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S.B. 183
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6 AN ACT RELATING TO PARTNERSHIPS; REPLACING THE UNIFORM PARTNERSHIP
7 ACT WITH THE REVISED UNIFORM PARTNERSHIP ACT; ADOPTING THE ENTITY
8 THEORY OF PARTNERSHIPS; REDEFINING PARTNERSHIP; PERMITTING
9 VOLUNTARY FILINGS; ADDRESSING DISSOCIATION AND DISSOLUTION;
10 ADDRESSING CONVERSIONS TO A LIMITED LIABILITY COMPANY; PROVIDING AN
11 EFFECTIVE DATE; AND PROVIDING A REPEAL DATE FOR THE EXISTING ACT.
12 This act affects sections of Utah Code Annotated 1953 as follows:
13 AMENDS:
14 48-2a-102, as last amended by Chapter 61, Laws of Utah 1994
15 ENACTS:
16 48-1a-100, Utah Code Annotated 1953
17 48-1a-101, Utah Code Annotated 1953
18 48-1a-102, Utah Code Annotated 1953
19 48-1a-103, Utah Code Annotated 1953
20 48-1a-104, Utah Code Annotated 1953
21 48-1a-105, Utah Code Annotated 1953
22 48-1a-106, Utah Code Annotated 1953
23 48-1a-107, Utah Code Annotated 1953
24 48-1a-201, Utah Code Annotated 1953
25 48-1a-202, Utah Code Annotated 1953
26 48-1a-203, Utah Code Annotated 1953
27 48-1a-204, Utah Code Annotated 1953
1 48-1a-301, Utah Code Annotated 1953
2 48-1a-302, Utah Code Annotated 1953
3 48-1a-303, Utah Code Annotated 1953
4 48-1a-304, Utah Code Annotated 1953
5 48-1a-305, Utah Code Annotated 1953
6 48-1a-306, Utah Code Annotated 1953
7 48-1a-307, Utah Code Annotated 1953
8 48-1a-308, Utah Code Annotated 1953
9 48-1a-401, Utah Code Annotated 1953
10 48-1a-402, Utah Code Annotated 1953
11 48-1a-403, Utah Code Annotated 1953
12 48-1a-404, Utah Code Annotated 1953
13 48-1a-405, Utah Code Annotated 1953
14 48-1a-406, Utah Code Annotated 1953
15 48-1a-501, Utah Code Annotated 1953
16 48-1a-502, Utah Code Annotated 1953
17 48-1a-503, Utah Code Annotated 1953
18 48-1a-504, Utah Code Annotated 1953
19 48-1a-601, Utah Code Annotated 1953
20 48-1a-602, Utah Code Annotated 1953
21 48-1a-603, Utah Code Annotated 1953
22 48-1a-701, Utah Code Annotated 1953
23 48-1a-702, Utah Code Annotated 1953
24 48-1a-703, Utah Code Annotated 1953
25 48-1a-704, Utah Code Annotated 1953
26 48-1a-705, Utah Code Annotated 1953
27 48-1a-801, Utah Code Annotated 1953
28 48-1a-802, Utah Code Annotated 1953
29 48-1a-803, Utah Code Annotated 1953
30 48-1a-804, Utah Code Annotated 1953
31 48-1a-805, Utah Code Annotated 1953
1 48-1a-806, Utah Code Annotated 1953
2 48-1a-807, Utah Code Annotated 1953
3 48-1a-901, Utah Code Annotated 1953
4 48-1a-902, Utah Code Annotated 1953
5 48-1a-903, Utah Code Annotated 1953
6 48-1a-904, Utah Code Annotated 1953
7 48-1a-905, Utah Code Annotated 1953
8 48-1a-906, Utah Code Annotated 1953
9 48-1a-907, Utah Code Annotated 1953
10 48-1a-908, Utah Code Annotated 1953
11 48-1a-909, Utah Code Annotated 1953
12 48-1a-1001, Utah Code Annotated 1953
13 48-1a-1002, Utah Code Annotated 1953
14 48-1a-1003, Utah Code Annotated 1953
15 48-1a-1004, Utah Code Annotated 1953
16 48-1a-1005, Utah Code Annotated 1953
17 48-1a-1101, Utah Code Annotated 1953
18 48-1a-1102, Utah Code Annotated 1953
19 48-1a-1103, Utah Code Annotated 1953
20 48-1a-1104, Utah Code Annotated 1953
21 48-1a-1105, Utah Code Annotated 1953
22 48-1a-1106, Utah Code Annotated 1953
23 48-1a-1107, Utah Code Annotated 1953
24 48-1a-1108, Utah Code Annotated 1953
25 48-1a-1109, Utah Code Annotated 1953
26 48-1a-1110, Utah Code Annotated 1953
27 63-55b-4801, Utah Code Annotated 1953
28 Be it enacted by the Legislature of the state of Utah:
29 Section 1. Section 48-1a-100 is enacted to read:
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2 48-1a-100. Title.
3 This chapter is known as the "Utah Revised Uniform Partnership and Limited Liability
4 Partnership Act."
5 Section 2. Section 48-1a-101 is enacted to read:
6 48-1a-101. Definitions.
7 As used in this chapter:
8 (1) "Business" includes every trade, occupation, and profession.
9 (2) "Debtor in bankruptcy" means a person who is the subject of:
10 (a) an order for relief under Title 11 of the United States Code or a comparable order under
11 a successor statute of general application; or
12 (b) a comparable order under federal, state, or foreign law governing insolvency.
13 (3) "Distribution" means a transfer of money or other property from a partnership to a
14 partner in the partner's capacity as a partner or to the partner's transferee.
15 (4) "Partnership" means an association of two or more persons to carry on as co-owners
16 a business for profit formed under Section 48-1a-202, predecessor law, or comparable law of
17 another jurisdiction.
18 (5) "Partnership agreement" means the agreement, whether written, oral, or implied,
19 among the partners concerning the partnership, including amendments to the partnership
20 agreement.
21 (6) "Partnership at will" means a partnership in which the partners have not agreed to
22 remain partners until the expiration of a definite term or the completion of a particular undertaking.
23 (7) "Partnership interest" or "partner's interest in the partnership" means all of a partner's
24 interests in the partnership, including the partner's transferable interest and all management and
25 other rights.
26 (8) "Person" means an individual, corporation, business trust, estate, trust, partnership,
27 association, joint venture, government, governmental subdivision, agency, or instrumentality, or
28 any other legal or commercial entity.
29 (9) "Property" means all property, real, personal, or mixed, tangible or intangible, or any
30 interest therein.
31 (10) "State" means a state of the United States, the District of Columbia, the
1 Commonwealth of Puerto Rico, or any territory or insular possession subject to the jurisdiction
2 of the United States.
3 (11) "Statement" means:
4 (a) a statement of partnership authority under Section 48-1a-303;
5 (b) a statement of denial under Section 48-1a-304;
6 (c) a statement of dissociation under Section 48-1a-704;
7 (d) a statement of dissolution under Section 48-1a-805;
8 (e) a statement of merger under Section 48-1a-907; or
9 (f) an amendment or cancellation of any of the statements listed in Subsections (11)(a)
10 through (e).
11 (12) "Transfer" includes an assignment, conveyance, lease, mortgage, deed, and
12 encumbrance.
13 Section 3. Section 48-1a-102 is enacted to read:
14 48-1a-102. Knowledge and notice.
15 For purposes of this chapter:
16 (1) A person knows a fact if the person has actual knowledge of it.
17 (2) A person has notice of a fact if the person:
18 (a) knows of it;
19 (b) has received a notification of it; or
20 (c) has reason to know it exists from all of the facts known to the person at the time in
21 question.
22 (3) A person notifies or gives a notification to another by taking steps reasonably required
23 to inform the other person in ordinary course, whether or not the other person learns of it.
24 (4) A person receives a notification when the notification:
25 (a) comes to the person's attention; or
26 (b) is duly delivered at the person's place of business or at any other place held out by the
27 person as a place for receiving communications.
28 (5) Except as otherwise provided in Subsection (6), a person other than an individual
29 knows, has notice, or receives a notification of a fact for purposes of a particular transaction when
30 the individual conducting the transaction knows, has notice, or receives a notification of the fact,
31 or in any event when the fact would have been brought to the individual's attention if the person
1 had exercised reasonable diligence. The person exercises reasonable diligence if it maintains
2 reasonable routines for communicating significant information to the individual conducting the
3 transaction and there is reasonable compliance with the routines. Reasonable diligence does not
4 require an individual acting for the person to communicate information unless the communication
5 is part of the individual's regular duties or the individual has reason to know of the transaction and
6 that the transaction would be materially affected by the information.
7 (6) A partner's knowledge, notice, or receipt of a notification of a fact relating to the
8 partnership is effective immediately as knowledge by, notice to, or receipt of a notification by the
9 partnership, except in the case of a fraud on the partnership committed by or with the consent of
10 that partner.
11 Section 4. Section 48-1a-103 is enacted to read:
12 48-1a-103. Effect of partnership agreement -- Nonwaivable provisions.
13 (1) Except as otherwise provided in Subsection (2), relations among the partners and
14 between the partners and the partnership are governed by the partnership agreement. To the extent
15 the partnership agreement does not otherwise provide, this chapter governs relations among the
16 partners and between the partners and the partnership.
17 (2) The partnership agreement may not:
18 (a) vary the rights and duties under Section 48-1a-105 except to eliminate the duty to
19 provide copies of statements to all the partners;
20 (b) unreasonably restrict the right of access to books and records under Subsection
21 48-1a-403(2);
22 (c) eliminate the duty of loyalty under Subsection 48-1a-404(2) or 48-1a-603(2)(c), but:
23 (i) the partnership agreement may identify specific types or categories of activities that do
24 not violate the duty of loyalty, if not manifestly unreasonable; or
25 (ii) all of the partners or a number or percentage specified in the partnership agreement
26 may authorize or ratify, after full disclosure of all material facts, a specific act or transaction that
27 otherwise would violate the duty of loyalty;
28 (d) unreasonably reduce the duty of care under Subsection 48-1a-404(3) or
29 48-1a-603(2)(c);
30 (e) eliminate the obligation of good faith and fair dealing under Subsection 48-1a-404(4),
31 but the partnership agreement may prescribe the standards by which the performance of the
1 obligation is to be measured, if the standards are not manifestly unreasonable;
2 (f) vary the power to dissociate as a partner under Section 48-1a-602(1), except to require
3 the notice under Subsection 48-1a-601(1) to be in writing;
4 (g) vary the right of a court to expel a partner in the events specified in Subsection
5 48-1a-601(5);
6 (h) vary the requirements to wind up the partnership business in cases specified in
7 Subsection 48-1a-801(4), (5), or (6); or
8 (i) restrict rights of third parties under this chapter.
