Default rules regarding management of an llp

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Reference no: EM131719770

The three managing partners and the 50 other partners are concerned that the RUPA's default rules regarding management of an LLP will not work for them at Winning LLP. These partners wish to write the management section of Winning LLP's articles to resolve their concerns. The 50 passive partners are willing to let the managing partners make the decisions, provided the business becomes profitable within five years. If not, they want the ability to take over control of Winning LLP's management. Each of the three managing partners will contribute capital of $16,667 (0.167% of the total) to Winning LLP. Each of the 50 passive partners will contribute $199,000 (1.99% of the total capital). All the partners understand that the business is capital intensive and that Winning LLP will want to retain at least a large part of its profits until Winning LLP's term ends in 2020.

Under the default rules of the RUPA, how does an LLP make decisions in the ordinary course of business and why will these rules need to be modified for Winning LLP?

Reference no: EM131719770

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