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14 Bull. Sec. Corp. Banking & Bus. L. 1 (1976-1977)

handle is hein.journals/txjbus14 and id is 1 raw text is: BULLETIN OF THE SECTION ON CORPORATION, BANKING & BUSINESS LAW Vol. 14 December, 1976 No. 1 Corporate Law Institutes The Section on Corporation, Banking & Business Law will sponsor four one day institutes on the subject: Corporation Law for General Practitioners. The Institutes will be identical programs, but with different speakers, in four cities, on the following dates: Thursday, April 21, 1977 Dallas Friday, April 22, 1977 Fort Worth Thursday, April 28, 1977 Houston Friday, April 29, 1977 San Antonio CONSIDERATIONS IN THE FORMATION OF LIMITED PARTNERSHIPS By Hal M. Bateman* The purpose of this article is to provide a brief outline of considerations relevant to the formation of limited partnerships which may be useful as a checklist. I. Why Use a Limited Partnership? Three basic considerations are usually involved in the decision to organize a business as a limited partnership: (1) the desire for limited liability for some participants; (2) the desire for flexibility in designing internal relationships; and (3) the desire for federal tax treatment of the business as a partnership on the conduit principle rather than as a taxpaying entity. The relative importance of each consideration varies from one situa- tion to the next. However, in 1916 when the Uniform Limited Partnership Act' (ULPA) was promulgated the first two were generally dominant, since corporate laws were rela- tively strict concerning internal relationships, corporations were more difficult to form and federal tax laws were a nominal factor. Today, on the other hand, the tax factor is generally dominant, since limited liability with high internal flexibility is available under modern corporate statuteS2 with perhaps greater ease and assurance than under the ULPA and federal taxation has assumed major importance in business formation deci- sions. *Professor of Law, Texas Tech University. 1. Texas adopted the Uniform Act in 1955, Texas Laws (1955), ch. 133, p. 471, codified as Article 6132a, Tex. Rev. Civ. Stats. The Texas Act (TULPA) is the Uniform Act with only one change-a short title is added as Section 1 of the TULPA which has the effect of making all subsequent sections numbered one higher than the ULPA counter- part. The text will refer to the ULPA section numbers. 2. For example the Texas Business Corporation Act today provides simplified formation and high flexibility for all corporations and as much internal flexibility as in a partner- ship under the new close corporation statutes, Articles 2.30-1 through 2.30-5.

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