Text: SF02310 Text: SF02312 Text: SF02300 - SF02399 Text: SF Index Bills and Amendments: General Index Bill History: General Index
PAG LIN 1 1 SENATE FILE 2311 1 2 1 3 AN ACT 1 4 RELATING TO PARTNERSHIPS BY REPLACING THE EXISTING LAW WITH A 1 5 UNIFORM PARTNERSHIP LAW AND PROVIDING PENALTIES AND AN EF- 1 6 FECTIVE DATE. 1 7 1 8 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 1 9 1 10 ARTICLE 1 1 11 GENERAL PROVISIONS 1 12 Section 1. NEW SECTION. 486.101 DEFINITIONS. 1 13 As used in this chapter, unless the context otherwise 1 14 requires: 1 15 1. "Business" includes every trade, occupation, and 1 16 profession. 1 17 2. "Debtor in bankruptcy" means a person who is the 1 18 subject of any of the following: 1 19 a. An order for relief under Title 11 of the United States 1 20 Code or a comparable order under a successor statute of 1 21 general application. 1 22 b. A comparable order under federal, state, or foreign law 1 23 governing insolvency. 1 24 3. "Distribution" means a transfer of money or other 1 25 property from a partnership to a partner in the partner's 1 26 capacity as a partner or to the partner's transferee. 1 27 4. "Foreign limited liability partnership" means a 1 28 partnership that satisfies both of the following: 1 29 a. The partnership is formed under laws other than the 1 30 laws of this state. 1 31 b. The partnership has the status of a limited liability 1 32 partnership under those laws. 1 33 5. "Limited liability partnership" means a partnership 1 34 that has filed a statement of qualification under section 1 35 486.1001 and does not have a similar statement in effect in 2 1 any other jurisdiction. 2 2 6. "Partnership" means an association of two or more 2 3 persons to carry on as co-owners a business for profit formed 2 4 under section 486.202, predecessor law, or comparable law of 2 5 another jurisdiction. 2 6 7. "Partnership agreement" means the agreement, whether 2 7 written, oral, or implied, among the partners concerning the 2 8 partnership, including amendments to the partnership 2 9 agreement. 2 10 8. "Partnership at will" means a partnership in which the 2 11 partners have not agreed to remain partners until the 2 12 expiration of a definite term or the completion of a 2 13 particular undertaking. 2 14 9. "Partnership interest" or "partner's interest in the 2 15 partnership" means all of a partner's interests in the 2 16 partnership, including the partner's transferable interest and 2 17 all management and other rights. 2 18 10. "Person" means as defined in section 4.1. 2 19 11. "Property" means all property, real, personal, or 2 20 mixed, tangible or intangible, or any interest in such 2 21 property. 2 22 12. "State" means a state, territory, or possession of the 2 23 United States, the District of Columbia, or the Commonwealth 2 24 of Puerto Rico. 2 25 13. "Statement" means a statement of partnership authority 2 26 under section 486.303, a statement of denial under section 2 27 486.304, a statement of dissociation under section 486.704, a 2 28 statement of dissolution under section 486.805, a statement of 2 29 merger under section 486.907, a statement of qualification 2 30 under section 486.1001, a statement of foreign qualification 2 31 under section 486.1102, or an amendment or cancellation of any 2 32 of the foregoing. 2 33 14. "Transfer" includes an assignment, conveyance, lease, 2 34 mortgage, deed, and encumbrance. 2 35 Sec. 2. NEW SECTION. 486.102 KNOWLEDGE AND NOTICE. 3 1 1. A person knows a fact if the person has actual 3 2 knowledge of it. 3 3 2. A person has notice of a fact if any of the following 3 4 apply: 3 5 a. The person knows of it. 3 6 b. The person has received a notification of it. 3 7 c. The person has reason to know it exists from all of the 3 8 facts known to the person at the time in question. 3 9 3. A person notifies or gives a notification to another by 3 10 taking steps reasonably required to inform the other person in 3 11 ordinary course, whether or not the other person learns of it. 3 12 4. A person receives a notification when any of the 3 13 following occur: 3 14 a. The notification comes to the person's attention. 3 15 b. The notification is duly delivered at the person's 3 16 place of business or at any other place held out by the person 3 17 as a place for receiving communications. 3 18 5. Except as otherwise provided in subsection 6, a person 3 19 other than an individual knows, has notice, or receives a 3 20 notification of a fact for purposes of a particular 3 21 transaction when the individual conducting the transaction 3 22 knows, has notice, or receives a notification of the fact, or 3 23 in any event when the fact would have been brought to the 3 24 individual's attention if the person had exercised reasonable 3 25 diligence. The person exercises reasonable diligence if the 3 26 person maintains reasonable routines for communicating 3 27 significant information to the individual conducting the 3 28 transaction and there is reasonable compliance with the 3 29 routines. Reasonable diligence does not require an individual 3 30 acting for the person to communicate information unless the 3 31 communication is part of the individual's regular duties or 3 32 the individual has reason to know of the transaction and that 3 33 the transaction would be materially affected by the 3 34 information. 3 35 6. A partner's knowledge, notice, or receipt of a 4 1 notification of a fact relating to the partnership is 4 2 effective immediately as knowledge by, notice to, or receipt 4 3 of a notification by the partnership, except in the case of a 4 4 fraud on the partnership committed by or with the consent of 4 5 that partner. 4 6 Sec. 3. NEW SECTION. 486.103 EFFECT OF PARTNERSHIP 4 7 AGREEMENT NONWAIVABLE PROVISIONS. 4 8 1. Except as otherwise provided in subsection 2, relations 4 9 among the partners and between the partners and the 4 10 partnership are governed by the partnership agreement. To the 4 11 extent the partnership agreement does not otherwise provide, 4 12 this chapter governs relations among the partners and between 4 13 the partners and the partnership. 4 14 2. The partnership agreement shall not do any of the 4 15 following: 4 16 a. Vary the rights and duties under section 486.105 except 4 17 to eliminate the duty to provide copies of statements to all 4 18 of the partners. 4 19 b. Unreasonably restrict the right of access to books and 4 20 records under section 486.403, subsection 2. 4 21 c. Eliminate the duty of loyalty under section 486.404, 4 22 subsection 2, or 486.603, subsection 2, paragraph "c", except 4 23 as follows: 4 24 (1) The partnership agreement may identify specific types 4 25 or categories of activities that do not violate the duty of 4 26 loyalty, if not manifestly unreasonable. 4 27 (2) All of the partners or a number or percentage 4 28 specified in the partnership agreement may authorize or 4 29 ratify, after full disclosure of all material facts, a 4 30 specific act or transaction that otherwise would violate the 4 31 duty of loyalty. 4 32 d. Unreasonably reduce the duty of care under section 4 33 486.404, subsection 3, or 486.603, subsection 2, paragraph 4 34 "c". 4 35 e. Eliminate the obligation of good faith and fair dealing 5 1 under section 486.404, subsection 4, but the partnership 5 2 agreement may prescribe the standards by which the performance 5 3 of the obligation is to be measured, if the standards are not 5 4 manifestly unreasonable. 5 5 f. Vary the power to dissociate as a partner under section 5 6 486.602, subsection 1, except to require the notice under 5 7 section 486.601, subsection 1, to be in writing. 5 8 g. Vary the right of a court to expel a partner in the 5 9 events specified in section 486.601, subsection 5. 5 10 h. Vary the requirement to wind up the partnership 5 11 business in cases specified in section 486.801, subsection 4, 5 12 5, or 6. 5 13 i. Vary the law applicable to a limited liability 5 14 partnership under section 486.106, subsection 2. 5 15 j. Restrict rights of third parties under this chapter. 5 16 Sec. 4. NEW SECTION. 486.104 SUPPLEMENTAL PRINCIPLES OF 5 17 LAW. 5 18 1. Unless displaced by particular provisions of this 5 19 chapter, the principles of law and equity supplement this 5 20 chapter. 5 21 2. If an obligation to pay interest arises under this 5 22 chapter and the rate is not specified, the rate is that 5 23 specified in section 535.3. 5 24 Sec. 5. NEW SECTION. 486.105 EXECUTION, FILING, AND 5 25 RECORDING OF STATEMENTS. 5 26 1. A statement may be filed in the office of the secretary 5 27 of state. A certified copy of a statement that is filed in an 5 28 office in another state may be filed in the office of the 5 29 secretary of state. Either filing has the effect provided in 5 30 this chapter with respect to partnership property located in 5 31 or transactions that occur in this state. 5 32 2. A certified copy of a statement that has been filed in 5 33 the office of the secretary of state and recorded in the 5 34 office for recording transfers of real property has the effect 5 35 provided for recorded statements in this chapter. A recorded 6 1 statement that is not a certified copy of a statement filed in 6 2 the office of the secretary of state does not have the effect 6 3 provided for recorded statements in this chapter. 6 4 3. A statement filed by a partnership must be executed by 6 5 at least two partners. Other statements must be executed by a 6 6 partner or other person authorized by this chapter. An 6 7 individual who executes a statement as, or on behalf of, a 6 8 partner or other person named as a partner in a statement 6 9 shall personally declare under penalty of perjury that the 6 10 contents of the statement are accurate. 6 11 4. A person authorized by this chapter to file a statement 6 12 may amend or cancel the statement by filing an amendment or 6 13 cancellation that names the partnership, identifies the 6 14 statement, and states the substance of the amendment or 6 15 cancellation. 6 16 5. A person who files a statement pursuant to this section 6 17 shall promptly send a copy of the statement to every nonfiling 6 18 partner and to any other person named as a partner in the 6 19 statement. Failure to send a copy of a statement to a partner 6 20 or other person does not limit the effectiveness of the 6 21 statement as to a person not a partner. 6 22 6. The secretary of state may collect a fee for filing or 6 23 providing a certified copy of a statement. The county 6 24 recorder may collect a fee for recording a statement. 6 25 Sec. 6. NEW SECTION. 486.106 GOVERNING LAW. 6 26 1. Except as otherwise provided in subsection 2, the law 6 27 of the jurisdiction in which a partnership has its chief 6 28 executive office governs relations among the partners and 6 29 between the partners and the partnership. 6 30 2. The law of this state governs relations among the 6 31 partners and the partnership and the liability of partners for 6 32 an obligation of a limited liability partnership. 6 33 Sec. 7. NEW SECTION. 486.107 PARTNERSHIP SUBJECT TO 6 34 AMENDMENT OR REPEAL OF CHAPTER. 6 35 A partnership governed by this chapter is subject to any 7 1 amendment to or repeal of this chapter. 7 2 ARTICLE 2 7 3 NATURE OF PARTNERSHIP 7 4 Sec. 8. NEW SECTION. 486.201 PARTNERSHIP AS ENTITY. 7 5 1. A partnership is an entity distinct from its partners. 7 6 2. A limited liability partnership continues to be the 7 7 same entity that existed before the filing of a statement of 7 8 qualification under section 486.1001. 7 9 Sec. 9. NEW SECTION. 486.202 FORMATION OF PARTNERSHIP. 7 10 1. Except as otherwise provided in subsection 2, the 7 11 association of two or more persons to carry on as co-owners a 7 12 business for profit forms a partnership, whether or not the 7 13 persons intend to form a partnership. 7 14 2. An association formed under a statute other than this 7 15 chapter, a predecessor statute, or a comparable statute of 7 16 another jurisdiction is not a partnership under this chapter. 7 17 3. In determining whether a partnership is formed, the 7 18 following rules apply: 7 19 a. Joint tenancy, tenancy in common, tenancy by the 7 20 entireties, joint property, common property, or part ownership 7 21 does not by itself establish a partnership, even if the co- 7 22 owners share profits made by the use of the property. 7 23 b. The sharing of gross returns does not by itself 7 24 establish a partnership, even if the persons sharing them have 7 25 a joint or common right or interest in property from which the 7 26 returns are derived. 7 27 c. A person who receives a share of the profits of a 7 28 business is presumed to be a partner in the business, unless 7 29 the profits were received in payment of or for any of the 7 30 following: 7 31 (1) Of a debt by installments or otherwise. 7 32 (2) For services as an independent contractor or of wages 7 33 or other compensation to an employee. 7 34 (3) Of rent. 7 35 (4) Of an annuity or other retirement or health benefit to 8 1 a beneficiary, representative, or designee of a deceased or 8 2 retired partner. 8 3 (5) Of interest or other charge on a loan, even if the 8 4 amount of payment varies with the profits of the business, 8 5 including a direct or indirect present or future ownership of 8 6 the collateral, or rights to income, proceeds, or increase in 8 7 value derived from the collateral. 8 8 (6) For the sale of the goodwill of a business or other 8 9 property by installments or otherwise. 8 10 Sec. 10. NEW SECTION. 