The Vermont Statutes Online
The Statutes below include the actions of the 2024 session of the General Assembly.
NOTE: The Vermont Statutes Online is an unofficial copy of the Vermont Statutes Annotated that is provided as a convenience.
Title 11: Corporations, Partnerships and Associations
Chapter 023: Limited Partnerships
- Subchapter 001: GENERAL PROVISIONS
§ 3401. Definitions
As used in this chapter:
(1) A “certificate of limited partnership” means the certificate referred to in section 3411 of this title, and the certificate as amended or restated.
(2) A “contribution” means any cash, property, services rendered, or a promissory note or other binding obligation to contribute cash or property or to perform services, which a partner contributes to a limited partnership in his or her capacity as a partner.
(3) An “event of withdrawal of a general partner” means an event that causes a person to cease to be a general partner as provided in section 3432 of this title.
(4) A “foreign limited partnership” means a partnership formed under laws other than the laws of this State and having as partners one or more general partners and one or more limited partners.
(5) “General partner” means a person who has been admitted to a limited partnership as a general partner in accordance with the partnership agreement and named in the certificate of limited partnership as a general partner.
(6) “Limited partner” means a person who has been admitted to a limited partnership as a limited partner in accordance with the partnership agreement.
(7) “Limited partnership” and “domestic limited partnership” mean a partnership formed by two or more persons under the laws of this State and having one or more general partners and one or more limited partners.
(8) “Partner” means a limited or general partner.
(9) “Partnership agreement” means any valid agreement, written or oral, of the partners as to the affairs of a limited partnership and the conduct of its business.
(10) “Partnership interest” means a partner’s share of the profits and losses of a limited partnership and the right to receive distributions of partnership assets.
(11) “Person” means a natural person, partnership, limited partnership (domestic or foreign), trust, estate, association, corporation, or limited liability company.
(12) “State” means a state, territory, or possession of the United States, the District of Columbia, or the Commonwealth of Puerto Rico. (Added 1997, No. 149 (Adj. Sess.), § 4, eff. Jan. 1, 1999.)
§ 3402. Name
(a) The name of each limited partnership as set forth in its certificate of limited partnership:
(1) shall contain the words “Limited Partnership,” or the letters “L.P.”;
(2) may not contain the name of a limited partner unless it is also the name of a general partner or the corporate name of a corporate general partner, or the business of the limited partnership had been carried on under that name before the admission of that limited partner;
(3) shall be distinguishable in the records of the Secretary of State from the name of any corporation, limited liability company, limited liability partnership, or limited partnership organized under the laws of this State or licensed or registered as a foreign corporation, limited liability company, limited liability partnership, or limited partnership in this State; and
(4) may not contain the following words: “corporation,” “incorporated,” “limited” by itself, “limited liability company,” “limited company,” or the abbreviations “corp.,” “Inc.,” or “Ltd.”
(b) A person intending to operate a postsecondary school, as defined in 16 V.S.A. §§ 176 and 176a, shall apply for a certificate of approval from the State Board of Education prior to registering a name under this chapter. (Added 1997, No. 149 (Adj. Sess.), § 4, eff. Jan. 1, 1999; amended 2003, No. 107 (Adj. Sess.), § 17; 2015, No. 17, § 6.)
§ 3403. Reservation of name
(a) The exclusive right to the use of a name may be reserved by:
(1) any person intending to organize a limited partnership under this chapter and to adopt that name;
(2) any domestic limited partnership or any foreign limited partnership registered in this State which, in either case, intends to adopt that name;
(3) any foreign limited partnership intending to register in this State and adopt that name; and
(4) any person intending to organize a foreign limited partnership and intending to have it registered in this State and to adopt that name.
(b) The reservation shall be made by filing with the Secretary of State an application, executed by the applicant, to reserve a specified name. If the Secretary of State finds that the name is available for use by a domestic or foreign limited partnership, he or she shall reserve the name for the exclusive use of the applicant for a period of 120 days. The owner of a name reserved under this section may renew the reservation for two successive periods of 120 days each. The right to the exclusive use of a reserved name may be transferred to any other person by filing in the Office of the Secretary of State a notice of the transfer, executed by the applicant for whom the name was reserved and specifying the name and address of the transferee. (Added 1997, No. 149 (Adj. Sess.), § 4, eff. Jan. 1, 1999.)
§ 3404. Specified office and agent
Each limited partnership shall continuously maintain in this State:
(1) an office, which may but need not be a place of its business in this State, at which shall be kept the records required by section 3405 of this title to be maintained; and
(2) an agent for service of process on the limited partnership, which agent must be an individual resident of this State, a domestic corporation, partnership, limited liability company, or a foreign corporation, partnership, or limited liability company authorized to do business in this State. (Added 1997, No. 149 (Adj. Sess.), § 4, eff. Jan. 1, 1999.)
§ 3405. Records to be kept
(a) Each limited partnership shall keep at the office referred to in subdivision 3404(1) of this title the following:
(1) a current list of the full name and last known business address of each partner, separately identifying the general partners (in alphabetical order) and the limited partners (in alphabetical order);
(2) a copy of the certificate of limited partnership and all certificates of amendment thereto, together with executed copies of any powers of attorney pursuant to which any certificate has been executed;
(3) copies of the limited partnership’s federal, state, and local income tax returns and reports, if any, for the three most recent years;
(4) copies of any then effective written partnership agreements and of any financial statements of the limited partnership for the three most recent years; and
(5) unless contained in a written partnership agreement, a writing setting out:
(A) the amount of cash and a description and statement of the agreed value of the other property or services contributed by each partner and which each partner has agreed to contribute;
(B) the times at which or events on the happening of which any additional contributions agreed to be made by each partner are to be made;
(C) any right of a partner to receive, or of a general partner to make, distributions to a partner which include a return of all or any part of the partner’s contribution; and
(D) any events upon the happening of which the limited partnership is to be dissolved and its affairs wound up.
