HOWARD J. SWIBEL, Suite 1200, 120 S. Riverside Plaza, Chicago, IL 60606, Chair

ANN CONAWAY ANKER, Widener University, School of Law, P.O. Box 7474, Wilmington,

HARRY J. HAYNSWORTH, IV, William Mitchell College of Law, 875 Summit Avenue, St. Paul, MN 55105

HARRIET LANSING, Court of Appeals, Judicial Building, 25 Constitution Avenue, St. Paul,

JAMES C. McKAY, Office of Corporation Counsel, 6th Floor South, 441 4th Street, NW, Washington, DC 20001, Committee on Style Liaison

THOMAS A. SHIELS, P.O. Box 1401, Legislative Council, Legislative Hall, Dover, DE 19901

DANIEL S. KLEINBERGER, William Mitchell College of Law, 875 Summit Avenue, St. Paul,

TERESA ANN BECK, House Legislative Services Office, P.O. Box 1018, Jackson, MS 39215,

MARTIN I. LUBAROFF, American Bar Association (1997-2000), One Rodney Sq., P.O. Box 551, Wilmington, DE 19899

ROBERT R. KEATINGE, American Bar Association, 555 17th St., Ste. 3200, Denver, CO 80202-3979

STEVEN G. FROST, American BarAssociation Section of Taxation, 111 W. Monroe St., Ste. 1500, Chicago, IL 60603-4006

THOMAS EARL GEU, American Bar Association Section of Real Property, Probate and Trust Law, Probate and Trust Division, University of South Dakota, School of Law, 414 Clark St., Suite 214, Vermillion, SD 57069-2390

SANFORD J. LIEBSCHUTZ, American Bar Association Section of Real Property, Probate and Trust Law, Real Property Division (1997-2000), 1600 Crossroads Bldg., Rochester, NY 14614

BARRY NEKRITZ, American Bar Association Section of Real Property, Probate and Trust Law, Real Property Division, 10 S. Wacker Dr., Suite 4000, Chicago, IL 60606-7407

FRED H. MILLER, University of Oklahoma, College of Law, 300 Timberdell Road, Norman,

WILLIAM J. PIERCE, 1505 Roxbury Road, Ann Arbor, MI 48104, Executive Director Emeritus

The new Limited Partnership Act is a “stand alone” act, “de-linked” from both the original general partnership act (“UPA”) and the Revised Uniform Partnership Act (“RUPA”). To be able to stand alone, the Limited Partnership incorporates many provisions from RUPA and some from the Uniform Limited Liability Company Act (“ULLCA”). As a result, the new Act is far longer and more complex than its immediate predecessor, the Revised Uniform Limited Partnership Act (“RULPA”).

The new Act has been drafted for a world in which limited liability partnerships and limited liability companies can meet many of the needs formerly met by limited partnerships. This Act therefore targets two types of enterprises that seem largely beyond the scope of LLPs and LLCs: (i) sophisticated, manager-entrenched commercial deals whose participants commit for the long term, and (ii) estate planning arrangements (family limited partnerships). This Act accordingly assumes that, more often than not, people utilizing it will want:

The Act’s rules, and particularly its default rules, have been designed to reflect these assumptions.

Unlike this Act, RULPA is not a stand alone statute. RULPA was drafted to rest on and link to the UPA. RULPA Section 1105 states that “In any case not provided for in this [Act] the provisions of the Uniform Partnership Act govern.” UPA Section 6(2) in turn provides that “this Act shall apply to limited partnerships except in so far as the statutes relating to such partnerships are inconsistent herewith.” More particularly, RULPA Section 403 defines the rights, powers, restrictions and liabilities of a “general partner of a limited partnership” by equating them to the rights, powers, restrictions and liabilities of “a partner in a partnership without limited partners.”

This arrangement has not been completely satisfactory, because the consequences of linkage are not always clear. See, e.g., Frye v. Manacare Ltd., 431 So.2d 181, 183-84 (Fla. Dist. Ct. App. 1983) (applying UPA Section 42 in favor of a limited partner), Porter v. Barnhouse, 354 N.W.2d 227, 232-33 (Iowa 1984) (declining to apply UPA Section 42 in favor of a limited partner) and Baltzell-Wolfe Agencies, Inc. v. Car Wash Investments No. 1, Ltd., 389 N.E.2d 517, 518-20 (Ohio App. 1978) (holding that neither the specific provisions of the general partnership statute nor those of the limited partnership statute determined the liability of a person who had withdrawn as general partner of a limited partnership). Moreover, in some instances the “not inconsistent” rules of the UPA can be inappropriate for the fundamentally different relations involved in a limited partnership.

