Uniform Partnership Act (1997). SECTION 101. DEFINITIONS.

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1 GENERAL PROVISIONS SECTION 101. SHORT TITLE. This [act] may be cited as the Revised Uniform Limited Liability Company Act. SECTION 102. DEFINITIONS. SECTION 101. SHORT TITLE. This [Act] may be cited as the [year of enactment]. SECTION 102. DEFINITIONS. SECTION SHORT TITLE. This [Act] may be cited as the Uniform Partnership Act. SECTION 101. DEFINITIONS. Category I In this [act]: (1) Certificate of organization means the certificate required by Section 201. The term includes the certificate as amended or restated. In this [Act]: (1) Certificate of limited partnership means the certificate required by Section 201. The term includes the certificate as amended or restated. In this [Act]: (1) Business includes every trade, occupation, and profession. Contribution conform to ULPA to RULLCA [except maintain ULPA s exception right of contribution for ULPA] whether to include definition in RUPA still pending (2) Contribution means any benefit provided by a person to a limited liability company: (A) in order to become a member upon formation of the company and in accordance with an agreement between or among the persons that have agreed to become the initial members of the company; (B) in order to become a member after formation of the (2) Contribution, except in the phrase right of contribution, means any benefit provided by a person to a limited partnership in order to become a partner or in the person s capacity as a partner. 1

2 company and in accordance with an agreement between the person and the company; or (C) in the person s capacity as a member and in accordance with the operating agreement or an agreement between the member and the company. Debtor in bankruptcy HUB (3) Debtor in bankruptcy means a person that is the subject of: (A) an order for relief under Title 11 of the United States Code or a successor statute of general application; or (B) a comparable order under federal, state, or foreign law governing insolvency. (4) Designated office means: (A) the office that a limited liability company is required to designate and maintain under Section 113; or (B) the principal office of a foreign limited liability company. (3) Debtor in bankruptcy means a person that is the subject of: (A) an order for relief under Title 11 of the United States Code or a comparable order under a successor statute of general application; or (B) a comparable order under federal, state, or foreign law governing insolvency. (4) Designated office means: (A) with respect to a limited partnership, the office that the limited partnership is required to designate and maintain under Section 114; and (B) with respect to a foreign limited partnership, its principal office. (2) Debtor in bankruptcy means a person who is the subject of: (i) an order for relief under Title 11 of the United States Code or a comparable order under a successor statute of general application; or (ii) a comparable order under federal, state, or foreign law governing insolvency. Designated office and HUB s definition of a principal office functions need to be separately identified and terminology aligned designated office should be included for RUPA LLP [paradigm: wherever the entity has a shield, designated office applies] 2

3 (5) Distribution, except as otherwise provided in Section 405(g), means a transfer of money or other property from a limited liability company to another person on account of a transferable interest. (6) Effective, with respect to a record required or permitted to be delivered to the [Secretary of State] for filing under this [act], means effective under Section 205(c). (5) Distribution means a transfer of money or other property from a limited partnership to a partner in the partner s capacity as a partner or to a transferee on account of a transferable interest owned by the transferee. (3) Distribution means a transfer of money or other property from a partnership to a partner in the partner s capacity as a partner or to the partner s transferee. Distribution conform to RULLCA (with clawback exception for services) [query whether the exception should be relocated] (7) Foreign limited liability company means an unincorporated entity formed under the law of a jurisdiction other than this state and denominated by that law as a limited liability company. (6) Foreign limited liability limited partnership means a foreign limited partnership whose general partners have limited liability for the obligations of the foreign limited partnership under a provision similar to Section 404(c). Effective belongs in the HUB [query whether the HUB provision might need to be somewhat modified to accommodate some of this provision] (7) Foreign limited partnership means a partnership formed under the laws of a jurisdiction other than this State and required (4) Foreign limited liability partnership means a partnership that: (i) is formed under laws 3

4 by those laws to have one or more general partners and one or more limited partners. The term includes a foreign limited liability limited partnership. other than the laws of this State; and (ii) has the status of a limited liability partnership under those laws. Foreign defer to HUB (8) Limited liability company, except in the phrase foreign limited liability company, means an entity formed under this [act]. (9) Manager means a person that under the operating agreement of a managermanaged limited liability company is responsible, alone or in concert with others, for performing the management functions stated in Section 407(c). (10) Manager managed limited liability company means a limited liability company that qualifies under Section 407(a). (11) Member means a person that has become a member of a limited liability company under Section 401 and has not dissociated under Section 602. (8) General partner means: (A) with respect to a limited partnership, a person that: (i) becomes a general partner under Section 401; or (ii) was a general partner in a limited partnership when the limited partnership became subject to this [Act] under Section 1206(a) or (b); and (B) with respect to a foreign limited partnership, a person that has rights, powers, and obligations similar to those of a general partner in a limited partnership. (9) Limited liability limited partnership, except in the phrase foreign limited liability limited partnership, means a limited partnership whose certificate of limited partnership states that the limited partnership is a limited (5) Limited liability partnership means a partnership that has filed a statement of qualification under Section 1001 and does not have a similar statement in effect in any other jurisdiction. (6) Partnership means an association of two or more persons to carry on as co owners a business for profit formed under Section 202, predecessor law, or comparable law of another jurisdiction. Limited liability company Limited partnership Limited liability limited partnership Limited liability partnership Category II (at least harmonize the parallel elements) Query whether RUPA definition of Partnership is also Category II 4

