HARMONIZED UNIFORM PARTNERSHIP ACT (1997)
Introductory
Reporters’ Note
The proposed revisions to the text of the act set forth in
this document have been prepared as part of a project that has two purposes:
(i) to harmonize the language of all of the unincorporated entity laws, and
(ii) to revise the language of each of those acts in a manner that permits
their integration into a single code of entity laws.
The Comments to the act have been omitted from this document to
reduce its length. Following the approval of the changes in this document by
the Conference, the Comments will be restored with appropriate changes.
The harmonization process has involved the revision of the
following acts:
Business Organizations Act (“HUB”)
Model Entity Transactions Act (“META”)
Model Registered Agents Act
Uniform Partnership Act (1997)
Uniform Limited Partnership Act (2001)
Uniform Limited Liability Company Act (2006)
(“ULLCA”)
Uniform Statutory Trust Entity Act
Uniform Limited Cooperative Association Act
Uniform Unincorporated Nonprofit Association Act (2008)
Changes to the currently effective text of the act are
shown by striking through text to be deleted and underlining text to
be added. Regular type is used to
show changes that (i) adopt language from the HUB or META, (ii) are merely
relocations of current language, or (iii) are corrections for the sake of
internal consistency within an act. Changes that adopt language from other
unincorporated entity acts are shown in italics. Changes
that do not have a source in one of the existing unincorporated entity acts are
shown in small caps. Often a small caps change made to one entity act will be replicated
in other acts as a matter of harmonization. These replications are shown in italics.
HARMONIZED UNIFORM
PARTNERSHIP ACT (1997)
SECTION 101. SHORT TITLE. This [act] may be cited as the Uniform
Partnership Act [year of enactment].
SECTION 101 102. DEFINITIONS.
In this [Act] [act]:
(1) “Business”
includes every trade, occupation, and profession.
(2) “Contribution”, except in the
phrase “right of contribution”, means property or a benefit described in
Section 403 provided by a person to a partnership to become a partner or in the
person’s capacity as a partner.
(2) (3)
“Debtor in bankruptcy” means a person who that is the subject of:
(i)
(A) an order for relief under Title 11 of the United States Code or a
comparable order under a successor statute of general application; or
(ii)
(B) a comparable order under federal, state, or foreign law governing
insolvency.
(3) (4) “Distribution”
means a transfer of money or other property from a partnership to a partner in the partner’s person
on account of a transferable interest or in a person’s capacity as a
partner or to the partner’s transferee. The term:
(A) includes:
(i) a redemption or
other purchase by a partnership of a transferable interest; and
(ii)
a transfer to a partner in return for the partner’s relinquishment of any right
to participate as a partner in the management or conduct of the partnership’s
business or have access to records or other information concerning the
partnership’s business; and
(B)
does not include amounts constituting reasonable
compensation for present or past service or payments made in the ordinary
course of business under a bona fide retirement plan or other bona fide
benefits program.
(4)
(5) “Foreign limited liability partnership” means a foreign partnership whose
partners have limited liability for the debts, obligations, or other
liabilities of the foreign partnership under a provision similar to Section
306(c) that (i) is formed under laws other than the laws
of this State and (ii) has the status of that
is a limited liability partnership under those laws.
(6) “Foreign partnership” means
an unincorporated entity formed under the law of a jurisdiction other than this
state which would be a partnership if formed under the law of this state. The term includes a foreign limited liability
partnership.
(7) “Jurisdiction” used
to refer to a political entity, means the United States, a state, a foreign
country, or a political subdivision of a foreign country.
(8)
“Jurisdiction of formation” means, with respect to an entity, the jurisdiction
(A)
under whose law the entity is formed; or
(B)
in the case of a limited liability partnership or
foreign limited liability partnership, in which the partnership’s statement of
qualification is filed.
(5)
(9) “Limited liability partnership”,
except in the phrase “foreign limited liability partnership”, means a
partnership that has filed a statement of qualification under Section 1001 and
does not have a similar statement in effect in any other jurisdiction.
(10) “Partner” means a person that:
(A)
has become a partner in a partnership under Section
402 or was a partner in a partnership when the partnership became subject to
this [act] under Section 1205; and
(B)
has not dissociated as a partner under Section 601.
(6) (11) “Partnership”
means an association of two or more persons to carry on as co-owners a business
for profit formed under Section 202,
predecessor law, or comparable law of another jurisdiction this [act] or
that becomes subject to this [act] under Article 9 or Section 1205(a) or (b).
The term includes a limited liability partnership.
(7)
(12) “Partnership agreement” means the
agreement, whether written, oral, or
implied, among or not referred to as a partnership agreement and whether oral, implied, in a record,
or in any combination thereof, of all the partners of
a partnership concerning the partnership,
including amendments to the partnership agreement matters described in Section 106(a). The term includes the agreement as amended or
restated.
(8)
(13) “Partnership at will” means a partnership in which the partners
have not agreed to remain partners until the expiration of a definite term or
the completion of a particular undertaking.
(9) “Partnership interest” or “partner’s interest in the
partnership” means all of a partner’s interests in the partnership, including
the partner’s transferable interest and all management and other rights.
(10)
(14) “Person” means an individual, corporation, business trust,
estate, trust, partnership, association, joint venture, government,
governmental subdivision, agency, or instrumentality, or any other legal or
commercial entity. business corporation, nonprofit corporation,
partnership, limited partnership, limited liability company, [general
cooperative association,] limited cooperative association, unincorporated
nonprofit association, statutory trust, business trust, common-law business
trust, estate, trust, association, joint venture, public corporation,
government or governmental subdivision, agency, or instrumentality, or any
other legal or commercial entity.
(15)
“Principal office” means the principal executive office of a partnership or a
foreign limited liability partnership is located, whether or not the
office is located in this state.
(11) (16)
“Property” means all property, whether real, personal, or mixed, or
tangible or intangible, or any right or interest therein.
(17) “Record”, used
as a noun, means information that is inscribed on a tangible medium or that is
stored in an electronic or other medium and is retrievable in perceivable form.
(18)
“Registered agent” means an agent of a limited liability partnership or foreign
limited liability partnership which is authorized to receive service of any
process, notice, or demand required or permitted by law to be served on the
partnership.
(19) “Registered foreign limited
liability partnership” means a foreign limited liability partnership that is
registered to do business in this state pursuant to a statement of registration
filed by the [Secretary of State].
(20)
“Sign” means, with present intent to authenticate or adopt a record:
(A)
to execute or adopt a tangible symbol; or
(B)
to attach to or logically associate with the record an
electronic symbol, sound, or process.
(12) (21)
“State” means a State state of the United States, the District of
Columbia, the Commonwealth of Puerto Rico, the United States Virgin
Islands, or any territory or insular possession subject to the jurisdiction
of the United States.
(13) “Statement”
means a statement of partnership authority under Section 303, a statement of
denial under Section 304, a statement of dissociation under Section 704, a
statement of dissolution under Section 805, a statement of merger under Section
907, a statement of qualification under Section 1001, a statement of foreign
qualification under Section 1102, or an amendment or cancellation of any of the
foregoing.
(14) (22) “Transfer”
includes:
(A)
an assignment;
(B)
a conveyance;
(C)
a sale;
(D)
a lease, mortgage, deed;
(E)
an encumbrance, including a mortgage or
security interest;
(F)
a gift; and
(G) a transfer by operation of law.
(23) “Transferable interest” means the
right, as initially owned by a person in the person’s capacity as a partner, to
receive distributions from a partnership in accordance with the partnership
agreement, whether or not the person remains a partner or continues to own any
part of the right. The term applies to any fraction of the interest, by whomever owned.
(24) “Transferee” means a person
to which all or part of a transferable interest has been transferred, whether
or not the transferor is a partner.
SECTION
102 103. KNOWLEDGE; AND NOTICE.
(a) A
person knows a fact if the person:
(1) has actual
knowledge of it; or
(2) is deemed to know it under
subsection (d)(1) or law other than this [act].
(b) A
person has notice of a fact if the person:
(1) knows of it;
(2) has received a
notification of it; or
(3) has reason
to know it exists the fact from
all of the facts known to the person at the time in question; or
(2) is deemed to have
notice of the fact under subsection (d)(2).
(c) Subject to Section 116(f), A a
person notifies or gives a
notification to another person
of a fact by taking steps reasonably required to inform the other
person in ordinary course, whether or not those
steps cause the other person learns
of it to know the fact.
(d) A
person receives a notification when
the notification not a partner is deemed:
(1) comes to the person’s attention; or to
know of a limitation on authority to transfer real property as provided in
Section 303(g); and
(2) is duly delivered at the person’s place of
business or at any other place held out by the person as a place for receiving
communications to have notice of:
(A) a partner’s dissociation 90 days after a statement of
dissociation under Section 704 becomes effective; and
(B) a partnership’s:
(i) dissolution 90 days after a statement of dissolution under
Section 802 becomes effective;
(ii) termination 90 days after a statement of termination under
Section 802 becomes effective; and
(iii)
participation in a merger, interest exchange,
conversion, or domestication 90 days after articles of merger, interest
exchange, conversion, or domestication under [Article] 9 become effective.
(e)
Except as otherwise provided in subsection (f), a person other than an
individual knows, has notice, or receives a notification of a fact for purposes
of a particular transaction when the individual conducting the transaction
knows, has notice, or receives a notification of the fact, or in any event when
the fact would have been brought to the individual’s attention if the person
had exercised reasonable diligence. The person exercises reasonable diligence
if it maintains reasonable routines for communicating significant information
to the individual conducting the transaction and there is reasonable compliance
with the routines. Reasonable
diligence does not require an individual acting for the person to communicate
information unless the communication is part of the individual’s regular duties
or the individual has reason to know of the transaction and that the
transaction would be materially affected by the information.
(f) (e) A partner’s knowledge, or notice,
or receipt of a notification of a fact relating to the partnership is
effective immediately as knowledge of
by, or notice to, or
receipt of a notification by the partnership, except in the case of a
fraud on the partnership committed by or with the consent of that partner.
Reporters’ Note
Conformed
to ULLCA § 103, except that subsection (e) is preserved because, unlike a
member of a limited liability company, a partner is an agent of the
partnership.
SECTION 106 104. GOVERNING LAW.
(a) Except as otherwise provided in subsection
(b), the law of jurisdiction in which a partnership has its chief executive
office governs relations among the partners and between the partners and the
partnership.
(b) The law of this State governs relations
among the partners and between the partners and the partnership and the
liability of partners for an obligation of a limited liability partnership.
The internal affairs of a partnership and the liability of a partner
as a partner for the debts, obligations, or other liabilities of the
partnership are governed by:
(1) in the case of a limited liability
partnership, the law of this state; and
(2) in the case of a partnership that is not a
limited liability partnership, the law of the state of the jurisdiction in
which the partnership has its principal office.
SECTION 104 105. SUPPLEMENTAL PRINCIPLES OF LAW.
(a) Unless
displaced by particular provisions of this [Act] [act], the
principles of law and equity supplement this [Act] [act].
(b) If an obligation to pay interest arises under this
[Act] and the rate is not specified, the rate is that specified in [applicable
statute].
SECTION 103 106. EFFECT
OF PARTNERSHIP AGREEMENT; NONWAIVABLE PROVISIONS SCOPE,
FUNCTION, AND LIMITATIONS.
(a) Except
as otherwise provided in subsection
(b) subsections (c) and (d), relations among the partners and
between the partners and the partnership are governed by the partnership
agreement. To the extent the partnership
agreement does not otherwise provide, this [Act] governs relations among the
partners and between the partners and the partnership agreement governs:
(1) relations
among the partners as partners and between the partners and the partnership;
(2) the business of the partnership and the conduct of that
business; and
(3)
the means and conditions for amending the partnership
agreement.
(b) To
the extent the partnership agreement does not provide for a matter described in subsection (a), this [act] governs the matter.
(c) The A
partnership agreement may not:
(1) vary the rights and
duties under Section 105 except to eliminate the duty to provide copies of
statements to all of the partners law applicable under Section 104;
(2) vary the provisions of Section 111;
(3) vary the provisions of Section 307;
(2) (4)
unreasonably restrict the right of
access to books and records under duties and rights under Section
403(b) 408, but the partnership agreement may impose
reasonable restrictions on the availability and use of information obtained
under that section and may define appropriate remedies, including liquidated
damages, for a breach of any reasonable restriction on use;
(3) eliminate the duty of loyalty under Section 404(b) or
603(b)(3), but:
(i) the partnership agreement may identify specific types or
categories of activities that do not violate the duty of loyalty, if not
manifestly unreasonable; or
(ii) all of
the partners or a number or percentage specified in the partnership agreement
may authorize or ratify, after full disclosure of all material facts, a
specific act or transaction that otherwise would violate the duty of loyalty;
(4) (5) unreasonably
reduce the duty of care under Section 404(c) or 603(b)(3)
eliminate the duty of care or the duty of loyalty;
(5) (6)
eliminate the contractual obligation
of good faith and fair dealing under Section 404(d) 409(d), but the partnership agreement may
prescribe the standards, if not manifestly unreasonable, by which the
performance of the obligation is to be measured if not manifestly
unreasonable;
(7) relieve or
exonerate a person from liability for conduct involving bad faith, willful
misconduct, or recklessness;
(6) (8)
vary the power to dissociate as a partner under Section 602(a), except to
require the notice under Section 601(1) to be in writing a record;
(7) (9)
vary the right of a court to expel a partner in the events specified in Section
601(5);
(8) (10)
vary the requirement to wind up the
partnership business in cases causes of dissolution specified in
Section 801(4), (5), or (6);
(9) (11)
vary the law
applicable to a limited liability partnership under Section 106(b); or requirement
to wind up the partnership’s business as specified in Section 802(a), (b)(1),
and (d);
(10) (12)
vary the right of a partner to approve a
merger, interest exchange, conversion, or domestication under Section
923(a)(2), 933(a)(2), 943(a)(2), or 953(a)(2);
(13) vary any
requirement, procedure, or other provision of this [act] pertaining to:
(A)
registered agents; or
(B)
the [Secretary of State], including provisions pertaining to records authorized
or required to be delivered to the [Secretary of State] for filing under this
[act]; or
(10) (14) except as otherwise provided in Sections
107 and 108(b), restrict the
rights of third parties under
this [Act] [act] of a person other than a partner.
(d) Subject to subsection (c), without
limiting other terms that may be included in a partnership agreement the
following rules apply:
(1) all of the partners or a number or percentage specified in the
partnership agreement may authorize or ratify, after full disclosure of all
material facts, a specific act or transaction that otherwise would violate the
duty of loyalty The
partnership agreement may specify the method by which a specific act or
transaction that would otherwise violate the duty of loyalty may be authorized
or ratified by one or more disinterested and independent persons after full
disclosure of all material facts.
(2) If not manifestly unreasonable, the
partnership agreement may:
(A) eliminate the duty of loyalty under Section 404(b) or 603(b)(3), but restrict or eliminate the aspects of the
duty of loyalty stated in Section 409(b);
(B) the partnership agreement may identify specific types or categories of activities
that do not violate the duty of loyalty,
if not manifestly unreasonable; or;
(C) alter the duty of
care, except to authorize intentional misconduct or knowing violation of law;
and
(D) alter or
eliminate any other fiduciary duty.
(e) The court shall decide as a matter of
law any claim under subsection (c)(6) or (d)(2) that a
term of a partnership agreement is manifestly unreasonable. The court:
(1) shall make its determination as of
the time the challenged term became part of the partnership agreement and by
considering only circumstances existing at that time; and
(2) may
invalidate the term only if, in light of the purposes and business of the
partnership, it is readily apparent that:
(A) the
objective of the term is unreasonable; or
(B) the term is
an unreasonable means to achieve the provision’s objective.
SECTION
107. PARTNERSHIP AGREEMENT;
EFFECT ON PARTNERSHIP AND PERSON BECOMING PARTNER; PREFORMATION AGREEMENT.
(a) A partnership is bound by and may enforce the partnership
agreement, whether or not the partnership has itself manifested assent to the
agreement.
(b) A person that
becomes a partner of a partnership is deemed to assent to the partnership
agreement.
(c) Two or more persons intending to
become the initial partners of a partnership may make an agreement providing
that upon the formation of the partnership the agreement will become the
partnership agreement.
SECTION
108. PARTNERSHIP AGREEMENT;
EFFECT ON THIRD PARTIES AND RELATIONSHIP TO RECORDS EFFECTIVE ON BEHALF OF
PARTNERSHIP.
(a) A partnership agreement may specify that its amendment requires
the approval of a person that is not a party to the agreement or the
satisfaction of a condition. An amendment is ineffective if its adoption does
not include the required approval or satisfy the specified condition.
(b) The
obligations of a partnership and its partners to a person in the person’s
capacity as a transferee or person dissociated as a partner are governed by the
partnership agreement. Subject only to a court order issued under Section
504(b)(2) to effectuate a charging order, an amendment to the partnership
agreement made after a person becomes a transferee or is dissociated as a
partner:
(1)
is effective with regard to any debt, obligation, or other liability of the
partnership or its partners to the person in the person’s capacity as a
transferee or person dissociated as a partner; and
(2)
is not effective to the extent the amendment:
(A)
imposes a new debt, obligation, or other liability on
the transferee or person dissociated as a partner; or
(B)
prejudices the rights under Section 701 of a person that dissociated as a
partner before the amendment was made.
(c) If a record delivered by a
partnership to the [Secretary of State] for filing becomes effective under this
[act] and contains a provision that would be ineffective under Section 106(c)
or (d)(2) if contained in the partnership agreement,
the provision is ineffective in the record.
(d) Subject to subsection (c), if a
record delivered by a partnership to the [Secretary of State] for filing becomes
effective under this [act] and conflicts with a provision of the partnership
agreement:
(1) the
agreement prevails as to partners, persons dissociated as partners, and
transferees; and
(2) the record
prevails as to other persons to the extent they reasonably rely on the record.
SECTION
105. EXECUTION, FILING, AND
RECORDING OF STATEMENTS.
(a) A statement
may be filed in the office of [the Secretary of State]. A certified copy of a statement that is filed
in an office in another State may be filed in the office of [the Secretary of
State]. Either filing has the effect
provided in this [Act] with respect to partnership property located in or
transactions that occur in this State.
(b) A certified
copy of a statement that has been filed in the office of the [Secretary of
State] and recorded in the office for recording transfers of real property has
the effect provided for recorded statements in this [Act]. A recorded statement that is not a certified
copy of a statement filed in the office of the [Secretary of State] does not
have the effect provided for recorded statements in this [Act].
(c) A statement
filed by a partnership must be executed by at least two partners. Other statements must be executed by a
partner or other person authorized by this [Act]. An individual who executes a statement as, or
on behalf of, a partner or other person named as a partner in a statement shall
personally declare under penalty of perjury that the contents of the statement
are accurate.
(d) A person
authorized by this [Act] to file a statement may amend or cancel the statement
by filing an amendment or cancellation that names the partnership, identifies
the statement, and states the substance of the amendment or cancellation.
(e) A person
who files a statement pursuant to this section shall promptly send a copy of
the statement to every nonfiling partner and to any other person named as a
partner in the statement. Failure to send a copy of a statement to a partner or
other person does not limit the effectiveness of the statement as to a person
not a partner.
(f) The
[Secretary of State] may collect a fee for filing or providing a certified copy
of a statement. The [officer responsible for recording transfers of real
property] may collect a fee for recording a statement.
SECTION 107. PARTNERSHIP SUBJECT TO
AMENDMENT OR REPEAL OF [ACT]. A partnership governed by this [Act] is
subject to any amendment to or repeal of this [Act].
SECTION 109. DELIVERY OF RECORD.
(a) Except as
otherwise provided in this [act], permissible means of delivery of a record
include delivery by hand, the United States Postal Service, commercial delivery
service, and electronic transmission.
(b)
Delivery to the [Secretary of State] is effective only when a record is
received by the [Secretary of State].
SECTION 110. SIGNING
OF RECORDS TO BE DELIVERED FOR FILING TO [SECRETARY OF STATE].
(a)
A record delivered to the [Secretary of State] for filing pursuant to this
[act] must be signed as follows:
(1) Except as otherwise
provided in paragraphs (2) and (3), a record signed by a partnership must be
signed by a person authorized by the partnership.
(2) A record filed on
behalf of a dissolved partnership that has no partner must be signed by the
person winding up the partnership’s business under Section 802(c) or a person
appointed under Section 802(d) to wind up the business.
(3) A statement of
denial by a person under Section 304 must be signed by that person.
(4) Any other record
delivered on behalf of a person to the [Secretary of State] for filing must be
signed by that person.
(b) Any record filed under this [act] may
be signed by an agent. Whenever this
[act] requires a particular individual to sign a record and the individual is
deceased or incompetent, the record may be signed by a legal representative of
the individual.
(c) A person that signs a record as an
agent or legal representative thereby affirms as a fact that the person is
authorized to sign the record.
SECTION 111. SIGNING AND FILING PURSUANT TO JUDICIAL ORDER.
(a) If a person
required by this [act] to sign a record or deliver a record to the [Secretary
of State] for filing under this [act] does not do so, any other person that is
aggrieved may petition [the appropriate court] to order:
(1) the person to sign the record;
(2) the person to deliver the record to the [Secretary of State]
for filing; or
(3) the [Secretary of State] to file the record unsigned.
(b) If a petitioner
under subsection (a) is not the partnership or foreign limited liability
partnership to which the record pertains, the petitioner shall make the
partnership a party to the action.
(c) A record filed under
subsection (a)(3) is effective without being signed.
SECTION 112. FILING REQUIREMENTS.
(a) To be filed
by the [Secretary of State] pursuant to this [act], a record must be received
by the [Secretary of State], comply with this [act], and satisfy the following:
(1) The filing of the record must be
required or permitted by this [act].
(2) The record must be physically
delivered in written form unless and to the extent the [Secretary of State]
permits electronic delivery of records.
(3) The words in the record must be in
English, and numbers must be in Arabic or Roman numerals, but the name of an
entity need not be in English if written in English letters or Arabic or Roman
numerals.
(4) The record must be signed by a person
authorized or required under this [act] to sign the record.
(5) The record must state the name and
capacity, if any, of each individual who signed it, either on the individual’s
behalf or on behalf of a person authorized or required to sign the record, but
need not contain a seal, attestation, acknowledgment, or verification.
(b) If law other than this [act] prohibits the
disclosure by the [Secretary of State] of information contained in a record
delivered to the [Secretary of State] for filing, the [Secretary of State]
shall accept the record if the record otherwise complies with this [act] but may
redact the information.
(c) When a record is delivered to the [Secretary of
State] for filing, any fee required under this [act] and any fee, tax, interest,
or penalty required to be paid under this [act] or law other than this [act]
must be paid in a manner permitted by the [Secretary of State] or by that law.
(d) The [Secretary of State] may require that a record
delivered in written form be accompanied by an identical or conformed copy.
SECTION 113. EFFECTIVE TIME AND DATE. Except as otherwise provided in Section 114
and subject to Section 115(c), a record filed under this [act] is effective:
(1) on the date and at the
time of its filing by the [Secretary of State], as provided in Section 116;
(2) on the date of filing and
at the time specified in the record as its effective time, if later than the
time under paragraph (1);
(3) at a specified delayed effective time and date,
which may not be more than 90 days after the date of filing; or
(4) if a delayed effective
date is specified, but no time is specified, at 12:01 a.m. on the date
specified, which may not be more than 90 days after the date of filing.
SECTION
114. WITHDRAWAL
OF FILED RECORD BEFORE EFFECTIVENESS.
(a) Except as otherwise provided in [Article] 9, a
record delivered to the [Secretary of State] for filing may be withdrawn before
it takes effect by delivering to the [Secretary of State] for filing a
statement of withdrawal.