(b) Records kept under this section are subject to inspection and copying at the reasonable request and at the expense of any partner during ordinary business hours. (Added 1997, No. 149 (Adj. Sess.), § 4, eff. Jan. 1, 1999.)
§ 3406. Nature of business
A limited partnership may carry on any business that a partnership without limited partners may carry on except a business in which a corporation formed under the general corporation law may not engage. (Added 1997, No. 149 (Adj. Sess.), § 4, eff. Jan. 1, 1999.)
§ 3407. Business transactions of partner with partnership
Except as provided in the partnership agreement, a partner may lend money to and transact other business with the limited partnership and, subject to other applicable law, has the same rights and obligations with respect thereto as a person who is not a partner. (Added 1997, No. 149 (Adj. Sess.), § 4, eff. Jan. 1, 1999.)
- Subchapter 002: CERTIFICATE OF LIMITED PARTNERSHIP
§ 3411. Certificate of limited partnership
(a) In order to form a limited partnership, a certificate of limited partnership must be executed and filed in the Office of the Secretary of State. The certificate shall set forth:
(1) the name of the limited partnership;
(2) the address of the office and the name and address of the agent for service of process required to be maintained by section 3404 of this title;
(3) the name and the business address of each general partner;
(4) the name and place of residence of each limited partner and the amount of cash and a description of and the agreed value of other property contributed by each limited partner;
(5) the latest date upon which the limited partnership is to dissolve; and
(6) any other matters the general partners determine to include therein.
(b) A limited partnership is formed at the time of the filing of the certificate of limited partnership in the Office of the Secretary of State or at any later time specified in the certificate of limited partnership if, in either case, there has been substantial compliance with the requirements of this section. (Added 1997, No. 149 (Adj. Sess.), § 4, eff. Jan. 1, 1999.)
§ 3412. Amendment to certificate
(a) A certificate of limited partnership is amended by filing a certificate of amendment thereto in the Office of the Secretary of State. The certificate shall set forth:
(1) the name of the limited partnership;
(2) the date of filing the original certificate; and
(3) the amendment to the certificate.
(b) Within 30 days after the happening of any of the following events, an amendment to a certificate of limited partnership reflecting the occurrence of the event or events shall be filed:
(1) the admission of a new general partner;
(2) the withdrawal of a general partner; or
(3) the continuation of the business under section 3471 of this title after an event of withdrawal of a general partner.
(c) A general partner who becomes aware that any statement in a certificate of limited partnership was false when made or that any arrangements or other facts described have changed, making the certificate inaccurate in any respect, shall promptly amend the certificate.
(d) A certificate of limited partnership may be amended at any time for any other proper purpose the general partners determine.
(e) No person has any liability because an amendment to a certificate of limited partnership has not been filed to reflect the occurrence of any event referred to in subsection (b) of this section if the amendment is filed within the 30-day period specified in subsection (b).
(f) A restated certificate of limited partnership may be executed and filed in the same manner as a certificate of amendment. (Added 1997, No. 149 (Adj. Sess.), § 4, eff. Jan. 1, 1999.)
§ 3413. Cancellation of certificate
A certificate of limited partnership shall be canceled upon the dissolution and the commencement of winding up of the partnership or at any other time there are no limited partners. A certificate of cancellation shall be filed in the Office of the Secretary of State and set forth:
(1) the name of the limited partnership;
(2) the date of filing of its original certificate of limited partnership;
(3) the reason for filing the certificate of cancellation;
(4) the effective date (which shall be a date certain) of cancellation if it is not to be effective upon the filing of the certificate; and
(5) any other information the general partners filing the certificate determine. (Added 1997, No. 149 (Adj. Sess.), § 4, eff. Jan. 1, 1999.)
§ 3414. Execution of certificates
(a) Each certificate required by this subchapter to be filed in the Office of the Secretary of State shall be executed in the following manner:
(1) an original certificate of limited partnership must be signed by all general partners;
(2) a certificate of amendment must be signed by at least one general partner and by each other general partner designated in the certificate as a new general partner; and
(3) a certificate of cancellation must be signed by all general partners.
(b) Any person may sign a certificate by an attorney-in-fact, but a power of attorney to sign a certificate relating to the admission of a general partner must specifically describe the admission.
(c) The execution of a certificate by a general partner constitutes an affirmation under the penalties of perjury that the facts stated therein are true. (Added 1997, No. 149 (Adj. Sess.), § 4, eff. Jan. 1, 1999.)
§ 3415. Execution by judicial act
If a person required by section 3414 of this title to execute any certificate fails or refuses to do so, any other person who is adversely affected by the failure or refusal, may petition the Superior Court for the county where the limited partnership has its principal place of business or, if it has no principal place of business in this State, then the county where the office required to be maintained by section 3404 of this title is located to direct the execution of the certificate. If the court finds that it is proper for the certificate to be executed and that any person so designated has failed or refused to execute the certificate, it shall order the Secretary of State to record an appropriate certificate. (Added 1997, No. 149 (Adj. Sess.), § 4, eff. Jan. 1, 1999.)