5 (12) Member managed limited liability company means a limited liability company that is not a manager managed limited liability company. liability limited partnership. (10) Limited partner means: (A) with respect to a limited partnership, a person that: (i) becomes a limited partner under Section 301; or (ii) was a limited partner in a limited partnership when the limited partnership became subject to this [Act] under Section 1206(a) or (b); and (B) with respect to a foreign limited partnership, a person that has rights, powers, and obligations similar to those of a limited partner in a limited partnership. (11) Limited partnership, except in the phrases foreign limited partnership and foreign limited liability limited partnership, means an entity, having one or more general partners and one or more limited partners, which is formed under this [Act] by two or more persons or becomes subject to this [Act] under [Article] 11 or Section Member Category II w/r/t ULPA definitions of general partner and limited partner and w/r/t RUPA not defining partner [query also whether RUPA should refer to general partner for clarity s sake for spoke purposes. I.e., in a comprehensive code, should partner mean limited or general partner in one spoke (limited partnership spoke) and [general] partner in another (general partnership spoke)? 5

6 1206(a) or (b). The term includes a limited liability limited partnership. (12) Partner means a limited partner or general partner. (13) Operating agreement means the agreement, whether or not referred to as an operating agreement and whether oral, in a record, implied, or in any combination thereof, of all the members of a limited liability company, including a sole member, concerning the matters described in Section 110(a). The term includes the agreement as amended or restated. (14) Organizer means a person that acts under Section 201 to form a limited liability company. (13) Partnership agreement means the partners agreement, whether oral, implied, in a record, or in any combination, concerning the limited partnership. The term includes the agreement as amended. (7) Partnership agreement means the agreement, whether written, oral, or implied, among the partners concerning the partnership, including amendments to the partnership agreement. (8) Partnership at will means a partnership in which the partners have not agreed to remain partners until the expiration of a definite term or the completion of a particular undertaking. (9) Partnership interest or partner s interest in the partnership means all of a partner s interests in the partnership, including the agreement Category I 6

7 partner s transferable interest and all management and other rights. (15) Person means an individual, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture, public corporation, government or governmental subdivision, agency, or instrumentality, or any other legal or commercial entity. (14) Person means an individual, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture, government; governmental subdivision, agency, or instrumentality; public corporation, or any other legal or commercial entity. (10) Person means an individual, corporation, business trust, estate, trust, partnership, association, joint venture, government, governmental subdivision, agency, or instrumentality, or any other legal or commercial entity. Partnership interest Category II (no comparable concept in ULPA or RULLCA) Person in HUB 16) Principal office means the principal executive office of a limited liability company or foreign limited liability company, whether or not the office is located in this state. (15) Person dissociated as a general partner means a person dissociated as a general partner of a limited partnership. (16) Principal office means the office where the principal executive office of a limited partnership or foreign limited partnership is located, whether or not the office is located in this State. (11) Property means all property, real, personal, or mixed, tangible or intangible, or any Principal office in HUB, but substantially different language; Section 1 102: (31) Principal office means the office, in or outside this state, designated by a filing entity as its principal office in the most recent filed record that contains that designation. Compare also 7

8 (17) Record means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form. (17) Record means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form. (18) Required information means the information that a limited partnership is required to maintain under Section 111. interest therein. RUPA 106(1): (a) Except as otherwise provided in subsection (b) [re: LLPs], the law of the jurisdiction in which a partnership has its chief executive office governs relations among the partners and between the partners and the partnership. Property Category I (no comparable provision in ULPA or RULLCA) (18) Sign means, with the present intent to authenticate or adopt a record: (A) to execute or adopt a tangible symbol; or (B) to attach to or logically associate with the record an electronic symbol, sound, or process. (19) State means a state of the United States, the District of Columbia, Puerto Rico, the United (19) Sign means: (A) to execute or adopt a tangible symbol with the present intent to authenticate a record; or (B) to attach or logically associate an electronic symbol, sound, or process to or with a record with the present intent to authenticate the record. (20) State means a State of the United States, the District of Columbia, Puerto Rico, the United (12) State means a State of the United States, the District of Columbia, the Commonwealth of Puerto Rico, or any territory or insular possession subject to the jurisdiction of the United States. Record in the HUB 8

