home
***
CD-ROM
|
disk
|
FTP
|
other
***
search
/
Shareware Overload Trio 2
/
Shareware Overload Trio Volume 2 (Chestnut CD-ROM).ISO
/
dir33
/
gde757_3.zip
/
LHARC3.EXE
/
ULPA.STA
< prev
next >
Wrap
Text File
|
1993-01-06
|
51KB
|
1,100 lines
/* The following is the full text of the Uniform Limited
Partnership Act, with comments. */
UNIFORM LIMITED PARTNERSHIP ACT
/* Alas, most uniform acts are not "uniform." Each state makes
changes in the basic framework, often in important ways. There
are also several different versions. What follows is the 1976
version as amended in 1985. Each state's version of this law may
differ significantly. However, this law represents the latest
thinking about limited partnership law.*/
Section 101. Definitions. As used in this Act, unless the context
otherwise requires:
(1) Certificate of limited partnership means the certificate
referred to in Section 201, and the certificate as amended or
restated.
(2) Contribution means any cash, property, services
rendered, or a promissory note or other binding obligation to
contribute cash or property or to preform services, which a
partner contributes to a limited partnership in his capacity as a
partner.
/* It is significant to note that the act permits a binding
commitment to provide future services to be a contribution. */
(3) Event of withdrawal of a general partner means an event
that causes a person to cease to be a general partner as provided
in Section 402.
(4) Foreign limited partnership means a partnership formed
under the laws of any State other than this State and having as
partners one or more general partners and one or more limited
partners.
(5) General partner means a person who has been admitted to
a limited partnership as a general partner in accordance with the
partnership agreement and named in the certificate of limited
partnership as a general partner.
(6) Limited partner means a person who has been admitted to
a limited partnership as a limited partner in accordance with the
partnership agreement.
(7) Limited partnership and domestic limited partnership
means a partnership formed by two or more persons under the laws
of this State and having one or more limited partners and one or
more general partners.
(8) Partner means a limited or general partner.
(9) Partnership agreement means any valid agreement, written
or oral, of the partners as to the affairs of a limited
partnership and the conduct of its business.
(10) Partnership interest means a partner's share of the
profits and losses of a limited partnership and the right to
receive distributions of partnership assets.
(11) Person means a natural person, partnership, limited
partnership (domestic or foreign) trust, estate, association, or
corporation.
(12) State means a state, territory, possession of the
Untied States, the District of Columbia, or the Commonwealth of
Puerto Rico.
Section 102. Name. The name of each limited partnership as set
forth in its certificate of limited partnership:
(1) shall contain without abbreviation the words "limited
partnership;"
(2) may not contain the name of a limited partner unless (i)
it is also the name of a general partner or the corporate name of
a corporate general partner or (ii) the business of the limited
partnership had been carried on under than name before the
admission of that limited partner.
(3) may not be the same as, or deceptive similar to, the
name of any corporation or limited partnership organized under
the laws of this State or license or registered as a foreign
corporation or limited partnership in this State; and
(4) may not contain the following words: [insert]
/* This usually include: bank, credit union, insurance company,
trust company, rail road, as they are required to have permission
from state or federal authorities first before formation. */
Section 103. Reservation of Name.
(a) The exclusive right to the use of a name may be reserved by:
(1) any person intending to organize a limited partnership
under this Act and to adopt that name;
(2) any domestic limited partnership or any foreign limited
partnership registered in this State, which in either case,
intends to adopt that name;
(3) any foreign limited partnership intending to register in
this State and use that name;
(4) any person intending to organize a foreign limited
partnership and intending to have it register in this State and
adopt that name.
(b) The reservation shall be made by filing with the Secretary of
State an application, executed by the applicant, to reserve a
specified name. If the Secretary of State finds that the name is
available for use by a domestic or foreign limited partnership,
he or she shall reserve that name for the exclusive use of the
applicant for a period of 120 days. Once having so reserved a
name, the same applicant may not again reserve the same name
until more than 60 days after the expiration of the last 120-day
period for which that applicant reserved that name. The right to
the exclusive use of a reserved name may be transferred to any
other person by filing with the Secretary of State a notice of
the transfer, executed by the applicant for whom the name was
reserved and specifying the name and address of the transferee.