(b) A statement of withdrawal must:
(1) be signed by
each person that signed the record being withdrawn, except as otherwise agreed
by those persons;
(2) identify the
record to be withdrawn; and
(3) if signed by
fewer than all the persons that signed the record being withdrawn, state that
the record is withdrawn in accordance with the agreement of all the persons that
signed the record.
(c) On filing by the [Secretary of State] of a
statement of withdrawal, the action or transaction evidenced by the original
record does not take effect.
SECTION
115. CORRECTING FILED
RECORD.
(a) A person on whose behalf a filed record was
delivered to the [Secretary of State] for filing may correct the record if:
(1) the record at
the time of filing was inaccurate;
(2) the record
was defectively signed; or
(3) the
electronic transmission of the record to the [Secretary of State] was
defective.
(b) To correct a filed record, a person on whose
behalf the record was delivered to the [Secretary of State] must deliver to the
[Secretary of State] for filing a statement of correction.
(c) A statement of correction:
(1) may not state
a delayed effective date;
(2) must be signed by the person correcting the filed record;
(3) must identify
the filed record to be corrected;
(4) must specify
the inaccuracy or defect to be corrected; and
(5) must correct
the inaccuracy or defect.
(d) A statement of correction is effective as of the
effective date of the filed record that it corrects except for purposes of
Section 103(d) and as to persons relying on the uncorrected filed record and
adversely affected by the correction. For those purposes and as to those persons,
the statement of correction is effective when filed.
SECTION
116. DUTY OF [SECRETARY OF
STATE] TO FILE; REVIEW OF REFUSAL TO FILE; TRANSMISSION OF INFORMATION BY
[SECRETARY OF STATE].
(a) The [Secretary of State] shall file a record
delivered to the [Secretary of State] for filing which satisfies this [act]. The
duty of the [Secretary of State] under this section is ministerial.
(b) When the [Secretary of State] files a record, the
[Secretary of State] shall record it as filed on the date and at the time of
its delivery. After filing a record, the [Secretary of State] shall deliver to
the person that submitted the record a copy of the record with an
acknowledgment of the date and time of filing and, in the case of a statement
of denial, also to the partnership to which the statement pertains.
(c) If the [Secretary of State] refuses to file a
record, the [Secretary of State], not later than [15] business days after the
record is delivered, shall:
(1) return the
record or notify the person that submitted the record of the refusal; and
(2) provide a
brief explanation in a record of the reason for the refusal.
(d) If the [Secretary of State] refuses to file a
record, the person that submitted the record may petition [the appropriate
court] to compel filing of the record.
The record and the explanation of the [Secretary of State] of the
refusal to file must be attached to the petition. The court may decide the matter in a summary
proceeding.
(e) The filing of or refusal to file a record does not
create a presumption that the information contained in the record is correct or
incorrect.
(f) Except as otherwise provided by Section 1007 or by
law other than this [act], the [Secretary of State] may deliver any record to a
person by delivering it:
(1) in person to
the person that submitted it;
(2) to the
address of the person’s registered agent;
(3) to the
principal office of the person; or
(4) to another
address the person provides to the [Secretary of State] for delivery.
SECTION
117. LIABILITY FOR INACCURATE
INFORMATION IN FILED RECORD.
(a) If a record delivered to the [Secretary of State]
for filing under this [act] and filed by the [Secretary of State] contains
inaccurate information, a person that suffers loss by reliance on the
information may recover damages for the loss from:
(1) a person that
signed the record, or caused another to sign it on the person’s behalf, and
knew the information to be inaccurate at the time the record was signed; and
(2) a partner,
if:
(A) the
record was delivered for filing on behalf of the partnership; and
(B) the
partner had notice of the inaccuracy for a reasonably sufficient time before
the information was relied upon so that, before the reliance, the partner
reasonably could have:
(i) effected an amendment under Section 1001(f);
(ii) filed a petition under Section 111; or
(iii) delivered to the [Secretary of State] for filing a statement
of change under Section 1004 or a statement of correction under Section 115.
(b) An individual who signs a record authorized or
required to be filed under this [act] affirms under penalty of perjury that the
information stated in the record is accurate.
SECTION 118. RESERVATION OF POWER TO
AMEND OR REPEAL. The
[legislature of this state] has power to amend or repeal all or part of this
[act] at any time, and all domestic and foreign limited liability partnerships
subject to this [act] are governed by the amendment or repeal.
SECTION
201. PARTNERSHIP AS ENTITY.
(a) A partnership
is an entity distinct from its partners.
(b) A limited liability partnership continues to be is the same entity that
existed before the filing of regardless of whether the
partnership has a statement of qualification in effect under Section 1001.
SECTION 202. FORMATION OF PARTNERSHIP.
(a)
Except as otherwise provided in subsection (b), the association of two or more
persons to carry on as co-owners a business for profit forms a partnership,
whether or not the persons intend to form a partnership.
(b) An association
formed under a statute other than this [Act] [act], a predecessor
statute, or a comparable statute of another jurisdiction is not a partnership
under this [Act] [act].
(c) In determining
whether a partnership is formed, the following rules apply:
(1) Joint
tenancy, tenancy in common, tenancy by the entireties, joint property, common
property, or part ownership does not by itself establish a partnership, even if
the co-owners share profits made by the use of the property.
(2) The sharing
of gross returns does not by itself establish a partnership, even if the
persons sharing them have a joint or common right or interest in property from
which the returns are derived.
(3) A person who
receives a share of the profits of a business is presumed to be a partner in
the business, unless the profits were received in payment:
(i) (A) of a debt by installments or
otherwise;
(ii) (B) for services as an independent
contractor or of wages or other compensation to an employee;
(iii) (C) of rent;
(iv) (D) of an annuity or other
retirement or health benefit to a beneficiary, representative, or designee of a
deceased or retired partner;
(v) (E) of interest or other charge on a
loan, even if the amount of payment varies with the profits of the business,
including a direct or indirect present or future ownership of the collateral,
or rights to income, proceeds, or increase in value derived from the
collateral; or
(vi) (F) for the sale of the goodwill of
a business or other property by installments or otherwise.
SECTION 203.
PARTNERSHIP PROPERTY. Property acquired by a partnership is
property of the partnership and not of the partners individually.
SECTION 204. WHEN PROPERTY IS
PARTNERSHIP PROPERTY.
(a) Property is
partnership property if acquired in the name of:
(1) the partnership; or
(2) one or more partners with an indication in the instrument
transferring title to the property of the person’s capacity as a partner or of
the existence of a partnership but without an indication of the name of the
partnership.
(b) Property is
acquired in the name of the partnership by a transfer to:
(1) the partnership in its name; or
(2) one or more partners in their capacity as partners in the
partnership, if the name of the partnership is indicated in the instrument
transferring title to the property.
(c) Property is
presumed to be partnership property if purchased with partnership assets, even
if not acquired in the name of the partnership or of one or more partners with
an indication in the instrument transferring title to the property of the
person’s capacity as a partner or of the existence of a partnership.
(d) Property
acquired in the name of one or more of the partners, without an indication in
the instrument transferring title to the property of the person’s capacity as a
partner or of the existence of a partnership and without use of partnership
assets, is presumed to be separate property, even if
used for partnership purposes.
SECTION 301.
PARTNER AGENT OF PARTNERSHIP. Subject to the effect of a statement of
partnership authority under Section 303, the following rules apply:
(1) Each partner
is an agent of the partnership for the purpose of its business. An act of a
partner, including the execution signing of an instrument in the
partnership name, for apparently carrying on in the ordinary course the
partnership business or business of the kind carried on by the partnership
binds the partnership, unless the partner had no did not have
authority to act for the partnership in the particular matter and the person
with whom which the partner was dealing knew, or had received
a notification notice, that the partner lacked authority.
(2) An act of a
partner which is not apparently for carrying on in the ordinary course the partnership
partnership’s business or business of the kind carried on by the
partnership binds the partnership only if the act was actually
authorized by all the other partners.
SECTION 302. TRANSFER OF PARTNERSHIP PROPERTY.
(a) Partnership
property may be transferred as follows:
(1) Subject to
the effect of a statement of partnership authority under Section 303,
partnership property held in the name of the partnership may be transferred by
an instrument of transfer executed by a partner in the partnership name.
(2) Partnership
property held in the name of one or more partners with an indication in the
instrument transferring the property to them of their capacity as partners or
of the existence of a partnership, but without an indication of the name of the
partnership, may be transferred by an instrument of transfer executed by the
persons in whose name the property is held.
(3) Partnership
property held in the name of one or more persons other than the partnership,
without an indication in the instrument transferring the property to them of
their capacity as partners or of the existence of a partnership, may be
transferred by an instrument of transfer executed by the persons in whose name
the property is held.
(b) A partnership
may recover partnership property from a transferee only if it proves that
execution of the instrument of initial transfer did not bind the partnership
under Section 301 and:
(1) as to a
subsequent transferee who gave value for property transferred under subsection
(a)(1) and (2), proves that the subsequent transferee knew or had received a
notification that the person who executed the instrument of initial transfer
lacked authority to bind the partnership; or
(2) as to a transferee who gave value for property transferred
under subsection (a)(3), proves that the transferee knew or had received a
notification that the property was partnership property and that the person who
executed the instrument of initial transfer lacked authority to bind the
partnership.
(c) A partnership
may not recover partnership property from a subsequent transferee if the
partnership would not have been entitled to recover the property, under
subsection (b), from any earlier transferee of the property.
(d) If a person
holds all of the partners’ interests in the partnership, all of
the partnership property vests in that person. The person may execute a
document in the name of the partnership to evidence vesting of the property in
that person and may file or record the document.
SECTION 303. STATEMENT OF PARTNERSHIP AUTHORITY.
(a) A partnership
may file deliver to the [Secretary of State] for filing a
statement of partnership authority. which
The statement:
(1) must include:
(i) (A)
the name of the partnership; and
(ii) (B)
if the partnership is not a limited
liability partnership, the
street address and mailing
addresses of its chief
executive principal
office and of one office in this
State, if there is one.
(iii) the names and mailing addresses of
all of the partners or of an agent appointed and maintained by the partnership
for the purpose of subsection (b); and
(iv) the names of the partners authorized
to execute an instrument transferring real property held in the name of the
partnership; and
(2) may state
the authority, or limitations on the authority, of some or all of the partners
to enter into other transactions on behalf of the partnership and any other
matter.
(b) If a statement of partnership
authority names an agent, the agent shall maintain a list of the names and
mailing addresses of all of the partners and make it available to any person on
request for good cause shown.
(c) If a filed statement of partnership
authority is executed pursuant to Section 105(c) and states the name of the
partnership but does not contain all of the other information required by
subsection (a), the statement nevertheless operates with respect to a person
not a partner as provided in subsections (d) and (e).
(d) Except as otherwise provided in
subsection (g), a filed statement of partnership authority supplements the
authority of a partner to enter into transactions on behalf of the partnership
as follows:
(1) Except for transfers of real
property, a grant of authority contained in a filed statement of partnership
authority is conclusive in favor of a person who gives value without knowledge
to the contrary, so long as and to the extent that a limitation on that
authority is not then contained in another filed statement. A filed
cancellation of a limitation on authority revives the previous grant of
authority.
(2) A grant of authority to transfer real
property held in the name of the partnership contained in a certified copy of a
filed statement of partnership authority recorded in the office for recording
transfers of that real property is conclusive in favor of a person who gives
value without knowledge to the contrary, so long as and to the extent that a
certified copy of a filed statement containing a limitation on that authority
is not then of record in the office for recording transfers of that real
property. The recording in the office for recording transfers of that real
property of a certified copy of a filed cancellation of a limitation on
authority revives the previous grant of authority.
(e) A person not a partner is deemed to
know of a limitation on the authority of a partner to transfer real property
held in the name of the partnership if a certified copy of the filed statement
containing the limitation on authority is of record in the office for recording
transfers of that real property.
(f) Except as otherwise provided in
subsections (d) and (e) and Sections 704 and 805, a person not a partner is not
deemed to know of a limitation on the authority of a partner merely because the
limitation is contained in a filed statement.
(g) Unless earlier canceled, a filed statement
of partnership authority is canceled by operation of law five years after the
date on which the statement, or the most recent amendment, was filed with the
[Secretary of State].
(2) with respect to any position that
exists in or with respect to the partnership, may state the authority, or
limitations on the authority, of all persons holding the position to:
(A)
execute an instrument transferring real property held
in the name of the partnership; or
(B)
enter into other transactions on behalf of, or otherwise
act for or bind, the partnership; and
(3) may state the authority, or limitations
on the authority, of a specific person to: (A) execute an
instrument transferring real property held in the name of the partnership; or
(B) enter
into other transactions on behalf of, or otherwise act for or bind, the
partnership.
(b) To amend or cancel a statement of authority filed by the
[Secretary of State], a partnership must deliver to the [Secretary of State]
for filing an amendment or cancellation stating:
(1) the name of the partnership;
(2) the street and mailing addresses of the partnership’s
principal office;
(3) the date the statement being affected became effective; and
(4) the contents of the amendment or a declaration that the
statement is cancelled.
(c) A statement of authority affects only the power of a person to
bind a partnership to persons that are not partners.
(d) Subject to
subsection (c) and Section 103(d)(1), and except as otherwise provided in
subsections (f), (g), and (h), a limitation on the authority of a person or a
position contained in an effective statement of
authority is not by itself evidence any person’s knowledge or notice of the
limitation.
(e) Subject to
subsection (c), a grant of authority not pertaining to transfers of real
property and contained in an effective statement of authority is conclusive in
favor of a person that gives value in reliance on the grant, except to the
extent that if the person gives value:
(1) the person has knowledge to the
contrary;
(2) the statement has been canceled or restrictively amended
under subsection (b); or
(3) a limitation on the grant is contained in another statement
of authority that became effective after the statement containing the grant
became effective.
(f) Subject to subsection (c), an effective statement of authority
that grants authority to transfer real property held in the name of the
partnership and a certified copy of which is recorded in the office for
recording transfers of the real property is conclusive in favor of a person
that gives value in reliance on the grant without knowledge to the contrary,
except to the extent that when the person gives value:
(1) the statement has been canceled or restrictively amended under
subsection (b), and a certified copy of the cancellation or restrictive
amendment has been recorded in the office for recording transfers of the real
property; or
(2) a
limitation on the grant is contained in another statement of authority that
became effective after the statement containing the grant became effective, and
a certified copy of the later-effective statement is recorded in the office for
recording transfers of the real property.
(g) Subject to subsection (c), if a certified copy of an effective
statement containing a limitation on the authority to transfer real property
held in the name of a partnership is recorded in the
office for recording transfers of that real property, all persons are deemed to
know of the limitation.
(h) Subject to
subsection (i), an effective statement of dissolution is a cancellation of any
filed statement of authority for the purposes of subsection (f) and is a
limitation on authority for purposes of subsection (g).
(i) After a
statement of dissolution becomes effective, a partnership may deliver to the
[Secretary of State] for filing and, if appropriate, may record a statement of
authority that is designated as a post-dissolution statement of authority. The statement
operates as provided in subsections (f) and (g).
(j) Unless
canceled earlier, an effective statement of authority is canceled by operation
of law five years after the date on which the statement, or its most recent
amendment, becomes effective. Cancellation is effective without recording under
subsection (f) or (g).
(k) An
effective statement of denial operates as a restrictive amendment under this
section and may be recorded by certified copy for purposes of subsection (f)(1).
SECTION 304.
STATEMENT OF DENIAL. A partner or other person named as a
partner in a filed statement of partnership authority or in a list maintained
by an agent pursuant to Section 303(b) may file a statement of denial stating
the name of the partnership and the fact that is being denied, which may
include denial of a person’s authority or status as a partner. A statement of
denial is a limitation on authority as provided in Section 303(d) and (e). A
person named in a filed statement of authority granting that person authority
may deliver to the [Secretary of State] for filing a statement of denial that:
(1) provides the name of the partnership
and the caption of the statement of authority to which the statement of denial
pertains; and
(2) denies the
grant of authority.
SECTION 305. PARTNERSHIP LIABLE FOR PARTNER’S ACTIONABLE CONDUCT.
(a) A partnership is liable for loss or
injury caused to a person, or for a penalty incurred, as a result of a wrongful
act or omission, or other actionable conduct, of a partner acting in the
ordinary course of business of the partnership or with the actual or apparent authority of the partnership.
(b) If, in the
course of the partnership’s business or while acting with actual or apparent authority of the partnership, a partner
receives or causes the partnership to receive money or property of a person not
a partner, and the money or property is misapplied by a partner, the
partnership is liable for the loss.
SECTION 306.
PARTNER’S LIABILITY.
(a) Except as otherwise provided in
subsections (b) and (c), all partners are liable jointly and severally for all debts, obligations, and other liabilities of the
partnership unless otherwise agreed by the claimant or provided by law.
(b) A person admitted as that becomes a
partner into an existing partnership
is not personally liable for any
partnership a debt, obligation, or other liability of the partnership incurred before the person’s admission as person
became a partner.
(c) An A debt, obligation, or other liability of a
partnership incurred while the partnership is a limited liability partnership, whether arising in contract, tort, or
otherwise, is solely the debt,
obligation, or other liability
of the limited liability partnership.
A partner is not personally liable, directly or indirectly, by way of
contribution or otherwise, for such
an a debt, obligation, or other liability of the limited
liability partnership solely by reason of being or so acting as a partner. This subsection applies:
(1)
notwithstanding despite anything
inconsistent in the partnership agreement that existed immediately before the vote consent required to
become a limited liability partnership under Section 1001(b); and
(2)
regardless of the dissolution of the limited liability
partnership.
(d) The failure of a limited liability
partnership to observe any formalities relating to the exercise of its powers
or management of its business is not a ground for imposing liability on any
partner of the partnership for any debt, obligation, or other liability of the
partnership.
(e) The cancellation or administrative revocation of a limited liability
partnership’s statement of qualification does not affect this section’s
limitation on the liability of a partner for a debt, obligation, or other
liability of the partnership incurred while the statement was in effect.
SECTION 307. ACTIONS BY AND AGAINST PARTNERSHIP AND PARTNERS.
(a) A partnership may sue and be sued in
the name of the partnership.
(b) An action may be brought against the
partnership and, to To the extent not inconsistent with Section 306,
any or all of the partners a
partner may be joined in an action against the partnership or named in a
separate action in the same action or in separate actions.
(c) A judgment
against a partnership is not by itself a judgment against a partner. A judgment against a partnership may not be
satisfied from a partner’s assets unless there is also a judgment against the
partner.
(d) A judgment
creditor of a partner may not levy execution against the assets of the partner
to satisfy a judgment based on a claim against the partnership unless the
partner is personally liable for the claim under Section 306 and:
(1) a judgment based on the same claim has been obtained against
the partnership and a writ of execution on the judgment has been returned
unsatisfied in whole or in part;
(2) the partnership is a debtor in bankruptcy;
(3) the partner has agreed that the creditor need not exhaust
partnership assets;
(4) a court
grants permission to the judgment creditor to levy execution against the assets
of a partner based on a finding that partnership assets subject to execution
are clearly insufficient to satisfy the judgment, that exhaustion of
partnership assets is excessively burdensome, or that the grant of permission
is an appropriate exercise of the court’s equitable powers; or
(5) liability is imposed on the partner by law or contract
independent of the existence of the partnership.
(e) This section applies to any partnership
liability or obligation resulting from a representation by a partner or
purported partner under Section 308.
SECTION 308. LIABILITY OF PURPORTED PARTNER.
(a) If a person,
by words or conduct, purports to be a partner, or consents to being represented
by another as a partner, in a partnership or with one or more persons not
partners, the purported partner is liable to a person to whom the
representation is made, if that person, relying on the representation, enters
into a transaction with the actual or purported partnership. If the
representation, either by the purported partner or by a person with the
purported partner’s consent, is made in a public manner, the purported partner
is liable to a person who relies upon the purported partnership even if the
purported partner is not aware of being held out as a partner to the claimant. If
partnership liability results, the purported partner is
liable with respect to that liability as if the purported partner were a
partner. If no partnership liability results, the purported partner is liable
with respect to that liability jointly and severally with any other person
consenting to the representation.
(b) If a person is
thus represented to be a partner in an existing partnership, or with one or
more persons not partners, the purported partner is an agent of persons
consenting to the representation to bind them to the same extent and in the
same manner as if the purported partner were a partner, with respect to persons
who enter into transactions in reliance upon the representation. If all of the partners of the existing partnership consent
to the representation, a partnership act or obligation results. If fewer
than all of the partners of the existing partnership consent to the
representation, the person acting and the partners consenting to the
representation are jointly and severally liable.
(c) A person is
not liable as a partner merely because the person is named by another in a
statement of partnership authority.
(d) A person does
not continue to be liable as a partner merely because of a failure to file a
statement of dissociation or to amend a statement of partnership authority to
indicate the partner’s dissociation from the partnership.
(e)
Except as otherwise provided in subsections (a) and (b), persons who are not
partners as to each other are not liable as partners to other persons.
SECTION 401. PARTNER’S RIGHTS AND DUTIES.
(a) Each partner is deemed to have an
account that is:
(1) credited with an amount equal to the
money plus the value of any other property, net of the amount of any
liabilities, the partner contributes to the partnership and the partner’s share
of the partnership profits; and
(2) charged with
an amount equal to the money plus the value of any other property, net of the
amount of any liabilities, distributed by the partnership to the partner and
the partner’s share of the partnership losses.
(b) Each
partner is entitled to an equal share of the partnership profits and, except in the case of a limited liability
partnership, is chargeable with a share of the partnership losses in
proportion to the partner’s share of the profits.
(c) (b) A partnership shall reimburse a partner for payments any payment made and
indemnify a partner for liabilities incurred by the partner in the ordinary course of the partner’s business on behalf of the partnership or for the preservation of its business
or property, if the partner complied with this section and Sections 406
and 409 in making the payment.
(c) A partnership shall indemnify and
hold harmless a person with respect to any claim or demand against the person
and any debt, obligation, or other liability incurred by the person by reason
of the person’s former or present capacity as partner, if the claim, demand,
debt, obligation, or other liability does not arise from the person’s breach of
this section or Section 406 or 409.
(d) In the ordinary course of its business, a partnership may
advance reasonable expenses, including attorney’s fees and costs, incurred by a
person in connection with a claim or demand against the person by reason of the
person’s former or present capacity as a partner, if the person promises to repay
the partnership if the person ultimately is determined not to be entitled to be
indemnified under subsection (c).
(e) A partnership may purchase and maintain insurance on behalf of a
partner against liability asserted against or incurred by the partner in that
capacity or arising from that status even if, under Section 103(c)(7), the
partnership agreement could not eliminate or limit the person’s liability to
the partnership for the conduct giving rise to the liability.
(d) (f) A partnership shall reimburse a partner for an
advance to the partnership beyond the amount of capital the partner agreed to
contribute.
(e) (g) A payment or advance made by a partner which gives
rise to a partnership obligation under subsection (c) (b) or (d)
(f) constitutes a loan to the partnership which accrues interest from
the date of the payment or advance.
(f) (h) Each partner has equal rights in the management and
conduct of the partnership partnership’s
business.
(g) (i) A partner may use or possess partnership property
only on behalf of the partnership.
(h) (j) A partner is not entitled to remuneration for
services performed for the partnership, except for reasonable compensation for
services rendered in winding up the business of the partnership.
(i) A person
may become a partner only with the consent of all of the partners.
(j) (k) A difference arising as to a matter in the ordinary
course of business of a partnership may be decided by a majority of the
partners. An act outside the ordinary course of business of a partnership, and an amendment to the
partnership agreement, and the
approval of a transaction under [Article] 9 may be undertaken only with
the consent of all of the
partners.
(k) This section does not affect the
obligations of a partnership to other persons under Section 301.
SECTION 402. BECOMING PARTNER.