9 Section 5. Section 48-1a-104 is enacted to read:
10 48-1a-104. Supplemental principles of law.
11 (1) Unless displaced by particular provisions of this chapter, the principles of law and
12 equity supplement this chapter.
13 (2) If an obligation to pay interest arises under this chapter and the rate is not specified,
14 the rate is that specified in Section 15-1-1.
15 Section 6. Section 48-1a-105 is enacted to read:
16 48-1a-105. Execution, filing, and recording of statements.
17 (1) A statement may be filed in the Division of Corporations and Commercial Code. A
18 certified copy of a statement that is filed in an office in another state may be filed in the Division
19 of Corporations and Commercial Code. Either filing has the effect provided in this chapter with
20 respect to partnership property located in or transactions that occur in this state.
21 (2) A certified copy of a statement that has been filed in the Division of Corporations and
22 Commercial Code and recorded in the office for recording transfers of real property has the effect
23 provided for recorded statements in this chapter. A recorded statement that is not a certified copy
24 of a statement filed in the Division of Corporations and Commercial Code does not have the effect
25 provided for recorded statements in this chapter.
26 (3) A statement filed by a partnership must be executed by at least two partners. Other
27 statements must be executed by a partner or other person authorized by this chapter. An individual
28 who executes a statement as, or on behalf of, a partner or other person named as a partner in a
29 statement shall personally declare under penalty of perjury that the contents of the statement are
30 accurate.
31 (4) A person authorized by this chapter to file a statement may amend or cancel the
1 statement by filing an amendment or cancellation that names the partnership, identifies the
2 statement, and states the substance of the amendment or cancellation.
3 (5) A person who files a statement pursuant to this section shall promptly send a copy of
4 the statement to every nonfiling partner and to any other person named as a partner in the
5 statement. Failure to send a copy of a statement to a partner or other person does not limit the
6 effectiveness of the statement as to a person not a partner.
7 (6) (a) The Division of Corporations and Commercial Code may collect a fee for filing or
8 providing a certified copy of a statement.
9 (b) An office of the county recorder may collect a fee for recording a statement.
10 Section 7. Section 48-1a-106 is enacted to read:
11 48-1a-106. Law governing internal relations.
12 The law of the jurisdiction in which a partnership has its chief executive office governs
13 relations among the partners and between the partners and the partnership.
14 Section 8. Section 48-1a-107 is enacted to read:
15 48-1a-107. Partnership subject to amendment or repeal of chapter.
16 A partnership governed by this chapter is subject to any amendment to or repeal of this
17 chapter.
18 Section 9. Section 48-1a-201 is enacted to read:
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20 48-1a-201. Partnership as entity.
21 A partnership is an entity distinct from its partners.
22 Section 10. Section 48-1a-202 is enacted to read:
23 48-1a-202. Formation of partnership.
24 (1) Except as otherwise provided in Subsection (2), the association of two or more persons
25 to carry on as co-owners a business for profit forms a partnership, whether or not the persons
26 intend to form a partnership.
27 (2) An association formed under a statute other than this chapter, a predecessor statute, or
28 a comparable statute of another jurisdiction is not a partnership under this chapter.
29 (3) In determining whether a partnership is formed, the following rules apply:
30 (a) Joint tenancy, tenancy in common, tenancy by the entireties, joint property, common
31 property, or part ownership does not by itself establish a partnership, even if the co-owners share
1 profits made by the use of the property.
2 (b) The sharing of gross returns does not by itself establish a partnership, even if the
3 persons sharing them have a joint or common right or interest in property from which the returns
4 are derived.
5 (c) A person who receives a share of the profits of a business is presumed to be a partner
6 in the business, unless the profits were received in payment:
7 (i) of a debt by installments or otherwise;
8 (ii) for services as an independent contractor or of wages or other compensation to an
9 employee;
10 (iii) of rent;
11 (iv) of an annuity or other retirement or health benefit to a beneficiary, representative, or
12 designee of a deceased or retired partner;
13 (v) of interest or other charge on a loan, even if the amount of payment varies with the
14 profits of the business, including a direct or indirect present or future ownership of the collateral,
15 or rights to income, proceeds, or increase in value derived from the collateral; or
16 (vi) for the sale of the goodwill of a business or other property by installments or
17 otherwise.
18 Section 11. Section 48-1a-203 is enacted to read:
19 48-1a-203. Partnership property.
20 Property acquired by a partnership is property of the partnership and not of the partners
21 individually.
22 Section 12. Section 48-1a-204 is enacted to read:
23 48-1a-204. When property is partnership property.
24 (1) Property is partnership property if acquired in the name of:
25 (a) the partnership; or
26 (b) one or more partners with an indication in the instrument transferring title to the
27 property of the person's capacity as a partner or of the existence of a partnership but without an
28 indication of the name of the partnership.
29 (2) Property is acquired in the name of the partnership by a transfer to:
30 (a) the partnership in its name; or
31 (b) one or more partners in their capacity as partners in the partnership, if the name of the
1 partnership is indicated in the instrument transferring title to the property.
2 (3) Property is presumed to be partnership property if purchased with partnership assets,
3 even if not acquired in the name of the partnership or of one or more partners with an indication
4 in the instrument transferring title to the property of the person's capacity as a partner or of the
5 existence of a partnership.
6 (4) Property acquired in the name of one or more of the partners, without an indication in
7 the instrument transferring title to the property of the person's capacity as a partner or of the
8 existence of a partnership and without use of partnership assets, is presumed to be separate
9 property, even if used for partnership purposes.
10 Section 13. Section 48-1a-301 is enacted to read:
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12 48-1a-301. Partner agent of partnership.
13 Subject to the effect of a statement of partnership authority under Section 48-1a-303;
14 (1) Each partner is an agent of the partnership for the purpose of its business. An act of
15 a partner, including the execution of an instrument in the partnership name, for apparently carrying
16 on in the ordinary course the partnership business or business of the kind carried on by the
17 partnership binds the partnership, unless the partner had no authority to act for the partnership in
18 the particular matter and the person with whom the partner was dealing knew or had received a
19 notification that the partner lacked authority.
20 (2) An act of a partner which is not apparently for carrying on in the ordinary course the
21 partnership business or business of the kind carried on by the partnership binds the partnership
22 only if the act was authorized by the other partners.
23 Section 14. Section 48-1a-302 is enacted to read:
24 48-1a-302. Transfer of partnership property.
25 (1) Partnership property may be transferred as follows:
26 (a) Subject to the effect of a statement of partnership authority under Section 48-1a-303,
27 partnership property held in the name of the partnership may be transferred by an instrument of
28 transfer executed by a partner in the partnership name.
29 (b) Partnership property held in the name of one or more partners with an indication in the
30 instrument transferring the property to them of their capacity as partners or of the existence of a
31 partnership, but without an indication of the name of the partnership, may be transferred by an
1 instrument of transfer executed by the persons in whose name the property is held.
2 (c) Partnership property held in the name of one or more persons other than the
3 partnership, without an indication in the instrument transferring the property to them of their
4 capacity as partners or of the existence of a partnership, may be transferred by an instrument of
5 transfer executed by the persons in whose name the property is held.
6 (2) A partnership may recover partnership property from a transferee only if it proves that
7 execution of the instrument of initial transfer did not bind the partnership under Section 48-1a-301:
8 (a) as to a subsequent transferee who gave value for property transferred under Subsections
9 (1)(a) and (b), proves that the subsequent transferee knew or had received a notification that the
10 person who executed the instrument of initial transfer lacked authority to bind the partnership; or
11 (b) as to a transferee who gave value for property transferred under Subsection (1)(c),
12 proves that the transferee knew or had received a notification that the property was partnership
13 property and that the person who executed the instrument of initial transfer lacked authority to bind
14 the partnership.
15 (3) A partnership may not recover partnership property from a subsequent transferee if the
16 partnership would not have been entitled to recover the property, under Subsection (2), from any
17 earlier transferee of the property.
18 (4) If a person holds all of the partners' interests in the partnership, all of the partnership
19 property vests in that person. The person may execute a document in the name of the partnership
20 to evidence vesting of the property in that person and may file or record the document.
21 Section 15. Section 48-1a-303 is enacted to read:
22 48-1a-303. Statement of partnership authority.
23 (1) A partnership may file a statement of partnership authority, which:
24 (a) must include:
25 (i) the name of the partnership;
26 (ii) the street address of its chief executive office and of one office in this state, if there is
27 one;
28 (iii) the names and mailing addresses of all of the partners or of an agent appointed and
29 maintained by the partnership for the purpose of Subsection (2); and
30 (iv) the names of the partners authorized to execute an instrument transferring real
31 property held in the name of the partnership; and
1 (b) may state the authority, or limitations on the authority, of some or all of the partners
2 to enter into other transactions on behalf of the partnership and any other matter.
3 (2) If a statement of partnership authority names an agent, the agent shall maintain a list
4 of the names and mailing addresses of all of the partners and make it available to any person on
5 request for good cause shown.
6 (3) If a filed statement of partnership authority is executed pursuant to Subsection
7 48-1a-105(3) and states the name of the partnership but does not contain all of the other
8 information required by Subsection (1), the statement nevertheless operates with respect to a
9 person not a partner as provided in Subsections (4) and (5).
10 (4) Except as otherwise provided in Subsection (7), a filed statement of partnership
11 authority supplements the authority of a partner to enter into transactions on behalf of the
12 partnership as follows:
13 (a) Except for transfers of real property, a grant of authority contained in a filed statement
14 of partnership authority is conclusive in favor of a person who gives value without knowledge to
15 the contrary, so long as and to the extent that a limitation on that authority is not then contained
16 in another filed statement. A filed cancellation of a limitation on authority revives the previous
17 grant of authority.