In any event, the promulgation of RUPA unsettled matters. RUPA differs substantially from the UPA, and the drafters of RUPA expressly declined to decide whether RUPA provides a suitable base and link for the limited partnership statute. According to RUPA’s Prefatory Note:

Partnership law no longer governs limited partnerships pursuant to the provisions of RUPA itself. First, limited partnerships are not “partnerships” within the RUPA definition. Second, UPA Section 6(2), which provides that the UPA governs limited partnerships in cases not provided for in the Uniform Limited Partnership Act (1976) (1985) (“RULPA”) has been deleted. No substantive change in result is intended, however. Section 1105 of RULPA already provides that the UPA governs in any case not provided for in RULPA, and thus the express linkage in RUPA is unnecessary. Structurally, it is more appropriately left to RULPA to determine the applicability of RUPA to limited partnerships. It is contemplated that the Conference will review the linkage question carefully, although no changes in RULPA may be necessary despite the many changes in RUPA.

The linkage question was the first major issue considered and decided by this Act’s Drafting Committee. Since the Conference has recommended the repeal of the UPA, it made no sense to recommend retaining the UPA as the base and link for a revised or new limited partnership act. The Drafting Committee therefore had to choose between recommending linkage to the new general partnership act (i.e., RUPA) or recommending de-linking and a stand alone act.

The Committee saw several substantial advantages to de-linking. A stand alone statute would:

• be more convenient, providing a single, self-contained source of statutory authority for issues pertaining to limited partnerships;

• eliminate confusion as to which issues were solely subject to the limited partnership act and which required reference (i.e., linkage) to the general partnership act; and

• rationalize future case law, by ending the automatic link between the cases concerning partners in a general partnership and issues pertaining to general partners in a limited partnership.

Thus, a stand alone act seemed likely to promote efficiency, clarity, and coherence in the law of limited partnerships.

In contrast, recommending linkage would have required the Drafting Committee to (1) consider each provision of RUPA and determine whether the provision addressed a matter provided for in RULPA; (2) for each RUPA provision which addressed a matter not provided for in RULPA, determine whether the provision stated an appropriate rule for limited partnerships; and (3) for each matter addressed both by RUPA and RULPA, determine whether RUPA or RULPA stated the better rule for limited partnerships.

That approach was unsatisfactory for at least two reasons. No matter how exhaustive the Drafting Committee’s analysis might be, the Committee could not guarantee that courts and practitioners would reach the same conclusions. Therefore, in at least some situations linkage would have produced ambiguity. In addition, the Drafting Committee could not guarantee that all currently appropriate links would remain appropriate as courts begin to apply and interpret RUPA. Even if the Committee recommended linkage, RUPA was destined to be interpreted primarily in the context of general partnerships. Those interpretations might not make sense for limited partnership law, because the modern limited partnership involves fundamentally different relations than those involved in “the small, often informal, partnership” that is “[t]he primary focus of RUPA.” RUPA, Prefatory Note.

The Drafting Committee therefore decided to draft and recommend a stand alone act.

Following the example of a growing number of States, this Act provides for limited liability limited partnerships. In a limited liability limited partnership (“LLLP”), no partner – whether general or limited – is liable on account of partner status for the limited partnership’s obligations. Both general and limited partners benefit from a full, status-based liability shield that is equivalent to the shield enjoyed by corporate shareholders, LLC members, and partners in an LLP.

This Act is designed to serve preexisting limited partnerships as well as limited partnerships formed after the Act’s enactment. Most of those preexisting limited partnership will not be LLLPs, and accordingly the Act does not prefer or presume LLLP status. Instead, the Act makes LLLP status available through a simple statement in the certificate of limited partnership. See Sections 102(9), 201(a)(4) and 404(c).

