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Bills and Amendments: General Index     Bill History: General Index

Senate Study Bill 209

Bill Text

PAG LIN
  1  1    Section 1.  Section 487.101, subsections 1 and 6, Code
  1  2 1997, are amended to read as follows:
  1  3    1.  "Certificate of limited partnership" means the
  1  4 certificate referred to in section 487.201, and the
  1  5 certificate as amended or restated.
  1  6    6.  "Limited partner" means a person who has been admitted
  1  7 to a limited partnership as a limited partner in accordance
  1  8 with the partnership agreement and named in the certificate of
  1  9 limited partnership as a limited partner.
  1 10    Sec. 2.  Section 487.101, Code 1997, is amended by adding
  1 11 the following new subsections:
  1 12    NEW SUBSECTION.  11.  "Person" means as defined in section
  1 13 4.1.
  1 14    NEW SUBSECTION.  12.  "State" means a state, territory, or
  1 15 possession of the United States, the District of Columbia, or
  1 16 the Commonwealth of Puerto Rico.
  1 17    Sec. 3.  Section 487.102, subsection 4, Code 1997, is
  1 18 amended to read as follows:
  1 19    4.  Shall be distinguishable upon the records of the
  1 20 secretary of state from the name of a corporation, limited
  1 21 liability company, or limited partnership organized under the
  1 22 law of this state or licensed or registered as a foreign
  1 23 corporation, foreign limited liability company, or foreign
  1 24 limited partnership in this state or a name the exclusive
  1 25 right to which is, at the time, reserved in the manner
  1 26 provided in this chapter, without the written consent of the
  1 27 corporation, limited liability company, or limited
  1 28 partnership, which consent shall be filed with the secretary
  1 29 of state, and provided the name is not identical.
  1 30    Sec. 4.  Section 487.102, subsection 3, Code 1997, is
  1 31 amended by striking the subsection.
  1 32    Sec. 5.  Section 487.104, subsection 3, Code 1997, is
  1 33 amended to read as follows:
  1 34    3.  An agent for service of process may resign as agent
  1 35 upon filing and recording in accordance with section 487.206
  2  1 487.108 a written notice of resignation, executed in
  2  2 duplicate, with the secretary of state.  The secretary of
  2  3 state shall forthwith mail a copy of the resignation to the
  2  4 limited partnership at its principal place of business.  The
  2  5 appointment of the agent terminates upon the expiration of
  2  6 thirty days after receipt of the notice by the secretary of
  2  7 state.
  2  8    Sec. 6.  Section 487.105, Code 1997, is amended to read as
  2  9 follows:
  2 10    487.105  RECORDS TO BE KEPT.
  2 11    A limited partnership shall keep at the office required
  2 12 under section 487.104, subsection 1, all of the following:
  2 13    1.  A current list of the full name and last known business
  2 14 address of each partner separately identifying the general
  2 15 partners and the limited partners, each list being in
  2 16 alphabetical order.
  2 17    2.  A copy of the certificate of limited partnership and
  2 18 all amendments to the certificate certificates of amendment to
  2 19 the certificate of limited partnership, together with any
  2 20 executed copies of any powers of attorney pursuant to which a
  2 21 any certificate or amendment has been executed.
  2 22    3.  Copies of the limited partnership's federal, state, and
  2 23 local income tax returns and reports, if any, for the three
  2 24 most recent years.
  2 25    4.  Copies of any currently effective written partnership
  2 26 agreements in effect and of any financial statements of the
  2 27 limited partnership for the three most recent years.
  2 28    Any partner may inspect and copy the records required to be
  2 29 kept under subsections 1 to 4 provided that the partner's
  2 30 request to inspect and copy is reasonable and done at the
  2 31 partner's expense.
  2 32    5.  Unless contained in a written partnership agreement, a
  2 33 writing setting out all of the following:
  2 34    a.  The amount of cash and a description and statement of
  2 35 the agreed value of the other property or services contributed
  3  1 by each partner and which each partner has agreed to
  3  2 contribute.
  3  3    b.  The times at which or events on the happening of which
  3  4 any additional contributions agreed to be made by each partner
  3  5 are to be made.
  3  6    c.  Any right of a partner to receive, or of a general
  3  7 partner to make, distributions to a partner which include a
  3  8 return of all or any part of the partner's contribution.
  3  9    d.  Any events upon the happening of which the limited
  3 10 partnership is to be dissolved and its affairs wound up.
  3 11    Records kept under this section are subject to inspection
  3 12 and copying at the reasonable request and at the expense of
  3 13 any partner during ordinary business hours.
  3 14    Sec. 7.  NEW SECTION.  487.108  FILING REQUIREMENTS.
  3 15    1.  A document shall satisfy the requirements of this
  3 16 section, and of any other section that adds to or varies these
  3 17 requirements, to be entitled to filing.
  3 18    2.  The document shall be filed in the office of the
  3 19 secretary of state.
  3 20    3.  The document shall contain the information required by
  3 21 this chapter.  It may contain other information as well.
  3 22    4.  The document shall be typewritten or printed.  The
  3 23 typewritten or printed portion shall be black.  Manually
  3 24 signed photocopies, or other reproduced copies, including
  3 25 facsimiles or other electronically or computer-generated
  3 26 copies of typewritten or printed documents, may be filed.
  3 27    5.  The document shall be in the English language.  A
  3 28 limited partnership name need not be in English if written in
  3 29 English letters or Arabic or Roman numerals.
  3 30    6.  Except as provided in section 487.205, the document
  3 31 shall be executed by one of the following methods:
  3 32    a.  If a domestic limited partnership, the documents shall
  3 33 be executed by all of its general partners.
  3 34    b.  If a foreign limited partnership, the document shall be
  3 35 subscribed and sworn to by a general partner.
  4  1    c.  If the general partner is in the hands of a receiver,
  4  2 trustee, or other court-appointed fiduciary, by that
  4  3 fiduciary.
  4  4    7.  The person executing the document shall sign it and
  4  5 state beneath or opposite the person's signature, the person's
  4  6 name and the capacity in which the person signs.  The
  4  7 secretary of state may accept for filing a document containing
  4  8 a copy of a signature, however made.