486.203 PARTNERSHIP PROPERTY. 8 11 Property acquired by a partnership is property of the 8 12 partnership and not of the partners individually. 8 13 Sec. 11. NEW SECTION. 486.204 WHEN PROPERTY IS 8 14 PARTNERSHIP PROPERTY. 8 15 1. Property is partnership property if acquired in the 8 16 name of any of the following: 8 17 a. The partnership. 8 18 b. One or more partners with an indication in the 8 19 instrument transferring title to the property of the person's 8 20 capacity as a partner or of the existence of a partnership but 8 21 without an indication of the name of the partnership. 8 22 2. Property is acquired in the name of the partnership by 8 23 a transfer to any of the following: 8 24 a. The partnership in its name. 8 25 b. One or more partners in their capacity as partners in 8 26 the partnership, if the name of the partnership is indicated 8 27 in the instrument transferring title to the property. 8 28 3. Property is presumed to be partnership property if 8 29 purchased with partnership assets, even if not acquired in the 8 30 name of the partnership or of one or more partners with an 8 31 indication in the instrument transferring title to the 8 32 property of the person's capacity as a partner or of the 8 33 existence of a partnership. 8 34 4. Property acquired in the name of one or more of the 8 35 partners, without an indication in the instrument transferring 9 1 title to the property of the person's capacity as a partner or 9 2 of the existence of a partnership and without use of 9 3 partnership assets, is presumed to be separate property, even 9 4 if used for partnership purposes. 9 5 ARTICLE 3 9 6 RELATIONS OF PARTNERS TO 9 7 PERSONS DEALING WITH PARTNERSHIP 9 8 Sec. 12. NEW SECTION. 486.301 PARTNER AGENT OF 9 9 PARTNERSHIP. 9 10 Subject to the effect of a statement of partnership 9 11 authority under section 486.303: 9 12 1. Each partner is an agent of the partnership for the 9 13 purpose of its business. An act of a partner, including the 9 14 execution of an instrument in the partnership name, for 9 15 apparently carrying on in the ordinary course the partnership 9 16 business or business of the kind carried on by the partnership 9 17 binds the partnership, unless the partner had no authority to 9 18 act for the partnership in the particular matter and the 9 19 person with whom the partner was dealing knew or had received 9 20 a notification that the partner lacked authority. 9 21 2. An act of a partner which is not apparently for 9 22 carrying on in the ordinary course the partnership business or 9 23 business of the kind carried on by the partnership binds the 9 24 partnership only if the act was authorized by the other 9 25 partners. 9 26 Sec. 13. NEW SECTION. 486.302 TRANSFER OF PARTNERSHIP 9 27 PROPERTY. 9 28 1. Partnership property may be transferred as follows: 9 29 a. Subject to the effect of a statement of partnership 9 30 authority under section 486.303, partnership property held in 9 31 the name of the partnership may be transferred by an 9 32 instrument of transfer executed by a partner in the 9 33 partnership name. 9 34 b. Partnership property held in the name of one or more 9 35 partners with an indication in the instrument transferring the 10 1 property to the partners of their capacity as partners or of 10 2 the existence of a partnership, but without an indication of 10 3 the name of the partnership, may be transferred by an 10 4 instrument of transfer executed by the persons in whose name 10 5 the property is held. 10 6 c. Partnership property held in the name of one or more 10 7 persons other than the partnership, without an indication in 10 8 the instrument transferring the property to the partners of 10 9 their capacity as partners or of the existence of a 10 10 partnership, may be transferred by an instrument of transfer 10 11 executed by the persons in whose name the property is held. 10 12 2. A partnership may recover partnership property from a 10 13 transferee only if it proves that execution of the instrument 10 14 of initial transfer did not bind the partnership under section 10 15 486.301 and if one of the following applies: 10 16 a. As to a subsequent transferee who gave value for 10 17 property transferred under subsection 1, paragraphs "a" and 10 18 "b", proves that the subsequent transferee knew or had 10 19 received a notification that the person who executed the 10 20 instrument of initial transfer lacked authority to bind the 10 21 partnership. 10 22 b. As to a transferee who gave value for property 10 23 transferred under subsection 1, paragraph "c", proves that the 10 24 transferee knew or had received a notification that the 10 25 property was partnership property and that the person who 10 26 executed the instrument of initial transfer lacked authority 10 27 to bind the partnership. 10 28 3. A partnership shall not recover partnership property 10 29 from a subsequent transferee if the partnership would not have 10 30 been entitled to recover the property, under subsection 2, 10 31 from any earlier transferee of the property. 10 32 4. If a person holds all of the partners' interests in the 10 33 partnership, all of the partnership property vests in that 10 34 person. The person may execute a document in the name of the 10 35 partnership to evidence vesting of the property in that person 11 1 and may file or record the document. 11 2 Sec. 14. NEW SECTION. 486.303 STATEMENT OF PARTNERSHIP 11 3 AUTHORITY. 11 4 1. A partnership may file a statement of partnership 11 5 authority as provided in this subsection. 11 6 a. The statement of partnership authority must include all 11 7 of the following: 11 8 (1) The name of the partnership. 11 9 (2) The street address of its chief executive office and 11 10 of one office in this state, if there is one. 11 11 (3) The names and mailing addresses of all of the partners 11 12 or of an agent appointed and maintained by the partnership for 11 13 the purpose of subsection 2. 11 14 (4) The names of the partners authorized to execute an 11 15 instrument transferring real property held in the name of the 11 16 partnership. 11 17 b. The statement of partnership authority may state the 11 18 authority, or limitations on the authority, of some or all of 11 19 the partners to enter into other transactions on behalf of the 11 20 partnership and any other matter. 11 21 2. If a statement of partnership authority names an agent, 11 22 the agent shall maintain a list of the names and mailing 11 23 addresses of all of the partners and make it available to any 11 24 person on request for good cause shown. 11 25 3. If a filed statement of partnership authority is 11 26 executed pursuant to section 486.105, subsection 3, and states 11 27 the name of the partnership but does not contain all of the 11 28 other information required by subsection 1, the statement 11 29 nevertheless operates with respect to a person not a partner 11 30 as provided in subsections 4 and 5. 11 31 4. Except as otherwise provided in subsection 7, a filed 11 32 statement of partnership authority supplements the authority 11 33 of a partner to enter into transactions on behalf of the 11 34 partnership as follows: 11 35 a. Except for transfers of real property, a grant of 12 1 authority contained in a filed statement of partnership 12 2 authority is conclusive in favor of a person who gives value 12 3 without knowledge to the contrary, so long as and to the 12 4 extent that a limitation on that authority is not then 12 5 contained in another filed statement. A filed cancellation of 12 6 a limitation on authority revives the previous grant of 12 7 authority. 12 8 b. A grant of authority to transfer real property held in 12 9 the name of the partnership contained in a certified copy of a 12 10 filed statement of partnership authority recorded in the 12 11 office for recording transfers of that real property is 12 12 conclusive in favor of a person who gives value without 12 13 knowledge to the contrary, so long as and to the extent that a 12 14 certified copy of a filed statement containing a limitation on 12 15 that authority is not then of record in the office for 12 16 recording transfers of that real property. The recording in 12 17 the office for recording transfers of that real property of a 12 18 certified copy of a filed cancellation of a limitation on 12 19 authority revives the previous grant of authority. 12 20 5. A person not a partner is deemed to know of a 12 21 limitation on the authority of a partner to transfer real 12 22 property held in the name of the partnership if a certified 12 23 copy of the filed statement containing the limitation on 12 24 authority is of record in the office for recording transfers 12 25 of that real property. 12 26 6. Except as otherwise provided in subsections 4 and 5 and 12 27 sections 486.704 and 486.805, a person not a partner is not 12 28 deemed to know of a limitation on the authority of a partner 12 29 merely because the limitation is contained in a filed 12 30 statement. 12 31 7. Unless earlier canceled, a filed statement of 12 32 partnership authority is canceled by operation of law five 12 33 years after the date on which the statement, or the most 12 34 recent amendment, was filed with the secretary of state. 12 35 Sec. 15. NEW SECTION. 486.304 STATEMENT OF DENIAL. 13 1 A partner or other person named as a partner in a filed 13 2 statement of partnership authority or in a list maintained by 13 3 an agent pursuant to section 486.303, subsection 2, may file a 13 4 statement of denial stating the name of the partnership and 13 5 the fact that is being denied, which may include denial of a 13 6 person's authority or status as a partner. A statement of 13 7 denial is a limitation on authority as provided in section 13 8 486.303, subsections 4 and 5. 13 9 Sec. 16. NEW SECTION. 486.305 PARTNERSHIP LIABLE FOR 13 10 PARTNER'S ACTIONABLE CONDUCT. 13 11 1. A partnership is liable for loss or injury caused to a 13 12 person, or for a penalty incurred, as a result of a wrongful 13 13 act or omission, or other actionable conduct, of a partner 13 14 acting in the ordinary course of business of the partnership 13 15 or with authority of the partnership. 13 16 2. If, in the course of the partnership's business or 13 17 while acting with authority of the partnership, a partner 13 18 receives or causes the partnership to receive money or 13 19 property of a person not a partner, and the money or property 13 20 is misapplied by a partner, the partnership is liable for the 13 21 loss. 13 22 Sec. 17. NEW SECTION. 486.306 PARTNER'S LIABILITY. 13 23 1. Except as otherwise provided in subsections 2 and 3, 13 24 all partners are liable jointly and severally for all 13 25 obligations of the partnership unless otherwise agreed by the 13 26 claimant or provided by law. 13 27 2. A person admitted as a partner into an existing 13 28 partnership is not personally liable for any partnership 13 29 obligation incurred before the person's admission as a 13 30 partner. 13 31 3. An obligation of a partnership incurred while the 13 32 partnership is a limited liability partnership, whether 13 33 arising in contract, tort, or otherwise, is solely the 13 34 obligation of the partnership. A partner is not personally 13 35 liable, directly or indirectly, by way of contribution or 14 1 otherwise, for such an obligation solely by reason of being or 14 2 so acting as a partner. This subsection applies 14 3 notwithstanding anything inconsistent in the partnership 14 4 agreement that existed immediately before the vote required to 14 5 become a limited liability partnership under section 486.1001, 14 6 subsection 2. 14 7 Sec. 18. NEW SECTION. 486.307 ACTIONS BY AND AGAINST 14 8 PARTNERSHIP AND PARTNERS. 14 9 1. A partnership may sue and be sued in the name of the 14 10 partnership. 14 11 2. An action may be brought against the partnership and, 14 12 to the extent not inconsistent with section 486.306, any or 14 13 all of the partners in the same action or in separate actions. 14 14 3. A judgment against a partnership is not by itself a 14 15 judgment against a partner. A judgment against a partnership 14 16 shall not be satisfied from a partner's assets unless there is 14 17 also a judgment against the partner. 14 18 4. A judgment creditor of a partner shall not levy 14 19 execution against the assets of the partner to satisfy a 14 20 judgment based on a claim against the partnership unless the 14 21 partner is personally liable for the claim under section 14 22 486.306 and one or more of the following apply: 14 23 a. A judgment based on the same claim has been obtained 14 24 against the partnership and a writ of execution on the 14 25 judgment has been returned unsatisfied in whole or in part. 14 26 b. The partnership is a debtor in bankruptcy. 14 27 c. The partner has agreed that the creditor need not 14 28 exhaust partnership assets. 14 29 d. A court grants permission to the judgment creditor to 14 30 levy execution against the assets of a partner based on a 14 31 finding that partnership assets subject to execution are 14 32 clearly insufficient to satisfy the judgment, that exhaustion 14 33 of partnership assets is excessively burdensome, or that the 14 34 grant of permission is an appropriate exercise of the court's 14 35 equitable powers. 15 1 e. Liability is imposed on the partner by law or contract 15 2 independent of the existence of the partnership. 15 3 5. This section applies to any partnership liability or 15 4 obligation resulting from a representation by a partner or 15 5 purported partner under section 486.308. 