18 (b) A grant of authority to transfer real property held in the name of the partnership
19 contained in a certified copy of a filed statement of partnership authority recorded in the office for
20 recording transfers of that real property is conclusive in favor of a person who gives value without
21 knowledge to the contrary, so long as and to the extent that a certified copy of a filed statement
22 containing a limitation on that authority is not then of record in the office for recording transfers
23 of that real property. The recording in the office for recording transfers of that real property of a
24 certified copy of a filed cancellation of a limitation on authority revives the previous grant of
25 authority.
26 (5) A person not a partner is deemed to know of a limitation on the authority of a partner
27 to transfer real property held in the name of the partnership if a certified copy of the filed statement
28 containing the limitation on authority is of record in the office for recording transfers of that real
29 property.
30 (6) Except as otherwise provided in Subsections (4) and (5) and Sections 48-1a-704 and
31 48-1a-805, a person not a partner is not deemed to know of a limitation on the authority of a
1 partner merely because the limitation is contained in a filed statement.
2 (7) Unless earlier canceled, a filed statement of partnership authority is canceled by
3 operation of law five years after the date on which the statement, or the most recent amendment,
4 was filed with the Division of Corporations and Commercial Code.
5 Section 16. Section 48-1a-304 is enacted to read:
6 48-1a-304. Statement of denial.
7 A partner or other person named as a partner in a filed statement of partnership authority
8 or in a list maintained by an agent pursuant to Subsection 48-1a-303(2) may file a statement of
9 denial stating the name of the partnership and the fact that is being denied, which may include
10 denial of a person's authority or status as a partner. A statement of denial is a limitation on
11 authority as provided in Subsections 48-1a-303(4) and (5).
12 Section 17. Section 48-1a-305 is enacted to read:
13 48-1a-305. Partnership liable for partner's actionable conduct.
14 (1) A partnership is liable for loss or injury caused to a person, or for a penalty incurred,
15 as a result of a wrongful act or omission, or other actionable conduct, of a partner acting in the
16 ordinary course of business of the partnership or with authority of the partnership.
17 (2) If, in the course of the partnership's business or while acting with authority of the
18 partnership, a partner receives or causes the partnership to receive money or property of a person
19 not a partner, and the money or property is misapplied by a partner, the partnership is liable for the
20 loss.
21 Section 18. Section 48-1a-306 is enacted to read:
22 48-1a-306. Partner's liability.
23 (1) Except as otherwise provided in Subsection (2), all partners are liable jointly and
24 severally for all obligations of the partnership unless otherwise agreed by the claimant or provided
25 by law.
26 (2) A person admitted as a partner into an existing partnership is not personally liable for
27 any partnership obligation incurred before the partner's admission as a partner.
28 Section 19. Section 48-1a-307 is enacted to read:
29 48-1a-307. Actions by and against partnership and partners.
30 (1) A partnership may sue and be sued in the name of the partnership.
31 (2) An action may be brought against the partnership and any or all of the partners in the
1 same action or in separate actions.
2 (3) A judgment against a partnership is not by itself a judgment against a partner. A
3 judgment against a partnership may not be satisfied from a partner's assets unless there is also a
4 judgment against the partner.
5 (4) A judgment creditor of a partner may not levy execution against the assets of the
6 partner to satisfy a judgment based on a claim against the partnership unless:
7 (a) a judgment based on the same claim has been obtained against the partnership and a
8 writ of execution on the judgment has been returned unsatisfied in whole or in part;
9 (b) the partnership is a debtor in bankruptcy;
10 (c) the partner has agreed that the creditor need not exhaust partnership assets;
11 (d) a court grants permission to the judgment creditor to levy execution against the assets
12 of a partner based on a finding that partnership assets subject to execution are clearly insufficient
13 to satisfy the judgment, that exhaustion of partnership assets is excessively burdensome, or that
14 the grant of permission is an appropriate exercise of the court's equitable powers; or
15 (e) liability is imposed on the partner by law or contract independent of the existence of
16 the partnership.
17 (5) This section applies to any partnership liability or obligation resulting from a
18 representation by a partner or purported partner under Section 48-1a-308.
19 Section 20. Section 48-1a-308 is enacted to read:
20 48-1a-308. Liability of purported partner.
21 (1) If a person, by words or conduct, purports to be a partner, or consents to being
22 represented by another as a partner, in a partnership or with one or more persons not partners, the
23 purported partner is liable to a person to whom the representation is made, if that person, relying
24 on the representation, enters into a transaction with the actual or purported partnership. If the
25 representation, either by the purported partner or by a person with the purported partner's consent,
26 is made in a public manner, the purported partner is liable to a person who relies upon the
27 purported partnership even if the purported partner is not aware of being held out as a partner to
28 the claimant. If partnership liability results, the purported partner is liable with respect to that
29 liability as if the purported partner were a partner. If no partnership liability results, the purported
30 partner is liable with respect to that liability jointly and severally with any other person consenting
31 to the representation.
1 (2) If a person is thus represented to be a partner in an existing partnership, or with one
2 or more persons not partners, the purported partner is an agent of persons consenting to the
3 representation to bind them to the same extent and in the same manner as if the purported partner
4 were a partner, with respect to persons who enter into transactions in reliance upon the
5 representation. If all of the partners of the existing partnership consent to the representation, a
6 partnership act or obligation results. If fewer than all of the partners of the existing partnership
7 consent to the representation, the person acting and the partners consenting to the representation
8 are jointly and severally liable.
9 (3) A person is not liable as a partner merely because the person is named by another in
10 a statement of partnership authority.
11 (4) A person does not continue to be liable as a partner merely because of a failure to file
12 a statement of dissociation or to amend a statement of partnership authority to indicate the partner's
13 dissociation from the partnership.
14 (5) Except as otherwise provided in Subsections (1) and (2), persons who are not partners
15 as to each other are not liable as partners to other persons.
16 Section 21. Section 48-1a-401 is enacted to read:
17
18 48-1a-401. Partner's rights and duties.
19 (1) Each partner is deemed to have an account that is:
20 (a) credited with an amount equal to the money plus the value of any other property, net
21 of the amount of any liabilities, the partner contributes to the partnership and the partner's share
22 of the partnership profits; and
23 (b) charged with an amount equal to the money plus the value of any other property, net
24 of the amount of any liabilities, distributed by the partnership to the partner and the partner's share
25 of the partnership losses.
26 (2) Each partner is entitled to an equal share of the partnership profits and is chargeable
27 with a share of the partnership losses in proportion to the partner's share of the profits.
28 (3) A partnership shall reimburse a partner for payments made and indemnify a partner for
29 liabilities incurred by the partner in the ordinary course of business of the partnership or for the
30 preservation of its business or property.
31 (4) A partnership shall reimburse a partner for an advance to the partnership beyond the
1 amount of capital the partner agreed to contribute.
2 (5) A payment or advance made by a partner which gives rise to a partnership obligation
3 under Subsection (3) or (4) constitutes a loan to the partnership which accrues interest from the
4 date of the payment or advance.
5 (6) Each partner has equal rights in the management and conduct of the partnership
6 business.
7 (7) A partner may use or possess partnership property only on behalf of the partnership.
8 (8) A partner is not entitled to remuneration for services performed for the partnership,
9 except for reasonable compensation for services rendered in winding up the business of the
10 partnership.
11 (9) A person may become a partner only with the consent of all of the partners.
12 (10) A difference arising as to a matter in the ordinary course of business of a partnership
13 may be decided by a majority of the partners. An act outside the ordinary course of business of
14 a partnership and an amendment to the partnership agreement may be undertaken only with the
15 consent of all of the partners.
16 (11) This section does not affect the obligations of a partnership to other persons under
17 Section 48-1a-301.
18 Section 22. Section 48-1a-402 is enacted to read:
19 48-1a-402. Distributions in kind.
20 A partner has no right to receive, and may not be required to accept, a distribution in kind.
21 Section 23. Section 48-1a-403 is enacted to read:
22 48-1a-403. Partner's rights and duties with respect to information.
23 (1) A partnership shall keep its books and records, if any, at its chief executive office.
24 (2) A partnership shall provide partners and their agents and attorneys access to its books
25 and records. It shall provide former partners and their agents and attorneys access to books and
26 records pertaining to the period during which they were partners. The right of access provides the
27 opportunity to inspect and copy books and records during ordinary business hours. A partnership
28 may impose a reasonable charge, covering the costs of labor and material, for copies of documents
29 furnished.
30 (3) Each partner and the partnership shall furnish to a partner, and to the legal
31 representative of a deceased partner or partner under legal disability:
1 (a) without demand, any information concerning the partnership's business and affairs
2 reasonably required for the proper exercise of the partner's rights and duties under the partnership
3 agreement or this chapter; and
4 (b) on demand, any other information concerning the partnership's business and affairs,
5 except to the extent the demand or the information demanded is unreasonable or otherwise
6 improper under the circumstances.
7 Section 24. Section 48-1a-404 is enacted to read:
8 48-1a-404. General standards of partner's conduct.
9 (1) The only fiduciary duties a partner owes to the partnership and the other partners are
10 the duty of loyalty and the duty of care set forth in Subsections (2) and (3).
11 (2) A partner's duty of loyalty to the partnership and the other partners is limited to the
12 following:
13 (a) to account to the partnership and hold as trustee for it any property, profit, or benefit
14 derived by the partner in the conduct and winding up of the partnership business or derived from
15 a use by the partner of partnership property, including the appropriation of a partnership
16 opportunity;
17 (b) to refrain from dealing with the partnership in the conduct or winding up of the
18 partnership business as or on behalf of a party having an interest adverse to the partnership; and
19 (c) to refrain from competing with the partnership in the conduct of the partnership
20 business before the dissolution of the partnership.
21 (3) A partner's duty of care to the partnership and the other partners in the conduct and
22 winding up of the partnership business is limited to refraining from engaging in grossly negligent
23 or reckless conduct, intentional misconduct, or a knowing violation of law.
24 (4) A partner shall discharge the duties to the partnership and the other partners under this
25 chapter or under the partnership agreement and exercise any rights consistently with the obligation
26 of good faith and fair dealing.