  4  9    8.  If, pursuant to any provision of this chapter, the
  4 10 secretary of state has prescribed a mandatory form for the
  4 11 document, the document shall be in or on the prescribed form.
  4 12    9.  The document shall be delivered to the office of the
  4 13 secretary of state for filing and shall be accompanied by the
  4 14 correct filing fee.
  4 15    10.  The secretary of state may adopt rules for the
  4 16 electronic filing of documents and the certification of
  4 17 electronically filed documents.
  4 18    Sec. 8.  NEW SECTION.  487.109  FEES.
  4 19    1.  The secretary of state shall collect the following fees
  4 20 when the documents described in this subsection are delivered
  4 21 to the secretary's office for filing:  
  4 22    a.  Certificate of limited partnership ................. $100
  4 23    b.  Application for registration of foreign limited partner-
  4 24 ship and also issuance of a certificate of registration to
  4 25 transact business in this state ........................... $100
  4 26    c.  Amendment to certificate of limited partnership .... $ 20
  4 27    d.  Amendment to application for registration of foreign
  4 28 limited partnership ....................................... $ 20
  4 29    e.  Cancellation of certificate of limited 
  4 30 partnership ............................................... $ 20
  4 31    f.  Cancellation of registration of foreign limited partner-
  4 32 ship ...................................................... $ 20
  4 33    g.  A consent required to be filed under this chapter .. $ 20
  4 34    h.  Application to reserve a limited partnership name .. $ 10
  4 35    i.  A notice of transfer of reservation of name ........ $ 10
  5  1    j.  A notice of resignation of agent for service of
  5  2 process ................................................... $  5
  5  3    k.  Articles of correction ............................. $  5
  5  4    l.  Application for certificate of existence or regis-
  5  5 tration ................................................... $  5
  5  6    m.  Any other document required or permitted to be
  5  7 filed ..................................................... $  5
  5  8    2.  The secretary of state shall collect a fee of five
  5  9 dollars each time process is served on the secretary under
  5 10 this chapter.  The party to a proceeding causing service of
  5 11 process is entitled to recover this fee as costs if the party
  5 12 prevails in the proceeding.
  5 13    3.  The secretary of state shall collect the following fees
  5 14 for copying and certifying the copy of any filed document
  5 15 relating to a domestic or foreign corporation:
  5 16    a.  One dollar per page for copying.
  5 17    b.  Five dollars for the certificate.
  5 18    Sec. 9.  NEW SECTION.  487.110  EFFECTIVE TIME AND DATE OF
  5 19 DOCUMENTS.
  5 20    1.  Except as provided in subsection 2 and section 487.112,
  5 21 subsection 3, a document accepted for filing is effective at
  5 22 the later of the following times:
  5 23    a.  At the time of filing on the date it is filed, as
  5 24 evidenced by the secretary of state's date and time
  5 25 endorsement on the original document.
  5 26    b.  At the time specified in the document as its effective
  5 27 time on the date it is filed.
  5 28    2.  A document may specify a delayed effective time and
  5 29 date, and if it does so the document becomes effective at the
  5 30 time and date specified.  If a delayed effective date but no
  5 31 time is specified, the document is effective at the close of
  5 32 business on that date.  A delayed effective date for a
  5 33 document shall not be later than the ninetieth day after the
  5 34 date it is filed.
  5 35    Sec. 10.  NEW SECTION.  487.111  CORRECTING FILED
  6  1 DOCUMENTS.
  6  2    1.  A domestic or foreign limited partnership may correct a
  6  3 document filed by the secretary of state if the document
  6  4 satisfies one or both of the following requirements:
  6  5    a.  Contains an incorrect statement.
  6  6    b.  Was defectively executed, attested, sealed, verified,
  6  7 or acknowledged.
  6  8    2.  A document is corrected by preparing articles of
  6  9 correction that satisfy all of the following requirements:
  6 10    a.  Describe the document, including its filing date, or
  6 11 attach a copy of it to the articles.
  6 12    b.  Specify the incorrect statement and the reason it is
  6 13 incorrect or the manner in which the execution was defective.
  6 14    c.  Correct the incorrect statement or defective execution.
  6 15    3.  Articles of correction are effective on the effective
  6 16 date of the document they correct except as to persons relying
  6 17 on the uncorrected document and adversely affected by the
  6 18 correction.  As to those persons, articles of correction are
  6 19 effective when filed.
  6 20    Sec. 11.  NEW SECTION.  487.112  FILING DUTY OF SECRETARY
  6 21 OF STATE.
  6 22    1.  If a document delivered to the office of the secretary
  6 23 of state for filing satisfies the requirements of section
  6 24 487.108, the secretary of state shall file it and issue any
  6 25 necessary certificate.
  6 26    2.  The secretary of state files a document by stamping or
  6 27 otherwise endorsing "filed", together with the secretary's
  6 28 name and official title and the date and time of receipt, on
  6 29 both the document and the receipt for the filing fee.  After
  6 30 filing a document, and except as provided in section 487.104A,
  6 31 subsection 3, and section 487.909, the secretary of state
  6 32 shall deliver the document, with the filing fee receipt, or
  6 33 acknowledgment of receipt if no fee is required, attached to
  6 34 the domestic or foreign limited partnership or its
  6 35 representative.
  7  1    3.  If the secretary of state refuses to file a document,
  7  2 the secretary of state shall return it to the domestic or
  7  3 foreign limited partnership or its representative within ten
  7  4 days after the document was received by the secretary of
  7  5 state, together with a brief, written explanation of the
  7  6 reason for the refusal.
  7  7    4.  The secretary of state's duty to file documents under
  7  8 this section is ministerial.  Filing or refusing to file a
  7  9 document does not do any of the following:
  7 10    a.  Affect the validity or invalidity of the document in
  7 11 whole or part.
  7 12    b.  Relate to the correctness or incorrectness of
  7 13 information contained in the document.
  7 14    c.  Create a presumption that the document is valid or
  7 15 invalid or that information contained in the document is
  7 16 correct or incorrect.
  7 17    Sec. 12.  NEW SECTION.  487.113  APPEAL FROM SECRETARY OF
  7 18 STATE'S REFUSAL TO FILE DOCUMENT.
