AB854: Bill Text

AB854,150,20 (3) The court may order the department to reinstate the limited partnership or may take other action that the court considers appropriate.

AB854,150,21 (4) The court's final decision may be appealed as in other civil proceedings.

AB854,150,22 subchapter IX

AB854,150,23 ACTIONS BY PARTNERS

AB854,151,4 179.0901 Direct action by partner. (1) Subject to sub. (2), a partner may maintain a direct action against another partner or the limited partnership, with or without an accounting as to the partnership's activities and affairs, to enforce the partner's rights and protect the partner's interests, including rights and interests under the partnership agreement or this chapter or arising independently of the partnership relationship.

AB854,151,7 (2) A partner maintaining a direct action under this section must plead and prove an actual or threatened injury that is not solely the result of an injury suffered or threatened to be suffered by the limited partnership.

AB854,151,9 (3) A right to an accounting on a dissolution and winding up does not revive a claim barred by law.

AB854,151,11 179.0902 Derivative action. A partner may maintain a derivative action to enforce a right of a limited partnership if any of the following applies:

AB854,151,14 (1) The partner first makes a demand on the general partners, requesting that they cause the limited partnership to bring an action to enforce the right, and the general partners do not bring the action within a reasonable time.

AB854,151,15 (2) A demand under sub. (1) would be futile.

AB854,151,18 179.0903 Proper plaintiff. A derivative action to enforce a right of a limited partnership may be maintained only by a person that is a partner at the time the action is commenced and to which any of the following applies:

AB854,151,20 (1) The person was a partner when the conduct giving rise to the action occurred.

AB854,151,23 (2) The person's status as a partner devolved on the person by operation of law or pursuant to the terms of the partnership agreement from a person that was a partner at the time of the conduct.

AB854,151,25 179.0904 Pleading. In a derivative action under s. 179.0902, the complaint must state with particularity one of the following:

AB854,152,2 (1) The date and content of plaintiff's demand and the response to the demand by the general partners.

AB854,152,3 (2) Why demand should be excused as futile.

AB854,152,12 179.0905 Special litigation committee. (1) If a limited partnership is named as or made a party in a derivative proceeding, the partnership may appoint a special litigation committee to investigate the claims asserted in the proceeding and determine whether pursuing the action is in the best interests of the partnership. If the partnership appoints a special litigation committee, on motion by the committee made in the name of the partnership, except for good cause shown, the court shall stay discovery for the time reasonably necessary to permit the committee to make its investigation. This subsection does not prevent the court from doing any of the following:

AB854,152,13 (a) Enforcing a person's right to information under s. 179.0304 or 179.0407.

AB854,152,15 (b) Granting extraordinary relief in the form of a temporary restraining order or preliminary injunction.

AB854,152,17 (2) A special litigation committee must be composed of one or more disinterested and independent individuals, who may be partners.

AB854,152,18 (3) A special litigation committee may be appointed as follows:

AB854,152,20 (a) By a majority of the general partners not named as parties in the proceeding.

AB854,152,22 (b) If all general partners are named as parties in the proceeding, by a majority of the general partners named as defendants.

AB854,152,24 (4) After appropriate investigation, a special litigation committee may determine that any of the following is in the best interests of the limited partnership:

AB854,152,25 (a) That the proceeding continue under the control of the plaintiff.

AB854,153,1 (b) That the proceeding continue under the control of the committee.

AB854,153,2 (c) That the proceeding be settled on terms approved by the committee.

AB854,153,3 (d) That the proceeding be dismissed.

AB854,153,15 (5) After making a determination under sub. (4), a special litigation committee shall file with the court a statement of its determination and its report supporting its determination and shall serve each party with a copy of the determination and report. The court shall determine whether the members of the committee were disinterested and independent and whether the committee conducted its investigation and made its recommendation in good faith, independently, and with reasonable care, with the committee having the burden of proof. If the court finds that the members of the committee were disinterested and independent and that the committee acted in good faith, independently, and with reasonable care, the court shall enforce the determination of the committee. Otherwise, the court shall dissolve the stay of discovery entered under sub. (1) and allow the action to continue under the control of the plaintiff.

AB854,153,18 179.0906 Proceeds and expenses. (1) (a) Except as otherwise provided in sub. (2), any proceeds or other benefits of a derivative action, whether by judgment, compromise, or settlement, belong to the limited partnership and not to the plaintiff.

AB854,153,20 (b) Except as otherwise provided in sub. (2), if the plaintiff receives any proceeds, the plaintiff shall remit them immediately to the partnership.