§ 3416. Filing in Office of Secretary of State
(a) Two signed copies of the certificate of limited partnership and of any certificates of amendment or cancellation (or of any judicial decree of amendment or cancellation) shall be delivered to the Secretary of State. A person who executes a certificate as an agent or fiduciary need not exhibit evidence of his or her authority as a prerequisite to filing. Unless the Secretary of State finds that any certificate does not conform to law, upon receipt of all filing fees required by law he or she shall:
(1) endorse on each duplicate original the word “Filed” and the day, month, and year of the filing thereof;
(2) file one duplicate original in his or her office; and
(3) return the other duplicate original to the person who filed it or his or her representative.
(b) Upon the filing of a certificate of amendment (or judicial decree of amendment) in the Office of the Secretary of State, the certificate of limited partnership shall be amended as set forth therein, and upon the effective date of a certificate of cancellation (or a judicial decree thereof), the certificate of limited partnership is canceled. (Added 1997, No. 149 (Adj. Sess.), § 4, eff. Jan. 1, 1999.)
§ 3417. Liability for false statement in certificate
If any certificate of limited partnership or certificate of amendment or cancellation contains a false statement, one who suffers loss by reliance on the statement may recover damages for the loss from:
(1) any person who executes the certificate, or causes another to execute it on his or her behalf, and knew, and any general partner who knew or should have known, the statement to be false at the time the certificate was executed; and
(2) any general partner who thereafter knows or should have known that any arrangement or other fact described in the certificate has changed, making the statement inaccurate in any respect within a sufficient time before the statement was relied upon reasonably to have enabled that general partner to cancel or amend the certificate, or to file a petition for its cancellation or amendment under section 3415 of this title. (Added 1997, No. 149 (Adj. Sess.), § 4, eff. Jan. 1, 1999.)
§ 3418. Scope of notice
The fact that a certificate of limited partnership is on file in the Office of the Secretary of State is notice that the partnership is a limited partnership and the persons designated therein as general partners are general partners and the persons designated therein as limited partners, if any are so designated, are limited partners, but it is not notice of any other fact. (Added 1997, No. 149 (Adj. Sess.), § 4, eff. Jan. 1, 1999.)
§ 3419. Delivery of certificates to limited partners
Upon the return by the Secretary of State pursuant to section 3416 of this title of a certificate marked “Filed”, the general partners shall promptly deliver or mail a copy of the certificate of limited partnership and each certificate of amendment or cancellation to each limited partner unless the partnership agreement provides otherwise. (Added 1997, No. 149 (Adj. Sess.), § 4, eff. Jan. 1, 1999.)
§ 3420. Fees
(a) The Secretary of State shall collect the following fees when a document described in this section is delivered to the Office of the Secretary of State for filing:
(1) Certificate of Limited Partnership $130.00
(2) Registration of Foreign Limited Partnership $155.00
(3) Amendment – Domestic $35.00
(4) Cancellation $25.00
(5) Merger $65.00
(6) Statement of change of designated agent or designated office, or both $35.00 not to exceed $1,000.00 per filer per calendar year
(7) Application for certificate of good standing $35.00
(8) Any other document permitted or required to be filed by this chapter $20.00
(9) Amendment – Foreign $35.00.
(10) Name reservation, application $20.00.
(11) Name reservation, transfer $20.00.
(12) Restated certificate of limited partnership $20.00.
(b) The Secretary of State shall collect the following fees:
(1) $25.00 each time process is served on the Secretary under this chapter. The party to a proceeding causing service of process is entitled to recover this fee as costs if he or she prevails in the proceeding.
(2) $25.00 for the certificate certifying the copy of any filed document related to a partnership, limited liability partnership, or a foreign limited liability partnership. (Added 1997, No. 149 (Adj. Sess.), § 4, eff. Jan. 1, 1999; amended 2003, No. 70 (Adj. Sess.), § 14, eff. March 1, 2004; 2013, No. 72, § 8; 2023, No. 77, § 39, eff. June 20, 2023.)
- Subchapter 003: LIMITED PARTNERS
§ 3421. Admission of limited partners
(a) A person becomes a limited partner:
(1) at the time the limited partnership is formed; or
(2) at any later time specified in the records of the limited partnership for becoming a limited partner.
(b) After the filing of a limited partnership’s original certificate of limited partnership, a person may be admitted as an additional limited partner:
(1) in the case of a person acquiring a partnership interest directly from the limited partnership, upon compliance with the partnership agreement or, if the partnership agreement does not so provide, upon the written consent of all partners; and
(2) in the case of an assignee of a partnership interest of a partner who has the power, as provided in section 3464 of this title, to grant the assignee the right to become a limited partner, upon the exercise of that power and compliance with any conditions limiting the grant or exercise of the power. (Added 1997, No. 149 (Adj. Sess.), § 4, eff. Jan. 1, 1999.)
§ 3422. Voting
Subject to section 3423 of this title, the partnership agreement may grant to all or a specified group of the limited partners the right to vote (on a per capita or other basis) upon any matter. (Added 1997, No. 149 (Adj. Sess.), § 4, eff. Jan. 1, 1999.)
§ 3423. Liability to third parties
(a) Except as provided in subsection (d) of this section, a limited partner is not liable for the obligations of a limited partnership unless he or she is also a general partner or, in addition to the exercise of his or her rights and powers as a limited partner, he or she participates in the control of the business. However, if the limited partner participates in the control of the business, he or she is liable only to persons who transact business with the limited partnership reasonably believing, based upon the limited partner’s conduct, that the limited partner is a general partner.