(a) Upon formation of a partnership, a
person becomes a partner under Section 202(a).
(b) After formation of a partnership, a
person becomes a partner:
(1) as provided
in the partnership agreement;
(2) as a result of a transaction effective
under [Article] 9; or
(3) with the consent of all the partners.
(c) A person may become a partner without
either:
(1)
acquiring a transferable interest; or
(2)
making or being obligated to make a contribution to
the partnership.
SECTION 403. FORM OF CONTRIBUTION. A contribution may consist of property transferred, services
performed, or other benefit provided to the partnership or an agreement to transfer
property, perform services, or provide another benefit.
SECTION 404. LIABILITY FOR CONTRIBUTION.
(a) A person’s
obligation to make a contribution to a partnership is not excused by the
person’s death, disability, or other inability to perform personally.
(b) If a person does not fulfill an
obligation to make a contribution, the person is obligated at the option of the
partnership to contribute money equal to the value of the part of the
contribution which has not been made.
(c) The obligation of a person to make a
contribution may be compromised only by consent of all partners. If a creditor
of a limited liability partnership extends credit or otherwise acts in reliance
on an obligation described in subsection (a), without notice of a compromise
under this subsection, the creditor may enforce the obligation.
SECTION 402 405. DISTRIBUTIONS IN KIND
SHARING OF AND RIGHT TO DISTRIBUTIONS BEFORE DISSOLUTION. A
partner has no right to receive, and may not be required to accept, a
distribution in kind.
(a) Any distributions made by a partnership before its dissolution
and winding up must be in equal shares among partners, except to the extent
necessary to comply with a transfer effective under Section 503 or charging
order in effect under Section 504.
(b) A person has a right to a distribution before the dissolution
and winding up of a partnership only if the partnership decides to make an
interim distribution.
(c) A person
does not have a right to demand or receive a distribution from a partnership in
any form other than money. Except as otherwise provided in Section 808, a partnership
may distribute an asset in kind only if each part of the asset is fungible with
each other part and each person receives a percentage of the asset equal in
value to the person’s share of distributions.
(d) If a
partner or transferee becomes entitled to receive a distribution, the partner
or transferee has the status of, and is entitled to all remedies available to,
a creditor of the partnership with respect to the distribution. However, the partnership’s obligation to make
a distribution is subject to offset for any amount owed to the partnership by
the partner or a person dissociated as partner on whose account the
distribution is made.
SECTION 406. LIMITATIONS ON DISTRIBUTIONS BY LIMITED LIABILITY PARTNERSHIP.
(a) A limited
liability partnership may not make a distribution, including a distribution
under Section 808, if after the distribution:
(1) the limited liability partnership would not be able to pay its
debts as they become due in the ordinary course of the partnership’s
business; or
(2) the limited liability partnership’s total assets would be less
than the sum of its total liabilities plus, unless the partnership agreement
permits otherwise, the amount that would be needed, if the partnership were to
be dissolved and wound up at the time of the distribution, to satisfy the
preferential rights upon dissolution and winding up of partners and transferees
whose preferential rights are superior to the right to receive distributions of
the persons receiving the distribution.
(b) A limited liability partnership may
base a determination that a distribution is not prohibited under subsection (a)
on:
(1) financial statements prepared on the basis of accounting
practices and principles that are reasonable in the circumstances; or
(2) a
fair valuation or other method that is reasonable under the circumstances.
(c) Except as otherwise provided in subsection (e), the effect of a
distribution under subsection (a) is measured:
(1) in the case
of a distribution as defined in Section 102(4)(A), as of the earlier of the
date:
(A) money or
other property is transferred or debt is incurred by the limited liability
partnership; or
(B) the person entitled to the distribution
ceases to own the interest or rights being acquired by the limited liability partnership
in return for the distribution;
(2) in the case
of any other distribution of indebtedness, as of the date the indebtedness is
distributed; and
(3) in all other cases, as of the date:
(A) the
distribution is authorized, if the payment occurs not later than 120 days after
that date; or
(B) the payment is made, if the payment
occurs more than 120 days after the distribution is authorized.
(d) A limited liability partnership’s
indebtedness to a partner or transferee incurred by reason of a distribution
made in accordance with this section is at parity with the limited liability
company’s indebtedness to its general, unsecured creditors, except to the
extent subordinated by agreement.
(e) A limited
liability partnership’s indebtedness, including indebtedness issued as a
distribution, is not a liability for purposes of subsection (a) if the terms of
the indebtedness provide that payment of principal and interest is made only if
and to the extent that a payment of a distribution could
then be made under this section. If the indebtedness is
issued as a distribution, each payment of principal or interest is treated as a
distribution, the effect of which is measured on the date the payment is made.
(f) In
measuring the effect of a distribution under Section 808, the debts and liabilities
of a dissolved limited liability partnership do not include any claim that has
been disposed of under Sections 809, 810, and 811.
SECTION 407. LIABILITY FOR IMPROPER DISTRIBUTIONS BY A LIMITED LIABILITY
PARTNERSHIP.
(a) If a partner
of a limited liability partnership consents to a distribution made in violation
of Section 406 and in consenting to the distribution fails to comply with
Section 409, the partner is personally liable to the partnership for the amount
of the distribution which exceeds the amount that could have been distributed
without the violation of Section 406.
(b) A person that receives a distribution
knowing that the distribution violated of Section 406 is personally liable to
the limited liability partnership but only to the extent that the distribution
received by the person exceeded the amount that could have been properly paid
under Section 406.
(c) A person against which an action is
commenced because the person is liable under subsection (a) may:
(1) implead any other person that is
subject to liability under subsection (a) and seek to enforce a right of
contribution from the person; and
(2) implead any person that received a distribution in violation
of subsection (b) and seek to enforce a right of contribution from the person
in the amount the person received in violation of subsection (b).
(d) An action under this section is
barred if not commenced not later than two years after the distribution.
SECTION 403 408. PARTNER’S RIGHTS OF PARTNERS AND DUTIES WITH RESPECT PERSON DISSOCIATED AS PARTNER TO
INFORMATION.
(a) A partnership shall keep its books
and records, if any, at its chief
executive principal office.
(b) A partnership shall provide partners
and their agents and attorneys access to its books and records. It shall
provide former partners and their agents and attorneys access to books and
records pertaining to the period during which they were partners. The right of
access provides the opportunity to inspect and copy books and records during
ordinary business hours. A partnership may impose a reasonable charge, covering
the costs of labor and material, for copies of documents furnished.
(c) Each partner and the partnership
shall furnish to a partner, and to the legal representative of a deceased
partner or partner under legal disability:
(1) without demand, any information
concerning the partnership’s business and affairs reasonably required for the
proper exercise of the partner’s rights and duties under the partnership
agreement or this [Act]; and
(2) on demand,
any other information concerning the partnership’s business and affairs, except
to the extent the demand or the information demanded is unreasonable or
otherwise improper under the circumstances.
(b) On
reasonable notice, a partner may inspect and copy during regular business
hours, at a reasonable location specified by the partnership, any record
maintained by the partnership regarding the partnership’s business, financial
condition, and other circumstances, to the extent the information is material
to the partner’s rights and duties under the partnership agreement or this
[act].
(c) The
partnership shall furnish to each partner:
(1)
without demand, any information concerning the partnership’s business,
financial condition, and other circumstances which the partnership knows and is
material to the proper exercise of the partner’s rights and duties under the
partnership agreement or this [act], except to the extent the partnership can
establish that it reasonably believes the member already knows the information;
and
(2) on demand, any other information concerning the
partnership’s business, financial condition, and other
circumstances, except to the extent the demand or information demanded is
unreasonable or otherwise improper under the circumstances.
(d) The duty to furnish information under subsection (c) also
applies to each partner to the extent the partner knows any of the information
described in subsection (c).
(e) Subjection to subsection (j), on 10 days’ demand made in a
record received by a partnership, a person dissociated as a partner may have
access to information to which the person was entitled while a partner if:
(1) the
information pertains to the period during which the person was a partner;
(2) the
person seeks the information in good faith; and
(3) the
person satisfies the requirements imposed on a partner by subsection (b).
(f) Not later
than 10 days after receiving a demand under subsection (e), the partnership in
a record shall inform the person that made the demand:
(1) of the information that the partnership will provide in
response to the demand and when and where the partnership will provide the
information; and
(2) if the partnership declines to provide any demanded
information, the partnership’s reasons for declining.
(g) A
partnership may charge a person that makes a demand under this section the
reasonable costs of copying, limited to the costs of labor and material.
(h) A partner
or person dissociated as a partner may exercise rights under this section
through an agent or, in the case of an individual under legal disability, a
legal representative. Any restriction or condition imposed by the partnership
agreement or under subsection (j) applies both to the agent or legal
representative and the partner or person dissociated as a partner.
(i) The rights
under this section do not extend to a person as transferee.
(j) In addition
to any restriction or condition stated in the partnership agreement, a
partnership, as a matter within the ordinary course of its business, may impose
reasonable restrictions and conditions on access to and use of information to
be furnished under this section, including designating information confidential
and imposing nondisclosure and safeguarding obligations on the recipient. In a
dispute concerning the reasonableness of a restriction under this subsection,
the partnership has the burden of proving reasonableness.
SECTION
404 409. GENERAL STANDARDS OF PARTNER’S
CONDUCT FOR PARTNERS.
(a) The only fiduciary duties a A partner
owes to the partnership and the other partners are the duty the duties of loyalty and the duty of care set forth stated in
subsections (b) and (c).
(b) A partner’s The
fiduciary duty of loyalty to
the partnership and the other partners is limited to the following of a
partner includes the duties:
(1) to account to the partnership and hold as trustee for it any
property, profit, or benefit derived by the partner:
(A) in the conduct and
or winding up of the partnership
partnership’s business;
(B) or derived from a use by the partner of the partnership partnership’s
property; or
(C) including from the appropriation of a
partnership opportunity;
(2) to refrain from dealing with the partnership in the conduct
or winding up of the partnership business as or on behalf of a party person having an
interest adverse to the partnership; and
(3) to refrain from competing with the partnership in the
conduct of the partnership partnership’s
business before the dissolution of the partnership.
(c) A partner’s The
duty of care of a partner to
the partnership and the other partners in the conduct and or winding up of the
partnership business is limited to
refraining refrain from
engaging in grossly negligent or reckless conduct, intentional misconduct, or a
knowing violation of law.
(d) A partner shall
discharge the duties to the
partnership and the other partners and obligations under this [Act]
[act] or under the partnership agreement and exercise any rights
consistently with the contractual obligation
of good faith and fair dealing.
(e) A partner does
not violate a duty or obligation under this [Act] [act] or under
the partnership agreement merely solely because the partner’s
conduct furthers the partner’s own interest.
(f) All the partners may authorize or
ratify, after full disclosure of all material facts, a specific act or
transaction that otherwise would violate the duty of loyalty.
(g) It is a defense to a claim under
subsection (b)(2) and any comparable claim in equity
or at common law that the transaction was fair to the partnership.
(f) (h) A partner
may lend money to and transact other business with the partnership, and as to
each loan or transaction the rights and obligations of the partner are the same
as those of a person who is not a partner, subject to other applicable law.
If, as permitted by subsection (f) or the partnership agreement, a partner
enters into a transaction with the partnership which otherwise would be
prohibited by subsection (b)(2), the partner’s rights
and obligations arising from the transaction are the same as those of a person that
is not a partner.
(g) This
section applies to a person winding up the partnership business as the personal
or legal representative of the last surviving partner as if the person were a
partner.
SECTION
405 410. ACTIONS BY PARTNERSHIP AND PARTNERS.
(a) A partnership
may maintain an action against a partner for a breach of the partnership
agreement, or for the violation of a duty to the partnership, causing harm to
the partnership.
(b) A partner may
maintain an action against the partnership or another partner for legal or
equitable relief, with or without an accounting as to partnership business, to:
(1) enforce the partner’s rights under the partnership
agreement;
(2) enforce the partner’s rights under this [Act] [act], including:
(i) the partner’s
rights under Sections 401, 403, or 404;
(ii) the partner’s right on dissociation
to have the partner’s interest in the partnership purchased pursuant to Section
701 or enforce any other right under [Article] 6 or 7; or
(iii) the
partner’s right to compel a dissolution and winding up of the partnership
business under Section 801 or enforce any other right under [Article] 8;
or
(3) enforce the rights and otherwise
protect the interests of the partner, including rights and interests arising
independently of the partnership relationship.
(c) The accrual
of, and any time limitation on, a right of action for a remedy under this section
is governed by other law. A right to an accounting upon a
dissolution and winding up does not revive a claim barred by law.
SECTION 406 411. CONTINUATION OF PARTNERSHIP BEYOND DEFINITE TERM OR PARTICULAR
UNDERTAKING.
(a) If a partnership for a definite term
or particular undertaking is continued, without an express agreement, after the
expiration of the term or completion of the undertaking, the rights and duties
of the partners remain the same as they were at the expiration or completion,
so far as is consistent with a partnership at will.
(b) If the
partners, or those of them who habitually acted in the business during the term
or undertaking, continue the business without any settlement or liquidation of
the partnership, they are presumed to have agreed that the partnership will
continue.
SECTION 501.
PARTNER NOT CO-OWNER OF PARTNERSHIP PROPERTY.
A partner is not a co-owner of partnership property and has no interest in
partnership property which can be transferred, either voluntarily or
involuntarily.
SECTION 502.
PARTNER’S NATURE OF TRANSFERABLE INTEREST IN
PARTNERSHIP. The only transferable interest of a
partner in the partnership is the partner’s share of the profits and losses of
the partnership and the partner’s right to receive distributions. The
A transferable interest is personal property.
SECTION 503.
TRANSFER OF PARTNER’S
TRANSFERABLE INTEREST.
(a)
A transfer, in whole or in part, of a partner’s
transferable interest in the
partnership:
(1) is permissible;
(2) does not by itself cause the partner’s a person’s
dissociation or a dissolution and winding up of the partnership business; and
(3) subject to
Section 505, does not, as
against the other partners or the partnership, entitle the transferee to:
(A) during the continuance of the partnership, to
participate in the management or conduct of the partnership partnership’s business; or
(B) business, to require except as otherwise
provided in subsection (c), have access to records or other information concerning the partnership partnership’s transactions, or
to inspect or copy the partnership books or records business.
(b) A transferee of
a partner’s transferable interest in the partnership has a the right to:
(1)
to receive, in accordance with the transfer,
distributions to which the transferor would otherwise be entitled; and
(2)
to receive upon the dissolution and winding
up of the partnership business, in accordance with the transfer, the net amount
otherwise distributable to the transferor; and
seek under Section 801(6) a judicial determination that it is equitable to wind
up the partnership business.
(c) In a dissolution and winding
up of a partnership, a
transferee is entitled to an account of partnership
the partnership’s transactions only from the date of the latest
account agreed to by all of
the partners.
(d) Upon
transfer, the transferor retains the rights and duties of a partner other than
the interest in distributions transferred. Except as otherwise provided
in Section 601(4)(B), if a partner transfers a
transferable interest, the transferor retains the rights of a partner other
than the transferable interest transferred and retains all duties and
obligations of a partner.
(e) A partnership need not give effect to a transferee’s
rights under this section until it
the partnership knows or has notice of the transfer.
(f) A transfer of a partner’s
transferable interest in the
partnership in violation of a restriction on transfer contained in the
partnership agreement is ineffective as to a person having knowledge or notice of the restriction at the time of
transfer.
(g) If a
partner transfers a transferable interest to a person that becomes a partner
with respect to the transferred interest, the transferee is liable for the
partner’s obligations under Sections 404 and 407 known to the transferee when
the transferee becomes a partner.
SECTION 504. PARTNER’S TRANSFERABLE INTEREST SUBJECT
TO CHARGING ORDER.
(a) On application
by a judgment creditor of a partner or of
a partner’s transferee, a court having
jurisdiction may charge the transferable interest of the judgment debtor to
satisfy the judgment. The court may appoint a receiver of the share of the
distributions due or to become due to the judgment debtor in respect of the
partnership and make all other orders, directions, accounts, and inquiries the
judgment debtor might have made or which the circumstances of the case may
require. may enter a charging order
against the transferable interest of the judgment debtor for the unsatisfied
amount of the judgment. A charging order constitutes a lien on a judgment
debtor’s transferable interest and requires the partnership to pay over to the
person to which the charging order was issued any distribution that otherwise would
be paid to the judgment debtor.
(b) A charging order constitutes a lien on
the judgment debtor’s transferable interest in the partnership. The court may
order a foreclosure of the interest subject to the charging order at any time.
The purchaser at the foreclosure sale has the rights of a transferee. To
the extent necessary to effectuate the collection of distributions pursuant to
a charging order in effect under subsection (a), the court may:
(c) At any time before foreclosure, an
interest charged may be redeemed:
(1) by the judgment debtor appoint a
receiver of the distributions subject to the charging order, with the power to
make all inquiries the judgment debtor might have made; and
(2) with property other than partnership
property, by one or more of the other partners; or make all other orders
necessary to give effect to the charging order.
(3) (c) with partnership property, by one or
more of the other partners with the consent of all of the partners whose
interests are not so charged. Upon
a showing that distributions under a charging order will not pay the judgment
debt within a reasonable time, the court may foreclose the lien and order the
sale of the transferable interest. The purchaser at the foreclosure sale
obtains only the transferable interest, does not thereby become a partner, and
is subject to Section 503.
(d) This [Act] does not deprive a partner of
a right under exemption laws with respect to the partner’s interest in the
partnership. At any time before foreclosure under subsection (c), the
partner or transferee whose transferable interest is subject to a charging
order under subsection (a) may extinguish the charging order by satisfying the
judgment and filing a certified copy of the satisfaction with the court that
issued the charging order.
(e) This section provides the exclusive
remedy by which a judgment creditor of a partner or partner’s transferee may
satisfy a judgment out of the judgment debtor’s transferable interest in the
partnership. At any time before foreclosure under subsection (c), a
partnership or one or more partners whose transferable interests are not
subject to the charging order may pay to the judgment creditor the full amount
due under the judgment and thereby succeed to the rights of the judgment
creditor, including the charging order.
(f) This [act] does not deprive any
partner or transferee of the benefit of any exemption law applicable to the
transferable interest of the partner or transferee.
(g) This section provides the exclusive
remedy by which a person seeking to enforce a judgment against a partner or
transferee may, in the capacity of judgment creditor, satisfy the judgment from
the judgment debtor’s transferable interest.
SECTION 505. POWER OF LEGAL REPRESENTATIVE
OF DECEASED PARTNER. If a partner dies, the deceased partner’s
legal representative may exercise:
(1) the rights of a transferee provided in
Section 503(c); and
(2) for purposes
of settling the estate, the rights the deceased partner had under Section 408.
SECTION 601.
EVENTS CAUSING PARTNER’S DISSOCIATION.
A partner
person is dissociated as
a partner from a partnership upon
the occurrence of any of the following events when:
(1) the partnership’s having partnership
has notice of the partner’s
person’s express will to withdraw as a partner, but, if the person specified a withdrawal date later than the date
the partnership had notice, or on a that later date specified
by the partner;
(2) an event agreed
to stated in the partnership agreement as causing the partner’s person’s dissociation
occurs;
(3) the partner’s expulsion
person is expelled as partner pursuant to the partnership agreement;
(4) the partner’s
expulsion person is expelled as partner by the unanimous vote consent of the other
partners if:
(i) (A)
it is unlawful to carry on the partnership business with that the person as a partner;
(ii) (B)
there has been a transfer of all or
substantially all of that partner’s of the
person’s transferable interest in the
partnership, other than:
(i) a transfer for security purposes,; or
(ii) a court order
charging the partner’s interest order
in effect under Section 504, which has not been foreclosed;
(iii) (C)
within 90 days after the partnership notifies a corporate partner that it
will be expelled because it has filed a certificate of dissolution or the
equivalent, its charter has been revoked, or its right to conduct business has
been suspended by the jurisdiction of its incorporation, there is no revocation
of the certificate of dissolution or no reinstatement of its charter or its
right to conduct business; the
person is a corporation and:
(i)
the partnership notifies the person that it will be expelled as a partner
because the person has filed a certificate of dissolution or the equivalent,
its charter has been revoked, or its right to conduct business has been
suspended by the jurisdiction of its incorporation; and
(ii)
not later than 90 days after the notification, the certificate of dissolution or
the equivalent has not been revoked or the charter or right to conduct business
has not been reinstated; or
(iv) (D)
a partnership that is a partner
the person is an unincorporated entity that has been dissolved and its whose business is being wound
up;
(5) on application by the partnership or another partner, the partner’s expulsion person is
expelled as a partner by judicial
determination order because the person:
(i) (A)
the partner has engaged
or is engaging in wrongful
conduct that has adversely and
materially, or will adversely and
materially, affected affect, the partnership business;
(ii) (B)
the partner has willfully
or persistently committed, or is
willfully and persistently committing, a material breach of the
partnership agreement or of a
duty or obligation owed to the
partnership or the other partners under Section 404 409;
or
(iii) (C)
the partner engaged or is engaging in conduct
relating to the partnership partnership’s
business which makes it not reasonably practicable to carry on the business in partnership with the person as a partner;
(6) the partner’s person:
(i) (A)
becoming becomes a
debtor in bankruptcy;
(ii) (B)
executing executes an
assignment for the benefit of creditors; or
(iii) (C)
seeking, consenting to, or acquiescing
seeks, consents to, or acquiesces in the appointment of a trustee,
receiver, or liquidator of that
partner the person or of all or substantially all of that partner’s the person’s
property; or
(iv) failing, within 90 days after the
appointment, to have vacated or stayed the appointment of a trustee, receiver,
or liquidator of the partner or of all or substantially all of the partner’s
property obtained without the partner’s consent or acquiescence, or failing
within 90 days after the expiration of a stay to have the appointment vacated;
(7) in the case of a
partner who is an individual:
(i) (A)
the partner’s death individual
dies;
(ii) (B)
the appointment of a guardian
or general conservator for the partner
individual is appointed; or
(iii) (C)
a judicial determination court orders
that the partner individual
has otherwise become incapable of performing the partner’s individual’s duties as a partner under this
[act] or the partnership agreement;
(8) in the case of
a partner person that
is a testamentary or inter vivos
trust or is acting as a partner by virtue of being a trustee of such a trust, distribution of the trust’s
entire transferable interest in the partnership is distributed, but not merely by reason of the substitution
of a successor trustee;
(9) in the case of
a partner person that
is an estate or is acting as a partner by virtue of being a personal
representative of an estate, distribution
of the estate’s entire transferable interest in the partnership is distributed, but not merely by
reason of the substitution of a successor personal representative; or
(10) termination of a partner who in the case of a
person that is not an individual, partnership
corporation, unincorporated entity,
trust, or estate, the existence of the
person terminates;
(11) the partnership participates in a merger under [Article] 9
and:
(A) the partnership is not the surviving
entity; or
(B) otherwise as a result of the merger,
the person ceases to be a partner;
(12) the
partnership participates in an interest exchange under [Article] 9 and, as a
result of the interest exchange, the person ceases to be a partner;
(13) the partnership participates in a conversion under [Article]
9;
(14) the partnership participates in a
domestication under [Article] 9 and, as a result of the domestication, the
person ceases to be a partner; or
(15) the partnership dissolves and completes winding up.
SECTION 602. PARTNER’S POWER TO
DISSOCIATE AS PARTNER;
WRONGFUL DISSOCIATION.
(a) A partner person has the
power to dissociate as a partner
at any time, rightfully or wrongfully, by withdrawing
as a partner by express will pursuant
to under Section 601(1).
