Senate Bill No. 325
(By Senators Ross, Anderson, Buckalew and Sharpe)
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[Introduced February 7, 1996; referred to
the Committee on Interstate Cooperation; and then to the
Committee on the Judiciary.]
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A BILL to amend and reenact sections one and six, article one,
chapter forty-seven-b of the code of West Virginia, one
thousand nine hundred thirty-one, as amended; to amend and
reenact sections six, seven and eight, article three of said
chapter; to amend and reenact section one, article four of
said chapter; to amend and reenact section three, article
seven of said chapter; to amend and reenact sections six and
seven, article eight of said chapter; to amend and reenact
sections two and three, article nine of said chapter; to amend
and reenact article ten of said chapter; and to further amend
said chapter by adding thereto a new article, designated
article eleven, all relating to registered limited liability
partnerships; defining the terms "registered limited liability
partnership" and "foreign registered limited liability
partnership" and expanding the definitions of other terms;
recognizing that a registered limited liability partnership is a general partnership; establishing governing law; providing
for the liability of a partner in a registered limited
liability partnership; limiting the right to bring an action
and to levy execution against only partners who are personally
liable for obligations of the partnership; limiting the
liability of a purported partner; setting forth the rights and
duties of partners in limited liability partnerships;
addressing rights and liabilities of partners upon
dissociation or dissolution of a registered limited liability
partnership; seeking accounts and contributions among
partners; conversions and mergers of partnerships; requiring
registered limited liability partnerships to register with the
secretary of state; establishing registration and annual
renewal fee; setting forth required content of such
registration; requiring that the names of such partnerships
contain the words "registered limited liability partnership"
or the abbreviation "L.L.P." or "LLP" as the last words or
letters in the partnership's name; requiring that a registered
limited liability partnership carry a minimum of one million
dollars in liability insurance or create, in lieu thereof, a
segregated fund consisting of an insurance bond or other
specified collateral, either of which shall be used to satisfy
judgments against the partnership and its partners; requiring
foreign registered limited liability partnerships to file
notice together with fee with secretary of state; recognizing
that foreign registered limited liability partnership shall be governed by the laws of the state of its formation; providing
for miscellaneous provisions; and making certain technical
revisions.
Be it enacted by the Legislature of West Virginia:
That sections one and six, article one, chapter forty-seven-b
of the code of West Virginia, one thousand nine hundred thirty-one,
as amended, be amended and reenacted; that sections six, seven and
eight, article three of said chapter be amended and reenacted; that
section one, article four of said chapter be amended and reenacted;
that section three, article seven of said chapter be amended and
reenacted; that sections six and seven, article eight of said
chapter be amended and reenacted; that sections two and three,
article nine of said chapter be amended and reenacted; that article
ten of said chapter be amended and reenacted; and that said chapter
be further amended by adding thereto a new article, designated
article eleven, all to read as follows:
ARTICLE 1. GENERAL PROVISIONS.
§47B-1-1. Definitions.
In this chapter:
(1) "Business" includes every trade, occupation and
profession.
(2)"Debtor in bankruptcy" means a person who is the subject
of:
(i)In 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.
(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.
(4) "Foreign limited liability partnership" means a
partnership or association formed under or pursuant to an agreement
governed by the laws of any state or jurisdiction other than this
state that is denominated as a registered limited liability
partnership or limited liability partnership under the laws of such
other jurisdiction.
(4)(5) "Partnership" means an association of two or more
persons to carry on as coowners a business for profit formed under
section two, article two of this chapter, predecessor law, or
comparable law of another jurisdiction and includes, for all
purposes of the laws of this state, a registered limited liability
partnership.
(5)(6) "Partnership agreement" means the agreement, whether
written, oral or implied, among the partners concerning the
partnership, including amendments to the partnership agreement.
(6)(7) "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.
(7)(8) "Partnership interest" or "partner's interest in the
partnership" means all of a partner's interests in the partnership,
including the partner's transferable interest and all management and other rights.
(8)(9) "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.
(9)(10) "Property" means all property, real, personal or
mixed, tangible or intangible, or any interest therein.
(11) "Registered limited liability partnership" means a
partnership formed pursuant to an agreement governed by the laws of
this state, registered under section one, article ten of this
chapter.
(10)(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.
(11)(13) "Statement" means a statement of partnership
authority under section three, article three of this chapter, a
statement of denial under section four of said article, a statement
of dissociation under section four, article seven of this chapter,
a statement of dissolution under section five, article eight of
this chapter, a statement of merger under section seven, article
nine of this chapter, a statement of registration and a statement
of withdrawal under section one, article ten of this chapter, or an
amendment or cancellation of any of the foregoing.
