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LRB-4814/1
ARG:wlj
2019 - 2020 LEGISLATURE
February 12, 2020 - Introduced by Senators LeMahieu, Risser and Marklein,
cosponsored by Representatives Tusler, Hebl and Katsma. Referred to
Committee on Agriculture, Revenue and Financial Institutions.
SB810,7,13 1An Act to repeal 178.0105 (3) (b), 178.1123 (3) (b), 178.1133 (3) (b), 178.1143 (3)
2(b), 178.1153 (3) (b), 178.1161 (2) (a), 180.0122 (1) (z), 180.0125 (4) (b), 180.0401
3(2) (a) 5., 6., 7. and 8., 180.0502 (1) (c), 180.0502 (2), 180.1101 (3) (a), 180.1103
4(title), 180.1103 (6), 180.1105 (1) (h), 180.1161 (5) (a), (b) and (c), 180.1506 (2)
5(a) 5., 6., 7. and 8., 180.1508 (1) (a) and (b), 180.1508 (1) (f), 181.0120, 181.0121
6(1) (a) 4., 181.0122, 181.0124, 181.0125, 181.0126, 181.0128 (1) (title), 181.0128
7(2) (title), 181.0128 (3) (title), 181.0128 (4), 181.0128 (5) (title), 181.0128 (6)
8(title), 181.0141 (5), 181.0401 (2) (a) 6., 7. and 8., 181.0402 (1) (title), 181.0402
9(2) (title), 181.0501 (1) (title), 181.0501 (2) (title), 181.0501 (3) (title), 181.0502
10(2), 181.0502 (3) (title), 181.0503 (1) (title), 181.0503 (1) (d) and (e), 181.0503
11(2), 181.0503 (3) (title), 181.0504 (1) (title), 181.0504 (2) (title), 181.0504 (3)
12(title), 181.1101 (1) (title), 181.1101 (2), 181.1101 (3), 181.1104, 181.1105,
13181.1106, 181.1107, 181.1161 (1) (b), 181.1161 (2) (b), 181.1161 (3) (e), (f) and
14(g), 181.1161 (4), (5) and (6), 181.1420 (5), 181.1506 (2) (a) 6., 7. and 8., 181.1507

1(1) (title), 181.1507 (2) (title), 181.1507 (3) (title), 181.1509 (1) (title), 181.1509
2(1) (d) and (e), 181.1509 (2), 181.1509 (3) (title), 181.1510 (1) (title), 181.1510
3(2) (title), 181.1510 (3) (title), 181.1510 (4) (title), 181.1533, 181.1622 (1),
4181.1622 (2) (title), 181.1622 (3) (title), 181.1622 (4) (title), 181.1622 (5) and
5612.22 (2) (a), (b), (c) and (d); to renumber 178.0104, 178.0806 (7), 180.0122 (1)
6(a) to (ym), 180.1100 (1), 180.1103 (4) (intro.) and (a), 180.1103 (5) (title) and (a),
7181.0128 (3), 181.0128 (6), 181.1100 (1), 181.1103 (5), 181.1103 (6), 181.1161 (3)
8(c), 181.1622 (title) and 613.13 (3); to renumber and amend 180.0122 (1)
9(intro.), 180.0122 (1) (yr), 180.0124 (1), 180.0125 (2) (b), 180.0501, 180.0502 (3),
10180.1101 (2), 180.1102 (2), 180.1102 (3), 180.1102 (4), 180.1103 (1), 180.1103 (2),
11180.1103 (3), 180.1103 (4) (b), 180.1103 (5) (b), 180.1105 (1) (i), 180.1106 (1) (am)
121., 180.1106 (1) (e), 180.1161 (5) (intro.), 180.1507, 180.1508 (2), 180.1531 (2) (c)
132., 181.0123, 181.0128 (title), 181.0128 (1), 181.0128 (2), 181.0128 (5), 181.0501
14(intro.), 181.0501 (1), 181.0501 (2), 181.0501 (3), 181.0502 (3), 181.1103 (1),
15181.1103 (2), 181.1103 (3), 181.1103 (4), 181.1161 (1) (a), 181.1161 (2) (a),
16181.1161 (3) (intro.), (a) and (b), 181.1161 (3) (d), 181.1507 (intro.), 181.1507 (1),
17181.1507 (2), 181.1507 (3), 181.1622 (2), 181.1622 (3), 181.1622 (4) and 612.22
18(2) (intro.); to consolidate, renumber and amend 178.1161 (2) (intro.) and
19(b), 180.0125 (4) (intro.) and (a) and 180.1101 (3) (intro.) and (b); to amend
2011.0101 (9), 13.69 (1), 44.03 (3), 71.80 (21), 71.80 (21m), 71.80 (22), 71.80 (22m),