(b) A partner’s person’s
dissociation as a partner is
wrongful only if the dissociation:
(1) it is in
breach of an express provision of the partnership agreement; or
(2) in the case of a partnership for a definite term or
particular undertaking, occurs before the expiration of the term or the
completion of the undertaking and:
(i) (A)
the partner person
withdraws by express will, unless the withdrawal follows within not
later than 90 days after another partner’s
person’s dissociation by death or otherwise under Section 601(6)
through (10) or wrongful dissociation under this subsection;
(ii) (B)
the partner person is
expelled by judicial determination
order under Section 601(5);
(iii) (C)
the partner person is
dissociated by becoming a debtor in
bankruptcy under Section 601(6); or
(iv) (D)
in the case of a partner who person
that is not a an individual, trust other than a business trust, or an estate, an individual, or a trust other than a
business trust, the partner
person is expelled or otherwise dissociated because it willfully
dissolved or terminated.
(c) A partner who person that
wrongfully dissociates is liable to the partnership and to the other partners
for damages caused by the dissociation. The liability is in addition to any other debt, obligation, or other liability of the
partner to the partnership or to the
other partners.
SECTION 603. EFFECT OF PARTNER’S
DISSOCIATION.
(a) If a partner’s person’s
dissociation results in a dissolution and winding up of the partnership
business, [Article] 8 applies; otherwise, [Article] 7 applies.
(b) Upon a partner’s dissociation If a person is dissociated:
(1) the partner’s person’s
right to participate in the management and conduct of the partnership business
terminates, except as otherwise provided in Section 803 802(c); and
(2) the partner’s duty
of loyalty under Section 404(b)(3) terminates person’s duties and
obligations under Section 409:
(A)
end with regard to matters arising and events
occurring after the person’s dissociation; and
(3) the partner’s duty of loyalty under
Section 404(b)(1) and (2) and duty of care under Section 404(c) (B) continue only with regard to matters arising and
events occurring before the partner’s
person’s dissociation, unless the partner participates in winding up
the partnership’s business pursuant to Section 803 802.
(c) A person’s dissociation does not of
itself discharge the person from a debt, obligation, or other liability to the
partnership or the other partners which the person incurred while a partner.
SECTION 701.
PURCHASE OF INTEREST OF PERSON
DISSOCIATED PARTNER’S INTEREST AS
PARTNER.
(a) If a person is dissociated as a partner is
dissociated from a partnership without the dissociation resulting in a
dissolution and winding up of the partnership business under Section
801, the partnership shall cause the dissociated
partner’s person’s interest in the partnership to be purchased
for a buyout price determined pursuant to subsection (b).
(b) The buyout
price of the interest of a person dissociated as a partner partner’s interest is the amount that would have been distributable
to the dissociating partner person
under Section 807(b) if, on the date of dissociation, the assets of the
partnership were sold and the partnership were wound up, with the sale at
a price equal to the greater of:
(1) the
liquidation value; or
(2) the
value based on a sale of the entire business as a going concern without the person
dissociated partner and the partnership were wound up as of that date.
(c)
Interest must be paid accrues
on the buyout price from the date of dissociation to the date of payment., but damages (c)
Damages for wrongful dissociation under Section 602(b), and
all other amounts owing, whether or not presently due, from the person dissociated as a partner to the partnership,
must be offset against the buyout price.
Interest must be paid from the date the amount owed becomes due to the
date of payment.
(d) A partnership
shall defend, indemnify, and hold harmless a person dissociated as a
partner whose interest is being purchased against all partnership
liabilities, whether incurred before or after the dissociation, except
liabilities incurred by an act of the person
dissociated partner under Section 702.
(e) If no
agreement for the purchase of the
interest of a person dissociated
as a partner partner’s interest
is reached within not later than 120 days after a written
demand for payment, the partnership shall pay, or cause to be paid, in money to
the person dissociated partner
the amount the partnership estimates to be the buyout price and accrued
interest, reduced by any offsets and accrued interest under subsection (c).
(f) If a deferred
payment is authorized under subsection (h), the partnership may tender a
written offer to pay the amount it estimates to be the buyout price and accrued
interest, reduced by any offsets under subsection (c), stating the time of
payment, the amount and type of security for payment, and the other terms and
conditions of the obligation.
(g) The payment or
tender required by subsection (e) or (f) must be accompanied by the following:
(1) a
statement of partnership assets and liabilities as of the date of dissociation;
(2) the
latest available partnership balance sheet and income statement, if any;
(3) an
explanation of how the estimated amount of the payment was calculated; and
(4) written notice that the payment
is in full satisfaction of the obligation to purchase unless, within not
later than 120 days after the written notice, the person dissociated as
a partner commences an action to determine the buyout price, any
offsets under subsection (c), or other terms of the obligation to purchase.
(h) A partner who person that
wrongfully dissociates as a partner
before the expiration of a definite term or the completion of a particular
undertaking is not entitled to payment of any portion part of the
buyout price until the expiration of the term or completion of the undertaking,
unless the partner person establishes
to the satisfaction of the court that earlier payment will not cause undue
hardship to the business of the partnership. A deferred payment must be
adequately secured and bear interest.
(i) A person dissociated as a partner may maintain an
action against the partnership, pursuant to Section 405(b)(2)(ii) 408(b)(2)(ii),
to determine the buyout price of that partner’s
person’s interest, any offsets under
subsection (c), or other terms of the obligation to purchase. The action must
be commenced within not later than 120 days after the partnership
has tendered payment or an offer to pay or within one year after written demand
for payment if no payment or offer to pay is tendered. The court shall determine the buyout price of
the dissociated partner’s person’s
interest, any offset due under subsection (c), and accrued interest, and enter
judgment for any additional payment or refund. If deferred payment is
authorized under subsection (h), the court shall also determine the security
for payment and other terms of the obligation to purchase. The court may assess
reasonable attorney’s fees and the fees and expenses of appraisers or other
experts for a party to the action, in amounts the court finds equitable,
against a party that the court finds acted arbitrarily, vexatiously, or not in
good faith. The finding may be based on the partnership’s failure to tender payment
or an offer to pay or to comply with subsection (g).
SECTION 702. DISSOCIATED PARTNER’S
POWER TO BIND AND LIABILITY TO
PARTNERSHIP OF PERSON DISSOCIATED AS PARTNER.
(a) For two years after a partner dissociates
After a person is dissociated as a partner without the
dissociation resulting in a dissolution and winding up of the partnership
business, and before
the partnership, including a surviving
partnership is merged out of
existence, converted, or domesticated under
[Article] 9 or dissolved, the
partnership is bound by an act of the person dissociated partner which only if:
(1) the act would have bound the partnership under
Section 301 before dissociation; and
(2) only if
at the time of entering the other party enters into the transaction the other party:
(A) less than two years has passed since the dissociation; and
(B) the other party does not know or have notice of the
dissociation and
(1)
reasonably believed
believes that the person is
a dissociated partner was
then a partner;
(2)
did not have notice of the partner’s dissociation; and
(3)
is not deemed to have had knowledge under Section
303(e) 303(f) or notice under Section 704(c).
(b) A If
a partnership is bound under subsection (a), the person dissociated as a partner which caused the partnership to be bound is liable:
(1) to the partnership for any
damage caused to the partnership arising from an the obligation
incurred by the dissociated partner
after dissociation for which the partnership is liable under subsection (a); and
(2) if a partner or another person dissociated as a partner is
liable for the obligation, to the partner or other person for any damage caused
to the partner or other person arising from the liability.
SECTION 703. DISSOCIATED PARTNER’S
LIABILITY OF PERSON DISSOCIATED AS
PARTNER TO OTHER PERSONS.
(a) A partner’s person’s dissociation
as a partner does not of
itself discharge the partner’s person’s
liability as a partner for a partnership debt, obligation, or other liability of the partnership
incurred before dissociation. A
dissociated partner is Except as otherwise provided in subsection (b),
the person is not liable for a partnership obligation incurred after
dissociation, except as otherwise
provided in subsection (b).
(b) A partner who dissociates person
that has dissociated as a partner without the dissociation resulting in a dissolution and winding up
of the partnership business is liable as
a partner to the other party in on a transaction entered into by
the partnership, or a surviving
partnership under [Article] 9, within two years after the partner’s
after the dissociation, only if:
(1)
the a partner is would be liable for the obligation under Section 306 and
at the time of entering into on the transaction the other party:; and
(2)
at the time the other party enters into the
transaction:
(A)
less than two years has passed since the dissociation;
and
(B)
the other party does not have knowledge or notice of
the dissociation and
(1) reasonably
believed believes that
the dissociated partner was then person
is a partner.
(c) By agreement
with the partnership a creditor
and the partners continuing the
business of a partnership and the partnership, a person dissociated as a partner may be released from
liability for a partnership an
obligation of the partnership.
(d) A person dissociated as a partner is released from
liability for a partnership an
obligation of the partnership
if a partnership the
partnership’s creditor, with knowledge or notice of the partner’s person’s dissociation
but without the partner’s person’s
consent, agrees to a material alteration in the nature or time of payment of a partnership the obligation.
SECTION 704. STATEMENT OF DISSOCIATION.
(a) A person dissociated as
a partner or the partnership may file a statement of dissociation
stating the name of the partnership and that the partner is dissociated from
the partnership.
(b) A statement of
dissociation is a limitation on the authority of a person dissociated as
a partner for the purposes of Section 303(d) and (e).
(c) For the
purposes of Sections 702(a)(3) and 703(b)(3), a person not a partner is deemed
to have notice of the dissociation 90 days after the statement of dissociation
is filed.
SECTION
705. CONTINUED
USE OF PARTNERSHIP NAME. Continued use of a partnership name, or name of a person dissociated partner’s name as part thereof a partner as part
of the partnership name, by partners continuing the business does not of
itself make the person dissociated
as a partner liable for an
obligation of the partners or the partnership continuing the business.
DISSOLUTION AND WINDING UP PARTNERSHIP
BUSINESS
SECTION
801. EVENTS
CAUSING DISSOLUTION AND WINDING UP OF PARTNERSHIP BUSINESS. A partnership
is dissolved, and its business must be wound up, only upon the occurrence of
any of the following events:
(1) in a
partnership at will, the partnership’s
having notice from a partner, other than a partner who is dissociated under
Section 601(2) through (10), of that partner’s express will to withdraw as a
partner, or on a later date specified by the partner the partnership has
notice of a person’s express will to withdraw as a partner, other than a
partner that has dissociated under Section 601(2) through (10), but, if the
person specifies a withdrawal date later than the date the partnership had
notice, on the later date;
(2) in a partnership for a definite term or particular
undertaking:
(i) (A)
within 90 days after a partner's person’s
dissociation by death or otherwise under Section 601(6) through (10) or
wrongful dissociation under Section 602(b), the will consent of at least half of the remaining
partners to wind up the partnership business, for which purpose a partner's person’s
rightful dissociation pursuant to Section 602(b)(2)(i)
constitutes the expression of that partner's will consent to wind up the partnership business;
(ii) (B)
the express will consent
of all of the partners to wind
up the partnership business; or
(iii) (C)
the expiration of the term or the completion of the undertaking;
(3) an event agreed to
in or circumstance that the partnership agreement resulting in the winding up of the
partnership business states causes dissolution;
(4) an event that makes it unlawful for
all or substantially all of the business of the partnership to be continued,
but a cure of illegality within 90 days after notice to the partnership of the
event is effective retroactively to the date of the event for purposes of this
section;
(5) (4)
on application by a partner, a
judicial determination the entry by [the appropriate court] of an order
dissolving the partnership on the ground that:
(i) (A)
the conduct of all or substantially
all the partnership’s business is unlawful;
(B) the economic purpose of the
partnership is likely to be unreasonably frustrated;
(ii) (C)
another partner has engaged in conduct relating to the partnership business
which makes it not reasonably practicable to carry on the business in
partnership with that partner; or
(iii) (D)
it is not otherwise reasonably practicable to carry on the partnership business
in conformity with the partnership agreement; or
(6) (5)
on application by a transferee of a
partner’s transferable interest, a judicial determination , the entry by
[the appropriate court] of an order dissolving the partnership on the ground
that it is equitable to wind up the partnership business:
(i) (A)
after the expiration of the term or completion of the undertaking, if the
partnership was for a definite term or particular undertaking at the time of
the transfer or entry of the charging order that gave rise to the transfer; or
(ii) (B)
at any time, if the partnership was a partnership at will at the time of the
transfer or entry of the charging order that gave rise to the transfer.; or
(6) the passage
of 90 consecutive days during which the partnership does not have at least two
partners.
SECTION 802. PARTNERSHIP CONTINUES AFTER DISSOLUTION
WINDING UP.
(a) Subject to subsection (b), a A
dissolved partnership shall
wind up its business and, except as otherwise provided in Section 803, the
partnership continues after dissolution only for the purpose of winding
up its business. The partnership is
terminated when the winding up of its business is completed.
(b) In winding up its business, the partnership:
(1) shall discharge the
partnership’s debts, obligations, and other liabilities, settle and close the
partnership’s business, and marshal and distribute the assets of the
partnership; and
(2) may:
(A) deliver to the [Secretary of State] for filing a
statement of dissolution stating the name of the partnership and that the
partnership is dissolved;
(B) preserve the partnership business and property as a going
concern for a reasonable time;
(C) prosecute and defend actions and proceedings, whether civil,
criminal, or administrative, ;
(D) transfer the partnership’s property;
(E) settle disputes by mediation or arbitration,;
(F) deliver to the [Secretary of State] for filing a statement
of termination stating the name of the partnership and that the partnership is
terminated; and
(G) perform other acts necessary or appropriate to the winding
up.
(2) shall
discharge the limited partnership’s liabilities, settle and close the limited
partnership’s activities, and marshal and distribute the assets of the
partnership.
(c) A person whose dissociation as a partner
resulted in dissolution may participate in winding up as if still a partner,
unless the dissociation was wrongful.
(d)
If a dissolved partnership does not have a partner and no person has the right
to participate in winding up under subsection (c), the personal or legal
representative of the last person to have been a partner may wind up the
partnership’s business. If the
representative does not
exercise that right, a
person to wind up the partnership’s business may be appointed by the
consent of transferees owning a majority
of the rights to receive distributions at the time the consent is to be
effective. A person appointed under this
subsection has the powers of a partner under Section 804 but is not liable for
the debts, obligations, and other liabilities of the partnership solely by
reason of having or exercising those powers or otherwise acting to wind up the
partnership’s business.
(e) On the application of any partner or person
entitled under subsection (c) to participate in winding up, the [appropriate
court] may order judicial supervision of the winding up of a dissolved
partnership, including the appointment of a person to wind up the partnership’s
business, if:
(1) a
the partnership does not have a partner and within a reasonable time following
the dissolution no person has been appointed under subsection (c); or
(2) the
applicant establishes other good cause.
(b) At any time after the dissolution of
a partnership and before the winding up of its business is completed, all of
the partners, including any dissociating partner other than a wrongfully
dissociating partner, may waive the right to have the partnership’s business
wound up and the partnership terminated. In that event:
(1) the partnership resumes carrying on its
business as if dissolution had never occurred, and any liability incurred by
the partnership or a partner after the dissolution and before the waiver is
determined as if dissolution had never occurred; and
(2) the rights of a third party accruing
under Section 804(1) or arising out of conduct in reliance on the dissolution
before the third party knew or received a notification of the waiver may not be
adversely affected.
SECTION
803. RESCINDING DISSOLUTION.
(a) A
partnership may rescind its dissolution, unless a statement of termination applicable
to the partnership is effective or [the appropriate court] has entered an order
under Section 801(4) or (5) dissolving the partnership.
(b) Rescinding
dissolution under this section requires:
(1) the consent of each partner;
(2) if a
statement of dissolution applicable to the partnership has been filed by the
[Secretary of State] but has not become effective, delivery to the [Secretary
of State] for filing of a statement of withdrawal under Section 114 applicable to
the statement of dissolution; and
(3) if a statement of dissolution applicable to the partnership
is effective, the delivery to the [Secretary of State] for filing of a
statement of correction under Section 115 stating that dissolution has been rescinded
under this section.
(c) If a partnership rescinds its dissolution:
(1) the
partnership resumes carrying on its business as if dissolution had never
occurred;
(2) subject
to paragraph (3), any liability incurred by the partnership after the dissolution
and before the rescission is effective is determined as if dissolution had
never occurred; and
(3) the rights of a third party
arising out of conduct in reliance on the dissolution before the third party
knew or had notice of the rescission may not be adversely affected.
SECTION 803. RIGHT TO WIND UP PARTNERSHIP BUSINESS.
(a) After dissolution, a partner who has
not wrongfully dissociated may participate in winding up the partnership’s
business, but on application of any partner, partner’s personal or legal
representative, or transferee, the [designate the appropriate court], for good
cause shown, may order judicial supervision of the winding up.
(b) The personal or legal representative
of the last surviving partner may wind up a partnership’s business.
(c) A person winding up a partnership’s
business may preserve the partnership business or property as a going concern
for a reasonable time, prosecute and defend actions and proceedings, whether
civil, criminal, or administrative, settle and close the partnership’s
business, dispose of and transfer the partnership’s property, discharge the
partnership’s liabilities, distribute the assets of the partnership pursuant to
Section 807, settle disputes by mediation or arbitration, and perform other
necessary acts.
SECTION 804.
PARTNER’S POWER TO BIND PARTNERSHIP AFTER DISSOLUTION.
(a) Subject
to Section 805, a A partnership is bound by a partner’s act
after dissolution that which:
(1) is appropriate for winding up
the partnership business; or
(2) would
have bound the partnership under Section 301 before dissolution, if, at the time the other party to enters into the
transaction, the other party did
does not know or have
notice of the dissolution.
(b) A person dissociated as a general partner
binds a partnership through an act occurring after dissolution if:
(1) at
the time the other party enters into the transaction:
(A) less than two years has passed since the dissociation; and
(B) the other party does not have notice of the dissociation and
reasonably believes that the person is a partner; and
(2) the
act:
(A) is appropriate
for winding up the partnership’s business; or
(B) would have bound
the partnership under Section 301 before dissolution and at the time the other
party enters into the transaction the other party does not know or have notice of the dissolution.
SECTION 805. STATEMENT OF DISSOLUTION.
(a) After dissolution, a partner who has
not wrongfully dissociated may file a statement of dissolution stating the name
of the partnership and that the partnership has dissolved and is winding up its
business.
(b) A statement of dissolution cancels a
filed statement of partnership authority for the purposes of Section 303(d) and
is a limitation on authority for the purposes of Section 303(e).
(c) For the purposes of Sections 301 and
804, a person not a partner is deemed to have notice of the dissolution and the
limitation on the partners’ authority as a result of the statement of
dissolution 90 days after it is filed.
(d) After filing and, if appropriate,
recording a statement of dissolution, a dissolved partnership may file and, if
appropriate, record a statement of partnership authority which will operate
with respect to a person not a partner as provided in Section 303(d) and (e) in
any transaction, whether or not the transaction is appropriate for winding up
the partnership business.
SECTION 806 805. PARTNER’S
LIABILITY TO OTHER PARTNERS
AFTER DISSOLUTION.
(a) Except as otherwise provided in
subsection (b) and Section 306, after dissolution a partner is liable to the
other partners for the partner’s share of any partnership liability incurred
under Section 804 805(2).
(b) A If a partner who, with having knowledge
of the dissolution, incurs causes
a partnership liability to
incur an obligation under Section 804(2) 804(a) by an act
that is not appropriate for winding up the partnership business, the partner is liable:
(1) to the partnership for any damage caused to the partnership
arising from the liability obligation;
and
(2) if another partner or person dissociated as a partner is
liable for the obligation, to that other partner or person for any damage
caused to that other partner or person arising from the liability.
(b) If a person dissociated as a partner causes a
partnership to incur an obligation under Section 804(b), the person is liable:
(1)
to the partnership for any damage caused to the
partnership arising from the obligation; and
(2)
if a partner or another person dissociated as a
partner is liable for the obligation, to the partner or other person for any
damage caused to the partner or other person arising from the obligation.
SECTION 807 806. SETTLEMENT OF ACCOUNTS AND CONTRIBUTIONS AMONG PARTNERS DISPOSITION OF ASSETS IN WINDING UP; WHEN
CONTRIBUTIONS REQUIRED.
(a) In winding up a
partnership’s its business,
the assets of the a partnership shall
apply its assets, including the contributions of the partners required by
this section, must be applied
to discharge its the
partnership’s obligations to creditors, including, to the extent permitted by law, partners who that
are creditors.
(b) After a partnership complies with
subsection (a), Any any surplus
must be applied to pay in cash the net
amount distributable to partners in accordance with their right to
distributions under subsection (b) distributed in the following order,
subject to any charging order in effect under Section 504:
(1) to each person owning a transferable
interest that reflects contributions made and not previously returned, an
amount equal to the value of the unreturned contributions; and
(2) among partners in proportion to their
respective rights to share in distributions immediately before the dissolution
of the partnership, except to the extent necessary to comply with any transfer
effective under Section 503.
(c) If a partnership’s assets are
insufficient to satisfy all its obligations under subsection (a), with respect
to each unsatisfied obligation incurred when the partnership was not a limited
liability partnership, the following rules apply:
(1) Each person that was a partner when
the obligation was incurred and that has not been released from the obligation
under Section 703(c) and (d) shall contribute to the partnership to enable the
partnership to satisfy the obligation. The contribution due from each of those
persons is in proportion to the right to receive distributions in the capacity
of partner in effect for each of those persons when the obligation was
incurred.
(2) If a person does not contribute the
full amount required under paragraph (1) with respect to an unsatisfied
obligation of the partnership, the other persons required to contribute by
paragraph (1) on account of the obligation shall contribute the additional
amount necessary to discharge the obligation. The additional contribution due
from each of those other persons is in proportion to the right to receive
distributions in the capacity of partner in effect for each of those other
persons when the obligation was incurred.
(3) If a person does not make the
additional contribution required by paragraph (2), further additional
contributions are determined and due in the same manner as provided in that
paragraph.
(d) A person that makes an additional
contribution under subsection (c)(2) or (3) may recover from any person whose
failure to contribute under subsection (c)(1) or (2) necessitated the
additional contribution. A person may not recover under this subsection more
than the amount additionally contributed. A person’s liability under this
subsection may not exceed the amount the person failed to contribute.
(e) If a partnership does not have
sufficient surplus to comply with subsection (b)(1),
any surplus must be distributed among the owners of transferable interests in
proportion to the value of the respective unreturned contributions.
(f) All distributions made under
subsections (b) and (c) must be paid in money.
(b) Each partner is entitled to a
settlement of all partnership accounts upon winding up the partnership
business. In settling accounts among the partners, profits and losses that
result from the liquidation of the partnership assets must be credited and
charged to the partners’ accounts. The partnership shall make a distribution to
a partner in an amount equal to any excess of the credits over the charges in
the partner’s account. A partner shall contribute to the partnership an amount
equal to any excess of the charges over the credits in the partner’s account
but excluding from the calculation charges attributable to an obligation for
which the partner is not personally liable under Section 306.
(c) If a partner fails to contribute the
full amount required under subsection (b), all of the other partners shall
contribute, in the proportions in which those partners share partnership
losses, the additional amount necessary to satisfy the partnership obligations
for which they are personally liable under Section 306. A partner or partner’s
legal representative may recover from the other partners any contributions the
partner makes to the extent the amount contributed exceeds that partner’s share
of the partnership obligations for which the partner is personally liable under
Section 306.
(d) After the settlement of accounts,
each partner shall contribute, in the proportion in which the partner shares
partnership losses, the amount necessary to satisfy partnership obligations
that were not known at the time of the settlement and for which the partner is
personally liable under Section 306.
(e) The estate of a deceased partner is
liable for the partner’s obligation to contribute to the partnership.
(f) An assignee for the benefit of
creditors of a partnership or a partner, or a person appointed by a court to
represent creditors of a partnership or a partner, may enforce a partner’s
obligation to contribute to the partnership.