  7 19    1.  If the secretary of state refuses to file a document
  7 20 delivered to the secretary's office for filing, the domestic
  7 21 or foreign limited partnership may appeal the refusal, within
  7 22 thirty days after the return of the document, to the district
  7 23 court for the county in which the limited partnership's
  7 24 principal office or, if none in this state, its registered
  7 25 office is or will be located.  The appeal is commenced by
  7 26 petitioning the court to compel filing the document and by
  7 27 attaching to the petition the document and the secretary of
  7 28 state's explanation of the refusal to file.
  7 29    2.  The court may summarily order the secretary of state to
  7 30 file the document or take other action the court considers
  7 31 appropriate.
  7 32    3.  The court's final decision may be appealed as in other
  7 33 civil proceedings.
  7 34    Sec. 13.  NEW SECTION.  487.114  EVIDENTIARY EFFECT OF COPY
  7 35 OF FILED DOCUMENT.
  8  1    A certificate attached to a copy of a document filed by the
  8  2 secretary of state, bearing the secretary of state's
  8  3 signature, which may be in facsimile, and the seal of the
  8  4 secretary of state, is conclusive evidence that the original
  8  5 document is on file with the secretary of state.
  8  6    Sec. 14.  NEW SECTION.  487.115  CERTIFICATE OF EXISTENCE.
  8  7    1.  Anyone may apply to the secretary of state to furnish a
  8  8 certificate of existence for a domestic limited partnership or
  8  9 a certificate of registration for a foreign limited
  8 10 partnership.
  8 11    2.  A certificate of existence or a certificate of
  8 12 registration shall set forth all of the following:
  8 13    a.  The domestic limited partnership's name or the foreign
  8 14 limited partnership's name used in this state.
  8 15    b.  That one of the following apply:
  8 16    (1)  If it is a domestic limited partnership, that it is
  8 17 duly organized under the law of this state, the date of its
  8 18 organization, and the period of its duration.
  8 19    (2)  If it is a foreign limited partnership, that it is
  8 20 authorized to transact business in this state.
  8 21    c.  That all fees required by this chapter have been paid.
  8 22    d.  That a certificate of cancellation has not been filed.
  8 23    e.  Other facts of record in the office of the secretary of
  8 24 state that may be requested by the applicant.
  8 25    3.  Subject to any qualification stated in the certificate,
  8 26 a certificate of existence or certificate of registration
  8 27 issued by the secretary of state may be relied upon as
  8 28 conclusive evidence that the domestic or foreign limited
  8 29 partnership is in existence or is registered to transact
  8 30 business in this state.
  8 31    Sec. 15.  NEW SECTION.  487.116  PENALTY FOR SIGNING FALSE
  8 32 DOCUMENT.
  8 33    1.  A person commits an offense if that person signs a
  8 34 document the person knows is false in any material respect
  8 35 with intent that the document be delivered to the secretary of
  9  1 state for filing.
  9  2    2.  An offense under this section is a serious misdemeanor
  9  3 punishable by a fine of not to exceed one thousand dollars.
  9  4    Sec. 16.  NEW SECTION.  487.117  SECRETARY OF STATE –
  9  5 POWERS.
  9  6    The secretary of state has the power reasonably necessary
  9  7 to perform the duties required of the secretary of state by
  9  8 this chapter.
  9  9    Sec. 17.  Section 487.201, subsection 1, Code 1997, is
  9 10 amended to read as follows:
  9 11    1.  In order to form a limited partnership, two or more
  9 12 persons shall execute a certificate of limited partnership.
  9 13 The certificate shall be must be executed and filed in the
  9 14 office of the secretary of state and set forth all of the
  9 15 following.  The certificate shall set forth all of the
  9 16 following:
  9 17    a.  The name of the limited partnership.
  9 18    b.  The general character of its business.
  9 19    c. b.  The address of the office and the name and address
  9 20 of the agent for service of process required to be maintained
  9 21 by section 487.104, subsection 1, and the address of its
  9 22 principal place of business.
  9 23    d. c.  The name and the business address of each general
  9 24 partner, specifying separately the general partners and
  9 25 limited partners.
  9 26    e.  The amount of cash and a description and statement of
  9 27 the agreed value of the other property or services contributed
  9 28 by each partner and which each partner has agreed to
  9 29 contribute in the future.
  9 30    f.  The times at which or events on the happening of which
  9 31 any additional contributions agreed to be made by each partner
  9 32 are to be made.
  9 33    g.  A power of a limited partner to grant the right to
  9 34 become a limited partner to an assignee of any part of the
  9 35 partner's partnership interest, and the terms and conditions
 10  1 of the power.
 10  2    h.  If agreed upon, the time at which or the events on the
 10  3 happening of which a partner may withdraw from the limited
 10  4 partnership and the amount of, or the method of determining
 10  5 the amount of, the distribution to which the partner may be
 10  6 entitled respecting the partnership interest, and the terms
 10  7 and conditions of the termination and distribution.
 10  8    i.  A right of a partner to receive distributions of
 10  9 property, including cash from the limited partnership.
 10 10    j.  A right of a partner to receive, or of a general
 10 11 partner to make, distributions to a partner which include a
 10 12 return of all or any part of the partner's contribution.
 10 13    k.  A time at which, or an event upon the happening of
 10 14 which,
 10 15    d.  The latest date upon which the limited partnership is
 10 16 to be dissolved and its affairs wound up dissolve.
 10 17    l.  A right of the remaining general partners to continue
 10 18 the business on the happening of an event of withdrawal of a
 10 19 general partner.
 10 20    m. e.  Other Any other matters the general partners
 10 21 determine to include in the certificate.
 10 22    Sec. 18.  Section 487.202, Code 1997, is amended to read as
 10 23 follows:
 10 24    487.202  AMENDMENT TO CERTIFICATE.
 10 25    1.  A certificate of limited partnership is amended by
 10 26 filing a certificate of amendment to the certificate of
 10 27 limited partnership in the office of the secretary of state.
 10 28 The certificate of amendment shall set forth all of the
 10 29 following:
 10 30    a.  The name of the limited partnership.
 10 31    b.  The date of filing the certificate of limited
 10 32 partnership.