27 (5) A partner does not violate a duty or obligation under this chapter or under the
28 partnership agreement merely because the partner's conduct furthers the partner's own interest.
29 (6) A partner may lend money to and transact other business with the partnership, and as
30 to each loan or transaction the rights and obligations of the partner are the same as those of a
31 person who is not a partner, subject to other applicable law.
1 (7) This section applies to a person winding up the partnership business as the personal
2 or legal representative of the last surviving partner as if the person were a partner.
3 Section 25. Section 48-1a-405 is enacted to read:
4 48-1a-405. Actions by partnership and partners.
5 (1) A partnership may maintain an action against a partner for a breach of the partnership
6 agreement, or for the violation of a duty to the partnership, causing harm to the partnership.
7 (2) A partner may maintain an action against the partnership or another partner for legal
8 or equitable relief, with or without an accounting as to partnership business, to:
9 (a) enforce the partner's rights under the partnership agreement;
10 (b) enforce the partner's rights under this chapter, including:
11 (i) the partner's rights under Section 48-1a-401, 48-1a-403, or 48-1a-404;
12 (ii) the partner's right on dissociation to have the partner's interest in the partnership
13 purchased pursuant to Section 48-1a-701 or enforce any other right under Part 6 or 7; or
14 (iii) the partner's right to compel a dissolution and winding up of the partnership business
15 under Section 48-1a-801 or enforce any other right under Part 8; or
16 (c) enforce the rights and otherwise protect the interests of the partner, including rights and
17 interests arising independently of the partnership relationship.
18 (3) The accrual of, and any time limitation on, a right of action for a remedy under this
19 section is governed by other law. A right to an accounting upon a dissolution and winding up does
20 not revive a claim barred by law.
21 Section 26. Section 48-1a-406 is enacted to read:
22 48-1a-406. Continuation of partnership beyond definite term or particular
23 undertaking.
24 (1) If a partnership for a definite term or particular undertaking is continued, without an
25 express agreement, after the expiration of the term or completion of the undertaking, the rights and
26 duties of the partners remain the same as they were at the expiration or completion, so far as is
27 consistent with a partnership at will.
28 (2) If the partners, or those of them who habitually acted in the business during the term
29 or undertaking, continue the business without any settlement or liquidation of the partnership, they
30 are presumed to have agreed that the partnership will continue.
31 Section 27. Section 48-1a-501 is enacted to read:
1
2 48-1a-501. Partner not co-owner of partnership property.
3 A partner is not a co-owner of partnership property and has no interest in partnership
4 property which can be transferred, either voluntarily or involuntarily.
5 Section 28. Section 48-1a-502 is enacted to read:
6 48-1a-502. Partner's transferable interest in partnership.
7 The only transferable interest of a partner in the partnership is the partner's share of the
8 profits and losses of the partnership and the partner's right to receive distributions. The interest
9 is personal property.
10 Section 29. Section 48-1a-503 is enacted to read:
11 48-1a-503. Transfer of partner's transferable interest.
12 (1) A transfer, in whole or in part, of a partner's transferable interest in the partnership:
13 (a) is permissible;
14 (b) does not by itself cause the partner's dissociation or a dissolution and winding up of
15 partnership business; and
16 (c) does not, as against the other partners or the partnership, entitle the transferee, during
17 the continuance of the partnership:
18 (i) to participate in the management or conduct of the partnership business;
19 (ii) to require access to information concerning partnership transactions; or
20 (iii) to inspect or copy the partnership books or records.
21 (2) A transferee of a partner's transferable interest in the partnership has a right:
22 (a) to receive, in accordance with the transfer, distributions to which the transferor would
23 otherwise be entitled;
24 (b) to receive upon the dissolution and winding up of the partnership business, in
25 accordance with the transfer, the net amount otherwise distributable to the transferor; and
26 (c) to seek under Subsection 48-1a-801(6) a judicial determination that it is equitable to
27 wind up the partnership business.
28 (3) In a dissolution and winding up, a transferee is entitled to an account of partnership
29 transactions only from the date of the latest account agreed to by all of the partners.
30 (4) Upon transfer, the transferor retains the rights and duties of a partner other than the
31 interest in distributions transferred.
1 (5) A partnership need not give effect to a transferee's rights under this section until it has
2 notice of the transfer.
3 (6) A transfer of a partner's transferable interest in the partnership in violation of a
4 restriction on transfer contained in the partnership agreement is ineffective as to a person having
5 notice of the restriction at the time of transfer.
6 Section 30. Section 48-1a-504 is enacted to read:
7 48-1a-504. Partner's transferable interest subject to charging order.
8 (1) On application by a judgment creditor of a partner or of a partner's transferee, a court
9 having jurisdiction may charge the transferable interest of the judgment debtor to satisfy the
10 judgment. The court may appoint a receiver of the share of the distributions due or to become due
11 to the judgment debtor in respect of the partnership and make all other orders, directions, accounts,
12 and inquiries the judgment debtor might have made or which the circumstances of the case may
13 require.
14 (2) A charging order constitutes a lien on the judgment debtor's transferable interest in the
15 partnership. The court may order a foreclosure of the interest subject to the charging order at any
16 time. The purchaser at the foreclosure sale has the rights of a transferee.
17 (3) At any time before foreclosure, an interest charged may be redeemed:
18 (a) by the judgment debtor;
19 (b) with property other than partnership property, by one or more of the other partners; or
20 (c) with partnership property, by one or more of the other partners with the consent of all
21 of the partners whose interests are not so charged.
22 (4) This chapter does not deprive a partner of a right under exemption laws with respect
23 to the partner's interest in the partnership.
24 (5) This section provides the exclusive remedy by which a judgment creditor of a partner
25 or partner's transferee may satisfy a judgment out of the judgment debtor's transferable interest in
26 the partnership.
27 Section 31. Section 48-1a-601 is enacted to read:
28
29 48-1a-601. Events causing partner's dissociation.
30 A partner is dissociated from a partnership upon the occurrence of any of the following
31 events:
1 (1) the partnership's having notice of the partner's express will to withdraw as a partner
2 or on a later date specified by the partner;
3 (2) an event agreed to in the partnership agreement as causing the partner's dissociation;
4 (3) the partner's expulsion pursuant to the partnership agreement;
5 (4) the partner's expulsion by the unanimous vote of the other partners if:
6 (a) it is unlawful to carry on the partnership business with that partner;
7 (b) there has been a transfer of all or substantially all of that partner's transferable interest
8 in the partnership, other than a transfer for security purposes, or a court order charging the partner's
9 interest, which has not been foreclosed;
10 (c) within 90 days after the partnership notifies a corporate partner that it will be expelled
11 because it has filed a certificate of dissolution or the equivalent, its charter has been revoked, or
12 its right to conduct business has been suspended by the jurisdiction of its incorporation, there is
13 no revocation of the certificate of dissolution or no reinstatement of its charter or its right to
14 conduct business; or
15 (d) a partnership that is a partner has been dissolved and its business is being wound up;
16 (5) on application by the partnership or another partner, the partner's expulsion by judicial
17 determination because:
18 (a) the partner engaged in wrongful conduct that adversely and materially affected the
19 partnership business;
20 (b) the partner willfully or persistently committed a material breach of the partnership
21 agreement or of a duty owed to the partnership or the other partners under Section 48-1a-404; or
22 (c) the partner engaged in conduct relating to the partnership business which makes it not
23 reasonably practicable to carry on the business in partnership with the partner;
24 (6) the partner's:
25 (a) becoming a debtor in bankruptcy;
26 (b) executing an assignment for the benefit of creditors;
27 (c) seeking, consenting to, or acquiescing in the appointment of a trustee, receiver, or
28 liquidator of that partner or of all or substantially all of that partner's property; or
29 (d) failing, within 90 days after the appointment, to have vacated or stayed the
30 appointment of a trustee, receiver, or liquidator of the partner or of all or substantially all of the
31 partner's property obtained without the partner's consent or acquiescence, or failing within 90 days
1 after the expiration of a stay to have the appointment vacated;
2 (7) in the case of a partner who is an individual:
3 (a) the partner's death;
4 (b) the appointment of a guardian or general conservator for the partner; or
5 (c) a judicial determination that the partner has otherwise become incapable of performing
6 the partner's duties under the partnership agreement;
7 (8) in the case of a partner that is a trust or is acting as a partner by virtue of being a trustee
8 of a trust, distribution of the trust's entire transferable interest in the partnership, but not merely
9 by reason of the substitution of a successor trustee;
10 (9) in the case of a partner that is an estate or is acting as a partner by virtue of being a
11 personal representative of an estate, distribution of the estate's entire transferable interest in the
12 partnership, but not merely by reason of the substitution of a successor personal representative;
13 or
14 (10) termination of a partner who is not an individual, partnership, corporation, trust, or
15 estate.
16 Section 32. Section 48-1a-602 is enacted to read:
17 48-1a-602. Partner's power to dissociate -- Wrongful dissociation.
18 (1) A partner has the power to dissociate at any time, rightfully or wrongfully, by express
19 will pursuant to Subsection 48-1a-601(1).
20 (2) A partner's dissociation is wrongful only if:
21 (a) it is in breach of an express provision of the partnership agreement; or
22 (b) in the case of a partnership for a definite term or particular undertaking, before the
23 expiration of the term or the completion of the undertaking;
24 (i) the partner withdraws by express will, unless the withdrawal follows within 90 days
25 after another partner's dissociation by death or otherwise under Subsections 48-1a-601(6) through
26 (10) or wrongful dissociation under this subsection;
27 (ii) the partner is expelled by judicial determination under Subsection 48-1a-601(5);
28 (iii) the partner is dissociated by becoming a debtor in bankruptcy; or
29 (iv) in the case of a partner who is not an individual, trust other than a business trust, or
30 estate, the partner is expelled or otherwise dissociated because it willfully dissolved or terminated.
31 (3) A partner who wrongfully dissociates is liable to the partnership and to the other
1 partners for damages caused by the dissociation. The liability is in addition to any other obligation
2 of the partner to the partnership or to the other partners.
3 Section 33. Section 48-1a-603 is enacted to read:
4 48-1a-603. Effect of partner's dissociation.
