State of Illinois
92nd General Assembly
Legislation

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92_SB2049

 
                                               LRB9216008DJgc

 1        AN ACT concerning partnerships.

 2        Be  it  enacted  by  the People of the State of Illinois,
 3    represented in the General Assembly:


 4                              ARTICLE 1
 5                         GENERAL PROVISIONS

 6        Section 100.  Short title.  This Act may be cited as  the
 7    Uniform Partnership Act (1997).

 8        Section 101. Definitions. In this Act:
 9        (a)  "Business"  includes  every  trade,  occupation, and
10    profession.
11        (b)  "Debtor in bankruptcy" means a  person  who  is  the
12    subject of:
13             (1)  an  order  for  relief  under  Title  11 of the
14        United  States  Code  or  a  comparable  order  under   a
15        successor statute of general application; or
16             (2)  a  comparable  order  under  federal, state, or
17        foreign law governing insolvency.
18        (c)  "Distribution" means a transfer of  money  or  other
19    property  from  a  partnership  to a partner in the partner's
20    capacity as a partner or to the partner's transferee.
21        (d)  "Foreign  limited  liability  partnership"  means  a
22    partnership that:
23             (1)  is formed under laws other  than  the  laws  of
24        this State; and
25             (2)  has   the   status   of   a  limited  liability
26        partnership under those laws.
27        (e)  "Limited liability partnership" means a  partnership
28    that  has  filed  a  statement of qualification under Section
29    1001 and does not have a similar statement in effect  in  any
 
                            -2-                LRB9216008DJgc
 1    other jurisdiction.
 2        (f)  "Partnership"  means  an  association  of  2 or more
 3    persons to carry on as co-owners a business for profit formed
 4    under Section 202 of this Act, predecessor law, or comparable
 5    law of another jurisdiction.
 6        (g)  "Partnership agreement" means the agreement, whether
 7    written, oral, or implied, among the partners concerning  the
 8    partnership,   including   amendments   to   the  partnership
 9    agreement.
10        (h)  "Partnership at will" means a partnership  in  which
11    the  partners  have  not  agreed to remain partners until the
12    expiration  of  a  definite  term  or  the  completion  of  a
13    particular undertaking.
14        (i)  "Partnership interest" or "partner's interest in the
15    partnership" means  all  of  a  partner's  interests  in  the
16    partnership,  including  the  partner's transferable interest
17    and all management and other rights.
18        (j)  "Person" means an individual, corporation,  business
19    trust,   estate,   trust,   partnership,  association,  joint
20    venture, government,  governmental  subdivision,  agency,  or
21    instrumentality, or any other legal or commercial entity.
22        (k)  "Property"  means  all  property, real, personal, or
23    mixed, tangible or intangible, or any interest therein.
24        (l)  "State" means a state  of  the  United  States,  the
25    District of Columbia, the Commonwealth of Puerto Rico, or any
26    territory  or  insular possession subject to the jurisdiction
27    of the United States.
28        (m)  "Statement"  means  a   statement   of   partnership
29    authority  under  Section  303  if  this  Act, a statement of
30    denial under Section 304, a statement of  dissociation  under
31    Section  704, a statement of dissolution under Section 805, a
32    statement of merger under Section 907 or 908, a statement  of
33    qualification  under  Section 1001, a statement of withdrawal
34    under  Section  1001  or  1102,  a   statement   of   foreign
 
                            -3-                LRB9216008DJgc
 1    qualification   under   Section  1102,  or  an  amendment  or
 2    cancellation of any of the foregoing.
 3        (n)  "Transfer"  includes  an   assignment,   conveyance,
 4    lease, mortgage, deed, and encumbrance.

 5        Section 102. Knowledge and notice.
 6        (a)  A  person  knows  a  fact  if  the person has actual
 7    knowledge of it.
 8        (b)  A person has notice of a fact if the person:
 9             (1)  knows of it;
10             (2)  has received a notification of it; or
11             (3)  has reason to know it exists from  all  of  the
12        facts known to the person at the time in question.
13        (c)  A person notifies or gives a notification to another
14    by  taking  steps  reasonably  required  to  inform the other
15    person in ordinary course, whether or not  the  other  person
16    learns of it.
17        (d)  A   person   receives   a   notification   when  the
18    notification:
19             (1)  comes to the person's attention; or
20             (2)  is duly delivered  at  the  person's  place  of
21        business  or at any other place held out by the person as
22        a place for receiving communications.
23        (e)  Except as otherwise provided in  subsection  (f),  a
24    person  other  than  an  individual  knows,  has  notice,  or
25    receives   a  notification  of  a  fact  for  purposes  of  a
26    particular transaction when  the  individual  conducting  the
27    transaction  knows, has notice, or receives a notification of
28    the fact, or in any event  when  the  fact  would  have  been
29    brought  to  the  individual's  attention  if  the person had
30    exercised  reasonable   diligence.   The   person   exercises
31    reasonable  diligence if it maintains reasonable routines for
32    communicating  significant  information  to  the   individual
33    conducting the transaction and there is reasonable compliance
 
                            -4-                LRB9216008DJgc
 1    with  the  routines. Reasonable diligence does not require an
 2    individual acting for the person to  communicate  information
 3    unless  the communication is part of the individual's regular
 4    duties  or  the  individual  has  reason  to  know   of   the
 5    transaction  and  that  the  transaction  would be materially
 6    affected by the information.
 7        (f)  A partner's  knowledge,  notice,  or  receipt  of  a
 8    notification  of  a  fact  relating  to  the  partnership  is
 9    effective  immediately as knowledge by, notice to, or receipt
10    of a notification by the partnership, except in the case of a
11    fraud on the partnership committed by or with the consent  of
12    that partner.

13        Section    103.    Effect   of   partnership   agreement;
14    nonwaivable provisions.
15        (a)  Except as  otherwise  provided  in  subsection  (b),
16    relations among the partners and between the partners and the
17    partnership are governed by the partnership agreement. To the
18    extent  the partnership agreement does not otherwise provide,
19    this Act governs relations among the partners and between the
20    partners and the partnership.
21        (b)  The partnership agreement may not:
22             (1)  vary the rights and duties  under  Section  105
23        except  to  eliminate  the  duty  to  provide  copies  of
24        statements to all of the partners;
25             (2)  unreasonably  restrict  the  right of access to
26        books and records under Section 403(b);
27             (3)  eliminate  or  reduce  a  partner's   fiduciary
28        duties, but may:
29                  (i)  identify  specific  types or categories of
30             activities that do not violate these duties, if  not
31             manifestly unreasonable; and
32                  (ii)  specify   the  number  or  percentage  of
33             partners that may authorize or  ratify,  after  full
 
                            -5-                LRB9216008DJgc
 1             disclosure  of all material facts, a specific act or
 2             transaction  that  otherwise  would  violate   these
 3             duties;
 4             (4)  eliminate  or  reduce  the  obligation  of good
 5        faith and fair dealing  under  Section  404(d),  but  the
 6        partnership  agreement  may  prescribe  the  standards by
 7        which  the  performance  of  the  obligation  is  to   be
 8        measured,   if   the   standards   are   not   manifestly
 9        unreasonable;
10             (5)  vary the power to dissociate as a partner under
11        Section  602(a),  except  to  require  the  notice  under
12        Section 601(1) to be in writing;
13             (6)  vary the right of a court to expel a partner in
14        the events specified in Section 601(5);
15             (7)  vary the requirement to wind up the partnership
16        business  in  cases  specified in Section 801(4), (5), or
17        (6);
18             (8)  vary the law applicable to a limited  liability
19        partnership under Section 106(b); or
20             (9)  restrict  the  rights of a person, other than a
21        partner  and  transferee  of  a  partner's   transferable
22        interest under this Act.

23        Section 104. Supplemental principles of law.
24        (a)  Unless  displaced  by  particular provisions of this
25    Act, the principles of law and equity supplement this Act.
26        (b)  If an obligation to pay interest arises  under  this
27    Act and the rate is not specified, the rate is that specified
28    in Section 4 of the Interest Act.

29        Section   105.   Execution,   filing,  and  recording  of
30    statements.
31        (a)  A statement may  be  filed  in  the  office  of  the
32    Secretary  of  State. A certified copy of a statement that is
 
                            -6-                LRB9216008DJgc
 1    filed in an office in another  State  may  be  filed  in  the
 2    office  of  the  Secretary  of  State.  Either filing has the
 3    effect provided in  this  Act  with  respect  to  partnership
 4    property located in or transactions that occur in this State.
 5        (b)  A  certified copy of a statement that has been filed
 6    in the office of the Secretary of State and recorded  in  the
 7    office  for  recording  transfers  of  real  property has the
 8    effect provided  for  recorded  statements  in  this  Act.  A
 9    recorded  statement  that  is  not  a  certified  copy  of  a
10    statement  filed in the office of the Secretary of State does
11    not have the effect provided for recorded statements in  this
12    Act.
13        (c)  A  statement filed by a partnership must be executed
14    by at least 2 partners. Other statements must be executed  by
15    a  partner  or  other  person  authorized  by  this  Act.  An
16    individual  who  executes  a statement as, or on behalf of, a
17    partner or other person named as a  partner  in  a  statement
18    shall  personally  declare  under penalty of perjury that the
19    contents of the statement are accurate.
20        (d)  A person authorized by this Act to file a  statement
21    may  amend  or cancel the statement by filing an amendment or
22    cancellation  that  names  the  partnership,  identifies  the
23    statement, and states  the  substance  of  the  amendment  or
24    cancellation.
25        (e)  A  person  who  files  a  statement pursuant to this
26    Section shall promptly send a copy of the statement to  every
27    nonfiling  partner and to any other person named as a partner
28    in the statement.  Failure to send a copy of a statement to a
29    partner or other person does not limit the  effectiveness  of
30    the statement as to a person not a partner.
31        (f)  The  Secretary of State may collect a fee for filing
32    or providing a certified copy of a statement as  provided  in
33    Section  108. The officer responsible for recording transfers
34    of real property may collect a fee for recording a statement.
 
                            -7-                LRB9216008DJgc
 1        Section 106. Governing law.
 2        (a)  Except as otherwise provided in subsection (b),  the
 3    law  of the jurisdiction in which a partnership has its chief
 4    executive office governs relations  among  the  partners  and
 5    between the partners and the partnership.
 6        (b)  The  law  of  this State governs relations among the
 7    partners and between the partners and the partnership and the
 8    liability  of  partners  for  an  obligation  of  a   limited
 9    liability partnership.

10        Section  107. Partnership subject to amendment  or repeal
11    of Act.  A partnership governed by this Act is subject to any
12    amendment to or repeal of this Act.

13        Section 108. Fees.
14        (a)  The Secretary of State shall charge and  collect  in
15    accordance   with  the  provisions  of  this  Act  and  rules
16    promulgated under its authority:
17             (1)  fees for filing documents;
18             (2)  miscellaneous charges; and
19             (3)  fees for the sale of lists of  filings,  copies
20        of  any  documents,  and  the  sale  or  release  of  any
21        information.
22        (b)  The Secretary of State shall charge and collect:
23             (1)  for  furnishing a copy or certified copy of any
24        document, instrument, or paper relating to  a  registered
25        limited  liability partnership, $1 per page, but not less
26        than $25, and $25 for the certificate  and  for  affixing
27        the seal to the certificate;
28             (2)  for  the  transfer  of  information by computer
29        process media to any purchaser, fees established by rule;
30             (3)  for   filing   a   statement   of   partnership
31        authority, $25;
32             (4)  for filing a statement of denial, $25;
 
                            -8-                LRB9216008DJgc
 1             (5)  for filing a statement of dissociation, $25;
 2             (6)  for filing a statement of dissolution, $100;
 3             (7)  for filing a statement of merger, $100;
 4             (8)  for filing a statement of qualification  for  a
 5        limited liability partnership organized under the laws of
 6        this  State, $100 for each partner, but in no event shall
 7        the fee be less than $200 or exceed $5,000;
 8             (9)  for   filing    a    statement    of    foreign
 9        qualification, $500;
10             (10)  for  filing  a renewal statement for a limited
11        liability partnership organized under the  laws  of  this
12        State,  $100  for each partner, but in no event shall the
13        fee be less than $200 or exceed $5,000;
14             (11)  for filing a renewal statement for  a  foreign
15        limited liability partnership, $300.
16             (12)  for  filing  an amendment or cancellation of a
17        statement, $25;
18             (13)  for filing a statement of withdrawal, $100;
19             (14)  for the purposes of  changing  the  registered
20        agent name or registered office, or both, $25.
21        (c)  All  fees  collected  pursuant  to this Act shall be
22    deposited into the Division of Corporations Limited Liability
23    Partnership Fund.
24        (d)  There is hereby continued in the  State  treasury  a
25    special  fund  to  be  known  as the Division of Corporations
26    Limited Liability Partnership Fund. Moneys deposited into the
27    Fund shall, subject to appropriation, be used by the Business
28    Services Division of the Office of the Secretary of State  to
29    administer  the  responsibilities  of the Secretary of  State
30    under this Act. The balance of the Fund at  the  end  of  any
31    fiscal  year  shall  not  exceed  $200,000, and any amount in
32    excess thereof shall be transferred to  the  General  Revenue
33    Fund.
 