(b) A limited partner does not participate in the control of the business within the meaning of subsection (a) of this section solely by doing one or more of the following:
(1) being a contractor for or an agent or employee of the limited partnership or of a general partner or being an officer, director, or shareholder of a general partner that is a corporation;
(2) consulting with and advising a general partner with respect to the business of the limited partnership;
(3) acting as surety for the limited partnership or guaranteeing or assuming one or more specific obligations of the limited partnership;
(4) taking any action required or permitted by law to bring or pursue a derivative action in the right of the limited partnership;
(5) requesting or attending a meeting of partners;
(6) proposing, approving, or disapproving, by voting or otherwise, one or more of the following matters:
(A) the dissolution and winding up of the limited partnership;
(B) the sale, exchange, lease, mortgage, pledge, or other transfer of all or substantially all of the assets of the limited partnership;
(C) the incurrence of indebtedness by the limited partnership other than in the ordinary course of its business;
(D) a change in the nature of the business;
(E) the admission or removal of a general partner;
(F) the admission or removal of a limited partner;
(G) a transaction involving an actual or potential conflict of interest between a general partner and the limited partnership or the limited partners;
(H) an amendment to the partnership agreement or certificate of limited partnership; or
(I) matters related to the business of the limited partnership not otherwise enumerated in this subsection, which the partnership agreement states in writing may be subject to the approval or disapproval of limited partners;
(7) winding up the limited partnership pursuant to section 3473 of this title; or
(8) exercising any right or power permitted to limited partners under this chapter and not specifically enumerated in this subsection.
(c) The enumeration in subsection (b) of this section does not mean that the possession or exercise of any other powers by a limited partner constitutes participation by him or her in the business of the limited partnership.
(d) A limited partner who knowingly permits his or her name to be used in the name of the limited partnership, except under circumstances permitted by subdivision 3402(a)(2) of this title, is liable to creditors who extend credit to the limited partnership without actual knowledge that the limited partner is not a general partner. (Added 1997, No. 149 (Adj. Sess.), § 4, eff. Jan. 1, 1999.)
§ 3424. Person erroneously believing himself or herself limited partner
(a) Except as provided in subsection (b) of this section, a person who makes a contribution to a business enterprise and erroneously but in good faith believes that he or she has become a limited partner in the enterprise is not a general partner in the enterprise and is not bound by its obligations by reason of making the contribution, receiving distributions from the enterprise, or exercising any rights of a limited partner, if, on ascertaining the mistake, he or she:
(1) causes an appropriate certificate of limited partnership or a certificate of amendment to be executed and filed; or
(2) withdraws from future equity participation in the enterprise by executing and filing in the Office of the Secretary of State a certificate declaring withdrawal under this section.
(b) A person who makes a contribution of the kind described in subsection (a) of this section is liable as a general partner to any third party who transacts business with the enterprise before the person withdraws and an appropriate certificate is filed to show withdrawal, or before an appropriate certificate is filed to show that he or she is not a general partner, but in either case only if the third party actually believed in good faith that the person was a general partner at the time of the transaction. (Added 1997, No. 149 (Adj. Sess.), § 4, eff. Jan. 1, 1999.)
§ 3425. Information
Each limited partner has the right to:
(1) inspect and copy any of the partnership records required to be maintained by section 3405 of this title; and
(2) obtain from the general partners from time to time upon reasonable demand true and full information regarding the state of the business and financial condition of the limited partnership; promptly after becoming available, a copy of the limited partnership’s federal, state, and local income tax returns for each year; and other information regarding the affairs of the limited partnership as is just and reasonable. (Added 1997, No. 149 (Adj. Sess.), § 4, eff. Jan. 1, 1999.)
- Subchapter 004: GENERAL PARTNERS
§ 3431. Admission of additional general partners
After the filing of a limited partnership’s original certificate of limited partnership, additional general partners may be admitted as provided in writing in the partnership agreement or, if the partnership agreement does not provide in writing for the admission of additional general partners, with the written consent of all partners. (Added 1997, No. 149 (Adj. Sess.), § 4, eff. Jan. 1, 1999.)
§ 3432. Events of withdrawal
Except as approved by the specific written consent of all partners at the time, a person ceases to be a general partner of a limited partnership upon the happening of any of the following events:
(1) the general partner withdraws from the limited partnership as provided in section 3452 of this title;
(2) the general partner ceases to be a member of the limited partnership as provided in section 3462 of this title;
(3) the general partner is removed as a general partner in accordance with the partnership agreement;
(4) unless otherwise provided in writing in the partnership agreement, the general partner: makes an assignment for the benefit of creditors; files a voluntary petition in bankruptcy; is adjudicated a bankrupt or insolvent; files a petition or answer seeking for himself or herself any reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief under any statute, law, or regulation; files an answer or other pleading admitting or failing to contest the material allegations of a petition filed against him or her in any proceeding of this nature; or seeks, consents to, or acquiesces in the appointment of a trustee, receiver, or liquidator of the general partner or of all or any substantial part of his or her properties;
(5) unless otherwise provided in writing in the partnership agreement, 120 days after the commencement of any proceeding against the general partner seeking reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief under any statute, law, or regulation, the proceeding has not been dismissed, or if within 90 days after the appointment without his or her consent or acquiescence of a trustee, receiver, or liquidator of the general partner or of all or any substantial part of his or her properties, the appointment is not vacated or stayed or within 90 days after the expiration of any such stay, the appointment is not vacated;
(6) in the case of a general partner who is a natural person:
(A) his or her death; or
(B) the entry of an order by a court of competent jurisdiction adjudicating him or her incompetent to manage his or her person or his or her estate;
(7) in the case of a general partner who is acting as a general partner by virtue of being a trustee of a trust, the termination of the trust (but not merely the substitution of a new trustee);
(8) in the case of a general partner that is a separate partnership, the dissolution and commencement of winding up of the separate partnership;
(9) in the case of a general partner that is a corporation, the filing of a certificate of dissolution, or its equivalent, for the corporation or the revocation of its charter; or
(10) in the case of an estate, the distribution by the fiduciary of the estate’s entire interest in the partnership. (Added 1997, No. 149 (Adj. Sess.), § 4, eff. Jan. 1, 1999.)