9 States Virgin Islands, or any territory or insular possession subject to the jurisdiction of the United States. (20) Transfer includes an assignment, conveyance, deed, bill of sale, lease, mortgage, security interest, encumbrance, gift, and transfer by operation of law. States Virgin Islands, or any territory or insular possession subject to the jurisdiction of the United States. (21) Transfer includes an assignment, conveyance, deed, bill of sale, lease, mortgage, security interest, encumbrance, gift, and transfer by operation of law. (13) Statement means a statement of partnership authority under Section 303, a statement of denial under Section 304, a statement of dissociation under Section 704, a statement of dissolution under Section 805, a statement of merger under Section 907, a statement of qualification under Section 1001, a statement of foreign qualification under Section 1102, or an amendment or cancellation of any of the foregoing. (14) Transfer includes an assignment, conveyance, lease, mortgage, deed, and encumbrance. Sign in the HUB State in the HUB Statement Category II (b/c ULPA and RULLCA have fewer statements; therefore query whether a collection type definition is worthwhile (although, in a hub and spoke code, parallelism in spoke definitions might be useful) (21) Transferable interest means the right, as originally associated with a person s capacity as a member, to receive distributions from a limited (22) Transferable interest means a partner s right to receive distributions. Transfer Category I; in HUB, but substantially different 9

10 liability company in accordance with the operating agreement, whether or not the person remains a member or continues to own any part of the right. (22) Transferee means a person to which all or part of a transferable interest has been transferred, whether or not the transferor is a member. (23) Transferee means a person to which all or part of a transferable interest has been transferred, whether or not the transferor is a partner. omits by operation of law ; Section 1 102: (43) Transfer includes an assignment, conveyance, lease, mortgage, deed, and encumbrance. Transferable interest Category I; in HUB, but HUB definition presupposes an definition in the organic law (i.e., the spoke); Section 1 102: (44) Transferable interest means the right under an unincorporated entity s organic law to receive distributions from the entity. Also definition should make clear that a transferee of a fraction of the original interest is within the definition Transferee Category I; also query whether this definition should exclude mere holder of a charging order SECTION 103. KNOWLEDGE; NOTICE. SECTION 103. KNOWLEDGE AND NOTICE. SECTION 102. KNOWLEDGE AND NOTICE. Knowledge /Notice 10

11 (a) A person knows a fact when the person: (1) has actual knowledge of it; or (2) is deemed to know it under subsection (d)(1) or law other than this [act]. (b) A person has notice of a fact when the person: (1) has reason to know the fact from all of the facts known to the person at the time in question; or (2) is deemed to have notice of the fact under subsection (d)(2); (c) A person notifies another of a fact by taking steps reasonably required to inform the other person in ordinary course, whether or not the other person knows the fact. (d) A person that is not a member is deemed: (1) to know of a limitation on authority to transfer real property as provided in Section 302(g); and (2) to have notice of a limited liability company s: (a) A person knows a fact if the person has actual knowledge of it. (b) A person has notice of a fact if the person: (1) knows of it; (2) has received a notification of it; (3) has reason to know it exists from all of the facts known to the person at the time in question; or (4) has notice of it under subsection (c) or (d). (c) A certificate of limited partnership on file in the [office of the Secretary of State] is notice that the partnership is a limited partnership and the persons designated in the certificate as general partners are general partners. Except as otherwise provided in subsection (d), the certificate is not notice of any other fact. (d) A person has notice of: (1) another person s dissociation as a general partner, 90 days after the effective date of an amendment to the certificate of limited partnership which (a) A person knows a fact if the person has actual knowledge of it. (b) A person has notice of a fact if the person: (1) knows of it; (2) has received a notification of it; or (3) has reason to know it exists from all of the facts known to the person at the time in question. (c) A person notifies or gives a notification to another by taking steps reasonably required to inform the other person in ordinary course, whether or not the other person learns of it. (d) A person receives a notification when the notification: (1) comes to the person s attention; or (2) is duly delivered at the person s place of business or at any other place held out by the person as a place for receiving communications. (e) Except as otherwise provided in subsection (f), a person other than an individual knows, has notice, or receives a notification Harmonize to RULLCA 11

