Small Business Reading Room

Wednesday, May 18, 2005

Amendments to the Delaware Revised Uniform Limited Partnership Act

In a previous blog post, Alan included a synopsis of the amendments facing the General Corporation Law. On May 5, 2005, the House passed HB 151 amending the Delaware Revised Uniform Limited Partnership Act.

A synopsis of the bill:
This Act continues the practice of amending periodically the Delaware Revised Uniform Limited Partnership Act (the “Act”) to keep it current and to maintain its national preeminence. The following is a section-by-section review of the proposed amendments of the Act.

Section 1 amends § 17-101(12) of the Act to confirm that a partner of a limited partnership and an assignee of an interest in a limited partnership are bound by the partnership agreement.

Section 2 amends § 17-106(a) of the Act to expand the permitted purposes of a limited partnership.

Section 3 amends § 17-211(g) of the Act to increase the flexibility permitted in the Act regarding amendments to partnership agreements and the adoption of new partnership agreements in connection with mergers and consolidations.

Sections 4 and 6 amend § 17-215(i) and § 17-217(g) of the Act to confirm that these sections of the Act address the effect of domestication and conversion, respectively, as a matter of Delaware law.

Section 5 amends § 17-216(b) to conform the approval requirements for the transfer of a domestic limited partnership to the requirements for the conversion of a domestic limited partnership.

Section 7 amends § 17-301(b)(3) of the Act to clarify the way in which a person is admitted as a partner of a limited partnership pursuant to a merger or consolidation.
Section 8 amends § 17-301(c) of the Act to confirm that a person is admitted as a partner of a limited partnership in connection with a domestication or a conversion as provided in the partnership agreement.

Section 9 amends the Act to add a new § 17-407 to clarify the circumstances under which limited partners, general partners and liquidating trustees of a limited partnership may rely on the records of, or information relating to, the limited partnership.

Sections 10, 11, 12, 13, 14, 15 and 16 amend § 17-703 to clarify the nature of a charging order and provide that a charging order is the sole method by which a judgment creditor may satisfy a judgment out of the partnership interest of a partner or partner’s assignee. Attachment, garnishment, foreclosure or like remedies are not available to the judgment creditor and a judgment creditor does not have any right to become or to exercise any rights or powers of a partner (other than the right to receive the distribution or distributions to which the partner would otherwise have been entitled, to the extent charged).

Section 17 amends the Act to add a new § 17-806 to provide, under certain circumstances, for the revocation of the dissolution of a limited partnership.

Sections 18 and 19 amend the Act to add a new § 17-912 to identify the activities of a foreign limited partnership in the State of Delaware that will not constitute doing business for purposes of Subchapter IX of the Act and move former subsection (b) of § 17-902 of the Act to new § 17-912.

Section 20 provides that the proposed amendments of the Act shall become effective on August 1, 2005.

This Act was submitted for sponsorship and consideration by the General Assembly by the Delaware Bar Association.


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