§ 3433. General powers and liabilities
(a) Except as provided in this chapter or in the partnership agreement, a general partner of a limited partnership has the rights and powers and is subject to the restrictions of a partner in a partnership without limited partners.
(b) Except as provided in this chapter, a general partner of a limited partnership has the liabilities of a partner in a partnership without limited partners to persons other than the partnership and the other partners. Except as provided in this chapter or in the partnership agreement, a general partner of a limited partnership has the liabilities of a partner in a partnership without limited partners to the partnership and to the other partners. (Added 1997, No. 149 (Adj. Sess.), § 4, eff. Jan. 1, 1999.)
§ 3434. Contributions by general partner
A general partner of a limited partnership may make contributions to the partnership and share in the profits and losses of, and in distributions from, the limited partnership as a general partner. A general partner also may make contributions to and share in profits, losses, and distributions as a limited partner. A person who is both a general partner and a limited partner has the rights and powers, and is subject to the restrictions and liabilities, of a general partner and, except as provided in the partnership agreement, also has the powers, and is subject to the restrictions, of a limited partner to the extent of his or her participation in the partnership as a limited partner. (Added 1997, No. 149 (Adj. Sess.), § 4, eff. Jan. 1, 1999.)
§ 3435. Voting
The partnership agreement may grant to all or certain identified general partners the right to vote (on a per capita or any other basis), separately or with all or any class of the limited partners, on any matter. (Added 1997, No. 149 (Adj. Sess.), § 4, eff. Jan. 1, 1999.)
- Subchapter 005: FINANCE
§ 3441. Form of contribution
The contribution of a partner may be in cash, property, or services rendered, or a promissory note or other obligation to contribute cash or property or to perform services. (Added 1997, No. 149 (Adj. Sess.), § 4, eff. Jan. 1, 1999.)
§ 3442. Liability for contribution
(a) A promise by a limited partner to contribute to the limited partnership is not enforceable unless set out in a writing signed by the limited partner.
(b) Except as provided in the partnership agreement, a partner is obligated to the limited partnership to perform any enforceable promise to contribute cash or property or to perform services, even if he or she is unable to perform because of death, disability, or any other reason. If a partner does not make the required contribution of property or services, he or she is obligated at the option of the limited partnership to contribute cash equal to that portion of the value, as stated in the partnership records required to be kept pursuant to section 3405 of this title, of the stated contribution which has not been made.
(c) Unless otherwise provided in the partnership agreement, the obligation of a partner to make a contribution or return money or other property paid or distributed in violation of this chapter may be compromised only by consent of all partners. Notwithstanding the compromise, a creditor of a limited partnership who extends credit or otherwise acts in reliance on that obligation after the partner signs a writing which reflects the obligation and before the amendment or cancellation thereof to reflect the compromise may enforce the original obligation. (Added 1997, No. 149 (Adj. Sess.), § 4, eff. Jan. 1, 1999.)
§ 3443. Sharing of profits and losses
The profits and losses of a limited partnership shall be allocated among the partners, and among classes of partners, in the manner provided in writing in the partnership agreement. If the partnership agreement does not so provide in writing, profits and losses shall be allocated on the basis of the value, as stated in the partnership records required to be kept pursuant to section 3405 of this title, of the contributions made by each partner to the extent they have been received by the partnership and have not been returned. (Added 1997, No. 149 (Adj. Sess.), § 4, eff. Jan. 1, 1999.)
§ 3444. Sharing of distributions
Distributions of cash or other assets of a limited partnership shall be allocated among the partners and among classes of partners in the manner provided in writing in the partnership agreement. If the partnership agreement does not so provide in writing, distributions shall be made on the basis of the value, as stated in the partnership records required to be kept pursuant to section 3405 of this title, of the contributions made by each partner to the extent they have been received by the partnership and have not been returned. (Added 1997, No. 149 (Adj. Sess.), § 4, eff. Jan. 1, 1999.)
- Subchapter 006: DISTRIBUTIONS AND WITHDRAWAL
§ 3451. Interim distributions
Except as provided in this subchapter, a partner is entitled to receive distributions from a limited partnership before his or her withdrawal from the limited partnership and before the dissolution and winding up thereof to the extent and at the times or upon the happening of the events specified in the partnership agreement. (Added 1997, No. 149 (Adj. Sess.), § 4, eff. Jan. 1, 1999.)
§ 3452. Withdrawal of general partner
A general partner may withdraw from a limited partnership at any time by giving written notice to the other partners, but if the withdrawal violates the partnership agreement, the limited partnership may recover from the withdrawing general partner damages for breach of the partnership agreement and offset the damages against the amount otherwise distributable to him or her. (Added 1997, No. 149 (Adj. Sess.), § 4, eff. Jan. 1, 1999.)
§ 3453. Withdrawal of limited partner
A limited partner may only withdraw from a limited partnership at the time or upon the happening of events specified in writing in the partnership agreement. If the agreement does not specify in writing the time or the events upon the happening of which a limited partner may withdraw or a definite time for the dissolution and winding up of the limited partnership, a limited partner may withdraw upon not less than six months’ prior written notice to each general partner at his or her address on the books of the limited partnership at its office in this State. (Added 1997, No. 149 (Adj. Sess.), § 4, eff. Jan. 1, 1999.)
