular because they are simpler to form than a corporation while providing comparable liability protection. 1
Why do real estate investors use series LLC?
Real estate investors with multiple properties use a series LLC to keep the liability for each one separate from the others. 3
What is UPSA in law?
The Uniform Protected Series Act (UPSA) was created by the Uniform Law commission in 2017 to give more protection to series LLCs in states that adopt this new measure . Prior to this law, series LLCs had a "vertical" liability shield, protecting the umbrella LLC from liability for the actions of one of the series companies. The new law includes a "horizontal" liability shield, protecting each protected series from the debts of any other protected series of the company.
What is SLLC in business?
A few states require a similar form called a Certificate of Organization. The series LLC (SLLC) includes a master or umbrella LLC and other LLCs which are separated from each other for liability purposes (called "cells.". Each cell LLC has assets separate from the others, while the master LLC controls all the LLCs in the series.
How to form a series LLC in Illinois?
To form a series LLC in Illinois, you must use a different form for the Articles of Organization, and the filing fee is more than for a single LLC. After the original Articles of Organization are filed, each individual LLC is formed using a Certificate of Designation for each LLC within the series. 3
How many state registrations are required for an LLC?
Only one state registration. Only the parent LLC must be registered with the state, which means fewer legal costs and registration fees. It also means only one annual or biennial fee is needed for the series. This assumes that all LLCs in the series are registered in the same state.
How to register a series LLC?
To register a series LLC in your state, go to the website of the state business division (usually part of the secretary of state or secretary of commonwealth website) and look for LLC registration. The Series LLC option should be listed if it is allowed in the state.
What is a Series LLC?
A series LLC is a unique form of limited liability company ("LLC") in which the articles of formation specifically allow for unlimited segregation of membership interests, assets, and operations into independent series. Each series operates like a separate entity with a unique name, bank account, and separate books and records. A series LLC may have different members and managers in each series. The rights and obligations of these members and managers differ from series to series. Each series may enter into contracts, sue or be sued, and hold title to real and personal property.
How to form a series LLC?
The series LLC is formed in much the same way as a regular LLC. You will need to file articles of formation with the appropriate governmental entity in a state where series LLCs are permitted. To be distinguished from a regular LLC, most states require that the articles of formation specifically state that the LLC is authorized to form series. Next, you will need an operating agreement for the master LLC and one for each series you plan to form. A series LLC can create additional series whenever one is needed.
How to maintain liability protection of each series?
This includes having a separate bank account, maintaining separate books and records, signing contracts using the name of the series, documenting all transactions, and keeping adequate amounts of capital on hand for business purposes.
Which states allow series LLCs?
Several states have followed suit including Illinois, Iowa, Nevada, Oklahoma, Tennessee, Texas, Utah and Puerto Rico.
Is a series LLC a separate entity?
There are some unresolved tax issues regarding series LLCs, primarily regarding whether each series is a separate entity for tax purposes. The California Franchise Tax Board has taken the position that each series in a series LLC is a separate entity and therefore must file its own tax return and pay its own LLC annual tax and fee if it is registered to do business in California.
What is the new series in the LLC Act?
However, the upcoming amendments to the LLC Act and LP Act will provide for a new type of series, known as a “registered series” under Section 18-218 of the LLC Act and 17-221 of the LP Act, as applicable. The “old” type of series will now be known as a “protected series.”. The perfection of a security interest in the assets ...
What is a registered series in Delaware?
The Delaware LLC Act and LP Act have for a number of years each permitted limited liability companies and limited partnerships to have multiple “series” and to segregate assets and liabilities to particular series. However, the upcoming amendments to the LLC Act and LP Act will provide for a new type of series, known as a “registered series” under Section 18-218 of the LLC Act and 17-221 of the LP Act, as applicable. The “old” type of series will now be known as a “protected series.”
When was the LLC Act amended?
Divisions of Limited Partnerships. As noted in our memo issued last summer, the LLC Act was amended, effective as of August 1, 2018, to permit “divisions” to be effectuated by a Delaware limited liability company.1 The LP Act is now being amended in a similar fashion to permit Delaware limited partnerships to effectuate such divisions as well.
When will the LP Act become effective?
On August 1, 2019, important amendments to the Delaware Limited Liability Company Act (the “LLC Act”) and the Delaware Revised Uniform Limited Partnership Act (the “LP Act”) will become effective. These amendments will provide for, among other things, the ability for (1) a Delaware limited partnership to effectuate a division, ...
Can a limited partnership be a division in Delaware?
As we recommended in our earlier memo related to divisions of limited liability companies, lenders should consider prohibiting divisions of limited partnerships unless consented to by such lender. We recommend that this prohibition extend to even those limited liability companies and limited partnerships that are not currently organized in Delaware, since it is possible for a restructuring or other type of reorganization to result in the entity becoming a Delaware limited liability company or limited partnership. In addition, there are a number of other states that allow for a similar division concept, and it is possible that additional states adopt legislation providing for similar provisions. We also recommended that this prohibition apply to all entities since, as we have seen, new legislation can make divisions available to other entities.
