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Delaware State Senate Acts to Amend Laws Relating to Delaware Partnerships and Foreign Limited Liability Partnerships

SYNOPSIS
Section 1. This section amends § 15-101(8) of the Act to confirm that a limited liability partnership under the Act refers to a domestic partnership.

Section 2. This section amends § 15-101(12) of the Act to confirm that a partner of a partnership and a transferee of an economic interest are bound by the partnership agreement.

Section 3. This section amends § 15-306(d) of the Act to confirm the application of this section only to the practice of law in Delaware.

Section 4. This section amends the Act to add a new § 15-409 of the Act to clarify the circumstances under which partners and liquidating trustees of a partnership may rely on the records of, or information relating to, the partnership.

Sections 5, 6, 7, 8, 9, 10 and 11. These sections amend § 15-504 of the Act 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 a partner’s or partner’s transferee’s interest in a partnership. 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).

Sections 12, 13, 14, 15, 16, 17, 18, 19, 26, 27, 28 and 29. These sections amend §§ 15-901 and 15-1001 of the Act to clarify the procedures for forming a limited liability partnership, causing an existing partnership to become a limited liability partnership and converting an other entity to a domestic partnership or a limited liability partnership.

Sections 20 and 23. These sections amend § 15-901(g) and § 15-904(i) of the Act to confirm that these sections of the Act address the effect of conversion and domestication, respectively, as a matter of Delaware law.

Section 21. This section amends § 15-901(j) of the Act to confirm that a person is admitted as a partner of a partnership in connection with a conversion as provided in the partnership agreement.

Section 22. This section amends § 15-902(k) of the Act to clarify the way in which a person is admitted as a partner of a partnership pursuant to a merger or conversion.

Section 24. This section amends § 15-904(k) of the Act to confirm that a person is admitted as a partner of a partnership in connection with a domestication as provided in the partnership agreement.

Section 25. This section amends § 15-905(b) of the Act to conform the approval requirements for the transfer of a domestic partnership to the requirements for the conversion of a domestic partnership.

Section 30. This section amends § 15-1003(c) of the Act to clarify the provisions relating to revocation of a statement of qualification or statement of foreign qualification.

Section 31. This section amends § 15-1003(e) of the Act to extend the period during which a partnership’s statement of qualification or statement of foreign qualification may be reinstated.

Sections 32, 33, 34, 35, 36 and 37. These sections amend § 15-1104(a) of the Act to identify certain additional activities of a foreign partnership in the State of Delaware that will not constitute doing business for purposes of Subchapter XI of the Act.

Sections 38, 39, 40 and 41. These sections amend §§ 15-1209 and 15-1210 of the Act to confirm that the cancellation of a statement of partnership existence cancels the statement of partnership existence and not the partnership and the revival of a statement of partnership existence revives the statement of partnership existence and not the partnership

Section 42. This section provides that the proposed amendments of the Act shall become effective on August 1, 2005.

Author: Senator Vaughn

2 Comments:

OK,

This is interesting, but what do these changes mean to us in English? :)

It's hard to interpret some of the language that they use in these legislative pronouncements.

Thanks. :)

By  Anonymous, at 12:36 AM  

Most of the law changes for LP's, LLP's and LLLP's are to bring the laws for each type of entity more into line with each other.

Since Delaware allowed conversions of entities, they have done a good job of updating the law to clarify what happens to an owner of an entity of one type that converts to another. That kind of thing is common in Delaware. The Corporation Law Section of the Delaware Bar Association writes the laws for the legislature to pass. And they usually write the bill allowing a feature, then write a follow up that answers the questions of the legal community.

They are also in the middle of an effort to standardize the law where possible between the General Corporation Law, the Limited Liability Comany Act and the various partnership laws.

The corporation changes are in the first stage - they are allowing more features for corporations. I expect to see more clarifications in the next legislative section.

By  Larry, at 4:29 PM  

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