SECTION 807. KNOWN CLAIMS AGAINST DISSOLVED LIMITED LIABILITY PARTNERSHIP.
(a) Except as otherwise provided in
subsection (d), a dissolved limited liability partnership may give notice of a
known claim under subsection (b), which has the effect provided in subsection
(c).
(b) A dissolved
limited liability partnership may in a record notify its known claimants of the
dissolution. The notice must:
(1) specify the information required to be
included in a claim;
(2) state that a claim must be in writing
and provide a mailing address to which the claim is to be sent;
(3) state the deadline for receipt of a
claim, which may not be less than 120 days after the date the notice is
received by the claimant;
(4) state that the claim will be barred if
not received by the deadline; and
(5) unless the
partnership has been throughout its existence a limited liability partnership,
state that the barring of a claim against the partnership will also bar any
corresponding claim against any partner or person dissociated as a partner which
is based on Section 306.
(c) A claim against a dissolved limited liability partnership is
barred if the requirements of subsection (b) are met and:
(1) the claim is not received by the
specified deadline; or
(2) if the claim is timely received but
rejected by the limited liability partnership:
(A) the
partnership causes the claimant to receive a notice in a record stating that
the claim is rejected and will be barred unless the claimant commences an
action against the partnership to enforce the claim not later than 90 days
after the claimant receives the notice; and
(B) the claimant does not commence the required action not later
than 90 days after the claimant receives the notice.
(d) This section does not apply to a claim based on an event
occurring after the effective
date of dissolution or a liability that on that date is
contingent.
SECTION 808. OTHER CLAIMS AGAINST
DISSOLVED LIMITED LIABILITY PARTNERSHIP.
(a) A dissolved limited liability partnership may publish notice of
its dissolution and request persons having claims against the partnership to
present them in accordance with the notice.
(b) A notice under subsection (a) must:
(1) be published at least once in a newspaper of general circulation
in the [county] in this state in which the dissolved limited liability
partnership’s principal office is located or, if the principal office is not
located in this state, in the [county] in which the office of the partnership’s
registered agent is or was last located;
(2) describe the information required to be contained in a claim,
state that the claim must be in writing, and provide a mailing address to which
the claim is to be sent;
(3) state that a claim against the
partnership is barred unless an action to enforce the claim is commenced not later than three
years after publication of the notice; and
(4) unless the
partnership has been throughout its existence a limited liability partnership,
state that the barring of a claim against the partnership will also bar any
corresponding claim against any partner or person dissociated as a partner
which is based on Section 306.
(c) If a dissolved limited liability partnership publishes a notice
in accordance with subsection (b), the claim of each of the following claimants
is barred unless the claimant commences an action to enforce the claim against
the partnership not later than three years after the publication date of the
notice:
(1) a claimant that did not receive notice
in a record under Section 808;
(2) a claimant whose claim was timely sent
to the partnership but not acted on; and
(3) a claimant whose claim is contingent
at, or based on an event occurring after, the effective date of dissolution.
(d) A claim not barred under this section or Section 808 may be
enforced:
(1) against a dissolved limited liability
partnership, to the extent of its undistributed assets;
(2) except as otherwise provided in Section 809(d), if assets of the
partnership have been distributed after dissolution, against a partner or
transferee to the extent of that person’s proportionate share of the claim or
of the partnership’s assets distributed to the partner or transferee after
dissolution, whichever is less, but a person’s total liability for all claims
under this paragraph may not exceed the total amount of assets distributed to
the person after dissolution; and
(3)
against any person liable on the claim under Sections
306, 703, and 805.
SECTION 809. COURT PROCEEDINGS.
(a) A dissolved limited liability partnership that has published a
notice under Section 809 may file an application with
[the appropriate court] in the [county] where the partnership’s principal
office is located or, if the principal office is not located in this state,
where the office of its registered agent is located, for a determination of the
amount and form of security to be provided for payment of claims that are
contingent, have not been made known to the partnership, or are based on an
event occurring after the effective date of dissolution but which, based on the
facts known to the dissolved partnership, are reasonably expected to arise
after the effective date of dissolution. Security is not required for any claim
that is or is reasonably anticipated to be barred under Section 807.
(b) Not later
than 10 days after the filing of an application under subsection (a), the
dissolved limited liability partnership shall give notice of the proceeding to
each claimant holding a contingent claim known to the partnership.
(c) In any
proceeding under this section, the court may appoint a guardian ad litem to represent
all claimants whose identities are unknown. The reasonable fees and expenses of
the guardian, including all reasonable expert witness fees, must be paid by the
dissolved limited liability partnership.
(d) A dissolved
limited liability partnership that provides security in the amount and form
ordered by the court under subsection (a) satisfies the partnership’s
obligations with respect to claims that are contingent, have not been made
known to the partnership, or are based on an event occurring after the
effective date of dissolution, and the claims may not be enforced against a
partner or transferee who receives assets in liquidation.
(e) This
section applies only to a debt, obligation, or liability incurred while a
partnership was a limited liability partnership.
SECTION
810. LIABILITY OF
PARTNER AND PERSON DISSOCIATED AS PARTNER WHEN CLAIM AGAINST LIMITED liability
PARTNERSHIP BARRED.
If a claim against a dissolved limited liability partnership is barred
under Section 807, 808, or 809, any corresponding claim under Section 306, 703,
or 805 is also barred.
CONVERSIONS
AND MERGERS, MERGER, INTEREST EXCHANGE, CONVERSION AND DOMESTICATION.
SECTION 901. DEFINITIONS.
In this [article]:
(1) “General
partner” means a partner in a partnership and a general partner in a limited
partnership.
(2) “Limited
partner” means a limited partner in a limited partnership.
(3) “Limited
partnership” means a limited partnership created under the [State Limited
Partnership Act], predecessor law, or comparable law of another jurisdiction.
(4) “Partner”
includes both a general partner and a limited partner.
SECTION 902. CONVERSION OF PARTNERSHIP TO LIMITED PARTNERSHIP.
(a) A partnership may be converted to
a limited partnership pursuant to this section.
(b) The terms
and conditions of a conversion of a partnership to a limited partnership must
be approved by all of the partners or by a number or percentage specified for
conversion in the partnership agreement.
(c) After the
conversion is approved by the partners, the partnership shall file a
certificate of limited partnership in the jurisdiction in which the limited
partnership is to be formed. The certificate must include:
(1) a statement that the partnership was converted to a limited
partnership from a partnership;
(2) its former name; and
(3) a statement of the number of votes cast by the partners for
and against the conversion and, if the vote is less than unanimous, the number
or percentage required to approve the conversion under the partnership
agreement.
(d) The
conversion takes effect when the certificate of limited partnership is filed or
at any later date specified in the certificate.
(e) A general
partner who becomes a limited partner as a result of the conversion remains
liable as a general partner for an obligation incurred by the partnership
before the conversion takes effect. If the other party to a transaction with
the limited partnership reasonably believes when entering the transaction that
the limited partner is a general partner, the limited partner is liable for an
obligation incurred by the limited partnership within 90 days after the
conversion takes effect. The limited partner’s liability for all other
obligations of the limited partnership incurred after the conversion takes
effect is that of a limited partner as provided in the [State Limited
Partnership Act].
SECTION 903. CONVERSION OF LIMITED PARTNERSHIP TO PARTNERSHIP.
(a) A limited
partnership may be converted to a partnership pursuant to this section.
(b)
Notwithstanding a provision to the contrary in a limited partnership agreement,
the terms and conditions of a conversion of a limited partnership to a
partnership must be approved by all of the partners.
(c) After the
conversion is approved by the partners, the limited partnership shall cancel
its certificate of limited partnership.
(d) The
conversion takes effect when the certificate of limited partnership is
canceled.
(e) A limited
partner who becomes a general partner as a result of the conversion remains
liable only as a limited partner for an obligation incurred by the limited
partnership before the conversion takes effect.
Except as otherwise provided in Section 306, the
partner is liable as a general partner for an obligation of the partnership
incurred after the conversion takes effect.
SECTION 904.
EFFECT OF CONVERSION; ENTITY UNCHANGED.
(a) A
partnership or limited partnership that has been converted pursuant to this
[article] is for all purposes the same entity that existed before the
conversion.
(b) When a
conversion takes effect:
(1) all property owned by the converting partnership or limited
partnership remains vested in the converted entity;
(2) all obligations of the converting partnership or limited
partnership continue as obligations of the converted entity; and
(3) an action or proceeding pending against the converting
partnership or limited partnership may be continued as if the conversion had
not occurred.
SECTION
905. MERGER OF PARTNERSHIPS.
(a) Pursuant to
a plan of merger approved as provided in subsection (c), a partnership may be
merged with one or more partnerships or limited partnerships.
(b) The plan of
merger must set forth:
(1) the name of each partnership or limited partnership that is
a party to the merger;
(2) the name of the surviving entity into which the other
partnerships or limited partnerships will merge;
(3) whether the surviving entity is a partnership or a limited
partnership and the status of each partner;
(4) the terms and conditions of the merger;
(5) the manner and basis of converting the interests of each
party to the merger into interests or obligations of the surviving entity, or
into money or other property in whole or part; and
(6) the street address of the surviving entity’s chief executive
office.
(c) The plan of
merger must be approved:
(1) in the case of a partnership that is a party to the merger,
by all of the partners, or a number or percentage specified for merger in the
partnership agreement; and
(2) in the
case of a limited partnership that is a party to the merger, by the vote
required for approval of a merger by the law of the State or foreign
jurisdiction in which the limited partnership is organized and, in the absence
of such a specifically applicable law, by all of the partners, notwithstanding
a provision to the contrary in the partnership agreement.
(d) After a
plan of merger is approved and before the merger takes effect, the plan may be
amended or abandoned as provided in the plan.
(e) The merger
takes effect on the later of:
(1) the approval of the plan of merger by all parties to the
merger, as provided in subsection (c);
(2) the filing of all documents required by law to be filed as a
condition to the effectiveness of the merger; or
(3) any effective date specified in the plan of merger.
SECTION
906. EFFECT OF MERGER.
(a) When a
merger takes effect:
(1) the separate existence of every partnership or limited
partnership that is a party to the merger, other than the surviving entity,
ceases;
(2) all property owned by each of the merged partnerships or
limited partnerships vests in the surviving entity;
(3) all obligations of every partnership or limited partnership
that is a party to the merger become the obligations of the surviving entity;
and
(4) an action or proceeding pending against a partnership or
limited partnership that is a party to the merger may be continued as if the
merger had not occurred, or the surviving entity may be substituted as a party
to the action or proceeding.
(b) The
[Secretary of State] of this State is the agent for service of process in an
action or proceeding against a surviving foreign partnership or limited
partnership to enforce an obligation of a domestic partnership or limited
partnership that is a party to a merger. The surviving entity shall promptly
notify the [Secretary of State] of the mailing address of its chief executive
office and of any change of address. Upon receipt of process, the [Secretary of
State] shall mail a copy of the process to the surviving foreign partnership or
limited partnership.
(c) A partner
of the surviving partnership or limited partnership is liable for:
(1) all obligations of a party to the merger for which the
partner was personally liable before the merger;
(2) all other
obligations of the surviving entity incurred before the merger by a party to
the merger, but those obligations may be satisfied only out of property of the
entity; and
(3) except as otherwise provided in Section 306, all obligations
of the surviving entity incurred after the merger takes effect, but those
obligations may be satisfied only out of property of the entity if the partner
is a limited partner.
(d) If the
obligations incurred before the merger by a party to the merger are not
satisfied out of the property of the surviving partnership or limited
partnership, the general partners of that party immediately before the
effective date of the merger shall contribute the amount necessary to satisfy
that party’s obligations to the surviving entity, in the manner provided in
Section 807 or in the [Limited Partnership Act] of the jurisdiction in which
the party was formed, as the case may be, as if the merged party were
dissolved.
(e) A partner
of a party to a merger who does not become a partner of the surviving
partnership or limited partnership is dissociated from the entity, of which that
partner was a partner, as of the date the merger takes effect. The surviving
entity shall cause the partner’s interest in the entity to be purchased under
Section 701 or another statute specifically applicable to that partner’s
interest with respect to a merger. The surviving entity is bound under Section
702 by an act of a general partner dissociated under this subsection, and the
partner is liable under Section 703 for transactions entered into by the
surviving entity after the merger takes effect.
SECTION 907. STATEMENT OF MERGER.
(a) After a
merger, the surviving partnership or limited partnership may file a statement
that one or more partnerships or limited partnerships have merged into the
surviving entity.
(b) A statement
of merger must contain:
(1) the name of each partnership or limited partnership that is
a party to the merger;
(2) the name of the surviving entity into which the other
partnerships or limited partnership were merged;
(3) the street address of the surviving entity’s chief executive
office and of an office in this State, if any; and
(4) whether the
surviving entity is a partnership or a limited partnership.
(c) Except as
otherwise provided in subsection (d), for the purposes of Section 302, property
of the surviving partnership or limited partnership which before the merger was
held in the name of another party to the merger is property held in the name of
the surviving entity upon filing a statement of merger.
(d) For the
purposes of Section 302, real property of the surviving partnership or limited
partnership which before the merger was held in the name of another party to
the merger is property held in the name of the surviving entity upon recording
a certified copy of the statement of merger in the office for recording transfers
of that real property.
(e) A filed
and, if appropriate, recorded statement of merger, executed and declared to be
accurate pursuant to Section 105(c), stating the name of a partnership or
limited partnership that is a party to the merger in whose name property was
held before the merger and the name of the surviving entity, but not containing
all of the other information required by subsection (b), operates with respect
to the partnerships or limited partnerships named to the extent provided in
subsections (c) and (d).
SECTION 908. NONEXCLUSIVE.
This [article] is not exclusive.
Partnerships or limited partnerships may be converted or merged in any other
manner provided by law.
SECTION 901. DEFINITIONS. In this [article]:
(1) “Acquired
entity” means the entity, all of one or more classes or series of interests in
which are acquired in an interest exchange.
(2) “Acquiring
entity” means the entity that acquires all of one or more classes or series of
interests of the acquired entity in an interest exchange.
(3) “Conversion”
means a transaction authorized by [Part] 4.
(4) “Converted
entity” means the converting entity as it continues in existence after a
conversion.
(5) “Converting
entity” means the domestic entity that approves a plan of conversion pursuant
to Section 943 or the foreign entity that approves a conversion pursuant to the
law of its jurisdiction of formation.
(6) “Distributional
interest” means the right under an unincorporated entity’s organic law and
organic rules to receive distributions from the entity.
(7) “Domestic”, with
respect to an entity, means governed as to its internal affairs by the law of
this state.
(8) “Domesticated
limited liability partnership” means a domesticating limited liability
partnership as it continues in existence after a domestication.
(9) “Domesticating
limited liability partnership” means a domestic limited liability partnership
that approves a plan of domestication pursuant to Section 953 or foreign
limited liability partnership that approves a domestication pursuant to the law of its jurisdiction of formation.
(10) “Domestication”
means a transaction authorized by [Part] 5.
(11) “Entity”:
(A) means:
(i) a business corporation;
(ii) a nonprofit corporation;
(iii) a general partnership, including a limited liability
partnership;
(iv) a limited partnership, including a limited liability
limited partnership;
(v) a limited liability company;
[(vi) a general cooperative association;]
(vii) a limited cooperative association;
(viii) an unincorporated nonprofit association;
(ix) a statutory trust, business trust, or common-law
business trust; or
(x) any other person that has:
(I) a legal
existence separate from any interest holder of that person; or
(II) the power to acquire an interest in real property in its own
name; and
(B) does not include:
(i) an individual;
(ii) a testamentary or inter vivos trust with a
predominantly donative purpose, or a charitable trust;
(iii) an association or relationship that is not a partnership
solely by reason of [Section 202(c) of the Revised Uniform Partnership Act]
[Section 7 of the Uniform Partnership Act] or a similar provision of the law of
another jurisdiction;
(iv) a decedent’s estate; [or]
(v) a government or a governmental subdivision, agency, or
instrumentality [; or]
[(vi) a person excluded under Section 1109].
(12) “Filing entity”
means an entity whose formation requires the filing of a public organic record.
(13) “Foreign”, with
respect to an entity, means an entity governed as to its internal affairs by
the law of a jurisdiction other than this state.
(14) “Governance
interest” means a right under the organic law or organic rules of an
unincorporated entity, other than as a governor, agent, assignee, or proxy, to:
(A) receive or demand access to information concerning, or the
books and records of, the entity;
(B) vote for the election of the governors of the entity; or
(C) receive notice of or vote on an issue involving the internal
affairs of the entity.
(15) “Governor”
means:
(A) a director of a business corporation;
(B) a director or trustee of a nonprofit corporation;
(C) a general partner of a general partnership;
(D) a general partner of a limited partnership;
(E) a manager of a manager-managed limited liability
company;
(F) a member of a member-managed limited liability company;
[(G) a director of a general cooperative association;]
(H) a director of a limited cooperative association;
(I) a manager of an
unincorporated nonprofit association;
(J) a trustee of a statutory trust, business trust, or
common-law business trust; or
(K) any other person
by or under whose authority the powers of an entity are exercised and under
whose direction the activities and affairs of the entity are managed pursuant
to the organic law and organic rules of the entity.
(16) “Interest”
means:
(A) a share in a business corporation;
(B) a membership in a nonprofit corporation;
(C) a partnership interest in a general partnership;
(D) a partnership interest in a limited partnership;
(E) a membership interest in a limited liability company;
[(F) a share in a general cooperative association;]
(G) a member’s interest in a limited cooperative
association;
(H) a membership in an unincorporated nonprofit
association;
(I) a beneficial
interest in a statutory trust, business trust, or common-law business trust; or
(J) a governance interest or distributional interest in any
other type of unincorporated entity.
(17) “Interest
Exchange” means a transaction authorized by [Part] 3.
(18) “Interest holder” means:
(A) a shareholder of a business corporation;
(B) a member of a nonprofit corporation;
(C) a general partner of a general partnership;
(D) a general partner of a limited partnership;
(E) a limited partner of a limited partnership;
(F) a member of a limited liability company;
[(G) a shareholder of a general cooperative association;]
(H) a member of a limited cooperative association;
(I) a member of an
unincorporated nonprofit association;
(J) a beneficiary or beneficial owner of a statutory trust,
business trust, or common-law business trust; or
(K) any other direct holder of an interest.
(19) “Interest
holder liability” means:
(A) personal liability for a liability of an entity that is
imposed on a person:
(i) solely by reason of
the status of the person
as an interest holder; or
(ii) by the organic
rules of the entity which make one or
more specified interest holders or
categories of interest holders liable in their capacity as interest holders for
all or specified liabilities of the entity; or
(B) an obligation of an interest holder under the organic
rules of an entity to contribute to the entity.
(20) “Jurisdiction
of formation” means the jurisdiction whose law includes the organic law of an
entity.
(21) “Merger” means
a transaction authorized by [Part] 2.
(22) “Merging
entity” means an entity that is a party to a merger and exists immediately
before the merger becomes effective.
(23) “Organic law”
means the law of an entity’s jurisdiction of formation governing the internal
affairs of the entity.
(24) “Organic rules”
means the public organic record and private organic rules of an entity.
(25) “Plan” means a
plan of merger, plan of interest exchange, plan of conversion, or plan of domestication.
(26) “Plan of conversion” means a plan under
Section 942.
(27)
“Plan of domestication” means a plan under Section 952.
(28)
“Plan of interest exchange” means a plan under Section 932.
(29)
“Plan of merger” means a plan under Section 922.
(30) “Private organic rules” means the rules, whether
or not in a record, that govern the internal affairs of an entity, are binding
on all of its interest holders, and are not part of its public organic record,
if any. The term includes:
(A) the bylaws of a business corporation;
(B) the bylaws of a nonprofit corporation;
(C) the partnership agreement of a general partnership;
(D) the partnership agreement of a limited partnership;
(E) the operating agreement of a limited liability company;
[(F) the bylaws of a general cooperative association;]
(G) the bylaws of a limited cooperative association;
(H) the governing principles of an unincorporated nonprofit
association; and
(I) the trust instrument of a statutory trust or
similar rules of a business trust or common-law business trust.
(31) “Protected
agreement” means:
(A) a record evidencing indebtedness and any related
agreement in effect on [the effective date of this [act]];
(B) an agreement that is binding on an entity on [the
effective date of this [act]];
(C) the organic rules of an entity in effect on [the
effective date of this [act]]; or
(D) an agreement that is binding on any of the governors or
interest holders of an entity on [the effective date of this [act]].
(32) “Public organic
record” means the record the filing of which by the [Secretary of State] is
required to form an entity and any amendment to or restatement of that record.
The term includes:
(A) the articles of incorporation of a business corporation;
(B) the articles of incorporation of a nonprofit corporation;
(C) the certificate of limited partnership of a limited
partnership;
(D) the certificate of organization of a limited liability
company;
[(E) the articles of incorporation of a general cooperative
association;]
(F) the articles of organization of a limited cooperative
association; and
(G) the certificate of trust of a statutory trust or similar
record of a business trust.
(33) “Registered
foreign entity” means a foreign entity that is registered to do business in
this state pursuant to a record filed by the [Secretary of State].
(34) “Statement of conversion” means a statement
under Section 945.
(35)
“Statement of domestication” means a statement under Section 955.
(36)
“Statement of interest exchange” means a statement under Section 935.
(37)
“Statement of merger” means a statement under Section 925.
(38) “Surviving entity” means an entity that continues
in existence after or is created by a merger.
(39) “Type of
entity” means a generic form of entity:
(A) recognized at common law; or
(B) formed under an
organic law, whether or not some entities formed under that organic law are subject
to provisions of that law that create different categories of the form of
entity.
SECTION 902. RELATIONSHIP OF [ARTICLE] TO OTHER
LAWS. This [article] does not authorize an act prohibited
by, and does not affect the application or requirements of, law other than this
[article].
SECTION 903. REQUIRED
NOTICE OR APPROVAL.
(a) A domestic or
foreign entity that is required to give notice to, or obtain the approval of, a
governmental agency or officer of this state to be a party to a merger must
give the notice or obtain the approval to be a party to an interest exchange,
conversion, or domestication.
(b) Property held
for a charitable purpose under the law of this state by a domestic or foreign
entity immediately before a transaction under this [article] becomes effective
may not, as a result of the transaction, be diverted from the objects for which
it was donated, granted, devised, or otherwise transferred unless, to the
extent required by or pursuant to the law of this state concerning cy pres or
other law dealing with nondiversion of charitable assets, the entity obtains an
appropriate order of [the appropriate court] [the Attorney General] specifying
the disposition of the property.
SECTION 904. STATUS OF FILINGS. A filing under
this [article] signed by a domestic entity becomes part of the public organic
record of the entity if the entity’s organic law provides that similar filings
under that law become part of the public organic record of the entity.
SECTION 905. NONEXCLUSIVITY. The fact that
a transaction under this [article] produces a certain result does not preclude
the same result from being accomplished in any other manner permitted by law
other than this [article].
SECTION 906. REFERENCE
TO EXTERNAL FACTS. A plan may refer to facts ascertainable
outside the plan if the manner in which the facts will operate upon the plan is
specified in the plan. The facts may include the occurrence of an event or a
determination or action by a person, whether or not the event, determination,
or action is within the control of a party to the transaction.
SECTION 907. ALTERNATIVE MEANS OF APPROVAL OF TRANSACTIONS. Except as otherwise provided in
the organic law or organic rules of a domestic entity, approval of a
transaction under this [article] by the unanimous vote or consent of its
interest holders satisfies the requirements of this [article] for approval of
the transaction.
SECTION 908. APPRAISAL
RIGHTS.
