[BUYING AND SELLING REAL ESTATE IN THE UNITED STATES - MASSACHUSETTS]
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6. Limited life. Withdrawal of partner dissolves partnership, but partnership can be reconstituted. 7. Advantages
4. Fiduciary duties self-dealing, corporate opportunities. Can be modified by contract. – C. Limited Partnerships 1. A statutory entity governed by G.L. c. 109. Creation requires filing of a brief certificate of limited partnership. 2. Limited partnership is managed and controlled by general partners (GPs). Limited partners (LPs) are passive investors. 3. Certain extraordinary actions can require approval of LPs. 4. Written limited partnership agreement not required but highly advisable. 5. Advantages 1. Limited liability for LPs. 2. “Pass - through” tax treatment. No entity-level tax. 3. Names of LPs not publicly disclosed. 6. Disadvantages 1. Unlimited liability for GPs, but a limited liability entity, such as an LLC or a corporation, can be a GP. 2. Unlimited liability for LP who takes part in control of business or knowingly permits his name to be used in the name of the limited partnership. 3. Limited transferability of interests requires consent of all partners to admit a new LP; unadmitted transferees are entitled to distributions but have no other rights as LP. 4. Fiduciary duties.
1. Simplicity, informality. 2. Pass-through treatment.
8. Disadvantages 1. No limited liability. Partners are jointly and severally liable for partnership liabilities. New partners liable only for future obligations; retired partners for past obligations. 2. Limited transferability of interests. 3. Conveyancing issues: (i) If title to real estate is in the
name of the partnership, any partner may convey title in the name of the partnership. A BFP may rely on the deed, notwithstanding any limitations on the partner’s authority (G.L. c. 108A, §10(1)). (ii) If title is in the name of less than all partners (and the record does not disclose the partnership’s rights), the named partners may convey title to a BFP, notwithstanding the existence of an undisclosed partner (G.L. c. 108A, §10 (3)). (iii) If title in the name of all the partners, all must sign the deed. (G.L. c. 108A, §10 (5). (iv) Attachments against partners individually can affect the partnership’s title if the claim relates to a partnership liability.
ILN Real Estate Group – Buying and Selling Real Estate Series
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