Also known as: Sarbanes-Oxley Section 404 · Section 404 SOX · SOX 404 · Section 404
Written by attorneys · grounded in primary & secondary sources — see below
A statutory requirement that public companies establish and maintain adequate internal control over financial reporting. Management must assess the effectiveness of those controls each year and disclose the results.
Select any source to read its text and confirm it supports the definition.
Omega Estates holds a judgment against Imperial Buildings after the partnership defaults on a construction loan. The loan documents make Spencer personally liable. Omega has not obtained a writ of execution against partnership property and the partnership is not in bankruptcy. The court denies permission to levy on Spencer's vacation home because partnership assets have not been shown clearly insufficient.
Dawn Athletic obtains a judgment against Crown Athletic for unpaid ticketing services. Quincy is the managing general partner. Dawn Athletic sues Quincy individually. The court permits joinder because the claim is consistent with the limited liability limited partnership rules and no formalities violation removes the shield.
A creditor must first obtain a judgment against the limited partnership and satisfy one of the conditions in section 405(c), such as an unsatisfied writ of execution or a court finding that partnership assets are clearly insufficient.
Supporting sources
Yes. Section 405(a) permits a general partner to be joined in an action against the limited partnership or named in a separate action to the extent not inconsistent with section 404.
Supporting sources