AB566: Bill Text

AB566,146,11 (2) After a limited partnership complies with sub. (1), any surplus must be distributed in the following order, subject to any charging order in effect under s. 179.0703:

AB566,146,14 (a) To each person owning a transferable interest that reflects contributions made and not previously returned, an amount equal to the value of the unreturned contributions.

AB566,146,17 (b) Among persons owning transferable interests, in proportion to their respective rights to share in distributions immediately before the dissolution of the partnership.

AB566,146,20 (3) If a limited partnership's assets are insufficient to satisfy all its obligations under sub. (1), with respect to each unsatisfied obligation incurred when the partnership was not a limited liability limited partnership, the following rules apply:

AB566,147,2 (a) Each person that was a general partner when the obligation was incurred and that has not been released from the obligation under s. 179.0607 shall contribute to the partnership for the purpose of enabling the partnership to satisfy the obligation. The contribution due from each of those persons is in proportion to the right to receive distributions in the capacity of a general partner in effect for each of those persons when the obligation was incurred.

AB566,147,9 (b) If a person does not contribute the full amount required under par. (a) with respect to an unsatisfied obligation of the partnership, the other persons required to contribute by par. (a) on account of the obligation shall contribute the additional amount necessary to discharge the obligation. The additional contribution due from each of those other persons is in proportion to the right to receive distributions in the capacity of a general partner in effect for each of those other persons when the obligation was incurred.

AB566,147,12 (c) If a person does not make the additional contribution required by par. (b), further additional contributions are determined and due in the same manner as provided in that paragraph.

AB566,147,17 (4) A person that makes an additional contribution under sub. (3) (b) or (c) may recover from any person whose failure to contribute under sub. (3) (a) or (b) necessitated the additional contribution. A person may not recover under this subsection more than the amount additionally contributed. A person's liability under this subsection may not exceed the amount the person failed to contribute.

AB566,147,20 (4r) If a limited partnership does not have sufficient surplus to comply with sub. (2) (a), any surplus must be distributed among the owners of transferable interests in proportion to the value of the respective unreturned contributions.

AB566,147,21 (5) All distributions made under sub. (2) must be paid in money.

AB566,147,24 179.0811 Administrative dissolution. (1) The department may commence a proceeding under sub. (2) to dissolve a limited partnership administratively if any of the following applies:

AB566,148,2 (a) The partnership does not pay, within one year after they are due, any fees or penalties required to be paid to the department under this chapter.

AB566,148,4 (b) The partnership does not have on file with the department its annual report within one year after it is due.

AB566,148,6 (c) The partnership is without a registered agent or registered office in this state for at least one year.

AB566,148,9 (d) The partnership does not notify the department within one year that its registered agent or registered office has been changed, that its registered agent has resigned, or that its registered office has been discontinued.

AB566,148,10 (e) The partnership violates s. 940.302 (2) or 948.051 (2).

AB566,148,14 (2) If the department determines that one or more grounds exist for administratively dissolving a limited partnership, the department may give the partnership notice of the determination. The notice shall be in writing and addressed to the registered agent of the limited partnership.

AB566,148,18 (3) (a) Within 60 days after the notice under sub. (2) takes effect under s. 179.0103 (7m), the limited partnership shall, with respect to each ground for administrative dissolution, either correct it or demonstrate to the reasonable satisfaction of the department that it does not exist.

AB566,148,23 (b) If the limited partnership fails to satisfy par. (a), the department may administratively dissolve the partnership. The department shall enter a notation in its records to reflect each ground for administrative dissolution and the effective date of dissolution and shall give the partnership notice of those facts. The notice shall be in writing and addressed to the registered agent of the partnership.

AB566,149,2 (3m) (a) If a notice under sub. (2) or (3) (b) is returned to the department as undeliverable, the department shall again give notice to the limited partnership. Except as provided under par. (b), this notice shall be in writing and addressed to the principal office of the partnership.

AB566,149,6 (b) If the notice under par. (a) is returned to the department as undeliverable or if the limited partnership's principal office cannot be determined from the records of the department, the department shall give notice by posting the notice on the department's Internet site.

AB566,149,10 (4) A limited partnership that is administratively dissolved continues in existence as an entity but may not carry on any activities except as necessary to wind up its activities and affairs and liquidate its assets under ss. 179.0802, 179.0806, 179.0807, 179.0808, and 179.0810, or to apply for reinstatement under s. 179.0812.

AB566,149,12 (4m) A limited partnership's right to the exclusive use of its name terminates on the date of the administrative dissolution under sub. (3) (b).

AB566,149,14 (5) The administrative dissolution of a limited partnership does not terminate the authority of its registered agent.

AB566,149,17 179.0812 Reinstatement. (1) A limited partnership that is administratively dissolved under s. 179.0811 may apply to the department for reinstatement. The application shall include all of the following:

AB566,149,19 (a) The name of the partnership and the effective date of its administrative dissolution.

AB566,149,21 (b) A statement that each ground for dissolution either did not exist or has been cured.

AB566,149,22 (c) A statement that the partnership's name satisfies s. 179.0114.

AB566,149,24 (2) (a) Upon application, the department shall reinstate a limited partnership if the department determines all of the following:

AB566,150,2 1. That the application contains the information required by sub. (1) and the information is correct.