2173.03 (58), 77.25 (6m), 77.25 (6q), 77.25 (6t), 77.61 (15), 97.605 (4) (a) 1., 97.67
22(2) (c) (intro.), 108.025 (1) (b), 139.34 (9), 157.62 (1) (b) and (2) (b) 1., 2. and 7.,
23178.0102 (11), 178.0102 (14), 178.0105 (3) (d), 178.0105 (3) (f), 178.0105 (3) (h)
24(intro.), 178.0105 (3) (n), 178.0105 (4) (c) (intro.), 178.0110 (2) (b), 178.0120 (1),
25178.0121 (title), 178.0121 (2) (a), 178.0121 (2) (b) 1., 178.0121 (2) (b) 2., 178.0121

1(2) (b) 3., 178.0121 (2) (b) 4., 178.0121 (2) (c), 178.0301 (1), 178.0303 (1) (b) 2.,
2178.0303 (1) (b) 3., 178.0303 (2) (b), 178.0303 (2) (c), 178.0303 (2m) (a) 2.,
3178.0303 (2m) (a) 3., 178.0401 (3), 178.0401 (5), 178.0402 (2) (a), 178.0405 (3),
4178.0409 (3), 178.0601 (4) (c) 2., 178.0701 (5), 178.0701 (7) (d), 178.0701 (9),
5178.0804 (1) (intro.), 178.0806 (3) (a), 178.0807 (2) (c), 178.0807 (3) (b) 1. and
62., 178.0807 (4), 178.0808 (title), 178.0808 (1), 178.0808 (2) (a), 178.0809 (1),
7178.0901 (3) (c), 178.0902 (1), 178.0902 (2), 178.0902 (5), 178.09032 (5),
8178.0905 (2), 178.0908 (2), 178.0911 (1) (intro.), 178.0911 (1) (b), 178.0911 (1)
9(c), 178.0912 (1), 178.0913 (1) (b), 178.1003 (5), 178.1004 (intro.), 178.1004 (1),
10178.1004 (4), 178.1006 (1), 178.1006 (2), 178.1009 (1) (c), 178.1009 (1) (f),
11178.10101 (1) (d), 178.10102 (1), 178.10102 (2) (b), 178.1011 (1) (c), 178.1101
12(16) (b), 178.1101 (16) (h), 178.1101 (18) (b), 178.1101 (18) (i), 178.1102 (2),
13178.1123 (2), 178.1124 (1) (d) 2., 178.1124 (1) (f), 178.1125 (1) (f), 178.1125 (2)
14(a), 178.1125 (2) (b), 178.1133 (1), 178.1133 (2), 178.1134 (1) (d), 178.1134 (1) (f),
15178.1135 (1) (a), 178.1135 (5) (a), 178.1135 (5) (b), 178.1141 (1), 178.1142 (1) (f),
16178.1143 (1), 178.1143 (2), 178.1144 (1) (a), 178.1144 (1) (d), 178.1144 (1) (f),
17178.1145 (1) (f), 178.1145 (2), 178.1153 (2), 178.1154 (1) (d), 178.1154 (1) (f),
18178.1155 (1) (e), 178.1155 (1) (f), 178.1161 (1) (intro.), 180.0103 (5), 180.0103 (8),
19180.0103 (9), 180.0103 (11m), 180.0120 (1) (intro.), 180.0120 (1) (g), 180.0120
20(3) (a) (intro.), 180.0121 (1) (a) 4., 180.0122 (4), 180.0122 (5), 180.0123 (title),
21180.0123 (1) (a) (intro.), 180.0125 (1), 180.0125 (4) (c), 180.0128 (2) (b) 5.,
22180.0141 (5) (a) (intro.), 180.0202 (1) (h), 180.0401 (2) (a) 2., 180.0401 (2) (a) 9.,
23180.0401 (3) (a), 180.0401 (4) (intro.), (a) and (b), 180.0402, 180.0403 (title),
24180.0403 (1) (a), 180.0403 (1) (c), 180.0502 (1) (intro.), 180.0503 (1) (intro.), (a),
25(b), (c) and (d), 180.0504 (2) (intro.), (a) and (c), 180.0504 (3), 180.0624,

1subchapter XI (title) of chapter 180 [precedes 180.1100], 180.1100 (2) and (3),
2180.1101 (title), 180.1101 (1), 180.1102 (title), 180.1102 (1), 180.1104 (1),
3180.1104 (2) (intro.) and (b), 180.1104 (3), 180.1104 (4), 180.11045 (1) (a),
4180.1105 (title), 180.1105 (1) (intro.), 180.1105 (1) (am), 180.1105 (1) (bm),
5180.1105 (1) (cm), 180.1105 (1) (dm), 180.1105 (1) (e), 180.1105 (1) (f), 180.1105
6(1) (g), 180.1105 (2), 180.1106 (title), 180.1106 (1) (intro.), 180.1106 (1) (a),
7180.1106 (1) (am) 2., 180.1106 (1) (b), 180.1106 (1) (c), 180.1106 (1) (d), 180.1106
8(1) (f), 180.1106 (2), 180.1106 (3), 180.1130 (2) (a), 180.1130 (3) (a) (intro.),
9180.1130 (3) (a) 2., 180.1140 (4) (a) (intro.), 180.1140 (4) (a) 2., 180.1140 (4) (e)