RULPA provides only a restricted liability shield for limited partners. The shield is at risk for any limited partner who “participates in the control of the business.” RULPA Section 303(a). Although this “control rule” is subject to a lengthy list of safe harbors, RULPA Section 303(b), in a world with LLPs, LLCs and, most importantly, LLLPs, the rule is an anachronism. This Act therefore eliminates the control rule and provides a full, status-based shield against limited partner liability for entity obligations. The shield applies whether or not the limited partnership is an LLLP. See Section 303.

Following RUPA’s example, this Act provides (i) an effective date, after which all newly formed limited partnerships are subject to this Act; (ii) an optional period, during which limited partnerships formed under a predecessor statute may elect to become subject to this Act; and (iii) a mandatory date, on which all preexisting limited partnerships become subject to this Act by operation of law.

A few provisions of this Act differ so substantially from prior law that they should not apply automatically to a preexisting limited partnership. Section 1206(c) lists these provisions and states that each remains inapplicable to a preexisting limited partnership, unless the limited partnership elects for the provision to apply.

The following table compares some of the major characteristics of RULPA and this Act. In most instances, the rules involved are “default” rules – i.e., subject to change by the partnership agreement.

Characteristic	RULPA	this Act
relationship to general partnership act	linked, Sections 1105, 403; UPA Section 6(2)	de-linked (but many RUPA provisions incorporated)
permitted purposes	subject to any specified exceptions, “any business that a partnership without limited partners may carry on, ” Section 106	any lawful purpose, Section 104(b)
constructive notice via publicly filed documents	only that limited partnership exists and that designated general partners are general partners, Section 208	RULPA constructive notice provisions carried forward, Section 103(c), plus constructive notice, 90 days after appropriate filing, of: general partner dissociation and of limited partnership dissolution, termination, merger and conversion, Section 103(d)
duration	specified in certificate of limited partnership, Section 201(a)(4)	perpetual, Section 104(c); subject to change in partnership agreement
use of limited partner name in entity name	prohibited, except in unusual circumstances, Section 102(2)	permitted, Section108(a)
annual report	none	required, Section 210
limited partner liability for entity debts	none unless limited partner “participates in the control of the business” and person “transact[s] business with the limited partnership reasonably believing . . . that the limited partner is a general partner,” Section 303(a); safe harbor lists many activities that do not constitute participating in the control of the business, Section 303(b)	none, regardless of whether the limited partnership is an LLLP, “even if the limited partner participates in the management and control of the limited partnership,” Section 303
limited partner duties	none specified	no fiduciary duties “solely by reason of being a limited partner,” Section 305(a); each limited partner is obliged to “discharge duties . . . and exercise rights consistently with the obligation of good faith and fair dealing,” Section 305(b)
partner access to information – required records/ information	all partners have right of access; no requirement of good cause; Act does not state whether partnership agreement may limit access; Sections 105(b) and 305(1)	list of required information expanded slightly; Act expressly states that partner does not have to show good cause; Sections 304(a), 407(a); however, the partnership agreement may set reasonable restrictions on access to and use of required information, Section 110(b)(4), and limited partnership may impose reasonable restrictions on the use of information, Sections 304(g) and 407(f)
partner access to information – other information	limited partners have the right to obtain other relevant information “upon reasonable demand,” Section 305(2); general partner rights linked to general partnership act, Section 403	for limited partners, RULPA approach essentially carried forward, with procedures and standards for making a reasonable demand stated in greater detail, plus requirement that limited partnership supply known material information when limited partner consent sought, Section 304; general partner access rights made explicit, following ULLCA and RUPA, including obligation of limited partnership and general partners to volunteer certain information, Section 407; access rights provided for former partners, Sections 304 and 407
general partner liability for entity debts	complete, automatic and formally inescapable, Section 403(b) (n.b. – in practice, most modern limited partnerships have used a general partner that has its own liability shield; e.g., a corporation or limited liability company)	LLLP status available via a simple statement in the certificate of limited partnership, Sections 102(9), 201(a)(4); LLLP status provides a full liability shield to all general partners, Section 404(c); if the limited partnership is not an LLLP, general partners are liable just as under RULPA, Section 404(a)
general partner duties	linked to duties of partners in a general partnership, Section 403	RUPA general partner duties imported, Section 408; general partner’s non-compete duty continues during winding up, Section 408(b)(3)
allocation of profits, losses and distributions	provides separately for sharing of profits and losses, Section 503, and for sharing of distributions, Section 504; allocates each according to contributions made and not returned	eliminates as unnecessary the allocation rule for profits and losses; allocates distributions according to contributions made, Section 503 (n.b. – in the default mode, the Act’s formulation produces the same result as RULPA formulation)