§ 3454. Distribution upon withdrawal
Except as provided in this subchapter, upon withdrawal any withdrawing partner is entitled to receive any distribution to which he or she is entitled under the partnership agreement and, if not otherwise provided in the agreement, he or she is entitled to receive, within a reasonable time after withdrawal, the fair value of his or her interest in the limited partnership as of the date of withdrawal based upon what a willing buyer would pay a willing seller for the interest, with neither party being under any compulsion to buy or sell his or her right to share in distributions from the limited partnership. (Added 1997, No. 149 (Adj. Sess.), § 4, eff. Jan. 1, 1999.)
§ 3455. Distribution in kind
Except as provided in writing in the partnership agreement, a partner, regardless of the nature of his or her contribution, has no right to demand and receive any distribution from a limited partnership in any form other than cash. Except as provided in writing in the partnership agreement, a partner may not be compelled to accept a distribution of any asset in kind from a limited partnership to the extent that the percentage of the asset distributed to him or her exceeds a percentage of that asset which is equal to the percentage in which he or she shares in distributions from the limited partnership. (Added 1997, No. 149 (Adj. Sess.), § 4, eff. Jan. 1, 1999.)
§ 3456. Right to distribution
At the time a partner becomes entitled to receive a distribution, he or she has the status of, and is entitled to all remedies available to, a creditor of the limited partnership with respect to the distribution. (Added 1997, No. 149 (Adj. Sess.), § 4, eff. Jan. 1, 1999.)
§ 3457. Limitations on distribution
A partner may not receive a distribution from a limited partnership to the extent that, after giving effect to the distribution, all liabilities of the limited partnership, other than liabilities to partners on account of their partnership interests, exceed the fair value of the partnership assets. (Added 1997, No. 149 (Adj. Sess.), § 4, eff. Jan. 1, 1999.)
§ 3458. Liability upon return of contribution
(a) If a partner has received the return of any part of his or her contribution without violation of the partnership agreement or this chapter, he or she is liable to the limited partnership for a period of one year thereafter for the amount of the returned contribution, but only to the extent necessary to discharge the limited partnership’s liabilities to creditors who extended credit to the limited partnership during the period the contribution was held by the partnership.
(b) If a partner has received the return of any part of his or her contribution in violation of the partnership agreement or this chapter, he or she is liable to the limited partnership for a period of six years thereafter for the amount of the contribution wrongfully returned.
(c) A partner receives a return of his or her contribution to the extent that a distribution to him or her reduces his or her share of the fair value of the net assets of the limited partnership below the value, as set forth in the partnership records required to be kept pursuant to section 3405 of this title, of his or her contribution which has not been distributed to him or her. (Added 1997, No. 149 (Adj. Sess.), § 4, eff. Jan. 1, 1999.)
- Subchapter 007: ASSIGNMENT OF PARTNERSHIP INTERESTS
§ 3461. Nature of partnership interest
A partnership interest is personal property. (Added 1997, No. 149 (Adj. Sess.), § 4, eff. Jan. 1, 1999.)
§ 3462. Assignment of partnership interest
Except as provided in the partnership agreement, a partnership interest is assignable in whole or in part. An assignment of a partnership interest does not dissolve a limited partnership or entitle the assignee to become or to exercise any rights of a partner. An assignment entitles the assignee to receive, to the extent assigned, only the distribution to which the assignor would be entitled. Except as provided in the partnership agreement, a partner ceases to be a partner upon assignment of all his or her partnership interest. (Added 1997, No. 149 (Adj. Sess.), § 4, eff. Jan. 1, 1999.)
§ 3463. Rights of creditor
On application to a court of competent jurisdiction by any judgment creditor of a partner, the court may charge the partnership interest of the partner with payment of the unsatisfied amount of the judgment with interest. To the extent so charged, the judgment creditor has only the rights of an assignee of the partnership interest. This chapter does not deprive any partner of the benefit of any exemption laws applicable to his or her partnership interest. (Added 1997, No. 149 (Adj. Sess.), § 4, eff. Jan. 1, 1999.)
§ 3464. Right of assignee to become limited partner
(a) An assignee of a partnership interest, including an assignee of a general partner, may become a limited partner if and to the extent that the assignor gives the assignee that right in accordance with authority described in the partnership agreement, or all other partners consent.
(b) An assignee who has become a limited partner has, to the extent assigned, the rights and powers, and is subject to the restrictions and liabilities, of a limited partner under the partnership agreement and this chapter. An assignee who becomes a limited partner also is liable for the obligations of his or her assignor to make and return contributions as provided in subchapters 5 and 6 of this title. However, the assignee is not obligated for liabilities unknown to the assignee at the time he or she became a limited partner.
(c) If an assignee of a partnership interest becomes a limited partner, the assignor is not released from his or her liability to the limited partnership under sections 3417 and 3442 of this title. (Added 1997, No. 149 (Adj. Sess.), § 4, eff. Jan. 1, 1999.)
§ 3465. Power of estate of deceased or partner who is incompetent
If a partner who is an individual dies or a court of competent jurisdiction adjudges him or her to be incompetent to manage his or her person or his or her property, the partner’s executor, administrator, guardian, conservator, or other legal representative may exercise all of the partner’s rights for the purpose of settling his or her estate or administering his or her property, including any power the partner had to give an assignee the right to become a limited partner. If a partner is a corporation, trust, or other entity and is dissolved or terminated, the powers of that partner may be exercised by its legal representative or successor. (Added 1997, No. 149 (Adj. Sess.), § 4, eff. Jan. 1, 1999; amended 2013, No. 96 (Adj. Sess.), § 41.)