5 (1) If a partner's dissociation results in a dissolution and winding up of the partnership
6 business, Part 8 applies; otherwise, Part 7 applies.
7 (2) Upon a partner's dissociation:
8 (a) the partner's right to participate in the management and conduct of the partnership
9 business terminates, except as otherwise provided in Section 48-1a-803;
10 (b) the partner's duty of loyalty under Subsection 48-1a-404(2)(c) terminates; and
11 (c) the partner's duty of loyalty under Subsections 48-1a-404(2)(a) and (b) and duty of care
12 under Subsection 48-1a-404(3) continue only with regard to matters arising and events occurring
13 before the partner's dissociation, unless the partner participates in winding up the partnership's
14 business pursuant to Section 48-1a-803.
15 Section 34. Section 48-1a-701 is enacted to read:
16
17 48-1a-701. Purchase of dissociated partner's interest.
18 (1) If a partner is dissociated from a partnership without resulting in a dissolution and
19 winding up of the partnership business under Section 48-1a-801, the partnership shall cause the
20 dissociated partner's interest in the partnership to be purchased for a buyout price determined
21 pursuant to Subsection (2).
22 (2) The buyout price of a dissociated partner's interest is the amount that would have been
23 distributable to the dissociating partner under Subsection 48-1a-807(2) if, on the date of
24 dissociation, the assets of the partnership were sold at a price equal to the greater of the liquidation
25 value or the value based on a sale of the entire business as a going concern without the dissociated
26 partner and the partnership were wound up as of that date. Interest must be paid from the date of
27 dissociation to the date of payment.
28 (3) Damages for wrongful dissociation under Subsection 48-1a-602(2), and all other
29 amounts owing, whether or not presently due, from the dissociated partner to the partnership, must
30 be offset against the buyout price. Interest must be paid from the date the amount owed becomes
31 due to the date of payment.
1 (4) A partnership shall indemnify a dissociated partner whose interest is being purchased
2 against all partnership liabilities, whether incurred before or after the dissociation, except liabilities
3 incurred by an act of the dissociated partner under Section 48-1a-702.
4 (5) If no agreement for the purchase of a dissociated partner's interest is reached within
5 120 days after a written demand for payment, the partnership shall pay, or cause to be paid, in cash
6 to the dissociated partner the amount the partnership estimates to be the buyout price and accrued
7 interest, reduced by any offsets and accrued interest under Subsection (3).
8 (6) If a deferred payment is authorized under Subsection (8), the partnership may tender
9 a written offer to pay the amount it estimates to be the buyout price and accrued interest, reduced
10 by any offsets under Subsection (3), stating the time of payment, the amount and type of security
11 for payment, and the other terms and conditions of the obligation.
12 (7) The payment or tender required by Subsection (5) or (6) must be accompanied by the
13 following:
14 (a) a statement of partnership assets and liabilities as of the date of dissociation;
15 (b) the latest available partnership balance sheet and income statement, if any;
16 (c) an explanation of how the estimated amount of the payment was calculated; and
17 (d) written notice that the payment is in full satisfaction of the obligation to purchase
18 unless, within 120 days after the written notice, the dissociated partner commences an action to
19 determine the buyout price, any offsets under Subsection (3), or other terms of the obligation to
20 purchase.
21 (8) A partner who wrongfully dissociates before the expiration of a definite term or the
22 completion of a particular undertaking is not entitled to payment of any portion of the buyout price
23 until the expiration of the term or completion of the undertaking, unless the partner establishes to
24 the satisfaction of the court that earlier payment will not cause undue hardship to the business of
25 the partnership. A deferred payment must be adequately secured and bear interest.
26 (9) A dissociated partner may maintain an action against the partnership, pursuant to
27 Subsection 48-1a-405(2)(b)(ii), to determine the buyout price of that partner's interest, any offsets
28 under Subsection (3), or other terms of the obligation to purchase. The action must be commenced
29 within 120 days after the partnership has tendered payment or an offer to pay or within one year
30 after written demand for payment if no payment or offer to pay is tendered. The court shall
31 determine the buyout price of the dissociated partner's interest, any offset due under Subsection
1 (3), and accrued interest, and enter judgment for any additional payment or refund. If deferred
2 payment is authorized under Subsection (8), the court shall also determine the security for payment
3 and other terms of the obligation to purchase. The court may assess reasonable attorney's fees and
4 the fees and expenses of appraisers or other experts for a party to the action, in amounts the court
5 finds equitable, against a party that the court finds acted arbitrarily, vexatiously, or not in good
6 faith. The finding may be based on the partnership's failure to tender payment or an offer to pay
7 or to comply with Subsection (7).
8 Section 35. Section 48-1a-702 is enacted to read:
9 48-1a-702. Dissociated partner's power to bind and liability to partnership.
10 (1) For two years after a partner dissociates without resulting in a dissolution and winding
11 up of the partnership business, the partnership, including a surviving partnership under Part 9, is
12 bound by an act of the dissociated partner which would have bound the partnership under Section
13 48-1a-301 before the dissociation only if at the time of entering into the transaction the other party:
14 (a) reasonably believed that the dissociated partner was then a partner;
15 (b) did not have notice of the partner's dissociation; and
16 (c) is not deemed to have had knowledge under Subsection 48-1a-303(5) or notice under
17 Subsection 48-1a-704(3).
18 (2) A dissociated partner is liable to the partnership for any damage caused to the
19 partnership arising from an obligation incurred by the dissociated partner after dissociation for
20 which the partnership is liable under Subsection (1).
21 Section 36. Section 48-1a-703 is enacted to read:
22 48-1a-703. Dissociated partner's liability to other persons.
23 (1) A partner's dissociation does not of itself discharge the partner's liability for a
24 partnership obligation incurred before dissociation. A dissociated partner is not liable for a
25 partnership obligation incurred after dissociation, except as otherwise provided in Subsection (2).
26 (2) A partner who dissociates without resulting in a dissolution and winding up of the
27 partnership business is liable as a partner to the other party in a transaction entered into by the
28 partnership, or a surviving partnership under Part 9, within two years after the partner's
29 dissociation, only if at the time of entering into the transaction the other party:
30 (a) reasonably believed that the dissociated partner was then a partner;
31 (b) did not have notice of the partner's dissociation; and
1 (c) is not deemed to have had knowledge under Subsection 48-1a-303(5) or notice under
2 Subsection 48-1a-704(3).
3 (3) By agreement with the partnership creditor and the partners continuing the business,
4 a dissociated partner may be released from liability for a partnership obligation.
5 (4) A dissociated partner is released from liability for a partnership obligation if a
6 partnership creditor, with notice of the partner's dissociation but without the partner's consent,
7 agrees to a material alteration in the nature or time of payment of a partnership obligation.
8 Section 37. Section 48-1a-704 is enacted to read:
9 48-1a-704. Statement of dissociation.
10 (1) A dissociated partner or the partnership may file a statement of dissociation stating the
11 name of the partnership and that the partner is dissociated from the partnership.
12 (2) A statement of dissociation is a limitation on the authority of a dissociated partner for
13 the purposes of Subsections 48-1a-303(4) and (5).
14 (3) For the purposes of Subsection 48-1a-702(1)(c) and 48-1a-703(2)(c), a person not a
15 partner is deemed to have notice of the dissociation 90 days after the statement of dissociation is
16 filed.
17 Section 38. Section 48-1a-705 is enacted to read:
18 48-1a-705. Continued use of partnership name.
19 Continued use of a partnership name, or a dissociated partner's name as part thereof, by
20 partners continuing the business does not of itself make the dissociated partner liable for an
21 obligation of the partners or the partnership continuing the business.
22 Section 39. Section 48-1a-801 is enacted to read:
23
24 48-1a-801. Events causing dissolution and winding up of partnership business.
25 A partnership is dissolved, and its business must be wound up, only upon the occurrence
26 of any of the following events:
27 (1) in a partnership at will, the partnership's having notice from a partner, other than a
28 partner who is dissociated under Subsections 48-1a-601(2) through (10), of that partner's express
29 will to withdraw as a partner, or on a later date specified by the partner;
30 (2) in a partnership for a definite term or particular undertaking:
31 (a) the expiration of 90 days after a partner's dissociation by death or otherwise under
1 Subsections 48-1a-601(6) through (10) or wrongful dissociation under Subsection 48-1a-602(2),
2 unless before that time a majority in interest of the remaining partners, including partners who
3 have rightfully dissociated pursuant to Subsection 48-1a-602(2)(b)(i), agree to continue the
4 partnership;
5 (b) the express will of all the partners to wind up the partnership business; or
6 (c) the expiration of the term or the completion of the undertaking;
7 (3) an event agreed to in the partnership agreement resulting in the winding up of the
8 partnership business;
9 (4) an event that makes it unlawful for all or substantially all of the business of the
10 partnership to be continued, but a cure of illegality within 90 days after notice to the partnership
11 of the event is effective retroactively to the date of the event for purposes of this section;
12 (5) on application by a partner, a judicial determination that:
13 (a) the economic purpose of the partnership is likely to be unreasonably frustrated;
14 (b) another partner has engaged in conduct relating to the partnership business which
15 makes it not reasonably practicable to carry on the business in partnership with that partner; or
16 (c) it is not otherwise reasonably practicable to carry on the partnership business in
17 conformity with the partnership agreement; or
18 (6) on application by a transferee of a partner's transferable interest, a judicial
19 determination that it is equitable to wind up the partnership business:
20 (a) after the expiration of the term or completion of the undertaking, if the partnership was
21 for a definite term or particular undertaking at the time of the transfer or entry of the charging
22 order that gave rise to the transfer; or
23 (b) at any time, if the partnership was a partnership at will at the time of the transfer or
24 entry of the charging order that gave rise to the transfer.
25 Section 40. Section 48-1a-802 is enacted to read:
26 48-1a-802. Partnership continues after dissolution.
27 (1) Subject to Subsection (2), a partnership continues after dissolution only for the purpose
28 of winding up its business. The partnership is terminated when the winding up of its business is
29 completed.