                            -9-                LRB9216008DJgc
 1        Section  109.  Illinois Administrative Procedure Act. The
 2    Illinois Administrative Procedure Act  is  expressly  adopted
 3    and  incorporated in Articles 10 and 11 of this Act as if all
 4    of the provisions of the  Illinois  Administrative  Procedure
 5    Act  were  included in Articles 10 and 11 of this Act, except
 6    that the provisions of subsection (c) of Section 10-65 of the
 7    Illinois Administrative Procedure Act, which provides that at
 8    a hearing the licensee has the right to show compliance  with
 9    all  lawful  requirements  for  retention,  continuation,  or
10    renewal of the license, is specifically excluded, and for the
11    purposes of this Act, the notice required under Section 10-25
12    of  the  Illinois  Administrative    Procedure  Act is deemed
13    sufficient when mailed to the last known address of a party.

14                              ARTICLE 2
15                        NATURE OF PARTNERSHIP

16        Section 201. Partnership as entity.
17        (a)  A  partnership  is  an  entity  distinct  from   its
18    partners.
19        (b)  A  limited liability partnership continues to be the
20    same entity that existed before the filing of a statement  of
21    qualification under Section 1001 of this Act.

22        Section 202. Formation of partnership.
23        (a)  Except  as otherwise provided in subsection (b), the
24    association of 2 or more persons to carry on as  co-owners  a
25    business  for  profit forms a partnership, whether or not the
26    persons intend to form a partnership.
27        (b)  An association formed under  a  statute  other  than
28    this  Act,  a predecessor statute, or a comparable statute of
29    another jurisdiction is not a partnership under this Act.
30        (c)  In determining whether a partnership is formed,  the
31    following rules apply:
 
                            -10-               LRB9216008DJgc
 1             (1)  Joint  tenancy,  tenancy  in common, tenancy by
 2        the entireties, joint property, common property, or  part
 3        ownership  does  not  by  itself establish a partnership,
 4        even if the co-owners share profits made by  the  use  of
 5        the property.
 6             (2)  The sharing of gross returns does not by itself
 7        establish a partnership, even if the persons sharing them
 8        have a joint or common right or interest in property from
 9        which the returns are derived.
10             (3)  A person who receives a share of the profits of
11        a  business  is presumed to be a partner in the business,
12        unless the profits were received in payment:
13                  (i)  of a debt by installments or otherwise;
14                  (ii)  for services as an independent contractor
15             or of wages or other compensation to an employee;
16                  (iii)  of rent;
17                  (iv)  of an  annuity  or  other  retirement  or
18             health  benefit to a beneficiary, representative, or
19             designee of a deceased or retired partner;
20                  (v)  of interest or other  charge  on  a  loan,
21             even  if  the  amount  of  payment  varies  with the
22             profits of  the  business,  including  a  direct  or
23             indirect   present   or   future  ownership  of  the
24             collateral,  or  rights  to  income,  proceeds,   or
25             increase in value derived from the collateral; or
26                  (vi)  for   the  sale  of  the  goodwill  of  a
27             business  or  other  property  by  installments   or
28             otherwise.

29        Section 203. Partnership property. Property acquired by a
30    partnership  is  property  of  the partnership and not of the
31    partners individually.

32        Section 204. When property is partnership property.
 
                            -11-               LRB9216008DJgc
 1        (a)  Property is partnership property if acquired in  the
 2    name of:
 3             (1)  the partnership; or
 4             (2)  one  or more partners with an indication in the
 5        instrument transferring title  to  the  property  of  the
 6        person's  capacity  as a partner or of the existence of a
 7        partnership but without an indication of the name of  the
 8        partnership.
 9        (b)  Property  is acquired in the name of the partnership
10    by a transfer to:
11             (1)  the partnership in its name; or
12             (2)  one or  more  partners  in  their  capacity  as
13        partners   in   the  partnership,  if  the  name  of  the
14        partnership is indicated in the  instrument  transferring
15        title to the property.
16        (c)  Property  is  presumed to be partnership property if
17    purchased with partnership assets, even if  not  acquired  in
18    the  name  of the partnership or of one or more partners with
19    an indication in the instrument  transferring  title  to  the
20    property  of  the  person's  capacity  as a partner or of the
21    existence of a partnership.
22        (d)  Property acquired in the name of one or more of  the
23    partners,   without   an   indication   in   the   instrument
24    transferring  title  to the property of the person's capacity
25    as a partner or of the existence of a partnership and without
26    use  of  partnership  assets,  is  presumed  to  be  separate
27    property, even if used for partnership purposes.

28                              ARTICLE 3
29                      RELATIONS OF PARTNERS TO
30                  PERSONS DEALING WITH PARTNERSHIP

31        Section 301. Partner agent of partnership. Subject to the
32    effect of a statement of partnership authority under  Section
 
                            -12-               LRB9216008DJgc
 1    303 of this Act:
 2             (1)  Each partner is an agent of the partnership for
 3        the  purpose  of  its  business.  An  act  of  a partner,
 4        including  the  execution  of  an   instrument   in   the
 5        partnership  name,  for  apparently  carrying  on  in the
 6        ordinary course the partnership business or  business  of
 7        the   kind  carried  on  by  the  partnership  binds  the
 8        partnership, unless the partner had no authority  to  act
 9        for  the  partnership  in  the  particular matter and the
10        person with whom the partner  was  dealing  knew  or  had
11        received   a   notification   that   the  partner  lacked
12        authority.
13             (2)  An act of a partner which is not apparently for
14        carrying  on  in  the  ordinary  course  the  partnership
15        business or business  of  the  kind  carried  on  by  the
16        partnership  binds  the  partnership  only if the act was
17        authorized by the other partners.

18        Section 302. Transfer of partnership property.
19        (a)  Partnership property may be transferred as follows:
20             (1)  Subject  to  the  effect  of  a  statement   of
21        partnership  authority  under  Section  303  of this Act,
22        partnership property held in the name of the  partnership
23        may  be transferred by an instrument of transfer executed
24        by a partner in the partnership name.
25             (2)  Partnership property held in the name of one or
26        more  partners  with  an  indication  in  the  instrument
27        transferring the property to them of  their  capacity  as
28        partners  or  of  the  existence  of  a  partnership, but
29        without an indication of the name of the partnership, may
30        be transferred by an instrument of transfer  executed  by
31        the persons in whose name the property is held.
32             (3)  Partnership property held in the name of one or
33        more  persons  other  than  the  partnership,  without an
 
                            -13-               LRB9216008DJgc
 1        indication in the instrument transferring the property to
 2        them of their capacity as partners or of the existence of
 3        a partnership, may be transferred  by  an  instrument  of
 4        transfer  executed  by  the  persons  in  whose  name the
 5        property is held.
 6        (b)  A partnership may recover partnership property  from
 7    a  transferee  only  if  it  proves  that  execution  of  the
 8    instrument  of  initial transfer did not bind the partnership
 9    under Section 301 and:
10             (1)  as to a subsequent transferee  who  gave  value
11        for  property transferred under subsection (a)(1) and (2)
12        of this Section, proves that  the  subsequent  transferee
13        knew  or  had received a notification that the person who
14        executed  the  instrument  of  initial  transfer   lacked
15        authority to bind the partnership; or
16             (2)  as  to a transferee who gave value for property
17        transferred under  subsection  (a)(3),  proves  that  the
18        transferee  knew  or had received a notification that the
19        property was partnership property and that the person who
20        executed  the  instrument  of  initial  transfer   lacked
21        authority to bind the partnership.
22        (c)  A  partnership  may not recover partnership property
23    from a subsequent transferee if  the  partnership  would  not
24    have  been entitled to recover the property, under subsection
25    (b), from any earlier transferee of the property.
26        (d)  If a person holds all of the partners' interests  in
27    the  partnership,  all  of  the partnership property vests in
28    that person. The person may execute a document in the name of
29    the partnership to evidence vesting of the property  in  that
30    person and may file or record the document.

31        Section 303. Statement of partnership authority.
32        (a)  A  partnership  may  file a statement of partnership
33    authority, which:
 
                            -14-               LRB9216008DJgc
 1             (1)  must include:
 2                  (i)  the name of the partnership;
 3                  (ii)  the street address of its chief executive
 4             office and of one office in this State, if there  is
 5             one;
 6                  (iii)  the  names  and mailing addresses of all
 7             of  the  partners  or  of  an  agent  appointed  and
 8             maintained by the partnership  for  the  purpose  of
 9             subsection (b); and
10                  (iv)  the  names  of the partners authorized to
11             execute an  instrument  transferring  real  property
12             held in the name of the partnership; and
13             (2)  may  state the authority, or limitations on the
14        authority, of some or all of the partners to  enter  into
15        other  transactions  on behalf of the partnership and any
16        other matter.
17        (b)  If a statement of  partnership  authority  names  an
18    agent,  the  agent  shall  maintain  a  list of the names and
19    mailing  addresses  of  all  of  the  partners  and  make  it
20    available to any person on request for good cause shown.
21        (c)  If a filed statement  of  partnership  authority  is
22    executed  pursuant  to  Section 105(c) and states the name of
23    the partnership  but  does  not  contain  all  of  the  other
24    information  required  by subsection (a) of this Section, the
25    statement nevertheless operates with respect to a person  not
26    a partner as provided in subsections (d) and (e).
27        (d)  Except  as  otherwise  provided in subsection (g) of
28    this Section, a  filed  statement  of  partnership  authority
29    supplements   the  authority  of  a  partner  to  enter  into
30    transactions on behalf of the partnership as follows:
31             (1)  Except for transfers of real property, a  grant
32        of   authority   contained   in   a  filed  statement  of
33        partnership authority is conclusive in favor of a  person
34        who  gives  value  without  knowledge to the contrary, so
 
                            -15-               LRB9216008DJgc
 1        long as and to the  extent  that  a  limitation  on  that
 2        authority   is   not  then  contained  in  another  filed
 3        statement.  A  filed  cancellation  of  a  limitation  on
 4        authority revives the previous grant of authority.
 5             (2)  A grant of authority to transfer real  property
 6        held  in  the  name  of  the  partnership  contained in a
 7        certified  copy  of  a  filed  statement  of  partnership
 8        authority recorded in the office for recording  transfers
 9        of  that real property is conclusive in favor of a person
10        who gives value without knowledge  to  the  contrary,  so
11        long  as  and  to  the  extent that a certified copy of a
12        filed statement containing a limitation on that authority
13        is not  then  of  record  in  the  office  for  recording
14        transfers  of  that  real  property. The recording in the
15        office for recording transfers of that real property of a
16        certified copy of a filed cancellation of a limitation on
17        authority revives the previous grant of authority.
18        (e)  A person not a  partner  is  deemed  to  know  of  a
19    limitation  on  the  authority  of a partner to transfer real
20    property held in the name of the partnership if  a  certified
21    copy  of  the  filed  statement  containing the limitation on
22    authority is of record in the office for recording  transfers
23    of that real property.
24        (f)  Except  as otherwise provided in subsections (d) and
25    (e) of this Section and Sections 704 and 805 of this  Act,  a
26    person not a partner is not deemed to know of a limitation on
27    the  authority  of a partner merely because the limitation is
28    contained in a filed statement.
29        (g)  Unless  earlier  canceled,  a  filed  statement   of
30    partnership authority is canceled by operation of law 5 years
31    after  the  date  on  which the statement, or the most recent
32    amendment, was filed with the Secretary of State.

33        Section 304. Statement of  denial.  A  partner  or  other
 
                            -16-               LRB9216008DJgc
 1    person named as a partner in a filed statement of partnership
 2    authority  or  in  a  list maintained by an agent pursuant to
 3    Section 303(b) may file a statement  of  denial  stating  the
 4    name  of  the  partnership and the fact that is being denied,
 5    which may include denial of a person's authority or status as
 6    a partner. A statement of denial is a limitation on authority
 7    as provided in Section 303(d) and (e).

 8        Section 305. Partnership liable for partner's  actionable
 9    conduct.
10        (a)  A partnership is liable for loss or injury caused to
11    a  person,  or  for  a  penalty  incurred,  as  a result of a
12    wrongful act or omission, or other actionable conduct,  of  a
13    partner  acting  in  the  ordinary  course of business of the
14    partnership or with authority of the partnership.
15        (b)  If, in the course of the partnership's  business  or
16    while  acting  with  authority  of the partnership, a partner
17    receives or  causes  the  partnership  to  receive  money  or
18    property of a person not a partner, and the money or property
19    is misapplied by a partner, the partnership is liable for the
20    loss.

21        Section 306. Partner's liability.
22        (a)  Except  as otherwise provided in subsections (b) and
23    (c) of this Section, all  partners  are  liable  jointly  and
24    severally  for  all  obligations  of  the  partnership unless
25    otherwise agreed by the claimant or provided by law.
26        (b)  A person admitted as  a  partner  into  an  existing
27    partnership  is  not  personally  liable  for any partnership
28    obligation  incurred  before  the  person's  admission  as  a
29    partner.
30        (c)  An obligation of a partnership  incurred  while  the
31    partnership  is  a  limited  liability  partnership,  whether
32    arising  in  contract,  tort,  or  otherwise,  is  solely the
 
                            -17-               LRB9216008DJgc
 1    obligation of the partnership. A partner  is  not  personally
 2    liable,  directly  or  indirectly,  by way of contribution or
 3    otherwise, for such an obligation solely by reason  of  being
 4    or   so   acting   as  a  partner.  This  subsection  applies
 5    notwithstanding  anything  inconsistent  in  the  partnership
 6    agreement that existed immediately before the  vote  required
 7    to  become  a  limited  liability  partnership  under Section
 8    1001(b) of this Act.

 9        Section 307.  Actions  by  and  against  partnership  and
10    partners.
11        (a)  A partnership may sue and be sued in the name of the
12    partnership.
13        (b)  An  action  may  be  brought against the partnership
14    and, to the extent not inconsistent with Section 306 of  this
15    Act,  any  or  all  of  the partners in the same action or in
16    separate actions.
17        (c)  A judgment against a partnership is not by itself  a
18    judgment  against a partner. A judgment against a partnership
19    may not be satisfied from a partner's assets unless there  is
20    also a judgment against the partner.
21        (d)  A  judgment  creditor  of  a  partner  may  not levy
22    execution against the assets of  the  partner  to  satisfy  a
23    judgment  based on a claim against the partnership unless the
24    partner is personally liable for the claim under Section  306
25    and:
26             (1)  a  judgment  based  on  the same claim has been
27        obtained against the partnership and a writ of  execution
28        on the judgment has been returned unsatisfied in whole or
29        in part;
30             (2)  the partnership is a debtor in bankruptcy;
31             (3)  the  partner  has agreed that the creditor need
32        not exhaust partnership assets;
33             (4)  a  court  grants  permission  to  the  judgment
 
                            -18-               LRB9216008DJgc
 1        creditor to  levy  execution  against  the  assets  of  a
 2        partner  based  on  a  finding  that  partnership  assets
 3        subject  to execution are clearly insufficient to satisfy
 4        the judgment, that exhaustion of  partnership  assets  is
 5        excessively  burdensome,  or that the grant of permission
 6        is an  appropriate  exercise  of  the  court's  equitable
 7        powers; or
 8             (5)  liability  is  imposed on the partner by law or
 9        contract independent of the existence of the partnership.
10        (e)  This Section applies to any partnership liability or
11    obligation resulting from a representation by  a  partner  or
12    purported partner under Section 308 of this Act.

13        Section 308. Liability of purported partner.
14        (a)  If  a  person, by words or conduct, purports to be a
15    partner, or consents to being represented  by  another  as  a
16    partner,  in  a  partnership  or with one or more persons not
17    partners, the purported partner is liable to a person to whom
18    the representation is made, if that person,  relying  on  the
19    representation,  enters into a transaction with the actual or
20    purported partnership. If the representation, either  by  the
21    purported partner or by a person with the purported partner's
22    consent, is made in a public manner, the purported partner is
23    liable  to a person who relies upon the purported partnership
24    even if the purported partner is not aware of being held  out
25    as  a  partner  to  the  claimant.  If  partnership liability
26    results, the purported partner is liable with respect to that
27    liability as if the purported partner were a partner.  If  no
28    partnership  liability  results,  the  purported  partner  is
29    liable  with  respect to that liability jointly and severally
30    with any other person consenting to the representation.
31        (b)  If a person is thus represented to be a  partner  in
32    an  existing  partnership,  or  with  one or more persons not
33    partners, the  purported  partner  is  an  agent  of  persons
 
                            -19-               LRB9216008DJgc
 1    consenting  to  the  representation  to bind them to the same
 2    extent and in the same manner as  if  the  purported  partner
 3    were  a  partner,  with  respect  to  persons  who enter into
 4    transactions in reliance upon the representation. If  all  of
 5    the  partners  of  the  existing  partnership  consent to the
 6    representation, a partnership act or obligation  results.  If
 7    fewer  than  all  of the partners of the existing partnership
 8    consent to the representation,  the  person  acting  and  the
 9    partners  consenting  to  the  representation are jointly and
10    severally liable.
11        (c)  A person is not liable as a partner  merely  because
12    the  person is named by another in a statement of partnership
13    authority.
14        (d)  A person does not continue to be liable as a partner
15    merely  because  of  a  failure  to  file  a   statement   of
16    dissociation or to amend a statement of partnership authority
17    to indicate the partner's dissociation from the partnership.
18        (e)  Except  as otherwise provided in subsections (a) and
19    (b) of this Section, persons who are not partners as to  each
20    other are not liable as partners to other persons.

21                              ARTICLE 4
22                 RELATIONS OF PARTNERS TO EACH OTHER
23                         AND TO PARTNERSHIP

24        Section 401. Partner's rights and duties.
25        (a)  Each partner is deemed to have an account that is:
26             (1)  credited with an amount equal to the money plus
27        the value of any other property, net of the amount of any
28        liabilities,  the  partner contributes to the partnership
29        and the partner's share of the partnership profits; and
30             (2)  charged with an amount equal to the money  plus
31        the value of any other property, net of the amount of any
32        liabilities,   distributed  by  the  partnership  to  the
 
                            -20-               LRB9216008DJgc
 1        partner  and  the  partner's  share  of  the  partnership
 2        losses.
 3        (b)  Each partner is entitled to an equal  share  of  the
 4    partnership  profits  and  is  chargeable with a share of the
 5    partnership losses in proportion to the  partner's  share  of
 6    the profits.
 7        (c)  A partnership shall reimburse a partner for payments
 8    made  and indemnify a partner for liabilities incurred by the
 9    partner in  the  ordinary  course  of  the  business  of  the
10    partnership  or  for  the  preservation  of  its  business or
11    property.
12        (d)  A partnership  shall  reimburse  a  partner  for  an
13    advance  to  the partnership beyond the amount of capital the
14    partner agreed to contribute.
15        (e)  A payment or advance made by a partner  which  gives
16    rise  to a partnership obligation under subsection (c) or (d)
17    of this Section constitutes a loan to the  partnership  which
18    accrues interest from the date of the payment or advance.
19        (f)  Each  partner has equal rights in the management and
20    conduct of the partnership business.
21        (g)  A partner may use or  possess  partnership  property
22    only on behalf of the partnership.
23        (h)  A  partner  is  not  entitled  to  remuneration  for
24    services performed for the partnership, except for reasonable
25    compensation for services rendered in winding up the business
26    of the partnership.
27        (i)  A  person may become a partner only with the consent
28    of all of the partners.
29        (j)  A difference arising as to a matter in the  ordinary
30    course  of  business  of  a  partnership  may be decided by a
31    majority of the partners. An act outside the ordinary  course
32    of  business  of  a  partnership  and  an  amendment  to  the
33    partnership agreement may be undertaken only with the consent
34    of all of the partners.
 
                            -21-               LRB9216008DJgc
 1        (k)  This  Section  does  not affect the obligations of a
 2    partnership to other persons under Section 301 of this Act.

 3        Section 402. Distributions in  kind.  A  partner  has  no
 4    right  to  receive,  and  may  not  be  required to accept, a
 5    distribution in kind.

 6        Section 403. Partner's rights and duties with respect  to
 7    information.
 8        (a)  A  partnership  shall keep its books and records, if
 9    any, at its chief executive office.
10        (b)  A  partnership  shall  provide  partners  and  their
11    agents and attorneys access to  its  books  and  records.  It
12    shall  provide former partners and their agents and attorneys
13    access to books and records pertaining to the  period  during
14    which  they  were  partners. The right of access provides the
15    opportunity to inspect and  copy  books  and  records  during
16    ordinary   business   hours.   A  partnership  may  impose  a
17    reasonable charge, covering the costs of labor and  material,
18    for copies of documents furnished.
19        (c)  Each  partner and the partnership shall furnish to a
20    partner, and  to  the  legal  representative  of  a  deceased
21    partner or partner under legal disability:
22             (1)  without  demand, any information concerning the
23        partnership's business and  affairs  reasonably  required
24        for  the  proper  exercise  of  the  partner's rights and
25        duties under the partnership agreement or this Act; and
26             (2)  on demand, any other information concerning the
27        partnership's business and affairs, except to the  extent
28        the demand or the information demanded is unreasonable or
29        otherwise improper under the circumstances.

30        Section 404. General standards of partner's conduct.
31        (a)  The   fiduciary   duties   a  partner  owes  to  the
 
                            -22-               LRB9216008DJgc
 1    partnership and  the  other  partners  include  the  duty  of
 2    loyalty and the duty of care set forth in subsections (b) and
 3    (c) of this Section.
 4        (b)  A  partner's  duty of loyalty to the partnership and
 5    the other partners includes the following:
 6             (1)  to account  to  the  partnership  and  hold  as
 7        trustee  for  it any property, profit, or benefit derived
 8        by the partner in the  conduct  and  winding  up  of  the
 9        partnership business or derived from a use by the partner
10        of partnership property, including the appropriation of a
11        partnership opportunity;
12             (2)  to  act  fairly  when  a partner deals with the
13        partnership  in  the  conduct  or  winding  up   of   the
14        partnership business as or on behalf of a party having an
15        interest adverse to the partnership; and
16             (3)  to  refrain from competing with the partnership
17        in the conduct of the  partnership  business  before  the
18        dissolution of the partnership.
19        (c)  A  partner's duty of care to the partnership and the
20    other  partners  in  the  conduct  and  winding  up  of   the
21    partnership  business  is limited to refraining from engaging
22    in  grossly  negligent  or  reckless   conduct,   intentional
23    misconduct, or a knowing violation of law.
24        (d)  A  partner  shall discharge his or her duties to the
25    partnership and the other partners under this  Act  or  under
26    the  partnership agreement and exercise any rights consistent
27    with the obligation of good faith and fair dealing.
28        (e)  A partner does not  violate  a  duty  or  obligation
29    under  this  Act  or  under  the partnership agreement merely
30    because the partner's  conduct  furthers  the  partner's  own
31    interest.
32        (f)  This  Section  applies  to  a  person winding up the
33    partnership business as the personal or legal  representative
34    of  the  last  surviving  partner  as  if  the  person were a
 
                            -23-               LRB9216008DJgc
 1    partner.

 2        Section 405. Actions by partnership and partners.
 3        (a)  A partnership  may  maintain  an  action  against  a
 4    partner for a breach of the partnership agreement, or for the
 5    violation  of  a duty to the partnership, causing harm to the
 6    partnership.
 7        (b)  A  partner  may  maintain  an  action  against   the
 8    partnership or another partner for legal or equitable relief,
 9    with or without an accounting as to partnership business, to:
10             (1)  enforce   the   partner's   rights   under  the
11        partnership agreement;
12             (2)  enforce the partner's rights  under  this  Act,
13        including:
14                  (i)  the  partner's  rights  under Section 401,
15             403, or 404;
16                  (ii)  the partner's right  on  dissociation  to
17             have  the  partner's  interest  in  the  partnership
18             purchased  pursuant  to  Section  701 or enforce any
19             other right under Article 6 or 7; or
20                  (iii)  the  partner's   right   to   compel   a
21             dissolution   and  winding  up  of  the  partnership
22             business under or  enforce  any  other  right  under
23             Article 8; or
24             (3)  enforce  the  rights  and otherwise protect the
25        interests of the partner, including rights and  interests
26        arising independently of the partnership relationship.
27        (c)  The  accrual of, and any time limitation on, a right
28    of action for a remedy under  this  Section  is  governed  by
29    other  law.  A  right to an accounting upon a dissolution and
30    winding up does not revive a claim barred by law.

31        Section 406. Continuation of partnership beyond  definite
32    term or particular undertaking.
 
                            -24-               LRB9216008DJgc
 1        (a)  If  a  partnership for a definite term or particular
 2    undertaking is continued, without an express agreement, after
 3    the expiration of the term or completion of the  undertaking,
 4    the rights and duties of the partners remain the same as they
 5    were at the expiration or completion, so far as is consistent
 6    with a partnership at will.
 7        (b)  If  the  partners,  or  those of them who habitually
 8    acted  in  the  business  during  the  term  or  undertaking,
 9    continue the business without any settlement  or  liquidation
10    of the partnership, they are presumed to have agreed that the
11    partnership will continue.

12                              ARTICLE 5
13                TRANSFEREES AND CREDITORS OF PARTNER

14        Section   501.   Partner   not  co-owner  of  partnership
15    property. A partner is not a co-owner of partnership property
16    and has no interest in  partnership  property  which  can  be
17    transferred, either voluntarily or involuntarily.

18        Section   502.   Partner's   transferable   interest   in
19    partnership.  The  only transferable interest of a partner in
20    the partnership is the partner's share  of  the  profits  and
21    losses  of the partnership and the partner's right to receive
22    distributions.  The interest is personal property.