AB854,153,23 (2) If a derivative action is successful in whole or in part, the court may award the plaintiff reasonable expenses, including reasonable attorney fees and costs, from the recovery of the limited partnership.

AB854,153,24 subchapter X

AB854,153,25 FOREIGN LIMITED PARTNERSHIPS

AB854,154,2 179.1001 Governing law. (1) The governing law of a foreign limited partnership governs all of the following:

AB854,154,3 (a) The internal affairs of the partnership.

AB854,154,5 (b) The liability of a partner as partner for a debt, obligation, or other liability of the foreign partnership.

AB854,154,8 (2) A foreign limited partnership is not precluded from registering to do business in this state because of any difference between its governing law and the law of this state.

AB854,154,12 (3) Registration of a foreign limited partnership to do business in this state does not authorize the foreign partnership to engage in any activities and affairs or exercise any power that a limited partnership may not engage in or exercise in this state.

AB854,154,15 179.1002 Registration to do business in this state. (1) A foreign limited partnership may not do business in this state until it registers with the department under this chapter.

AB854,154,18 (2) A foreign limited partnership doing business in this state may not maintain an action or proceeding in this state unless it has registered to do business in this state.

AB854,154,22 (3) The failure of a foreign limited partnership to register to do business in this state does not impair the validity of a contract or act of the foreign partnership or its title to property in this state or preclude it from defending an action or proceeding in this state.

AB854,154,25 (4) A limitation on the liability of a general partner or limited partner of a foreign limited partnership is not waived solely because the foreign partnership does business in this state without registering to do business in this state.

AB854,155,2 (5) Section 179.1001 (1) and (2) applies even if a foreign limited partnership fails to register under this subchapter.

AB854,155,6 (5m) (a) A foreign limited partnership that does business in this state without registering to do business in this state is liable to this state, for each year or any part of a year during which it did business in this state without registration, in an amount equal to all of the following:

AB854,155,9 1. All fees and other charges that would have been imposed by this chapter on the foreign limited partnership had it properly filed a foreign registration statement as required by this section and thereafter filed all reports required by this chapter.

AB854,155,10 2. Fifty percent of the amount owed under subd. 1 or $5,000, whichever is less.

AB854,155,15 (b) The foreign limited partnership shall pay the amount owed under par. (a) to the department, and the department may not file a foreign registration statement for the foreign limited partnership until the amount owed is paid. The attorney general may enforce a foreign limited partnership's obligation to pay to the department any amount owed under this subsection.

AB854,155,18 179.1003 Foreign registration statement. To register to do business in this state, a foreign limited partnership must deliver a foreign registration statement to the department for filing. The statement must state all of the following:

AB854,155,20 (1) The name of the partnership and, if the name does not comply with s. 179.0114, a fictitious name adopted pursuant to s. 179.1006 (1).

AB854,155,21 (2) That the partnership is a foreign limited partnership.

AB854,155,22 (3) The jurisdiction of the partnership's governing law.

AB854,156,2 (4) The street and mailing addresses of the partnership's principal office and, if the partnership's governing law requires the partnership to maintain an office in the jurisdiction of such governing law, the street and mailing addresses of the required office.

AB854,156,4 (5) The street address of the partnership's registered office in this state and the name and e-mail address of its registered agent at that office.

AB854,156,7 179.1004 Amendment of foreign registration statement. A registered foreign limited partnership shall deliver to the department for filing an amendment to its foreign registration statement if there is a change in any of the following:

AB854,156,10 (1) The name of the partnership and, if the name of the partnership filing an amendment does not comply with s. 179.0114, a fictitious name adopted pursuant to s. 179.1006 (1).

AB854,156,11 (1r) The cessation of the partnership's status as a foreign limited partnership.

AB854,156,12 (2) The jurisdiction of the partnership's governing law.

AB854,156,13 (3) An address required by s. 179.1003 (4).

AB854,156,15 (4) The information required by s. 179.1003 (5), unless such information has previously been changed pursuant to s. 179.0118, 179.0209, or 179.0212.

AB854,156,18 179.1005 Activities not constituting doing business. (1) Activities of a foreign limited partnership which do not constitute doing business in this state under this subchapter include all of the following:

AB854,156,20 (a) Maintaining, defending, mediating, arbitrating, or settling an action or proceeding.

AB854,156,22 (b) Carrying on any activity concerning its internal affairs, including holding meetings of its partners.