12 (A) dissolution, 90 days after a statement of dissolution under Section 702(b)(2)(A) becomes effective; (B) termination, 90 days after a statement of termination Section 702(b)(2)(F) becomes effective; and (C) merger, conversion, or domestication, 90 days after articles of merger, conversion, or domestication under [Article] 10 become effective. states that the other person has dissociated or 90 days after the effective date of a statement of dissociation pertaining to the other person, whichever occurs first; (2) a limited partnership s dissolution, 90 days after the effective date of an amendment to the certificate of limited partnership stating that the limited partnership is dissolved; (3) a limited partnership s termination, 90 days after the effective date of a statement of termination; (4) a limited partnership s conversion under [Article] 11, 90 days after the effective date of the articles of conversion; or (5) a merger under [Article] 11, 90 days after the effective date of the articles of merger. (e) A person notifies or gives a notification to another person by taking steps reasonably required to inform the other person in ordinary course, whether or not the other person learns of it. (f) A person receives a of a fact for purposes of a particular transaction when the individual conducting the transaction knows, has notice, or receives a notification of the fact, or in any event when the fact would have been brought to the individual s attention if the person had exercised reasonable diligence. The person exercises reasonable diligence if it maintains reasonable routines for communicating significant information to the individual conducting the transaction and there is reasonable compliance with the routines. Reasonable diligence does not require an individual acting for the person to communicate information unless the communication is part of the individual s regular duties or the individual has reason to know of the transaction and that the transaction would be materially affected by the information. (f) A partner s knowledge, notice, or receipt of a notification of a fact relating to the partnership is effective immediately as knowledge by, notice to, or 12

13 notification when the notification: (1) comes to the person s attention; or (2) is delivered at the person s place of business or at any other place held out by the person as a place for receiving communications. (g) Except as otherwise provided in subsection (h), a person other than an individual knows, has notice, or receives a notification of a fact for purposes of a particular transaction when the individual conducting the transaction for the person knows, has notice, or receives a notification of the fact, or in any event when the fact would have been brought to the individual s attention if the person had exercised reasonable diligence. A person other than an individual exercises reasonable diligence if it maintains reasonable routines for communicating significant information to the individual conducting the transaction for the person and there is reasonable compliance with the routines. Reasonable diligence does not receipt of a notification by the partnership, except in the case of a fraud on the partnership committed by or with the consent of that partner. 13

14 require an individual acting for the person to communicate information unless the communication is part of the individual s regular duties or the individual has reason to know of the transaction and that the transaction would be materially affected by the information. (h) A general partner s knowledge, notice, or receipt of a notification of a fact relating to the limited partnership is effective immediately as knowledge of, notice to, or receipt of a notification by the limited partnership, except in the case of a fraud on the limited partnership committed by or with the consent of the general partner. A limited partner s knowledge, notice, or receipt of a notification of a fact relating to the limited partnership is not effective as knowledge of, notice to, or receipt of a notification by the limited partnership. SECTION 104. NATURE, PURPOSE, AND DURATION OF LIMITED LIABILITY COMPANY. SECTION 104. NATURE, PURPOSE, AND DURATION OF ENTITY. SECTION 201. PARTNERSHIP AS ENTITY. Nature/Purpose/Duration Harmonize RUPA 201 (b) with 14

15 (a) A limited liability company is an entity distinct from its members. (b) A limited liability company may have any lawful purpose, regardless of whether for profit. (c) A limited liability company has perpetual duration. (a) A limited partnership is an entity distinct from its partners. A limited partnership is the same entity regardless of whether its certificate states that the limited partnership is a limited liability limited partnership. (b) A limited partnership may be organized under this [Act] for any lawful purpose. (c) A limited partnership has a perpetual duration. (a) A partnership is an entity distinct from its partners. (b) A limited liability partnership continues to be the same entity that existed before the filing of a statement of qualification under Section SECTION 101. DEFINITIONS (8) A Partnership at will means a partnership in which the partners have not agreed to remain partners until the expiration of a definite term or the completion of a particular undertaking. ULPA, 104(a), second sentence Harmonize ULPA to RULLCA w/r/t regardless of whether for profit (RULLCA 104(b)) [note for further discussion query whether to further harmonize by relocating or repeating RUPA s definition of partnership as being business for profit ] SECTION 801. EVENTS CAUSING DISSOLUTION AND WINDING UP OF PARTNERSHIP BUSINESS. A partnership is dissolved, and its business must be wound up, only upon the occurrence of any of the following events: (1) in a partnership at will, the partnership=s having notice from a partner, other than a partner who is dissociated under Section 601(2) through (10), of that partner s express will to withdraw 15

16 as a partner, or on a later date specified by the partner; (2) in a partnership for a definite term or particular undertaking:. SECTION 105. POWERS. A limited liability company has the capacity to sue and be sued in its own name and the power to do all things necessary or convenient to carry on its activities. SECTION 106. GOVERNING LAW. The law of this state governs: (1) the internal affairs of a limited liability company; and (2) the liability of a member as member and a manager as manager for the debts, obligations, or other liabilities of a limited liability company. SECTION 105. POWERS. A limited partnership has the powers to do all things necessary or convenient to carry on its activities, including the power to sue, be sued, and defend in its own name and to maintain an action against a partner for harm caused to the limited partnership by a breach of the partnership agreement or violation of a duty to the partnership. SECTION 106. GOVERNING LAW. The law of this State governs relations among the partners of a limited partnership and between the partners and the limited partnership and the liability of partners as partners for an obligation of the limited partnership. SECTION 307. ACTIONS BY AND AGAINST PARTNERSHIP AND PARTNERS. (a) A partnership may sue and be sued in the name of the partnership. SECTION 106. GOVERNING LAW. (a) Except as otherwise provided in subsection (b), the law of the jurisdiction in which a partnership has its chief executive office governs relations among the partners and between the partners and the partnership. (b) The law of this State governs relations among the partners and between the partners and the Powers Conform to ULPA (including adding Power to RUPA) Governing Law [of domestic entity] Harmonize, including RUPA LLP provisions, with different approach for RUPA non LLP; harmonization to occur in light of HUB, [by its terms not limited to foreign entities, although located in foreign entities Article] 16