Section 104. Specified Office and Agent. Each limited partnership
shall keep at the office referred to in Section 104(1) the
following:
(1) A current list of the full name and last known business
address of each partner, separately identifying the general (in
alphabetical order) and the limited partners (in alphabetical
order);
(2) A copy of the certificate of limited partnership and all
certificates of amendment thereto, together with executed copies
of any powers of attorney pursuant to which any certificate has
been executed;
(3) copies of the limited partnership's federal, state and
local income tax returns and reports, if any, for the three most
recent years;
(4) copies of any then efficient written partnership
agreements and of any financial statements of the limited
partnership for the three most recent years; and
(5) unless contained in a written partnership agreement, a
writing setting out:
(i) the amount of cash and a description and statement
of the agreed value of the other property or services contributed
by each partner and which each partner has agreed to contribute;
(ii) the times at which or events on the happening of which
any additional contributions agreed to be made by each partner
are to be made;
(ii) any right of a partner to receive, or a general partner
to make, distributions to a partner which include a return of all
or any part of the partner's contribution;
(iii) any right of a partner to receive, or of a general
partner to make, distributions to a partner which include a
return of all or any part of the partner's contribution;
(iv) any events upon the happening of which the limited
partnership is to be dissolved and its affairs wound up.
(b) Records kept under this section are subject to inspection and
copying at the reasonable request and at the expense of any
partner during ordinary business hours.
Section 106. Nature of partnership. A limited partnership may
carry on any business that a partnership without limited partners
may carry on except [add here]
Section 107. Business Transaction of Partner with Partnership.
Except as provided in the partnership agreement, a partner may
lend money to and transact other business with the limited
partnership and, subject to other applicable law, has the same
rights and obligations with respect thereto as a person who is
not a partner.
/* It is not unusual for a partner to be a creditor, limited and
general partner at once. The ULPA accommodates extreme flexibility
in the form and nature of contributions and other financial
arrangements. */
ARTICLE 2
FORMATION; CERTIFICATE OF LIMITED PARTNERSHIP
Section 201. Certificate of Limited Partnership. (a) In order to
form a limited partnership, a certificate of limited partnership
must be executed and filed in the office of the Secretary of
State. The certificate shall set forth:
(1) the name of the limited partnership;
(2) the address of the office and name and address of the
agent for service of process required to be maintained by Section
104;
(3) the name and business address of each general partner;
(4) the latest date upon which the limited partnership is to
dissolve;
(5) any other matters the general partners determine to
include therein.
/* Ordinarily the actual certificate of limited partnership is
kept rather sparse to maintain confidentiality. The partnership
agreement is the place where all of these matters MUST be set
forth. */
Section 202. Amendment of Certificate. (a) A certificate of
limited partnership is amended by filing a certificate of
amendment thereto in the office of the Secretary of State. The
certificate shall set forth:
(1) the name of the limited partnership;
(2) the date of filing the certificate;
(3) the amendment to the certificate.
(b) within 30 days after the happening of any of the following
events, an amendment to a certificate of limited partnership
reflecting the occurrence of the event or events shall be filed:
(1) the admission of a new general partner;
(2) the withdrawal of a general partner;
(3) the continuation of business under section 801 after an
event of withdrawal of a limited partnership.
(c) A general partner who becomes aware that any statement in a
certificate of limited partnership was false when made or than
any arrangements or other facts described have changed, making
the certificate inaccurate in any respect, shall promptly amend
the certificate.
(d) A certificate of limited partnership shall be may be amended
at any time for any other proper purpose the general partners
determine.
(e) No person has any liability because an amendment to a
certificate of general partnership has not been filed to reflect
the occurrence of any event referred to in subsection (b) of this
section if the amendment is filed within the 30-day period
specified in subsection (b).
(f) A restated certificate of limited partnership may be executed
and filed in the same manner as a certificate of amendment.
Section 203. Cancellation of Certificate. A certificate of
limited partnership shall be canceled upon the dissolution and
the and the commencement of winding up of the partnership or at
any other time there are no limited partners. A certificate of
cancellation shall be filed in the office of the Secretary of
State and set forth:
(1) the name of the limited partnership;
(2) the date of filing of its certificate of limited
partnership;
(3) the reason for the filing of the certificate of
cancellation;
(4) the effective date (which shall be a date certain) of
cancellation if it is not to be effective upon the filing of the
certificate;
(5) any other information the general partners filing the
certificate of amendment.
Section 204. Execution of Certificates. (a) Each certificate
required by this Article to be filed in the office of the
Secretary if State shall be executed in the following manner:
(1) an original certificate of limited partnership must be
signed by all general partners;
(2) a certificate of amendment must be signed by at least
one general partner and by each other general partner designated
in the certificate as a new general partner;
(3) a certificate of cancellation must be signed by all
general partners,
(b) any person may sign a certificate by an attorney in fact, but
a power of attorney to sign a certificate relating to the
admission of a general partner must specifically describe the
admission;
(c) The execution of a certificate by a general partner
constitutes an affirmation under penalties of perjury that the
facts stated therein are true.
