Corporate Vs. Non-Corporate Partnerships, Joint Ventures, Merger And Acquisitions, And MannKind’s Affairs

Corporate law can be mind-boggling, but understanding the fundamentals could lead to profitable investments. Essential concepts, along with notable partnerships like those of MannKind, Sanofi and Regeneron, served to solidify investors’ learning.

Corporate Partnerships

LLC, LP, LLP and C-Corp

As “corporations,” these “legal entities”—the limited liability company “LLC,” limited partnership “LP” and C-corp—are also “corporate partnerships.” These partnerships come with duties and rights, offering different advantages and disadvantages. However, they have one thing in common, a “corporate veil” that protects the personal assets of owners and officers.

An LLC can effectively shield “hot assets” prone to lawsuits. In the event of a bankruptcy filing, creditors cannot go after the personal assets of officers and shareholders. Offering flexibility, owners can file their LLC as a C-corporation or a limited partnership. Hence, LLCs are referred to as “companies” and “partnerships.”

As legal entities, these partnerships have to file required documents with appropriate authorities while adhering to various corporate formalities. While there are many requirements, the annual meeting and election of officers and directors are important regulations. Filings include the certificate of incorporation, operating agreement for the LLC, bylaws for C-corporations, as well as quarterly and annual reports.

Non-Corporate Partnerships 

Joint Ventures
Involves two or more parties, a joint venture—under legal binding agreements among members—pooled the partners’ money in a single endeavor like software programming, and dissolved when the task is done.

Despite legal terms between parties, joint ventures are not corporate entities. Therefore, they do not need to file paper works like a corporate partnership nor adhering to corporate rituals. Since their partnership does not form a new company, joint ventures do not have the corporate veil protection.

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Disclosure: I am long on MannKind.

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