(12)(14) "Transfer" includes an assignment, conveyance, lease,
mortgage, deed and encumbrance.
§47B-1-6. Law governing internal relations.
The Except as provided otherwise in section four, article ten
of this chapter, the law of the jurisdiction in which a partnership
has its chief executive office, governs the relations among the
partners and between the partners and the partnership.
ARTICLE 3. RELATIONS OF PARTNERS TO PERSONS DEALING WITH
PARTNERSHIP.
§47B-3-6. Partner's liability.
(a)Except as otherwise provided in subsection subsections
(b) and (c) of this section, all partners are liable jointly and
severally for all obligations of the partnership unless otherwise
agreed by the claimant or provided by law.
(b) A person admitted as a partner into an existing
partnership, including a registered limited liability partnership,
is not personally liable for any partnership obligation incurred
before the person's admission as a partner.
(c) Subject to the provisions of subsection (d) of this
section, a partner in a registered limited liability partnership is
not personally liable directly or indirectly (including by way of
indemnification, contribution or otherwise) for debts, obligations
and liabilities of or chargeable to the partnership, whether in
tort, contract or otherwise, arising from omissions, negligence,
wrongful acts, misconduct or malpractice committed while the
partnership is a registered limited liability partnership and in
the course of partnership business by another partner or by an
employee, agent or representative of the partnership.
(d) Subsection (c) of this section does not affect the
liability of a partner in a registered limited liability
partnership for the partner's own omissions, negligence, wrongful
acts, misconduct or malpractice, or that of any person under the
partner's direct supervision and control.
§47B-3-7. Actions by and against partnership and partners.
(a)A partnership may sue and be sued in the name of the
partnership.
(b)An action may be brought against the partnership and any
or all of the partners who are personally liable for obligations of
the partnership under section six of this article in the same
action or in separate actions.
(c)A judgment against a partnership is not by itself a
judgment against a partner. A judgment against a partnership may
not be satisfied from a partner's assets unless there is also a
judgment against the partner.
(d)A judgment creditor of a partner may not levy execution
against the assets of the a partner who is personally liable for
obligations of the partnership under section six of this article to
satisfy a judgment based on a claim against the partnership unless:
(1)A judgment based on the same claim has been obtained
against the partnership and a writ of execution on the judgment has
been returned unsatisfied, in whole or in part;
(2)The partnership is a debtor in bankruptcy;
(3)The partner has agreed that the creditor need not exhaust
partnership assets;
(4)A court grants permission to the judgment creditor to
levy execution against the assets of a partner based on a finding
that partnership assets subject to execution are clearly
insufficient to satisfy the judgment, that exhaustion of
partnership assets is excessively burdensome, or that the grant of
permission is an appropriate exercise of the court's equitable
powers; or
(5)Liability is imposed on the partner by law or contract
independent on the existence of the partnership.
(e)This section applies to any partnership liability or
obligation resulting from a representation by a partner or
purported partner under section eight, article three of this
chapter.
§47B-3-8. Liability of purported partner.
(a)If a person, by words or conduct, purports to be a
partner, or consents to being represented by another as a partner,
in a partnership or with one or more persons not partners, the
purported partner is liable to a person to whom the representation
is made,:
(1)if If that person, relying on the representation, enters
into a transaction with the actual or purported partnership; and
(2) The purported partner would have been personally liable
for obligations of the partnership under section six, article three
of this chapter if the purported partner had actually been a
partner.
(b)If Subject to subsection (a) of this section, If if the representation, either by the purported partner or by a person with
the purported partner's consent, is made in a public manner, the
purported partner is liable to a person who relies upon the
purported partnership even if the purported partner is not aware of
being held out as a partner to the claimant. If partnership
liability results, the purported partner is liable with respect to
that liability as if the purported partner were a partner. If no
partnership liability results, the purported partner is liable with
respect to that liability jointly and severally with any other
person consenting to the representation.
(b)(c) If a person is thus represented to be a partner in an
existing partnership, or with one or more persons not partners, the
purported partner is an agent of persons consenting to the
representation to bind them to the same extent and in the same
manner as if the purported partner were a partner, with respect to
persons who enter into transactions in reliance upon the
representation. If all of the partners of the existing partnership
consent to the representation, a partnership act or obligation
results. If fewer than all of the partners of the existing
partnership consent to the representation, the person acting and
the partners consenting to the representation are jointly and
severally liable as if such person had actually been a partner.