103., 180.1150 (3) (e), 180.1150 (4) (f), 180.1161 (1), 180.1161 (2), 180.1161 (3)
11(intro.), (a), (b), (d) and (e), 180.1161 (4) (intro.) and (a) 1., 180.1161 (4) (b), (c)
12and (d), 180.1161 (6), 180.1301 (2), 180.1302 (1) (a) 1., 180.1302 (1) (a) 3. c.,
13180.1302 (1) (a) 3. d., 180.1302 (1) (b), 180.1330 (2), 180.1407 (1) (intro.) and (b),
14180.1421 (1), 180.1421 (2), 180.1421 (2m) (a), 180.1422 (3), 180.1423 (2),
15180.1503 (1) (e), 180.1506 (2) (a) 2., 180.1506 (2) (a) 9., 180.1506 (2) (b), 180.1506
16(3) (a), 180.1506 (4) (intro.), (a) and (b), 180.1508 (1) (intro.), 180.1508 (1) (d),
17180.1509 (1) (intro.), (a), (b), (c) and (d), 180.1510 (4) (a) (intro.), 180.1520 (2)
18(c), 180.1530 (1) (a), (d), (e) and (f), 180.1531 (1), 180.1531 (2) (a), 180.1531 (2)
19(b), 180.1531 (2) (c) 1. (intro.), 180.1531 (2m) (a), 180.1532 (1), 180.1622 (1)
20(intro.), (b), (c) and (d), 180.1622 (2), 180.1706 (1), 180.1706 (2) (intro.),
21180.1707 (1), 180.1708 (5), 180.1805 (5), 180.1813 (title), 180.1813 (1), 181.0103
22(5), 181.0103 (12), 181.0103 (13), 181.0103 (19), 181.0121 (1) (a) 3., 181.0121 (1)
23(b), 181.0141 (4), subchapter II (title) of chapter 181 [precedes 181.0201],
24181.0202 (1) (d), 181.0203 (1), 181.0401 (1) (a) 1., 181.0401 (2) (a) 3., 181.0401
25(2) (a) 9., 181.0401 (3) (a), 181.0401 (4) (intro.), (a) and (b), 181.0402 (title),

1181.0402 (1), 181.0402 (2), 181.0403 (title), 181.0403 (1) (a), 181.0403 (1) (c),
2181.0501 (title), 181.0502 (title), 181.0503 (1) (intro.), (a) and (b), 181.0503 (1)
3(c), 181.0503 (3) (intro.), 181.0504 (title), 181.0504 (1), 181.0504 (2) (intro.), (a)
4and (c), 181.0504 (3), 181.0670 (2) (d), 181.0705 (2), 181.0705 (3) (b), 181.0809
5(2) (c), subchapter XI (title) of chapter 181 [precedes 181.1100], 181.1100 (2),
6181.1100 (3), 181.1101 (1), 181.1161 (title), 181.1421 (1), 181.1421 (4), 181.1422
7(3), 181.1423 (2), 181.1503 (1) (e), 181.1506 (2) (a) 3., 181.1506 (2) (a) 9.,
8181.1506 (3) (a), 181.1506 (4) (intro.), (a) and (b), 181.1509 (1) (intro.), (a) and
9(b), 181.1509 (1) (c), 181.1509 (3) (intro.), 181.1510 (title), 181.1510 (1),
10181.1510 (4) (a) (intro.), 1. and 3., 181.1510 (4) (b), 181.1520 (2) (c), 182.01 (3)
11(intro.), 185.045, 190.01 (2), 196.205 (1) (c), 196.485 (1) (dv), 196.485 (1) (fe),
12196.485 (3m) (c) (intro.), 204.104 (2), 221.0701, 234.03 (28), 340.01 (6u), 440.92
13(6) (b) 1., 611.72 (1) and (2), 611.73 (1) (a), 613.13 (2) (intro.), 613.13 (3) (title),
14613.13 (4), 766.51 (10), 766.70 (4) (c), 799.06 (2), 800.035 (1) and 857.015; to
15repeal and recreate
178.0120 (2) (a), 178.0120 (2) (b), chapter 179, 180.0141
16(title), (1), (2) and (3), 180.0141 (5) (a) 4., 180.0401 (2) (a) 1., 180.0403 (1) (b),
17180.0502 (1) (a), 180.0502 (1) (b), 180.0504 (1), 180.0504 (4), 180.1161 (3) (f) and
18(g), 180.1161 (4) (a) 2., 180.1506 (2) (a) 1., 181.0401 (2) (a) 1., 181.0403 (1) (b),
19181.0502 (1), 181.0504 (4), 181.1101 (title), 181.1103 (title), 181.1506 (2) (a) 1.,
20181.1508, 181.1510 (5) and chapter 183; and to create 44.03 (3m), 178.0103 (6)
21(d), 178.0104 (2m) and (3m), 178.0105 (3) (np), 178.0401 (11m), 178.09032 (6),
22178.1124 (1) (g), 178.1125 (3), 178.1132 (1) (f), 178.1135 (6), 178.1144 (1) (g),
