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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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