(c)(d) A person is not liable as a partner merely because the
person is named by another in a statement of partnership authority.
(d)(e) A person does not continue to be liable as a partner
merely because of a failure to file a statement of dissociation or to amend a statement of partnership authority to indicate the
partner's dissociation from the partnership.
(e)(f) Except as provided in subsections (a), (b) and (c) of
this section, persons who are not partners as to each other are not
liable as partners to other persons.
ARTICLE 4. RELATIONS OF PARTNERS TO EACH OTHER AND TO PARTNERSHIP.
§47B-4-1. Partner's rights and duties.
(a)Each partner is deemed to have an account that is:
(1)Credited with an amount equal to the money plus the value
of any other property, net of the amount of any liabilities as
provided in section six, article three of this chapter, the partner
contributes to the partnership and the partner's share of the
partnership profits; and
(2)Charged with an amount equal to the money plus the value
of any other property, net of the amount of any liabilities,
distributed by the partnership to the partner and the partner's
share of the partnership losses.: Provided, That a partner shall
be personally liable on account of such charges only as provided in
section six, article three and section seven, article eight, both
of this chapter.
(b)Each partner is entitled to an equal share of the: (i)
Shall share equally in partnership profits: and is chargeable with
a (ii) shall share in partnership losses as provided in section
seven, article eight of this chapter in proportion to the partner's
share of the profits.
(c)A partnership shall reimburse a partner for payments made and indemnify a partner for liabilities incurred by the partner in
the ordinary course of the business of the partnership or for the
preservation of its business or property: Provided, That no other
partner shall be required to make any payment, except as provided
in section seven, article eight of this chapter, including any
payments attributable all or in part to partnership liabilities for
reimbursement or indemnification.
(d)A partnership shall reimburse a partner for an advance to
the partnership beyond the amount of capital the partner agreed to
contribute.
(e)A payment or advance made by a partner which gives rise
to a partnership obligation under subsection (c) or (d) of this
section constitutes a loan to the partnership which accrues
interest from the date of the payment or advance.
(f)Each partner has equal rights in the management and
conduct of the partnership business.
(g)A partner may use or possess partnership property only on
behalf of the partnership.
(h)A partner is not entitled to remuneration for services
performed for the partnership, except for reasonable compensation
for services rendered in winding up the business of the
partnership.
(i)A person may become a partner only with the consent of
all of the partners.
(j)A difference arising as to a matter in the ordinary
course of business of a partnership may be decided by a majority of the partners. An act outside the ordinary course of business of a
partnership and an amendment to the partnership agreement may be
undertaken only with the consent of all of the partners.
(k)This section does not affect the obligations of a
partnership to other persons under section one, article three of
this chapter.
ARTICLE 7. PARTNER'S DISSOCIATION WHEN BUSINESS NOT WOUND UP.
§47B-7-3. Dissociated partner's liability to other persons.
(a)A partner's dissociation does not of itself discharge the
partner's liability for a partnership obligation incurred before
dissociation. A dissociated partner is not liable for a
partnership obligation incurred after dissociation, except as
otherwise provided in subsection (b) of this section.
(b)A partner who dissociates without resulting in a
dissolution and winding up of the partnership business is
personally liable as a partner to the other party in on account of
a partnership obligation incurred in connection with a transaction
entered into by the partnership, or a surviving partnership under
article nine of this chapter, within two years after the partner's
dissociation, only if at the time of entering into the transaction
the other party:
(1)Reasonably believed that the dissociated partner was then
a partner;
(2)Did not have notice of the partner's dissociation;
(3)Is not deemed to have had knowledge under subsection (e),
section three, article three of this chapter or notice under subsection (c), section four of this article; and
(4)The obligation is one on account of which the partner
would be personally liable under section six, article three of this
chapter if the partner had not dissociated from the partnership.
ARTICLE 8. WINDING UP PARTNERSHIP BUSINESS.
§47B-8-6. Partner's liability to other partners after dissolution.
(a)Except as otherwise provided in subsection (b) of this
section, after dissolution a partner is liable to the other
partners for the partner's share of any partnership liability
incurred under section four, article eight of this chapter for
which such partner is personally liable under section six, article
three of this chapter.
(b)A partner who, with knowledge of the dissolution, incurs
a partnership liability under subsection (2), section four of this
article by an act that is not appropriate for winding up the
partnership business is liable to the partnership for any damage
caused to the partnership arising from the liability.