23        Section 503. Transfer of partner's transferable interest.
24        (a)  A transfer, in whole or  in  part,  of  a  partner's
25    transferable interest in the partnership:
26             (1)  is permissible;
27             (2)  does   not   by   itself  cause  the  partner's
28        dissociation or a  dissolution  and  winding  up  of  the
29        partnership business; and
30             (3)  does  not, as against the other partners or the
 
                            -25-               LRB9216008DJgc
 1        partnership,   entitle   the   transferee,   during   the
 2        continuance of the partnership,  to  participate  in  the
 3        management  or  conduct  of  the partnership business, to
 4        require  access  to  information  concerning  partnership
 5        transactions, or to inspect or copy the partnership books
 6        or records.
 7        (b)  A transferee of a partner's transferable interest in
 8    the partnership has a right:
 9             (1)  to receive, in accordance  with  the  transfer,
10        distributions  to which the transferor would otherwise be
11        entitled;
12             (2)  to receive upon the dissolution and winding  up
13        of  the  partnership  business,  in  accordance  with the
14        transfer, the net amount otherwise distributable  to  the
15        transferor; and
16             (3)  to  seek under a judicial determination that it
17        is equitable to wind up the partnership business.
18        (c)  In a dissolution and winding  up,  a  transferee  is
19    entitled  to an account of partnership transactions only from
20    the date of the latest  account  agreed  to  by  all  of  the
21    partners.
22        (d)  Upon transfer, the transferor retains the rights and
23    duties  of a partner other than the interest in distributions
24    transferred.
25        (e)  A partnership need not give effect to a transferee's
26    rights  under  this  Section  until  it  has  notice  of  the
27    transfer.
28        (f)  A transfer of a partner's transferable  interest  in
29    the  partnership  in  violation  of a restriction on transfer
30    contained in the partnership agreement is ineffective as to a
31    person having notice  of  the  restriction  at  the  time  of
32    transfer.

33        Section  504.  Partner's transferable interest subject to
 
                            -26-               LRB9216008DJgc
 1    charging order.
 2        (a)  On application by a judgment creditor of  a  partner
 3    or of a partner's transferee, a court having jurisdiction may
 4    charge  the  transferable  interest of the judgment debtor to
 5    satisfy the judgment. The court may appoint a receiver of the
 6    share of the distributions  due  or  to  become  due  to  the
 7    judgment  debtor  in  respect of the partnership and make all
 8    other  orders,  directions,  accounts,  and   inquiries   the
 9    judgment debtor might have made or which the circumstances of
10    the case may require.
11        (b)  A  charging order constitutes a lien on the judgment
12    debtor's transferable interest in the partnership. The  court
13    may  order  a  foreclosure  of  the  interest  subject to the
14    charging order at any time. The purchaser at the  foreclosure
15    sale has the rights of a transferee.
16        (c)  At  any time before foreclosure, an interest charged
17    may be redeemed:
18             (1)  by the judgment debtor;
19             (2)  with property other than partnership  property,
20        by one or more of the other partners; or
21             (3)  with  partnership  property,  by one or more of
22        the other  partners  with  the  consent  of  all  of  the
23        partners whose interests are not so charged.
24        (d)  This Act does not deprive a partner of a right under
25    exemption  laws with respect to the partner's interest in the
26    partnership.
27        (e)  This Section provides the exclusive remedy by  which
28    a  judgment creditor of a partner or partner's transferee may
29    satisfy a judgment out of the judgment debtor's  transferable
30    interest in the partnership.

31                              ARTICLE 6
32                       PARTNER'S DISSOCIATION
 
                            -27-               LRB9216008DJgc
 1        Section  601.  Events  causing  partner's dissociation. A
 2    partner is dissociated from a partnership upon the occurrence
 3    of any of the following events:
 4             (1)  the  partnership's   having   notice   of   the
 5        partner's  express  will to withdraw as a partner or on a
 6        later date specified by the partner;
 7             (2)  an event agreed to in the partnership agreement
 8        as causing the partner's dissociation;
 9             (3)  the  partner's  expulsion   pursuant   to   the
10        partnership agreement;
11             (4)  the  partner's  expulsion by the unanimous vote
12        of the other partners if:
13                  (i)  it is unlawful to carry on the partnership
14             business with that partner;
15                  (ii)  there has  been  a  transfer  of  all  or
16             substantially  all  of  that  partner's transferable
17             interest in the partnership, other than  a  transfer
18             for security purposes, or a court order charging the
19             partner's interest, which has not been foreclosed;
20                  (iii)  within  90  days  after  the partnership
21             notifies  a  corporate  partner  that  it  will   be
22             expelled  because  it  has  filed  a  certificate of
23             dissolution or the equivalent, its charter has  been
24             revoked,  or  its right to conduct business has been
25             suspended by the jurisdiction of its  incorporation,
26             there   is  no  revocation  of  the  certificate  of
27             dissolution or no reinstatement of  its  charter  or
28             its right to conduct business; or
29                  (iv)  a  partnership that is a partner has been
30             dissolved and its business is being wound up;
31             (5)  on application by the  partnership  or  another
32        partner,    the    partner's    expulsion   by   judicial
33        determination because:
34                  (i)  the partner engaged  in  wrongful  conduct
 
                            -28-               LRB9216008DJgc
 1             that   adversely   and   materially   affected   the
 2             partnership business;
 3                  (ii)  the  partner  willfully  or  persistently
 4             committed  a  material  breach  of  the  partnership
 5             agreement  or  of  a duty owed to the partnership or
 6             the other partners under Section 404 of this Act; or
 7                  (iii)  the partner engaged in conduct  relating
 8             to  the  partnership  business  which  makes  it not
 9             reasonably practicable to carry on the  business  in
10             partnership with the partner;
11             (6)  the partner's:
12                  (i)  becoming a debtor in bankruptcy;
13                  (ii)  executing  an  assignment for the benefit
14             of creditors;
15                  (iii)  seeking, consenting to,  or  acquiescing
16             in  the  appointment  of  a  trustee,  receiver,  or
17             liquidator   of   that   partner   or   of   all  or
18             substantially all of that partner's property; or
19                  (iv)  failing,  within  90   days   after   the
20             appointment,   to   have   vacated   or  stayed  the
21             appointment of a trustee, receiver, or liquidator of
22             the partner or of all or substantially all   of  the
23             partner's  property  obtained  without the partner's
24             consent or acquiescence, or failing within  90  days
25             after   the   expiration  of  a  stay  to  have  the
26             appointment vacated;
27             (7)  in the case of a partner who is an individual:
28                  (i)  the partner's death;
29                  (ii)  the appointment of a guardian or  general
30             conservator for the partner; or
31                  (iii)  a   judicial   determination   that  the
32             partner has otherwise become incapable of performing
33             the   partner's   duties   under   the   partnership
34             agreement;
 
                            -29-               LRB9216008DJgc
 1             (8)  in the case of a partner that is a trust or  is
 2        acting  as  a  partner  by virtue of being a trustee of a
 3        trust, distribution of the  trust's  entire  transferable
 4        interest  in the partnership, but not merely by reason of
 5        the substitution of a successor trustee;
 6             (9)  in the case of a partner that is an  estate  or
 7        is  acting  as  a  partner  by virtue of being a personal
 8        representative of an estate, distribution of the estate's
 9        entire transferable interest in the partnership, but  not
10        merely  by  reason  of  the  substitution  of a successor
11        personal representative; or
12             (10)  termination  of  a  partner  who  is  not   an
13        individual, partnership, corporation, trust, or estate.

14        Section  602.  Partner's  power  to  dissociate; wrongful
15    dissociation.
16        (a)  A partner has the power to dissociate at  any  time,
17    rightfully or wrongfully, by express will pursuant to Section
18    601(1) of this Act.
19        (b)  A partner's dissociation is wrongful only if:
20             (1)  it  is in breach of an express provision of the
21        partnership agreement; or
22             (2)  in the case of a  partnership  for  a  definite
23        term  or particular undertaking, before the expiration of
24        the term or the completion of the undertaking:
25                  (i)  the partner  withdraws  by  express  will,
26             unless  the  withdrawal follows within 90 days after
27             another partner's dissociation by death or otherwise
28             under  Section  601(6)  through  (10)  or   wrongful
29             dissociation under this subsection;
30                  (ii)  the   partner  is  expelled  by  judicial
31             determination under Section 601(5);
32                  (iii)  the partner is dissociated by becoming a
33             debtor in bankruptcy; or
 
                            -30-               LRB9216008DJgc
 1                  (iv)  in the case of a partner who  is  not  an
 2             individual,  trust  other  than a business trust, or
 3             estate,  the  partner  is  expelled   or   otherwise
 4             dissociated   because   it  willfully  dissolved  or
 5             terminated.
 6        (c)  A partner who wrongfully dissociates  is  liable  to
 7    the  partnership and to the other partners for damages caused
 8    by the dissociation. The liability  is  in  addition  to  any
 9    other  obligation of the partner to the partnership or to the
10    other partners.

11        Section 603. Effect of partner's dissociation.
12        (a)  If a partner's dissociation results in a dissolution
13    and winding up of the partnership business, Article 8 of this
14    Act applies; otherwise, Article 7 applies.
15        (b)  Upon a partner's dissociation:
16             (1)  the  partner's  right  to  participate  in  the
17        management  and  conduct  of  the  partnership   business
18        terminates, except as otherwise provided in Section 803;
19             (2)  except  as  provided  in  clause  (3)  of  this
20        subsection, a partner's duties terminate; and
21             (3)  the  partner's  duty  of  loyalty under Section
22        404(b)(1) and (2) and duty of care under  Section  404(c)
23        continue  only  with regard to matters arising and events
24        occurring before the partner's dissociation,  unless  the
25        partner  participates  in  winding  up  the partnership's
26        business pursuant to Section 803.

27                              ARTICLE 7
28          PARTNER'S DISSOCIATION WHEN BUSINESS NOT WOUND UP

29        Section 701. Purchase of dissociated partner's interest.
30        (a)  If a  partner  is  dissociated  from  a  partnership
31    without  resulting  in  a  dissolution  and winding up of the
 
                            -31-               LRB9216008DJgc
 1    partnership business under  Section  801  of  this  Act,  the
 2    partnership shall cause the dissociated partner's interest in
 3    the partnership to be purchased for a buyout price determined
 4    pursuant to subsection (b) of this Section.
 5        (b)  The buyout price of a dissociated partner's interest
 6    is  the  amount  that  would  have  been distributable to the
 7    dissociating partner under Section 807(b) if, on the date  of
 8    dissociation,  the  assets  of the partnership were sold at a
 9    price equal to the greater of the liquidation  value  or  the
10    value  based  on  a  sale  of  the entire business as a going
11    concern without the dissociated partner and  the  partnership
12    were wound up as of that date. Interest must be paid from the
13    date of dissociation to the date of payment.
14        (c)  Damages  for  wrongful  dissociation  under  Section
15    602(b), and all other amounts owing, whether or not presently
16    due, from the dissociated partner to the partnership, must be
17    offset  against  the buyout price. Interest must be paid from
18    the date the amount owed becomes due to the date of payment.
19        (d)  A partnership shall indemnify a dissociated  partner
20    whose  interest  is  being  purchased against all partnership
21    liabilities,   whether   incurred   before   or   after   the
22    dissociation, except liabilities incurred by an  act  of  the
23    dissociated partner under Section 702.
24        (e)  If  no  agreement  for the purchase of a dissociated
25    partner's interest is reached within 120 days after a written
26    demand for payment, the partnership shall pay, or cause to be
27    paid, in cash to  the  dissociated  partner  the  amount  the
28    partnership  estimates  to  be  the  buyout price and accrued
29    interest, reduced by any offsets and accrued  interest  under
30    subsection (c).
31        (f)  If a deferred payment is authorized under subsection
32    (h),  the  partnership  may tender a written offer to pay the
33    amount it estimates  to  be  the  buyout  price  and  accrued
34    interest,  reduced  by  any  offsets  under  subsection  (c),
 
                            -32-               LRB9216008DJgc
 1    stating  the time of payment, the amount and type of security
 2    for payment, and  the  other  terms  and  conditions  of  the
 3    obligation.
 4        (g)  The  payment or tender required by subsection (e) or
 5    (f) must be accompanied by the following:
 6             (1)  a   statement   of   partnership   assets   and
 7        liabilities as of the date of dissociation;
 8             (2)  the latest available partnership balance  sheet
 9        and income statement, if any;
10             (3)  an  explanation  of how the estimated amount of
11        the payment was calculated; and
12             (4)  written notice that  the  payment  is  in  full
13        satisfaction of the obligation to purchase unless, within
14        120  days  after  the  written  notice,  the  dissociated
15        partner  commences  an  action  to  determine  the buyout
16        price, any offsets under subsection (c), or  other  terms
17        of the obligation to purchase.
18        (h)  A  partner  who  wrongfully  dissociates  before the
19    expiration  of  a  definite  term  or  the  completion  of  a
20    particular undertaking is not  entitled  to  payment  of  any
21    portion  of the buyout price until the expiration of the term
22    or  completion  of  the  undertaking,  unless   the   partner
23    establishes  to  the  satisfaction  of the court that earlier
24    payment will not cause undue hardship to the business of  the
25    partnership.  A  deferred  payment must be adequately secured
26    and bear interest.
27        (i)  A dissociated partner may maintain an action against
28    the  partnership,  pursuant  to  Section  405(b)(2)(ii),   to
29    determine  the  buyout  price of that partner's interest, any
30    offsets  under  subsection  (c),  or  other  terms   of   the
31    obligation  to  purchase. The action must be commenced within
32    120 days after the partnership has  tendered  payment  or  an
33    offer  to  pay  or  within  one year after written demand for
34    payment if no payment or offer to pay is tendered. The  court
 
                            -33-               LRB9216008DJgc
 1    shall determine the buyout price of the dissociated partner's
 2    interest,  any  offset  due  under  subsection  (c)  of  this
 3    Section,  and  accrued  interest,  and enter judgment for any
 4    additional  payment  or  refund.  If  deferred   payment   is
 5    authorized   under  subsection  (h),  the  court  shall  also
 6    determine the security for payment and  other  terms  of  the
 7    obligation  to  purchase.  The  court  may  assess reasonable
 8    attorney's fees and the fees and expenses  of  appraisers  or
 9    other experts for a party to the action, in amounts the court
10    finds  equitable,  against a party that the court finds acted
11    arbitrarily, vexatiously, or not in good faith.  The  finding
12    may  be  based on the partnership's failure to tender payment
13    or an offer to pay or to comply with subsection (g).