23178.1145 (3), 178.1154 (1) (g), 178.1161 (3), (4) and (5), 180.0103 (3m), 180.0103
24(7d), 180.0103 (8r), 180.0103 (9m) and (9r), 180.0103 (11g) and (11i), 180.0103
25(12g), 180.0103 (12r), 180.0103 (13m), 180.0103 (16m), 180.0103 (17g),

1180.0105, 180.0112, 180.0120 (3) (am), 180.0120 (5) and (6), 180.0122 (1g),
2180.0124 (1) (c), 180.0124 (2) (d), 180.0125 (2) (b) 1. to 19., 180.0125 (4) (am),
3180.0141 (6) and (7), 180.0143, 180.0144, 180.0145, 180.0401 (1) (a) 3.,
4180.0401 (3m), 180.0501 (2m) and (3m), 180.0502 (1m) and (1r), 180.0502 (3)
5(a), (b) and (c), 180.0502 (5), 180.0503 (4) and (5), 180.0504 (3m), 180.0704 (7),
6180.0821 (4), 180.1100 (1c) and (1e), 180.1100 (1j), (1m), (1o), (1q), (1s), (1u) and
7(1w), 180.1100 (4) to (14), 180.11001, 180.11002, 180.11003, 180.11004,
8180.1101 (2m), 180.11012 (title), 180.11012 (1) (d), (e) and (f), 180.1102 (1m),
9180.1102 (2m), 180.11021 (title), 180.11021 (1) (d) and (e), 180.11031, 180.11032
10(title), 180.1105 (1) (em) and (er), 180.1105 (1g), 180.1106 (1) (am) 1g., 180.1106
11(1) (e) 2., 180.1106 (1) (g), 180.1106 (1m), 180.1161 (3m), 180.1161 (4) (f), (g) and
12(h), 180.1161 (5) (am) 1., 2., 3., 4., 5. and 6., (bm) and (cm), 180.1161 (7), 180.1161
13(8), 180.1171, 180.1172, 180.1173, 180.1174, 180.1175, 180.1421 (5), 180.1422
14(4), 180.1506 (3m), 180.1507 (2m) and (3m), 180.1508 (1) (e), 180.1508 (1g),
15180.1508 (1m) and (1r), 180.1508 (2) (a), (b) and (c), 180.1508 (4), 180.1509 (4)
16and (5), 180.1531 (2) (c) 1m., 180.1531 (2) (c) 2. (intro.) and b., 180.1622 (6),
17181.0103 (10g), 181.0103 (12g), 181.0103 (13g) and (13m), 181.0103 (14g) and
18(14m), 181.0103 (18m), 181.0103 (20m) and (20r), 181.0103 (21m), 181.0103
19(23m), 181.0103 (24m), 181.0105, 181.0107, 181.0162, 181.0163, 181.0208,
20181.0210, 181.0211, 181.0212, 181.0214 (1), 181.0214 (5), 181.0401 (1) (a) 3.,
21181.0401 (3m), 181.0403 (1) (e), 181.0501 (3m) and (4m), 181.0502 (1m) and
22(1r), 181.0502 (3) (a), (b) and (c), 181.0502 (5), 181.0503 (1) (bm), 181.0503 (4),
23(5) and (6), 181.0504 (3m), 181.0505, 181.0506, 181.0507, 181.0704 (5),
24181.0821 (4), 181.1100 (1c), (1e), (1j), (1m), (1o), (1q), (1s), (1u) and (1w),
25181.1100 (4) to (14), 181.11001, 181.11002, 181.11003, 181.11004, 181.1101

1(2m), 181.1102, 181.1103 (1m) (title), 181.1103 (1m) (a), 181.1103 (2m), (3m)
2and (4m), 181.11045, 181.11055, 181.1131, 181.1132, 181.1133, 181.1134,
3181.1135, 181.1162 (title), 181.1162 (1) (e) and (f), 181.1162 (2), 181.1163,
4181.1164, 181.1165, 181.1171, 181.1172, 181.1173, 181.1174, 181.1175,
5181.1180, 181.1421 (7), 181.1422 (4), 181.1506 (3m), 181.1507 (3m) and (4m),
6181.1509 (1) (bm), 181.1509 (4), (5) and (6), 181.1510 (4m), 613.13 (3) (a) and
7613.51 (3m) of the statutes; relating to: adopting revisions to the state's
8uniform limited partnership law and the state's limited liability company law;
9making modifications to the state's uniform partnership law; procedures
10applicable to business corporations and nonstock corporations; certificates of
11authority of service insurance corporations; providing an exemption from
12emergency rule procedures; granting rule-making authority; and providing a
13penalty.
Analysis by the Legislative Reference Bureau
This bill adopts, with modifications, the most recent versions of the Uniform
Limited Partnership Act and Uniform Limited Liability Company Act. The bill also
makes changes to the state's partnership law and to the law governing business
corporations and nonstock corporations.
LIMITED PARTNERSHIPS
Background
In 1916, the National Conference of Commissioners on Uniform State Laws,
now called the Uniform Law Commission (ULC), promulgated the Uniform Limited
Partnership Act. In 1976, the ULC adopted a Revised Uniform Limited Partnership
Act and, in 1985, adopted amendments to this act. The revised act was again revised
in 2001. In 2013, the ULC amended the Revised Uniform Limited Partnership Act
(2001).
This state has, by statute, recognized limited partnerships since the 1850s.
This state first adopted the Uniform Limited Partnership Act in 1919. In 1983
Wisconsin Act 173
, this state adopted, with modifications, the Revised Uniform
Limited Partnership Act (1976). In 1989 Wisconsin Act 232, this state adopted, with
modifications, the 1985 amendments to the Revised Uniform Limited Partnership

Act (1976). Current law, therefore, reflects the Revised Uniform Limited
Partnership Act (1976), as amended in 1985, subject to various modifications.
This bill repeals and recreates Wisconsin's limited partnership law to adopt the
Revised Uniform Limited Partnership Act (2001), as last amended in 2013 (RULPA),
subject to certain modifications. Many provisions of RULPA and current law are
similar, including the following: A limited partnership is a legal entity separate from
its partners, and the filing of a certificate of limited partnership is required to form
a limited partnership. A limited partnership is distinguished from a general
partnership by the presence of limited partners. A limited partnership must have
at least one general partner and at least one limited partner. The limited
partnership generally is managed by general partners, and limited partners
primarily provide capital for the limited partnership. A partnership agreement
usually provides rules of governance for the limited partnership and, in many
instances, statutory provisions are default rules that govern the limited partnership
only in the absence of applicable terms in the partnership agreement. However, in
some instances, the terms of the partnership agreement may not vary from statutory
requirements. Unless stated otherwise in the partnership agreement, a limited
partnership interest (a partner's right to receive distributions from the limited
partnership) is transferable, but the recipient of the transfer (transferee) generally
is entitled to receive only partnership distributions and does not gain the voting and
other rights of a partner. Yet there are significant changes to current law made by
RULPA, as adopted under this bill, which are discussed below.
Formation and partnership agreement
Current law defines “limited partnership" as a partnership formed under
applicable state law by two or more persons and having one or more general partners
and one or more limited partners. To form a limited partnership, a certificate of
limited partnership, containing certain information, must be filed with the
Department of Financial Institutions. The limited partnership is formed upon the
filing of the certificate of limited partnership or, if a later date is specified in the
certificate of limited partnership, on that later date.
Under this bill, a certificate of limited partnership containing specified
information must still be filed with DFI to form a limited partnership. However, the
limited partnership is not formed until the certificate of limited partnership is filed
and becomes effective and the limited partnership, which must have at least two
partners, has at least one general partner and at least one limited partner. The bill
also eliminates as required information in the certificate of limited partnership a
statement of duration of the limited partnership (when the limited partnership must
dissolve). Instead, the bill specifies that a limited partnership has perpetual
duration, although this may be modified by the partnership agreement.
The bill clarifies that a person may be both a general partner and a limited
partner and that the rights, powers, duties, and obligations of such a person are
determined by the capacity in which the person acts.
The bill includes provisions related to permissible names for a limited
partnership. The bill eliminates a provision of current law that, with exceptions,
prohibits a limited partner's name from appearing in the limited partnership's name.