AB854,156,23 (c) Maintaining accounts in financial institutions.

AB854,157,3 (d) Maintaining offices or agencies for the transfer, exchange, and registration of securities of the partnership or maintaining trustees or depositaries with respect to those securities.

AB854,157,4 (e) Selling through independent contractors.

AB854,157,6 (f) Soliciting or obtaining orders by any means if the orders require acceptance outside this state before they become contracts.

AB854,157,8 (g) Creating or acquiring indebtedness, mortgages, or security interests in property.

AB854,157,10 (h) Securing or collecting debts or enforcing mortgages or security interests in property securing the debts and holding, protecting, or maintaining property.

AB854,157,12 (i) Conducting an isolated transaction that is not in the course of similar transactions.

AB854,157,13 (j) Owning, without more, property.

AB854,157,14 (k) Doing business in interstate commerce.

AB854,157,16 (2) A person does not do business in this state solely by being a partner of a foreign limited partnership that does business in this state.

AB854,157,19 (3) This section does not apply in determining the contacts or activities that may subject a foreign limited partnership to service of process, taxation, or regulation under law of this state other than this chapter.

AB854,157,25 179.1006 Noncomplying name of foreign limited partnership. (1) A foreign limited partnership whose name does not comply with s. 179.0114 may not register to do business in this state until it adopts, for the purpose of doing business in this state, a fictitious name that complies with s. 179.0114. After registering to do business in this state with a fictitious name, the partnership shall only do business in this state under the fictitious name.

AB854,158,4 (2) If a registered foreign limited partnership changes its name to one that does not comply with s. 179.0114, it may not do business in this state until it complies with sub. (1) by amending its registration to adopt a fictitious name that complies with s. 179.0114.

AB854,158,11 179.1007 Withdrawal deemed on conversion to or merger into domestic filing entity or domestic limited liability partnership. A registered foreign limited partnership that converts to, or merges into, a domestic limited liability partnership or to or into a domestic entity whose formation requires the delivery of a record to the department for filing is deemed to have withdrawn its registration on the effective date of the conversion or merger, unless the registration is transferred to such partnership pursuant to s. 179.1009.

AB854,158,18 179.1008 Withdrawal on dissolution or conversion to nonfiling entity other than limited liability partnership. (1) (a) A registered foreign limited partnership that has dissolved and completed winding up or has converted to, or merged into, a domestic or foreign entity whose formation does not require the delivery of a record for filing by the department, other than a limited liability partnership, shall deliver a statement of withdrawal to the department for filing, as provided in s. 179.1011.

AB854,158,21 (b) In the case of a merger or conversion, the statement under par. (a) must also state the name and type of entity to which or into which the partnership has converted or merged and the jurisdiction of its governing law.

AB854,158,25 (2) After a withdrawal under this section is effective, service of process in any action or proceeding based on a cause of action arising during the time the foreign limited partnership was registered to do business in this state may be made pursuant to s. 179.0121, as provided in s. 179.1011 (2).

AB854,159,6 179.1009 Transfer of registration. (1) When a registered foreign limited partnership has merged into a foreign entity that is not registered to do business in this state or has converted to a foreign entity required to register with the department to do business in this state, the foreign entity shall deliver to the department for filing an application for transfer of registration. The application must state all of the following:

AB854,159,8 (a) The name of the registered foreign limited partnership before the merger or conversion.

AB854,159,10 (b) That before the merger or conversion the registration pertained to a foreign limited partnership.

AB854,159,13 (c) The name of the applicant foreign entity into which the foreign limited partnership has merged or to which it has been converted and, if the name does not comply with s. 179.0114, a fictitious name adopted pursuant to s. 179.1006 (1).

AB854,159,15 (d) The type of entity of the applicant foreign entity and the jurisdiction of its governing law.

AB854,159,19 (e) The street and mailing addresses of the principal office of the applicant foreign entity and, if the foreign limited partnership's governing law requires the entity to maintain an office in the jurisdiction of that governing law, the street and mailing addresses of that office.

AB854,159,21 (f) The street address of the applicant foreign entity's registered office in this state and the name and e-mail address of its registered agent at that address.

AB854,159,25 (2) When an application for transfer of registration takes effect, the registration of the foreign limited partnership to do business in this state is transferred without interruption to the foreign entity into which the partnership has merged or to which it has been converted.

AB854,160,3 179.10101 Grounds for termination. (1) The department may terminate the registration of a registered foreign limited partnership in the manner provided in s. 179.10102 if any of the following applies: