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