partner liability for distributions	recapture liability if distribution involved “the return of . . . contribution”; one year recapture liability if distribution rightful, Section 608(a); six year recapture liability if wrongful, Section 608(b)	following ULLCA Sections 406 and 407, the Act adopts the RMBCA approach to improper distributions, Sections 508 and 509
limited partner voluntary dissociation	theoretically, limited partner may withdraw on six months notice unless partnership agreement specifies a term for the limited partnership or withdrawal events for limited partner, Section 603; practically, virtually every partnership agreement specifies a term, thereby eliminating the right to withdraw (n.b. – due to estate planning concerns, several States have amended RULPA to prohibit limited partner withdrawal unless otherwise provided in the partnership agreement)	no “right to dissociate as a limited partner before the termination of the limited partnership,” Section 601(a); power to dissociate expressly recognized, Section 601(b)(1), but can be eliminated by the partnership agreement
limited partner involuntary dissociation	not addressed	lengthy list of causes, Section 601(b), taken with some modification from RUPA
limited partner dissociation – payout	“fair value . . . based upon [the partner’s] right to share in distributions,” Section 604	no payout; person becomes transferee of its own transferable interest, Section 602(3)
general partner voluntary dissociation	right exists unless otherwise provided in partnership agreement, Section 602; power exists regardless of partnership agreement, Section 602	RULPA rule carried forward, although phrased differently, Section 604(a); dissociation before termination of the limited partnership is defined as wrongful, Section 604(b)(2)
general partner involuntary dissociation	Section 402 lists causes	following RUPA, Section 603 expands the list of causes, including expulsion by court order, Section 603(5)
general partner dissociation – payout	“fair value . . . based upon [the partner’s] right to share in distributions,” Section 604, subject to offset for damages caused by wrongful withdrawal, Section 602	no payout; person becomes transferee of its own transferable interest, Section 605(5)
transfer of partner interest – nomenclature	“Assignment of Partnership Interest,” Section 702	“Transfer of Partner’s Transferable Interest,” Section 702
transfer of partner interest – substance	economic rights fully transferable, but management rights and partner status are not transferable, Section 702	same rule, but Sections 701 and 702 follow RUPA’s more detailed and less oblique formulation
rights of creditor of partner	limited to charging order, Section 703	essentially the same rule, but, following RUPA and ULLCA, the Act has a more elaborate provision that expressly extends to creditors of transferees, Section 703
dissolution by partner consent	requires unanimous written consent, Section 801(3)	requires consent of “all general partners and of limited partners owning a majority of the rights to receive distributions as limited partners at the time the consent is to be effective,” Section 801(2)
dissolution following dissociation of a general partner	occurs automatically unless all partners agree to continue the business and, if there is no remaining general partner, to appoint a replacement general partner, Section 801(4)	if at least one general partner remains, no dissolution unless “within 90 days after the dissociation . . . partners owning a majority of the rights to receive distributions as partners” consent to dissolve the limited partnership; Section 801(3)(A); if no general partner remains, dissolution occurs upon the passage of 90 days after the dissociation, unless before that deadline limited partners owning a majority of the rights to receive distributions owned by limited partners consent to continue the business and admit at least one new general partner and a new general partner is admitted, Section 801(3)(B)
filings related to entity termination	certificate of limited partnership to be cancelled when limited partnership dissolves and begins winding up, Section 203	limited partnership may amend certificate to indicate dissolution, Section 803(b)(1), and may file statement of termination indicating that winding up has been completed and the limited partnership is terminated, Section 203
procedures for barring claims against dissolved limited partnership	none	following ULLCA Sections 807 and 808, the Act adopts the RMBCA approach providing for giving notice and barring claims, Sections 806 and 807
conversions and mergers	no provision	Article 11 permits conversions to and from and mergers with any “organization,” defined as “a general partnership, including a limited liability partnership; limited partnership, including a limited liability limited partnership; limited liability company; business trust; corporation; or any other entity having a governing statute . . . [including] domestic and foreign entities regardless of whether organized for profit.” Section1101(8)
writing requirements	some provisions pertain only to written understandings; see, e.g., Sections 401 (partnership agreement may “provide in writing for the admission of additional general partners”; such admission also permitted “with the written consent of all partners”), 502(a) (limited partner’s promise to contribute “is not enforceable unless set out in a writing signed by the limited partner”), 801(2) and (3) (dissolution occurs “upon the happening of events specified in writing in the partnership agreement” and upon “written consent of all partners”), 801(4) (dissolution avoided following withdrawal of a general partner if “all partners agree in writing”)	removes virtually all writing requirements; but does require that certain information be maintained in record form, Section 111