14        Section 702. Dissociated  partner's  power  to  bind  and
15    liability to partnership.
16        (a)  For  2  years  after  a  partner dissociates without
17    resulting in a dissolution and winding up of the  partnership
18    business,  the partnership, including a surviving partnership
19    under Article 9 of this Act,  is  bound  by  an  act  of  the
20    dissociated  partner  which  would have bound the partnership
21    under Section 301 before dissociation only if at the time  of
22    entering into the transaction the other party:
23             (1)  reasonably   believed   that   the  dissociated
24        partner was then a partner;
25             (2)  did  not   have   notice   of   the   partner's
26        dissociation; and
27             (3)  is  not  deemed  to  have  had  knowledge under
28        Section 303(e) or notice under Section 704(c).
29        (b)  A dissociated partner is liable to  the  partnership
30    for  any  damage  caused  to  the partnership arising from an
31    obligation  incurred  by  the   dissociated   partner   after
32    dissociation  for  which  the  partnership  is  liable  under
33    subsection (a) of this Section.
 
                            -34-               LRB9216008DJgc
 1        Section  703.  Dissociated  partner's  liability to other
 2    persons.
 3        (a)  A  partner's  dissociation  does   not   of   itself
 4    discharge   the   partner's   liability   for  a  partnership
 5    obligation  incurred  before  dissociation.   A   dissociated
 6    partner  is  not liable for a partnership obligation incurred
 7    after  dissociation,  except   as   otherwise   provided   in
 8    subsection (b) of this Section.
 9        (b)  A  partner  who  dissociates  without resulting in a
10    dissolution and winding up of  the  partnership  business  is
11    liable  as  a  partner  to  the  other party in a transaction
12    entered into by the partnership, or a  surviving  partnership
13    under  Article  9  of  this  Act,  within  2  years after the
14    partner's dissociation, only if the partner is liable for the
15    obligation under Section 306 and at the time of entering into
16    the transaction the other party:
17             (1)  reasonably  believed   that   the   dissociated
18        partner was then a partner;
19             (2)  did   not   have   notice   of   the  partner's
20        dissociation; and
21             (3)  is not  deemed  to  have  had  knowledge  under
22        Section 303(e) or notice under Section 704(c).
23        (c)  By  agreement  with the partnership creditor and the
24    partners continuing the business, a dissociated  partner  may
25    be released from liability for a partnership obligation.
26        (d)  A dissociated partner is released from liability for
27    a  partnership  obligation  if  a  partnership creditor, with
28    notice  of  the  partner's  dissociation  but   without   the
29    partner's  consent,  agrees  to  a material alteration in the
30    nature or time of payment of a partnership obligation.

31        Section 704. Statement of dissociation.
32        (a)  A dissociated partner or the partnership may file  a
33    statement of dissociation stating the name of the partnership
 
                            -35-               LRB9216008DJgc
 1    and that the partner is dissociated from the partnership.
 2        (b)  A  statement  of dissociation is a limitation on the
 3    authority of  a  dissociated  partner  for  the  purposes  of
 4    Section 303(d) and (e).
 5        (c)  For the purposes of Sections 702(a)(3) and 703(b)(3)
 6    of  this Act, a person not a partner is deemed to have notice
 7    of  the  dissociation  90  days  after   the   statement   of
 8    dissociation is filed.

 9        Section 705. Continued use of partnership name. Continued
10    use of a partnership name, or a dissociated partner's name as
11    part thereof, by partners continuing the business does not of
12    itself  make the dissociated partner liable for an obligation
13    of the partners or the partnership continuing the business.

14                              ARTICLE 8
15                   WINDING UP PARTNERSHIP BUSINESS

16        Section 801. Events causing dissolution and winding up of
17    partnership business. A partnership  is  dissolved,  and  its
18    business must be wound up, only upon the occurrence of any of
19    the following events:
20             (1)  in  a  partnership  at  will, the partnership's
21        having notice from a partner, other than a partner who is
22        dissociated under Section 601(2) through  (10),  of  that
23        partner's  express will to withdraw as a partner, or on a
24        later date specified by the partner;
25             (2)  in  a  partnership  for  a  definite  term   or
26        particular undertaking:
27                  (i)  within   90   days   after   a   partner's
28             dissociation  by  death  or  otherwise under Section
29             601(6) through (10) or wrongful  dissociation  under
30             Section 602(b), the express will of at least half of
31             the  remaining  partners  to wind up the partnership
 
                            -36-               LRB9216008DJgc
 1             business, for which  purpose  a  partner's  rightful
 2             dissociation   pursuant   to   Section  602(b)(2)(i)
 3             constitutes the expression of that partner's will to
 4             wind up the partnership business;
 5                  (ii)  the express will of all of  the  partners
 6             to wind up the partnership business; or
 7                  (iii)  the   expiration  of  the  term  or  the
 8             completion of the undertaking;
 9             (3)  an event agreed to in the partnership agreement
10        resulting in the winding up of the partnership business;
11             (4)  an event that makes  it  unlawful  for  all  or
12        substantially  all  of the business of the partnership to
13        be continued, but a cure of  illegality  within  90  days
14        after notice to the partnership of the event is effective
15        retroactively  to  the  date of the event for purposes of
16        this Section;
17             (5)  on  application  by  a  partner,   a   judicial
18        determination that:
19                  (i)  the economic purpose of the partnership is
20             likely to be unreasonably frustrated;
21                  (ii)  another  partner  has  engaged in conduct
22             relating to the partnership business which makes  it
23             not  reasonably practicable to carry on the business
24             in partnership with that partner; or
25                  (iii)  it   is   not    otherwise    reasonably
26             practicable  to carry on the partnership business in
27             conformity with the partnership agreement; or
28             (6)  on application by a transferee of  a  partner's
29        transferable  interest,  a judicial determination that it
30        is equitable to wind up the partnership business:
31                  (i)  after  the  expiration  of  the  term   or
32             completion  of  the  undertaking, if the partnership
33             was for a definite term or particular undertaking at
34             the time of the transfer or entry  of  the  charging
 
                            -37-               LRB9216008DJgc
 1             order that gave rise to the transfer; or
 2                  (ii)  at  any  time,  if  the partnership was a
 3             partnership at will at the time of the  transfer  or
 4             entry  of  the  charging order that gave rise to the
 5             transfer.

 6        Section 802. Partnership continues after dissolution.
 7        (a)  Subject  to  subsection  (b)  of  this  Section,   a
 8    partnership  continues after dissolution only for the purpose
 9    of winding up its business.  The  partnership  is  terminated
10    when the winding up of its business is completed.
11        (b)  At  any  time after the dissolution of a partnership
12    and before the winding up of its business is  completed,  all
13    of  the  partners,  including  any dissociating partner other
14    than a wrongfully dissociating partner, may waive  the  right
15    to   have   the  partnership's  business  wound  up  and  the
16    partnership terminated. In that event:
17             (1)  the  partnership  resumes   carrying   on   its
18        business  as  if  dissolution had never occurred, and any
19        liability incurred by the partnership or a partner  after
20        the dissolution and before the waiver is determined as if
21        dissolution had never occurred; and
22             (2)  the  rights  of  a  third  party accruing under
23        Section 804(1) of this Act or arising out of  conduct  in
24        reliance  on  the dissolution before the third party knew
25        or received a notification  of  the  waiver  may  not  be
26        adversely affected.

27        Section 803. Right to wind up partnership business.
28        (a)  After  dissolution, a partner who has not wrongfully
29    dissociated may participate in winding up  the  partnership's
30    business,  but on application of any partner, partner's legal
31    representative, or transferee,  the  appropriate  court,  for
32    good  cause  shown,  may  order  judicial  supervision of the
 
                            -38-               LRB9216008DJgc
 1    winding up.
 2        (b)  The  legal  representative  of  the  last  surviving
 3    partner may wind up a partnership's business.
 4        (c)  A person winding up  a  partnership's  business  may
 5    preserve  the  partnership  business  or  property as a going
 6    concern for a reasonable time, prosecute and  defend  actions
 7    and  proceedings, whether civil, criminal, or administrative,
 8    settle and close the partnership's business, dispose  of  and
 9    transfer    the   partnership's   property,   discharge   the
10    partnership's  liabilities,  distribute  the  assets  of  the
11    partnership pursuant  to  Section  807,  settle  disputes  by
12    mediation or arbitration, and perform other necessary acts.

13        Section  804.  Partner's  power to bind partnership after
14    dissolution.  Subject  to  Section  805  of   this   Act,   a
15    partnership  is  bound  by  a partner's act after dissolution
16    that:
17             (1)  is appropriate for winding up  the  partnership
18        business; or
19             (2)  would  have bound the partnership under Section
20        301  before  dissolution,  if  the  other  party  to  the
21        transaction did not have notice of the dissolution.

22        Section 805. Statement of dissolution.
23        (a)  After dissolution, a partner who has not  wrongfully
24    dissociated  may  file a statement of dissolution stating the
25    name  of  the  partnership  and  that  the  partnership   has
26    dissolved and is winding up its business.
27        (b)  A statement of dissolution cancels a filed statement
28    of  partnership  authority for the purposes of Section 303(d)
29    and is a limitation on authority for the purposes of  Section
30    303(e).
31        (c)  For  the  purposes of Sections 301 and 804, a person
32    not a partner is deemed to have notice of the dissolution and
 
                            -39-               LRB9216008DJgc
 1    the limitation on the partners' authority as a result of  the
 2    statement of dissolution 90 days after it is filed.
 3        (d)  After   filing  and,  if  appropriate,  recording  a
 4    statement of dissolution, a dissolved  partnership  may  file
 5    and,  if  appropriate,  record  a  statement  of  partnership
 6    authority  which  will operate with respect to a person not a
 7    partner  as  provided  in  Section  303(d)  and  (e)  in  any
 8    transaction, whether or not the  transaction  is  appropriate
 9    for winding up the partnership business.

10        Section  806. Partner's liability to other partners after
11    dissolution.
12        (a)  Except as otherwise provided in  subsection  (b)  of
13    this Section and Section 306 of this Act, after dissolution a
14    partner  is  liable  to  the other partners for the partner's
15    share of any partnership  liability  incurred  under  Section
16    804.
17        (b)  A  partner  who,  with knowledge of the dissolution,
18    incurs a partnership liability under Section 804(2) by an act
19    that is  not  appropriate  for  winding  up  the  partnership
20    business  is  liable to the partnership for any damage caused
21    to the partnership arising from the liability.

22        Section 807. Settlement  of  accounts  and  contributions
23    among partners.
24        (a)  In  winding  up a partnership's business, the assets
25    of  the  partnership,  including  the  contributions  of  the
26    partners  required  by  this  Section,  must  be  applied  to
27    discharge its obligations to  creditors,  including,  to  the
28    extent  permitted  by  law,  partners  who are creditors. Any
29    surplus must be  applied  to  pay  in  cash  the  net  amount
30    distributable  to  partners in accordance with their right to
31    distributions under subsection (b) of this Section.
32        (b)  Each partner is entitled  to  a  settlement  of  all
 
                            -40-               LRB9216008DJgc
 1    partnership   accounts   upon   winding  up  the  partnership
 2    business. In settling accounts among  the  partners,  profits
 3    and   losses   that   result  from  the  liquidation  of  the
 4    partnership assets  must  be  credited  and  charged  to  the
 5    partners' accounts. The partnership shall make a distribution
 6    to  a partner in an amount equal to any excess of the credits
 7    over the charges in the partner's account.  A  partner  shall
 8    contribute  to  the partnership an amount equal to any excess
 9    of the charges over the credits in the partner's account  but
10    excluding  from  the  calculation  charges attributable to an
11    obligation for which the partner  is  not  personally  liable
12    under Section 306 of this Act.
13        (c)  If  a  partner  fails  to contribute the full amount
14    required under subsection (b) of this  Section,  all  of  the
15    other  partners shall contribute, in the proportions in which
16    those  partners  share  partnership  losses,  the  additional
17    amount necessary to satisfy the partnership  obligations  for
18    which they are personally liable under Section 306. A partner
19    or  partner's legal representative may recover from the other
20    partners any contributions the partner makes  to  the  extent
21    the  amount  contributed  exceeds that partner's share of the
22    partnership obligations for which the partner  is  personally
23    liable under Section 306.
24        (d)  After the settlement of accounts, each partner shall
25    contribute,  in  the  proportion  in which the partner shares
26    partnership  losses,  the   amount   necessary   to   satisfy
27    partnership  obligations  that  were not known at the time of
28    the settlement and for which the partner is personally liable
29    under Section 306.
30        (e)  The estate of a deceased partner is liable  for  the
31    partner's obligation to contribute to the partnership.
32        (f)  An  assignee  for  the  benefit  of  creditors  of a
33    partnership or a partner, or a person appointed by a court to
34    represent creditors  of  a  partnership  or  a  partner,  may
 
                            -41-               LRB9216008DJgc
 1    enforce   a   partner's   obligation  to  contribute  to  the
 2    partnership.