 10 33    c.  The amendment to the certificate of limited
 10 34 partnership.
 10 35    2.  Except as provided in subsection 5, within Within
 11  1 thirty days after the happening of any of the following
 11  2 events, an amendment to a certificate of limited partnership
 11  3 reflecting the occurrence of the event shall be filed:
 11  4    a.  A change in the amount or character of the contribution
 11  5 of a partner, or in a partner's obligation to make a
 11  6 contribution.
 11  7    b. a.  The admission of a new general partner.
 11  8    b.  The withdrawal of a general partner.
 11  9    c.  The continuation of the business under section 487.801
 11 10 after an event of withdrawal of a general partner.
 11 11    3.  A general partner who becomes aware that a any
 11 12 statement in a certificate of limited partnership was false
 11 13 when made or that any arrangements or other facts described
 11 14 have changed, making the certificate inaccurate in any
 11 15 respect, shall promptly amend the certificate.  An amendment
 11 16 to show the admission of or a change of address of a limited
 11 17 partner shall be filed within twelve months of the admission
 11 18 or change of address.
 11 19    4.  A certificate of limited partnership may be amended at
 11 20 any time for any other proper purpose the general partners
 11 21 determine.
 11 22    5.  An amendment is not required to reflect distributions
 11 23 made pursuant to rights described in section 487.201,
 11 24 subsection 1, paragraph "j".
 11 25    6. 5.  A limited partner person is not liable because an
 11 26 amendment to a certificate of limited partnership has not been
 11 27 filed to reflect the occurrence of an any event referred to in
 11 28 subsection 2 if the amendment is filed within the thirty-day
 11 29 period specified in subsection 2.
 11 30    6.  A restated certificate of limited partnership may be
 11 31 executed and filed in the same manner as a certificate of
 11 32 amendment.  The restated certificate must contain the
 11 33 information required in section 487.201 and may set forth any
 11 34 other provision consistent with law.
 11 35    Sec. 19.  Section 487.204, subsection 1, Code 1997, is
 12  1 amended to read as follows:
 12  2    1.  Each certificate required by this chapter to be filed
 12  3 in the office of the secretary of state shall be executed in
 12  4 the following manner:
 12  5    a.  An original A certificate of limited partnership shall
 12  6 be signed by all general partners named in the certificate.
 12  7    b.  A certificate of amendment shall be signed by at least
 12  8 one general partner and by each other general partner
 12  9 designated in the certificate as a new general partner or
 12 10 whose contribution is described as having been increased.
 12 11    c.  A certificate of cancellation shall be signed by all
 12 12 general partners.
 12 13    Sec. 20.  Section 487.205, Code 1997, is amended to read as
 12 14 follows:
 12 15    487.205  AMENDMENT OR CANCELLATION BY JUDICIAL ACT.
 12 16    If a person required by section 487.204 to execute a any
 12 17 certificate of amendment or cancellation fails or refuses to
 12 18 do so, any other partner, or any assignee of a partnership
 12 19 interest, person who is adversely affected by the failure or
 12 20 refusal may petition the Iowa district court for the county in
 12 21 which the office described in section 487.104 is located to
 12 22 direct the amendment or cancellation execution of the
 12 23 certificate.  If the court finds that the amendment or
 12 24 cancellation is proper and that a it is proper for the
 12 25 certificate to be executed and that any person so designated
 12 26 has failed or refused to execute the certificate, the court
 12 27 shall order the secretary of state to record accept for filing
 12 28 an appropriate certificate of amendment or cancellation.
 12 29    Sec. 21.  Section 487.208, Code 1997, is amended to read as
 12 30 follows:
 12 31    487.208  SCOPE OF NOTICE.
 12 32    The fact that a certificate of limited partnership is on
 12 33 file in the office of the secretary of state is notice that
 12 34 the partnership claims to be is a limited partnership and the
 12 35 persons designated in such certificate as general partners are
 13  1 general partners, but it is not notice of any other fact.
 13  2    Sec. 22.  Section 487.301, Code 1997, is amended to read as
 13  3 follows:
 13  4    487.301  ADMISSION OF NEW LIMITED PARTNERS.
 13  5    1.  A person becomes a limited partner at either of the
 13  6 following times:
 13  7    a.  At the time the limited partnership is formed.
 13  8    b.  At any later time specified in the records of the
 13  9 limited partnership for becoming a limited partner.
 13 10    2.  After the filing of a limited partnership's original
 13 11 certificate of limited partnership, a person may be admitted
 13 12 as a new limited partner under the following conditions:
 13 13    a.  In the case of a person acquiring a partnership
 13 14 interest directly from the limited partnership, upon
 13 15 compliance with the partnership agreement or, if the
 13 16 partnership agreement does not so provide, upon the written
 13 17 consent of all partners.
 13 18    b.  In the case of an assignee of a partnership interest of
 13 19 a partner who has the power, as provided in section 487.704 to
 13 20 grant the assignee the right to become a limited partner, upon
 13 21 the exercise of that power and compliance with any conditions
 13 22 limiting the grant or exercise of the power.
 13 23    2.  Under both paragraphs "a" and "b" of subsection 1, the
 13 24 person acquiring the partnership interest becomes a limited
 13 25 partner at the time specified in the certificate of limited
 13 26 partnership or, if a time is not specified, upon amendment of
 13 27 the certificate of limited partnership to show the partnership
 13 28 interest.
 13 29    Sec. 23.  Section 487.303, Code 1997, is amended to read as
 13 30 follows:
 13 31    487.303  LIABILITY TO THIRD PARTIES.
 13 32    1.  Except as provided in subsection 4, a limited partner
 13 33 is not liable for the obligations of a limited partnership
 13 34 unless the limited partner is also a general partner or, in
 13 35 addition to the exercise of the limited partner's rights and
 14  1 powers as a limited partner, the limited partner takes part
 14  2 participates in the control of the business.  However, if the
 14  3 limited partner's participation partner participates in the
 14  4 control of the business is not substantially the same as the
 14  5 exercise of the powers of a general partner, the limited
 14  6 partner is liable only to persons who transact business with
 14  7 the limited partnership with actual knowledge of the limited
 14  8 partner's participation in control reasonably believing, based
 14  9 upon the limited partner's conduct, that the limited partner
 14 10 is a general partner.
