(23) Dissolution of an Limited Liability Partnership

What rules govern the dissolution of an LLP?

The same rules and regulations that govern the dissolution of a general partnership.

Does an LLP have unique statutory dissolution rules in most states?

Generally, no.

What uncertainty exists regarding the LLP liability shield during dissolution?

Many states have not specifically addressed whether the liability shield continues during dissolution.

Is it always clear whether an LLP's liability shield remains in effect while the partnership is winding up?

No.

What question do many state statutes leave unresolved regarding LLP dissolution?

Whether the liability shield remains personal to the partners during dissolution.

Do most states expressly allow an LLP's liability shield to transfer to a successor partnership after dissolution?

No.

What happens to the LLP liability shield if a successor partnership continues the former LLP's business?

Most state statutes do not specifically provide that the liability shield transfers to the successor partnership.

Testable Issue: What law generally governs the dissolution of an LLP?

The same dissolution rules that apply to general partnerships.

Testable Issue: What is the primary unresolved issue concerning LLP dissolution?

Whether the statutory liability shield continues to protect partners during the dissolution and winding-up process.

Testable Issue: Does the LLP liability shield automatically transfer to a successor partnership?

Most state statutes do not expressly provide for such a transfer.

Essay Rule: How should you analyze dissolution of an LLP?

Apply the general partnership rules governing dissolution and winding up, then determine whether the applicable state statute addresses the continued effectiveness of the LLP liability shield during dissolution or after the business is succeeded by another partnership.

Master Synthesis: What is the framework for analyzing LLP dissolution?

Begin by applying the general partnership rules governing dissolution, identify any statutory provisions affecting the LLP liability shield during winding up, and determine whether state law addresses continuation or transfer of the liability shield to a successor partnership after dissolution.