Section 205. Execution by Judicial Act. If a person required by
Section 204 to execute any certification fails or refuses to do
so any person who is adversely affected by the failure or
refusal, may petition [designate court] to direct the execution
of the certificate. If the court finds that it is proper for the
certificate to be executed and that any person so designated has
failed or refused to execute the certificate, it shall order the
Secretary of State to record an appropriate certificate.
Section 206. Filing in Office of Secretary of State. (a) Two
signed copies of the certificate of limited partnership and of
any certificate of amendment or cancellation (or any judicial
decree of amendment or cancellation) shall be delivered to the
Secretary of State. A person who executes a certificate as an
agent or fiduciary need not exhibit evidence of his or her
authority as a prerequisite to filing. Unless the Secretary of
State finds that any certificate does not conform to law, upon
receipt of all filing fee required by law he or she shall:
(1) endorse on each duplicate original the word "Filed" and
the day, month and year of the filing thereof;
(2) file one duplicate original in his or her office;
(3) return the other duplicate original to the person who
filed it or his or her representative.
(b) Upon filing of a certificate of amendment (or judicial decree
of amendment) in the Office of the Secretary of State, the
certificate of limited partnership shall be amended as set forth
therein, and upon the effective date of a certificate of
cancellation (or a judicial decree thereof) the certificate of
limited partnership is canceled.
Section 207. Liability for False Statement in Certificate. If any
certificate of limited partnership or certificate of amendment or
cancellation contains a false state, one who suffers loss by
reliance on the statement may recover damages for the loss from:
(1) any person who executes the certificate, or causes
another to execute it on his behalf, and knew, and any general
partner who knew or should have known, the statement to be false
at the time the certificate was executed; and
(2) any general partner who thereafter knows or should have
known that any arrangement or other fact described in the
certificate has changed, making the statement inaccurate in any
respect within a sufficient time before the statement was relied
upon reasonably to have enabled that general partner to cancel or
amend the certificate, or to file a petition for its cancellation
or amendment under Section 205.
Section 208. Scope of Notice. The fact that a certificate of
limited partnership is on file in the office of the Secretary of
State is notice that the partnership is a limited partnership and
the persons designated therein as general partners are general
partners, but it is not notice of any other fact.
Section 209. Delivery of Certificates to Limited Partners. Upon
the return by the Secretary of State pursuant to Section 206 of a
certificate marked filed, the general partners shall promptly
deliver or mail a copy of the certificate of limited partnership
to each limited partner unless the partnership agreement provides
otherwise.
ARTICLE 3
LIMITED PARTNERS
Section 301. Admission of Limited Partners.
(a) A person becomes a limited partner:
(1) at the time that the limited partnership is formed;
or,
(2) at any later time specified in the records of the
limited partnership for becoming a limited partner.
(b) After the filing of a limited partnership's original
certificate of limited partnership, a person may be admitted as
an additional limited partner:
(1) in the case of a person acquiring a partnership
interest directly from the limited partnership, upon compliance
with the partnership agreement or, if the partnership agreement
does not so provide, upon the written consent of all partners;
and
(2) in the case of an assignee of a partnership
interest of a partner who has the power, as provided in Section
704, to grant the assignee the right to become a limited partner,
upon the exercise of that power and compliance with any
conditions limiting the grant or exercise of the power.
Section 302. Voting. Subject to Section 303, the partnership
agreement may grant to all or a specified group of the limited
partners the right to vote (on a per capita or other basis) upon
any matter.
/* Such power if used should be used sparingly. See Section 303
making limited partners involved in the business liable for the
debts of the limited partnership. Being a limited partner is
primarily designed to allow the benefits of ownership (such as
flow through of tax losses) without the risk of ownership
outright, personal liability for the debts. */
Section 303. Liability to Third Parties. (a) Except as provided
in subsection (d), a limited partner is not liable for the
obligations of a limited partnership unless he or she is also a
general partner, or, in addition to the exercise of his or her
rights and powers as a limited partner, participates in control
of the business. However, if the limited partner participates in
the control of the business he or she is liable only to persons
who transact business with the limited partnership, reasonably
believing, based upon the limited partner's conduct, that the
limited partner is a general partner.