The bill also changes the standard for permissible limited partnership names. Under
current law, a limited partnership's name may not be the same as or “deceptively
similar" to the names of certain other businesses. Under the bill, a limited
partnership's name must be “distinguishable" from the names of certain other
businesses.
Current law defines “partnership agreement" as any valid agreement of the
partners (limited partners and general partners) as to the affairs of a limited
partnership and the conduct of its business. Certain provisions of current law
relating to rights and duties of and restrictions on a partner in a limited partnership
apply only if there is no contrary provision in the partnership agreement.
This bill provides more specific guidance, in comparison with current law, as to
when the provisions of a partnership agreement override contrary statutory
provisions and when they do not. Under the bill, “partnership agreement" means the
agreement, whether oral, implied, written, or recorded in a tangible or electronic
medium, of all the general and limited partners of a limited partnership concerning:
1) relations among the partners and between the partners and the limited
partnership; 2) the activities and affairs of the limited partnership and the conduct
of those activities and affairs; 3) the means and conditions for amending the
partnership agreement; and 4) mergers and other reorganizations involving the
limited partnership. As to these matters, statutory provisions govern only in the
absence of an applicable provision in the partnership agreement. However, the bill
also imposes restrictions on the terms of a partnership agreement. Among these
restrictions, a partnership agreement may not vary from certain statutory
provisions relating to the following: the power of a person to dissociate as a general
partner, except with respect to a limited liability limited partnership (LLLP)
(discussed further below); the grounds for expulsion of a general partner by judicial
order because of certain conduct by the general partner; the causes of dissolution;
requirements for winding up the limited partnership's activities and affairs;
requirements for DFI filings or for a limited partnership's registered agent; lawsuits
by and against partners and the limited partnership; records and information
required to be kept by the limited partnership and a partner's right of access to the
records and information; a partner's fiduciary and other duties (discussed further
below); and the applicable law governing a limited partnership's internal affairs and
the liability of its partners. The partnership agreement also governs the obligations
of the limited partnership and its partners to a person dissociated as a partner
(discussed further below) and to a transferee of a partner's interest, but an
amendment to the partnership agreement after a person has dissociated as a partner
cannot impose a new obligation on the person.
Partner liability and limited liability limited partnerships
Under current law, a general partner of a limited partnership has the same
liabilities as a partner in a partnership without limited partners (general
partnership). In general, all partners in a general partnership are jointly and
severally liable for all debts, obligations, and other liabilities of the general
partnership. In contrast, a limited partner is generally not liable for the obligations
of the limited partnership. However, there are exceptions if the limited partner is

also a general partner or if the limited partner participates in the control of the
business and a person who transacts business with the limited partnership
reasonably believes that the limited partner is a general partner.
Under this bill, general partners are, with exceptions, liable jointly and
severally for all debts, obligations, and other liabilities of the limited partnership.
The bill also eliminates the “control" exception under current law to a limited
partner's exemption from liability. Under the bill, a limited partner is not personally
liable for a debt, obligation, or other liability of the limited partnership solely by
reason of being or acting as a limited partner, even if the limited partner participates
in the management and control of the limited partnership.
Under current law, a general partnership may form as or become a limited
liability partnership (LLP), and a partner in an LLP is not personally liable for any
debt, obligation, or liability of the LLP, except that under some circumstances the
partner may be liable for the partner's own actions or the actions of a person under
the partner's supervision and control.
This bill allows a limited partnership to form as or become an LLLP by
including a statement to this effect in the certificate of limited partnership. If a
limited partnership is an LLLP, a general partner is not personally liable for a debt,
obligation, or other liability of the LLLP solely by reason of being or acting as a
general partner. Instead, a debt, obligation, or other liability incurred by the LLLP
is solely that of the LLLP.
Fiduciary and other duties of partners
Under current law, except as provided in the partnership agreement, a general
partner of a limited partnership generally has the rights and powers, and is subject
to the restrictions, of a partner in a general partnership. In general, a partner in a
general partnership owes to the partnership and to the other partners duties of
loyalty and care and must discharge the partner's duties and obligations consistently
with the contractual obligation of good faith and fair dealing. Except as provided in
the partnership agreement, a general partner or limited partner may lend money to
and transact other business with the limited partnership.
This bill more directly specifies a general partner's duties to the limited
partnership and to other partners and also specifies the extent to which these
statutory duties may be overridden by the partnership agreement. The bill also
specifies a limited partner's duties. Under the bill, unless the duty is permissibly
modified in the partnership agreement (as discussed below), a general partner owes
to the limited partnership, and to the other general and limited partners, duties of
loyalty and care, as described below. A general partner must also discharge its duties
and obligations, whether statutory or arising under the partnership agreement, and
exercise its rights, consistently with the contractual obligation of good faith and fair
dealing. However, a general partner does not violate a duty or obligation solely
because the general partner's conduct furthers the general partner's own interest.