- Subchapter 008: DISSOLUTION
§ 3471. Nonjudicial dissolution
A limited partnership is dissolved and its affairs shall be wound up upon the happening of the first to occur of the following:
(1) at the time specified in the certificate of limited partnership;
(2) upon the happening of events specified in writing in the partnership agreement;
(3) written consent of all partners;
(4) an event of withdrawal of a general partner unless at the time there is at least one other general partner and the written provisions of the partnership agreement permit the business of the limited partnership to be carried on by the remaining general partner and that partner does so, but the limited partnership is not dissolved and is not required to be wound up by reason of any event of withdrawal if, within 90 days after the withdrawal, all partners agree in writing to continue the business of the limited partnership and to the appointment of one or more additional general partners if necessary or desired; or
(5) entry of a decree of judicial dissolution under section 3472 of this title. (Added 1997, No. 149 (Adj. Sess.), § 4, eff. Jan. 1, 1999.)
§ 3472. Judicial dissolution
On application by or for a partner the Superior Court may decree dissolution of a limited partnership whenever it is not reasonably practicable to carry on the business in conformity with the partnership agreement. Venue for such a proceeding lies in the county where the partnership’s principal office is or was located. (Added 1997, No. 149 (Adj. Sess.), § 4, eff. Jan. 1, 1999.)
§ 3473. Winding up
Except as provided in the partnership agreement, the general partners who have not wrongfully dissolved a limited partnership or, if none, the limited partners, may wind up the limited partnership’s affairs; but the Superior Court may wind up the limited partnership’s affairs upon application of any partner, his or her legal representative, or assignee. Venue for such a proceeding lies in the county where the partnership’s principal office is or was located. (Added 1997, No. 149 (Adj. Sess.), § 4, eff. Jan. 1, 1999.)
§ 3474. Distribution of assets
Upon the winding up of a limited partnership, the assets shall be distributed as follows:
(1) to creditors, including partners who are creditors, to the extent permitted by law, in satisfaction of liabilities of the limited partnership other than liabilities for distributions to partners under section 3451 or 3454 of this title;
(2) except as provided in the partnership agreement, to partners and former partners in satisfaction of liabilities for distributions under section 3451 or 3454 of this title; and
(3) except as provided in the partnership agreement, to partners first for the return of their contributions and secondly respecting their partnership interests, in the proportions in which the partners share in distributions. (Added 1997, No. 149 (Adj. Sess.), § 4, eff. Jan. 1, 1999.)
- Subchapter 009: FOREIGN LIMITED PARTNERSHIPS
§ 3481. Law governing
Subject to the constitution of this State, the laws of the state under which a foreign limited partnership is organized govern its organization and internal affairs and the liability of its limited partners, and a foreign limited partnership may not be denied registration by reason of any difference between those laws and the laws of this State. (Added 1997, No. 149 (Adj. Sess.), § 4, eff. Jan. 1, 1999.)
§ 3482. Registration
Before transacting business in this State, a foreign limited partnership shall register with the Secretary of State. In order to register, a foreign limited partnership shall submit to the Secretary of State, in duplicate, an application for registration as a foreign limited partnership, signed and sworn to by a general partner and setting forth:
(1) the name of the foreign limited partnership and, if different, the name under which it proposes to register and transact business in this State;
(2) the state and date of its formation;
(3) the name and address of any agent for service of process on the foreign limited partnership whom the foreign limited partnership elects to appoint; the agent must be an individual resident of this State, a domestic corporation, or a foreign corporation having a place of business in, and authorized to do business in, this State;
(4) a statement that the Secretary of State is appointed the agent of the foreign limited partnership for service of process if no agent has been appointed under subdivision (3) of this section or, if appointed, the agent’s authority has been revoked or if the agent cannot be found or served with the exercise of reasonable diligence;
(5) the address of the office required to be maintained in the state of its organization by the laws of that state or, if not so required, of the principal office of the foreign limited partnership;
(6) the name and business address of each general partner; and
(7) the address of the office at which is kept a list of the names and addresses of the limited partners and their capital contributions, together with an undertaking by the foreign limited partnership to keep those records until the foreign limited partnership’s registration in this State is canceled or withdrawn. (Added 1997, No. 149 (Adj. Sess.), § 4, eff. Jan. 1, 1999.)
§ 3483. Issuance of registration
(a) If the Secretary of State finds that an application for registration conforms to law and all requisite fees have been paid, he or she shall:
(1) endorse on the application the word “Filed,” and the month, day, and year of the filing thereof;
(2) file in his or her office a duplicate original of the application; and
(3) issue a certificate of registration to transact business in this State.
(b) The certificate of registration, together with a duplicate original of the application, shall be returned to the person who filed the application or his or her representative. (Added 1997, No. 149 (Adj. Sess.), § 4, eff. Jan. 1, 1999.)
§ 3484. Name
A foreign limited partnership may register with the Secretary of State under any name, whether or not it is the name under which it is registered in its state of organization, and it:
(1) shall contain the words “Limited Partnership,” or the letters “L.P.”;
(2) may not contain the name of a limited partner unless it is also the name of a general partner or the corporate name of a corporate general partner, or the business of the limited partnership had been carried on under the name before the admission of that limited partner;
(3) shall be distinguishable in the records of the Secretary of State from the name of any corporation, limited liability company, limited liability partnership, or limited partnership organized under the laws of the State or licensed or registered as a foreign corporation, limited liability company, limited liability partnership, or limited partnership in this State; and
(4) may not contain the following words: “corporation,” “incorporated,” “limited by itself,” “limited liability company,” “limited company,” or the abbreviations “corp.,” “inc.,” or “ltd.” (Added 1997, No. 149 (Adj. Sess.), § 4, eff. Jan. 1, 1999; amended 2015, No. 17, § 7.)