(b) A limited partner does not participate in the control of the
business within the meaning of subsection (1) solely by doing one
or more of the following:
(1) being a contractor for or an agent or employee of the
limited partnership or of a general partner or being an officer,
director, or shareholder of a general partner that is a
corporation;
(2) consulting with and advising a general partner with
respect to the business of the limited partnership;
(3) acting as surety for the limited partnership or
guaranteeing or assuming one or more specific obligations of the
limited partnership;
(4) taking any action required or permitted by law to bring
or pursue a derivate action in the right of the limited
partnership;
(5) requesting or attending a meeting of partners;
(6) proposing, approving, or disapproving, by voting or
otherwise, one ore more of the following matters;
(i) the dissolution and winding up of the limited
partnership;
(ii) the sale, exchange, lease, mortgage, pledge, or
other transfer of all or substantially all of the assets of the
limited partnership;
(iii) the incurrence of indebtedness by the limited
partnership other than in the ordinary course of business;
(iv) a change in the nature of the business;
(v) the admission or removal of a general partner;
(vi) the admission or removal of a limited partner;
(vii) a transaction involving an actual or potential
conflict of interest between a general partner and the limited
partnership or the limited partners;
(viii) an amendment to the partnership agreement or
certificate of limited partnership;
(ix) matters related to the business of the limited
partnership not otherwise enumerated in this subsection (b),
which the partnership agreement states in writing may be subject
to the approval or disapproval of the limited partners;
(7) winding up the limited partnership pursuant to
section 803;
(8) exercising any right or power permitted to limited
partners under this Act and not specifically enumerated in this
subsection (b).
(c) The enumeration in subsection (b) does not mean that the
possession or exercise of any other powers by a limited partner
constitutes participation by him or her in the business of the
limited partnership.
(d) A limited partner who knowingly permits his or her name
to be used in the name of the limited partnership, except under
circumstances permitted by Section 102(2), is liable to creditors
who extend credit to the limited partnership without actual
knowledge that the limited partner is not a general partner.
Section 304. Person Erroneously Believing Himself or Herself a
Limited Partner. (a) Except as provided in subsection (b), a
person who makes a contribution to a business enterprise and
erroneously but in good faith believes that he or she has become
a limited partner in the enterprise is not a general partner in
the enterprise and is not bound by its obligations by reason of
making the contribution, receiving distributions from the
enterprise or exercising any rights of a limited partner, if on
ascertaining the mistake, he or she:
(1) cause an appropriate certificate of limited
partnership or a certificate of amendment to be executed and
filed; or
(2) withdraws from future equity participation in the
enterprise by executing and filing in the office of the Secretary
of State a certificate declaring withdrawal under this Section.
(b) A person who makes a contribution of the kind described in
subsection (a) is liable as a general partner to any third party
who transacts business with the enterprise (i) before the person
withdraws and an appropriate certificate is filed to show
withdrawal, or (ii) before an appropriate certificate is filed to
show that he or she is not a general partner; but in either case
only if the third party actually believed in good faith that the
person was a general partner at the time of the transaction.
Section 305. Each limited partner has a right to:
(1) inspect and copy any of the partnership records required
to be maintained by Section 105; and
(2) obtain from the general partners from time to time upon
reasonable demand (i) true and full information regarding the
state of the business and financial condition of the partnership,
(ii) promptly after becoming available, a copy of the limited
partnership's federal, state, and local income tax returns for
each year, and (iii) other information regarding the affairs of
the limited partnership as is just and reasonable.
ARTICLE 4
GENERAL PARTNERS
Section 401. Admission of Additional General Partners. After the
filing of a limited partnership's original certificate of limited
partnership, additional general partners may be admitted as
provided in writing in the partnership agreement or, if the
partnership agreement does not provide in writing for the
admission of additional general partners, with the written
consent of all partners.
Section 402. Events of Withdrawal. Except as approved by the
specific written consent of all partners at the time, a person
ceases to be a general partner of a limited partnership only upon
the happening of any of the following events:
(1) the general partner withdraws from the limited
partnership as provided in Section 602;
(2) the general partner ceases to be a member of the limited
partnership as provided in Section 702;
(3) the general partner is removed as a general partner in
accordance with the partnership agreement;
(4) unless otherwise provided in writing in the partnership
agreement, the general partner: (i) makes an assignment for the
benefit of creditors; (ii) files a voluntary petition in
bankruptcy; (iii) is adjudicated a bankrupt or insolvent; (iv)
files a petition or answer seeking for himself or herself any
reorganization, arrangement, composition, readjustment,
liquidation, dissolution, or similar relief under any statute,
law, or regulation; (v) files an answer or other pleading
admitting or failing to contest the material allegations of a
petition filed against him or her in any proceeding of this
matter; (vi) seeks, consents to, or acquiesces in the appointment
of a trustee, receiver, or liquidator of the general partner or
of all or any substantial part of his or her properties;
(5) unless otherwise provided in writing in the partnership
agreement, 120 days after the commencement of any proceeding
against the general partner seeking reorganization, arrangement,
composition, readjustment, liquidation, dissolution, or similar
relief under any statute, law, or regulation, the proceeding has
not been dismissed, or if within 90 days after the appointment
without his or her consent or acquiescence of a trustee,
receiver, or liquidator of the general partner or of all or any
substantial part of his or her properties, the appointment is not
stayed or within 90 days after the expiration of any such stay,
the appointment is not vacated;
(6) in the case of a general partner who is a natural
person,
(i) his or her death; or
(ii) the entry of an order by a court of competent
jurisdiction adjudicating him or her incompetent to manage his or
her person or his or her estate;
(7) in the cases of a general partner who is acting as a
general partner by virtue of being a trustee of a trust, the
termination of the trust (but not merely the substitution of a
new trustee);
(8) in the case of a general partner that is a separate
partnership, the dissolution and commencement of winding up of
the separate partnership;
(9) in the case of a general partner that is a corporation,
the filing of a certificate of dissolution, or its equivalent,
for the corporation, or the revocation of its charter; or
(10) in the case of an estate, the distribution by the
fiduciary of the estate's entire interest in the partnership.