 3                              ARTICLE 9
 4                       CONVERSIONS AND MERGERS

 5        Section 901. Definitions. In this article:
 6             (1)  "General  partner"  means  a   partner   in   a
 7        partnership   and   a   general   partner  in  a  limited
 8        partnership.
 9             (2)  "Limited partner" means a limited partner in  a
10        limited partnership.
11             (3)  "Limited    partnership"    means   a   limited
12        partnership created under  the  Revised  Uniform  Limited
13        Partnership  Act,  predecessor  law, or comparable law of
14        another jurisdiction.
15             (4)  "Partner" includes both a general partner and a
16        limited partner.

17        Section  902.  Conversion  of  partnership   to   limited
18    partnership.
19        (a)  A   partnership   may  be  converted  to  a  limited
20    partnership pursuant to this Section.
21        (b)  The terms  and  conditions  of  a  conversion  of  a
22    partnership  to a limited partnership must be approved by all
23    of the partners or by a number or  percentage  specified  for
24    conversion in the partnership agreement.
25        (c)  After  the  conversion  is approved by the partners,
26    the  partnership  shall  file  a   certificate   of   limited
27    partnership   in   the  jurisdiction  in  which  the  limited
28    partnership is to be formed. The certificate must include:
29             (1)  a statement that the partnership was  converted
30        to a limited partnership from a partnership;
31             (2)  its former name; and
 
                            -42-               LRB9216008DJgc
 1             (3)  a  statement of the number of votes cast by the
 2        partners for and against the conversion and, if the  vote
 3        is less than unanimous, the number or percentage required
 4        to   approve   the   conversion   under  the  partnership
 5        agreement.
 6        (d)  The conversion takes effect when the certificate  of
 7    limited  partnership  is filed or at any later date specified
 8    in the certificate.
 9        (e)  A general partner who becomes a limited partner as a
10    result of the conversion remains liable as a general  partner
11    for  an  obligation  incurred  by  the partnership before the
12    conversion takes effect. If the other party to a  transaction
13    with   the   limited  partnership  reasonably  believes  when
14    entering the  transaction  that  the  limited  partner  is  a
15    general  partner,  the  limited  partner  is  liable  for  an
16    obligation incurred by the limited partnership within 90 days
17    after  the  conversion  takes  effect.  The limited partner's
18    liability  for  all  other   obligations   of   the   limited
19    partnership  incurred  after  the  conversion takes effect is
20    that of a limited partner as provided in the Revised  Uniform
21    Limited Partnership Act.

22        Section   903.   Conversion  of  limited  partnership  to
23    partnership.
24        (a)  A  limited  partnership  may  be  converted   to   a
25    partnership pursuant to this Section.
26        (b)  Notwithstanding  a  provision  to  the contrary in a
27    limited partnership agreement, the terms and conditions of  a
28    conversion  of a limited partnership to a partnership must be
29    approved by all of the partners.
30        (c)  After the conversion is approved  by  the  partners,
31    the  limited  partnership  shall  cancel  its  certificate of
32    limited partnership.
33        (d)  The conversion takes effect when the certificate  of
 
                            -43-               LRB9216008DJgc
 1    limited partnership is canceled.
 2        (e)  A limited partner who becomes a general partner as a
 3    result  of  the  conversion  remains liable only as a limited
 4    partner for an obligation incurred by the limited partnership
 5    before the  conversion  takes  effect.  Except  as  otherwise
 6    provided  in  Section 306, the partner is liable as a general
 7    partner for an obligation of the partnership  incurred  after
 8    the conversion takes effect.

 9        Section 904. Effect of conversion; entity unchanged.
10        (a)  A  partnership  or limited partnership that has been
11    converted pursuant to this article is for  all  purposes  the
12    same entity that existed before the conversion.
13        (b)  When a conversion takes effect:
14             (1)  all    property   owned   by   the   converting
15        partnership or limited partnership remains vested in  the
16        converted entity;
17             (2)  all  obligations  of the converting partnership
18        or limited partnership continue  as  obligations  of  the
19        converted entity; and
20             (3)  an  action  or  proceeding  pending against the
21        converting partnership  or  limited  partnership  may  be
22        continued as if the conversion had not occurred.

23        Section 905. Merger of partnerships.
24        (a)  Pursuant to a plan of merger approved as provided in
25    subsection  (c)  of this Section, a partnership may be merged
26    with one or more partnerships or limited partnerships.
27        (b)  The plan of merger must set forth:
28             (1)  the  name  of  each  partnership   or   limited
29        partnership that is a party to the merger;
30             (2)  the name of the surviving entity into which the
31        other partnerships or limited partnerships will merge;
32             (3)  whether  the  surviving entity is a partnership
 
                            -44-               LRB9216008DJgc
 1        or a limited partnership and the status of each partner;
 2             (4)  the terms and conditions of the merger;
 3             (5)  the  manner  and  basis   of   converting   the
 4        interests  of  each party to the merger into interests or
 5        obligations of the surviving entity,  or  into  money  or
 6        other property in whole or part; and
 7             (6)  the  street  address  of the surviving entity's
 8        chief executive office.
 9        (c)  The plan of merger must be approved:
10             (1)  in the case of a partnership that is a party to
11        the merger, by all  of  the  partners,  or  a  number  or
12        percentage   specified  for  merger  in  the  partnership
13        agreement; and
14             (2)  in the case of a limited partnership that is  a
15        party to the merger, by the vote required for approval of
16        a  merger by the law of the State or foreign jurisdiction
17        in which the limited partnership is organized and, in the
18        absence of such a specifically applicable law, by all  of
19        the partners, notwithstanding a provision to the contrary
20        in the partnership agreement.
21        (d)  After  a  plan  of merger is approved and before the
22    merger takes effect, the plan may be amended or abandoned  as
23    provided in the plan.
24        (e)  The merger takes effect on the later of:
25             (1)  the  approval  of  the  plan  of  merger by all
26        parties to the merger, as provided in subsection (c);
27             (2)  the filing of all documents required by law  to
28        be  filed  as  a  condition  to  the effectiveness of the
29        merger; or
30             (3)  any effective date specified  in  the  plan  of
31        merger.

32        Section 906. Effect of merger.
33        (a)  When a merger takes effect:
 
                            -45-               LRB9216008DJgc
 1             (1)  the  separate existence of every partnership or
 2        limited partnership that is a party to the merger,  other
 3        than the surviving entity, ceases;
 4             (2)  all  property  owned  by  each  of  the  merged
 5        partnerships   or   limited  partnerships  vests  in  the
 6        surviving entity;
 7             (3)  all obligations of every partnership or limited
 8        partnership that is a party  to  the  merger  become  the
 9        obligations of the surviving entity; and
10             (4)  an  action  or  proceeding  pending  against  a
11        partnership or limited partnership that is a party to the
12        merger  may  be  continued  as  if  the  merger  had  not
13        occurred, or the surviving entity may be substituted as a
14        party to the action or proceeding.
15        (b)  The  Secretary  of  State of this State is the agent
16    for service of process in an action or proceeding  against  a
17    surviving  foreign  partnership  or  limited  partnership  to
18    enforce  an  obligation  of a domestic partnership or limited
19    partnership that is a party to a merger. The surviving entity
20    shall promptly notify the Secretary of State of  the  mailing
21    address  of  its  chief executive office and of any change of
22    address. Upon receipt of  process,  the  Secretary  of  State
23    shall  mail  a  copy  of the process to the surviving foreign
24    partnership or limited partnership.
25        (c)  A partner of the surviving  partnership  or  limited
26    partnership is liable for:
27             (1)  all  obligations  of  a party to the merger for
28        which  the  partner  was  personally  liable  before  the
29        merger;
30             (2)  all other obligations of the  surviving  entity
31        incurred  before the merger by a party to the merger, but
32        those obligations may be satisfied only out  of  property
33        of the entity; and
34             (3)  except  as otherwise provided in Section 306 of
 
                            -46-               LRB9216008DJgc
 1        this  Act,  all  obligations  of  the  surviving   entity
 2        incurred   after  the  merger  takes  effect,  but  those
 3        obligations may be satisfied only out of property of  the
 4        entity if the partner is a limited partner.
 5        (d)  If  the  obligations incurred before the merger by a
 6    party to the merger are not satisfied out of the property  of
 7    the surviving partnership or limited partnership, the general
 8    partners  of that party immediately before the effective date
 9    of the  merger  shall  contribute  the  amount  necessary  to
10    satisfy  that party's obligations to the surviving entity, in
11    the  manner  provided  in  Section  807  or  in  the  Limited
12    Partnership Act of the jurisdiction in which  the  party  was
13    formed,  as  the  case  may  be,  as if the merged party were
14    dissolved.
15        (e)  A partner of a party to a merger who does not become
16    a partner of the surviving partnership or limited partnership
17    is dissociated from the entity, of which that partner  was  a
18    partner,  as  of  the  date  the  merger  takes  effect.  The
19    surviving  entity  shall  cause the partner's interest in the
20    entity to be purchased under  Section  701  of  this  Act  or
21    another  statute  specifically  applicable  to that partner's
22    interest with respect to a merger. The  surviving  entity  is
23    bound  under  Section  702  by  an  act  of a general partner
24    dissociated under this subsection, and the partner is  liable
25    under  Section  703  for  transactions  entered  into  by the
26    surviving entity after the merger takes effect.

27        Section 907. Statement of merger.
28        (a)  After a merger, the surviving partnership or limited
29    partnership  may  file  a  statement   that   one   or   more
30    partnerships  or  limited  partnerships  have merged into the
31    surviving entity.
32        (b)  A statement of merger must contain:
33             (1)  the  name  of  each  partnership   or   limited
 
                            -47-               LRB9216008DJgc
 1        partnership that is a party to the merger;
 2             (2)  the name of the surviving entity into which the
 3        other partnerships or limited partnership were merged;
 4             (3)  the  street  address  of the surviving entity's
 5        chief executive office and of an office in this State, if
 6        any; and
 7             (4)  whether the surviving entity is  a  partnership
 8        or a limited partnership.
 9        (c)  Except  as  otherwise  provided in subsection (d) of
10    this Section, for the purposes of Section  302,  property  of
11    the surviving partnership or limited partnership which before
12    the  merger  was  held  in  the  name of another party to the
13    merger is property held in the name of the  surviving  entity
14    upon filing a statement of merger.
15        (d)  For  the  purposes  of Section 302, real property of
16    the surviving partnership or limited partnership which before
17    the merger was held in the  name  of  another  party  to  the
18    merger  is  property held in the name of the surviving entity
19    upon recording a certified copy of the statement of merger in
20    the office for recording transfers of that real property.
21        (e)  A filed and, if appropriate, recorded  statement  of
22    merger,  executed  and  declared  to  be accurate pursuant to
23    Section 105(c), stating the name of a partnership or  limited
24    partnership  that  is  a  party  to  the merger in whose name
25    property was held before the  merger  and  the  name  of  the
26    surviving  entity,  but  not  containing  all  of  the  other
27    information  required  by  subsection  (b)  of  this Section,
28    operates  with  respect  to  the  partnerships   or   limited
29    partnerships  named to the extent provided in subsections (c)
30    and (d).