(a) An interest holder of a domestic merging, acquired, converting, or
domesticating entity is entitled to appraisal rights in connection with the
transaction if the interest holder would have been entitled to appraisal rights
under the entity’s organic law in connection with a merger in which the
interest of the interest holder was changed, converted, or exchanged unless:
(1) the organic law permits the
organic rules to limit the availability of appraisal rights; and
(2) the organic rules provide such a
limit.
(b) An interest holder of a domestic merging, acquired, converting, or
domesticating entity is entitled to contractual appraisal rights in connection
with a transaction under this [article] to the extent provided in:
(1) the entity’s organic rules; or
(2) the plan.
[SECTION
1109. EXCLUDED ENTITIES AND TRANSACTIONS.
(a) The following entities may not participate in
a transaction under this [article]:
(1)
(2).
(b) This [article] may not be used to effect a
transaction that:
(1)
(2).]
SECTION 921. MERGER AUTHORIZED.
(a) By complying with this [part]:
(1) one or more domestic partnerships
may merge with one or more domestic or foreign entities into a domestic or
foreign surviving entity; and
(2) two or more foreign entities may
merge into a domestic partnership.
(b) By complying with the provisions of this [part] applicable to
foreign entities, a foreign entity may be a party to a merger under this [part] or may
be the surviving entity in such a merger if the merger is authorized by the law
of the foreign entity’s jurisdiction of formation.
SECTION 922. PLAN
OF MERGER.
(a) A domestic partnership may become a party to a merger under this
[part] by approving a plan of merger. The plan must be in a record and contain:
(1) as to each merging entity, its
name, jurisdiction of formation, and type of entity;
(2) if the surviving entity is to be created in the merger, a statement
to that effect and the entity’s name, jurisdiction of formation, and type of
entity;
(3) the manner of converting the interests in each party to the merger
into interests, securities, obligations, money, other property, rights to
acquire interests or securities, or any combination of the foregoing;
(4) if the surviving entity exists before the merger, any proposed
amendments to its public organic record, if any, or to its private organic
rules that are, or are proposed to be, in a record;
(5) if the surviving entity is to be created in the merger, its proposed
public organic record, if any, and the full text of its private organic rules
that are proposed to be in a record;
(6) the other terms and conditions of
the merger; and
(7) any other provision required by
the law of a merging entity’s jurisdiction of formation or the organic rules of
a merging entity.
(b) In addition to the requirements of subsection (a), a plan of merger
may contain any other provision not prohibited by law.
SECTION 923. APPROVAL
OF MERGER.
(a) A plan of merger
is not effective unless it has been approved:
(1) by a domestic
merging partnership, by all the partners of the partnership entitled to vote on
or consent to any matter; and
(2) in a record, by
each partner of a domestic merging partnership that will have interest holder
liability for debts, obligations, and other liabilities that arise after the
merger becomes effective, unless:
(A) the partnership
agreement of the partnership provides in a record for the approval of a merger
in which some or all of its partners become subject to interest holder
liability by the vote or consent of fewer than all the partners; and
(B) the partner consented in a record to or voted for that
provision of the partnership agreement or became a partner after the adoption
of that provision.
(b) A merger
involving a domestic merging entity that is not a partnership is not effective
unless the merger is approved by that entity in accordance with its organic
law.
(c) A merger
involving a foreign merging entity is not effective unless the merger is
approved by the foreign entity in accordance with the law of the foreign
entity’s jurisdiction of formation.
SECTION 924. AMENDMENT
OR ABANDONMENT OF PLAN OF MERGER.
(a) A plan of merger
may be amended only with the consent of each party to the plan, except as
otherwise provided in the plan.
(b) A domestic
merging partnership may approve an amendment of a plan of merger:
(1) in the same manner as the plan was approved, if the plan
does not provide for the manner in which it may be amended; or
(2) by the partners
in the manner provided in the plan, but a partner that was entitled to vote on
or consent to approval of the merger is entitled to vote on or consent to any
amendment of the plan that will change:
(A) the amount or
kind of interests, securities, obligations, money, other property, rights to acquire interests or securities, or
any combination of the foregoing, to be received by the interest holders of any
party to the plan;
(B) the public
organic record, if any, or private organic rules of the surviving entity that
will be in effect immediately after the merger becomes effective, except for
changes that do not require approval of the interest holders of the surviving
entity under its organic law or organic rules; or
(C) any other terms or conditions of the plan, if the change
would adversely affect the partner in any material respect.
(c) After a plan of
merger has been approved and before a statement of merger becomes effective,
the plan may be abandoned as provided in the plan. Unless prohibited by the
plan, a domestic merging partnership may abandon the plan in the same manner as
the plan was approved.
(d) If a plan of
merger is abandoned after a statement of merger has been delivered to the
[Secretary of State] for filing and before the statement becomes effective, a
statement of abandonment, signed by a party to the plan, must be delivered to
the [Secretary of State] for filing before the statement of merger becomes
effective. The statement of abandonment takes effect upon filing, and the
merger is abandoned and does not become effective. The statement of abandonment
must contain:
(1) the name of each party to the plan of merger;
(2) the date on which the statement of merger was delivered
to the [Secretary of State] for filing; and
(3) a statement that the merger has been abandoned in
accordance with this section.
SECTION 925. STATEMENT
OF MERGER.
(a) A statement of
merger must be signed by each merging entity and delivered to the [Secretary of
State] for filing.
(b) A statement of
merger must contain:
(1) the name, jurisdiction of formation, and type of entity
of each merging entity that is not the surviving entity;
(2) the name, jurisdiction of formation, and type of entity
of the surviving entity;
(3) a
statement that the merger was approved by each domestic merging entity, if any,
in accordance with this [part] and by each foreign merging entity, if any, in
accordance with the law of its jurisdiction of formation;
(4) if the surviving entity exists before the merger and is
a domestic filing entity, any amendment to its public organic record approved
as part of the plan of merger;
(5) if the surviving entity is created by the merger and is
a domestic filing entity, its public organic record, as an attachment;
(6) if the surviving
entity is created by the merger and is a domestic limited liability
partnership, its statement of qualification, as an attachment; and
(7) if the surviving entity is a foreign entity that is not
a registered foreign entity, a mailing address to which the [Secretary of
State] may send any process served on the [Secretary of State] pursuant to
Section 926(e).
(c) In addition to the
requirements of subsection (b), a statement of merger may contain any other
provision not prohibited by law.
(d) If the surviving
entity is a domestic entity, its public organic record, if any, must satisfy
the requirements of the law of this state, except that the public organic
record does not need to be signed.
(e) A plan of merger
that is signed by all the merging entities and meets all the requirements of
subsection (b) may be delivered to the [Secretary of State] for filing instead
of a statement of merger and upon filing has the same effect. If a plan of
merger is filed as provided in this subsection, references in this [article] to
a statement of merger refer to the plan of merger filed under this subsection.
SECTION 926. EFFECT
OF MERGER.
(a) When a merger
becomes effective:
(1) the surviving entity continues or
comes into existence;
(2) each merging entity that is not the surviving entity
ceases to exist;
(3) all property of each merging entity vests in the
surviving entity without transfer, reversion, or impairment;
(4) all debts, obligations, and other
liabilities of each merging entity are
debts, obligations, and liabilities
of the surviving entity;
(5) except as
otherwise provided by law or the plan of merger, all the
rights, privileges, immunities, powers, and purposes of each merging
entity vest in the surviving entity;
(6) if the surviving entity exists before the merger:
(A) all its property continues to be vested in it without
transfer, reversion, or impairment;
(B) it remains subject to all its debts, obligations, and
liabilities; and
(C) all its rights, privileges,
immunities, powers, and purposes continue to be
vested in it;
(7) the name of the surviving entity may be substituted for
the name of any merging entity that is a party to any pending action or
proceeding;
(8) if the surviving entity exists before the merger:
(A) its public organic record, if any, is amended as provided
in the statement of merger; and
(B) its private
organic rules that are to be in a record, if any, are amended to the extent
provided in the plan of merger;
(9) if the surviving entity is created by the merger:
(A) its public organic record, if any, is effective; and
(B) its private organic rules are effective; and
(10) the interests
in each merging entity which are to be converted in the merger are converted,
and the interest holders of those interests are entitled only to the rights
provided to them under the plan of merger and to any appraisal rights they have
under Section 908 and the merging entity’s organic law.
(b) Except as
otherwise provided in the organic law or organic rules of a merging entity, the
merger does not give rise to any rights that an interest holder, governor, or
third party would otherwise have upon a dissolution, liquidation, or winding up
of the merging entity.
(c) When a merger
becomes effective, a person that did not have interest holder liability with
respect to any of the merging entities and that becomes subject to interest
holder liability with respect to a domestic entity as a result of a merger has
interest holder liability only to the extent provided by the organic law of
that entity and only for those debts, obligations, and other liabilities that
arise after the merger becomes effective.
(d) When a merger
becomes effective, the interest holder liability of a person that ceases to
hold an interest in a domestic merging entity with respect to which the person
had interest holder liability is as follows:
(1) The merger does
not discharge any interest holder liability under the organic law of the
domestic merging entity to the extent the interest holder liability arose
before the merger became effective.
(2) The person does
not have interest holder liability under the organic law of the domestic
merging entity for any liability that arises after the merger becomes effective.
(3) The organic law
of the domestic merging entity continues to apply to the release, collection,
or discharge of any interest holder liability preserved under paragraph (1) as
if the merger had not occurred and the surviving entity were the domestic
merging entity.
(4) The person has
whatever rights of contribution from any other person as are provided by law
other than this [act], this [act], or the organic rules of the domestic merging
entity with respect to any interest holder liability preserved under paragraph
(1) as if the merger had not occurred.
(e) When a merger
becomes effective, a foreign entity that is the surviving entity may
be served with process in this state for the collection and enforcement of any debts,
obligations, or other liabilities of a domestic merging entity in accordance
with applicable law.
(f) When a merger
becomes effective, the registration to do business in this
state of any
foreign merging entity that is not the surviving entity is canceled.
SECTION 931. INTEREST EXCHANGE
AUTHORIZED.
(a) By complying
with this [part]:
(1) a domestic
partnership may acquire all of one or more classes or series of interests of
another domestic or foreign entity in exchange for interests, securities,
obligations, money, other property, rights
to acquire interests or securities, or any combination of the foregoing;
or
(2) all of one or
more classes or series of interests of a domestic partnership may be acquired
by another domestic or foreign entity in exchange for interests, securities,
obligations, money, other property, rights
to acquire interests or securities, or any combination of the foregoing.
(b) By complying
with the provisions of this [part] applicable to foreign entities, a foreign entity may be the acquiring or acquired
entity in an interest exchange under this [part] if the interest exchange is
authorized by the law of the foreign entity’s jurisdiction of formation.
(c) If a protected
agreement contains a provision that applies to a merger of a domestic
partnership but does not refer to an interest exchange, the provision applies
to an interest exchange in which the domestic partnership is the acquired
entity as if the interest exchange were a merger until the provision is amended
after [the effective date of this [act]].
SECTION 932. PLAN
OF INTEREST EXCHANGE.
(a) A domestic
partnership may be the acquired entity in an interest exchange under this
[part] by approving a plan of interest exchange. The plan must be in a record
and contain:
(1) the name of the acquired entity;
(2) the name, jurisdiction of formation, and type of entity of
the acquiring entity;
(3) the manner of
converting the interests in the acquired entity into interests, securities,
obligations, money, other property, rights
to acquire interests or securities, or any combination of the foregoing;
(4) any proposed amendments to the partnership agreement that
are, or are proposed to be, in a record of the acquired entity;
(5) the other terms and conditions of the interest exchange;
and
(6) any other provision required by the law of this state or
the partnership agreement of the acquired entity.
(b) In addition to
the requirements of subsection (a), a plan of interest exchange may contain any
other provision not prohibited by law.
SECTION 933. APPROVAL
OF INTEREST EXCHANGE.
(a) A plan of
interest exchange is not effective unless it has been approved:
(1) by all the partners of a domestic acquired partnership
entitled to vote on or consent to any matter; and
(2) in a record, by
each partner of the domestic acquired partnership that will have interest
holder liability for debts, obligations, and other liabilities that arise after
the interest exchange becomes effective, unless:
(A) the partnership
agreement of the partnership provides in a record for the approval of an
interest exchange or a merger in which some or all its partners become subject
to interest holder liability by the vote or consent of fewer than all the
partners; and
(B) the partner consented in a record to or voted for that
provision of the partnership agreement or became a partner after the adoption
of that provision.
(b) An interest
exchange involving a domestic acquired entity that is not a partnership is not
effective unless it is approved by the domestic entity in accordance with its
organic law.
(c) An interest
exchange involving a foreign acquired entity is not effective unless it is
approved by the foreign entity in accordance with the law of the foreign
entity’s jurisdiction of formation.
(d) Except as
otherwise provided in its organic law or organic rules, the interest holders of
the acquiring entity are not required to
approve the interest exchange.
SECTION 934. AMENDMENT
OR ABANDONMENT OF PLAN OF INTEREST EXCHANGE.
(a) A plan of interest
exchange may be amended only with the consent of each party to the plan,
except as otherwise provided in the plan.
(b) A domestic
acquired partnership may approve an amendment of a plan of interest exchange:
(1) in the same manner as the plan was approved, if the plan
does not provide for the manner in which it may be amended; or
(2) by the partners
of the partnership in the manner provided in the plan, but a partner that was
entitled to vote on or consent to approval of the interest exchange is entitled
to vote on or consent to any amendment of the plan that will change:
(A) the amount or
kind of interests, securities, obligations, money, other property, rights to acquire interests or securities, or
any combination of the foregoing, to be received by any of the partners of the
acquired partnership under the plan;
(B) the partnership
agreement of the acquired partnership that will be in effect immediately after
the interest exchange becomes effective, except for changes that do not require
approval of the partners of the acquired partnership under this [act] or the
partnership agreement; or
(C) any other terms or conditions of the plan, if the change
would adversely affect the partner in any material respect.
(c) After a plan of
interest exchange has been approved and before a statement of interest exchange
becomes effective, the plan may be abandoned as provided in the
plan. Unless prohibited by the plan, a domestic acquired partnership may
abandon the plan in the same manner as the plan was approved.
(d) If a plan of
interest exchange is abandoned after a statement of interest exchange has been
delivered to the [Secretary of State] for filing and before the statement
becomes effective, a statement of abandonment, signed by the acquired
partnership, must be delivered to the [Secretary of State] for filing before
the statement of interest exchange becomes effective. The statement of
abandonment takes effect upon filing, and the interest exchange is abandoned
and does not become effective. The statement of abandonment must contain:
(1) the name of the acquired partnership;
(2) the date on which the statement of interest exchange was
delivered to the [Secretary of State] for filing; and
(3) a statement that the interest exchange has been
abandoned in accordance with this section.
SECTION 935. STATEMENT
OF INTEREST EXCHANGE.
(a) A statement of
interest exchange must be signed by a domestic acquired partnership and
delivered to the [Secretary of State] for filing.
(b) A statement of
interest exchange must contain:
(1) the name of the acquired partnership;
(2) the name, jurisdiction of formation, and type of the
acquiring entity;
(3)
a statement that the plan of interest exchange was
approved by the acquired entity in accordance with this [part].
(c) In addition to the requirements of subsection (b),
a statement of interest exchange may contain any other provision not prohibited
by law.
(d) A plan of
interest exchange that is signed by a domestic acquired partnership and meets
all the requirements of subsection (b) may be delivered to the [Secretary of
State] for filing instead of a statement of interest exchange and upon filing
has the same effect. If a plan of interest exchange is filed as provided in
this subsection, references in this [article] to a statement of interest
exchange refer to the plan of interest exchange filed under this subsection.
SECTION 936. EFFECT
OF INTEREST EXCHANGE.
(a) When an interest
exchange in which the acquired entity is a domestic partnership becomes
effective:
(1) the interests in
the domestic acquired partnership that are the subject of the interest exchange
cease to exist or are converted or exchanged, and the partners holding those
interests are entitled only to the rights provided to them under the plan of
interest exchange and to any appraisal rights they have under Section 908;
(2) the acquiring entity becomes the interest holder of the
interests in the acquired partnership stated in the plan of interest exchange
to be acquired by the acquiring entity; and
(3) the provisions of
the partnership agreement of the acquired partnership that are to be in a
record, if any, are amended to the extent provided in the plan of interest
exchange.
(b) Except as
otherwise provided in the partnership agreement of a domestic acquired
partnership, the interest exchange does not give rise to any rights that a
partner or third party would otherwise have upon a dissolution, liquidation, or
winding up of the acquired partnership.
(c) When an interest
exchange becomes effective, a person that did not have interest holder
liability with respect to a domestic acquired partnership and that becomes
subject to interest holder liability with respect to a domestic entity as a
result of the interest exchange has interest holder liability only to the
extent provided by the organic law of the entity and only for those debts,
obligations, and other liabilities that arise after the interest exchange
becomes effective.
(d) When an interest
exchange becomes effective, the interest holder liability of a person that ceases
to hold an interest in a domestic acquired partnership with respect to which
the person had interest holder liability is as follows:
(1) The interest
exchange does not discharge any interest holder liability to the extent the
interest holder liability arose before the interest exchange became effective.
(2) The person does
not have interest holder liability for any liability that arises after the
interest exchange becomes effective.
(3) The person has
whatever rights of contribution from any other person as are provided by law
other than this [act], this [act], or the partnership agreement of the acquired
entity with respect to any interest holder liability preserved under paragraph
(1) as if the interest exchange had not occurred.
SECTION 941. CONVERSION AUTHORIZED.
(a) By complying with this [part], a domestic partnership may become:
(1) a domestic entity of a different
type; or
(2) a foreign entity of a different
type, if the conversion is authorized by the law of the foreign jurisdiction.
(b) By complying with the provisions of this [part] applicable to
foreign entities, a foreign entity that is not a foreign partnership may become a
domestic partnership if the conversion is authorized by the law of the foreign
entity’s jurisdiction of formation.
(c) If a protected agreement contains a provision that applies to a
merger of a domestic partnership but does not refer to a conversion, the
provision applies to a conversion of the entity as if the conversion were a
merger until the provision is amended after [the effective date of this [act]].
SECTION 942. PLAN
OF CONVERSION.
(a) A domestic
partnership may convert to a different type of entity under this [part] by
approving a plan of conversion. The plan must be in a record and contain:
(1) the name of the converting partnership;
(2) the name, jurisdiction of formation, and type of entity
of the converted entity;
(3) the manner of
converting the interests in the converting partnership into interests,
securities, obligations, money, other property, rights to acquire interests or securities, or any combination of
the foregoing;
(4) the proposed public organic record of the converted
entity if it will be a filing entity;
(5) the full text of the private organic rules of the
converted entity that are proposed to be in a record;
(6) the other terms and conditions of the conversion; and
(7) any other provision required by the law of this state or
the partnership agreement of the converting partnership.
(b) In addition to
the requirements of subsection (a), a plan of conversion may contain any other
provision not prohibited by law.
SECTION 943. APPROVAL
OF CONVERSION.
(a) A plan of
conversion is not effective unless it has been approved:
(1) by a domestic
converting partnership by all the partners of the partnership entitled to vote
on or consent to any matter; and
(2) in a record, by each partner of a domestic converting
partnership that will have interest holder liability for debts, obligations,
and other liabilities that arise after the conversion becomes effective:
(A) the partnership
agreement provides in a record for the approval of a conversion or a merger in
which some or all of its partners become subject to interest holder liability
by the vote or consent of fewer than all the interest holders; and
(B) the partner voted for or consented in a record to that
provision of the partnership agreement or became a partner after the adoption
of that provision.
(b) A conversion
involving a domestic converting entity that is not a partnership is not
effective unless it is approved by the domestic converting entity in accordance
with its organic law.
(c) A conversion of
a foreign converting entity is not effective unless it is approved by the
foreign entity in accordance with the law of the foreign entity’s jurisdiction
of formation.
SECTION 944. AMENDMENT
OR ABANDONMENT OF PLAN OF CONVERSION.
(a) A plan of
conversion of a domestic converting partnership may be amended:
(1) in the same manner as the plan was approved, if the plan
does not provide for the manner in which it may be amended; or
(2) by the partners
of the entity in the manner provided in the plan, but a partner that was
entitled to vote on or consent to approval of the conversion is entitled to
vote on or consent to any amendment of the plan that will change:
(A) the amount or
kind of interests, securities, obligations, money, other property, rights to acquire interests or securities, or
any combination of the foregoing, to be received by any of the partners of the
converting entity under the plan;
(B) the public
organic record or private organic rules of the converted entity that will be in
effect immediately after the conversion becomes effective, except for changes
that do not require approval of the interest holders of the converted entity
under its organic law or organic rules; or
(C) any other terms or conditions of the plan, if the change
would adversely affect the partner in any material respect.
(b) After a plan of
conversion has been approved by a domestic converting partnership and before a
statement of conversion becomes effective, the plan may be abandoned
as provided in the plan. Unless prohibited by the plan, a domestic
converting partnership may abandon the plan in the same manner as the plan was
approved.
(c) If a plan of conversion
is abandoned after a statement of conversion has been delivered to the
[Secretary of State] for filing and before the filing becomes effective, a
statement of abandonment, signed by the converting entity, must be delivered to
the [Secretary of State] for filing before the time the statement of conversion
becomes effective. The statement of abandonment takes effect upon filing, and
the conversion is abandoned and does not become effective. The statement of
abandonment must contain:
(1) the name of the converting partnership;
(2) the date on which the statement of conversion was
delivered to the [Secretary of State] for filing; and
(3) a statement that the conversion has been abandoned in
accordance with this section.
SECTION 945. STATEMENT
OF CONVERSION.
(a) A statement of
conversion must be signed by the converting entity and delivered to the
[Secretary of State] for filing.
(b) A statement of
conversion must contain:
(1) the name, jurisdiction of formation, and type of the
converting entity;
(2) the name, jurisdiction of formation, and type of the
converted entity;
(3) if the
converting entity is a domestic entity, a statement that the plan of conversion
was approved in accordance with this [part] or, if the converting entity is a
foreign entity, a statement that the conversion was approved by the foreign
converting entity in accordance with the law of its jurisdiction of formation;
(4) if the converted entity is a domestic filing entity, the
text of its public organic record, as an attachment;
(5) if the converted entity is a domestic limited liability
partnership, the text of its statement of qualification, as an attachment; and
(6) if the converted entity is a foreign entity that is not
a registered foreign entity, a mailing address to which the [Secretary of
State] may send any process served on the [Secretary of State] pursuant to
Section 946(e).
(c) In addition to
the requirements of subsection (b), a statement of conversion may contain any
other provision not prohibited by law.
(d) If the converted
entity is a domestic entity, its public organic record, if any, must satisfy
the requirements of the law of this state, except that the public organic
record does not need to be signed.
(e) A plan of
conversion that is signed by a domestic converting entity and meets all the
requirements of subsection (b) may be delivered to the [Secretary of State] for
filing instead of a statement of conversion and upon filing has the same
effect. If a plan of conversion is filed as provided in this subsection, references
in this [article] to a statement of conversion refer to the plan of conversion
filed under this subsection.
SECTION 946. EFFECT
OF CONVERSION.
(a) When a
conversion in which the converted entity is a domestic partnership becomes
effective:
(1) the converted entity is:
(A) organized under and subject to this [act]; and
(B) the same entity without interruption as the converting
entity;
(2) all property of the converting entity continues to be
vested in the converted entity without transfer, reversion, or impairment;
(3) all debts, obligations,
and liabilities of the converting entity continue as debts, obligations, and
liabilities of the converted entity;
(4) except as
otherwise provided by law or the plan of conversion, all the
rights, privileges, immunities, powers, and purposes of the converting entity
remain in the converted entity;
(5) the name of the converted entity may be substituted for
the name of the converting entity in any pending action or proceeding;
(6) if the converted entity is a limited liability
partnership, its statement of qualification is effective simultaneously;
(7) the provisions
of the partnership agreement of the converted entity that are to be in a
record, if any, approved as part of the plan of conversion are effective; and
(8) the interests in the converting entity are converted, and
the interest holders of the converting entity are entitled only to the rights
provided to them under the plan of conversion and to any appraisal rights they
have under Section 908 and the converting entity’s organic law.
