Question

I have read on the web that following combination exists :

Proprietary Source code + GPL Source code – > GPL Source code ( All code has to be released under GPL)

Proprietary Source code + LGPL Source code – > Proprietary Source code ( All code remains Proprietary )

Now how does statically/Dynamically linking GPL and LGPL code works with the above combination?

Answer 1

If you want to distribute a combined work, you’ll have to use the following license;

Proprietary Source code + GPL Source code

• Either static or dynamically linked: You must release both parts as GPL.

Proprietary Source code + LGPL Source code

• statically linked:
  • Either you must release both parts as LGPL.
  • Or provide everything that allow the user to relink the application with a different version of the LGPL source code. In this case the other requirements are the same as if it was dynamically linked.
• dynamically linked: LGPL code stays LGPL, you can keep the proprietary code proprietary.

See also executing a (L)GPL program from proprietary Source code.

Update (November 2014): A Comprehensive Tutorial and Guide contains a clear an detailed description of the (L)GPL and its usage, including distribution. I recommend it for more details.