 14 11    2.  A limited partner does not participate in the control
 14 12 of the business within the meaning of subsection 1 solely by
 14 13 doing one or more of the following:
 14 14    a.  Being a contractor for or an agent or employee of the
 14 15 limited partnership.
 14 16    b.  Being a contractor for or an agent, employee, manager,
 14 17 member, director, officer, or shareholder of or a limited
 14 18 partner of a general partner, or a partner in a limited
 14 19 liability partnership that is a general partner.
 14 20    c.  Consulting with and advising a general partner with
 14 21 respect to the business of the limited partnership.
 14 22    d.  Acting as surety for the limited partnership or
 14 23 guaranteeing or assuming one or more specific obligations of
 14 24 the limited partnership.
 14 25    e.  Approving or disapproving an amendment to the
 14 26 partnership agreement.  Taking any action required or
 14 27 permitted by law to bring or pursue a derivative action in the
 14 28 right of the limited partnership.
 14 29    f.  Voting on Requesting or attending a meeting of
 14 30 partners.
 14 31    g.  Proposing, approving, or disapproving, by voting or
 14 32 otherwise, one or more of the following matters:
 14 33    (1)  The dissolution and winding up of the limited
 14 34 partnership.
 14 35    (2)  The sale, exchange, lease, mortgage, pledge, or other
 15  1 transfer of all or substantially all the assets of the limited
 15  2 partnership other than in the ordinary course of its business.
 15  3    (3)  The incurrence of indebtedness by the limited
 15  4 partnership other than in the ordinary course of its business.
 15  5    (4)  A change in the nature of the business.
 15  6    (5)  The admission or removal of a general partner.
 15  7    (6)  The admission or removal of a limited partner.
 15  8    (7)  A transaction involving an actual or potential
 15  9 conflict of interest between a general partner and the limited
 15 10 partnership or the limited partners.
 15 11    (8)  An amendment to the partnership agreement or
 15 12 certificate of limited partnership.
 15 13    (9)  Matters related to the business of the limited
 15 14 partnership not otherwise enumerated in this subsection, which
 15 15 the partnership agreement states in writing may be subject to
 15 16 the approval or disapproval of limited partners.
 15 17    h.  Winding up the limited partnership pursuant to section
 15 18 487.803.
 15 19    i.  Exercising any right or power permitted to limited
 15 20 partners under this chapter and not specifically enumerated in
 15 21 this subsection.
 15 22    3.  The enumeration in subsection 2 does not mean that the
 15 23 possession or exercise of any other powers by a limited
 15 24 partner constitutes participation by the limited partner in
 15 25 the business of the limited partnership.
 15 26    4.  A limited partner who knowingly permits the limited
 15 27 partner's name to be used in the name of the limited
 15 28 partnership, except under circumstances permitted by section
 15 29 487.102, subsection 2, paragraph "a", is liable to creditors
 15 30 who extend credit to the limited partnership without actual
 15 31 knowledge that the limited partner is not a general partner.
 15 32    Sec. 24.  Section 487.304, Code 1997, is amended to read as
 15 33 follows:
 15 34    487.304  PERSON ERRONEOUSLY BELIEVING SELF TO BE A LIMITED
 15 35 PARTNER.
 16  1    1.  Except as provided in subsection 2, a person who makes
 16  2 a contribution to a business enterprise and erroneously but in
 16  3 good faith believes that the person has become a limited
 16  4 partner in the enterprise is not a general partner in the
 16  5 enterprise and is not bound by its obligations by reason of
 16  6 making the contribution, receiving distributions from the
 16  7 enterprise, or exercising any rights of a limited partner, if,
 16  8 on ascertaining the mistake, the person does either of the
 16  9 following:
 16 10    a.  Causes an appropriate certificate of limited
 16 11 partnership or a certificate of amendment to be executed and
 16 12 filed; or.
 16 13    b.  Withdraws from future equity participation in the
 16 14 enterprise by executing and filing in the office of the
 16 15 secretary of state a certificate declaring withdrawal under
 16 16 this section.
 16 17    2.  A person who makes a contribution of the kind described
 16 18 in subsection 1 is liable as a general partner to a third
 16 19 party who, believing the person to be a general partner,
 16 20 transacts business with the enterprise before an appropriate
 16 21 certificate is filed and before either of the following:
 16 22    a.  The person withdraws and an appropriate certificate is
 16 23 filed to show the withdrawal.
 16 24    b.  An appropriate certificate is filed to show the
 16 25 person's status as a limited partner and, in the case of an
 16 26 amendment, after expiration of the period for filing the
 16 27 amendment relating to the person as a limited partner under
 16 28 section 487.202 that the person is not a general partner.
 16 29    However, in either case referred to in paragraph "a" or
 16 30 "b", the person is liable as a general partner only if the
 16 31 third party actually believed in good faith that the person
 16 32 was a general partner at the time of the transaction.
 16 33    Sec. 25.  Section 487.401, Code 1997, is amended to read as
 16 34 follows:
 16 35    487.401  ADMISSION OF ADDITIONAL GENERAL PARTNERS.
 17  1    After the filing of a limited partnership's original
 17  2 certificate of limited partnership, additional general
 17  3 partners shall be admitted only with the specific written
 17  4 consent of each partner.  However, if the certificate of
 17  5 limited partnership or may be admitted as provided in writing
 17  6 in the partnership agreement names a person to be admitted as
 17  7 a general partner upon the occurrence of a specified
 17  8 circumstance or at a specified time, the consent required is
 17  9 deemed to have been given or, if the partnership agreement
 17 10 does not provide in writing for the admission of additional
 17 11 general partners, with the written consent of all partners.
 17 12    Sec. 26.  Section 487.402, Code 1997, is amended to read as
 17 13 follows:
 17 14    487.402  EVENTS OF WITHDRAWAL.
 17 15    Except as otherwise agreed in writing by approved by the
 17 16 specific written consent of all partners at the time of the
 17 17 event, a person ceases to be a general partner of a limited
 17 18 partnership upon the happening of any of the following events:
 17 19    1.  The general partner withdraws from the limited
 17 20 partnership as provided in section 487.602.