15 6 Sec. 19. NEW SECTION. 486.308 LIABILITY OF PURPORTED 15 7 PARTNER. 15 8 1. If a person, by words or conduct, purports to be a 15 9 partner, or consents to being represented by another as a 15 10 partner, in a partnership or with one or more persons not 15 11 partners, the purported partner is liable to a person to whom 15 12 the representation is made, if that person, relying on the 15 13 representation, enters into a transaction with the actual or 15 14 purported partnership. If the representation, either by the 15 15 purported partner or by a person with the purported partner's 15 16 consent, is made in a public manner, the purported partner is 15 17 liable to a person who relies upon the purported partnership 15 18 even if the purported partner is not aware of being held out 15 19 as a partner to the claimant. If partnership liability 15 20 results, the purported partner is liable with respect to that 15 21 liability as if the purported partner were a partner. If no 15 22 partnership liability results, the purported partner is liable 15 23 with respect to that liability jointly and severally with any 15 24 other person consenting to the representation. 15 25 2. If a person is thus represented to be a partner in an 15 26 existing partnership, or with one or more persons not 15 27 partners, the purported partner is an agent of persons 15 28 consenting to the representation to bind the persons to the 15 29 same extent and in the same manner as if the purported partner 15 30 were a partner, with respect to persons who enter into 15 31 transactions in reliance upon the representation. If all of 15 32 the partners of the existing partnership consent to the 15 33 representation, a partnership act or obligation results. If 15 34 fewer than all of the partners of the existing partnership 15 35 consent to the representation, the person acting and the 16 1 partners consenting to the representation are jointly and 16 2 severally liable. 16 3 3. A person is not liable as a partner merely because the 16 4 person is named by another in a statement of partnership 16 5 authority. 16 6 4. A person does not continue to be liable as a partner 16 7 merely because of a failure to file a statement of 16 8 dissociation or to amend a statement of partnership authority 16 9 to indicate the partner's dissociation from the partnership. 16 10 5. Except as otherwise provided in subsections 1 and 2, 16 11 persons who are not partners as to each other are not liable 16 12 as partners to other persons. 16 13 ARTICLE 4 16 14 RELATIONS OF PARTNERS TO EACH OTHER AND TO PARTNERSHIP 16 15 Sec. 20. NEW SECTION. 486.401 PARTNER'S RIGHTS AND 16 16 DUTIES. 16 17 1. Each partner is deemed to have an account subject to 16 18 the following: 16 19 a. The account is credited with an amount equal to the 16 20 money plus the value of any other property, net of the amount 16 21 of any liabilities, the partner contributes to the partnership 16 22 and the partner's share of the partnership profits. 16 23 b. The account is charged with an amount equal to the 16 24 money plus the value of any other property, net of the amount 16 25 of any liabilities, distributed by the partnership to the 16 26 partner and the partner's share of the partnership losses. 16 27 2. Each partner is entitled to an equal share of the 16 28 partnership profits and is chargeable with a share of the 16 29 partnership losses in proportion to the partner's share of the 16 30 profits. 16 31 3. A partnership shall reimburse a partner for payments 16 32 made and indemnify a partner for liabilities incurred by the 16 33 partner in the ordinary course of the business of the 16 34 partnership or for the preservation of its business or 16 35 property, if such payments were made or liabilities incurred 17 1 without violation of the partner's duties to the partnership 17 2 or the other partners. 17 3 4. A partnership shall reimburse a partner for an advance 17 4 to the partnership beyond the amount of capital the partner 17 5 agreed to contribute. 17 6 5. A payment or advance made by a partner which gives rise 17 7 to a partnership obligation under subsection 3 or 4 17 8 constitutes a loan to the partnership which accrues interest 17 9 from the date of the payment or advance. 17 10 6. Each partner has equal rights in the management and 17 11 conduct of the partnership business. 17 12 7. A partner may use or possess partnership property only 17 13 on behalf of the partnership. 17 14 8. A partner is not entitled to remuneration for services 17 15 performed for the partnership, except for reasonable 17 16 compensation for services rendered in winding up the business 17 17 of the partnership. 17 18 9. A person may become a partner only with the consent of 17 19 all of the partners. 17 20 10. A difference arising as to a matter in the ordinary 17 21 course of business of a partnership may be decided by a 17 22 majority of the partners. An act outside the ordinary course 17 23 of business of a partnership and an amendment to the 17 24 partnership agreement may be undertaken only with the consent 17 25 of all of the partners. 17 26 11. This section does not affect the obligations of a 17 27 partnership to other persons under section 486.301. 17 28 Sec. 21. NEW SECTION. 486.402 DISTRIBUTIONS IN KIND. 17 29 A partner has no right to receive, and shall not be 17 30 required to accept, a distribution in kind. 17 31 Sec. 22. NEW SECTION. 486.403 PARTNER'S RIGHTS AND 17 32 DUTIES WITH RESPECT TO INFORMATION. 17 33 1. A partnership shall keep its books and records, if any, 17 34 at its chief executive office. 17 35 2. A partnership shall provide partners and their agents 18 1 and attorneys access to its books and records. It shall 18 2 provide former partners and their agents and attorneys access 18 3 to books and records pertaining to the period during which the 18 4 former partners were partners. The right of access provides 18 5 the opportunity to inspect and copy books and records during 18 6 ordinary business hours. A partnership may impose a 18 7 reasonable charge, covering the costs of labor and material, 18 8 for copies of documents furnished. 18 9 3. Each partner and the partnership shall furnish to a 18 10 partner, and to the legal representative of a deceased partner 18 11 or partner under legal disability all of the following: 18 12 a. Without demand, any information concerning the 18 13 partnership's business and affairs reasonably required for the 18 14 proper exercise of the partner's rights and duties under the 18 15 partnership agreement or this chapter. 18 16 b. On demand, any other information concerning the 18 17 partnership's business and affairs, except to the extent the 18 18 demand or the information demanded is unreasonable or 18 19 otherwise improper under the circumstances. 18 20 Sec. 23. NEW SECTION. 486.404 GENERAL STANDARDS OF 18 21 PARTNER'S CONDUCT. 18 22 1. The only fiduciary duties a partner owes to the 18 23 partnership and the other partners are the duty of loyalty and 18 24 the duty of care set forth in subsections 2 and 3. 18 25 2. A partner's duty of loyalty to the partnership and the 18 26 other partners is limited to the following: 18 27 a. To account to the partnership and hold as trustee for 18 28 the partnership any property, profit, or benefit derived by 18 29 the partner in the conduct and winding up of the partnership 18 30 business or derived from a use by the partner of partnership 18 31 property, including the appropriation of a partnership 18 32 opportunity. 18 33 b. To refrain from dealing with the partnership in the 18 34 conduct or winding up of the partnership business as or on 18 35 behalf of a party having an interest adverse to the 19 1 partnership. 19 2 c. To refrain from competing with the partnership in the 19 3 conduct of the partnership business before the dissolution of 19 4 the partnership. 19 5 3. A partner's duty of care to the partnership and the 19 6 other partners in the conduct and winding up of the 19 7 partnership business is limited to refraining from engaging in 19 8 grossly negligent or reckless conduct, intentional misconduct, 19 9 or a knowing violation of law. 19 10 4. A partner shall discharge the duties to the partnership 19 11 and the other partners under this chapter or under the 19 12 partnership agreement and exercise any rights consistently 19 13 with the obligation of good faith and fair dealing. 19 14 5. A partner does not violate a duty or obligation under 19 15 this chapter or under the partnership agreement merely because 19 16 the partner's conduct furthers the partner's own interest. 19 17 6. A partner may lend money to and transact other business 19 18 with the partnership, and as to each loan or transaction the 19 19 rights and obligations of the partner are the same as those of 19 20 a person who is not a partner, subject to other applicable 19 21 law. 19 22 7. This section applies to a person winding up the 19 23 partnership business as the personal or legal representative 19 24 of the last surviving partner as if the person were a partner. 19 25 Sec. 24. NEW SECTION. 486.405 ACTIONS BY PARTNERSHIP AND 19 26 PARTNERS. 19 27 1. A partnership may maintain an action against a partner 19 28 for a breach of the partnership agreement, or for the 19 29 violation of a duty to the partnership, causing harm to the 19 30 partnership. 19 31 2. A partner may maintain an action against the 19 32 partnership or another partner for legal or equitable relief, 19 33 with or without an accounting as to partnership business, to 19 34 do any of the following: 19 35 a. Enforce the partner's rights under the partnership 20 1 agreement. 20 2 b. Enforce the partner's rights under this chapter, 20 3 including any or all of the following: 20 4 (1) The partner's rights under section 486.401, 486.403, 20 5 or 486.404. 20 6 (2) The partner's right on dissociation to have the 20 7 partner's interest in the partnership purchased pursuant to 20 8 section 486.701 or enforce any other right under article 6 or 20 9 7. 20 10 (3) The partner's right to compel a dissolution and 20 11 winding up of the partnership business under section 486.801 20 12 or enforce any other right under article 8. 20 13 c. Enforce the rights and otherwise protect the interests 20 14 of the partner, including rights and interests arising 20 15 independently of the partnership relationship. 20 16 3. The accrual of, and any time limitation on, a right of 20 17 action for a remedy under this section is governed by other 20 18 law. A right to an accounting upon a dissolution and winding 20 19 up does not revive a claim barred by law. 20 20 Sec. 25. NEW SECTION. 486.406 CONTINUATION OF 20 21 PARTNERSHIP BEYOND DEFINITE TERM OR PARTICULAR UNDERTAKING. 20 22 1. If a partnership for a definite term or particular 20 23 undertaking is continued, without an express agreement, after 20 24 the expiration of the term or completion of the undertaking, 20 25 the rights and duties of the partners remain the same as they 20 26 were at the expiration or completion, so far as is consistent 20 27 with a partnership at will. 20 28 2. If the partners, or those of them who habitually acted 20 29 in the business during the term or undertaking, continue the 20 30 business without any settlement or liquidation of the 20 31 partnership, they are presumed to have agreed that the 20 32 partnership will continue. 20 33 ARTICLE 5 20 34 TRANSFEREES AND CREDITORS OF PARTNER 20 35 Sec. 26. NEW SECTION. 486.501 PARTNER NOT CO-OWNER OF 21 1 PARTNERSHIP PROPERTY. 21 2 A partner is not a co-owner of partnership property and has 21 3 no interest in partnership property which can be transferred, 21 4 either voluntarily or involuntarily. 21 5 Sec. 27. NEW SECTION. 486.502 PARTNER'S TRANSFERABLE 21 6 INTEREST IN PARTNERSHIP. 21 7 The only transferable interest of a partner in the 21 8 partnership is the partner's share of the profits and losses 21 9 of the partnership and the partner's right to receive 21 10 distributions. The interest is personal property. 21 11 Sec. 28. NEW SECTION. 486.503 TRANSFER OF PARTNER'S 21 12 TRANSFERABLE INTEREST. 21 13 1. A transfer, in whole or in part, of a partner's 21 14 transferable interest in the partnership is or does all of the 21 15 following: 21 16 a. Is permissible. 21 17 b. Does not by itself cause the partner's dissociation or 21 18 a dissolution and winding up of the partnership business. 21 19 c. Does not, as against the other partners or the 21 20 partnership, entitle the transferee, during the continuance of 21 21 the partnership, to participate in the management or conduct 21 22 of the partnership business, to require access to information 21 23 concerning partnership transactions, or to inspect or copy the 21 24 partnership books or records. 21 25 2. A transferee of a partner's transferable interest in 21 26 the partnership has a right to all of the following: 21 27 a. To receive, in accordance with the transfer, 21 28 distributions to which the transferor would otherwise be 21 29 entitled. 21 30 b. To receive upon the dissolution and winding up of the 21 31 partnership business, in accordance with the transfer, the net 21 32 amount otherwise distributable to the transferor. 21 33 c. To seek under section 486.801, subsection 6, a judicial 21 34 determination that it is equitable to wind up the partnership 21 35 business. 