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What are General Partners and Limited Partners?

Logo for Quora, which was the source for a question about general partners

This post is based on a question about general partners that I answered on Quora a couple of weeks ago.

Q.: Why do general partnerships and limited partnerships both have a “general partner” position?

A.: General partners – in each type of partnership – have control over and manage the business. They are jointly and severally liable for the partnership’s obligations. (more…)

Single-Member LLCs – What’s the Deal?

Logo for Avvo, where Dana Shultz answered a question about single-member LLCs

From time to time, I receive question from entrepreneurs about alleged deficiencies in single-member LLCs (limited liability companies).  (As is discussed below, single-member LLCs are different from multi-member LLCs.) This post is adapted from a question about single-member LLCs that I answered on Avvo.

Single-Member LLCs Provide Limited Liability Protection

Q. What is a best way to include a relative-foreigner as LLC member in CA? I formed single-member LLC in CA. Unfortunately I found later that single-member LLCs do not provide usual limited liability protection. (more…)

Beware Your Alter Ego

Banner of the California Courts, which have written opinions about the alter ego doctrineThis post discusses the alter ego doctrine, particularly as it is applied by courts in California.

The section references below has been updated to reflect California’s new LLC law that took effect on January 1, 2014 (see RULLCA Brings New LLC Laws to California in 2014).

Corporations have existed for centuries. One way they promote economic activity is by allowing stockholders to limit their personal liability for corporate debts to the amount of their individual investments in the corporation (“limited personal liability”). (more…)