SECTION 101. SHORT TITLE. This [Act] may be cited as the Uniform Limited Partnership Act [year of enactment].

(1) “Certificate of limited partnership” means the certificate required by Section 201. The term includes the certificate as amended or restated.

(2) “Contribution”, except in the phrase “right of contribution,” means any benefit provided by a person to a limited partnership in order to become a partner or in the person’s capacity as a partner.

(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

(B) a comparable order under federal, state, or foreign law governing insolvency.

(A) with respect to a limited partnership, the office that the limited partnership is required to designate and maintain under Section 114; and

(5) “Distribution” means a transfer of money or other property from a limited partnership to a partner in the partner’s capacity as a partner or to a transferee on account of a transferable interest owned by the transferee.

(6) “Foreign limited liability limited partnership” means a foreign limited partnership whose general partners have limited liability for the obligations of the foreign limited partnership under a provision similar to Section 404(c).

(7) “Foreign limited partnership” means a partnership formed under the laws of a jurisdiction other than this State and required by those laws to have one or more general partners and one or more limited partners. The term includes a foreign limited liability limited partnership.

(ii) was a general partner in a limited partnership when the limited partnership became subject to this [Act] under Section 1206(a) or (b); and

(B) with respect to a foreign limited partnership, a person that has rights, powers, and obligations similar to those of a general partner in a limited partnership.

(9) “Limited liability limited partnership”, except in the phrase “foreign limited liability limited partnership”, means a limited partnership whose certificate of limited partnership states that the limited partnership is a limited liability limited partnership.

(ii) was a limited partner in a limited partnership when the limited partnership became subject to this [Act] under Section 1206(a) or (b); and

(B) with respect to a foreign limited partnership, a person that has rights, powers, and obligations similar to those of a limited partner in a limited partnership.

(11) “Limited partnership”, except in the phrases “foreign limited partnership” and “foreign limited liability limited partnership”, means an entity, having one or more general partners and one or more limited partners, which is formed under this [Act] by two or more persons or becomes subject to this [Act] under [Article] 11 or Section 1206(a) or (b). The term includes a limited liability limited partnership.

(13) “Partnership agreement” means the partners’ agreement, whether oral, implied, in a record, or in any combination, concerning the limited partnership. The term includes the agreement as amended.

(14) “Person” means an individual, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture, government; governmental subdivision, agency, or instrumentality; public corporation, or any other legal or commercial entity.

(15) “Person dissociated as a general partner” means a person dissociated as a general partner of a limited partnership.

(16) “Principal office” means the office where the principal executive office of a limited partnership or foreign limited partnership is located, whether or not the office is located in this State.

(17) “Record” 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) “Required information” means the information that a limited partnership is required to maintain under Section 111.

(20) “State” means a State of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands, or any territory or insular possession subject to the jurisdiction of the United States.

(21) “Transfer” includes an assignment, conveyance, deed, bill of sale, lease, mortgage, security interest, encumbrance, gift, and transfer by operation of law.

(22) “Transferable interest” means a partner’s right to receive distributions.

(23) “Transferee” means a person to which all or part of a transferable interest has been transferred, whether or not the transferor is a partner.

This section contains definitions applicable throughout the Act. Section 1101 provides additional definitions applicable within Article 11.

Paragraph 8(A)(i) [General partner] – A partnership agreement may vary Section 401 and provide a process or mechanism for becoming a general partner which is different from or additional to the rules stated in that section. For the purposes of this definition, a person who becomes a general partner pursuant to a provision of the partnership agreement “becomes a general partner under Section 401.”