22 1 3. In a dissolution and winding up, a transferee is 22 2 entitled to an account of partnership transactions only from 22 3 the date of the latest account agreed to by all of the 22 4 partners. 22 5 4. Upon transfer, the transferor retains the rights and 22 6 duties of a partner other than the interest in distributions 22 7 transferred. 22 8 5. A partnership need not give effect to a transferee's 22 9 rights under this section until it has notice of the transfer. 22 10 6. A transfer of a partner's transferable interest in the 22 11 partnership in violation of a restriction on transfer 22 12 contained in the partnership agreement is ineffective as to a 22 13 person having notice of the restriction at the time of 22 14 transfer. 22 15 Sec. 29. NEW SECTION. 486.504 PARTNER'S TRANSFERABLE 22 16 INTEREST SUBJECT TO CHARGING ORDER. 22 17 1. On application by a judgment creditor of a partner or 22 18 of a partner's transferee, a court having jurisdiction may 22 19 charge the transferable interest of the judgment debtor to 22 20 satisfy the judgment. The court may appoint a receiver of the 22 21 share of the distributions due or to become due to the 22 22 judgment debtor in respect of the partnership and make all 22 23 other orders, directions, accounts, and inquiries the judgment 22 24 debtor might have made or which the circumstances of the case 22 25 may require. 22 26 2. A charging order constitutes a lien on the judgment 22 27 debtor's transferable interest in the partnership. The court 22 28 may order a foreclosure of the interest subject to the 22 29 charging order at any time. The purchaser at the foreclosure 22 30 sale has the rights of a transferee. 22 31 3. At any time before foreclosure, an interest charged may 22 32 be redeemed by or with any of the following: 22 33 a. By the judgment debtor. 22 34 b. With property other than partnership property, by one 22 35 or more of the other partners. 23 1 c. With partnership property, by one or more of the other 23 2 partners with the consent of all of the partners whose 23 3 interests are not so charged. 23 4 4. This chapter does not deprive a partner of a right 23 5 under exemption laws with respect to the partner's interest in 23 6 the partnership. 23 7 5. This section provides the exclusive remedy by which a 23 8 judgment creditor of a partner or partner's transferee may 23 9 satisfy a judgment out of the judgment debtor's transferable 23 10 interest in the partnership. 23 11 ARTICLE 6 23 12 PARTNER'S DISSOCIATION 23 13 Sec. 30. NEW SECTION. 486.601 EVENTS CAUSING PARTNER'S 23 14 DISSOCIATION. 23 15 A partner is dissociated from a partnership upon the 23 16 occurrence of any of the following events: 23 17 1. The partnership's having notice of the partner's 23 18 express will to withdraw as a partner or on a later date 23 19 specified by the partner. 23 20 2. An event agreed to in the partnership agreement as 23 21 causing the partner's dissociation. 23 22 3. The partner's expulsion pursuant to the partnership 23 23 agreement. 23 24 4. The partner's expulsion by the unanimous vote of the 23 25 other partners if any of the following apply: 23 26 a. It is unlawful to carry on the partnership business 23 27 with that partner. 23 28 b. There has been a transfer of all or substantially all 23 29 of that partner's transferable interest in the partnership, 23 30 other than a transfer for security purposes, or a court order 23 31 charging the partner's interest, which has not been 23 32 foreclosed. 23 33 c. Within ninety days after the partnership notifies a 23 34 corporate partner that it will be expelled because it has 23 35 filed a certificate of dissolution or the equivalent, its 24 1 charter has been revoked, or its right to conduct business has 24 2 been suspended by the jurisdiction of its incorporation, there 24 3 is no revocation of the certificate of dissolution or no 24 4 reinstatement of its charter or its right to conduct business. 24 5 d. A partnership, limited partnership, or limited 24 6 liability company that is a partner has been dissolved and its 24 7 business is being wound up. 24 8 5. On application by the partnership or another partner, 24 9 the partner's expulsion by judicial determination because of 24 10 any of the following: 24 11 a. The partner engaged in wrongful conduct that adversely 24 12 and materially affected the partnership business. 24 13 b. The partner willfully or persistently committed a 24 14 material breach of the partnership agreement or of a duty owed 24 15 to the partnership or the other partners under section 24 16 486.404. 24 17 c. The partner engaged in conduct relating to the 24 18 partnership business which makes it not reasonably practicable 24 19 to carry on the business in partnership with the partner. 24 20 6. The partner's actions constituting any of the 24 21 following: 24 22 a. Becoming a debtor in bankruptcy. 24 23 b. Executing an assignment for the benefit of creditors. 24 24 c. Seeking, consenting to, or acquiescing in the 24 25 appointment of a trustee, receiver, or liquidator of that 24 26 partner or of all or substantially all of that partner's 24 27 property. 24 28 d. Failing, within ninety days after the appointment, to 24 29 have vacated or stayed the appointment of a trustee, receiver, 24 30 or liquidator of the partner or of all or substantially all of 24 31 the partner's property obtained without the partner's consent 24 32 or acquiescence, or failing within ninety days after the 24 33 expiration of a stay to have the appointment vacated. 24 34 7. In the case of a partner who is an individual any of 24 35 the following: 25 1 a. The partner's death. 25 2 b. The appointment of a general guardian or general 25 3 conservator for the partner. 25 4 c. A judicial determination that the partner has otherwise 25 5 become incapable of performing the partner's duties under the 25 6 partnership agreement. 25 7 8. In the case of a partner that is a trust or is acting 25 8 as a partner by virtue of being a trustee of a trust, 25 9 distribution of the trust's entire transferable interest in 25 10 the partnership, but not merely by reason of the substitution 25 11 of a successor trustee. 25 12 9. In the case of a partner that is an estate or is acting 25 13 as a partner by virtue of being a personal representative of 25 14 an estate, distribution of the estate's entire transferable 25 15 interest in the partnership, but not merely by reason of the 25 16 substitution of a successor personal representative. 25 17 10. Termination of a partner who is not an individual, 25 18 partnership, corporation, trust, or estate. 25 19 Sec. 31. NEW SECTION. 486.602 PARTNER'S POWER TO 25 20 DISSOCIATE WRONGFUL DISSOCIATION. 25 21 1. A partner has the power to dissociate at any time, 25 22 rightfully or wrongfully, by express will pursuant to section 25 23 486.601, subsection 1. 25 24 2. A partner's dissociation is wrongful only if any of the 25 25 following applies: 25 26 a. It is in breach of an express provision of the 25 27 partnership agreement. 25 28 b. In the case of a partnership for a definite term or 25 29 particular undertaking, before the expiration of the term or 25 30 the completion of the undertaking if any of the following 25 31 occur: 25 32 (1) The partner withdraws by express will, unless the 25 33 withdrawal follows within ninety days after another partner's 25 34 dissociation by death or otherwise under section 486.601, 25 35 subsections 6 through 10, or wrongful dissociation under this 26 1 subsection. 26 2 (2) The partner is expelled by judicial determination 26 3 under section 486.601, subsection 5. 26 4 (3) The partner is dissociated by becoming a debtor in 26 5 bankruptcy. 26 6 (4) In the case of a partner who is not an individual, 26 7 trust other than a business trust, or estate, the partner is 26 8 expelled or otherwise dissociated because it willfully 26 9 dissolved or terminated. 26 10 3. A partner who wrongfully dissociates is liable to the 26 11 partnership and to the other partners for damages caused by 26 12 the dissociation. The liability is in addition to any other 26 13 obligation of the partner to the partnership or to the other 26 14 partners. 26 15 Sec. 32. NEW SECTION. 486.603 EFFECT OF PARTNER'S 26 16 DISSOCIATION. 26 17 1. If a partner's dissociation results in a dissolution 26 18 and winding up of the partnership business, article 8 applies; 26 19 otherwise, article 7 applies. 26 20 2. Upon a partner's dissociation all of the following 26 21 apply: 26 22 a. The partner's right to participate in the management 26 23 and conduct of the partnership business terminates, except as 26 24 otherwise provided in section 486.803. 26 25 b. The partner's duty of loyalty under section 486.404, 26 26 subsection 2, paragraph "c", terminates. 26 27 c. The partner's duty of loyalty under section 486.404, 26 28 subsection 2, paragraphs "a" and "b", and duty of care under 26 29 section 486.404, subsection 3, continue only with regard to 26 30 matters arising and events occurring before the partner's 26 31 dissociation, unless the partner participates in winding up 26 32 the partnership's business pursuant to section 486.803. 26 33 ARTICLE 7 26 34 PARTNER'S DISSOCIATION WHEN BUSINESS NOT WOUND UP 26 35 Sec. 33. NEW SECTION. 486.701 PURCHASE OF DISSOCIATED 27 1 PARTNER'S INTEREST. 27 2 1. If a partner is dissociated from a partnership without 27 3 resulting in a dissolution and winding up of the partnership 27 4 business under section 486.801, the partnership shall cause 27 5 the dissociated partner's interest in the partnership to be 27 6 purchased for a buyout price determined pursuant to subsection 27 7 2. 27 8 2. The buyout price of a dissociated partner's interest is 27 9 the amount that would have been distributable to the 27 10 dissociating partner under section 486.807, subsection 2, if, 27 11 on the date of dissociation, the assets of the partnership 27 12 were sold at a price equal to the greater of the liquidation 27 13 value or the value based on a sale of the entire business as a 27 14 going concern without the dissociated partner and the 27 15 partnership were wound up as of that date. Interest must be 27 16 paid from the date of dissociation to the date of payment. 27 17 3. Damages for wrongful dissociation under section 27 18 486.602, subsection 2, and all other amounts owing, whether or 27 19 not presently due, from the dissociated partner to the 27 20 partnership, must be offset against the buyout price. 27 21 Interest must be paid from the date the amount owed becomes 27 22 due to the date of payment. 27 23 4. A partnership shall indemnify a dissociated partner 27 24 whose interest is being purchased against all partnership 27 25 liabilities, whether incurred before or after the 27 26 dissociation, except liabilities incurred by an act of the 27 27 dissociated partner under section 486.702. 27 28 5. If no agreement for the purchase of a dissociated 27 29 partner's interest is reached within one hundred twenty days 27 30 after a written demand for payment, the partnership shall pay, 27 31 or cause to be paid, in cash to the dissociated partner the 27 32 amount the partnership estimates to be the buyout price and 27 33 accrued interest, reduced by any offsets and accrued interest 27 34 under subsection 3. 27 35 6. If a deferred payment is authorized under subsection 8, 28 1 the partnership may tender a written offer to pay the amount 28 2 the partnership estimates to be the buyout price and accrued 28 3 interest, reduced by any offsets under subsection 3, stating 28 4 the time of payment, the amount and type of security for 28 5 payment, and the other terms and conditions of the obligation. 28 6 7. The payment or tender required by subsection 5 or 6 28 7 must be accompanied by all of the following: 28 8 a. A written statement of partnership assets and 28 9 liabilities as of the date of dissociation. 28 10 b. The latest available partnership balance sheet and 28 11 income statement, if any. 28 12 c. A written explanation of how the estimated amount of 28 13 the payment was calculated. 28 14 d. Written notice that the payment is in full satisfaction 28 15 of the obligation to purchase unless, within one hundred 28 16 twenty days after the written notice, the dissociated partner 28 17 commences an action to determine the buyout price, any offsets 28 18 under subsection 3, or other terms of the obligation to 28 19 purchase. 28 20 8. A partner who wrongfully dissociates before the 28 21 expiration of a definite term or the completion of a 28 22 particular undertaking is not entitled to payment of any 28 23 portion of the buyout price until the expiration of the term 28 24 or completion of the undertaking, unless the partner 28 25 establishes to the satisfaction of the court that earlier 28 26 payment will not cause undue hardship to the business of the 28 27 partnership. A deferred payment must be adequately secured 28 28 and bear interest. 