Section 403. General Powers and Liabilities.
(a) Except as provided in this Act or in the partnership
agreement, a general partner of a limited partnership has the
rights and powers and is subject to the restrictions of a partner
in a partnership without limited partners.
/* Thus, it is possible that a general partner's right to manage
can be less extensive or more extensive. This is why banks and
others who deal with limited partnerships will want to examine
the partnership agreement and get assurances that the general
partners can borrow, etc. */
(b) Except as provided in this Act or in the partnership
agreement a general partner of a limited partnership has the
liabilities of a partner in a partnership without limited
partners to persons other than the partnership and other
partners. Except as provided in this Act or in the partnership
agreement, a general partner of a limited partnership has the
liabilities of a partner in a partnership without limited
partners to the partnership and to other partners.
Section 404. Contributions by General Partner. A general partner
of a limited partnership may make contributions to the
partnership and share in the profits and losses of, and in
distributions from, the limited partnership as a general partner.
A general partner may also make contributions to and share in
profits, losses and distributions as a limited partner. A person
who is both a general and limited partner has the rights and
powers, and is subject to the restrictions and liabilities, of a
general partner, and, except and provided in the partnership
agreement, also has the powers, and is subject to the
restrictions, of a limited partner to the extent of his or her
participation in the partnership as a limited partner.
Section 405. Voting. The partnership agreement may grant to all
or certain identified limited partners the right to vote (on a
per capita or any other basis), separately or with all or any
other class of the limited partners, on any matter.
ARTICLE 5
FINANCE
Section 501. Form of Contribution. The Contribution of a partner
may be in cash property, or services rendered, or a promissory
note or other obligation to contribute cash or property or to
perform services.
Section 502. Liability for Contribution. (a) A promise by a
limited partner to contribute to the limited partnership is not
enforceable unless set out in a writing signed by the limited
partner.
(b) Except as provided in the partnership agreement, a partner is
obligated to the limited partnership to perform any enforceable
promise to contribute cash or property or to perform services,
even if he or she is unable to perform because of death,
disability or any other reason. If a partner does not make the
required contribution of property or services, he or she is
obligated at the option of the limited partnership to contribute
cash equal to that portion of the value, as stated in the
partnership records required to be kept pursuant to Section 105,
of the stated contribution which has not been made.
(c) Unless otherwise provided in the partnership agreement, the
obligation of a partner to make a contribution or return money or
other property paid or distributed in violation of this Act may
be compromised only by consent of all partners. Notwithstanding
the compromise, a creditor of a limited partnership who extends
credit, or otherwise acts in reliance on that obligation after
the partner signs a writing which, reflects the obligation, and
before the amendment or cancellation thereof to reflect the
compromise, may enforce the original obligation.
Section 503. Sharing of Profits and Losses. The profits and
losses of a limited partnership shall be allocated among the
partners, and among classes of partners, in the manner provided
in wiring in the partnership agreement. If the partnership
agreement does not so provide in writing, profits and losses
shall be allocated on the basis of value, as stated in the
partnership records required to be kept pursuant to Section 105,
of the contribution made by each partner to the extent that they
have been received by the partnership and have not been returned.
Section 504. Sharing of Distributions. Distributions of cash or
other assets of a limited partnership shall be allocated among
the partners and among classes of partners in the manner provided
in writing in the partnership agreement. If the partnership
agreement does not so provide in writing, distributions shall be
made on the basis of the value as stated in the partnership
records required to be kept under section 105, of the
contribution made by each partner to the extent that they have
been received by the partnership and have not been returned.