Paragraph 10(A)(i) [ Limited partner] – The Comment to Paragraph 8(A)(i) applies here as well. For the purposes of this definition, a person who becomes a limited partner pursuant to a provision of the partnership agreement “becomes a limited partner under Section 301.”

Paragraph (11) [Limited partnership] – This definition pertains to what is commonly termed a “domestic” limited partnership. The definition encompasses: (i) limited partnerships originally formed under this Act, including limited partnerships formed under Section 1101(11) to be the surviving organization in a merger; (ii) any entity that becomes subject to this Act by converting into a limited partnership under Article 11; (iii) any preexisting domestic limited partnership that elects pursuant to Section 1206(a) to become subject to this Act; and (iv) all other preexisting domestic limited partnerships when they become subject to this Act under Section 1206(b).

Following the approach of predecessor law, RULPA Section 101(7), this definition contains two substantive requirements. First, it is of the essence of a limited partnership to have two classes of partners. Accordingly, under Section 101(11) a limited partnership must have at least one general and one limited partner. Section 801(3)(B) and (4) provide that a limited partnership dissolves if its sole general partner or sole limited partner dissociates and the limited partnership fails to admit a replacement within 90 days of the dissociation. The 90 day limitation is a default rule, but, in light of Section 101(11), a limited partnership may not indefinitely delay “having one or more general partners and one or more limited partners.”

It is also of the essence of a limited partnership to have at least two partners. Section 101(11) codifies this requirement by referring to a limited partnership as “an entity . . . which is formed under this [Act] by two or more persons.” Thus, while the same person may be both a general and limited partner, Section 113 (Dual Capacity), one person alone cannot be the “two persons” contemplated by this definition. However, nothing in this definition prevents two closely affiliated persons from satisfying the two person requirement.

Paragraph (13) [Partnership agreement] – Section 110 is essential to understanding the significance of the partnership agreement. See also Section 201(d) (resolving inconsistencies between the certificate of limited partnership and the partnership agreement).

Paragraph (21) [Transfer] – Following RUPA, this Act uses the words “transfer” and “transferee” rather than the words “assignment” and “assignee.” See RUPA Section 503.

The reference to “transfer by operation of law” is significant in connection with Section 702 (Transfer of Partner's Transferable Interest). That section severely restricts a transferee's rights (absent the consent of the partners), and this definition makes those restrictions applicable, for example, to transfers ordered by a family court as part of a divorce proceeding and transfers resulting from the death of a partner.

Paragraph (23) [Transferee] – See comment to Paragraph 21 for an explanation of why this Act refers to “transferee” rather than “assignee.”

(3) has reason to know it exists from all of the facts known to the person at the time in question; or

(c) A certificate of limited partnership on file in the [office of the Secretary of State] is notice that the partnership is a limited partnership and the persons designated in the certificate as general partners are general partners. Except as otherwise provided in subsection (d), the certificate is not notice of any other fact.

(1) another person’s dissociation as a general partner, 90 days after the effective date of an amendment to the certificate of limited partnership which states that the other person has dissociated or 90 days after the effective date of a statement of dissociation pertaining to the other person, whichever occurs first;

(2) a limited partnership’s dissolution, 90 days after the effective date of an amendment to the certificate of limited partnership stating that the limited partnership is dissolved;

(3) a limited partnership’s termination, 90 days after the effective date of a statement of termination;

(4) a limited partnership’s conversion under [Article] 11, 90 days after the effective date of the articles of conversion; or

(5) a merger under [Article] 11, 90 days after the effective date of the articles of merger.

(e) A person notifies or gives a notification to another person by taking steps reasonably required to inform the other person in ordinary course, whether or not the other person learns of it.

(2) is delivered at the person’s place of business or at any other place held out by the person as a place for receiving communications.

(g) Except as otherwise provided in subsection (h), 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 for the person 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. A person other than an individual exercises reasonable diligence if it maintains reasonable routines for communicating significant information to the individual conducting the transaction for the person 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.

(h) A general partner’s knowledge, notice, or receipt of a notification of a fact relating to the limited partnership is effective immediately as knowledge of, notice to, or receipt of a notification by the limited partnership, except in the case of a fraud on the limited partnership committed by or with the consent of the general partner. A limited partner’s knowledge, notice, or receipt of a notification of a fact relating to the limited partnership is not effective as knowledge of, notice to, or receipt of a notification by the limited partnership.