17 SECTION 107. SUPPLEMENTAL PRINCIPLES OF LAW. Unless displaced by particular provisions of this [act], the principles of law and equity supplement this [act]. SECTION 108. NAME. SECTION 107. SUPPLEMENTAL PRINCIPLES OF LAW; RATE OF INTEREST. (a) Unless displaced by particular provisions of this [Act], the principles of law and equity supplement this [Act]. (b) If an obligation to pay interest arises under this [Act] and the rate is not specified, the rate is that specified in [applicable statute]. SECTION 108. NAME. partnership and the liability of partners for an obligation of a limited liability partnership. SECTION 104. SUPPLEMENTAL PRINCIPLES OF LAW. (a) Unless displaced by particular provisions of this [Act], the principles of law and equity supplement this [Act]. (b) If an obligation to pay interest arises under this [Act] and the rate is not specified, the rate is that specified in [applicable statute]. SECTION NAME. Supplemental Principles in Hub, Name HUB, (a) The name of a limited liability company must contain the words limited liability company or limited company or the abbreviation L.L.C., LLC, L.C., or LC. Limited may be abbreviated as Ltd., and company may be abbreviated as Co.. (b) Unless authorized by subsection (c), the name of a limited liability company must be distinguishable in the records of (a) The name of a limited partnership may contain the name of any partner. (b) The name of a limited partnership that is not a limited liability limited partnership must contain the phrase limited partnership or the abbreviation L.P. or LP and may not contain the phrase limited liability limited partnership or the abbreviation LLLP or L.L.L.P.. (c) The name of a limited liability The name of a limited liability partnership must end with Registered Limited Liability Partnership, Limited Liability Partnership, R.L.L.P., L.L.P., RLLP, or LLP. 17

18 the [Secretary of State] from: (1) the name of each person that is not an individual and that is incorporated, organized, or authorized to transact business in this state; (2) the limited liability company name stated in each certificate of organization that contains the statement as provided in Section 201(b)(3) and that has not lapsed; and (3) each name reserved under Section 109 and [cite other state laws allowing the reservation or registration of business names, including fictitious or assumed name statutes]. (c) A limited liability company may apply to the [Secretary of State] for authorization to use a name that does not comply with subsection (b). The [Secretary of State] shall authorize use of the name applied for if, as to each noncomplying name: (1) the present user, registrant, or owner of the noncomplying name consents in a signed record to the use and limited partnership must contain the phrase limited liability limited partnership or the abbreviation LLLP or L.L.L.P. and must not contain the abbreviation L.P. or LP. (d) Unless authorized by subsection (e), the name of a limited partnership must be distinguishable in the records of the [Secretary of State] from: (1) the name of each person other than an individual incorporated, organized, or authorized to transact business in this State; and (2) each name reserved under Section 109 [or other state laws allowing the reservation or registration of business names, including fictitious name statutes]. (e) A limited partnership may apply to the [Secretary of State] for authorization to use a name that does not comply with subsection (d). The [Secretary of State] shall authorize use of the name applied for if, as to each conflicting name: (1) the present user, 18

19 submits an undertaking in a form satisfactory to the [Secretary of State] to change the noncomplying name to a name that complies with subsection (b) and is distinguishable in the records of the [Secretary of State] from the name applied for; or (2) the applicant delivers to the [Secretary of State] a certified copy of the final judgment of a court establishing the applicant s right to use in this state the name applied for. (d) Subject to Section 805, this section applies to a foreign limited liability company transacting business in this state which has a certificate of authority to transact business in this state or which has applied for a certificate of authority. registrant, or owner of the conflicting name consents in a signed record to the use and submits an undertaking in a form satisfactory to the [Secretary of State] to change the conflicting name to a name that complies with subsection (d) and is distinguishable in the records of the [Secretary of State] from the name applied for; (2) the applicant delivers to the [Secretary of State] a certified copy of the final judgment of a court of competent jurisdiction establishing the applicant s right to use in this State the name applied for; or (3) the applicant delivers to the [Secretary of State] proof satisfactory to the [Secretary of State] that the present user, registrant, or owner of the conflicting name: (A) has merged into the applicant; (B) has been converted into the applicant; or (C) has transferred substantially all of its assets, including the conflicting 19