 17 21    2.  The general partner ceases to be a member of the
 17 22 limited partnership as provided in section 487.702.
 17 23    2. 3.  The general partner is removed as a general partner
 17 24 in accordance with the partnership agreement.
 17 25    3. 4.  Unless otherwise provided in the certificate of
 17 26 limited writing in the partnership agreement, the general
 17 27 partner does any of the following:
 17 28    a.  Makes an assignment for the benefit of creditors.
 17 29    b.  Files a voluntary petition in bankruptcy.
 17 30    c.  Is adjudicated a bankrupt or insolvent.
 17 31    d.  Files a petition or answer seeking for the general
 17 32 partner reorganization, arrangement, composition,
 17 33 readjustment, liquidation, dissolution, or similar relief
 17 34 under any statute, law, or regulation.
 17 35    e.  Files an answer or other pleading admitting or failing
 18  1 to contest material allegations of a petition filed against
 18  2 the general partner in a proceeding of a nature specified in
 18  3 paragraph "d".
 18  4    f.  Seeks, consents to, or acquiesces in the appointment of
 18  5 a trustee, receiver, or liquidator of the general partner or
 18  6 of all or a substantial part of the general partner's
 18  7 properties.
 18  8    4. 5.  Unless otherwise provided in the certificate of
 18  9 limited writing in the partnership agreement, upon the
 18 10 expiration of the following time periods:
 18 11    a.  One hundred twenty days after the commencement of a
 18 12 proceeding against the general partner seeking reorganization,
 18 13 arrangement, composition, readjustment, liquidation,
 18 14 dissolution, or similar relief, under any statute, law, or
 18 15 regulation, if the proceeding has not been dismissed within
 18 16 that time.
 18 17    b.  Ninety days after the appointment without the general
 18 18 partner's consent or acquiescence of a trustee, receiver, or
 18 19 liquidator of the general partner or of all or a substantial
 18 20 part of the general partner's properties, if the appointment
 18 21 is not vacated or stayed within that time.
 18 22    c.  If an appointment of the nature specified in paragraph
 18 23 "b" is stayed and if the appointment is not then vacated,
 18 24 ninety days after the expiration of the stay.
 18 25    5. 6.  If the general partner is a natural person when
 18 26 either of the following occur:
 18 27    a.  The general partner dies.
 18 28    b.  The district court finds the general partner incapable
 18 29 of managing the general partner's person or property.
 18 30    6. 7.  If the general partner is acting as a general
 18 31 partner by virtue of being a trustee of a trust, when the
 18 32 trust terminates.  Substitution of a new trustee is not
 18 33 termination of the trust.
 18 34    7. 8.  If the general partner is a separate partnership,
 18 35 the dissolution and commencement of winding up of the separate
 19  1 partnership.
 19  2    8. 9.  If the general partner is a corporation, the filing
 19  3 of a certificate of dissolution, or its equivalent, for the
 19  4 corporation or revocation of the corporation's charter.
 19  5    10.  If the general partner is a limited liability company,
 19  6 the filing of a certificate of dissolution, or its equivalent,
 19  7 for the limited liability company or revocation of the limited
 19  8 liability company's charter.
 19  9    9. 11.  In the case of an estate, the distribution by the
 19 10 fiduciary of the estate's entire interest in the partnership.
 19 11    Sec. 27.  Section 487.403, Code 1997, is amended to read as
 19 12 follows:
 19 13    487.403  GENERAL POWERS AND LIABILITIES.
 19 14    1.  Except as provided in this chapter or in the
 19 15 partnership agreement, a general partner of a limited
 19 16 partnership has the rights and powers and is subject to the
 19 17 restrictions and liabilities of a general partner in a
 19 18 partnership without limited partners.
 19 19    2.  Except as provided in this chapter, a general partner
 19 20 of a limited partnership has the liabilities of a partner in a
 19 21 partnership without limited partners to persons other than the
 19 22 partnership and the other partners.  Except as provided in
 19 23 this chapter or in the partnership agreement, a general
 19 24 partner of a limited partnership has the liabilities of a
 19 25 partner in a partnership without limited partners to the
 19 26 partnership and to the other partners.
 19 27    Sec. 28.  Section 487.405, Code 1997, is amended to read as
 19 28 follows:
 19 29    487.405  VOTING.
 19 30    The partnership agreement may grant to all or certain
 19 31 identified general partners the right to vote on a per capita
 19 32 or any other basis, separately or with all or any class of the
 19 33 limited partners, on any matter.
 19 34    Sec. 29.  Section 487.502, Code 1997, is amended to read as
 19 35 follows:
 20  1    487.502  LIABILITY FOR CONTRIBUTION.
 20  2    1.  A promise by a limited partner to contribute to the
 20  3 limited partnership is not enforceable unless set out in a
 20  4 writing signed by the limited partner.
 20  5    2.  Except as provided in the certificate of limited
 20  6 partnership agreement, a partner is obligated to the limited
 20  7 partnership to perform a any enforceable promise to contribute
 20  8 cash or property or to perform services even if the partner is
 20  9 unable to perform because of death, disability, or any other
 20 10 reason.  If the a partner does not make the required
 20 11 contribution of property or services, the partner is obligated
 20 12 at the option of the limited partnership may require the
 20 13 partner to contribute cash equal to that portion of the value,
 20 14 as stated in the certificate of limited partnership,
 20 15 partnership records required to be kept pursuant to section
 20 16 487.105, of the stated contribution that which has not been
 20 17 made.
 20 18    3.  Unless otherwise provided in the partnership agreement,
 20 19 the obligation of a partner to make a contribution or return
 20 20 money or other property paid or distributed in violation of
 20 21 this chapter may be compromised only by consent of all
 20 22 partners.  Notwithstanding the compromise, a creditor of a
 20 23 limited partnership who extends credit or otherwise acts in
 20 24 reliance on that obligation after the partner signs a writing
 20 25 which reflects the obligation and before the amendment or
 20 26 cancellation of such obligation to reflect the compromise may
 20 27 enforce the original obligation.
 20 28    Sec. 30.  Section 487.503, Code 1997, is amended to read as
 20 29 follows:
 20 30    487.503  SHARING OF PROFITS AND LOSSES.
