Corporate Liability

Beginning with Wyoming in 1977 and ending with the Hawaii legislature in 1996, all 50 states have adopted limited liability company (LLC) laws. In 1988, the IRS published Revenue Ruling 88-76, which classified a Wyoming LLC as a partnership for federal income tax purposes. Subsequently, the IRS issued a number of private letter rulings that treated limited liability companies as partnerships. However, the IRS laid down complex requirements that LLCs had to follow if they were to avoid being subject to corporate income taxes.

Generally, classification as a partnership or corporation for federal income tax purposes is made by reference to section 7701 of the Internal Revenue Code (IRC), as amended, and the Treasury Regulations promulgated under that section. Traditionally, Treasury Regulations sections 301.7701-2 identified six chara

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after a partnership is terminated, the former partners are not personally liable for partnership obligations incurred while the partnership was an LLP. Section 1001(f) provides that once a statement of qualification is executed and filed, the partnership assumes the status of a limited liability partnership. The statute holds that this status is intended to be conclusive with regard to third parties dealing with the partnership. It is not intended to affect the rights of partners. For example, a properly executed and filed statement of qualification conclusively establishes the limited liability shield described in section 306(c). If the partners executing and filing the statement exceed their authority, the internal abuse of authority has no effect on the liability shield with regard to third parties. Partners may challenge the abuse of authority for purposes of establishing the liability of the culpable partners but may not effect the liability shield as to third parties. Likewise, third parties may not challenge the existence of the liability shield because the decision to file the statement lacked the proper vote. Generally, in most states and under RUPA, the filing of a statement of qualification establishes that a partne
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Some common words found in the essay are:
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Approximate Word count = 6520
Approximate Pages = 26 (250 words per page)

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