(b) Except as
otherwise provided in the partnership agreement of a domestic converting
partnership, the conversion does not give rise to any rights that a partner or
third party would otherwise have upon a dissolution, liquidation, or winding up
of the converting entity.
(c) When a
conversion becomes effective, a person that did not have interest holder
liability with respect to the converting entity and that becomes subject to
interest holder liability with respect to a domestic entity as a result of a
conversion has interest holder liability only to the extent provided by the
organic law of the entity and only for those debts, obligations, and
liabilities that arise after the conversion becomes effective.
(d) When a
conversion becomes effective, the interest holder liability of a person that
ceases to hold an interest in a domestic partnership with respect to which the
person had interest holder liability is as follows:
(1) The conversion
does not discharge any interest holder liability to the extent the interest
holder liability arose before the conversion became effective.
(2) The person does
not have interest holder liability for any liability that arises after the
conversion becomes effective.
(3) The person has
whatever rights of contribution from any other person as are provided by law
other than this [act], this [act], or the partnership agreement of the
converting entity with respect to any interest holder liability preserved under
paragraph (1) as if the conversion had not occurred.
(e) When a
conversion becomes effective, a foreign entity that is the converted entity may
be served with process in this state for the collection and enforcement of any
of its debts, obligations, and liabilities in accordance with applicable law.
(f) If the
converting entity is a registered foreign entity, its registration to do
business in this state is canceled when the conversion becomes effective.
(g) A conversion
does not require the entity to wind up its affairs and does not constitute or
cause the dissolution of the entity.
SECTION 951. DOMESTICATION
AUTHORIZED.
(a) By complying
with this [part], a domestic limited liability partnership may become a foreign
limited liability partnership if the domestication is authorized by the law of
the foreign jurisdiction.
(b) By complying
with the provisions of this [part] applicable to foreign limited liability
partnerships, a foreign limited
liability partnership may become a domestic limited liability partnership if
the domestication is authorized by the law of the foreign limited liability
partnership’s jurisdiction of formation.
(c) If a protected
agreement contains a provision that applies to a merger of a domestic limited
liability partnership but does not refer to a domestication, the provision
applies to a domestication of the limited liability partnership as if the
domestication were a merger until the provision is amended after [the effective
date of this [act]].
SECTION 952. PLAN
OF DOMESTICATION.
(a) A domestic limited
liability partnership may become a foreign limited liability partnership in a domestication by approving a plan of domestication. The plan must
be in a record and contain:
(1) the name of the domesticating limited liability
partnership;
(2) the name and jurisdiction of formation of the
domesticated limited liability partnership;
(3) the manner of
converting the interests in the domesticating limited liability partnership
into interests, securities, obligations, money, other property, rights to acquire interests or securities, or
any combination of the foregoing;
(4) the proposed statement of qualification of the
domesticated limited liability partnership;
(5) the full text of the partnership agreement of the
domesticated limited liability partnership that are proposed to be in a record;
(6) the other terms and conditions of the domestication; and
(7) any other provision required by the law of this state or
the partnership agreement of the domesticating limited liability partnership.
(b) In addition to the
requirements of subsection (a), a plan of domestication may contain any other
provision not prohibited by law.
SECTION 953. APPROVAL
OF DOMESTICATION.
(a) A plan of
domestication of a domestic domesticating limited liability partnership is not
effective unless it has been approved:
(1) by all the partners entitled to vote on or consent to
any matter; and
(2) in a record, by
each partner that will have interest holder liability for debts, obligations,
and other liabilities that arise after the domestication becomes effective,
unless:
(A) the partnership
agreement of the entity in a record provide for the approval of a domestication
or merger in which some or all of its partners become subject to interest
holder liability by the vote or consent of fewer than all the partners; and
(B) the partner voted for or consented in a record to that
provision of the partnership agreement or became a partner after the adoption
of that provision.
(b) A domestication
of a foreign domesticating limited liability partnership is not effective
unless it is approved in accordance with the law of the foreign limited
liability partnership’s jurisdiction of formation.
SECTION 954. AMENDMENT
OR ABANDONMENT OF PLAN OF DOMESTICATION.
(a) A plan of
domestication of a domestic domesticating limited liability partnership may be
amended:
(1) in the same manner as the plan was approved, if the plan
does not provide for the manner in which it may be amended; or
(2) by the partners
of the limited liability partnership in the manner provided in the plan, but a
partner that was entitled to vote on or consent to approval of the
domestication is entitled to vote on or consent to any amendment of the plan
that will change:
(A) the amount or
kind of interests, securities, obligations, money, other property, rights to acquire interests or securities, or
any combination of the foregoing, to be received by any of the partners of the
domesticating limited liability partnership under the plan;
(B) the partnership
agreement of the domesticated limited liability partnership that will be in
effect immediately after the domestication becomes effective, except for
changes that do not require approval of the partners of the domesticated
limited liability partnership under its organic law or partnership agreement;
or
(C) any other terms or conditions of the plan, if the change
would adversely affect the partner in any material respect.
(b) After a plan of
domestication has been approved by a domestic domesticating limited liability
partnership and before a statement of domestication becomes effective, the plan
may be abandoned as provided in the
plan. Unless
prohibited by the plan, a domestic domesticating limited liability partnership
may abandon the plan in the same manner as the plan was approved.
(c) If a plan of
domestication is abandoned after a statement of domestication has been
delivered to the [Secretary of State] for filing and before the filing becomes
effective, a statement of abandonment, signed by the limited liability
partnership, must be delivered to the [Secretary of State] for filing before
the time the statement of domestication becomes effective. The statement of abandonment takes effect upon
filing, and the domestication is abandoned and does not become effective. The
statement of abandonment must contain:
(1) the name of the domesticating limited liability
partnership;
(2) the date on which the statement of domestication was
delivered to the [Secretary of State] for filing; and
(3) a statement that the domestication has been abandoned
in accordance with this section.
SECTION 955. STATEMENT
OF DOMESTICATION.
(a) A statement of
domestication must be signed by the domesticating limited liability partnership
and delivered to the [Secretary of State] for filing.
(b) A statement of
domestication must contain:
(1) the name of the domesticating limited liability
partnership and the name of the jurisdiction whose law governs the
partnership’s internal affairs;
(2) the name of the domesticated limited liability
partnership and the name of the jurisdiction whose law governs the
partnership’s internal affairs;
(3) if the
domesticating limited liability partnership is a domestic limited liability
partnership, a statement that the plan of domestication was approved in
accordance with this [part] or, if the domesticating limited liability
partnership is a foreign limited liability partnership, a statement that the
domestication was approved in accordance with the law of the jurisdiction whose law governs the internal affairs of the foreign
partnership;
(4) the statement of qualification of the domesticated
limited liability partnership, as an attachment; and
(5) if the domesticated foreign limited liability
partnership is not a registered foreign limited liability partnership, a
mailing address to which the [Secretary of State] may send any process served
on the [Secretary of State] pursuant to Section 956(e).
(c) In addition to
the requirements of subsection (b), a statement of domestication may contain
any other provision not prohibited by law.
(d) The statement of
qualification of a domesticated domestic limited liability partnership
must satisfy the
requirements of the law of this state, but the statement does not need to be
signed.
(e) A plan of domestication that is signed by a
domesticating domestic limited liability partnership and meets all the
requirements of subsection (b) may be delivered to the [Secretary of State] for
filing instead of a statement of domestication and upon filing has the same
effect. If a plan of domestication is filed as provided in this subsection,
references in this [part] to a statement of domestication refer to the plan of
domestication filed under this subsection.
SECTION 956. EFFECT
OF DOMESTICATION.
(a) When a domestication becomes effective:
(1) the domesticated limited liability partnership is:
(A) organized under and subject to the organic law of the
domesticated limited liability partnership; and
(B) the same entity without interruption as the domesticating
limited liability partnership;
(2) all property of the domesticating limited liability
partnership continues to be vested in the domesticated entity without transfer,
reversion, or impairment;
(3) all debts, obligations, and liabilities of the
domesticating limited liability partnership continue as debts, obligations, and
liabilities of the domesticated limited liability partnership;
(4) except as
otherwise provided by law or the plan of domestication, all the rights,
privileges, immunities, powers, and purposes of the domesticating limited
liability partnership remain in the domesticated limited liability partnership;
(5) the name of the domesticated limited liability
partnership may be substituted for the name of the domesticating limited
liability partnership in any pending action or proceeding;
(6) the statement of qualification of the domestic limited
liability partnership is effective;
(7) the provisions of the partnership agreement of the
domesticated limited liability partnership that are to be in a record, if any,
approved as part of the plan of domestication are effective; and
(8) the interests in
the domesticating limited liability partnership are converted to the extent and
as approved in connection with the domestication, and the partners of the
domesticating limited liability partnership are entitled only to the rights
provided to them under the plan of domestication and to any appraisal rights
they have under Section 908.
(b) Except as
otherwise provided in the organic law or partnership agreement of the
domesticating limited liability partnership, the domestication does not give
rise to any rights that a partner or third party would otherwise have upon a
dissolution, liquidation, or winding up of the domesticating limited liability
partnership.
(c) When a
domestication becomes effective, a person that did not have interest holder
liability with respect to the domesticating limited liability partnership and
that becomes subject to interest holder liability with respect to a domestic limited
liability partnership as a result of the domestication has interest holder
liability only to the extent provided by the organic law of the domestic
limited liability partnership and only for those debts, obligations, and other
liabilities that arise after the domestication becomes effective.
(d) When a domestication becomes effective:
(1) The
domestication does not discharge any interest holder liability under this [act]
to the extent the interest holder liability arose before the domestication
became effective.
(2) A person does
not have interest holder liability under this [act] for any debts, obligations,
and liabilities that arise after the domestication becomes effective.
(3) A person has
whatever rights of contribution from any other person as are provided by law
other than this [act], or this [act], or the partnership agreement of a
domestic domesticating limited liability partnership with respect to any
interest holder liability preserved under paragraph (1) as if the domestication
had not occurred.
(e) When a domestication becomes effective, a foreign limited liability
partnership that is the domesticated limited liability partnership may
be served with process in this state for the collection and enforcement of any
of its debts, obligations, and liabilities in accordance with applicable law.
(f) If the
domesticating limited liability partnership is a registered foreign limited
liability partnership, the registration of the limited liability partnership is
canceled when the domestication becomes effective.
(g) A domestication does not require the limited liability partnership to
wind up its business and does not constitute or cause the dissolution of the
limited liability partnership.
SECTION 1001. STATEMENT OF QUALIFICATION.
(a) A partnership may become a limited
liability partnership pursuant to this section.
(b) The terms and
conditions on which a partnership becomes a limited liability partnership must
be approved by the vote necessary to amend the partnership agreement except, in
the case of a partnership agreement that expressly considers obligations to
contribute to the partnership, the vote necessary to amend those provisions.
(c) After the
approval required by subsection (b), a partnership may become a limited
liability partnership by filing delivering to the [Secretary of
State] for filing a statement of qualification. The statement must contain:
(1) the name of the partnership;
(2) the street address of the partnership’s chief executive principal office and, if different,
the street address of an office in this State state, if any;
(3) if the partnership does not have an office in this
State, the name and street address of the partnership’s registered agent for service of process; and
(4) a statement that the partnership elects to be become
a limited liability partnership; and
(5) a deferred effective date, if any.
(d) The agent
of a limited liability partnership for service of process must be an individual
who is a resident of this State or other person authorized to do business in
this State.
(e) (d) The status of a partnership as a limited liability
partnership is effective on the later of the filing of the statement or a date
specified in the statement. The A partnership’s status as a
limited liability partnership remains effective, regardless of changes in
the partnership, until it is canceled pursuant to Section 105(d) subsection
(f) or administratively revoked pursuant to Section 1003 1010.
(f) (e)The
status of a partnership as a limited liability partnership and the liability of
its partners for the debts, obligations, or other liabilities of the
partnership while it is a limited liability partnership is not affected by
errors or later changes in the information required to be contained in the
statement of qualification under subsection (c).
(g) The filing of a statement of
qualification establishes that a partnership has satisfied all conditions
precedent to the qualification of the partnership as a limited liability
partnership.
(h) An
amendment or cancellation of a statement of qualification is effective when it
is filed or on a deferred effective date specified in the amendment or
cancellation.
(f)
A limited liability partnership may amend or cancel its statement of
qualification by delivering to the [Secretary of State] for filing a statement
of amendment or cancellation. The
statement must be consented to by all partners and
state the name of the limited liability partnership and in the case of:
(1)
an amendment, state the amendment; and
(2)
a cancellation, state that the statement of qualification is canceled.
SECTION 1002. NAME PERMITTED NAMES.
(a) The name of a partnership that is not
a limited liability partnership may not contain the phrase “Registered Limited
Liability Partnership” or “Limited Liability Partnership” or the abbreviation
“R.L.L.P.”, “L.L.P.”, “RLLP” , or “LLP”.
(b) The
name of a limited liability partnership must end with contain the words “Registered Limited
Liability Partnership”, “Limited Liability Partnership”, “R.L.L.P.”, “L.L.P.”,
“RLLP”, or “LLP”.
(c)
Except as otherwise
provided in subsection (f), the name of a limited liability partnership, and
the name under which a foreign limited liability partnership may register to do
business in this state must be distinguishable on the records of the [Secretary
of State] from any:
(1)
name of a person whose formation required the filing
of a record by the [Secretary of State];
(2)
name of a limited liability partnership;
(3)
name of a person that is registered to do business in
this state by the filing of a record by the [Secretary of State];
(4)
name that is reserved under Section 1012 or other law of this state providing
for the reservation of a name by a filing of a record by the [Secretary of
State];
(5)
name that is registered under Section 1013 or other law of this state providing
for the registration of a name by a filing of a record by the [Secretary of
State]; or
(6)
assumed name registered under [this state’s assumed
name statute].
(d) If a
person consents in a record to the use of its name and submits an undertaking
in a form satisfactory to the [Secretary of State] to change its name to a name
that is distinguishable on the records of the [Secretary of State] from any
name in any category of names in subsection (c), the name of the consenting
person may be used by the person to which the consent was given.
(e)
Except as otherwise provided in subsection (f), in determining whether a name
is the same as or not distinguishable on the records of the [Secretary of
State] from the name of another person, words, phrases, or abbreviations
indicating the type of entity, such as “corporation”, “corp.”, “incorporated”,
“Inc.”, “professional corporation”, “PC”, “professional association”, “PA”,
“Limited”, “Ltd.”, “limited partnership”, “LP”, “limited liability
partnership”, “LLP”, “registered limited liability partnership”, “RLLP”,
“limited liability limited partnership”, “LLLP”, “registered limited liability
limited partnership”, “RLLLP”, “limited liability company”, or “LLC”, may not
be taken into account.
(f) A
person may consent in a record to the
use of a name that is not distinguishable on the records of the [Secretary of
State] from its name except for the addition of a word, phrase, or abbreviation
indicating the type of person as provided in subsection (e). In such a case, the person need not change its
name pursuant to subsection (d).
(g) The
name of a limited liability partnership or foreign limited liability
partnership may not contain the words [insert prohibited words or words that
may be used only with approval by the appropriate state agency].
SECTION 1003. REGISTERED AGENT.
(a) Each limited liability
partnership and each registered foreign limited liability partnership shall
designate and maintain a registered agent in this state.
The designation of a registered agent pursuant to this subsection is an
affirmation of fact by
the limited liability partnership or registered foreign limited liability
partnership that the agent has
consented to serve.
(b) A registered agent for a
limited liability partnership or registered foreign limited liability
partnership must have a place of
business in this state.
(c) The only duties under this
[act] of a registered agent that has complied with this [act] are:
(1) to forward to the limited
liability partnership or registered foreign limited liability partnership at
the address most recently supplied to the agent by the partnership any process,
notice, or demand pertaining to the partnership which is served on or received
by the agent;
(2) if the registered agent
resigns, to provide the notice required by Section 1005(c) to the partnership
at the address most recently supplied to the agent by the partnership; and
(3) to keep current the
information with respect to the agent in the statement of qualification.
SECTION
1004. CHANGE OF REGISTERED AGENT OR ADDRESS FOR REGISTERED AGENT.
(a) A limited liability
partnership or registered foreign limited liability partnership may change its
registered agent or the address of its registered agent
by delivering to the [Secretary of State] for filing a statement of change which
states:
(1) the
name of the partnership or foreign partnership; and
(2) the
information that is to be in effect as a result of the filing of the statement
of change.
(b) The partners of a limited
liability partnership need not approve the filing of:
(1) a statement of change under this section; or
(2) a similar filing changing the registered agent or registered
office, if any, of the partnership in any other jurisdiction.
(c) A statement of change under this section
designating a new registered agent is an affirmation of fact by the limited liability partnership or registered foreign
limited liability partnership that the agent has consented to serve.
(d) As an alternative to using the procedure in this
section, a limited liability partnership or registered foreign limited
liability partnership may amend its statement of qualification.
SECTION 1005. RESIGNATION OF REGISTERED
AGENT.
(a) A registered agent may
resign as an agent for a limited liability partnership or registered foreign
limited liability partnership by delivering to the [Secretary of State] for
filing a statement of resignation that states:
(1) the
name of the partnership;
(2) the
name of the agent;
(3) that
the agent resigns from serving as registered agent for the partnership; and
(4) the
address of the partnership to which the agent will send the notice required by subsection (c).
(b) A statement of resignation
takes effect on the earlier of the 31st day after the day on which it is filed
by the [Secretary of State] or the designation of a new registered agent for
the limited liability partnership or registered foreign limited liability
partnership.
(c) A registered agent shall promptly
furnish to the limited liability partnership or registered foreign limited
liability partnership notice in a record of the date on which a statement of
resignation was filed.
(d) When a statement of
resignation takes effect, the registered agent ceases to have responsibility under
this [act] for any matter thereafter tendered
to it as agent for the limited liability partnership or registered foreign
limited liability partnership. The resignation does not affect any contractual
rights the partnership has against the agent or that the agent has against the
partnership.
(e) A registered agent may resign with respect to a
limited liability partnership or registered foreign limited liability
partnership whether or not the partnership is in good standing.
SECTION 1006. CHANGE
OF NAME OR ADDRESS BY REGISTERED AGENT.
(a) If a registered agent changes its name or
address, the agent may deliver to the [Secretary of State] for filing a
statement of change that states:
(1) the name of the limited
liability partnership or registered foreign limited liability partnership represented
by the registered agent;
(2) the name of the agent
as currently shown in the records of the [Secretary of State] for the
partnership or registered foreign partnership;
(3) if the name of the
agent has changed, its new name; and
(4) if the address of the agent
has changed, its new address.
(b) A registered agent promptly shall furnish notice
to the represented limited liability partnership or registered foreign limited
liability partnership of the filing of the statement of change by the
[Secretary of State] and the changes made by the statement.
SECTION
1007. SERVICE OF PROCESS, NOTICE,
OR DEMAND.
(a) A limited liability
partnership or registered foreign limited liability partnership may be served with any process, notice, or demand required or permitted
by law by serving its registered agent.
(b) If a limited liability
partnership or registered foreign limited liability partnership ceases to have
a registered agent, or if
its registered agent cannot with
reasonable diligence be served, the partnership may be served by registered or
certified mail, return receipt requested, or by similar commercial delivery
service, addressed to the partnership
at its principal office.
The address of the principal office must be as shown in the
partnership’s most recent [annual] [biennial] report filed by the [Secretary of
State]. Service is effected
under this subsection on the earliest of:
(1) the
date the partnership receives the mail or delivery by the commercial delivery
service;
(2) the
date shown on the return receipt, if signed by the partnership; or
(3) five days after its
deposit with the United States Postal Service, or with the commercial delivery
service, if correctly addressed and with sufficient postage or payment.
(c) If process, notice, or
demand cannot be served on a partnership or registered foreign limited
liability partnership pursuant to subsection (a) or (b), service may be made by
handing a copy to the individual
in charge of any regular place of business of the partnership if the individual
served is not a plaintiff in the action.
(d) Service of process,
notice, or demand on a registered agent must be in a written record.
(e) Service of process,
notice, or demand may be made by other means under law other than this [act].
SECTION 1003 1008. ANNUAL [ANNUAL] [BIENNIAL] REPORT FOR [SECRETARY
OF STATE].
(a) A Each limited liability partnership and a
registered foreign limited liability partnership authorized to transact
business in this State shall file an annual report in the office of deliver
to the [Secretary of State] for filing [an annual] [a biennial] report
which contains that states:
(1) the name of the partnership and the State or other
jurisdiction under whose laws the foreign limited liability partnership is
formed or foreign partnership;
(2) the
street address of the partnership’s chief executive office and, if different,
the street address of an office of the partnership in this State, if any; and
the name and street and mailing addresses of its registered agent in this
state;
(3) if the partnership does not have an office in this
State state, the name and street address of the partnership’s current
agent for service of process. the street
and mailing addresses of its principal office;
(4) the
name of at least one partner; and
(5) in the case of a foreign partnership, its jurisdiction of
formation and any alternate name adopted under Section 1106.
(b) Information in [an annual] [a biennial] report must
be current as of the date the report is signed by the limited liability
partnership or registered foreign limited liability partnership.
(b) (c) An annual report must be filed
between [January 1 and April 1] of each year following the calendar year in
which a partnership files a statement of qualification or a foreign partnership
becomes authorized to transact business in this State. The first [annual]
[biennial] report must be delivered to the [Secretary of State] after [January
1] and before [April 1] of the year following the calendar year in which the
limited liability partnership’s statement of qualification became effective or the
foreign limited liability partnership registered to do business in this state.
Subsequent [annual] [biennial] reports must be delivered to the [Secretary of
State] after [January 1] and before [April 1] of each [second] calendar year
thereafter.
(d) If [an annual] [a biennial] report does not contain
the information required by this section, the [Secretary of State] promptly shall
notify the reporting limited liability partnership or registered foreign
limited liability partnership in a record and return the report for correction.
(e) If [an annual] [a biennial] report contains the name
or address of a registered agent which differs from the information shown in
the records of the [Secretary of State] immediately before the [annual]
[biennial] report becomes effective, the differing information in the [annual]
[biennial] report is considered a statement of change under Section 1004.
SECTION
1009. ADMINISTRATIVE REVOCATION OF
STATEMENT OF QUALIFICATION.
(c) (a) The [Secretary of State] may commence
a proceeding under subsections (b) and (c) to revoke the statement of
qualification of a limited liability partnership that fails to file an
annual report when due or pay the required filing fee. administratively
if the partnership does not:
(1) pay any fee, tax, or penalty required to be paid to the
[Secretary of State] not later than [six
months] after it is due;
(2) deliver [an annual] [a biennial] report to the [Secretary of
State] not later than [six months] after it is due; or
(3)
have a registered agent in this state for [60] consecutive
days.
(b) To do so, the
[Secretary of State] shall provide the partnership at least 60 days’ written
notice of intent to revoke the statement. The notice m be mailed to the partnership
at its chief executive office set forth in the last filed statement of
qualification or annual report. The notice must specify the annual report that
has not been filed, the fee that has not been paid, and the effective date of
the revocation. The revocation is not effective if the annual report is filed
and the fee is paid before the effective date of the revocation If the
[Secretary of State] determines that one or more grounds exist for administratively
revoking a statement of qualification, the [Secretary of State] shall serve the
partnership with notice in a record of the [Secretary of State’s]
determination.
