SB 112

Abstract

This Act continues the practice of amending periodically the Delaware Revised Uniform Limited Partnership Act (the “LP Act”) to keep it current and to maintain its national preeminence. The following is a section-by-section review of the proposed amendments to the LP Act: Section 1 amends § 17-204(a) of the LP Act to clarify that certificates required by the LP Act to be filed in the office of the Secretary of State be executed in the manner set forth in § 17-204(a). Further, because Section 5 of this Act contains amendments that permit or require a certificate of amendment to a certificate of division to be filed in the office of the Secretary of State, this section also amends § 17-204(a) of the LP Act to provide the manner in which a certificate of amendment to a certificate of division must be signed. Section 2 amends § 17-211(g) of the LP Act. Currently, § 17-211(g) of the LP Act permits a duly approved agreement of merger or consolidation or plan of merger to effect any amendment to the partnership agreement or effect the adoption of a new partnership agreement. This amendment to § 17-211(g) confirms that an amendment to a partnership agreement or adoption of a new partnership agreement effected pursuant to § 17-211(g) of the LP Act may be effected only with respect to the partnership agreement of the surviving or resulting limited partnership and not with respect to the partnership agreement of a constituent limited partnership that is not the surviving or resulting limited partnership. Sections 3 and 6 amend § 17-218(b)(1) and § 17-221(c)(1) of the LP Act. Each protected or registered series of a Delaware limited partnership must have a general partner associated with it. If a partnership agreement fails to designate an initial general partner associated with such a series, the LP Act designates a general partner to be associated with such a series. If a partnership agreement fails to designate a general partner of the limited partnership generally, the LP Act designates a general partner of the limited partnership generally. These sections amend § 17-218(b)(1) of the LP Act and § 17-221(c)(1) of the LP Act to confirm that the rules for designating a general partner for a limited partnership that has protected or registered series apply only to the designation of an initial general partner and not to subsequent general partners. Section 4 amends §17-218 of the LP Act. Currently, § 17-806 of the LP Act permits revocation of dissolution of a limited partnership prior to the filing of a certificate of cancellation of the certificate of limited partnership in the office of the Secretary of State; however, the LP Act does not currently address revocation of termination of a protected series prior to the completion of the winding up of the protected series. This amendment adds a new § 17-218(d) to permit revocation of termination of a protected series prior to the completion of the winding up of the protected series. Section 5 amends § 17-220(h) of the LP Act. Currently, among other requirements, a certificate of division must state the name and business address of the division contact and the name and address of the division partnership where the plan of division is on file. Because this information may change over time, this amendment permits or requires the filing of a certificate of amendment of certificate of division to amend the name or business address of the division contact or the name and address of the division partnership where the plan of division is on file. The requirement to update such information in a certificate of division ends after the expiration of a period of 6 years following the effective date of the division. Section 5 also amends § 17-220(l)(1) of the LP Act to clarify that pursuant to a division, a dividing partnership is divided into distinct and independent division partnerships as such term is used in the LP Act. Finally, Section 5 also amends § 17-220(l)(9) of the LP Act. Currently, under § 17-220 of the LP Act, a dividing partnership does not need to survive a division. This amendment confirms that a dividing partnership need not be a surviving partnership. Section 7 amends §17-221 of the LP Act. Currently, § 17-806 of the LP Act permits revocation of dissolution of a limited partnership prior to the filing of a certificate of cancellation of the certificate of limited partnership in the office of the Secretary of State; however, the LP Act does not currently address revocation of dissolution of a registered series prior to the filing of a certificate of cancellation of the certificate of registered series in the office of the Secretary of State. This amendment adds a new § 17-221(f) to permit revocation of dissolution of a registered series prior to the filing of a certificate of cancellation of the certificate of registered series in the office of the Secretary of State. Section 8 adds a new § 17-506 to the LP Act to clarify that a subscription for a partnership interest may be irrevocable if the subscription states it is irrevocable to the extent provided by the terms of the subscription. Section 9 amends § 17-1107(a)(3) of the LP Act to specify the fee payable to the Secretary of State to file a certificate of amendment of certificate of division. Section 10 amends § 17-1109(j) of the LP Act to acknowledge that certificates of amendment of certificate of division should be accepted for filing by the Secretary of State if at least 1 division partnership is in good standing at the time of such filings. Section 11 provides that the proposed amendments to the LP Act take effect August 1, 2023. This Act requires a greater than majority vote for passage because § 11 of Article VIII of the Delaware Constitution requires the affirmative vote of three-fifths of the members elected to each house of the General Assembly to impose or levy a tax or license fee.