Under the bill, a general partner owes a fiduciary duty of loyalty that includes
the duty 1) to account to the limited partnership and hold as trustee for it any
property, profit, or benefit derived by the general partner in the conduct or winding
up of the partnership's activities and affairs, from use of the partnership's property,

or from the appropriation of a partnership opportunity; 2) to refrain from dealing
with the partnership, in the conduct or winding up of the partnership's activities and
affairs, adversely or on behalf of a person having an adverse interest; and 3) to refrain
from competing with the partnership in the conduct of the partnership's activities
and affairs. However, all the general and limited partners, or those disinterested
partners with authority to act, may authorize or ratify, after disclosure of all material
facts, a specific act or transaction by a general partner that otherwise would violate
the duty of loyalty. Also, it is a defense to a claim of dealing adversely with the limited
partnership (item 2 above) that the transaction was fair to the limited partnership.
Under the bill, a general partner also owes a duty of care, in the conduct or
winding up of the limited partnership's activities and affairs, to refrain from 1)
grossly negligent or reckless conduct; 2) willfully failing to deal fairly with the
limited partnership or its partners when the partner has a material conflict of
interest; 3) violating the criminal law; 4) engaging in a transaction in which the
partner derives an improper personal profit; or 5) engaging in willful misconduct.
Under the bill, in contrast to general partners, limited partners have minimal
duties to the limited partnership. A limited partner must exercise any rights under
the statutes or the partnership agreement and discharge any duties under the
partnership agreement consistently with the contractual obligation of good faith and
fair dealing. A limited partner does not have any other duty to the limited
partnership or to any other partner solely by reason of acting as a limited partner.
Under the bill, the partnership agreement of a limited partnership may not do
any of the following: alter or eliminate, or restrict remedies for the breach of, the duty
of loyalty or the duty of care owed by a general partner, except as described below;
eliminate a general partner's or limited partner's contractual obligation of good faith
and fair dealing, but may, if not manifestly unreasonable, prescribe standards by
which performance of the obligation is measured or restrict remedies for breach of
the obligation; or relieve a partner from liability for conduct that violates the duty
of care (described above). However, the partnership agreement may specify the
method by which an act or transaction that would otherwise violate the duty of
loyalty may be authorized or ratified after the disclosure of all material facts. If not
manifestly unreasonable, the partnership agreement may also alter or eliminate, or
restrict remedies with respect to, certain aspects of the duty of loyalty; identify
specific types or categories of activities that do not violate the duty of loyalty or the
contractual obligation of good faith and fair dealing; otherwise alter the duty of care;
or alter or eliminate any other fiduciary duty. A court determines, as a matter of law,
whether a term of a partnership agreement is manifestly unreasonable.
Under the bill, if a general partner acts in compliance with the general
partner's fiduciary and other duties, the limited partnership must reimburse the
general partner for any payment made by the general partner in the course of the
general partner's activities on behalf of the partnership and must indemnify the
general partner with respect to third-party claims. The limited partnership may
also advance reasonable litigation expenses to the general partner. A general
partner is also entitled to reimbursement from the limited partnership for advances

to the partnership beyond the amount of capital the general partner agreed to
contribute, which advances are considered loans.
The bill also allows a limited partnership to file with DFI a statement of
partnership authority. This statement may recognize or limit, for purposes of a third
party dealing with the limited partnership, the authority of a person to act for or
enter into transactions on behalf of the limited partnership. In this statement, the
limited partnership may identify the authority, or limitations on the authority, of any
person or position (which covers all persons holding that position). The statement
of authority is effective for five years from its original date or its most recent
amendment or renewal, and the statement affects only the power of a person to bind
the limited partnership to persons that are not partners. All persons are deemed to
know of a statement of authority recorded with the register of deeds that limits a
person's authority to transfer real property on behalf of the limited partnership. The
bill also allows any person named in a statement of authority to file with DFI a
statement of denial of authority.
Operating requirements
Current law requires a limited partnership to maintain in this state a record
office where specified limited partnership records are kept. This bill continues to
require a limited partnership to maintain specified records and information and
requires the limited partnership to maintain a registered office in this state. The bill
also retains the current law requirement that the limited partnership maintain a
registered agent for service of process in this state.
This bill requires limited partnerships to file with DFI annual reports
containing specified information. This requirement also applies to registered foreign
limited partnerships, which are limited partnerships governed by the law of another
jurisdiction and authorized to do business in this state.