30 (2) At any time after the dissolution of a partnership and before the winding up of its
31 business is completed, all of the partners, including any dissociating partner other than a
1 wrongfully dissociating partner, may waive the right to have the partnership's business wound up
2 and the partnership terminated. In that event:
3 (a) the partnership resumes carrying on its business as if dissolution had never occurred,
4 and any liability incurred by the partnership or a partner after the dissolution and before the waiver
5 is determined as if dissolution had never occurred; and
6 (b) the rights of a third party accruing under Subsection 48-1a-804(1) or arising out of
7 conduct in reliance on the dissolution before the third party knew or received a notification of the
8 waiver may not be adversely affected.
9 Section 41. Section 48-1a-803 is enacted to read:
10 48-1a-803. Right to wind up partnership business.
11 (1) After dissolution, a partner who has not wrongfully dissociated may participate in
12 winding up the partnership's business, but on application of any partner, partner's legal
13 representative, or transferee, the district court, for good cause shown, may order judicial
14 supervision of the winding up.
15 (2) The legal representative of the last surviving partner may wind up a partnership's
16 business.
17 (3) A person winding up a partnership's business may:
18 (a) preserve the partnership business or property as a going concern for a reasonable time;
19 (b) prosecute and defend actions and proceedings, whether civil, criminal, or
20 administrative;
21 (c) settle and close the partnership's business;
22 (d) dispose of and transfer the partnership's property;
23 (e) discharge the partnership's liabilities;
24 (f) distribute the assets of the partnership pursuant to Section 48-1a-807;
25 (g) settle disputes by mediation or arbitration; and
26 (h) perform other necessary acts.
27 Section 42. Section 48-1a-804 is enacted to read:
28 48-1a-804. Partner's power to bind partnership after dissolution.
29 Subject to Section 48-1a-805, a partnership is bound by a partner's act after dissolution
30 that:
31 (1) is appropriate for winding up the partnership business; or
1 (2) would have bound the partnership under Section 48-1a-301 before dissolution, if the
2 other party to the transaction did not have notice of the dissolution.
3 Section 43. Section 48-1a-805 is enacted to read:
4 48-1a-805. Statement of dissolution.
5 (1) After dissolution, a partner who has not wrongfully dissociated may file a statement
6 of dissolution stating the name of the partnership and that the partnership has dissolved and is
7 winding up its business.
8 (2) A statement of dissolution cancels a filed statement of partnership authority for the
9 purposes of Subsection 48-1a-303(4) and is a limitation on authority for the purposes of
10 Subsection 48-1a-303(5).
11 (3) For purposes of Sections 48-1a-301 and 48-1a-804, a person not a partner is deemed
12 to have notice of the dissolution and the limitation on the partners' authority as a result of the
13 statement of dissolution 90 days after it is filed.
14 (4) After filing and, if appropriate, recording a statement of dissolution, a dissolved
15 partnership may file and, if appropriate, record a statement of partnership authority which will
16 operate with respect to a person not a partner as provided in Subsections 48-1a-303(4) and (5) in
17 any transaction, whether or not the transaction is appropriate for winding up the partnership
18 business.
19 Section 44. Section 48-1a-806 is enacted to read:
20 48-1a-806. Partner's liability to other partners after dissolution.
21 (1) Except as otherwise provided in Subsection (2), after dissolution a partner is liable to
22 the other partners for the partner's share of any partnership liability incurred under Section
23 48-1a-804.
24 (2) A partner who, with knowledge of the dissolution, incurs a partnership liability under
25 Subsection 48-1a-804(2) by an act that is not appropriate for winding up the partnership business
26 is liable to the partnership for any damage caused to the partnership arising from the liability.
27 Section 45. Section 48-1a-807 is enacted to read:
28 48-1a-807. Settlement of accounts and contributions among partners.
29 (1) In winding up a partnership's business, the assets of the partnership, including the
30 contributions of the partners required by this section, must be applied to discharge its obligations
31 to creditors, including, to the extent permitted by law, partners who are creditors. Any surplus
1 must be applied to pay in cash the net amount distributable to partners in accordance with their
2 right to distributions under Subsection (2).
3 (2) Each partner is entitled to a settlement of all partnership accounts upon winding up the
4 partnership business. In settling accounts among the partners, the profits and losses that result
5 from the liquidation of the partnership assets must be credited and charged to the partner's
6 accounts. The partnership shall make a distribution to a partner in an amount equal to any excess
7 of the credits over the charges in the partner's account. A partner shall contribute to the partnership
8 an amount equal to any excess of the charges over the credits in the partner's account.
9 (3) If a partner fails to contribute, all of the other partners shall contribute, in the
10 proportions in which those partners share partnership losses, the additional amount necessary to
11 satisfy the partnership obligations. A partner or partner's legal representative may recover from
12 the other partners any contributions the partner makes to the extent the amount contributed exceeds
13 that partner's share of the partnership obligations.
14 (4) After the settlement of accounts, each partner shall contribute, in the proportion in
15 which the partner shares partnership losses, the amount necessary to satisfy partnership obligations
16 that were not known at the time of the settlement.
17 (5) The estate of a deceased partner is liable for the partner's obligation to contribute to
18 the partnership.
19 (6) An assignee for the benefit of creditors of a partnership or a partner, or a person
20 appointed by a court to represent creditors of a partnership or a partner, may enforce a partner's
21 obligation to contribute to the partnership.
22 Section 46. Section 48-1a-901 is enacted to read:
23
24 48-1a-901. Definitions.
25 In this part:
26 (1) "General partner" means a partner in a partnership and a general partner in a limited
27 partnership.
28 (2) "Limited partner" means a limited partner in a limited partnership.
29 (3) "Limited partnership" means a limited partnership created under Chapter 2a, Utah
30 Revised Uniform Limited Partnership Act, predecessor law, or comparable law of another
31 jurisdiction.
1 (4) "Partner" includes both a general partner and a limited partner.
2 Section 47. Section 48-1a-902 is enacted to read:
3 48-1a-902. Conversion of partnership to limited partnership.
4 (1) A partnership may be converted to a limited partnership pursuant to this section.
5 (2) The terms and conditions of a conversion of a partnership to a limited partnership must
6 be approved by all of the partners or by a number or percentage specified for conversion in the
7 partnership agreement.
8 (3) After the conversion is approved by the partners, the partnership shall file a certificate
9 of limited partnership in the jurisdiction in which the limited partnership is to be formed. The
10 certificate must include:
11 (a) a statement that the partnership was converted to a limited partnership from a
12 partnership;
13 (b) its former name; and
14 (c) a statement of the number of votes cast by the partners for and against the conversion
15 and, if the vote is less than unanimous, the number or percentage required to approve the
16 conversion under the partnership agreement.
17 (4) The conversion takes effect when the certificate of limited partnership is filed or at any
18 later date specified in the certificate.
19 (5) A general partner who becomes a limited partner as a result of the conversion remains
20 liable as a general partner for an obligation incurred by the partnership before the conversion takes
21 effect. If the other party to a transaction with the limited partnership reasonably believes when
22 entering the transaction that the limited partner is a general partner, the limited partner is liable for
23 an obligation incurred by the limited partnership within 90 days after the conversion takes effect.
24 The limited partner's liability for all other obligations of the limited partnership incurred after the
25 conversion takes effect is that of a limited partner as provided in Chapter 2a, Utah Revised
26 Uniform Limited Partnership Act.
27 Section 48. Section 48-1a-903 is enacted to read:
28 48-1a-903. Conversion of limited partnership to partnership.
29 (1) A limited partnership may be converted to a partnership pursuant to this section.
30 (2) Notwithstanding a provision to the contrary in a limited partnership agreement, the
31 terms and conditions of a conversion of a limited partnership to a partnership must be approved
1 by all of the partners.
2 (3) After the conversion is approved by the partners, the limited partnership shall cancel
3 its certificate of limited partnership.
4 (4) The conversion takes effect when the certificate of limited partnership is canceled.
5 (5) A limited partner who becomes a general partner as a result of the conversation
6 remains liable only as a limited partner for an obligation incurred by the limited partnership before
7 the conversion takes effect. The partner is liable as a general partner for an obligation of the
8 partnership incurred after the conversion takes effect.
9 Section 49. Section 48-1a-904 is enacted to read:
10 48-1a-904. Effect of conversion -- Entity unchanged.
11 (1) A partnership or limited partnership that has been converted pursuant to this part is for
12 all purposes the same entity that existed before the conversion.
13 (2) When a conversion takes effect:
14 (a) all property owned by the converting partnership or limited partnership remains vested
15 in the converted entity;
16 (b) all obligations of the converting partnership or limited partnership continue as
17 obligations of the converted entity; and
18 (c) an action or proceeding pending against the converting partnership or limited
19 partnership may be continued as if the conversion had not occurred.
20 Section 50. Section 48-1a-905 is enacted to read:
21 48-1a-905. Merger of partnerships.
22 (1) Pursuant to a plan of merger approved as provided in Subsection (3), a partnership may
23 be merged with one or more partnerships or limited partnerships.
24 (2) The plan of merger must set forth:
25 (a) the name of each partnership or limited partnership that is a party to a merger;
26 (b) the name of the surviving entity into which the other partnerships or limited
27 partnerships will merge;
28 (c) whether the surviving entity is a partnership or a limited partnership and the status of
29 each partner;
30 (d) the terms and conditions of the merger;
31 (e) the manner and basis of converting the interests of each party to the merger into
1 interests or obligations of the surviving entity, or into money or other property in whole or part;
2 and
3 (f) the street address of the surviving entity's chief executive office.
4 (3) The plan of merger must be approved:
5 (a) in the case of a partnership that is a party to the merger, by all of the partners, or a
6 number or percentage specified for merger in the partnership agreement; and
7 (b) in the case of a limited partnership that is a party to the merger, by the vote required
8 for approval of a merger by the law of the state or foreign jurisdiction in which the limited
9 partnership is organized and, in the absence of such a specifically applicable law, by all of the
10 partners, notwithstanding a provision to the contrary in the partnership agreement.
11 (4) After a plan of merger is approved and before the merger takes effect, the plan may be
12 amended or abandoned as provided in the plan.
13 (5) The merger takes effect on the later of:
14 (a) the approval of the plan of merger by all parties to the merger, as provided in
15 Subsection (3);
16 (b) the filing of all documents required by law to be filed as a condition to the
17 effectiveness of the merger; or
18 (c) any effective date specified in the plan of merger.