ARTICLE 6
DISTRIBUTIONS AND WITHDRAWAL
Section 601. Interim Distributions. Except as provided in this
article, a partner is entitled to receive distributions from a
limited partnership before his or her withdrawal from the limited
partnership and before the dissolution and winding up thereof:
to the extent and at the times or upon the happening of the
events specified in the partnership agreement.
Section 602 Withdrawal of General Partner. A general partner may
withdraw from a limited partnership at any time by giving written
notice to the other partners, but if the withdrawal violates the
partnership agreement, the limited partnership may recover from
the withdrawing general partner damages for breach of the
partnership agreement and offset the damages against the amount
otherwise distributable to him or her.
Section 603. Withdrawal of Limited Partner. A limited partner may
withdraw from a limited partnership at the time or upon the
happening of events specified in writing in the partnership
agreement. If the agreement does not specify in writing the time
or events upon the happening of which a limited partner may
withdraw or a definite time for dissolution of the limited
partnership, a limited partner may withdraw upon less than six
months prior written notice to each general partner at his
address on the books of the limited partnership at its office in
this state.
Section 604. Distribution Upon Withdrawal. Except as provided in
this Article, upon withdrawal any withdrawing partner is entitled
to receive any distribution to which he or she is entitled under
the partnership agreement and, if not otherwise provided in the
agreement, he or she is entitled to receive, within a reasonable
time after withdrawal, the fair value of his or her interest in
the limited partnership as of the date of withdrawal based upon
his or her right to share in distributions from the limited
partnership.
/* This underlies the importance of making provisions in the
partnership agreement regarding limited partners shares.
Otherwise, you could be in the uncomfortable position of having
to find the money to pay a limited partner back his contribution.
Most limited partnership agreements prevent the partners from
demanding repayment prior to the expiration of the partnership.*/
Section 605. Distribution in kind. Except as provided in writing
in the partnership agreement, a partner, regardless of the nature
of his or her contribution, has no right to demand and receive
any distribution from a limited partnership in any other form
than cash. Except as provided in writing in the partnership
agreement, a partner may not be compelled to accept a
distribution of any asset in kind from a limited partnership to
the extent that the percentage of the asset distributed to him or
her exceeds a percentage of that asset which is equal to the
percentage in which he or she shares in distributions from the
limited partnership.
Section 606.. Right to Distribution. At the time a partner
becomes entitled to receive a distribution, he or she, has the
status of, and is entitled to, all remedies available to, a
creditor of the limited partnership with respect to the
distribution.
Section 607. Limitations On Distribution. A partner may not
receive a distribution from a limited partnership to the extent
that, after giving effect to the distribution, all liabilities of
the limited partnership, other than liabilities to partners on
account of their partnership interests, exceed the fair value of
the partnership assets.
Section 608. Liability Upon Return of Contribution. (a) If a
partner has received the return of any part of his or her
contribution without violation of the partnership agreement or
this Act, he or she is liable to the limited partnership for a
period of one year thereafter for the amount of the returned
contribution, but only to the extent necessary to discharge the
limited partnership's liabilities to creditors who extended
credit to the limited partnership during the period the
contribution was held by the partnership.
(b) If a partner has received the return of any part of his or
her contribution in violation of the partnership agreement or
this Act, he or she is liable to the limited partnership for a
period of six years thereafter for the amount of the contribution
wrongfully returned.
(c) A partner receives a return of his or her contribution to the
extent that a distribution to him or her reduces his or her share
of the fair value of the of the fair value of the net assets of
the limited partnership below the value, as set forth in the
partnership records required to be kept pursuant to Section 105,
of his contribution which has not been distributed to him or her.
ARTICLE 7
ASSIGNMENT OF PARTNERSHIP INTEREST
Section 701. Nature of partnership interest. A partnership
interest is personal property.
/* This has the effect of making it clear that if a partnership
has real estate, that it is the limited partnership who owns the
real estate, not the limited or general partners. */
Section 702. Assignment of partnership interest. Except as
provided in the partnership agreement, a partnership interest is
assignable in whole or in part. An assignment of a partnership
interest does not dissolve a limited partnership or entitle the
assignee to become or to exercise any rights of a partner. An
assignment entitled the assignee to receive, to the extent
assigned, only the distribution to which the assignor would be
entitled. Except as provided in the partnership agreement, a
partner ceases to be a partner upon assignment of all his [or
her] partnership interest.
/* The key phrase in this section is "except as provided in the
partnership agreement," which means that the limited partnership
agreement could forbid any transfer, or make all interests
transferable. In cases where the limited partnership agreement
does not specify, only the right to receive income (or losses)
can be transferred by a limited partner. */
Section 703. Rights of creditor.- On application to a court of
competent jurisdiction by any judgment creditor of a partner, the
court may charge the partnership interest of the partner with
payment of the unsatisfied partnership interest. This Act does
not deprive any partner of any exemption law applicable to his
[or her] partnership interest.