§47B-8-7. Settlement of accounts and contributions among partners.
(a)In winding up a partnership's business, the assets of the
partnership, including the contributions of the partners required
by this section, must be applied to discharge its obligations to
creditors, including, to the extent permitted by law, partners who
are creditors. Any surplus must be applied to pay in cash the net
amount distributable to partners in accordance with their right to
distributions under subsection (b) of this section.
(b)Each partner is entitled to a settlement of all partnership accounts upon winding up the partnership business. In
settling accounts among the partners, the profits and losses that
result from the liquidation of the partnership assets must be
credited and charged to the partners' accounts. The partnership
shall make a distribution to a partner in an amount equal to any
excess of the credits over the charges in the partner's account.
A partner shall contribute to the partnership an amount equal to
any excess of the charges over the credits in the partner's account
that is attributable to an obligation for which such partner is
personally liable under section six, article three of this chapter.
(c)If a partner fails or is not obligated to contribute, all
of the other partners shall contribute, in the proportions in which
those partners share partnership losses, the additional amount
necessary to satisfy the any partnership obligations for which such
partner is personally liable under section six, article three of
this chapter. A partner or partner's legal representative may
recover from the other partners any contributions the partner makes
to the extent the amount contributed exceeds that partner's share
of the partnership obligations. , to the extent such contributions
are made on account of obligations for which the other partners are
liable under section six, article three of this chapter.
(d)After the settlement of accounts, each partner shall
contribute, in the proportion in which the partner shares
partnership losses, the amount necessary to satisfy partnership
obligations for which such partner is personally liable under
section six, article three of this chapter and that were not known at the time of settlement.
(e)The estate of a deceased partner is liable for the
partner's obligation to contribute to the partnership under
subsection (b) of this section.
(f)An assignee for the benefit of creditors of a partnership
or a partner, or a person appointed to a court to represent
creditors of a partnership or a partner, may enforce a partner's
obligation to contribute to the partnership under subsection (b) of
this section.
ARTICLE 9. CONVERSIONS AND MERGERS.
§47B-9-2. Conversion of partnership to limited partnership.
(a)A partnership may be converted to a limited partnership
pursuant to this section.
(b)The terms and conditions of a conversion of a partnership
to a limited partnership must be approved by all of the partners or
by a number or percentage specified for conversion in the
partnership agreement.
(c)After the conversion is approved by the partners, the
partnership shall file a certificate of limited partnership in the
jurisdiction in which the limited partnership is to be formed. The
certificate must include:
(1)A statement that the partnership was converted to a
limited partnership from a partnership;
(2)Its former name; and
(3)A statement of the number of votes cast by the partners
for and against the conversion and, if the vote is less than unanimous, the number or percentage required to approve the
conversion under the partnership agreement.
(d)The conversion takes effect when the certificate of
limited partnership is filed or at any later date specified in the
certificate.
(e)A general partner who becomes a limited partner as a
result of the conversion remains liable as a general partner for an
obligation incurred by the partnership before the conversion takes
effect for which the partner is personally liable under section
six, article three of this chapter. If the other party to a
transaction with the limited partnership reasonably believes when
entering the transaction that the limited partner is a general
partner, the limited partner is liable for an obligation incurred
by the limited partnership within ninety days after the conversion
takes effect for which a general partner would be personally liable
under section six, article three of this chapter. The limited
partner's liability for all other obligations of the limited
partnership incurred after the conversion takes effect is that of
a limited partner as provided in section one et seq., article nine,
chapter forty-seven of this code.
§47B-9-3. Conversion of limited partnership to partnership.
(a)A limited partnership may be converted to a partnership
pursuant to this section.
(b)Notwithstanding a provision to the contrary in a limited
partnership agreement, the terms and conditions of a conversion of
a limited partnership to a partnership must be approved by all of the partners.
(c)After the conversion is approved by the partners, the
limited partnership shall cancel its certificate of limited
partnership.
(d)The conversion takes effect when the certificate of
limited partnership is canceled.
(e)A limited partner who becomes a general partner as a
result of the conversion remains liable only as a limited partner
for an obligation incurred by the limited partnership before the
conversion takes effect. The partner is liable as a general
partner for an obligation of the partnership for which the partner
is personally liable under section six, article three of this
chapter incurred after the conversion takes effect.
ARTICLE 10. LIMITED LIABILITY PARTNERSHIPS.
§47B-10-1. Registered limited liability partnerships.