19 Section 51. Section 48-1a-906 is enacted to read:
20 48-1a-906. Effect of merger.
21 (1) When a merger takes effect:
22 (a) the separate existence of every partnership or limited partnership that is a party to the
23 merger, other than the surviving entity, ceases;
24 (b) all property owned by each of the merged partnerships or limited partnerships vests
25 in the surviving entity;
26 (c) all obligations of every partnership or limited partnership that is a party to the merger
27 become the obligations of the surviving entity; and
28 (d) an action or proceeding pending against a partnership or limited partnership that is a
29 party to the merger may be continued as if the merger had not occurred, or the surviving entity
30 may be substituted as a party to the action or proceeding.
31 (2) The Division of Corporations and Commercial Code of this state is the agent for
1 service of process in an action or proceeding against a surviving foreign partnership or limited
2 partnership to enforce an obligation of a domestic partnership or limited partnership that is a party
3 to a merger. The surviving entity shall promptly notify the Division of Corporations and
4 Commercial Code of the mailing address of its chief executive office and of any change of address.
5 Upon receipt of process, the Division of Corporations and Commercial Code shall mail a copy of
6 the process to the surviving foreign partnership or limited partnership.
7 (3) A partner of the surviving partnership or limited partnership is liable for:
8 (a) all obligations of a party to the merger for which the partner was personally liable
9 before the merger;
10 (b) all other obligations of the surviving entity incurred before the merger by a party to the
11 merger, but those obligations may be satisfied only out of property of the entity; and
12 (c) all obligations of the surviving entity incurred after the merger takes effect, but those
13 obligations may be satisfied only out of property of the entity if the partner is a limited partner.
14 (4) If the obligations incurred before the merger by a party to the merger are not satisfied
15 out of the property of the surviving partnership or limited partnership, the general partner of that
16 party immediately before the effective date of the merger shall contribute the amount necessary
17 to satisfy that party's obligations to the surviving entity, in the manner provided in Section
18 48-1a-807 or in the limited partnership act of the jurisdiction in which the party was formed, as
19 the case may be, as if the merged party were dissolved.
20 (5) A partner of a party to a merger who does not become a partner of the surviving
21 partnership or limited partnership is dissociated from the entity, of which that partner was a
22 partner, as of the date the merger takes effect. The surviving entity shall cause the partner's
23 interest in the entity to be purchased under Section 48-1a-701 or another statute specifically
24 applicable to that partner's interest with respect to a merger. The surviving entity is bound under
25 Section 48-1a-702 by an act of a general partner dissociated under this subsection, and the partner
26 is liable under Section 48-1a-703 for transactions entered into by the surviving entity after the
27 merger takes effect.
28 Section 52. Section 48-1a-907 is enacted to read:
29 48-1a-907. Statement of merger.
30 (1) After a merger, the surviving partnership or limited partnership may file a statement
31 that one or more partnerships or limited partnerships have merged into the surviving entity.
1 (2) A statement of merger must contain:
2 (a) the name of each partnership or limited partnership that is a party to the merger;
3 (b) the name of the surviving entity into which the other partnerships or limited partnership
4 were merged;
5 (c) the street address of the surviving entity's chief executive office and of an office in this
6 state, if any; and
7 (d) whether the surviving entity is a partnership or a limited partnership.
8 (3) Except as otherwise provided in Subsection (4), for the purposes of Section 48-1a-302,
9 property of the surviving partnership or limited partnership which before the merger was held in
10 the name of another party to the merger is property held in the name of the surviving entity upon
11 filing a statement of merger.
12 (4) For the purposes of Section 48-1a-302, real property of the surviving partnership or
13 limited partnership which before the merger was held in the name of another party to the merger
14 is property held in the name of the surviving entity upon recording a certified copy of the statement
15 of merger in the office for recording transfers of that real property.
16 (5) A filed and, if appropriate, recorded statement of merger, executed and declared to be
17 accurate pursuant to Subsection 48-1a-105(3), stating the name of a partnership or limited
18 partnership that is a party to the merger in whose name property was held before the merger and
19 the name of the surviving entity, but not containing all of the other information required by
20 Subsection (2), operates with respect to the partnerships or limited partnerships named to the
21 extent provided in Subsections (3) and (4).
22 Section 53. Section 48-1a-908 is enacted to read:
23 48-1a-908. Nonexclusive.
24 This part is not exclusive. Partnerships or limited partnerships may be converted or merged
25 in any other manner provided by law.
26 Section 54. Section 48-1a-909 is enacted to read:
27 48-1a-909. Conversion of partnership to limited liability company.
28 (1) A partnership may be converted to a limited liability company pursuant to this section.
29 (2) The terms and conditions of a conversion of a partnership to a limited liability
30 company must be approved by all of the partners or by a number or percentage of the partners
31 required for conversion in the partnership agreement.
1 (3) An agreement of conversion must set forth the terms and conditions of the conversion
2 of the interests of partners of a partnership into interests in the converted limited liability company
3 or the cash or other consideration to be paid or delivered as a result of the conversion of the
4 interests of the partners, or a combination thereof.
5 (4) After a conversion is approved under Subsection (2), the partnership shall file articles
6 of organization in the Division of Corporations and Commercial Code which satisfy the
7 requirements of Section 48-2b-116 and contain:
8 (a) a statement that the partnership was converted to a limited liability company from a
9 partnership;
10 (b) its former name; and
11 (c) a statement of the number of votes cast by the partners entitled to vote for and against
12 the conversion and, if the vote is less than unanimous, the number or percentage required to
13 approve the conversion under Subsection (2).
14 (5) A conversion takes effect when the articles of organization are filed in the Division of
15 Corporations and Commercial Code or at any later date specified in the articles of organization.
16 (6) A partner who becomes a member of a limited liability company as a result of a
17 conversion remains liable as a partner for an obligation incurred by the partnership before the
18 conversion takes effect.
19 (7) A partner's liability for all obligations of the limited liability company incurred after
20 the conversion takes effect is that of a member of the company.
21 Section 55. Section 48-1a-1001 is enacted to read:
22
23 48-1a-1001. Uniformity of application and construction.
24 This chapter shall be applied and construed to effectuate its general purpose to make
25 uniform the law with respect to the subject of this chapter among states enacting it.
26 Section 56. Section 48-1a-1002 is enacted to read:
27 48-1a-1002. Severability clause.
28 If any provision of this chapter or its application to any person or circumstance is held
29 invalid, the invalidity does not affect other provisions or applications of this chapter which can be
30 given effect without the invalid provision or application, and to this end the provisions of this
31 chapter are severable.
1 Section 57. Section 48-1a-1003 is enacted to read:
2 48-1a-1003. Effective date.
3 This chapter takes effect January 1, 1998.
4 Section 58. Section 48-1a-1004 is enacted to read:
5 48-1a-1004. Applicability.
6 (1) Before January 1, 1999, this chapter governs only a partnership formed:
7 (a) on or after January 1, 1998, unless that partnership is continuing the business of a
8 dissolved partnership under Section 48-1-38; and
9 (b) before January 1, 1998, that elects, as provided by Subsection (3), to be governed by
10 this chapter.
11 (2) On and after January 1, 1999, this chapter governs all partnerships.
12 (3) Before January 1, 1999, a partnership voluntarily may elect, in the manner provided
13 in its partnership agreement or by law for amending the partnership agreement, to be governed by
14 this chapter. The provisions of this chapter relating to the liability of the partnership's partners to
15 third parties apply to limit those partners' liability to a third party who had done business with the
16 partnership within one year preceding the partnership's election to be governed by this chapter,
17 only if the third party knows or has received a notification of the partnership's election to be
18 governed by this chapter.
19 Section 59. Section 48-1a-1005 is enacted to read:
20 48-1a-1005. Savings clause.
21 This chapter does not affect an action or proceeding commenced or right accrued before
22 this chapter takes effect.
23 Section 60. Section 48-1a-1101 is enacted to read:
24
25 48-1a-1101. Title.
26 This part shall be known as the "Utah Limited Liability Partnership Act."
27 Section 61. Section 48-1a-1102 is enacted to read:
28 48-1a-1102. Definitions.
29 (1) As used in this part:
30 (a) "division" means the Division of Corporations and Commercial Code; and
31 (b) "limited liability partnership" means a partnership registered under Section 48-1a-1104
1 and complying with Section 48-1a-1105.
2 (2) "Partnership" when used in a statute of the state, includes a limited liability partnership
3 governed by this chapter and registered under Section 48-1a-1104, unless the context requires
4 otherwise.
5 Section 62. Section 48-1a-1103 is enacted to read:
6 48-1a-1103. Application of Revised Uniform Partnership Act -- Liability.
7 (1) Except as provided in Subsection (2), this chapter applies to limited liability
8 partnerships.
9 (2) (a) A partner in a limited liability partnership is not liable, directly or indirectly,
10 including by way of indemnification, contribution or otherwise, for a debt, obligation, or liability
11 chargeable to the partnership arising from negligence, wrongful acts, or misconduct committed
12 while the partnership is registered as a limited liability partnership and in the course of the
13 partnership business by another partner, or an employee, agent, or representative of the limited
14 liability partnership.
15 (b) Notwithstanding Subsection (2)(a), a partner in a limited liability partnership is liable
16 for the partner's own negligence, wrongful acts, or misconduct.
17 Section 63. Section 48-1a-1104 is enacted to read:
18 48-1a-1104. Registration of limited liability partnerships.
19 (1) (a) A limited liability partnership shall register with the division by filing an
20 application or a renewal statement:
21 (i) to become and to continue as a limited liability partnership; or
22 (ii) to do business in this state as a foreign limited liability partnership.
23 (b) The application or renewal statement shall include:
24 (i) the name of the limited liability partnership;
25 (ii) the address of its principal office;
26 (iii) if the principal office of the limited liability partnership is not located in this state:
27 (A) the address of a registered office; and
28 (B) the name and address of a registered agent for service of process in this state;
29 (iv) the number of partners;
30 (v) a brief statement of the business in which the limited liability partnership engages;
31 (vi) a brief statement that the partnership is applying for, or seeking to renew its status as
1 a limited liability partnership; and
2 (vii) if a foreign limited liability partnership, an original certificate of fact or good standing
3 from the office of the secretary of state or other responsible authority of the state in which the
4 limited liability partnership is formed.