20 SECTION 109. RESERVATION OF NAME. name, to the applicant. (f) Subject to Section 905, this section applies to any foreign limited partnership transacting business in this State, having a certificate of authority to transact business in this State, or applying for a certificate of authority. SECTION 109. RESERVATION OF NAME. Reservation of Name in HUB, (a) A person may reserve the exclusive use of the name of a limited liability company, including a fictitious or assumed name for a foreign limited liability company whose name is not available, by delivering an application to the [Secretary of State] for filing. The application must state the name and address of the applicant and the name proposed to be reserved. If the [Secretary of State] finds that the name applied for is available, it must be reserved for the applicant s exclusive use for a 120 day period. (b) The owner of a name reserved for a limited liability company may transfer the reservation to (a) The exclusive right to the use of a name that complies with Section 108 may be reserved by: (1) a person intending to organize a limited partnership under this [Act] and to adopt the name; (2) a limited partnership or a foreign limited partnership authorized to transact business in this State intending to adopt the name; (3) a foreign limited partnership intending to obtain a certificate of authority to transact business in this State and adopt the name; (4) a person intending to organize a foreign limited partnership and intending to have 20

21 another person by delivering to the [Secretary of State] for filing a signed notice of the transfer which states the name and address of the transferee. it obtain a certificate of authority to transact business in this State and adopt the name; (5) a foreign limited partnership formed under the name; or (6) a foreign limited partnership formed under a name that does not comply with Section 108(b) or (c), but the name reserved under this paragraph may differ from the foreign limited partnership s name only to the extent necessary to comply with Section 108(b) and (c). (b) A person may apply to reserve a name under subsection (a) by delivering to the [Secretary of State] for filing an application that states the name to be reserved and the paragraph of subsection (a) which applies. If the [Secretary of State] finds that the name is available for use by the applicant, the [Secretary of State] shall file a statement of name reservation and thereby reserve the name for the exclusive use of the applicant for a 120 days. (c) An applicant that has reserved a name pursuant to subsection (b) 21

22 SECTION 110. OPERATING AGREEMENT; SCOPE, FUNCTION, AND LIMITATIONS. may reserve the same name for additional 120 day periods. A person having a current reservation for a name may not apply for another 120 day period for the same name until 90 days have elapsed in the current reservation. (d) A person that has reserved a name under this section may deliver to the [Secretary of State] for filing a notice of transfer that states the reserved name, the name and street and mailing address of some other person to which the reservation is to be transferred, and the paragraph of subsection (a) which applies to the other person. Subject to Section 206(c), the transfer is effective when the [Secretary of State] files the notice of transfer. SECTION 110. EFFECT OF PARTNERSHIP AGREEMENT; NONWAIVABLE PROVISIONS. SECTION 103. EFFECT OF PARTNERSHIP AGREEMENT; NONWAIVABLE PROVISIONS. Effect of Agreements (including ULLCA, sec ) Category II (a) Except as otherwise provided in subsections (b) and (c), the operating agreement governs: (1) relations among the members as members and (a) Except as otherwise provided in subsection (b), the partnership agreement governs relations among the partners and between the partners and the partnership. (a) Except as otherwise provided in subsection (b), relations among the partners and between the partners and the partnership are governed by the partnership 22

23 between the members and the limited liability company; (2) the rights and duties under this [act] of a person in the capacity of manager; (3) the activities of the company and the conduct of those activities; and (4) the means and conditions for amending the operating agreement. (b) To the extent the operating agreement does not otherwise provide for a matter described in subsection (a), this [act] governs the matter. (c) An operating agreement may not: (1) vary a limited liability company s capacity under Section 105 to sue and be sued in its own name; (2) vary the law applicable under Section 106; (3) vary the power of the court under Section 204; (4) subject to subsections (d) through (g), eliminate the duty of loyalty, the duty of care, or any other fiduciary duty; (5) subject to subsections To the extent the partnership agreement does not otherwise provide, this [Act] governs relations among the partners and between the partners and the partnership. (b) A partnership agreement may not: (1) vary a limited partnership s power under Section 105 to sue, be sued, and defend in its own name; (2) vary the law applicable to a limited partnership under Section 106; (3) vary the requirements of Section 204; (4) vary the information required under Section 111 or unreasonably restrict the right to information under Sections 304 or 407, but the partnership agreement may impose reasonable restrictions on the availability and use of information obtained under those sections and may define appropriate remedies, including liquidated damages, for a breach of any reasonable restriction on use; (5) eliminate the duty of agreement. To the extent the partnership agreement does not otherwise provide, this [Act] governs relations among the partners and between the partners and the partnership. (b) The partnership agreement may not: (1) vary the rights and duties under Section 105 except to eliminate the duty to provide copies of statements to all of the partners; (2) unreasonably restrict the right of access to books and records under Section 403(b); (3) eliminate the duty of loyalty under Section 404(b) or 603(b)(3), but: (i) the partnership agreement may identify specific types or categories of activities (ii) all of the partners or a number or percentage specified in the partnership agreement may authorize or ratify, after full disclosure of all material facts, a specific act or transaction that otherwise would violate the duty of loyalty; 23