28 29 9. A dissociated partner may maintain an action against 28 30 the partnership, pursuant to section 486.405, subsection 2, 28 31 paragraph "b", subparagraph (2), to determine the buyout price 28 32 of that partner's interest, any offsets under subsection 3, or 28 33 other terms of the obligation to purchase. The action must be 28 34 commenced within one hundred twenty days after the partnership 28 35 has tendered payment or an offer to pay or within one year 29 1 after written demand for payment if no payment or offer to pay 29 2 is tendered. The court shall determine the buyout price of 29 3 the dissociated partner's interest, any offset due under 29 4 subsection 3, and accrued interest, and enter judgment for any 29 5 additional payment or refund. If deferred payment is 29 6 authorized under subsection 8, the court shall also determine 29 7 the security for payment and other terms of the obligation to 29 8 purchase. The court may assess reasonable attorney's fees and 29 9 the fees and expenses of appraisers or other experts for a 29 10 party to the action, in amounts the court finds equitable, 29 11 against a party that the court finds acted arbitrarily, 29 12 vexatiously, or not in good faith. The finding may be based 29 13 on the partnership's failure to tender payment or an offer to 29 14 pay or to comply with subsection 7. 29 15 Sec. 34. NEW SECTION. 486.702 DISSOCIATED PARTNER'S 29 16 POWER TO BIND AND LIABILITY TO PARTNERSHIP. 29 17 1. For two years after a partner dissociates without 29 18 resulting in a dissolution and winding up of the partnership 29 19 business, the partnership, including a surviving partnership 29 20 under article 9, is bound by an act of the dissociated partner 29 21 which would have bound the partnership under section 486.301 29 22 before dissociation only if at the time of entering into the 29 23 transaction all of the following apply: 29 24 a. The other party reasonably believed that the 29 25 dissociated partner was then a partner. 29 26 b. The other party did not have notice of the partner's 29 27 dissociation. 29 28 c. The other party is not deemed to have had knowledge 29 29 under section 486.303, subsection 5, or notice under section 29 30 486.704, subsection 3. 29 31 2. A dissociated partner is liable to the partnership for 29 32 any damage caused to the partnership arising from an 29 33 obligation incurred by the dissociated partner after 29 34 dissociation for which the partnership is liable under 29 35 subsection 1. 30 1 Sec. 35. NEW SECTION. 486.703 DISSOCIATED PARTNER'S 30 2 LIABILITY TO OTHER PERSONS. 30 3 1. A partner's dissociation does not of itself discharge 30 4 the partner's liability for a partnership obligation incurred 30 5 before dissociation. A dissociated partner is not liable for 30 6 a partnership obligation incurred after dissociation, except 30 7 as otherwise provided in subsection 2. 30 8 2. A partner who dissociates without resulting in a 30 9 dissolution and winding up of the partnership business is 30 10 liable as a partner to the other party in a transaction 30 11 entered into by the partnership, or a surviving partnership 30 12 under article 9, within two years after the partner's 30 13 dissociation, only if the partner is liable for the obligation 30 14 under section 486.306 and at the time of entering into the 30 15 transaction all of the following apply: 30 16 a. The other party reasonably believed that the 30 17 dissociated partner was then a partner. 30 18 b. The other party did not have notice of the partner's 30 19 dissociation. 30 20 c. The other party is not deemed to have had knowledge 30 21 under section 486.303, subsection 5, or notice under section 30 22 486.704, subsection 3. 30 23 3. By agreement with the partnership creditor and the 30 24 partners continuing the business, a dissociated partner may be 30 25 released from liability for a partnership obligation. 30 26 4. A dissociated partner is released from liability for a 30 27 partnership obligation if a partnership creditor, with notice 30 28 of the partner's dissociation but without the partner's 30 29 consent, agrees to a material alteration in the nature or time 30 30 of payment of a partnership obligation. 30 31 Sec. 36. NEW SECTION. 486.704 STATEMENT OF DISSOCIATION. 30 32 1. A dissociated partner or the partnership may file a 30 33 statement of dissociation stating the name of the partnership 30 34 and that the partner is dissociated from the partnership. 30 35 2. A statement of dissociation is a limitation on the 31 1 authority of a dissociated partner for the purposes of section 31 2 486.303, subsections 4 and 5. 31 3 3. For the purposes of sections 486.702, subsection 1, 31 4 paragraph "c", and 486.703, subsection 2, paragraph "c", a 31 5 person not a partner is deemed to have notice of the 31 6 dissociation ninety days after the statement of dissociation 31 7 is filed. 31 8 Sec. 37. NEW SECTION. 486.705 CONTINUED USE OF 31 9 PARTNERSHIP NAME. 31 10 Continued use of a partnership name, or a dissociated 31 11 partner's name as part of a partnership name, by partners 31 12 continuing the business does not of itself make the 31 13 dissociated partner liable for an obligation of the partners 31 14 or the partnership continuing the business. 31 15 ARTICLE 8 31 16 WINDING UP PARTNERSHIP BUSINESS 31 17 Sec. 38. NEW SECTION. 486.801 EVENTS CAUSING DISSOLUTION 31 18 AND WINDING UP OF PARTNERSHIP BUSINESS. 31 19 A partnership is dissolved, and its business must be wound 31 20 up, only upon the occurrence of any of the following events: 31 21 1. In a partnership at will, the partnership's having 31 22 notice from a partner, other than a partner who is dissociated 31 23 under section 486.601, subsections 2 through 10, of that 31 24 partner's express will to withdraw as a partner, or on a later 31 25 date specified by the partner. 31 26 2. In a partnership for a definite term or particular 31 27 undertaking if any of the following occur or are present: 31 28 a. The expiration of ninety days after a partner's 31 29 dissociation by death or otherwise under section 486.601, 31 30 subsections 6 through 10, or wrongful dissociation under 31 31 section 486.602, subsection 2, unless before that time a 31 32 majority in interest of the remaining partners, including 31 33 partners who have rightfully dissociated pursuant to section 31 34 486.602, subsection 2, paragraph "b", subparagraph (1), agree 31 35 to continue the partnership. 32 1 b. The express will of all of the partners to wind up the 32 2 partnership business. 32 3 c. The expiration of the term or the completion of the 32 4 undertaking. 32 5 3. An event agreed to in the partnership agreement 32 6 resulting in the winding up of the partnership business. 32 7 4. An event that makes it unlawful for all or 32 8 substantially all of the business of the partnership to be 32 9 continued, but a cure of illegality within ninety days after 32 10 notice to the partnership of the event is effective 32 11 retroactively to the date of the event for purposes of this 32 12 section. 32 13 5. On application by a partner, a judicial determination 32 14 that concludes any of the following: 32 15 a. The economic purpose of the partnership is likely to be 32 16 unreasonably frustrated. 32 17 b. Another partner has engaged in conduct relating to the 32 18 partnership business which makes it not reasonably practicable 32 19 to carry on the business in partnership with that partner. 32 20 c. It is not otherwise reasonably practicable to carry on 32 21 the partnership business in conformity with the partnership 32 22 agreement. 32 23 6. On application by a transferee of a partner's 32 24 transferable interest, a judicial determination that it is 32 25 equitable to wind up the partnership business at any of the 32 26 following times: 32 27 a. After the expiration of the term or completion of the 32 28 undertaking, if the partnership was for a definite term or 32 29 particular undertaking at the time of the transfer or entry of 32 30 the charging order that gave rise to the transfer. 32 31 b. At any time, if the partnership was a partnership at 32 32 will at the time of the transfer or entry of the charging 32 33 order that gave rise to the transfer. 32 34 Sec. 39. NEW SECTION. 486.802 PARTNERSHIP CONTINUES 32 35 AFTER DISSOLUTION. 33 1 1. Subject to subsection 2, a partnership continues after 33 2 dissolution only for the purpose of winding up its business. 33 3 The partnership is terminated when the winding up of its 33 4 business is completed. 33 5 2. At any time after the dissolution of a partnership and 33 6 before the winding up of its business is completed, all of the 33 7 partners, including any dissociating partner other than a 33 8 wrongfully dissociating partner, may waive the right to have 33 9 the partnership's business wound up and the partnership 33 10 terminated. In that event all of the following apply: 33 11 a. The partnership resumes carrying on its business as if 33 12 dissolution had never occurred, and any liability incurred by 33 13 the partnership or a partner after the dissolution and before 33 14 the waiver is determined as if dissolution had never occurred. 33 15 b. The rights of a third party accruing under section 33 16 486.804, subsection 1, or arising out of conduct in reliance 33 17 on the dissolution before the third party knew or received a 33 18 notification of the waiver shall not be adversely affected. 33 19 Sec. 40. NEW SECTION. 486.803 RIGHT TO WIND UP 33 20 PARTNERSHIP BUSINESS. 33 21 1. After dissolution, a partner who has not wrongfully 33 22 dissociated may participate in winding up the partnership's 33 23 business, but on application of any partner, partner's legal 33 24 representative, or transferee, the court, for good cause 33 25 shown, may order judicial supervision of the winding up. 33 26 2. The legal representative of the last surviving partner 33 27 may wind up a partnership's business. 33 28 3. A person winding up a partnership's business may 33 29 preserve the partnership business or property as a going 33 30 concern for a reasonable time, prosecute and defend actions 33 31 and proceedings, whether civil, criminal, or administrative, 33 32 settle and close the partnership's business, dispose of and 33 33 transfer the partnership's property, discharge the 33 34 partnership's liabilities, distribute the assets of the 33 35 partnership pursuant to section 486.807, settle disputes by 34 1 mediation or arbitration, and perform other necessary acts. 34 2 Sec. 41. NEW SECTION. 486.804 PARTNER'S POWER TO BIND 34 3 PARTNERSHIP AFTER DISSOLUTION. 34 4 Subject to section 486.805, a partnership is bound by a 34 5 partner's act after dissolution that meets any of the 34 6 following criteria: 34 7 1. Is appropriate for winding up the partnership business. 34 8 2. Would have bound the partnership under section 486.301 34 9 before dissolution, if the other party to the transaction did 34 10 not have notice of the dissolution. 34 11 Sec. 42. NEW SECTION. 486.805 STATEMENT OF DISSOLUTION. 34 12 1. After dissolution, a partner who has not wrongfully 34 13 dissociated may file a statement of dissolution stating the 34 14 name of the partnership and that the partnership has dissolved 34 15 and is winding up its business. 34 16 2. A statement of dissolution cancels a filed statement of 34 17 partnership authority for the purposes of section 486.303, 34 18 subsection 4, and is a limitation on authority for the 34 19 purposes of section 486.303, subsection 5. 34 20 3. For the purposes of sections 486.301 and 486.804, a 34 21 person not a partner is deemed to have notice of the 34 22 dissolution and the limitation on the partners' authority as a 34 23 result of the statement of dissolution ninety days after it is 34 24 filed. 34 25 4. After filing and, if appropriate, recording a statement 34 26 of dissolution, a dissolved partnership may file and, if 34 27 appropriate, record a statement of partnership authority which 34 28 will operate with respect to a person not a partner as 34 29 provided in section 486.303, subsections 4 and 5, in any 34 30 transaction, whether or not the transaction is appropriate for 34 31 winding up the partnership business. 34 32 Sec. 43. NEW SECTION. 486.806 PARTNER'S LIABILITY TO 34 33 OTHER PARTNERS AFTER DISSOLUTION. 34 34 1. Except as otherwise provided in subsection 2 and 34 35 section 486.306, after dissolution a partner is liable to the 35 1 other partners for the partner's share of any partnership 35 2 liability incurred under section 486.804. 35 3 2. A partner who, with knowledge of the dissolution, 35 4 incurs a partnership liability under section 486.804, 35 5 subsection 2, by an act that is not appropriate for winding up 35 6 the partnership business is liable to the partnership for any 35 7 damage caused to the partnership arising from the liability. 35 8 Sec. 44. NEW SECTION. 486.807 SETTLEMENT OF ACCOUNTS AND 35 9 CONTRIBUTIONS AMONG PARTNERS. 35 10 1. In winding up a partnership's business, the assets of 35 11 the partnership, including the contributions of the partners 35 12 required by this section, must be applied to discharge its 35 13 obligations to creditors, including, to the extent permitted 35 14 by law, partners who are creditors. Any surplus must be 35 15 applied to pay in cash the net amount distributable to 35 16 partners in accordance with their right to distributions under 35 17 subsection 2. 35 18 2. Each partner is entitled to a settlement of all 35 19 partnership accounts upon winding up the partnership business. 35 20 In settling accounts among the partners, profits and losses 35 21 that result from the liquidation of the partnership assets 35 22 must be credited and charged to the partners' accounts. The 35 23 partnership shall make a distribution to a partner in an 35 24 amount equal to any excess of the credits over the charges in 35 25 the partner's account. A partner shall contribute to the 35 26 partnership an amount equal to any excess of the charges over 35 27 the credits in the partner's account, but excluding from the 35 28 calculation charges attributable to an obligation for which 35 29 the partner is not personally liable under section 486.306. 