Help Me With Sign Delaware Assignment of Partnership Interest

Signatory partnership agreement amendment

hello Rob Lambert here with asset protection training calm today I'm going to talk about family limited partnerships some of the nuts and bolts about how to form one what does the document that forms would even look like where should you go just a little bit on that not too much on it what does a typical agreement look like I'm going to give you a 30,000 foot overview we're not going to get into the details of multiple partners business purpose that relatively new cases giving you some comfort that certain types of family limited partnerships actually will survive attack we're not going to go into the many cases that allow family limited partnerships to be easily torn apart not going to talk about that now just going to deal with what's it look like how do you format what are the tricks let's start with a typical LP one that we use to form the partnership this is a form called an LP one it's pretty much the same in all 50 states some are a little more complicated than others this one happens to be from Delaware aiya Delaware's by far my favorite jurisdiction by the way it has super laws the laws are really flexible they allow remarkable flexibility and the ability to do things you can't get away with in other states like you can have by statute zero ownership with the general partner and a hundred percent ownership with the limited partner often asset protection trust that's just one of hundreds of unique things when they're laws there's no secret that all the fortune 500 companies try to go there if they can't and I usually do because in most cases the simple act of holding property for investment is not a trade or business and in most states you're not required to qualify to do business places like California New York and many of the others dates try to impose huge fees you know close to a thousand dollars a year forcing you to take auto state companies and qualify them to do business it normally isn't necessary oftentimes the rubber meets the road when you go in to open a bank account and the person thats a Wells Fargo says well if you want to open a bank account for a Delaware partnership in California you're going to have to qualify to do business and pay uncle not uncle Finn I guess it's now Jerry Brown close to a thousand dollars a year for the right to do business in California I just tell my clients to get up and walk out of the bank I walk to the next bank the bank next door could even be another wells fargo eventually they'll take your money because unless you're actually engaged in a trade or business you'd normally don't need to qualify that's something you should talk over with a lawyer because there are some repercussions if you don't particularly if you get food normally they're not too relevant to my clients anyway this is a sample family limited partnership LP one I called the partnership sample flp that's the name and all you need to do on most flts was give the name the address of the agent for service of process that you can see that in paragraph 2 of this the name of the general partner of the partnership and it usually needs to be signed by the general partner that is all that's filed and normally normal fees are between mid fours to mid fives depending upon how fancy of a kit you want to get I usually use a company called corporate creations that's owned by one of my former law students is built it to the number three company formation company in the United States they guarantee to be anybody in everybody's prices if you call and mention rod Lambert a task the protection training they will take good care of you if they don't I want to hear about it because they will hear from me and they will be everybody's price I think I already said that so this is a typical thing that you file to form a partnership don't don't think it takes a lot of art to do it you don't need to pay some lawyer $5,000 to do this type of thing in fact in most cases most law firms will simply call a company like corporate creations and have them form the entity put together a fancy set of often leather-bound books send those out the lawyer puts them together or has his or her secretary or paralegal you know organize it you give it to your client and you charge them 2500 or $5,000 along with a standard form agreement kind of something you don't really need to give your lawyer a lot of money to do however there are some very significant decisions that you will need to make along the process and we'll touch on some of them today anyway this is a typical lp1 and you'll find that it's downloadable likely agreement i'm about to show you it's downloadable below now i'm going to take a look at a typical limited partnership agreement we named this partnership sample flp stupid name but it made the form kind of easy and let's take a look at its table of contents what what it what it does is it just organizes your behavior the operating agreement the partnership agreement that you're looking at is basically a list of rules that you agree to be bound by as the partner general partner a limited partner and it's you've got intense amounts of flexibility all i care about when people do partnership agreements when they're doing asset protection is that they understand the rules and that the partnership agreement is really solidly put together as all the business and tax provisions that might be necessary in the future and basically works it needs to look and feel and act proper the the fundamentals the formalities are not as intense as with a corporation but it's still very important that you follow the rules and that's what the partnership agreement does let's look at it first section is organization i'm going to show you these little provisions but here we have term if you're if you're putting your partnership with a asset protection trust they both should be roughly the same term that we both should be the same term it has definitions you can see an article to it has stuff about partnership capital this actual agreement is written so that you can actually have multiple limited partners and it has something called 704 be two provisions that's not that important to most asset protection folks but it means you can go into business with your what you can go into business form a donut shop you put up the money and your your other partner does all the work he might be the general partner you might be the limited and you can structure it so you get all the tax benefits and all that's a cash flow until you've gotten your original investment back then you can split the cash flow on the end tax benefits differently to allow the other partner to have a payback this is that's called 70 be 70 for be two provisions not critical by almost always include them because they don't hurt anybody financial this just talks about these as you can see paragraph for the accounting methods the fiscal year talks about management who manages the partnership where you'll see when I when I scroll scroll through management it's basically a hundred percent managed by the general partner there are very few if anything that's important nothing really with the operation there's very few things that the limited partners have any voice on that's why I love limited partnerships because by statute the limited partners don't have a lot of power and they don't have enough power to put themselves on in a position where they are vulnerable to easy reach by an aggrieved somebody who think they've been by the partnership limited partners have such limited authority it's hard to maintain that they created that they did a tour that they violated a contract that's always the general partner that's always the managers that is not the limited partners and here paragraph 6 limited partners look they have no management control I'm going to get to these in just a second books and records very important