Can a Delaware registered series be converted to a protected series?
The Delaware Secretary of State will also be able to provide certificates of good standing for registered series (which is not the case for protected series). A protected series is permitted to convert into a registered series (and vice versa). Additionally, one or more registered series of a single limited liability company or limited partnership ...
What is series LLC?
The concept of the series LLC was first introduced to help the mutual fund industry avoid filing multiple SEC filings for different classes of funds. Instead the idea was to use one entity for all funds so that the SEC filing would be under one umbrella, but still permit the individual funds' activities to be conducted separately. The concept is similar to that of the segregated portfolio company or protected cell company, concepts which existed prior to the invention of the series LLC. Segregated portfolio companies exist in countries such as Guernsey, the British Virgin Islands, Bermuda, the Cayman Islands, Mauritius, and Belize.
How many income taxes can a series LLC file?
Although each cell of a Series LLC can own distinct assets, incur separate liabilities, and have different managers and members, a Series LLC may be able to pay a single set of annual state fees and may be able to file one income tax return each year .
How to put creditors on notice in a series?
Have each series file a fictitious business name statement in each county where it owns property. Each series should have its own name and the filing should emphasize the ownership of that series, for example, "Abracadabra LLC, Blackacre Series only". This is to put creditors on notice.
What should be signed in the name of the series?
All contracts, deeds, notes, etc. should be signed in the name of the series. Again, use something like "Abracadabra LLC, Blackacre Series only".
How many series should be co-owners?
Keep the assets and operations of each series separate from the other series. Each asset should be owned solely by one series. In other words, two or more series should not be co-owners of the same property.
When did Wisconsin pass series LLC?
Wisconsin passed a stripped-down version of the series LLC legislation in 2001. As of April 2005, Iowa and Oklahoma already had passed similar acts. Later in 2005, Illinois and Nevada followed. Tennessee and Utah passed legislation effective in 2006. Texas enacted non-entity series LLC legislation in 2009.
Is Delaware a series LLC?
The Delaware Division of Corporations will not provide a separate certificate of good standing for each series, but it will provide a certificate of good standing saying that the entire company is a series LLC (and not just a traditional LLC).
Why is a series organization not considered the owner of a series?
A series organization is not treated as the owner of a series or of the assets associated with a series merely because the series organization holds legal title to the assets associated with the series. . . .
What would make it difficult to determine whether the series or the series organization should be considered the employer with respect to the services?
The series structure would make it difficult to determine whether the series or the series organization should be considered the employer with respect to the services provided.
What is the proposed regulation?
The Proposed Regulations state a beneficial rule in that they will allow the same income tax classification that would apply if separate juridical LLCs were established. The Proposed Regulations apply to series created by "series organizations" pursuant to "series statutes.".
What is LLC in Delaware?
The Delaware LLC Act states: A limited liability company agreement may establish or provide for the establishment of 1 or more designated series of members, managers, limited liability company interests or assets.
What is the obligor of series?
Similarly, for Federal tax purposes, the obligor for the liability of a series is determined under general tax principles. In general, the same legal principles that apply to determine who owns interests in other types of entities apply to determine the ownership of interests in series and series organizations.
Where is Allen Sparkman?
Allen Sparkman practices at Sparkman + Foote LLP in Houston and Denver.
When did Allen Sparkman start the series?
Allen Sparkman. The series concept arose in Delaware when that state in 1988 adopted its Business Trust Act (changed to Statutory Trust Act in 2001). 12 Del. Code §3801 (g). This statute provided a framework for trusts utilized for asset securitization and the organization of investment companies.
What is a registered series LLC in Delaware?
The Delaware LLC Act and LP Act have for a number of years each permitted limited liability companies and limited partnerships to have multiple “series” and to segregate assets and liabilities to particular series. However, the upcoming amendments to the LLC Act and LP Act will provide for a new type of series, known as a “registered series” under Section 18-218 of the LLC Act and 17-221 of the LP Act, as applicable. The “old” type of series will now be known as a “protected series.”
Why are registered series created?
Registered series are being created largely as a way to facilitate secured lending to these types of entities. Importantly, registered series are designed to qualify as “registered organizations” under the Uniform Commercial Code.
What is the LP Act?
On August 1, 2019, important amendments to the Delaware Limited Liability Company Act (the “LLC Act”) and the Delaware Revised Uniform Limited Partnership Act (the “LP Act”) will become effective. These amendments will provide for, among other things, the ability for (1) a Delaware limited partnership to effectuate a division, just as a Delaware limited liability company may now do, and (2) a Delaware series limited liability company or limited partnership to create a new type of series, known as a “registered series.”
Can a limited partnership be a division in Delaware?
As we recommended in our earlier memo related to divisions of limited liability companies, lenders should consider prohibiting divisions of limited partnerships unless consented to by such lender. We recommend that this prohibition extend to even those limited liability companies and limited partnerships that are not currently organized in Delaware, since it is possible for a restructuring or other type of reorganization to result in the entity becoming a Delaware limited liability company or limited partnership. In addition, there are a number of other states that allow for a similar division concept, and it is possible that additional states adopt legislation providing for similar provisions. We also recommended that this prohibition apply to all entities since, as we have seen, new legislation can make divisions available to other entities.
