1400 Gables Ct #103 Plano, TX 75075
5601 Bridge Street, #300, Ft. Worth, TX 76112

“What About the Limited Liability Partnerships I’ve Heard About?”- Part 2

While Section 152.801 is very helpful in limiting a partner’s liability, one must be very careful not to interpret it over-broadly.  The insulation from individual liability occurs, first, only for obligations incurred while the entity is a limited liability partnership. For purposes of Section 152.801, such obligations include: (1) obligations related to an action or omission which occurs while the partnership ha LLP status; (2) obligations arising under a contract or commitment entered into while the partnership is a limited liability partnership; or (3) the means by which service of citation or other civil process may be served in an action against a partnership (service on a partner authorizes judgment against the partnership, Sec. 17.022, Texas Civil Practice and Remedies Code).

This insulation from liability must be distinguished from the liability of an individual partner which is imposed by contract or law independently of the partner’s status as a partner. The most common example we see of this is that of a guaranty signed by an individual partner guaranteeing a loan or similar obligation of the entity. The registered limited liability partnership statute won’t shield him  from individual liability if the partnership defaults on the obligation because, independent of his status as a partner of the L.L.P., he contractually obligated himself to pay.

Next time, we’ll look at how to qualify with the State of Texas for limited liability partnership status.

Richard Armstrong, Principal

Richard Armstrong, Principal

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Armstrong The Law Firm, P.C.
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1400 Gables Ct #103
Plano, TX 75075

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Ft. Worth, Texas 76112

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