35 30 3. If a partner fails to contribute the full amount 35 31 required under subsection 2, all of the other partners shall 35 32 contribute, in the proportions in which those partners share 35 33 partnership losses, the additional amount necessary to satisfy 35 34 the partnership obligations for which they are personally 35 35 liable under section 486.306. A partner or partner's legal 36 1 representative may recover from the other partners any 36 2 contributions the partner makes to the extent the amount 36 3 contributed exceeds that partner's share of the partnership 36 4 obligations for which the partner is personally liable under 36 5 section 486.306. 36 6 4. After the settlement of accounts, each partner shall 36 7 contribute, in the proportion in which the partner shares 36 8 partnership losses, the amount necessary to satisfy 36 9 partnership obligations that were not known at the time of the 36 10 settlement and for which the partner is personally liable 36 11 under section 486.306. 36 12 5. The estate of a deceased partner is liable for the 36 13 partner's obligation to contribute to the partnership. 36 14 6. An assignee for the benefit of creditors of a 36 15 partnership or a partner, or a person appointed by a court to 36 16 represent creditors of a partnership or a partner, may enforce 36 17 a partner's obligation to contribute to the partnership. 36 18 ARTICLE 9 36 19 CONVERSIONS AND MERGERS 36 20 Sec. 45. NEW SECTION. 486.901 DEFINITIONS. 36 21 In this article: 36 22 1. "General partner" means a partner in a partnership and 36 23 a general partner in a limited partnership. 36 24 2. "Limited partner" means a limited partner in a limited 36 25 partnership. 36 26 3. "Limited partnership" means a limited partnership 36 27 created under chapter 487, predecessor law, or comparable law 36 28 of another jurisdiction. 36 29 4. "Partner" includes both a general partner and a limited 36 30 partner. 36 31 Sec. 46. NEW SECTION. 486.902 CONVERSION OF PARTNERSHIP 36 32 TO LIMITED PARTNERSHIP. 36 33 1. A partnership may be converted to a limited partnership 36 34 pursuant to this section. 36 35 2. The terms and conditions of a conversion of a 37 1 partnership to a limited partnership must be approved by all 37 2 of the partners or by a number or percentage specified for 37 3 conversion in the partnership agreement. 37 4 3. After the conversion is approved by the partners, the 37 5 partnership shall file a certificate of limited partnership in 37 6 the jurisdiction in which the limited partnership is to be 37 7 formed. The certificate must include all of the following: 37 8 a. A statement that the partnership was converted to a 37 9 limited partnership from a partnership. 37 10 b. Its former name. 37 11 c. A statement of the number of votes cast by the partners 37 12 for and against the conversion and, if the vote is less than 37 13 unanimous, the number or percentage required to approve the 37 14 conversion under the partnership agreement. 37 15 4. The conversion takes effect when the certificate of 37 16 limited partnership is filed or at any later date specified in 37 17 the certificate. 37 18 5. A general partner who becomes a limited partner as a 37 19 result of the conversion remains liable as a general partner 37 20 for an obligation incurred by the partnership before the 37 21 conversion takes effect. If the other party to a transaction 37 22 with the limited partnership reasonably believes when entering 37 23 the transaction that the limited partner is a general partner, 37 24 the limited partner is liable for an obligation incurred by 37 25 the limited partnership within ninety days after the 37 26 conversion takes effect. The limited partner's liability for 37 27 all other obligations of the limited partnership incurred 37 28 after the conversion takes effect is that of a limited partner 37 29 as provided in chapter 487. 37 30 Sec. 47. NEW SECTION. 486.903 CONVERSION OF LIMITED 37 31 PARTNERSHIP TO PARTNERSHIP. 37 32 1. A limited partnership may be converted to a partnership 37 33 pursuant to this section. 37 34 2. Notwithstanding a provision to the contrary in a 37 35 limited partnership agreement, the terms and conditions of a 38 1 conversion of a limited partnership to a partnership must be 38 2 approved by all of the partners. 38 3 3. After the conversion is approved by the partners, the 38 4 limited partnership shall cancel its certificate of limited 38 5 partnership. 38 6 4. The conversion takes effect when the certificate of 38 7 limited partnership is canceled. 38 8 5. A limited partner who becomes a general partner as a 38 9 result of the conversion remains liable only as a limited 38 10 partner for an obligation incurred by the limited partnership 38 11 before the conversion takes effect. Except as otherwise 38 12 provided in section 486.306, the partner is liable as a 38 13 general partner for an obligation of the partnership incurred 38 14 after the conversion takes effect. 38 15 Sec. 48. NEW SECTION. 486.904 EFFECT OF CONVERSION 38 16 ENTITY UNCHANGED. 38 17 1. A partnership or limited partnership that has been 38 18 converted pursuant to this article is for all purposes the 38 19 same entity that existed before the conversion. 38 20 2. When a conversion takes effect all of the following 38 21 apply: 38 22 a. All property owned by the converting partnership or 38 23 limited partnership remains vested in the converted entity. 38 24 b. All obligations of the converting partnership or 38 25 limited partnership continue as obligations of the converted 38 26 entity. 38 27 c. An action or proceeding pending against the converting 38 28 partnership or limited partnership may be continued as if the 38 29 conversion had not occurred. 38 30 Sec. 49. NEW SECTION. 486.905 MERGER OF PARTNERSHIPS. 38 31 1. Pursuant to a plan of merger approved as provided in 38 32 subsection 3, a partnership may be merged with one or more 38 33 partnerships or limited partnerships. 38 34 2. The plan of merger must set forth all of the following: 38 35 a. The name of each partnership or limited partnership 39 1 that is a party to the merger. 39 2 b. The name of the surviving entity into which the other 39 3 partnerships or limited partnerships will merge. 39 4 c. Whether the surviving entity is a partnership or a 39 5 limited partnership and the status of each partner. 39 6 d. The terms and conditions of the merger. 39 7 e. The manner and basis of converting the interests of 39 8 each party to the merger into interests or obligations of the 39 9 surviving entity, or into money or other property in whole or 39 10 part. 39 11 f. The street address of the surviving entity's chief 39 12 executive office. 39 13 3. The plan of merger must be approved as follows: 39 14 a. In the case of a partnership that is a party to the 39 15 merger, by all of the partners, or a number or percentage 39 16 specified for merger in the partnership agreement. 39 17 b. In the case of a limited partnership that is a party to 39 18 the merger, by the vote required for approval of a merger by 39 19 the law of the state or foreign jurisdiction in which the 39 20 limited partnership is organized and, in the absence of such a 39 21 specifically applicable law, by all of the partners, 39 22 notwithstanding a provision to the contrary in the partnership 39 23 agreement. 39 24 4. After a plan of merger is approved and before the 39 25 merger takes effect, the plan may be amended or abandoned as 39 26 provided in the plan. 39 27 5. The merger takes effect on the later of any of the 39 28 following: 39 29 a. The approval of the plan of merger by all parties to 39 30 the merger, as provided in subsection 3. 39 31 b. The filing of all documents required by law to be filed 39 32 as a condition to the effectiveness of the merger. 39 33 c. Any effective date specified in the plan of merger. 39 34 Sec. 50. NEW SECTION. 486.906 EFFECT OF MERGER. 39 35 1. When a merger takes effect all of the following apply: 40 1 a. The separate existence of every partnership or limited 40 2 partnership that is a party to the merger, other than the 40 3 surviving entity, ceases. 40 4 b. All property owned by each of the merged partnerships 40 5 or limited partnerships vests in the surviving entity. 40 6 c. All obligations of every partnership or limited 40 7 partnership that is a party to the merger become the 40 8 obligations of the surviving entity. 40 9 d. An action or proceeding pending against a partnership 40 10 or limited partnership that is a party to the merger may be 40 11 continued as if the merger had not occurred, or the surviving 40 12 entity may be substituted as a party to the action or 40 13 proceeding. 40 14 2. The secretary of state of this state is the agent for 40 15 service of process in an action or proceeding against a 40 16 surviving foreign partnership or limited partnership to 40 17 enforce an obligation of a domestic partnership or limited 40 18 partnership that is a party to a merger. The surviving entity 40 19 shall promptly notify the secretary of state of the mailing 40 20 address of its chief executive office and of any change of 40 21 address. Upon receipt of process, the secretary of state 40 22 shall mail a copy of the process to the surviving foreign 40 23 partnership or limited partnership. 40 24 3. A partner of the surviving partnership or limited 40 25 partnership is liable for all of the following: 40 26 a. All obligations of a party to the merger for which the 40 27 partner was personally liable before the merger. 40 28 b. All other obligations of the surviving entity incurred 40 29 before the merger by a party to the merger, but those 40 30 obligations may be satisfied only out of property of the 40 31 entity. 40 32 c. Except as otherwise provided in section 486.306, all 40 33 obligations of the surviving entity incurred after the merger 40 34 takes effect, but those obligations may be satisfied only out 40 35 of property of the entity if the partner is a limited partner. 41 1 4. If the obligations incurred before the merger by a 41 2 party to the merger are not satisfied out of the property of 41 3 the surviving partnership or limited partnership, the general 41 4 partners of that party immediately before the effective date 41 5 of the merger shall contribute the amount necessary to satisfy 41 6 that party's obligations to the surviving entity, in the 41 7 manner provided in section 486.807 or in chapter 487 or under 41 8 the law of the jurisdiction in which the party was formed, as 41 9 the case may be, as if the merged party were dissolved. 41 10 5. A partner of a party to a merger who does not become a 41 11 partner of the surviving partnership or limited partnership is 41 12 dissociated from the entity, of which that partner was a 41 13 partner, as of the date the merger takes effect. The 41 14 surviving entity shall cause the partner's interest in the 41 15 entity to be purchased under section 486.701 or another 41 16 statute specifically applicable to that partner's interest 41 17 with respect to a merger. The surviving entity is bound under 41 18 section 486.702 by an act of a general partner dissociated 41 19 under this subsection, and the partner is liable under section 41 20 486.703 for transactions entered into by the surviving entity 41 21 after the merger takes effect. 41 22 Sec. 51. NEW SECTION. 486.907 STATEMENT OF MERGER. 41 23 1. After a merger, the surviving partnership or limited 41 24 partnership may file a statement that one or more partnerships 41 25 or limited partnerships have merged into the surviving entity. 41 26 2. A statement of merger must contain all of the 41 27 following: 41 28 a. The name of each partnership or limited partnership 41 29 that is a party to the merger. 41 30 b. The name of the surviving entity into which the other 41 31 partnerships or limited partnership were merged. 41 32 c. The street address of the surviving entity's chief 41 33 executive office and of an office in this state, if any. 41 34 d. Whether the surviving entity is a partnership or a 41 35 limited partnership. 42 1 3. Except as otherwise provided in subsection 4, for the 42 2 purposes of section 486.302, property of the surviving 42 3 partnership or limited partnership which before the merger was 42 4 held in the name of another party to the merger is property 42 5 held in the name of the surviving entity upon filing a 42 6 statement of merger. 42 7 4. For the purposes of section 486.302, real property of 42 8 the surviving partnership or limited partnership which before 42 9 the merger was held in the name of another party to the merger 42 10 is property held in the name of the surviving entity upon 42 11 recording a certified copy of the statement of merger in the 42 12 office for recording transfers of that real property. 42 13 5. A filed and, if appropriate, recorded statement of 42 14 merger, executed and declared to be accurate pursuant to 42 15 section 486.105, subsection 3, stating the name of a 42 16 partnership or limited partnership that is a party to the 42 17 merger in whose name property was held before the merger and 42 18 the name of the surviving entity, but not containing all of 42 19 the other information required by subsection 2, operates with 42 20 respect to the partnerships or limited partnerships named to 42 21 the extent provided in subsections 3 and 4. 42 22 Sec. 52. NEW SECTION. 