What Is A Limited Partnership (LP)?
Understanding Limited Partnerships
- A limited partnership is required to have both general partners and limited partners. General partners have unlimited liability and have full management control of the business. Limited partners have little to no involvement in management, but also have liability that's limited to their investment amount in the LP.
Types of Partnerships
- Generally, a partnershipis a business where two or more individuals have ownership. There are three forms of partnerships: limited partnership, general partnership, and limited liability partnership. The three forms differ in various aspects, but also share similar features. In all forms of partnerships, each partner must contribute resources such as property, money, skills, or labor …
Special Considerations
- Almost all U.S. states govern the formation of limited partnerships under the Uniform Limited Partnership Act, which was originally introduced in 1916 and has since been amended multiple times. The most recent revision was in 2013.1 The majority of the United States—49 states and the District of Columbia—have adopted these provisions with Louisiana as the sole exception.2 …
Advantages and Disadvantages of A Limited Partnership
- The key advantage to an LP, at least for limited partners, is that their personal liability is limited. They are only responsible for the amount invested in the LP. These entities can be used by GPs when looking to raise capital for investment. Many hedge funds and real estate investment partnerships are set up as LPs. Limited partners also don't have to pay self-employment taxes. L…
Limited Partnership (LP) FAQs
- What Is a Limited Partnership (LP) in Business?
Businesses that form a limited partnership generally do so to own or operate a set of specific assets, such as a real estate investment partnership or LP for managing oil pipelines. One party (the general partner) has control over the assets and management responsibilities, but also are … - What Is the Difference Between an LLC and a Limited Partnership?
Both LLCs and LPs offer flexibility in structuring responsibilities, profit-split, and taxes. An LP allows certain investors (limited partners) to invest without having a management role or any personal liability, while the general partners carry all the liability. With an LLC, the owners can shi…
The Bottom Line
- Limited partnerships are generally used by hedge funds and investment partnerships as they offer the ability to raise capital without giving up control. Limited partners invest in an LP and have little to no control over the management of the entity, but their liability is limited to their personal investment. Meanwhile, general partners manage and run the LP, but their liability is unlimited.
The Evolution of Limited Liability Entities
- Corporations
The last 15 or 20 years have witnessed a rapid evolution in entity types available for operating a business. For a couple of centuries, corporations were the major choice for a limited liability entity. Over the years, state corporate statutes, appellate case decisions, and tax regulations hav… - Limited Liability Companies
Beginning in the late ‘70s in Wyoming through the mid–'90s in Delaware, several new types of limited liability entities have been created. These include limited liability companies, limited liability partnerships, limited liability limited partnerships, and, beginning in 1996, the amendmen…
Understanding The Series LLC Structure
- A series LLC is essentially a group of separate LLCs contained within one master LLC entity. The Delaware Code describes it as follows: "A limited liability company agreement may establish or provide for the establishment of 1 or more designated series of members, managers, limited liability company interests or assets. Any such series may have sep...
How to Form A Series LLC
- Forming a series LLC is essentially the same as forming a regular LLC. Articles of Organization are prepared and filed with the Secretary of State or equivalent agency in a state and a filing fee is paid. The Articles of Organization may have a checkbox signifying that a series LLC is being formed or it may allow or require the preparer to insert certain statutory provisions indicating tha…
A Different Business Purpose For Each Series
- Each series may have its own completely diverse business purpose or investment objective. One series could own one or more real estate assets while another may operate a retail business while a third series may have a portfolio of passive investments such as stocks and bonds. The only prohibited business purposes are typically for banking or insurance company operations. Additi…
Tax Treatment Currently Unsettled
- At the time of this writing, the tax treatment is unsettled for a series LLC both at the federal and state levels. Though state statutes provide that each series may operate as if it were a separate legal entity (though only Illinois affirmatively states that a series is a separate legal entity), this is not binding on the federal government which could classify each series as a partnership for tax …
Possible Advantages of The Series LLC
- There are clear cost and administrative efficiencies by establishing a series LLC to segregate real property (and other) assets and businesses into their own series within an LLC for asset-protection purposes when compared to the cost of establishing separate, multiple LLCs for each property or business. Each specific real property in a multi-state or multi-parcel transaction can …
Potential Risks and Unresolved Issues
- Some unresolved tax and legal issues have been touched upon previously. Here are some other issues that remain to be resolved: 1. To confirm ownership of real property by a specific series, must a deed specify the series by name or is it sufficient for title to be in the name of the master LLC only and have the books and records of the LLC specify the series that owns the property? 2…
Conclusion
- With all the legal and tax uncertainties surrounding a series LLC, the cost and administrative efficiencies are unlikely to be sufficient motivation for preferring a series LLC over multiple single LLCs. Clarification of federal income tax treatment by the IRS in the near future will give some impetus to the attractiveness of the series LLC, but will not resolve many of the remaining signifi…