31        Section 908. Merger of partnership and limited  liability
32    company.
33        (a)  Under a plan of merger approved under subsection (c)
 
                            -48-               LRB9216008DJgc
 1    of  this  Section, any one or more partnerships of this State
 2    may  merge  with  or  into  one  or  more  limited  liability
 3    companies of this  State, any other state or  states  of  the
 4    United  States,  or  the District of Columbia, if the laws of
 5    the other state or states or the District of Columbia  permit
 6    the  merger.  The partnership or partnerships and the limited
 7    liability company or companies  may  merge  with  or  into  a
 8    partnership,  which  may be any one of these partnerships, or
 9    they may merge with or  into  a  limited  liability  company,
10    which  may  be  any one of these limited liability companies,
11    which shall be a partnership or limited liability company  of
12    this  State,  any  other  state  of the United States, or the
13    District of Columbia, which permits the merger.
14        (b)  A  plan  of  merger  must  set  forth  all  of   the
15    following:
16             (1)  The  name of each entity that is a party to the
17        merger.
18             (2)  The name of the surviving entity into which the
19        other entities will merge.
20             (3)  The  type  of  organization  of  the  surviving
21        entity.
22             (4)  The terms and conditions of the merger.
23             (5)  The  manner  and  basis  for   converting   the
24        interests  of  each  party  to the merger into interests,
25        obligations, or other securities of the surviving entity,
26        or into money or other property in whole or in part.
27             (6)  The street address of  the  surviving  entity's
28        principal place of business.
29        (c)  The  plan  of  merger  required by subsection (b) of
30    this Section must be approved by each party to the merger  in
31    accordance with all of the following:
32             (1)  In  the  case  of  a partnership, by all of the
33        partners or by the number or percentage of  the  partners
34        required to approve a merger specified in the partnership
 
                            -49-               LRB9216008DJgc
 1        agreement.
 2             (2)  In  the case of a limited liability company, by
 3        all members or by the number  or  percentage  of  members
 4        required  to  approve a merger specified in the operating
 5        agreement.
 6        (d)  After a plan of merger is approved  and  before  the
 7    merger  takes effect, the plan may be amended or abandoned as
 8    provided in the plan of merger.
 9        (e)  After approval of the  plan  of  merger  under  this
10    Section,  unless the merger is abandoned under subsection (d)
11    of this Section, a statement of  merger  must  be  signed  on
12    behalf  of  each  party  to  the  merger and delivered to the
13    Secretary of State of this State for filing. The statement of
14    merger must set forth all of the following:
15             (1)  The  name  and,  in  the  case  of  a   limited
16        liability  partnership,  jurisdiction of each partnership
17        and the name and jurisdiction  of  organization  of  each
18        limited liability company that is a party to the merger.
19             (2)  That  a  plan  of  merger has been approved and
20        signed by each partnership  and  each  limited  liability
21        company that is a party to the merger.
22             (3)  The   name   and   address   of  the  surviving
23        partnership or surviving limited liability company.
24             (4)  The effective date of the merger.
25             (5)  If a party to the merger is a  foreign  limited
26        liability   company   or   a  foreign  limited  liability
27        partnership, the jurisdiction and date of the  filing  of
28        its    articles   of   organization   or   statement   of
29        qualification, as the case may be, and the date when  its
30        application for authority was filed with the Secretary of
31        State  of  this  State or, if an application has not been
32        filed, a statement to that effect.
33             (6)  If the surviving entity is not a partnership or
34        limited liability company organized  under  the  laws  of
 
                            -50-               LRB9216008DJgc
 1        this State, an agreement that the surviving entity may be
 2        served  with  process  in  this  State  and is subject to
 3        liability in any action or proceeding for the enforcement
 4        of any liability or  obligation  of  any  partnership  or
 5        limited  liability company which is a party to the merger
 6        or which was previously subject to suit  in  this  State,
 7        and  for the enforcement, as provided in this Act, of the
 8        right of partners of any partnership or  members  of  any
 9        limited  liability  company  to receive payment for their
10        interests  in  the  partnership  or   limited   liability
11        company,  as  the  case  may  be,  against  the surviving
12        entity.
13        (f)  If a foreign limited liability company or a  foreign
14    limited  liability  partnership  is the surviving entity of a
15    merger, it may  not  do  business  in  this  State  until  an
16    application for that authority is filed with the Secretary of
17    State.
18        (g)  The  surviving  partnership  or  other  entity shall
19    furnish a copy of the plan of merger, on request, and without
20    cost, to any person holding an interest in an entity that  is
21    to merge.
22        (h)  To  the  extent  that  the  statement  of  merger is
23    inconsistent with the articles of organization of  a  limited
24    liability  company  or  the  statement  of qualification of a
25    limited liability partnership, the statement of merger  shall
26    operate  as  an  amendment to the articles of organization or
27    statement of qualification, as the case may be.
28        (i)  The merger is  effective  upon  the  filing  of  the
29    statement  of  merger  with  the  Secretary  of State of this
30    State, or on a later date as specified in  the  statement  of
31    merger not later than 30 days subsequent to the filing of the
32    statement of merger under subsection (e) of this Section.
33        (j)  When   any   merger  becomes  effective  under  this
34    Section:
 
                            -51-               LRB9216008DJgc
 1             (1)  the separate existence of each partnership  and
 2        each  limited  liability  company  that is a party to the
 3        merger, other than the surviving entity, terminates;
 4             (2)  all property owned by each partnership and each
 5        limited liability company that is a party to  the  merger
 6        vests in the surviving entity;
 7             (3)  all  debts,  liabilities, and other obligations
 8        of each partnership and each  limited  liability  company
 9        that  is  a party to the merger become the obligations of
10        the surviving entity;
11             (4)  an  action  or  proceeding  by  or  against   a
12        partnership or limited liability company that  is a party
13        to  the  merger may be continued as if the merger had not
14        occurred or the surviving entity may be substituted as  a
15        party to the action or proceeding; and
16             (5)  except  as  prohibited  by  other  law, all the
17        rights, privileges, immunities, powers, and  purposes  of
18        each  partnership and limited liability company that is a
19        party to the merger vest in the surviving entity.
20        (k)  The Secretary of State of this State is an agent for
21    service of process in an action  or  proceeding  against  any
22    surviving  foreign  entity  to  enforce  an obligation of any
23    party to a merger if the surviving foreign  entity  fails  to
24    appoint  or  maintain  an  agent  designated  for  service of
25    process in this State or the agent  for  service  of  process
26    cannot  with  reasonable diligence be found at the designated
27    office. Service is effected under this subsection (k) at  the
28    earliest of:
29             (1)  the  date  the  surviving  entity  receives the
30        process notice or demand;
31             (2)  the date shown on the return receipt, if signed
32        on behalf of the surviving entity; or
33             (3)  5 days after its deposit in the mail, if mailed
34        postpaid and correctly addressed.
 
                            -52-               LRB9216008DJgc
 1        (l)  Service under subsection (k) of this  Section  shall
 2    be  made by the person instituting the action by doing all of
 3    the following:
 4             (1)  Serving on  the  Secretary  of  State  of  this
 5        State,  or  on  any  employee  having  responsibility for
 6        administering this Act in his or her office,  a  copy  of
 7        the  process, notice, or demand, together with any papers
 8        required by  law  to  be  delivered  in  connection  with
 9        service  and  paying the fee prescribed by Section 108 of
10        this Act.
11             (2)  Transmitting  notice  of  the  service  on  the
12        Secretary of State of  this  State  and  a  copy  of  the
13        process, notice, or demand and accompanying papers to the
14        surviving entity being served, by registered or certified
15        mail at the address set forth in the statement of merger.
16             (3)  Attaching  an affidavit of compliance with this
17        Section, in substantially the form that the Secretary  of
18        State  of  this  State  may  by  rule  prescribe,  to the
19        process, notice, or demand.
20        (m)  Nothing contained in this  Section  shall  limit  or
21    affect  the  right  to  serve  any process, notice, or demand
22    required or permitted by law to be served upon a  partnership
23    in any other manner now or hereafter permitted by law.
24        (n)  The Secretary of State of this State shall keep, for
25    a period of 5 years from the date of service, a record of all
26    processes,  notices, and demands served upon him or her under
27    this Section and shall record the time of the service and the
28    person's action with reference to the service.
29        (o)  Except as provided by agreement  with  a  person  to
30    whom  a  partner of a partnership is obligated, a merger of a
31    partnership that has become effective shall  not  affect  any
32    obligation or liability existing at the time of the merger of
33    a partner of a partnership that is merging.
 
                            -53-               LRB9216008DJgc
 1        Section  909.  Approval  of  conversion  into  a  limited
 2    liability  company.  A partnership may convert into a limited
 3    liability company organized, formed,  or  created  under  the
 4    laws  of  this  State,  upon  approval  of  the conversion in
 5    accordance with this Section. The terms and conditions  of  a
 6    conversion  of  a  partnership to a limited liability company
 7    must be approved by all of the partners or  by  a  number  or
 8    percentage  of  the  partners  required for conversion in the
 9    partnership agreement.
10        After a conversion is  approved,  the  partnership  shall
11    file  articles of organization in the Office of the Secretary
12    of State in accordance with subsection (d) of  Section  37-10
13    of the Limited Liability Company Act.

14        Section 910. Nonexclusive. This Article is not exclusive.
15    Partnerships  or  limited  partnerships  may  be converted or
16    merged in any other manner provided by law.

17                             ARTICLE 10
18                    LIMITED LIABILITY PARTNERSHIP

19        Section 1001. Statement of qualification.
20        (a)  A  partnership  may  become  a   limited   liability
21    partnership pursuant to this Section.
22        (b)  The  terms  and  conditions  on  which a partnership
23    becomes a limited liability partnership must be  approved  by
24    the vote necessary to amend the partnership agreement except,
25    in  the  case  of  a  partnership  agreement  that  expressly
26    considers  obligations  to contribute to the partnership, the
27    vote necessary to amend those provisions.
28        (c)  After the approval required  by  subsection  (b)  of
29    this  Section,  a  partnership may become a limited liability
30    partnership by filing a statement of qualification  with  the
31    Secretary of State. The statement must contain:
 
                            -54-               LRB9216008DJgc
 1             (1)  the name of the partnership;
 2             (2)  the  street  address of the partnership's chief
 3        executive office and, if different, the street address of
 4        an office in this State, if any;
 5             (3)  the   name   and   street   address   of    the
 6        partnership's agent for service of process;
 7             (4)  the number of partners;
 8             (5)  a  brief statement of the business in which the
 9        partnership engages;
10             (6)  a statement that the  partnership  applies  for
11        qualification as a limited liability partnership; and
12             (7)  a  deferred  effective  date,  if  any,  of  an
13        application   for   status   as   a   limited   liability
14        partnership.
15        (d)  The  agent  of  a  limited liability partnership for
16    service of process must be an individual who is a resident of
17    this State or other person authorized to do business in  this
18    State.
19        (e)  The  status  of a partnership as a limited liability
20    partnership is effective on the later of the  filing  of  the
21    statement  or  a  date  specified  in  the  statement and the
22    receipt by the Secretary of State of the  required  fee.  The
23    status  remains  effective  for  one  year  after  the date a
24    statement of qualification is filed, regardless of changes in
25    the partnership, unless the partnership voluntarily withdraws
26    by filing a statement  of  withdrawal,  in  which  event  the
27    status  of the partnership as a limited liability partnership
28    shall terminate on the date such statement is  filed  or,  if
29    later, a date specified on the statement.
30        (f)  The  status  of a partnership as a limited liability
31    partnership and the liability of its partners is not affected
32    by errors or later changes in the information required to  be
33    contained in the  statement of qualification under subsection
34    (c) of this Section.
 
                            -55-               LRB9216008DJgc
 1        (g)  The   filing   of   a   statement  of  qualification
 2    establishes that a partnership has satisfied  all  conditions
 3    precedent  to  the  qualification  of  the  partnership  as a
 4    limited liability partnership.
 5        (h)  An amendment  or  cancellation  of  a  statement  of
 6    qualification  is effective when it is filed or on a deferred
 7    effective date specified in the amendment or cancellation.
 8        (i)  The Secretary of State shall register as  a  limited
 9    liability   partnership   any   partnership  that  submits  a
10    completed application with the required fee.
11        (j)  The Secretary of State shall provide statements  for
12    registration   application,   renewal   of  registration  and
13    voluntary cancellation.

14        Section 1002. Name.  The  name  of  a  limited  liability
15    partnership  must  end  with  "Registered  Limited  Liability
16    Partnership",  "Limited  Liability  Partnership", "R.L.L.P.",
17    "L.L.P.", "RLLP", or "LLP".

18        Section 1003. Renewal statements.
19        (a)  A  limited  liability  partnership,  and  a  foreign
20    limited liability partnership authorized to transact business
21    in this State, shall file a renewal statement in  the  Office
22    of the Secretary of State which contains:
23             (1)  the name of the partnership;
24             (2)  the  street  address of the partnership's chief
25        executive office and, if different, the street address of
26        an office in this State, if any;
27             (3)  the   name   and   street   address   of    the
28        partnership's agent for service of process;
29             (4)  if   the  partnership  is  a  domestic  limited
30        liability partnership, the number of partners;
31             (5)  a brief statement of the business in which  the
32        partnership engages; and
 
                            -56-               LRB9216008DJgc
 1             (6)  if   the   partnership  is  a  foreign  limited
 2        liability partnership, a current certificate of status in
 3        good  standing  as   a   registered   limited   liability
 4        partnership under the laws of that state or jurisdiction.
 5        (b)  Qualification  as  a  limited liability partnership,
 6    whether pursuant  to  an  original  statement  or  a  renewal
 7    statement,  is renewed if, during the 60 day period preceding
 8    the date the initial statement or renewal statement otherwise
 9    would have expired, the partnership files with the  Secretary
10    of State a renewal statement. A renewal statement expires one
11    year  after the date an original statement would have expired
12    if the last renewal of the statement had not occurred.
13        (c)  The Secretary of State shall renew the  registration
14    of  any limited liability partnership of any partnership that
15    submits a renewal statement with the required fee.

16                             ARTICLE 11
17                FOREIGN LIMITED LIABILITY PARTNERSHIP

18        Section 1101. Law  governing  foreign  limited  liability
19    partnership.
20        (a)  The  law  under  which  a  foreign limited liability
21    partnership is formed governs relations  among  the  partners
22    and   between  the  partners  and  the  partnership  and  the
23    liability of partners for obligations of the partnership.
24        (b)  A foreign limited liability partnership may  not  be
25    denied  a statement of foreign qualification by reason of any
26    difference between the law under which  the  partnership  was
27    formed and the law of this State.
28        (c)  A   statement  of  foreign  qualification  does  not
29    authorize a foreign limited liability partnership  to  engage
30    in  any business or exercise any power that a partnership may
31    not engage  in  or  exercise  in  this  State  as  a  limited
32    liability partnership.
 