24 (d) through (g), eliminate the contractual obligation of good faith and fair dealing under Section 409(d); (6) unreasonably restrict the duties and rights stated in Section 410; (7) vary the power of a court to decree dissolution in the circumstances specified in Section 701(a)(4) and (5); (8) vary the requirement to wind up a limited liability company s business as specified in Section 702(a) and (b)(1); (9) unreasonably restrict the right of a member to maintain an action under [Article] 9; (10) restrict the right to approve a merger, conversion, or domestication under Section 1014 to a member that will have personal liability with respect to a surviving, converted, or domesticated organization; or (11) except as otherwise provided in Section 112(b), restrict the rights under this [act] of a person other than a member or manager. (d) If not manifestly loyalty under Section 408, but the partnership agreement may: (A) identify specific types or categories of activities that do not violate the duty of loyalty, if not manifestly unreasonable; and (B) specify the number or percentage of partners which may authorize or ratify, after full disclosure to all partners of all material facts, a specific act or transaction that otherwise would violate the duty of loyalty; (6) unreasonably reduce the duty of care under Section 408(c); (7) eliminate the obligation of good faith and fair dealing under Sections 305(b) and 408(d), but the partnership agreement may prescribe the standards by which the performance of the obligation is to be measured, if the standards are not manifestly unreasonable; (8) vary the power of a person to dissociate as a general partner under Section 604(a) except to require that the notice under Section 603(1) be in a (4) unreasonably reduce the duty of care under Section 404(c) or 603(b)(3); (5) eliminate the obligation of good faith and fair dealing under Section 404(d), but the partnership agreement may prescribe the standards by which the performance of the obligation is to be measured, if the standards are not manifestly unreasonable; (6) vary the power to dissociate as a partner under Section 602(a), except to require the notice under Section 601(1) to be in writing; (7) vary the right of a court to expel a partner in the events specified in Section 601(5); (8) vary the requirement to wind up the partnership business in cases specified in Section 801(4), (5), or (6); (9) vary the law applicable to a limited liability partnership under 24

25 unreasonable, the operating agreement may: (1) restrict or eliminate the duty: (A) as required in Section 409(b)(1) and (g), to account to the limited liability company and to hold as trustee for it any property, profit, or benefit derived by the member in the conduct or winding up of the company s business, from a use by the member of the company s property, or from the appropriation of a limited liability company opportunity; (B) as required in Section 409(b)(2) and (g), to refrain from dealing with the company in the conduct or winding up of the company s business as or on behalf of a party having an interest adverse to the company; and (C) as required by Section 409(b)(3) and (g), to refrain from competing with the company in the conduct of the company s business before the dissolution of the company; (2) identify specific types record; (9) vary the power of a court to decree dissolution in the circumstances specified in Section 802; (10) vary the requirement to wind up the partnership s business as specified in Section 803; (11) unreasonably restrict the right to maintain an action under [Article] 10; (12) restrict the right of a partner under Section 1110(a) to approve a conversion or merger or the right of a general partner under Section 1110(b) to consent to an amendment to the certificate of limited partnership which deletes a statement that the limited partnership is a limited liability limited partnership; or (13) restrict rights under this [Act] of a person other than a partner or a transferee. Section 106(b); or (10) restrict rights of third parties under this [Act].that do not violate the duty of loyalty, if not manifestly unreasonable; or (ii) all of the partners or a number or percentage specified in the partnership agreement may authorize or ratify, after full disclosure of all material facts, a specific act or transaction that otherwise would violate the duty of loyalty; (4) unreasonably reduce the duty of care under Section 404(c) or 603(b)(3); (5) eliminate the obligation of good faith and fair dealing under Section 404(d), but the partnership agreement may prescribe the standards by which the performance of the obligation is to be measured, if the standards are not manifestly unreasonable; (6) vary the power to dissociate as a partner under Section 602(a), except to require the notice under Section 601(1) to 25

26 or categories of activities that do not violate the duty of loyalty; (3) alter the duty of care, except to authorize intentional misconduct or knowing violation of law; (4) alter any other fiduciary duty, including eliminating particular aspects of that duty; and (5) prescribe the standards by which to measure the performance of the contractual obligation of good faith and fair dealing under Section 409(d). (e) The operating agreement may specify the method by which a specific act or transaction that would otherwise violate the duty of loyalty may be authorized or ratified by one or more disinterested and independent persons after full disclosure of all material facts. (f) To the extent the operating agreement of a member managed limited liability company expressly relieves a member of a responsibility that the member would otherwise have under this be in writing; (7) vary the right of a court to expel a partner in the events specified in Section 601(5); (8) vary the requirement to wind up the partnership business in cases specified in Section 801(4), (5), or (6); (9) vary the law applicable to a limited liability partnership under Section 106(b); or (10) restrict rights of third parties under this [Act]. 26