 20 31    The profits and losses of a limited partnership shall be
 20 32 allocated among the partners, and among classes of partners,
 20 33 in the manner provided in writing in the partnership
 20 34 agreement.  If the partnership agreement does not so provide
 20 35 in writing, profits and losses shall be allocated on the basis
 21  1 of the value, as stated in the certificate of limited
 21  2 partnership records required to be kept pursuant to section
 21  3 487.105, of the contributions made by each partner to the
 21  4 extent the contributions have been received by the partnership
 21  5 and have not been returned.
 21  6    Sec. 31.  Section 487.504, Code 1997, is amended to read as
 21  7 follows:
 21  8    487.504  SHARING OF DISTRIBUTIONS.
 21  9    Distributions of cash or other assets of a limited
 21 10 partnership shall be allocated among the partners, and among
 21 11 classes of partners, in the manner provided in writing in the
 21 12 partnership agreement.  If the partnership agreement does not
 21 13 so provide in writing, distributions shall be made on the
 21 14 basis of the value, as stated in the certificate of limited
 21 15 partnership records required to be kept pursuant to section
 21 16 487.105, of the contributions made by each partner to the
 21 17 extent the contributions have been received by the partnership
 21 18 and have not been returned.
 21 19    Sec. 32.  Section 487.601, Code 1997, is amended to read as
 21 20 follows:
 21 21    487.601  INTERIM DISTRIBUTIONS.
 21 22    Except as provided in this article, a partner is entitled
 21 23 to receive distributions from a limited partnership before the
 21 24 partner's withdrawal from the limited partnership and before
 21 25 the dissolution and winding up of the partnership subject to
 21 26 the following conditions:
 21 27    1.  To to the extent and at the times or upon the happening
 21 28 of the events specified in the partnership agreement.
 21 29    2.  If a distribution is a return of part of the partner's
 21 30 contribution under section 487.608, subsection 2, to the
 21 31 extent and at the times or upon the happening of the events
 21 32 specified in the certificate of limited partnership.
 21 33    Sec. 33.  Section 487.603, Code 1997, is amended to read as
 21 34 follows:
 21 35    487.603  WITHDRAWAL OF LIMITED PARTNER.
 22  1    A limited partner may withdraw from a limited partnership
 22  2 only at the time or upon the happening of events specified in
 22  3 the certificate of limited partnership and in accordance with
 22  4 writing in the partnership agreement.  If the certificate does
 22  5 not specify the time or the events upon the happening of which
 22  6 a limited partner may withdraw or a time for the dissolution
 22  7 and winding up of the limited partnership, a limited partner
 22  8 may withdraw upon not less than six months prior written
 22  9 notice directed or delivered to the partnership or to each
 22 10 general partner at the partner's address on the books of the
 22 11 limited partnership at its office in this state.
 22 12    Sec. 34.  Section 487.605, Code 1997, is amended to read as
 22 13 follows:
 22 14    487.605  DISTRIBUTION IN KIND.
 22 15    Except as provided in the certificate of limited writing in
 22 16 the partnership agreement, a partner, regardless of the nature
 22 17 of the partner's contribution, has no right to demand and
 22 18 receive any distribution from a limited partnership in any
 22 19 form other than cash.  Except as provided in writing in the
 22 20 partnership agreement, a partner shall not be compelled to
 22 21 accept a distribution of any asset in kind from a limited
 22 22 partnership to the extent that the percentage of the asset
 22 23 distributed to the partner exceeds a percentage of that asset
 22 24 which is equal to the percentage in which the partner shares
 22 25 in distributions from the limited partnership.
 22 26    Sec. 35.  Section 487.607, Code 1997, is amended to read as
 22 27 follows:
 22 28    487.607  LIMITATIONS ON DISTRIBUTION.
 22 29    A partner shall not receive a distribution if, after from a
 22 30 limited partnership to the extent that, after giving effect to
 22 31 the distribution, all liabilities of the limited partnership,
 22 32 other than liabilities to partners on account of their
 22 33 partnership interests, will exceed the fair value of the
 22 34 partnership assets.
 22 35    Sec. 36.  Section 487.608, subsection 3, Code 1997, is
 23  1 amended to read as follows:
 23  2    3.  A partner receives a return of the partner's
 23  3 contribution only to the extent that a distribution to the
 23  4 partner reduces the partner's share of the fair value, as
 23  5 specified in the certificate of the net assets of the limited
 23  6 partnership below the value, as set forth in the partnership
 23  7 records required to be kept pursuant to section 487.105, of
 23  8 the partner's contribution which has not been distributed to
 23  9 the partner.
 23 10    Sec. 37.  Section 487.702, Code 1997, is amended to read as
 23 11 follows:
 23 12    487.702  ASSIGNMENT OF PARTNERSHIP INTEREST.
 23 13    Except as provided in the partnership agreement, a
 23 14 partnership interest is assignable in whole or in part.  An
 23 15 assignment of a partnership interest does not dissolve a
 23 16 limited partnership or entitle the assignee to become or to
 23 17 exercise any rights of a partner.  An assignment entitles the
 23 18 assignee to receive, to the extent assigned, only the
 23 19 distribution to which the assignor would be entitled.  Except
 23 20 as provided in the partnership agreement, a partner ceases to
 23 21 be a partner upon assignment of all the partner's partnership
 23 22 interest.
 23 23    Sec. 38.  Section 487.704, Code 1997, is amended to read as
 23 24 follows:
 23 25    487.704  RIGHT OF ASSIGNEE TO BECOME LIMITED PARTNER.
 23 26    1.  An assignee of a partnership interest, including an
 23 27 assignee of a general partner, may become a limited partner
 23 28 under any of the following conditions if and to the extent
 23 29 that either of the following applies:
 23 30    a.  When the certificate of limited partnership so
 23 31 provides, if the The assignor gives the assignee the right to
 23 32 become a limited partner in the manner specified in the
 23 33 agreement. that right in accordance with authority described
 23 34 in
 23 35    b.  When the partnership agreement so provides, if persons
 24  1 required to consent to the assignee becoming a limited partner
 24  2 consent in the manner specified in the agreement.