                            -57-               LRB9216008DJgc
 1        Section 1102. Statement of foreign qualification.
 2        (a)  Before   transacting   or   continuing  to  transact
 3    business  in  this  State,  a   foreign   limited   liability
 4    partnership  must  file  a  statement  of  qualification or a
 5    renewal statement under Section 1001; provided, however, that
 6    the statement must contain:
 7             (1)  the  name  of  the  foreign  limited  liability
 8        partnership which satisfies the requirements of the state
 9        or other jurisdiction under whose law it  is  formed  and
10        ends  with  "Registered  Limited  Liability Partnership",
11        "Limited Liability  Partnership",  "R.L.L.P.",  "L.L.P.",
12        "RLLP", or "LLP";
13             (2)  the  street  address of the partnership's chief
14        executive office and, if different, the street address of
15        an office of the partnership in this State, if any;
16             (3)  the   name   and   street   address   of    the
17        partnership's agent for service of process;
18             (4)  a  brief statement of the business in which the
19        partnership engages;
20             (5)  a deferred effective date, if any; and
21             (6)  a document or documents  sufficient  under  the
22        laws  of  the  state or jurisdiction in which the limited
23        liability partnership is organized to constitute official
24        certification of current status in  good  standing  as  a
25        registered  limited  liability partnership under the laws
26        of that state or jurisdiction.
27        (b)  A foreign partnership may  not  use  an  assumed  or
28    fictitious   name   in   the   conduct  of  its  business  to
29    intentionally misrepresent the geographic origin or  location
30    of the partnership. This subsection (b) does not apply to any
31    foreign  limited  liability partnership that has gross annual
32    revenues in excess of $100,000,000.
33        (c)  A person shall not advertise or cause to  be  listed
34    in  a  telephone  directory an assumed or fictitious business
 
                            -58-               LRB9216008DJgc
 1    name that intentionally misrepresents where the  business  is
 2    actually  located  or  operating  or  falsely states that the
 3    business is located or operating in the area covered  by  the
 4    telephone  directory. This subsection (c) does not apply to a
 5    telephone service provider or to the publisher or distributor
 6    of  a  telephone  service  directory,  unless   the   conduct
 7    prescribed  in  this  subsection  (c)  is  on  behalf of that
 8    telephone service provider or that publisher or  distributor.
 9    This  subsection  (c)  does  not apply to any foreign limited
10    liability partnership  that  has  gross  annual  revenues  in
11    excess of $100,000,000.
12        (d)  A   foreign   limited   liability  partnership  that
13    violates this Section is guilty of a petty offense  and  must
14    be  fined  not  less  than  $501  and not more than $1,000. A
15    foreign  limited  liability  partnership  is  guilty  of   an
16    additional  offense  for  each additional day in violation of
17    this Section.
18        (e)  The agent of a foreign limited liability partnership
19    for service of  process  must  be  an  individual  who  is  a
20    resident  of  this  State  or  other  person authorized to do
21    business in this State.
22        (f)  The status of a partnership  as  a  foreign  limited
23    liability partnership is effective on the later of the filing
24    of the statement of foreign qualification or a date specified
25    in the statement. The status remains effective, regardless of
26    changes   in   the   partnership,   unless   the  partnership
27    voluntarily withdraws by filing a statement of withdrawal, in
28    which event the  status  of  the  partnership  as  a  foreign
29    limited  liability  partnership  shall  terminate on the date
30    such statement is filed or, if later, a date specified on the
31    statement.
32        (g)  An amendment  or  cancellation  of  a  statement  of
33    foreign  qualification  is effective when it is filed or on a
34    deferred  effective  date  specified  in  the  amendment   or
 
                            -59-               LRB9216008DJgc
 1    cancellation.
 2        (h)  The  Secretary  of State shall register as a limited
 3    liability   partnership   any   foreign   limited   liability
 4    partnership that submits a  completed  application  with  the
 5    required fee.

 6        Section 1103. Effect of failure to qualify.
 7        (a)  A  foreign limited liability partnership transacting
 8    business  in  this  State  may  not  maintain  an  action  or
 9    proceeding in this State unless it has in effect a  statement
10    of foreign qualification.
11        (b)  The   failure   of   a   foreign  limited  liability
12    partnership  to  have  in  effect  a  statement  of   foreign
13    qualification  does  not impair the validity of a contract or
14    act of the foreign limited liability partnership or  preclude
15    it from defending an action or proceeding in this State.
16        (c)  A  limitation  on personal liability of a partner is
17    not waived solely  by  transacting  business  in  this  State
18    without a statement of foreign qualification.
19        (d)  If a foreign limited liability partnership transacts
20    business  in  this  State  without  a  statement  of  foreign
21    qualification,  the  Secretary  of  State  is  its  agent for
22    service of process with respect to a right of action  arising
23    out of the transaction of business in this State.

24        Section  1104.  Activities  not  constituting transacting
25    business.
26        (a)  Activities   of   a   foreign   limited    liability
27    partnership  which do not constitute transacting business for
28    the purpose of this Article include:
29             (1)  maintaining, defending, or settling  an  action
30        or proceeding;
31             (2)  holding meetings of its partners or carrying on
32        any other activity concerning its internal affairs;
 
                            -60-               LRB9216008DJgc
 1             (3)  maintaining bank accounts;
 2             (4)  maintaining   offices   or   agencies  for  the
 3        transfer, exchange, and registration of the partnership's
 4        own securities or maintaining  trustees  or  depositories
 5        with respect to those securities;
 6             (5)  selling through independent contractors;
 7             (6)  soliciting or obtaining orders, whether by mail
 8        or  through  employees  or  agents  or  otherwise, if the
 9        orders require acceptance outside this State before  they
10        become contracts;
11             (7)  creating  or  acquiring  indebtedness,  with or
12        without  a  mortgage,  or  other  security  interest   in
13        property;
14             (8)  collecting  debts  or  foreclosing mortgages or
15        other security interests in property securing the  debts,
16        and  holding,  protecting,  and  maintaining  property so
17        acquired;
18             (9)  conducting  an  isolated  transaction  that  is
19        completed within 30 days and is not one in the course  of
20        similar transactions; and
21             (10)  transacting business in interstate commerce.
22        (b)  For  purposes of this Article, the ownership in this
23    State of income-producing real property or tangible  personal
24    property,  other  than property excluded under subsection (a)
25    of this Section, constitutes  transacting  business  in  this
26    State.
27        (c)  This  Section  does  not  apply  in  determining the
28    contacts or activities that may  subject  a  foreign  limited
29    liability  partnership  to  service  of process, taxation, or
30    regulation under any other law of this State.

31        Section 1105. Action by Attorney  General.  The  Attorney
32    General  may maintain an action to restrain a foreign limited
33    liability partnership from transacting business in this State
 
                            -61-               LRB9216008DJgc
 1    in violation of this Article.

 2                             ARTICLE 12
 3                      MISCELLANEOUS PROVISIONS

 4        Section 1201. Uniformity of application and construction.
 5    This Act shall be applied and  construed  to  effectuate  its
 6    general  purpose  to make uniform the law with respect to the
 7    subject of this Act among States enacting it.

 8        Section 1202. Short title. (See  Section  100  for  short
 9    title.)

10        Section  1203.  Severability  clause. If any provision of
11    this Act or its application to any person or circumstance  is
12    held invalid, the invalidity does not affect other provisions
13    or applications of this Act which can be given effect without
14    the  invalid  provision  or  application, and to this end the
15    provisions of this Act are severable.

16        Section 1204.  Effective  date.  (See  Section  1299  for
17    effective date.)

18        Section 1205. Repealer. (See Section 1290 for repeals.)

19        Section 1206. Applicability.
20        (a)  Before  January  1,  2008,  this  Act governs only a
21    partnership formed:
22             (1)  on  or  after  January  1,   2003,   except   a
23        partnership   that   is  continuing  the  business  of  a
24        dissolved partnership under Section 33 of the  superseded
25        Uniform Partnership Act; and
26             (2)  before   January   1,  2003,  that  elects,  as
27        provided  by  subsection  (c)  of  this  Section,  to  be
 
                            -62-               LRB9216008DJgc
 1        governed by this Act.
 2        (b)  On and after January 1, 2008, this Act  governs  all
 3    partnerships.
 4        (c)  Before  January  1,  2008, a partnership voluntarily
 5    may  elect,  in  the  manner  provided  in  its   partnership
 6    agreement  or  by law for amending the partnership agreement,
 7    to be governed by  this  Act.  The  provisions  of  this  Act
 8    relating  to  the  liability of the partnership's partners to
 9    third parties apply to limit those partners' liability  to  a
10    third party who had done business with the partnership within
11    one  year before the partnership's election to be governed by
12    this Act only if the third party  knows  or  has  received  a
13    notification  of the partnership's election to be governed by
14    this Act.

15        Section 1207. Savings clause. This Act does not affect an
16    action or proceeding commenced or right accrued  before  this
17    Act takes effect.

18        Section  1290.  The Uniform Partnership Act is amended by
19    adding Part VII as follows:

20        (805 ILCS 205/Part VII heading new)
21                  PART VII.  APPLICABILITY; REPEAL

22        (805 ILCS 205/90 new)
23        Sec. 90.  Applicability of Act.
24        (a)  Except as  provided  in  subsection  (b),  this  Act
25    governs  a  partnership  formed before January 1, 2003.  This
26    Act governs a partnership formed after December 31, 2002  and
27    before January 1, 2008 only if that partnership is continuing
28    the  business of a dissolved partnership under Section 33.  A
29    partnership may not be formed under  this  Act  on  or  after
30    January  1,  2003  unless  it is continuing the business of a
 
                            -63-               LRB9216008DJgc
 1    dissolved partnership under Section 33.
 2        (b)  A partnership formed  before  January  1,  2003  may
 3    voluntarily  elect to be governed, before January 1, 2008, by
 4    the Uniform Partnership Act (1997)  as  provided  in  Section
 5    1206 of that Act.

 6        (805 ILCS 205/95 new)
 7        Sec.  95.  Repeal.   This  Act  is repealed on January 1,
 8    2008.

 9        Section 1295.  The Revised  Uniform  Limited  Partnership
10    Act  is  amended by changing Sections 201 and 1204 and adding
11    Section 805 as follows:

12        (805 ILCS 210/201) (from Ch. 106 1/2, par. 152-1)
13        Sec. 201.  Certificate of Limited Partnership.
14        (a)  In  order  to  form   a   limited   partnership,   a
15    certificate of limited partnership must be executed and filed
16    in  the  office  of  the Secretary of State in Springfield or
17    Chicago.   Certificates  may  be  filed  in  such  additional
18    offices  as  the  Secretary  of  State  may  designate.   The
19    certificate shall set forth:
20             (1)  the name of the limited partnership;
21             (2)  the  purposes  for  which  the  partnership  is
22        formed, which may be stated to be,  or  to  include,  the
23        transaction  of  any  or  all lawful businesses for which
24        limited partnerships may be formed under this Act;
25             (3)  the address of the office at which the  records
26        required to be maintained by Section 104 are kept and the
27        name  of  its  registered  agent  and  the address of its
28        registered office required to be  maintained  by  Section
29        103;
30             (4)  the  name  and business address of each general
31        partner;
 
                            -64-               LRB9216008DJgc
 1             (5)  the latest date, if any, upon which the limited
 2        partnership is to dissolve;
 3             (6)  any other matters  the  partners  determine  to
 4        include therein; and
 5             (7)  any  other  information  the Secretary of State
 6        shall by rule deem necessary to administer this Act.
 7        (b)  A limited partnership is formed at the time  of  the
 8    filing  of  the  certificate  of  limited  partnership in the
 9    office of the Secretary of State or at any  later  time,  not
10    more than 60 days subsequent to the filing of the certificate
11    of  limited  partnership,  specified  in  the  certificate of
12    limited partnership  if,  in  either  case,  there  has  been
13    substantial compliance with the requirements of this Section.
14        (c)  A  limited partnership may be formed by converting a
15    partnership to a limited partnership as provided  in  Section
16    902 of the Uniform Partnership Act (1997).
17    (Source: P.A. 92-33, eff. 7-1-01.)

18        (805 ILCS 210/805 new)
19        Sec.   805.  Conversion   to   partnership.    A  limited
20    partnership may be converted to a partnership as provided  in
21    Section 903 of the Uniform Partnership Act (1997).

22        (805 ILCS 210/1204) (from Ch. 106 1/2, par. 162-4)
23        Sec. 1204.  Rules for Cases Not Provided for in this Act.
24    Before  January 1, 2008, in any case not provided for in this
25    Act the provisions of the Uniform Partnership Act  govern  if
26    that Act is otherwise applicable as provided in Section 90 of
27    that  Act.  After December 31, 2002, in any case not provided
28    for in this Act, the provisions of  the  Uniform  Partnership
29    Act  (1997)  govern  if  that  Act is otherwise applicable as
30    provided in Section 1206 of that Act.
31    (Source: P.A. 84-1412.)
 
                            -65-               LRB9216008DJgc
 1        Section 1299.  Effective date.  This Act takes effect  on
 2    January 1, 2003.

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