AB566,150,4 2. That all fees and penalties owed by the partnership to the department under this chapter have been paid.

AB566,150,10 (b) Upon reinstatement of a limited partnership under par. (a), the department shall enter a notation in its records revising the notation specified in s. 179.0811 (3) (b) to reflect cancellation of the dissolution and reinstatement of the partnership. The notation shall state both the department's determination under par. (a) and the effective date of reinstatement. The department shall provide notice of the reinstatement to the partnership or its representative.

AB566,150,12 (4) When the reinstatement under this section is effective, all of the following shall apply:

AB566,150,14 (a) Except as provided in par. (c), the reinstatement relates back to and takes effect as of the effective date of the administrative dissolution.

AB566,150,16 (b) Except as provided in par. (c), the limited partnership resumes carrying on its activities and affairs as if the administrative dissolution had never occurred.

AB566,150,18 (c) The rights of a person arising out of an act or omission in reliance on the dissolution before the person knew or had notice of the reinstatement are unaffected.

AB566,150,22 179.0813 Appeal from denial of reinstatement. (1) If the department denies a limited partnership's application for reinstatement under s. 179.0812, the department shall serve the partnership with a written notice, addressed to the registered agent of the partnership, that explains each reason for denial.

AB566,151,5 (2) The limited partnership may appeal the denial of reinstatement to the circuit court for the county where the partnership's principal office or, if none in this state, the office of its registered agent is located, within 30 days after service of the notice of denial is effective under s. 179.0103 (7m). To appeal, the partnership shall petition the court to set aside the administrative dissolution and attach to the petition copies of the department's notice of administrative dissolution under s. 179.0811 (3) (b), the partnership's application for reinstatement under s. 179.0812 (1), and the department's notice of denial under sub. (1).

AB566,151,7 (3) The court may order the department to reinstate the limited partnership or may take other action that the court considers appropriate.

AB566,151,8 (4) The court's final decision may be appealed as in other civil proceedings.

AB566,151,9 subchapter IX

AB566,151,10 ACTIONS BY PARTNERS

AB566,151,16 179.0901 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.

AB566,151,19 (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.

AB566,151,21 (3) A right to an accounting on a dissolution and winding up does not revive a claim barred by law.

AB566,151,23 179.0902 Derivative action. A partner may maintain a derivative action to enforce a right of a limited partnership if any of the following applies:

AB566,152,3 (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.

AB566,152,4 (2) A demand under sub. (1) would be futile.

AB566,152,7 179.0903 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:

AB566,152,9 (1) The person was a partner when the conduct giving rise to the action occurred.

AB566,152,12 (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.

AB566,152,14 179.0904 Pleading. In a derivative action under s. 179.0902, the complaint must state with particularity one of the following:

AB566,152,16 (1) The date and content of plaintiff's demand and the response to the demand by the general partners.

AB566,152,17 (2) Why demand should be excused as futile.

AB566,153,2 179.0905 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:

AB566,153,3 (a) Enforcing a person's right to information under s. 179.0304 or 179.0407.

AB566,153,5 (b) Granting extraordinary relief in the form of a temporary restraining order or preliminary injunction.

AB566,153,7 (2) A special litigation committee must be composed of one or more disinterested and independent individuals, who may be partners.

AB566,153,8 (3) A special litigation committee may be appointed as follows:

AB566,153,10 (a) By a majority of the general partners not named as parties in the proceeding.

AB566,153,12 (b) If all general partners are named as parties in the proceeding, by a majority of the general partners named as defendants.

AB566,153,14 (4) After appropriate investigation, a special litigation committee may determine that any of the following is in the best interests of the limited partnership:

AB566,153,15 (a) That the proceeding continue under the control of the plaintiff.

AB566,153,16 (b) That the proceeding continue under the control of the committee.

AB566,153,17 (c) That the proceeding be settled on terms approved by the committee.

AB566,153,18 (d) That the proceeding be dismissed.

AB566,154,5 (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.

AB566,154,8 179.0906 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.

AB566,154,10 (b) Except as otherwise provided in sub. (2), if the plaintiff receives any proceeds, the plaintiff shall remit them immediately to the partnership.

AB566,154,13 (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.

AB566,154,14 subchapter X

AB566,154,15 FOREIGN LIMITED PARTNERSHIPS

AB566,154,17 179.1001 Governing law. (1) The governing law of a foreign limited partnership governs all of the following:

AB566,154,18 (a) The internal affairs of the partnership.

AB566,154,20 (b) The liability of a partner as partner for a debt, obligation, or other liability of the foreign partnership.

AB566,154,23 (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.

AB566,155,2 (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.

AB566,155,5 179.1002 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.

AB566,155,8 (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.

AB566,155,12 (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.

AB566,155,15 (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.

AB566,155,17 (5) Section 179.1001 (1) and (2) applies even if a foreign limited partnership fails to register under this subchapter.

AB566,155,21 (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:

AB566,155,24 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.

AB566,155,25 2. Fifty percent of the amount owed under subd. 1 or $5,000, whichever is less.

AB566,156,5 (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.

AB566,156,8 179.1003 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:

AB566,156,10 (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).

AB566,156,11 (2) That the partnership is a foreign limited partnership.