486.908 NONEXCLUSIVE. 42 23 This article is not exclusive. Partnerships or limited 42 24 partnerships may be converted or merged in any other manner 42 25 provided by law. 42 26 ARTICLE 10 42 27 LIMITED LIABILITY PARTNERSHIP 42 28 Sec. 53. NEW SECTION. 486.1001 STATEMENT OF 42 29 QUALIFICATION. 42 30 1. A partnership may become a limited liability 42 31 partnership pursuant to this section. 42 32 2. The terms and conditions on which a partnership becomes 42 33 a limited liability partnership must be approved by the vote 42 34 necessary to amend the partnership agreement except, in the 42 35 case of a partnership agreement that expressly considers 43 1 obligations to contribute to the partnership, by the vote 43 2 necessary to amend those provisions. 43 3 3. After the approval required by subsection 2, a 43 4 partnership may become a limited liability partnership by 43 5 filing a statement of qualification. The statement must 43 6 contain all of the following: 43 7 a. The name of the partnership. 43 8 b. The street address of the partnership's chief executive 43 9 office and, if different, the street address of an office in 43 10 this state, if any. 43 11 c. The address of a registered office and the name and 43 12 address of a registered agent for service of process in this 43 13 state, which the partnership is required to maintain as 43 14 provided in section 486.1211. 43 15 d. A statement that the partnership elects to be a limited 43 16 liability partnership. 43 17 e. A deferred effective date, if any. 43 18 4. The statement shall be executed by one or more partners 43 19 authorized to execute the statement on behalf of the 43 20 partnership. 43 21 5. The status of a partnership as a limited liability 43 22 partnership is effective on the later of the filing of the 43 23 statement or a date specified in the statement. The status 43 24 remains effective, regardless of changes in the partnership, 43 25 until the statement is canceled pursuant to section 486.105, 43 26 subsection 4. 43 27 6. The status of a partnership as a limited liability 43 28 partnership and the liability of its partners is not affected 43 29 by errors or later changes in the information required to be 43 30 contained in the statement of qualification under subsection 43 31 3. 43 32 7. The filing of a statement of qualification establishes 43 33 that a partnership has satisfied all conditions precedent to 43 34 the qualification of the partnership as a limited liability 43 35 partnership. 44 1 8. An amendment or cancellation of a statement of 44 2 qualification is effective when it is filed or on a deferred 44 3 effective date specified in the amendment or cancellation. 44 4 Sec. 54. NEW SECTION. 486.1002 NAME. 44 5 The name of a limited liability partnership must end with 44 6 "Registered Limited Liability Partnership", "Limited Liability 44 7 Partnership", "R.L.L.P.", "L.L.P.", "RLLP", or "LLP". 44 8 ARTICLE 11 44 9 FOREIGN LIMITED LIABILITY PARTNERSHIP 44 10 Sec. 55. NEW SECTION. 486.1101 LAW GOVERNING FOREIGN 44 11 LIMITED LIABILITY PARTNERSHIP. 44 12 1. The law under which a foreign limited liability 44 13 partnership is formed governs relations among the partners and 44 14 between the partners and the partnership and the liability of 44 15 partners for obligations of the partnership. 44 16 2. A foreign limited liability partnership may not be 44 17 denied a statement of foreign qualification by reason of any 44 18 difference between the law under which the partnership was 44 19 formed and the law of this state. 44 20 3. A statement of foreign qualification does not authorize 44 21 a foreign limited liability partnership to engage in any 44 22 business or exercise any power that a partnership may not 44 23 engage in or exercise in this state as a limited liability 44 24 partnership. 44 25 Sec. 56. NEW SECTION. 486.1102 STATEMENT OF FOREIGN 44 26 QUALIFICATION. 44 27 1. Before transacting business in this state, a foreign 44 28 limited liability partnership must file a statement of foreign 44 29 qualification. The statement must contain all of the 44 30 following: 44 31 a. The name of the foreign limited liability partnership 44 32 which satisfies the requirements of the state or other 44 33 jurisdiction under whose law it is formed and ends with 44 34 "Registered Limited Liability Partnership", "Limited Liability 44 35 Partnership", "R.L.L.P.", "L.L.P.", "RLLP", or "LLP". 45 1 b. The street address of the partnership's chief executive 45 2 office and, if different, the street address of an office of 45 3 the partnership in this state, if any. 45 4 c. If there is no office of the partnership in this state, 45 5 the name and street address of the partnership's agent for 45 6 service of process. 45 7 d. A deferred effective date, if any. 45 8 2. The agent of a foreign limited liability company for 45 9 service of process must be an individual who is a resident of 45 10 this state or other person authorized to do business in this 45 11 state. 45 12 3. The status of a partnership as a foreign limited 45 13 liability partnership is effective on the later of the filing 45 14 of the statement of foreign qualification or a date specified 45 15 in the statement. The status remains effective, regardless of 45 16 changes in the partnership, until it is canceled pursuant to 45 17 section 486.105, subsection 4. 45 18 4. An amendment or cancellation of a statement of foreign 45 19 qualification is effective when it is filed or on a deferred 45 20 effective date specified in the amendment or cancellation. 45 21 Sec. 57. NEW SECTION. 486.1103 EFFECT OF FAILURE TO 45 22 QUALIFY. 45 23 1. A foreign limited liability partnership transacting 45 24 business in this state may not maintain an action or 45 25 proceeding in this state unless it has in effect a statement 45 26 of foreign qualification. 45 27 2. The failure of a foreign limited liability partnership 45 28 to have in effect a statement of foreign qualification does 45 29 not impair the validity of a contract or act of the foreign 45 30 limited liability partnership or preclude it from defending an 45 31 action or proceeding in this state. 45 32 3. A limitation on personal liability of a partner is not 45 33 waived solely by transacting business in this state without a 45 34 statement of foreign qualification. 45 35 4. If a foreign limited liability partnership transacts 46 1 business in this state without a statement of foreign 46 2 qualification, the secretary of state is its agent for service 46 3 of process with respect to a right of action arising out of 46 4 the transaction of business in this state. 46 5 Sec. 58. NEW SECTION. 486.1104 ACTIVITIES NOT 46 6 CONSTITUTING TRANSACTING BUSINESS. 46 7 1. Activities of a foreign limited liability partnership 46 8 which do not constitute transacting business for the purpose 46 9 of this article include all of the following: 46 10 a. Maintaining, defending, or settling an action or 46 11 proceeding. 46 12 b. Holding meetings of its partners or carrying on any 46 13 other activity concerning its internal affairs. 46 14 c. Maintaining bank accounts. 46 15 d. Maintaining offices or agencies for the transfer, 46 16 exchange, and registration of the partnership's own securities 46 17 or maintaining trustees or depositories with respect to those 46 18 securities. 46 19 e. Selling through independent contracts. 46 20 f. Soliciting or obtaining orders, whether by mail or 46 21 through employees or agents or otherwise, if the orders 46 22 require acceptance outside this state before they become 46 23 contracts. 46 24 g. Creating or acquiring indebtedness, with or without a 46 25 mortgage, or other security interest in property. 46 26 h. Collecting debts or foreclosing mortgages or other 46 27 security interests in property securing the debts, and 46 28 holding, protecting, and maintaining property so acquired. 46 29 i. Conducting an isolated transaction that is completed 46 30 within thirty days and is not one in the course of similar 46 31 transactions. 46 32 j. Transacting business in interstate commerce. 46 33 2. For purposes of this article, the ownership in this 46 34 state of income-producing real property or tangible personal 46 35 property, other than property excluded under subsection 1, 47 1 constitutes transacting business in this state. 47 2 3. This section does not apply in determining the 47 3 contracts or activities that may subject a foreign limited 47 4 liability partnership to service of process, taxation, or 47 5 regulation under any other law of this state. 47 6 Sec. 59. NEW SECTION. 486.1105 ACTION BY ATTORNEY 47 7 GENERAL. 47 8 The attorney general may maintain an action to restrain a 47 9 foreign limited liability partnership from transacting 47 10 business in this state in violation of this article. 47 11 ARTICLE 12 47 12 FILING PROVISIONS 47 13 Sec. 60. NEW SECTION. 486.1201 FILING REQUIREMENTS. 47 14 1. A document shall satisfy the requirements of this 47 15 section, and of any other section that adds to or varies these 47 16 requirements, to be entitled to filing. 47 17 2. The document shall be filed in the office of the 47 18 secretary of state. 47 19 3. The document shall contain the information required by 47 20 this chapter. The document may contain other information as 47 21 well. 47 22 4. The document shall be typewritten or printed. The 47 23 typewritten or printed portion shall be black. Manually 47 24 signed photocopies, or other reproduced copies, including 47 25 facsimiles or other electronically or computer-generated 47 26 copies of typewritten or printed documents may be filed. 47 27 5. The document shall be in the English language. A 47 28 limited partnership name need not be in English if written in 47 29 English letters or arabic or roman numerals. 47 30 6. Except as otherwise provided in this chapter, the 47 31 document shall be executed by one of the following methods: 47 32 a. By two or more partners. 47 33 b. By a person authorized under this chapter, the 47 34 partnership agreement, or other law to execute the document. 47 35 c. If the partnership is in the hands of a receiver, 48 1 trustee, or other court-appointed fiduciary, by such receiver, 48 2 trustee, or fiduciary. 48 3 d. If the document is that of a registered agent, by the 48 4 registered agent, if the person is an individual, or by a 48 5 person authorized by the registered agent to execute the 48 6 document, if the registered agent is an entity. 48 7 7. The person executing the document shall sign it and 48 8 state beneath or opposite the person's signature, the person's 48 9 name and the capacity in which the person signs. The 48 10 secretary of state may accept for filing a document containing 48 11 a copy of a signature, however made. 48 12 8. If, pursuant to any provision of this chapter, the 48 13 secretary of state has prescribed a mandatory form for the 48 14 document, the document shall be in or on the prescribed form. 48 15 9. The document shall be delivered to the office of the 48 16 secretary of state for filing and shall be accompanied by the 48 17 correct filing fee. 48 18 10. The secretary of state may adopt rules for the 48 19 electronic filing of documents and the certification of 48 20 electronically filed documents. 48 21 Sec. 61. NEW SECTION. 486.1202 FEES. 48 22 1. The secretary of state shall collect fees for documents 48 23 described in this subsection which are delivered to the 48 24 secretary's office for filing as follows: 48 25 DOCUMENT FEE 48 26 a. Statement of qualification ....................... $ 50 48 27 b. Statement of foreign qualification ............... $100 48 28 c. Amendment to statement of qualification .......... $ 20 48 29 d. Amendment to statement of foreign qualification .. $ 20 48 30 e. Cancellation of statement of qualification ....... $ 20 48 31 f. Cancellation of statement of foreign 48 32 qualification ........................................... $ 20 48 33 g. Application for certificate of existence or 48 34 qualification ........................................... $ 5 48 35 h. Any other statement or document required or 49 1 permitted to be filed ................................... $ 5 49 2 2. The secretary of state shall collect a fee of five 49 3 dollars each time process is served on the secretary under 49 4 this chapter. The party to a proceeding causing service of 49 5 process is entitled to recover this fee as costs if the party 49 6 prevails in the proceeding. 49 7 3. The secretary of state shall collect fees for copying 49 8 and certifying the copy of any filed document relating to a 49 9 domestic or foreign partnership as follows: 49 10 a. One dollar a page for copying. 49 11 b. Five dollars for the certificate. 49 12 Sec. 62. NEW SECTION. 486.1203 EFFECTIVE TIME AND DATE 49 13 OF DOCUMENTS. 49 14 1. Except as provided in subsection 2 and section 49 15 486.1204, subsection 3, a document accepted for filing is 49 16 effective at the later of the following: 49 17 a. At the time of filing on the date it is filed, as 49 18 evidenced by the secretary of state's date and time 49 19 endorsement on the original document. 49 20 b. At the time specified in the document as its effective 49 21 time on the date it is filed. 49 22 2. A document may specify a delayed effective time and 49 23 date, and if it does so the document becomes effective at the 49 24 time and date specified. If a delayed effective date but no 49 25 time is specified, the document is effective at the close of 49 26 business on that date. A delayed effective date for a 49 27 document shall not be later than the ninetieth day after the 49 28 date it is filed. 