(a)To become a registered limited liability partnership, a
partnership shall file with the secretary of state a statement of
registration stating the name of the partnership; the address of
its principal office; if the partnership's principal office is not
located in this state, the address of a registered office and the
name and address of a registered agent for service of process in
this state, which the partnership will be required to maintain; a
brief statement of the business in which the partnership engages;
any other matters that the partnership determines to include; and
that the partnership thereby registers as a registered limited
liability partnership.
(b)The registration shall be executed by one or more
partners authorized to execute a registration.
(c)The registration shall be accompanied by a fee of two
hundred fifty dollars.
(d)The secretary of state shall register as a registered
limited liability partnership any partnership that submits a
completed registration with the required fee.
(e)A partnership registered under this section shall pay, in
each year following the year in which its registration is filed, on
a date specified by the secretary of state, an annual fee of five
hundred dollars. The fee must be accompanied by a notice, on a
form provided by the secretary of state, of any material changes in
the information contained in the partnership's registration.
(f)Registration is effective:
(1) Immediately after the date a registration is filed; or
(2)On a date specified in the statement of registration,
which date shall not be more than sixty days after the date of
filing.
(g)Registration remains effective until:
(1) It is voluntarily withdrawn by filing with the secretary
of state a statement of withdrawal; or
(2)Thirty days after receipt by the partnership of a notice
from the secretary of state, which notice shall be sent by
certified mail, return receipt requested, that the partnership has
failed to make timely payment of the annual fee specified in
subsection (e) of this section, unless the fee is paid within such a thirty day period.
(h)The status of a partnership as a registered limited
liability partnership and the liability of the partners thereof
shall not be affected by:
(1)Errors in the information contained in a statement of
registration under subsection (a) of this section or notice under
subsection (e) of this section; or
(2)Changes after the filing of such statement of
registration or notice in the information stated in the
registration or notice.
(i)The secretary of state shall provide forms for the
statement of registration under subsection (a) of this section or
a notice under subsection (e) of this section.
§47B-10-2. Effect of registration; entity unchanged.
(a)A partnership that has registered pursuant to this
article is for all purposes the same partnership that existed
before the registration.
(b)When registration takes effect:
(1)All property owned by the registering partnership remains
vested in the registered partnership;
(2)All obligations of the registering partnership continue
as obligations of the registered partnership; and
(3)An action or proceeding pending against the registering
partnership may be continued as if the registration had not
occurred.
§47B-10-3. Name of registered limited liability partnership.
The name of a registered limited liability partnership shall
contain the words "Registered Limited Liability Partnership" or the
abbreviation "L.L.P." or "LLP" as the last words or letters of its
name.
§47B-10-4. Applicability of article to foreign and interstate
commerce.
(a)A registered limited liability partnership formed under
this article may conduct its business, carry on its operations, and
have and exercise the powers granted by this chapter in any state,
territory, district or possession of the United States or in any
foreign country.
(b)It is the intent of the Legislature that the legal
existence of registered limited liability partnerships formed under
this article be recognized outside the boundaries of this state and
that the laws of this state governing such registered limited
liability partnerships doing business outside this state be granted
the protection of full faith and credit under the Constitution of
the United States.
(c)Notwithstanding section six, article one of this chapter,
the internal affairs of registered limited liability partnerships
formed under this article, including the liability of partners for
debts, obligations and liabilities of or chargeable to the
partnership, shall be subject to and governed by the laws of this
state.
(d)Before transacting business in this state, a foreign
registered limited liability partnership shall:
(i)Comply with any statutory or administrative registration
or filing requirements governing the specific type of business in
which the partnership is engaged; and
(ii) File a notice with the secretary of state, on such forms
as the secretary of state shall provide, stating the name of the
partnership; the address of its principal office; if the
partnership's principal office is not located in this state, the
address of a registered office and the name and address of a
registered agent for service of process in this state, which the
partnership will be required to maintain; any other matters that
the partnership determines to include; and a brief statement of the
business in which the partnership engages. Such notice shall be
effective for two years from the date of filing, after which time
the partnership shall file a new notice.
(e)The name of a foreign registered limited liability
partnership doing business in this state shall contain the words
"Registered Limited Liability Partnership" or the abbreviation
"L.L.P." or "LLP" as the last words or letters of its name.
(f)Notwithstanding section six, article one of this chapter,
the internal affairs of foreign registered limited liability
partnerships, including the liability of partners for debts,
obligations and liabilities of or chargeable to the partnership,
shall be subject to and governed by the laws of the jurisdiction in
which the foreign registered limited liability partnership is
registered.
