Take Note (Jeff Lebow) (Date)_Notes

Take Note (Jeff Lebow) (Date)_Notes - C. The court agreed,...

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C. The court agreed, holding that Stover had induced GE Credit to do business with a limited partner. IX. In the case of Shimko v. Guenther , an Ohio law firm sued a client for 360,ooo of unpaid attorneys’ fees. A. The clients were limited partnerships in Arizona. B. The firm had represented Mr. and Mrs. Guenter both as individuals and as LP’s C. The firm argued the Guenthers had acted as general partners and were liable for all of the legal fees. D. The court held that the Guenthers were only liable for their personal fees; the law firm was expected to be more knowledgeable about limited partnership law than an “ordinary creditor” E. The court stated that the firm should be familiar with the client’s “organic documents”; i.e. the certificate, partnership agreement, etc. X. A limited Liability Company is a recent development that allows the management flexibility and flow- through taxation of apartnership to be combined with the limited liability of a corporation. A. The IRS has a test for an association to determine corporate taxation status. 1. The first two requirements (that a group of individuals conduct a business for profit) will always be met in the cases we’re interested in. 2. The other requirements are: a. Continuity of Life b. Centralized Management c. Limited Liability d. Free Transferability of Interests B. LLC’s are structure so tha at least two of the last four requirements are not met. 1. Generally, LLC statutes will set a time limit of 30 years or less until dissolution occurs by law. 2. Generally, LLC’ statutes will also hold that member shares are not freely transferable 3. Historically, LLCs were required to have more than one member but this requirement was eventually dropped by almost all states. C. LLCs are more flexible than corporations at both the operational and organizational level. D. Similar to the LP, all procedural filing requirements must be met and an agent must be specified for service of process against the LLC.
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1. Most states allow the LLC to designate the Secretary of State as such an agent. XI. A Limited Liability Company is owned by its members and operated by its managers. A. An LLC can have as many managers as it deems necessary.
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Take Note (Jeff Lebow) (Date)_Notes - C. The court agreed,...

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