(c) If a limited liability partnership, not later than
[60] days after service of the notice is effected under subsection (b), does
not cure each ground for revocation or demonstrate to the satisfaction of the
[Secretary of State] that each ground determined by the [Secretary of State]
does not exist, the [Secretary of State] shall administratively revoke the
statement of qualification by signing a statement of administrative revocation
that recites the grounds for revocation and the effective date of the
revocation. The [Secretary of State] shall file the statement and serve a copy
on the partnership pursuant to Section 116.
(d) An administrative
revocation under subsection (c) affects only a partnership’s status as a
limited liability partnership and is not an event causing dissolution of the
partnership.
(e)
The administrative revocation of a statement of qualification of a limited
liability partnership does not terminate the authority of its registered agent.
SECTION
1010. REINSTATEMENT.
(a) A partnership whose statement of qualification has
been revoked administratively under Section 1010 may apply to the [Secretary of
State] for reinstatement of the statement of qualification [not later than two
years] after the effective date of the revocation. The application must state:
(1) the name of the partnership at the time of the
administrative revocation of its statement of qualification and, if needed, a
different name that satisfies Section 1002;
(2) the address of the principal office of the partnership and
the name and address of its registered agent;
(3) the effective date of administrative revocation of the
partnership’s statement of qualification; and
(4) that the grounds for revocation did not exist or have been cured.
(b) To have its statement of qualification reinstated, a
partnership must pay all fees, taxes, and penalties that were due to the
[Secretary of State] at the time of the administrative revocation and all fees,
taxes, and penalties that would have been due to the [Secretary of State] while
the partnership’s statement of qualification was revoked administratively.
(c) If the [Secretary of State] determines that the application
contains the information required by subsection (a), is satisfied that the
information is correct, and determines that all payments required to be made to
the [Secretary of State] by subsection (b) have been made, the [Secretary of
State] shall cancel the statement of revocation and prepare a statement of
reinstatement that states the [Secretary of State’s] determination and the
effective date of reinstatement, file the statement, and serve a copy on the
partnership.
(d) When
reinstatement under this section is effective:
(1) it
relates back to and takes effect as of the effective date of the administrative
revocation; and
(2) the
partnership’s status as a limited liability partnership continues as if the
revocation had never occurred, except for the rights of a person arising out of
an act or omission in reliance on the revocation before the person knew or had notice
of the reinstatement.
SECTION 1011. JUDICIAL REVIEW OF DENIAL OF REINSTATEMENT.
(a)
If the [Secretary of State] denies a partnership’s application for
reinstatement following administrative revocation of the partnership’s
statement of qualification, the [Secretary of State] shall serve the
partnership with notice in a record that explains the reasons for the denial.
(b)
A partnership may seek judicial review of denial of reinstatement in [the appropriate
court] not later than [30] days after service of the notice of denial.
SECTION 1012. RESERVATION OF NAME.
(a) A person may
reserve the exclusive use of a name by delivering an application to the
[Secretary of State] for filing. The
application must state the name and address of the applicant and the name to be
reserved. If the [Secretary of State] finds
that the name is available, the [Secretary of State] shall reserve the name for
the applicant’s exclusive use for a period of 120 days.
(b) The owner of a
reserved name may transfer the reservation to another person that is not an
individual by delivering to the [Secretary of State] a signed notice in a
record of the transfer which states the name and address of the transferee.
SECTION
1013. REGISTRATION OF NAME.
(a) A foreign limited liability partnership not
registered to do business in this state under [Article] 11 may register its
name, or an alternate name adopted pursuant to Section 1002, if the name is
distinguishable upon on the records of the [Secretary of State] from the names
that are not available under Section 1002.
(b) To register its name or an alternate name adopted
pursuant to Section 1002, a foreign limited liability partnership must deliver
to the [Secretary of State] for filing an application stating the partnership’s
name, the jurisdiction and date of its formation, and any alternate name
adopted pursuant to Section 1002. If the
[Secretary of State] finds that the name applied for is available, the
[Secretary of State] shall register the name for the applicant’s exclusive use.
(c) The registration of a name under this section is
effective for [one year] after the date of registration.
(d) A foreign limited liability partnership whose name
registration is effective may renew the registration for successive one-year
periods by delivering, not earlier than [three months] before the expiration of
the registration, to the [Secretary of State] for filing a renewal application
that complies with this section. When
filed, the renewal application renews the registration for a succeeding
one-year period.
(e) A foreign limited liability partnership whose name
registration is effective may register as a foreign limited liability company
under the registered name or consent in a signed record to the use of that name
by another person that is not an individual.
SECTION 1101. GOVERNING LAW.
(a) The law under of the jurisdiction in
which the statement of qualification of a foreign limited liability
partnership is formed filed governs relations among the
partners and between the partners and:
(1) the internal affairs of the partnership; and
(2)
the partnership and the liability of partners
for obligations a partner as partner for a debt, obligation, or
liability of the partnership.
(b) A
foreign limited liability partnership may is not be denied a
statement of foreign qualification by reason precluded from registering
to do business in this state because of any difference between the law of
the jurisdiction under which the partnership was formed is
recognized and the law of this State state.
(c) A
statement of foreign qualification Registration of a foreign limited
liability partnership to do business in this state does not authorize a
the foreign limited liability partnership to engage in any
business or exercise any power that a domestic partnership may not
engage in or exercise in this State state as a limited liability
partnership.
SECTION
1102. STATEMENT OF FOREIGN
QUALIFICATION.
(a) Before
transacting business in this State, a foreign limited liability partnership
must file a statement of foreign qualification. The statement must contain:
(1) the name
of the foreign limited liability partnership which satisfies the requirements
of the State or other jurisdiction under whose law it is formed and ends with
“Registered Limited Liability Partnership”, “Limited Liability Partnership”,
“R.L.L.P.”, “L.L.P.”, “RLLP,” or “LLP”;
(2) the street
address of the partnership’s chief executive office and, if different, the
street address of an office of the partnership in this State, if any;
(3) if there is no office of the partnership in this State, the
name and street address of the partnership’s agent for service of process; and
(4) a deferred effective date, if any.
(b) The agent
of a foreign limited liability company for service of process must be an
individual who is a resident of this State or other person authorized to do
business in this State.
(c) The status
of a partnership as a foreign limited liability partnership is effective on the
later of the filing of the statement of foreign qualification or a date
specified in the statement. The status
remains effective, regardless of changes in the partnership, until it is
canceled pursuant to Section 105(d) or revoked pursuant to Section 1003.
(d) An
amendment or cancellation of a statement of foreign qualification is effective
when it is filed or on a deferred effective date specified in the amendment or
cancellation.
SECTION
1102. REGISTRATION TO DO BUSINESS
IN THIS STATE.
(a) A foreign limited liability partnership may not do
business in this state until it registers with the [Secretary of State] under
this [article].
(b) A foreign limited liability partnership doing
business in this state may not maintain an action or proceeding in
this state unless it has registered to do business in this state.
(c) The failure of a foreign limited liability
partnership to register to do business in this state does not impair the
validity of a contract or act of the foreign partnership or preclude it from
defending an action or proceeding in this state.
(d) A limitation on the liability of a partner of a
foreign limited liability partnership is not waived solely because the
partnership does business in this state without registering to do business in
this state.
(e) Section 1101(a) and (b) applies even if a foreign
limited liability partnership fails to register under this [article].
SECTION 1103. FOREIGN REGISTRATION
STATEMENT. To
register to do business in this state, a foreign limited liability partnership
must deliver a foreign registration statement to the [Secretary of State] for
filing. The statement must state:
(1) the name of the foreign
limited liability partnership and, if the name does not comply with Section
1002, an alternate name adopted pursuant to Section 1106(a);
(2) that the partnership is a
foreign limited liability partnership;
(3) the jurisdiction in which
the partnership’s statement of qualification is filed;
(4)
the street and mailing addresses of the partnership’s principal office and, if the law of the jurisdiction in which the
partnership’s statement of qualification is filed requires the partnership to
maintain an office in that jurisdiction, the street and mailing addresses of
the required office; and
(5) the name and street and
mailing addresses of the partnership’s registered
agent in this state.
SECTION 1104. AMENDMENT OF FOREIGN REGISTRATION STATEMENT.
A
registered foreign limited liability partnership shall deliver to the
[Secretary of State] for filing an amendment to its foreign registration
statement if there is a change in:
(1) the
name of partnership;
(2) the partnership’s
jurisdiction of formation;
(3) an
address required by Section 1103(4); or
(4) the information
required by Section 1103(5).
SECTION
1103. EFFECT OF FAILURE TO QUALIFY.
(a) A foreign limited liability
partnership transacting business in this State may not maintain an action or
proceeding in this State unless it has in effect a statement of foreign
qualification.
(b) The failure
of a foreign limited liability partnership to have in effect a statement of
foreign qualification does not impair the validity of a contract or act of the
foreign limited liability partnership or preclude it from defending an action
or proceeding in this State.
(c) A
limitation on personal liability of a partner is not waived solely by
transacting business in this State without a statement of foreign
qualification.
(d) If a
foreign limited liability partnership transacts business in this State without
a statement of foreign qualification, the [Secretary of State] is its agent for
service of process with respect to a right of action arising out of the transaction
of business in this State.
SECTION 1104. ACTIVITIES
NOT CONSTITUTING TRANSACTING BUSINESS.
(a) Activities
of a foreign limited liability partnership which do not constitute transacting
business for the purpose of this [article] include:
(1) maintaining, defending, or settling an action or proceeding;
(2) holding meetings of its partners or carrying on any other
activity concerning its internal affairs;
(3) maintaining bank accounts;
(4) maintaining offices or agencies for the transfer, exchange,
and registration of the partnership’s own securities or maintaining trustees or
depositories with respect to those securities;
(5) selling through independent contractors;
(6) soliciting or obtaining orders, whether by mail or through
employees or agents or otherwise, if the orders require acceptance outside this
State before they become contracts;
(7) creating or acquiring indebtedness, with or without a
mortgage, or other security interest in property;
(8) collecting
debts or foreclosing mortgages or other security interests in property securing
the debts, and holding, protecting, and maintaining property so acquired;
(9) conducting an isolated transaction that is completed within
30 days and is not one in the course of similar transactions; and
(10) transacting business in interstate commerce.
(b) For
purposes of this [article], the ownership in this State of income-producing
real property or tangible personal property, other than property excluded under
subsection (a), constitutes transacting business in this State.
(c) This
section does not apply in determining the contacts or activities that may
subject a foreign limited liability partnership to service of process,
taxation, or regulation under any other law of this State.
SECTION
1105. ACTIVITIES NOT CONSTITUTING DOING BUSINESS.
(a) Activities of a foreign limited liability
partnership which do not constitute doing business in this state under this
[article] include:
(1) maintaining, defending, mediating, arbitrating, and settling
an action or proceeding;
(2) carrying on any activity concerning its internal affairs,
including meetings of its partners;
(3) maintaining accounts in financial institutions;
(4) maintaining offices or agencies for the transfer, exchange,
and registration of securities of the partnership or maintaining trustees or
depositories with respect to those securities;
(5) selling through independent contractors;
(6) soliciting or obtaining orders by any
means if the orders require acceptance outside this
state before they become contracts;
(7) creating or acquiring indebtedness, mortgages, or security
interests in property;
(8)
securing or collecting debts or enforcing mortgages or security interests in
property securing the debts, and holding, protecting, and maintaining property;
(9) conducting an isolated transaction that is not in the course
of similar transactions;
(10) owning, without more, property; and
(11) doing business in interstate commerce.
(b) A person does not do business in this state solely
by being a partner of a foreign limited liability partnership that does
business in this state.
(c)
This section does not apply in determining the contacts or activities that may
subject a foreign limited liability partnership to service of process,
taxation, or regulation under law of this state other than this [act].
SECTION 1106. NONCOMPLYING NAME OF FOREIGN LIMITED LIABILITY PARTNERSHIP.
(a) A foreign limited
liability partnership whose name does not comply with Section 1002 may not
register to do business in this state until it adopts, for the purpose of doing
business in this state, an alternate name that complies with Section 1002. A
registered foreign limited liability partnership that registers under an
alternate name under this subsection need not comply with [this state’s assumed
or fictitious name statute]. After registering to do business in this state
with an alternate name, a registered foreign partnership shall do business in
this state under:
(1) the alternate name;
(2) the partnership’s name, with the addition of its
jurisdiction of formation clearly identified; or
(3) an assumed or fictitious name the partnership is authorized
to use under [this state’s assumed or ficticious name statute].
(b) If a registered foreign limited liability
partnership changes its name to one that does not comply with Section 1002, it
may not do business in this state until it complies with subsection (a) by
amending its registration to adopt an alternate name that complies with Section
1002.
SECTION
1107. WITHDRAWAL DEEMED
ON CONVERSION TO DOMESTIC FILING ENTITY OR DOMESTIC LIMITED LIABILITY
PARTNERSHIP. A registered foreign limited
liability partnership that converts to a domestic limited liability partnership
or to a domestic entity that is organized, incorporated, or otherwise formed
through the delivery of a record to the [Secretary of State] for filing is
deemed to have withdrawn its registration on the effective date of the
conversion.
SECTION
1108. WITHDRAWAL ON DISSOLUTION OR
CONVERSION TO NONFILING ENTITY OTHER THAN LIMITED LIABILITY PARTNERSHIP.
(a) A registered foreign limited liability partnership
that has dissolved and completed winding up or has converted to a domestic or
foreign entity that is not organized, incorporated, or otherwise formed through
the public filing of a record, other than a limited liability partnership,
shall deliver a statement of withdrawal to the [Secretary of State] for filing.
The statement must state:
(1) in
the case of foreign limited liability partnership that has completed winding
up:
(A)
its name and the jurisdiction
in which the partnership’s statement of qualification is filed;
(B)
that the partnership surrenders its registration to do
business in this state; and
(2)
in the case of a foreign partnership that has converted:
(A) the
name of the converting partnership and the jurisdiction in which the
partnership’s statement of qualification is filed;
(B) the
type of entity to which the partnership has converted and its jurisdiction of
formation;
(C) that the converted entity
surrenders the converting partnership’s registration to do business and revokes
the authority of the converting partnership’s registered agent to act as
registered agent in this state; and
(D) a
mailing address to which service of process may be made under subsection (b).
(b) After a withdrawal under this section of a foreign
limited liability partnership that has converted to another type of entity is
effective, service of process in any action or proceeding based on a cause of
action arising during the time the foreign limited liability partnership was
registered to do business in this state may be made pursuant to Section 1007.
SECTION 1109. TRANSFER OF REGISTRATION.
(a) When a
registered foreign limited liability partnership has merged into a
foreign entity that is not registered to do business in this state or has
converted to a foreign entity
required to register with the [Secretary of State] to do
business in this state, the foreign entity
shall deliver to the [Secretary of State] for filing an application for
transfer of registration. The application must state:
(1) the name of the registered foreign limited partnership
before the merger or conversion;
(2) that before the merger or conversion the registration
pertained to a foreign limited liability partnership;
(3) the
name of the applicant foreign entity into which the foreign limited liability
partnership has merged or to which
it has been converted, and, if the name does not comply with Section 1002, an
alternate name adopted pursuant to Section 1106(a);
(4) the type of entity of the applicant foreign entity and its
jurisdiction of formation; and
(5) the street and mailing addresses of the principal office
of the applicant foreign entity and, if the law of that entity’s jurisdiction
of formation requires the entity to maintain an office in that jurisdiction,
the street and mailing addresses of that office; and
(6) the name and street and mailing addresses of the applicant
foreign entity’s registered agent in this state.
(b) When an application for transfer of registration
takes effect, the registration of the foreign limited liability limited
partnership to do business in this state is transferred without interruption to
the foreign entity into which it the partnership has merged or to which it has
been converted.
SECTION 1110. TERMINATION OF REGISTRATION.
(a) The [Secretary of State] may terminate the
registration of a registered foreign limited liability partnership in the
manner provided in subsections (b) and (c) if the partnership does not:
(1) pay, not later than [60 days] after the due date, any fee,
tax, interest, or penalty required to be paid to the [Secretary of State] under
this [act] or law other than this [act];
(2) deliver to the [Secretary of State] for filing, not later
than [60 days] after the due date, [an annual] [a biennial] report required
under Section 1009;
(3) have a registered agent as required by Section 1003; or
(4) deliver to the [Secretary of State] for filing a statement
of a change under Section 1004 not later than 30 days after a change has
occurred in the name or address of the registered agent.
(b) The [Secretary of State] may terminate the
registration of a registered foreign limited liability partnership by:
(1) filing
a notice of termination or noting the termination in the records of the
[Secretary of State]; and
(2) delivering a copy of the
notice or the information in the notation to the foreign limited liability
partnership’s registered agent, or if the partnership does not have a registered
agent, to the partnership’s principal office.
(c)
A notice or information in a notation under subsection (b) must include:
(1) the effective date of the termination, which must be at
least [60 days] after the date the [Secretary of State] delivers the copy; and
(2) the grounds for termination under subsection (a).
(d) The authority of a registered foreign limited
liability partnership to do business in this state ceases on the effective date
of the notice of termination or notation under subsection (b), unless before
that date the partnership cures each ground for termination stated in the
notice or notation. If the partnership cures each ground, the [Secretary of
State] shall file a record so stating.
SECTION 1111. WITHDRAWAL OF REGISTRATION OF REGISTERED FOREIGN LIMITED LIABILITY
Partnership.
(a)
A registered foreign limited liability partnership may withdraw its
registration by delivering a statement of withdrawal to the [Secretary of
State] for filing. The statement of withdrawal must state:
(1) the name of the partnership and its jurisdiction of
formation;
(2) that the partnership is not doing business in this state and
that it withdraws its registration to do business in this state;
(3) that the partnership revokes the authority of its registered
agent to accept service on its behalf in this state; and
(4) an address to which service of process may be made under
subsection (b).
(b) After the withdrawal of the registration of a
foreign limited liability partnership, service of process in any action or
proceeding based on a cause of action arising during the time the partnership
was registered to do business in this state may be made pursuant to Section 1007.
SECTION 1105
1112. ACTION
BY [ATTORNEY GENERAL].
The [Attorney General] may maintain an action to restrain
enjoin a foreign limited liability partnership from transacting doing
business in this State state in violation of this [article].
SECTION 1201.
UNIFORMITY OF APPLICATION AND CONSTRUCTION. This [Act] shall be applied and construed
to effectuate its general purpose to make uniform the law with respect to the
subject of this [Act] among States enacting it. In applying and
construing this uniform act, consideration must be given to the need to promote
uniformity of the law with respect to its subject matter among states that
enact it.
SECTION 1202. SHORT TITLE.
This [Act] may be cited as the Uniform
Partnership Act (1997).
SECTION 1203 1202. SEVERABILITY CLAUSE.
If any provision of this [Act] [act]
or its application to any person or circumstance is held invalid, the
invalidity does not affect other provisions or applications of this [Act]
[act] which can be given effect without the invalid provision or
application, and to this end the provisions of this [Act] [act] are
severable.
Legislative Note: Include this section only if this state lacks
a general severability statute or decision by the highest court of this state
stating a general rule of severability.
SECTION 1203. RELATION TO ELECTRONIC
SIGNATURES IN GLOBAL AND NATIONAL COMMERCE ACT. This [act] modifies, limits, or supersedes the
Electronic Signatures in Global and National Commerce Act, 15 U.S.C. Section
7001 et seq., but this [act] does not modify, limit, or supersede Section 101(c)
of that act, 15 U.S.C. Section 7001(c), or authorize electronic delivery of any
of the notices described in Section 103(b) of that act, 15 U.S.C. Section
7003(b).
SECTION 1204. EFFECTIVE DATE.
This [Act] takes effect
. . . . . . . . . . . . . .
SECTION 1205. REPEALS.
Effective January 1, ___, the following
acts and parts of acts are repealed: [the State Partnership Act as amended and
in effect immediately before the effective date of this [Act]].
SECTION 1205 1204. APPLICABILITY APPLICATION TO EXISTING RELATIONSHIPS.
(a) Before
January 1, ___, this [Act] governs only a partnership formed:
(1) after the effective date of this [Act], except a partnership
that is continuing the business of a dissolved partnership under [Section 41 of
the superseded Uniform Partnership Act]; and
(2) before the effective date of this [Act], that elects, as
provided by subsection (c), to be governed by this [Act].
(b) On and after January 1, ___, this [Act]
governs all partnerships.
(c) Before
January 1, ___, a partnership voluntarily may elect, in the manner provided in
its partnership agreement or by law for amending the partnership agreement, to
be governed by this [Act]. The provisions of this [Act] relating to the
liability of the partnership’s partners to third parties apply to limit those
partners’ liability to a third party who had done business with the partnership
within one year before the partnership’s election to be governed by this [Act]
only if the third party knows or has received a notification of the partnership’s
election to be governed by this [Act].
(a) Before
[all-inclusive date], this [act] governs only:
(1) a partnership formed on or after [the effective date of this
[act]]; and
(2) except as otherwise provided in subsections (c) and (d), a
partnership formed before [the effective date of this [act]] which elects, in
the manner provided in its partnership agreement or by law for amending the
partnership agreement, to be subject to this [act].
(b) Except as
otherwise provided in subsection (c), on and after [all-inclusive date] this
[act] governs all partnerships.
(c) With
respect to a partnership that elects pursuant to subsection (a)(2) to be
subject to this [act], after the election takes effect the provisions of this [act]
relating to the liability of the partnership’s partners to third parties apply:
(1) before [all-inclusive date], to:
(A) a third party that had not done business with the
partnership in the year before the election took effect; and
(B) a third
party that had done business with the partnership in the year before the
election took effect only if the third party knows or has received a
notification of the election; and
(2) on and after [all-inclusive date], to all third parties, but
those provisions remain inapplicable to any obligation incurred while those
provisions were inapplicable under paragraph (1)(B).
SECTION 1206 1205. SAVINGS CLAUSE. This [Act] [act] does not affect
an action or proceeding commenced or right accrued before this [Act] [act]
takes effect.
SECTION 1207 1206. EFFECTIVE DATE. These [Amendments] take This [act] takes effect . . .
SECTION
1208 1207. REPEALS. Effective January 1, __, the following acts
and parts of acts are repealed: [the Limited Liability Partnership amendments
to the State Partnership Act as amended and in effect immediately before the
effective date of these [Amendments]]. The following are repealed:
(1) [the State
Partnership Act as [amended, and as] in effect immediately before [the
effective date of this [Act]].
(2) . . . .
(3) . . . .
SECTION
1210. APPLICABILITY.
(a)
Before January 1, __, these [Amendments] govern only a limited liability
partnership formed:
(1)
on or after the effective date of these [Amendments],
unless that partnership is continuing the business of a dissolved limited
liability partnership; and
(2)
before the effective date of these [Amendments], that
elects, as provided by subsection (c), to be governed by these [Amendments].
(b)
On and after January 1, __, these [Amendments] govern all partnerships.
(c)
Before January 1, __, a partnership voluntarily may elect, in the manner
provided in its partnership agreement or by law for amending the partnership
agreement, to be governed by these [Amendments]. The provisions of these
[Amendments] relating to the liability of the partnership’s partners to third
parties apply to limit those partners’ liability to a third party who had done
business with the partnership within one year before the partnership’s election
to be governed by these [Amendments], only if the third party knows or has
received a notification of the partnership’s election to be governed by these
[Amendments].
(d)
The existing provisions for execution and filing a statement of qualification
of a limited liability partnership continue until either the limited liability
partnership elects to have this [Act] apply or January 1, ____.
SECTION 1211 1208. SAVINGS CLAUSE. These
[Amendments] do not affect an action or proceeding commenced or right accrued
before these [Amendments] take effect. This [act] does not affect an
action commenced, proceeding brought, or right accrued before [the effective
date of this [act]].