don't get sloppy never treat either you trust your partnerships or any of your LLC's as your alter ego remember this is a separate brand new baby this may be your first baby and you don't want to treat your baby as your pocketbook this this partnership and the related asset protection trust if you choose to do it and this agreement is perfectly fine to do without and ask their protection trust you can have human beings or companies as the partners it just doesn't work very well from an asset protection point of view if you don't do that in my mind but it works it does work and it is designed that way let's take a look at it the first page I'm just going to read you the beginning so you can kind of see the stuff this agreement of limited partnership is made an integer entered into as of a date by the general partner and the limited partners that's all you need to form it that does it just to keep things clean so your records are sensible it talks about having a business purpose it talks about the name it talks about the term which is this in this case 60 years you can go much longer and just oftentimes no reason not to go much longer than 60 years sometimes in fact more and more of my clients are asking for trusts that go for a large large amount of time it can save a teeny bit of taxes but it mostly allows you to rule from the grave I don't like people trying to do it because it's very hard to give them any confidence that they can successfully do it but it's becoming more and more popular as people are getting less and less comfortable that both their heirs and their entities are going to be safe and sound safe and the government is rapidly falling apart definitions these aren't really very important to you right now you should read them but they're all dealing with mostly tax consequences because of that thing I called 704 be too that's not something I'm going to talk about right now but it is something that you might want to do a little reading up on and certainly you can take this agreement and give it to your lawyer or whoever is helping you with your planning and this will save them an awful lot of work this was a good starting place this agreement has been reviewed by hundreds and hundreds of law firms and it's just a simple straightforward document it has gills with capital counts and you actually need to maintain capital accounts not something you actually do yourself but you need to maintain records so that your CPA can tell you what the the magnitude of your capital account is when necessary to dissolve or make distributions from the partnership all those distributions have to have what we call substantial economic effect again beyond the beyond the scope of this lesson but normally not an issue when you're doing ask their protection I'm just throwing things that you can talk with your advisor about it's quite important the financial side it's basically almost always a cash basis calendar your taxpayer there's a lot of stuff about allocating net income and chargebacks that is really your relevant stuff to ninety-nine point nine percent of the people doing asset protection but i'll tell you what they putting it in there you sure make your agreement look and feel good and sometimes the appearances a reality are just as important as the reality paragraph five is important this is deals with the management and basically read the first paragraph of 5.1 the operations and affairs of the partnership shall be administered by the general partner who shall have all authority item powers conferred by law etc the real important thing is the limited partner has no authority by the way look at all you know they're here is effort to identify some of the powers that the general partner has it goes on and on responsibilities of the general partner limitations of the general partner basically you can't steal and compensation does the general 5.4 says the general partner can get paid this is all just standard stuff you can do it almost any way you want you have a huge amount of flexibility any good lawyer and indeed any good asset protection person will be able to give you your options and show you how how you can do your options now here 6.1 that's important the limited partners shall not be bound by or be personally liable for the expenses liabilities or obligations of the partnership now I want to cram this into your head one more time if you decide to combine a family limited partnership with an asset protection trust the asset protection trust should be the limited partner usually in often and ninety-nine percent limited partner sometimes a hundred percent sometimes eighty percent this this there's no hard and fast rule but this limited partner trust where your savings they are where your money you're going to rely upon if your whole world falls apart exists and resides this limited partner trust shall not be bound by this is 6.1 not be bound by or be personally liable for the expenses liability or obligations of the partnership look at 6.2 limited partners shall take no part in or interfere in any manner with the control conduct or operation of the partnership period bottom line and you can read 6.3 kind of not too important but the limited partners have right to vote in heaven have a voice on a few things like converting a limited partner to a general partner or alters the interest of a general partner or affects the status of the partnership as a partnership that's d these are not relevant in most cases it very seldom happens but it's very important that you all realize that the limited partner really really is not likely to be successfully named and then held held responsible for the actions of the partnership itself the entity the person that is responsible will almost always really i can say always be the general partner 7 has some transfer of interesting restrictions all of these are pretty standard you'll see them in all sorts of different types of agreements that talks about records in 8.1 inspection reports 9 deals with dissolution this are all standard is they don't really require a lot of explanation but your agreement should have all of this stuff in it not because your think you're even going to need it but it should have all this stuff in it so that if somebody decides they're going to try to invalidate your partnership you're at least starting with a good agreement and you've done proper you've done a proper bank account and you kept proper records and observed all the formalities required that is a big deal this you don't live off the money in the partnership it's money that is for a business purpose it's part of your also part of your savings that you're holding for a rainy day it's not money you put in every week and take out every week I'm just going to keep flipping through 12 article 12 was just miscellaneous things that you can execute it in counterparts it's binding on the successors choice of law normally the choice of law will be the state in which you reside even though it's a Delaware partnership that's that's it look it's it this is 18 pages and only about three pages are really necessary the rest of it is all there to make it feel good and look good and again all you need is a General Partner signature right up here and a limited partner signature right here and the general partner can be a human it can be a company and the limited partner can be an offshore trust e it can have a united states code trustee that would that would be if you had a kinetic trust where you were involved as co-trustee that's probably unwise for most of you but there's plenty of options and this is a darn good agreement to start with I hope that this is helpful to you download it look it over and there will be a large number of additional videos dealing with the nuances but get the basic flavor of what an agreement looks like into your head it'll help you with the vocabulary and it will help you with your comfort thank you very much