§ 3485. Changes and amendments
If any statement in the application for registration of a foreign limited partnership was false when made or any arrangements or other facts described have changed, making the application inaccurate in any respect, the foreign limited partnership shall promptly file in the Office of the Secretary of State a certificate, signed and sworn to by a general partner, correcting such statement. (Added 1997, No. 149 (Adj. Sess.), § 4, eff. Jan. 1, 1999.)
§ 3486. Cancellation of registration
A foreign limited partnership may cancel its registration by filing with the Secretary of State a certificate of cancellation signed and sworn to by a general partner. A cancellation does not terminate the authority of the Secretary of State to accept service of process on the foreign limited partnership with respect to claims for relief or causes of action arising out of the transaction of business in this State. (Added 1997, No. 149 (Adj. Sess.), § 4, eff. Jan. 1, 1999.)
§ 3487. Transaction of business without registration
(a)(1) A foreign limited partnership transacting business in this State may not maintain an action or proceeding or raise a counterclaim, crossclaim, or affirmative defense in this State until it has registered in this State.
(2) The successor to a foreign limited partnership that transacted business in this State without a certificate of authority and the assignee of a cause of action arising out of that business may not maintain a proceeding or raise a counterclaim, crossclaim, or affirmative defense based on that cause of action in any court in this State until the foreign limited partnership or its successor or assignee obtains a certificate of authority.
(b) The failure of a foreign limited partnership to register in this State does not impair the validity of any contract or act of the foreign limited partnership or prevent the foreign limited partnership from defending any action, suit, or proceeding in any court of this State.
(c) A limited partner of a foreign limited partnership is not liable as a general partner of the foreign limited partnership solely by reason of having transacted business in this State without registration.
(d) A foreign limited partnership, by transacting business in this State without registration, appoints the Secretary of State as its agent for service of process with respect to claims for relief and causes of action arising out of the transaction of business in this State.
(e) A foreign limited partnership that transacts business in this State without a registration shall be liable to the State for:
(1) a civil penalty of $50.00 for each day, not to exceed a total of $10,000.00 for each year, it transacts business in this State without a registration;
(2) an amount equal to the fees due under this chapter during the period it transacted business in this State without a registration; and
(3) other penalties imposed by law. (Added 1997, No. 149 (Adj. Sess.), § 4, eff. Jan. 1, 1999; amended 2015, No. 128 (Adj. Sess.), § C.6.)
§ 3488. Action by Attorney General
The Attorney General may bring an action in the Civil Division of the Superior Court to collect the penalties imposed under section 3487 of this title and to restrain a foreign limited partnership from transacting business in this State in violation of this subchapter. (Added 1997, No. 149 (Adj. Sess.), § 4, eff. Jan. 1, 1999; amended 2015, No. 128 (Adj. Sess.), § C.7.)
- Subchapter 010: DERIVATIVE ACTIONS
§ 3491. Right of action
A limited partner may bring an action in the right of a limited partnership to recover a judgment in its favor if general partners with authority to do so have refused to bring the action or if an effort to cause those general partners to bring the action is not likely to succeed. (Added 1997, No. 149 (Adj. Sess.), § 4, eff. Jan. 1, 1999.)
§ 3492. Proper plaintiff
In a derivative action, the plaintiff must be a partner at the time of bringing the action and must have been a partner at the time of the transaction of which he or she complains or his or her status as a partner must have devolved upon him or her by operation of law or pursuant to the terms of the partnership agreement from a person who was a partner at the time of the transaction. (Added 1997, No. 149 (Adj. Sess.), § 4, eff. Jan. 1, 1999.)
§ 3493. Pleading
In a derivative action, the complaint shall set forth with particularity the effort of the plaintiff to secure initiation of the action by a general partner or the reasons for not making the effort. (Added 1997, No. 149 (Adj. Sess.), § 4, eff. Jan. 1, 1999.)
§ 3494. Expenses
If a derivative action is successful, in whole or in part, or if anything is received by the plaintiff as a result of a judgment, compromise, or settlement of an action or claim, the court may award the plaintiff reasonable expenses, including reasonable attorney’s fees, and shall direct him or her to remit to the limited partnership the remainder of those proceeds received by him or her. (Added 1997, No. 149 (Adj. Sess.), § 4, eff. Jan. 1, 1999.)
- Subchapter 011: MISCELLANEOUS
§ 3501. Construction and application
This chapter shall be so 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. (Added 1997, No. 149 (Adj. Sess.), § 4, eff. Jan. 1, 1999.)
§ 3502. Rules for cases not provided for in this chapter
In any case not provided for in this chapter the provisions of the Uniform Partnership Act govern. (Added 1997, No. 149 (Adj. Sess.), § 4, eff. Jan. 1, 1999.)
§ 3503. Savings clause
The repeal of any statutory provision by this act does not impair, or otherwise affect, the organization or the continued existence of a limited partnership existing at the effective date of this act, nor does the repeal of any existing statutory provision by this act impair any contract or affect any right accrued before the effective date of this act. (Added 1997, No. 149 (Adj. Sess.), § 4, eff. Jan. 1, 1999.)