 24  3    c. b.  All other partners other than the assignor of the
 24  4 interest consent to the assignee becoming a limited partner.
 24  5    2.  An assignee who has become a limited partner has, to
 24  6 the extent assigned, the rights and powers, and is subject to
 24  7 the restrictions and liabilities, of a limited partner under
 24  8 the partnership agreement and this chapter.  An assignee who
 24  9 becomes a limited partner also is liable for the obligations
 24 10 of the assignor to make and return contributions as provided
 24 11 in article articles 5 and 6 of this chapter.  However, the
 24 12 assignee is not obligated for liabilities unknown to the
 24 13 assignee at the time the assignee became a limited partner and
 24 14 which could not be ascertained from the certificate of limited
 24 15 partnership.
 24 16    3.  The fact that an assignee of a partnership interest has
 24 17 become a limited partner does not release the assignor from
 24 18 the assignor's liability to the limited partnership under
 24 19 sections 487.207 and 487.502.
 24 20    Sec. 39.  Section 487.801, subsection 1, Code 1997, is
 24 21 amended to read as follows:
 24 22    1.  A limited partnership is dissolved and its affairs
 24 23 shall be wound up when any of the following occur:
 24 24    a.  When events specified in the certificate of limited
 24 25 partnership occur.
 24 26    b.  When events specified in the partnership agreement
 24 27 occur.
 24 28    c.  When all partners consent in writing to the
 24 29 dissolution.
 24 30    c. d.  When a general partner withdraws unless at the time
 24 31 there is at least one other general partner and the
 24 32 certificate provisions of limited the partnership permits
 24 33 agreement permit the business of the limited partnership to be
 24 34 carried on by the remaining general partner and the remaining
 24 35 partner does so.
 25  1    d. e.  When a decree of judicial dissolution is entered
 25  2 under section 487.802.
 25  3    Sec. 40.  Section 487.902, subsections 3 and 7, Code 1997,
 25  4 are amended by striking the subsections.
 25  5    Sec. 41.  Section 487.902, Code 1997, is amended by adding
 25  6 the following new subsections:
 25  7    NEW SUBSECTION.  6A.  The name and business address of each
 25  8 general partner.
 25  9    NEW SUBSECTION.  6B.  The address of the office at which is
 25 10 kept a list of the names and addresses of the limited partners
 25 11 and their capital contributions, together with an undertaking
 25 12 by the foreign limited partnership to keep those records until
 25 13 the foreign limited partnership's registration in this state
 25 14 is canceled or withdrawn.
 25 15    Sec. 42.  Section 487.1002, Code 1997, is amended to read
 25 16 as follows:
 25 17    487.1002  PROPER PLAINTIFF.
 25 18    In a derivative action, the plaintiff shall must be a
 25 19 partner at the time of bringing the action and either shall
 25 20 must have been a partner at the time the cause of action arose
 25 21 or shall of the transaction of which the partner complains or
 25 22 must have acquired the status of partner by operation of law
 25 23 or pursuant to the terms of the partnership agreement from a
 25 24 person who was a partner at the time the cause of action arose
 25 25 of the transaction of which the partner complains.
 25 26    Sec. 43.  Section 487.1104, Code 1997, is amended to read
 25 27 as follows:
 25 28    487.1104  EFFECT ON EXISTING LIMITED PARTNERSHIPS.
 25 29    This chapter Except as specifically provided in this
 25 30 section, this chapter applies to all limited partnerships in
 25 31 existence on July 1, 1997, and does not invalidate provisions
 25 32 in limited partnership agreements or certificates executed
 25 33 prior to July 1, 1982 1997.  Unless otherwise agreed to by the
 25 34 partners, the applicable provisions of existing law, in effect
 25 35 prior to July 1, 1997, governing events of withdrawal,
 26  1 withdrawal of a limited partner, and assignment of a
 26  2 partnership interest, govern limited partnerships formed
 26  3 before July 1, 1997.
 26  4    Sec. 44.  NEW SECTION.  487.1106  SAVINGS CLAUSE.
 26  5    The repeal of any statutory provision effective July 1,
 26  6 1997, does not impair or otherwise affect the organization or
 26  7 the continued existence of a limited partnership existing on
 26  8 July 1, 1997, nor does the repeal of any existing statutory
 26  9 provision effective July 1, 1997, impair any contract or any
 26 10 right accrued before July 1, 1997.
 26 11    Sec. 45.  Sections 487.206 and 487.1105, Code 1997, are
 26 12 repealed.  
 26 13                           EXPLANATION
 26 14    This bill rewrites provisions of the uniform limited
 26 15 partnership law contained in Code chapter 487.  Generally, the
 26 16 bill amends provisions allowing a limited partner to
 26 17 contribute services to the limited partnership in lieu of
 26 18 property or other valuable obligations, allowing limited
 26 19 partners to be granted voting rights in the partnership
 26 20 agreement, granting limited partners access to partnership
 26 21 records, authorizing a derivative action by limited partners
 26 22 against the partnership, and providing for the registration of
 26 23 foreign limited partnerships.
 26 24    The bill refocuses the chapter on the limited partnership
 26 25 agreement as the primary governing document, as opposed to the
 26 26 certificate of limited partnership, and provides that unless
 26 27 contained in a written limited partnership agreement, the
 26 28 partnership must keep at its office a writing containing
 26 29 amounts contributed by each partner, times or events
 26 30 triggering additional contributions, the right of a partner to
 26 31 receive a distribution of assets, and events triggering
 26 32 dissolution of the limited partnership.
 26 33    The bill creates new Code sections rewriting provisions
 26 34 relating to filing requirements, fees to be charged by the
 26 35 secretary of state related to such filings, the effective time
 27  1 and date of documents filed, procedures and duties of the
 27  2 secretary of state with respect to such filings, the
 27  3 evidentiary effect of a copy of a filed document, the creation
 27  4 of a certificate of existence, penalties for signing false
 27  5 documents, and powers of the secretary of state.
 27  6    The bill strikes items currently required to be contained
 27  7 in the certificate of limited partnership and provides for the
 27  8 inclusion of those items in the partnership agreement or other
 27  9 writing.  
 27 10 LSB 1732SC 77
 27 11 mj/sc/14
     

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