27 [act] and imposes the responsibility on one or more other members, the operating agreement may, to the benefit of the member that the operating agreement relieves of the responsibility, also eliminate or limit any fiduciary duty that would have pertained to the responsibility. (g) The operating agreement may alter or eliminate the indemnification for a member or manager provided by Section 408(a) and may eliminate or limit a member or manager s liability to the limited liability company and members for money damages, except for: (1) breach of the duty of loyalty; (2) a financial benefit received by the member or manager to which the member or manager is not entitled; (3) a breach of a duty under Section 406; (4) intentional infliction of harm on the company or a member; or (5) an intentional 27

28 violation of criminal law. (h) The court shall decide any claim under subsection (d) that a term of an operating agreement is manifestly unreasonable. The court: (1) shall make its determination as of the time the challenged term became part of the operating agreement and by considering only circumstances existing at that time; and (2) may invalidate the term only if, in light of the purposes and activities of the limited liability company, it is readily apparent that: (A) the objective of the term is unreasonable; or (B) the term is an unreasonable means to achieve the provision s objective. SECTION 111. REQUIRED INFORMATION. Required Information Category III A limited partnership shall maintain at its designated office the following information: (1) a current list showing the full name and last known street and mailing address of each partner, However, there is a related issue as to information rights, which each statute addresses. See below. 28

29 separately identifying the general partners, in alphabetical order, and the limited partners, in alphabetical order; (2) a copy of the initial certificate of limited partnership and all amendments to and restatements of the certificate, together with signed copies of any powers of attorney under which any certificate, amendment, or restatement has been signed; (3) a copy of any filed articles of conversion or merger; (4) a copy of the limited partnership s federal, state, and local income tax returns and reports, if any, for the three most recent years; (5) a copy of any partnership agreement made in a record and any amendment made in a record to any partnership agreement; (6) a copy of any financial statement of the limited partnership for the three most recent years; (7) a copy of the three most recent annual reports delivered by the limited partnership to the [Secretary of State] pursuant to 29

30 Section 210; (8) a copy of any record made by the limited partnership during the past three years of any consent given by or vote taken of any partner pursuant to this [Act] or the partnership agreement; and (9) unless contained in a partnership agreement made in a record, a record stating: (A) the amount of cash, and a description and statement of the agreed value of the other benefits, contributed and agreed to be contributed by each partner; (B) the times at which, or events on the happening of which, any additional contributions agreed to be made by each partner are to be made; (C) for any person that is both a general partner and a limited partner, a specification of what transferable interest the person owns in each capacity; and (D) any events upon the happening of which the limited partnership is to be dissolved and its activities wound up. SECTION 111. OPERATING RULLCA, sec. 111 is part of the 30

31 AGREEMENT; EFFECT ON LIMITED LIABILITY COMPANY AND PERSONS BECOMING MEMBERS; PREFORMATION AGREEMENT. Category II discussion of agreements. (a) A limited liability company is bound by and may enforce the operating agreement, whether or not the company has itself manifested assent to the operating agreement. (b) A person that becomes a member of a limited liability company is deemed to assent to the operating agreement. (c) Two or more persons intending to become the initial members of a limited liability company may make an agreement providing that upon the formation of the company the agreement will become the operating agreement. One person intending to become the initial member of a limited liability company may assent to terms providing that upon the formation of the company the terms will become the operating agreement. SECTION 409 STANDARDS OF CONDUCT FOR MEMBERS AND SECTION 112. BUSINESS TRANSACTIONS OF PARTNER SECTION 404. GENERAL STANDARDS OF PARTNER S Harmonize to RULLCA [co reporter suggests that 31

32 MANAGERS. [language purposefully omitted See sec. 409(e) cmt] WITH PARTNERSHIP. A partner may lend money to and transact other business with the limited partnership and has the same rights and obligations with respect to the loan or other transaction as a person that is not a partner. SECTION 113. DUAL CAPACITY. A person may be both a general partner and a limited partner. A person that is both a general and limited partner has the rights, powers, duties, and obligations provided by this [Act] and the partnership agreement in each of those capacities. When the person acts as a general partner, the person is subject to the obligations, duties and restrictions under this [Act] and the partnership agreement for general partners. When the person acts as a limited partner, the person is subject to the obligations, duties and restrictions under this [Act] and the partnership agreement for CONDUCT (f) A partner may lend money to and transact other business with the partnership, and as to each loan or transaction the rights and obligations of the partner are the same as those of a person who is not a partner, subject to other applicable law. Harmonization should occur under Article 4 discussion] Defer to Category II query whether comparable provision appropriate as to managermanaged LLC; in part need to decide how to balance forwardlooking harmonization with historical vestiges 32

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