Under current law, a general partner or limited partner has the right to inspect
and copy any of the partnership records required to be maintained by the limited
partnership and also has certain rights to other information.
As under current law, this bill provides general partners and limited partners
with certain rights to inspect and copy records maintained by the limited
partnership, although the details of these rights in the bill differ from current law.
The bill specifies records and information that the limited partnership must furnish
to general partners and limited partners without demand, as well as information
that the limited partnership must furnish to partners on demand. The duty to
furnish information also applies to each general partner on whom a demand is made,
not just to the limited partnership. The bill also specifies the rights to information
of a person dissociated as a general partner or limited partner. The bill allows a
limited partnership to impose reasonable restrictions and conditions on access to and
use of information furnished by the partnership.
Dissociation of partners
Current law specifies the circumstances under which a general partner or
limited partner may withdraw from a limited partnership. With a narrow exception,
a limited partner may withdraw from a limited partnership only at the time or upon
the occurrence of an event specified in the partnership agreement. In contrast, a

general partner may withdraw from a limited partnership at any time by giving
notice to the other partners, but if the withdrawal violates the partnership
agreement, the limited partnership may recover damages from the withdrawing
general partner for breaching the partnership agreement. Current law also specifies
events that, absent consent of all partners, cause a person to cease to be a general
partner of the limited partnership, including that the general partner: 1) is removed
as a general partner in accordance with the partnership agreement; 2) assigns all his
or her partnership interest to another; 3) files for bankruptcy; or 4) dies or is
adjudicated incompetent.
This bill adopts the term “dissociation" in connection with the voluntary or
involuntary withdrawal of a general partner or limited partner from a limited
partnership and modifies the bases under which a partner's dissociation from the
limited partnership occurs. Among other events causing dissociation, a general
partner is dissociated when 1) the partner withdraws from the partnership or is
expelled from the partnership; 2) an event occurs that, under the terms of the
partnership agreement, results in the partner's dissociation; 3) the partner becomes
a debtor in bankruptcy, dies, has a guardian or conservator appointed, or is adjudged
to be incapable of performing his or her duties under the partnership agreement; or
4) the partnership dissolves and completes winding up. A general partner has the
power to dissociate from a limited partnership at any time, rightfully or wrongfully,
by expressly withdrawing, but the dissociation is wrongful if it breaches the
partnership agreement or if it occurs before the winding up of the limited partnership
and the general partner withdraws by express will, is expelled by judicial order, files
for bankruptcy, or dissolves or terminates. A general partner that wrongfully
dissociates is liable to the limited partnership and the other partners for damages
caused by the dissociation.
Under this bill, in contrast to a general partner, a limited partner does not have
a right to dissociate before the winding up of the limited partnership. The bill
specifies that, among the events causing dissociation, a limited partner is dissociated
when 1) the partner withdraws from the partnership or is expelled from the
partnership; 2) an event occurs that, under the terms of the partnership agreement,
results in the partner's dissociation; 3) the partner dies or, if an entity, its existence
terminates; or 4) the partnership dissolves and completes winding up.
The bill provides more specific information, in comparison with current law,
about the effects of a general partner's or limited partner's dissociation from a
limited partnership. Among these effects, a dissociated general partner has no right
to participate in the management and conduct of the partnership activities and
affairs; a dissociated partner's interest takes on the status of a transferee's interest
rather than a partner's interest; and certain obligations terminate as to future
events but may continue to apply to past events.
Under current law, a partner that withdraws from a limited partnership is
entitled to receive, within a reasonable time after withdrawal, the fair value of the
partner's interest in the limited partnership as of the date of withdrawal, unless the
partnership agreement provides otherwise.

Under this bill, unless the partnership agreement provides otherwise, a
partner has no right to a distribution before the dissolution and winding up of the
limited partnership, and any earlier distribution to a dissociated partner is
discretionary with the limited partnership.
Dissolution and winding up
This bill modifies some of the grounds under which a limited partnership is
dissolved and its activities and affairs must be wound up. Under current law, among
the grounds for dissolution, a limited partnership may be voluntarily dissolved on
the written consent of all general partners and limited partners.
Under the bill, a limited partnership may be voluntarily dissolved on the
consent of all general partners and of limited partners owning a majority of the rights
to receive distributions, whether as a general partner, limited partner, or both.
Under current law, if any general partner withdraws or otherwise ceases to be
a general partner, the limited partnership is dissolved unless: 1) the partnership
agreement allows the limited partnership to continue and there is at least one
remaining general partner that continues the partnership's business; or 2) within 90
days, all partners agree to continue the business of the limited partnership and to
appoint one or more additional general partners if necessary.
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