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AMBRECHT & BRITTAIN, LLPFollow-Up on the New General Partnership LawBy Dibby Allan Green, CLAS |
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Link to Original Article.
The article noted that certain provisions of the new general partnership law will apply to limited partnerships to the extent that the California Revised Limited Partnership Act refers to general partnership law. Thus, the article suggested, that a limited partnership which timely elected to be governed by the new Uniform Partnership Act of 1994 (California Corporations Code §§16100, et. seq.) would benefit from the new "exhaustion requirement" concerning a general partner's liability. (This will also be true for all limited partners created after January 1, 1997, and for all limited partnerships in existence on January 1, 1999, when the new law becomes effective as to all partnerships.) The next question, then, is what to do concerning public notice of a limited partnership now being governed by the new law, whether occurring by election or by creation after January 1, 1997? For general partnerships, the Act gives the option filing the new Form GP-1 and recording a certified copy in appropriate counties which meets the requirements of a "recorded statement" under the new provisions. The article speculated that in order to meet the requirements of a "recorded statement" that perhaps limited partnerships should also file the new Form GP-1's. Our office attempted to do this for three limited partnerships who timely made the election. Upon initial rejection by a clerk with the Secretary of State's office, we sent in an opinion letter as to our reasons for doing so. At the end of July, we finally received a written response from staff counsel with the Secretary of State's office. Following are excerpts from that letter: ". . . [I]t does not appear necessary to file these statements [Form GP-1's] on behalf of the limited partnerships, and indeed, may create confusion concerning the partnerships, since they would be on record as both general partnerships and limited partnerships. It seems, upon review of the relevant code sections, that you would be better to amend the partnership agreements [this was required for making the election by December 31, 1996] and the Certificates of Limited Partnership (LP-1s) to elect to come under the new provisions of the Revised Uniform Partnership Act (RUPA) [note: §16100 refers to the new Act as "Uniform Partnership Act of 1994"]. The amended certificates could be filed with this office and with the appropriate county recorders to provide notice and intent with regard to the partnerships." "In discussing this issue with members of the Partnerships and Limited Liability Companies Committee of the Business Law Section of the State Bar of California, it was felt that the reference to CCC [California Corporations Code] 15010.5 in CCC section 15621[(d)] should be amended to reference CCC section 16105 (a new RUPA provision)." The meaning of this latter sentence is that were Corporations Code §15621(d) so amended, then the recorded Certificate of Limited Partnership will have "such other presumptions" as are included in the new Act for a "recorded statement." (Unfortunately, the letter stopped short of saying "legislation would be introduced" or other assurance that this change was in the works.) Thus, the Secretary of State's recommend is not to file GP-1's for limited partnerships, but to have the LP-1's reflect the partnership is subject to the new Act (an amendment to the LP-1 for existing partnerships, and perhaps a specific statement in the LP-1's for partnerships created between January 1, 1997, and December 31, 1998). If and when the code section referenced above is changed, the last uncertainty of proper public notice for limited partnerships governed by the new Act should be removed.
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