49 29 Sec. 63. NEW SECTION. 486.1204 CORRECTING FILED 49 30 DOCUMENTS. 49 31 1. A partnership may correct a document filed by the 49 32 secretary of state if the document satisfies one or both of 49 33 the following: 49 34 a. The document contains an incorrect statement. 49 35 b. The document was defectively executed, attested, 50 1 sealed, verified, or acknowledged. 50 2 2. A document is corrected by complying with both of the 50 3 following: 50 4 a. By preparing a statement of correction that satisfies 50 5 all of the following: 50 6 (1) The statement describes the document, including its 50 7 filing date, or a copy of the document is attached to the 50 8 statement. 50 9 (2) The statement specifies the incorrect statement and 50 10 the reason it is incorrect or the manner in which the 50 11 execution was defective. 50 12 (3) The statement corrects the incorrect statement or 50 13 defective execution. 50 14 b. By delivering the statement to the secretary of state 50 15 for filing. 50 16 3. Statements of corrections are effective on the 50 17 effective date of the document they correct except as to 50 18 persons relying on the uncorrected document and adversely 50 19 affected by the correction. As to those persons, statements 50 20 of correction are effective when filed. 50 21 Sec. 64. NEW SECTION. 486.1205 FILING DUTY OF SECRETARY 50 22 OF STATE. 50 23 1. If a document delivered to the office of the secretary 50 24 of state for filing satisfies the requirements of section 50 25 486.1201, the secretary of state shall file it and issue any 50 26 necessary certificate. 50 27 2. The secretary of state files a document by stamping or 50 28 otherwise endorsing "filed", together with the secretary of 50 29 state's name and official title and the date and time of 50 30 receipt, on both the document and the receipt for the filing 50 31 fee. After filing a document, and except as provided in 50 32 sections 486.304 and 486.1213, the secretary of state shall 50 33 deliver the document, with the filing fee receipt, or 50 34 acknowledgment of receipt if no fee is required, attached, to 50 35 the domestic or foreign partnership or its representative. 51 1 3. If the secretary of state refuses to file a document, 51 2 the secretary of state shall return it to the domestic or 51 3 foreign partnership or its representative within ten days 51 4 after the document was received by the secretary of state, 51 5 together with a brief, written explanation of the reason for 51 6 the refusal. 51 7 4. The secretary of state's duty to file documents under 51 8 this section is ministerial. Filing or refusing to file a 51 9 document does not do any of the following: 51 10 a. Affect the validity or invalidity of the document in 51 11 whole or part. 51 12 b. Relate to the correctness or incorrectness of 51 13 information contained in the document. 51 14 c. Create a presumption that the document is valid or 51 15 invalid or that information contained in the document is 51 16 correct or incorrect. 51 17 Sec. 65. NEW SECTION. 486.1206 APPEAL FROM SECRETARY OF 51 18 STATE'S REFUSAL TO FILE DOCUMENT. 51 19 1. If the secretary of state refuses to file a document 51 20 delivered to the secretary of state's office for filing, the 51 21 domestic or foreign partnership may appeal the refusal, within 51 22 thirty days after the return of the document, to the district 51 23 court for the county in which the partnership's principal 51 24 office is located or, if none is located in this state, for 51 25 the county in which its registered office is or will be 51 26 located. The appeal is commenced by petitioning the court to 51 27 compel filing the document and by attaching to the petition 51 28 the document and the secretary of state's explanation of the 51 29 refusal to file. 51 30 2. The court may summarily order the secretary of state to 51 31 file the document or take other action the court considers 51 32 appropriate. 51 33 3. The court's final decision may be appealed as in other 51 34 civil proceedings. 51 35 Sec. 66. NEW SECTION. 486.1207 EVIDENTIARY EFFECT OF 52 1 COPY OF FILED DOCUMENT. 52 2 A certificate attached to a copy of a document filed by the 52 3 secretary of state, bearing the secretary of state's 52 4 signature, which may be in facsimile, and the seal of the 52 5 secretary of state, is conclusive evidence that the original 52 6 document is on file with the secretary of state. 52 7 Sec. 67. NEW SECTION. 486.1208 CERTIFICATES ISSUED BY 52 8 SECRETARY OF STATE. 52 9 1. The secretary of state shall issue to any person, upon 52 10 request, a certificate that sets forth any facts recorded in 52 11 the office of the secretary of state. 52 12 2. A certificate issued by the secretary of state may be 52 13 relied upon, subject to any qualification stated in the 52 14 certificate, as prima facie evidence of the facts set forth in 52 15 the certificate. 52 16 Sec. 68. NEW SECTION. 486.1209 PENALTY FOR SIGNING FALSE 52 17 DOCUMENT. 52 18 1. A person commits an offense if that person signs a 52 19 document the person knows is false in any material respect 52 20 with intent that the document be delivered to the secretary of 52 21 state for filing. 52 22 2. An offense under this section is a serious misdemeanor 52 23 punishable by a fine not to exceed one thousand dollars. 52 24 Sec. 69. NEW SECTION. 486.1210 SECRETARY OF STATE 52 25 POWERS. 52 26 The secretary of state has the power reasonably necessary 52 27 to perform the duties required of the secretary of state by 52 28 this chapter. 52 29 Sec. 70. NEW SECTION. 486.1211 REGISTERED OFFICE AND 52 30 REGISTERED AGENT. 52 31 Each partnership that is qualified under section 486.1001 52 32 shall continuously maintain in this state the following: 52 33 1. A registered office. 52 34 2. A registered agent, who is one of the following: 52 35 a. An individual who resides in this state and whose 53 1 business office is identical with the registered office. 53 2 b. A domestic corporation whose business office is 53 3 identical with the registered office. 53 4 c. A foreign corporation authorized to transact business 53 5 in this state whose business office is identical with the 53 6 registered office. 53 7 Sec. 71. NEW SECTION. 486.1212 CHANGE OF REGISTERED 53 8 OFFICE OR REGISTERED AGENT. 53 9 1. A partnership may change its registered office or 53 10 registered agent by delivering to the secretary of state for 53 11 filing a statement of change that sets forth all of the 53 12 following: 53 13 a. The name of the partnership. 53 14 b. The street address of its current registered office. 53 15 c. If the registered office is to be changed, the street 53 16 address of the new registered office. 53 17 d. The name of its current registered agent. 53 18 e. If the registered agent is to be changed, the name of 53 19 the new registered agent and the new registered agent's 53 20 written consent to the appointment, either on the statement of 53 21 change or in an accompanying document. 53 22 f. That, after the change or changes are made, the street 53 23 addresses of its registered office and of the business office 53 24 of its registered agent will be identical. 53 25 2. If a registered agent changes the street address of the 53 26 registered agent's business office, the registered agent may 53 27 change the street address of the registered office of any 53 28 partnership for which the registered agent is the registered 53 29 agent by giving written notice to the partnership of the 53 30 change and executing, either manually or in facsimile, and 53 31 delivering to the secretary of state for filing a statement of 53 32 change that complies with the requirements of subsection 1 and 53 33 recites that notice of the change has been given to the 53 34 partnership. 53 35 Sec. 72. NEW SECTION. 486.1213 RESIGNATION OF REGISTERED 54 1 AGENT. 54 2 1. The registered agent of a partnership may resign the 54 3 agency by delivering to the secretary of state for filing a 54 4 statement of resignation, which shall be accompanied by two 54 5 exact or conformed copies of such statement. The statement of 54 6 resignation may include a statement that the registered office 54 7 is also discontinued. 54 8 2. After filing the statement of resignation, the 54 9 secretary of state shall deliver one copy to the registered 54 10 office of the partnership and the other copy to the chief 54 11 executive office of the partnership. 54 12 3. The agency appointment is terminated, and the 54 13 registered office discontinued if so provided, on the thirty- 54 14 first day after the date on which the statement of resignation 54 15 was filed. 54 16 Sec. 73. NEW SECTION. 486.1214 SERVICE ON PARTNERSHIP. 54 17 1. A partnership's registered agent is the partnership's 54 18 agent for service of any process, notice, or demand required 54 19 or permitted by law to be served on the partnership. 54 20 2. If a partnership has no registered agent, or the 54 21 registered agent cannot with reasonable diligence be served, 54 22 the partnership may be served by registered or certified mail, 54 23 return receipt requested, addressed to the partnership at its 54 24 chief executive office. Service is perfected under this 54 25 subsection at the earliest of the following: 54 26 a. The date the partnership receives the process, notice, 54 27 or demand. 54 28 b. The date shown on the return receipt, if signed on 54 29 behalf of the partnership. 54 30 c. Five days after mailing. 54 31 3. This section does not prescribe the only means, or 54 32 necessarily the required means, of serving a partnership. 54 33 ARTICLE 13 54 34 MISCELLANEOUS PROVISIONS 54 35 Sec. 74. NEW SECTION. 486.1301 UNIFORMITY OF APPLICATION 55 1 AND CONSTRUCTION. 55 2 This chapter shall be applied and construed to effectuate 55 3 its general purpose to make uniform the law with respect to 55 4 the subject of this chapter among states enacting it. 55 5 Sec. 75. NEW SECTION. 486.1302 SHORT TITLE. 55 6 This chapter may be cited as the "Uniform Partnership Act". 55 7 Sec. 76. SEVERABILITY CLAUSE. If any provision of this 55 8 chapter or its application to any person or circumstance is 55 9 held invalid, the invalidity does not affect other provisions 55 10 or applications of this chapter which can be given effect 55 11 without the invalid provision or application, and to this end 55 12 the provisions of this chapter are severable. 55 13 Sec. 77. SAVINGS CLAUSE. This Act does not affect an 55 14 action or proceeding commenced or right accrued before this 55 15 Act takes effect. 55 16 Sec. 78. Chapter 486, Code and Code Supplement 1997, is 55 17 repealed effective January 1, 2001. 55 18 Sec. 79. APPLICABILITY. 55 19 1. Prior to January 1, 2001, this Act applies to a 55 20 partnership formed as follows: 55 21 a. On or after January 1, 1999, except a partnership that 55 22 is continuing the business of a dissolved partnership under 55 23 section 486.41. 55 24 b. Prior to January 1, 2001, if such partnership elects, 55 25 as provided in subsection 3, to be governed by this Act. 55 26 2. On or after January 1, 2001, this Act applies to all 55 27 partnerships. 55 28 3. Prior to January 1, 2001, a partnership, in the manner 55 29 provided in its partnership agreement or by law for amending 55 30 the partnership agreement, may voluntarily elect to be 55 31 governed by this Act. The provisions of this Act relating to 55 32 the liability of the partnerships' partners to third parties 55 33 apply to limit those partners' liability to a third party who 55 34 had done business with the partnership within one year before 55 35 the partnership's election to be governed by this Act only if 56 1 the third party knows or has received a notification of the 56 2 partnership's election to be governed by this Act. 56 3 Sec. 80. CODE EDITOR DIRECTIVE. In order to distinguish 56 4 between chapter 486, Code and Code Supplement 1997, which is 56 5 not repealed until January 1, 2001, and which will appear in 56 6 Code 1999, and the new sections of chapter 486 which are 56 7 created by this Act, which are effective January 1, 1999, and 56 8 which will also appear in Code 1999, the Code editor shall 56 9 codify the new sections of chapter 486, as enacted by this 56 10 Act, as a new chapter 486A. 56 11 Sec. 81. EFFECTIVE DATE. Section 80 of this Act, being 56 12 deemed of immediate importance, takes effect upon enactment. 56 13 Sec. 82. EFFECTIVE DATE. This Act takes effect January 1, 56 14 1999. 56 15 56 16 56 17 56 18 MARY E. KRAMER 56 19 President of the Senate 56 20 56 21 56 22 56 23 RON J. CORBETT 56 24 Speaker of the House 56 25 56 26 I hereby certify that this bill originated in the Senate and 56 27 is known as Senate File 2311, Seventy-seventh General Assembly. 56 28 56 29 56 30 56 31 MARY PAT GUNDERSON 56 32 Secretary of the Senate 56 33 Approved , 1998 56 34 56 35 57 1 57 2 TERRY E. BRANSTAD 57 3 Governor
Text: SF02310 Text: SF02312 Text: SF02300 - SF02399 Text: SF Index Bills and Amendments: General Index Bill History: General Index
© 1998 Cornell College and League of Women Voters of Iowa
Comments about this site or page?
webmaster@legis.iowa.gov.
Please remember that the person listed above does not vote on bills. Direct all comments concerning legislation to State Legislators.
Last update: Wed Jul 1 13:48:14 CDT 1998
URL: /DOCS/GA/77GA/Legislation/SF/02300/SF02311/980513.html
jhf