Notice and the relationship among subsections (b), (c) and (d) – These subsections provide separate and independent avenues through which a person can have notice of a fact. A person has notice of a fact as soon as any of the avenues applies.

Example: A limited partnership dissolves and amends its certificate of limited partnership to indicate dissolution. The amendment is effective on March 1. On March 15, Person #1 has reason to know of the dissolution and therefore has “notice” of the dissolution under Section 103(b)(3) even though Section 103(d)(2) does not yet apply. Person #2 does not have actual knowledge of the dissolution until June 15. Nonetheless, under Section 103(d)(2) Person #2 has “notice” of the dissolution on May 30.

Subsection (c) – This subsection provides what is commonly called constructive notice and comes essentially verbatim from RULPA Section 208. As for the significance of constructive notice “that the partnership is a limited partnership,” see Water, Waste & Land, Inc. v. Lanham, 955 P.2d 997, 1001-1003 (Colo. 1998) (interpreting a comparable provision of the Colorado LLC statute and holding the provision ineffective to change common law agency principles, including the rules relating to the liability of an agent that transacts business for an undisclosed principal).

As for constructive notice that “the persons designated in the certificate as general partners are general partners,” Section 201(a)(3) requires the initial certificate of limited partnership to name each general partner, and Section 202(b) requires a limited partnership to promptly amend its certificate of limited partnership to reflect any change in the identity of its general partners. Nonetheless, it will be possible, albeit improper, for a person to be designated in the certificate of limited partnership as a general partner without having become a general partner as contemplated by Section 401. Likewise, it will be possible for a person to have become a general partner under Section 401 without being designated as a general partner in the certificate of limited partnership. According to the last clause of this subsection, the fact that a person is not listed as in the certificate as a general partner is not notice that the person is not a general partner. For further discussion of this point, see the Comment to Section 401.

If the partnership agreement and the public record are inconsistent, Section 201(d) applies (partnership agreement controls inter se; public record controls as to third parties who have relied). See also Section 202(b) (requiring the limited partnership to amend its certificate of limited partnership to keep accurate the listing of general partners), 202(c) (requiring a general partner to take corrective action when the general partner knows that the certificate of limited partnership contains false information), and 208 (imposing liability for false information in inter alia the certificate of limited partnership).

Subsection (d) – This subsection also provides what is commonly called constructive notice and works in conjunction with other sections of this Act to curtail the power to bind and personal liability of general partners and persons dissociated as general partners. See Sections 402, 606, 607, 804, 805, 1111, and 1112. Following RUPA (in substance, although not in form), the constructive notice begins 90 days after the effective date of the filed record. For the Act’s rules on delayed effective dates, see Section 206(c).

The 90-day delay applies only to the constructive notice and not to the event described in the filed record.

Example: On March 15 X dissociates as a general partner from XYZ Limited Partnership by giving notice to XYZ. See Section 603(1). On March 20, XYZ amends its certificate of limited partnership to remove X’s name from the list of general partners. See Section 202(b)(2).

X’s dissociation is effective March 15. If on March 16 X purports to be a general partner of XYZ and under Section 606(a) binds XYZ to some obligation, X will be liable under Section 606(b) as a “person dissociated as a general partner.”

On June 13 (90 days after March 15), the world has constructive notice of X’s dissociation as a general partner. Beginning on that date, X will lack the power to bind XYZ. See Section 606(a)(2)(B) (person dissociated as a general partner can bind the limited partnership only if, inter alia, “at the time the other party enters into the transaction . . . the other party does not have notice of the dissociation”).

Constructive notice under this subsection applies to partners and transferees as well as other persons.

Subsection (e) – The phrase “person learns of it” in this subsection is equivalent to the phrase “knows of it” in subsection (b)(1).

Subsection (h) – Under this subsection and Section 302, information possessed by a person that is only a limited partner is not attributable to the limited partnership. However, information possessed by a person that is both a general partner and a limited partner is attributable to the limited partnership. See Section 113 (Dual Capacity)

(a) A limited partnership is an entity distinct from its partners. A limited partnership is the same entity regardless of whether its certificate states that the limited partnership is a limited liability limited partnership.

(b) A limited partnership may be organized under this [Act] for any lawful purpose.