5 (2) The application or renewal statement required by Subsection (1) shall be executed by
6 a majority in voting interest of the partners or by one or more partners authorized by the
7 partnership to execute an application or renewal statement.
8 (3) The application or renewal statement shall be accompanied by a filing fee established
9 under Section 63-38-3.2.
10 (4) The division shall register as a limited liability partnership any partnership that submits
11 a completed application with the required fee.
12 (5) (a) The registration expires one year after the date an application is filed unless the
13 registration is voluntarily withdrawn by filing with the division a written withdrawal notice
14 executed by a majority in voting interest of the partners or by one or more partners authorized to
15 execute a withdrawal notice.
16 (b) Registration of a partnership as a limited liability partnership shall be renewed if no
17 earlier than 60 days before the date the registration expires and no later than the date of expiration,
18 the limited liability partnership files with the division a renewal statement.
19 (c) The division shall renew the registration as a limited liability partnership of any limited
20 liability partnership that timely submits a completed renewal statement with the required fee.
21 (d) If a renewal statement is timely filed, the registration is effective for one year after the
22 date the registration would have expired but for the filing or the renewal statement.
23 (6) The status of a partnership as a limited liability partnership is not affected by changes
24 in the information stated in the application or renewal statement which take place after the filing
25 of an application or a renewal statement.
26 (7) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
27 division may issue rules providing for the form content and submittal of applications for
28 registration or of renewal statements.
29 (8) An application or a renewal statement filed under this section shall be considered a
30 statement of partnership authority filed under Section 48-1a-303 subject to the requirements of
31 Section 48-1a-303.
1 Section 64. Section 48-1a-1105 is enacted to read:
2 48-1a-1105. Scope of chapter -- Choice of law.
3 (1) A limited liability partnership may conduct its business, carry on its operations, and
4 exercise the powers granted by this chapter within and without the state.
5 (2) (a) It is the intent of the Legislature that the legal existence of limited liability
6 partnerships formed in this state and registered under Section 48-1a-1104 be recognized outside
7 the boundaries of this state and that the laws of this state governing the limited liability partnership
8 transacting business outside this state be granted the protection of full faith and credit under the
9 Constitution of the United States.
10 (b) It is the intent of the Legislature that the internal affairs of a limited liability
11 partnership formed in this state and registered under Section 48-1a-1104 be subject to and
12 governed by the laws of this state, including the provisions providing for liability of partners for
13 debts, obligations, and liabilities chargeable to partnerships.
14 Section 65. Section 48-1a-1106 is enacted to read:
15 48-1a-1106. Foreign limited liability partnerships.
16 (1) Subject to any statute regulating a specific type of business, a limited liability
17 partnership registered and existing under the laws of another state, may do business in this state
18 if it registers with the division in accordance with Section 48-1a-1104.
19 (2) The internal affairs of a limited liability partnership registered and existing under the
20 laws of another jurisdiction, including the provisions providing for the liability of partners for
21 debts, obligations of and liabilities chargeable to partnerships, shall be subject to and governed by
22 the laws of the state where the partnership is formed.
23 Section 66. Section 48-1a-1107 is enacted to read:
24 48-1a-1107. Name of registered limited liability partnership.
25 The name of a limited liability partnership shall contain the words "limited liability
26 partnership" or the abbreviations "L.L.P." or "LLP" as the last words or letters of its name.
27 Section 67. Section 48-1a-1108 is enacted to read:
28 48-1a-1108. Professional relationship -- Personal liability.
29 (1) This part does not alter any law applicable to the relationship between a person
30 rendering professional services and a person receiving those services, including liability arising
31 out of those professional services. All persons rendering professional services shall remain
1 personally liable for any results of that person's acts or omissions.
2 (2) (a) Except as provided in Subsection (2)(b), a partner or employee of a limited liability
3 partnership is not personally liable for:
4 (i) a debt, obligation, or liability of the limited liability partnership; or
5 (ii) the acts or omissions of any other partner or employee of the limited liability
6 partnership.
7 (b) Subsection (2)(a) does not affect the liability of a partner for the partner's own
8 negligence, wrongful acts, or misconduct.
9 (3) Partners in a registered limited liability partnership do not become liable, directly or
10 indirectly, for debts, obligations, or liabilities incurred while the partnership was a registered
11 limited liability partnership merely because the partnership ceases to be a registered limited
12 liability partnership.
13 Section 68. Section 48-1a-1109 is enacted to read:
14 48-1a-1109. Regulatory agency or board authority -- Prohibitions on individuals
15 apply.
16 (1) This part does not restrict or limit the authority and duty of any appropriate regulatory
17 agency or board to license individual persons rendering professional services or the practice of the
18 profession that is within the jurisdiction of the regulatory agency or board, notwithstanding that
19 the person is a partner or employee of a limited liability partnership and rendering the professional
20 services or engaging in the practice of the profession through the limited liability partnership.
21 (2) A limited liability partnership may not do anything that is prohibited to be done by an
22 individual licensed to practice the profession that the limited liability partnership is organized to
23 render.
24 Section 69. Section 48-1a-1110 is enacted to read:
25 48-1a-1110. Limited liability partnerships providing professional services.
26 (1) A limited liability partnership organized under this part to render professional services:
27 (a) may render only one specific type of professional service and services ancillary to that
28 type of professional service; and
29 (b) may not engage in any business other than rendering the professional service that it was
30 organized to render and services ancillary to those services.
31 (2) A limited liability partnership organized to render professional services may:
1 (a) include partners and employees authorized under the laws of the jurisdiction where
2 they reside to provide similar services; and
3 (b) render professional services in Utah only through its partners and employees who are
4 licensed or registered by the state to render those professional services.
5 (3) A limited liability partnership organized to render professional services shall have the
6 powers provided a limited liability partnership under this chapter.
7 Section 70. Section 48-2a-102 is amended to read:
8 48-2a-102. Name.
9 (1) The name of each limited partnership as set forth in its certificate of limited
10 partnership:
11 (a) shall contain the words "limited partnership," "limited," "L.P.," or "Ltd.";
12 (b) may not contain the name of a limited partner unless:
13 (i) it is also the name of a general partner or the corporate name of a corporate general
14 partner; or
15 (ii) the business of the limited partnership had been carried on under that name before the
16 admission of that limited partner;
17 (c) may not contain the words "association," "corporation," or "incorporated," or any
18 abbreviation thereof, or any words or any abbreviation thereof which are of like import in any
19 other language; and
20 (d) may not, without the written consent of the United States Olympic Committee, contain
21 the words "Olympic," "Olympiad," or "Citius Altius Fortius."
22 (2) No person or entity other than a limited partnership formed or registered under this title
23 may use any of the terms "limited," "limited partnership," "Ltd.," or "L.P." in its name in this state
24 except that any foreign corporation whose actual name includes the word "limited" or "Ltd." may
25 use its actual name in this state if "corporation," "incorporated," or any abbreviation of them is also
26 used. Notwithstanding Subsection 48-2a-102 (2):
27 (a) a limited liability company may use the terms "limited," "limited company," "L.C.,"
28 "L.L.C.," "LC," or "LLC" in its name in this state; and
29 (b) a limited liability partnership may use the terms "limited liability partnership,"
30 "L.L.P.," or "LLP" in the manner allowed in Section 48-1-45 or Section 48-1a-1107.
31 (3) Except as authorized by Subsection (4), the name of a limited partnership must be
1 distinguishable as defined in Subsection (5) upon the records of the division from:
2 (a) the name of any limited partnership formed or authorized to transact business in this
3 state;
4 (b) the corporate name of any corporation incorporated or authorized to transact business
5 in this state;
6 (c) any limited partnership name reserved under this chapter;
7 (d) any corporate name reserved under Title 16, Chapter 10a, Utah Revised Business
8 Corporation Act;
9 (e) any fictitious name adopted by a foreign corporation or limited partnership authorized
10 to transact business in this state because its real name is unavailable;
11 (f) any corporate name of a not-for-profit corporation incorporated or authorized to
12 transact business in this state; and
13 (g) any assumed business name, trademark, or service mark registered by the division.
14 (4) A limited partnership may apply to the division for approval to file its certificate under,
15 or to reserve, a name that is not distinguishable upon the division's records from one or more of
16 the names described in Subsection (3). The division shall approve of the name for which
17 application is made if:
18 (a) the other person whose name is not distinguishable from the name under which the
19 applicant desires to file consents to the filing in writing and submits an undertaking in a form
20 satisfactory to the division to change its name to a name that is distinguishable from the name of
21 the applicant; or
22 (b) the applicant delivers to the division a certified copy of the final judgment of a court
23 of competent jurisdiction establishing the applicant's right to use in this state the name for which
24 the application is made.
25 (5) A name is distinguishable from other names, trademarks, and service marks registered
26 with the division if it contains one or more different letters or numerals from other names upon the
27 division's records. Differences between singular and plural forms of words are distinguishing.
28 (6) The following differences are not distinguishing:
29 (a) the words "corporation," "incorporated," "company," "limited partnership," "limited,"
30 "L.P.," or "Ltd.," or any abbreviation thereof;
31 (b) the presence or absence of the words or symbols of the words "the," "and," "a," or
1 "plus";
2 (c) differences in punctuation and special characters; or
3 (d) differences in capitalization.
4 (7) The director of the division shall have the power and authority reasonably necessary
5 to interpret and efficiently administer this section and to perform the duties imposed upon the
6 division by this section.
7 (8) A name that implies that the limited partnership is an agency of this state or any of its
8 political subdivisions, if it is not actually such a legally established agency or subdivision, may
9 not be approved for filing by the division.
10 Section 71. Section 63-55b-4801 is enacted to read:
11 63-55b-4801. Repeal date.
12 Title 48, Chapter 1, Uniform Partnership and Limited Liability Partnership Act, is repealed
13 January 1, 1999.
14 Section 72. Effective date.
15 This act takes effect on January 1, 1998.
Legislative Review Note
as of 1-17-97 12:54 PM
A limited legal review of this bill raises no obvious constitutional or statutory concerns.
Office of Legislative Research and General Counsel
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