/* This is the same rule as in general partnerships. Creditors of
a partner do not get to levy [sell through judicial process] the
partnerships property. They do however have the right to the
partner's income and capital contribution. */
Section 704. Right of Assignee to become Limited Partner.
(a) An assignee of a partnership interest, including an
assignee of a general partner, may become a limited partner if
and to the extent that (i) the assignor gives the assignee that
right in accordance with authority described in the partnership
agreement, or (ii) all other partners consent.
(b) An assignee who has become a limited partner has, to the
extent assigned, the rights and powers, and is subject to the
restrictions and liabilities, of a limited partner under the
partnership agreement and this Act. An assignee who becomes a
limited partner also is liable for the obligations of his or her
assignor to make and return contributions as provided in Articles
5 and 6. However, the assignee is not obligated for liabilities
unknown to the assignee at the time he or she became a limited
partner.
/* Thus, a person getting a limited partnership interest can get
the "right" to make further capital contributions. */
(c) If an assignee of a partnership interest becomes a
limited partner, the assignor is not released from his or her
liability to the limited partnership under sections 207 and 502.
Section 705. Power of estate of Deceased or Incompetent Partner.
If a partner who is an individual dies or a court of competent
jurisdiction adjudges him ore her to be incompetent to manage his
or her person or his or her property, the partner's executor,
administrator, guardian, conservator, or other legal
representative may exercise all of the partner's rights for the
purpose of settling his or her estate or administering his or her
property, including an power the partner had to give an assignee
the right to become a limited partner. If a partner is a
corporation, trust, or other entity and is dissolved or
terminated, the powers of that partner may be exercised by its
legal representative or successor.
ARTICLE 8
DISSOLUTION
Section 801. Nonjudicial Dissolution. A limited partnership is
dissolved and its affairs shall be wound up upon the happening of
the first to occur of the following:
(1) at the time specified in the certificate of limited
partnership;
(2) upon the happening of events specified in writing in the
limited partnership agreement;
(3) written consent of all partners;
(4) an event of withdrawal of a general partner unless at
the time there is at least one other general partner and the
written provisions of the partnership agreement permit the
business of the limited partnership to be carried on by the
remaining general partner and that partner does so, by reason of
any event of withdrawal, if, within 90 days after withdrawal, all
partners agree in writing to continue the business of the limited
partnership, and to the appointment of one or more additional
general partners if necessary or desired;
(5) entry of a decree of judicial dissolution under Section
802.
Section 802. Judicial dissolution. On application by or far a
partner the [designated court] may decree dissolution of a
limited partnership whenever it is not reasonably practicable to
carry on the business in conformity with the partnership
agreement.
/* This section is similar to those in corporate law which allow
a corporation to be dissolved when the governing parties are
deadlocked. */
Section 803. Winding Up. Except as provided in the partnership
agreement, the general partners who have not wrongfully dissolved
a limited partnership, or, if none, the limited partners, may
wind up the limited partnership's affairs; but the [appropriate
court] may wind up the limited partnership's affairs upon
application of any partner, his [or her] legal representative, or
assignee.
Section 804. Distribution of Assets. Upon the winding up of a
limited partnership, the assets shall be distributed as follows:
(1) to creditors, including partners who are creditors, to
the extent permitted by law, in satisfaction of liabilities of
the limited partnership, other than liabilities for distribution
to partners under Section 601 or 604;
(2) except as provided in the partnership, to partners and
former partners in satisfaction of liabilities for distributions
under Section 601 or 604; and
(3) except as provided in the partnership agreement, to
partners first for the return of their capital contributions and
secondly respecting their partnership interests, in the
proportions in which the partners share in distributions.
ARTICLE 9
FOREIGN LIMITED PARTNERSHIPS
Section 901. Law Governing. Subject to the Constitution of this
State, (i) the laws of the state under a foreign limited
partnership is organized govern its organization and internal
affairs and the liability of its limited partners, and (ii) a
foreign limited partnership may not be denied registration in
this state by reasons of any difference between those laws and
the laws of this State.