§47B-10-5. Insurance or financial responsibility of registered limited liability partnerships.
(a)A registered limited liability partnership, and any
foreign limited liability partnership transacting business in this
state, shall carry at all times at least one million dollars of
liability insurance, beyond the amount of any applicable
deductible, of a kind that is designed to cover the kinds of
omissions, negligence, wrongful acts, misconduct and malpractice
for which liability is limited by subsection (c), section six,
article three of this chapter and which insures the partnership and
its partners.
(b)If, in any proceeding, compliance by a partnership with
the requirements of subsection (a) of this section is disputed,
that issue shall be determined by the court, and the burden of
proof of compliance shall be on the person who claims the
limitation of liability in subsection (c), section six, article
three of this chapter.
(c)If a registered limited liability company is in
compliance with the requirements of subsection (a) of this section,
the requirements of this section shall not be admissible or in any
way be made known to a jury in determining an issue of liability
for or extent of the obligation or damages in question.
(d)A registered limited liability partnership is considered
to be in compliance with subsection (a) of this section if the
partnership provides one million dollars of funds specifically
designated and segregated for the satisfaction of judgments against
the partnership or its partners based on the kinds of omissions, negligence, wrongful acts, misconduct and malpractice for which
liability is limited by subsection (c), section six, article three
of this chapter, by:
(1)Deposit in trust or in bank escrow of cash, bank
certificates of deposit or United States Treasury obligations; or
(2)A bank letter of credit or insurance company bond.
ARTICLE 10. ARTICLE 11. MISCELLANEOUS PROVISIONS.
§47B-10-1. §47B-11-1. Uniformity of application and construction.
This chapter shall be applied and construed to effectuate its
general purpose to make uniform the law with respect to the subject
of this chapter among states enacting it.
§47B-10-2. §47B-11-2. Short title.
This chapter may be cited as the Uniform Partnership Act.
§47B-10-3. §47B-11-3. Severability clause.
If any provision of this chapter or its application to any
person or circumstance is held invalid, the invalidity does not
affect other provisions or applications of this chapter which can
be given effect without the invalid provision or application, and
to this end the provisions of this chapter are severable.
§47B-10-4. §47B-11-4. Applicability.
(a)Before the first day of July, one thousand nine hundred
ninety-five, this chapter governs only a partnership formed:
(1)After the effective date of this chapter, unless that
partnership is continuing the business of a dissolved partnership
under section forty-one, article eight-a, chapter forty-seven of
this code; and
(2)Before the effective date of this chapter, that elects,
as provided by subsection (c) of this section, to be governed by
this chapter.
(b)After the first day of July, one thousand nine hundred
ninety-five, this chapter governs all partnerships.
(c)Before the first day of July, one thousand nine hundred
ninety-five, a partnership voluntarily may elect, in the manner
provided in its partnership agreement or by law for amending the
partnership agreement, to be governed by this chapter. The
provisions of this chapter relating to the liability of the
partnership's partners to third parties apply to limit those
partners' liability to a third party who had done business with the
partnership within one year preceding the partnership's election to
be governed by this chapter, only if the third party knows or has
received a notification of the partnership's election to be
governed by this chapter.
§47B-10-5. §47B-11-5. Savings clause.
This chapter does not affect an action or proceeding commenced
or right accrued before this chapter takes effect.
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(NOTE: This bill was recommended for introduction and passage
this session by Subcommittee B of the Joint Committee on the
Judiciary. The purpose of this bill is to permit the general
partners of a general partnership organized under state law to
limit the scope of their personal liability for certain obligations
and liabilities of the partnership. Under present law, each
partner in a general partnership is personally liable, jointly and
severally with all other partners in the partnership, for the
negligence, misconduct or wrongful acts of another partner or
representative of the partnership. The bill would permit a general
partnership to register as a limited liability partnership and thereby limit a partner's personal liability to those partnership
obligations and debts arising from such partner's own omissions,
negligence, wrongful acts, misconduct or malpractice.
Strike-throughs indicate language that would be stricken
from the present law, and underlining indicates new language that
would be added.
Article ten is new; therefore, strike-throughs and
underlining have been omitted.)
__________
JUDICIARY COMMITTEE AMENDMENT
The Committee on the Judiciary moved to amend the bill on page
____, section 5, lines ___ and ___, after the word "insurance"
by striking out the comma and the words "beyond the amount of any
applicable deductible,".