Section 902. Registration. Before transacting business in this
State, a foreign limited partnership shall register with the
Secretary of State. In order to register, a foreign limited
partnership shall submit to the Secretary of State, in duplicate,
an application for registration as a foreign limited partnership
signed and sworn to by a general partner and setting forth:
(1) the name of the foreign limited partnership and, if
different, the name under which it proposes to register and
transact business in this state;
(2) the state and date of its formation;
(3) the name and address of any agent for service of process
on the foreign limited partnership whom the foreign limited
partnership elects to appoint' the agent must be an individual
resident of this state, a domestic corporation, or a foreign
corporation having a place of business, and authorized, to do
business in this State;
(4) a statement that the Secretary of State is appointed the
agent of the foreign limited partnership for service of process
if no agent has been appointed under paragraph (3), or if
appointed, the agent's authority has been revoked or if the agent
cannot be found or served with the exercise of reasonable
diligence;
(5) the address of the office required to be maintained in
the state of its organization by the laws of that state or, if
not so required, of the principal office of the foreign limited
partnership.
(6) the name and business address of each general partner;
(7) the address of the office at which is kept a list of the
names and addresses of the limited partners and their capital
contributions, together with an undertaking by the foreign
limited partnership to keep those records until the foreign
limited partnership's registration in this State is canceled or
withdrawn.
Section 903. Issuance of registration.
(a) If the Secretary of State finds that an application for
registration conforms to law ad all requisite fees have been
paid, he or she shall:
(1) endorse on the application the word "Filed", and
the month, day and year of the filing thereof;
(2) file in his or her office a duplicate original of
the application; and
(3) issue a certificate of registration to transact
business in this State.
(b) The certificate of registration, together with a duplicate
original of the application, shall be returned to the person who
filed the application or his [or her] representative.
Section 904. Name. A foreign limited partnership may register
with the Secretary of State under any name, whether or not it is
the name under which it is registered in is state of
organization, that includes without abbreviation the words
"limited partnership" and that could be registered by a domestic
limited partnership.
Section 905. Changes and Amendments. If any statement in the
application for a foreign limited partnership was false when made
or any arrangements or other facts described have changed, making
the application inaccurate in any respect, the foreign limited
partnership shall promptly file in the office of the Secretary of
State a certificate, signed and sworn to by a general partner,
correcting such statement.
Section 906. Cancellation of Registration. A foreign limited
partnership may cancel its registration by filing with the
Secretary of State a certificate of cancellation signed and sworn
to by a general partner. A cancellation does not terminate the
authority of the Secretary of State to accept service of process
on the foreign limited partnership with respect to claims for
relief arising out of the transaction of business in this State.
Section 907. Transaction of Business without Registration. (a) A
foreign limited partnership transacting business in this State
may not maintain any action, suit, or proceeding in any court of
this State until it has registered with this State.
(b) The failure of a foreign limited partnership to register in
this State does not impair the validity of any contract or act of
the foreign limited partnership or prevent the foreign limited
partnership from defending any action, suit, or proceeding in any
court of this State.
(c) A limited partner of a foreign limited partnership is not
liable as a general partner of the foreign limited partnership
solely by reason of having transacted business in this State
without registration.
(d) A foreign limited partnership, by transacting business in
this State without registration, appoints the Secretary of State
as its agent for service of process with respect to claims for
relief arising out of the transaction of business in this State.
Section 908. Action regarding unregistered limited partnerships.
The [State officer] may bring an action to restrain a foreign
limited partnership from transacting business in this State in
violation of this Article.
ARTICLE 10
DERIVATIVE ACTIONS
Section 1001. Right of Action. A limited partner may bring an
action in the right of a limited partnership to recover a
judgment in its favor if general partners with authority to do so
have refused to bring the action or if an effort to cause those
general partners to bring the action is not likely to succeed.
/* This is equivalent to the right of corporate shareholders to
bring "derivative actions." Generally, if the management of the
limited partnership (the general partners) have wronged the
limited partnership, they are not willing to sue themselves.
Therefore, this part of the act allows the limited partners to
bring these suits themselves. */
Section 1002. Proper plaintiff. In a derivative action, the
plaintiff must be a partner at the time of bringing the action
and (i) must have been a partner at the time of the transaction
of which he or she complains or (ii) his or her status as a
partner must have devolved upon him or her by operation of law or
pursuant to the terms of the partnership agreement from a person
who was a partner at the time of the transaction.
Section 1003. Pleading. In a derivative action, the complaint
shall set forth with particularity the effort of the plaintiff to
secure initiation of the action by a general partner or the
reasons for not making the effort.
Section 1004. Expenses. If a derivative action is successful, in
whole or in part, or if anything is received by the plaintiff as
a result of a judgment, compromise, or settlement of an action or
claim, the court may award the plaintiff reasonable expenses,
including reasonable attorney's fees, and shall direct him [or
her] to remit to the limited partnership the remainder of those
proceeds received by him [or her.]
ARTICLE 11
MISCELLANEOUS
/* This is omitted since it comprises the effective date of the
law and other minutiae. */