CHAPTER 316

FORMERLY

HOUSE BILL NO. 600

AN ACT TO AMEND CHAPTER 17, TITLE 6 OF THE DELAWARE CODE RELATING TO THE CREATION, REGULATION, OPERATION AND DISSOLUTION OF DOMESTIC LIMITED PARTNERSHIPS AND THE REGISTRATION AND REGULATION OF FOREIGN LIMITED PARTNERSHIPS.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE (Three-fifths of all members elected to each House thereof concurring therein):

Section I. Amend §17-101 by renumbering current subsections (8), (9), (10), (11) and

(12) thereof as subsections (9), (10), (11), (12) and (13), respectively, and by adding a new subsection (B) reading as follows:

"(8) 'Liquidating trustee' means a person, other than a general partner, but including a limited partner, carrying out the winding up of a limited partnership."

Section 2. Amend current subsection (9) of §17-101 by deleting the subsection In its entirety and substituting In lieu thereof the following:

"(10) 'Partnership agreement' means any agreement, written or oral, of the partners as to the affairs of a limited partnership and the conduct of its business. A written partnership agreement (a) may provide that a person shall be admitted as a limited partner of a limited partnership, or shall become an assignee of a partnership Interest or other rights or powers of a limited partner to the extent assigned, and shall become bound by the partnership agreement (1) if such person (or a representative authorized by such person orally, In writing or by other action such as payment for a partnership interest) executes the partnership agreement or any other writing evidencing the Intent of such person to become a limited partner or assignee, or (ii) without Such execution, if such person (or a representative authorized by such person orally, in writing or by other action such as payment for a partnership interest) complies with the conditions for becoming a limited partner or assignee as set forth In the partnership agreement or any other writing and requests (orally, In writing or by other action such as payment for a partnership interest) that the records of the limited partnership reflect such admission or assignment, and (b) shall not be unenforceable by reason of Its not having been signed by a person being admitted as a limited partner or becoming an assignee as provided in 517-101(10)(a), or by reason of Its having been signed by a representative as provided in this Title."

Section 3. Amend current subsection (11) of 517-101, by deleting ", limited partnership

(domestic or foreign)", and substituting in lieu thereof "(whether general or limited and whether domestic or foreign)".

Section 4. Amend §17-102 by deleting subsections (2) and (3) thereof in their entirety,

by renumbering current subsections (4) and (5) thereof as subsections (3) and (4), respectively, and by adding a new subsection (2) reading as follows:

"(2) May contain the name of a partner;".

Section 5. Amend §17-107 by adding after "may lend money to" the following:

borrow money from, act as a surety, guarantor or endorser for, guarantee or assume one or more specific obligations of, provide collateral for,".

Section 6. Amend Subchapter 1 of Chapter 17, Title 6 by adding thereto, Immediately following §17-108, a new §17-109 reading as follows:

517-109 Service of Process on General Partners and Liquidating Trustees.

(a) A general partner or a liquidating trustee of a limited partnership may be served with process In the manner prescribed in this section In all civil actions or proceedings brought in the State of Delaware involving or relating to the business of the limited partnership or a violation by the general partner or the liquidating trustee of a duty to the limited partnership, or any partner of the limited partnership, whether or not the general partner or the liquidating trustee is a general partner or a liquidating trustee at the time suit is commenced The filing in the Office of the Secreta,y of State of a certificate of limited partnership executed, and the execution thereof, by a resident or nonresident of the State of Delaware which names such person as a general partner or a liquidating trustee of a limited partnership constitute such person's consent to the appointment of the registered agent of the limited partnership (or, if there is none, the Secretary of State) as such person's agent upon whom service of process may be made as provided in this section. Such execution and filing shall signify the consent of such general partner or liquidating trustee that any process when so served shall be of the same legal force and validity as if served upon such general partner or liquidating trustee within the State of Delaware and such appointment of the registered agent (or, if there is none, the Secretary of State) shall be irrevocable.

(b) Service of process shall be effected by serving the registered agent (or, if there is none, the Secretary of State) with 1 copy of such process in the manner provided by law for service of writs of summons. In the event service is made under
this §17-109(b) upon the Secretary of State, the plaintiff shall pay to the Secretary of State the sum of $50 for the use of the State of Delaware, which sum shall be taxed as part of the costs of the proceeding if the plaintiff shall prevail therein. In addition, the Prothonotary or the Regis.e: in Chancery of the court in which the civil action or proceeding is pending shall, within 7 days of such service, deposit in the United States mails, by registered mall, postage prepaid, true and attested copies of the process, together with a statement that service is being made pursuant to this section, addressed to such general partner or liquidating trustee at his address as the same appears in the certificate of limited partnership of the limited partnership, Or if no such address appears, at his address last known to the party desiring to make such service.

(a) In any action in which any such general partner or liquidating trustee has been served with process as hereinabove provided, the time in which a defendant shall be required to appear and file a responsive pleading shall be computed from the date of mailing by the Prothonotary or the Register in Chancery as provided in subsection (b) of this section; however, the court in which such action has been commenced may order such continuance or continuances as may be necessary to afford such general partner or liquidating trustee reasonable opportunity to defend the action.

(a) Nothing herein contained limits or affects the right to serve process in any

other manner now or hereafter provided by law. This section is an extension of and not

a limitation upon the right otherwise existing of service of legal process upon nonresidents.

(a) The Court of Chancery and the Superior Court may make all necessary rules
respecting the form of process, the manner of Issuance and return thereof and such other rules which may be necessary to Implement this section and are not inconsistent with this section."

Section 7. Amend §17-202 by adding at the end of the section the following new subsection (f):

"(f) If after the dissolution of a limited partnership but prior to the filing of a certificate of cancellation as provided in §17-203 of this title,

(I) a certificate of limited partnership has been amended to reflect the withdrawal of all general partners of a limited partnership, the certificate of limited partnership shall be amended to set forth the name and the business, residence or mailing address of each person winding up the limited partnership's affairs, each of whom shall execute and file such certificate of amendment, and each of whom shall not be subject to liability as a general partner by reason of such amendment, or

(11) a person shown on d certificate of limited partnership as a general partner is not winding up the limited partnership's affairs, the certificate of limited partnership shall be amended to add the name and the business, residence or mailing address of each person winding up the limited partnership's affairs, each of whom shall execute and file such certificate of amendment, and each of whom shall not be subject to liability as a general partner by reason of such amendment."

Section 8. Amend §17-203 by deleting therefrom ", or upon a merger or consolidation as provided in §17-211(b) of this title".

Section 9. Amend subsection (2) of §17-204(a) by adding before the ";", the following:

but If the certificate of amendment reflects the withdrawal of a general partner as a general partner, it need not be signed by that former general partner", and by deleting the word and found at the end of the subsection.

entirety and substituting in lieu thereof the following:

"(3) A certificate of cancellation must be signed by all general partners or, If the general partners are not winding up the limited partnership's affairs, then by all liquidating trustees, provided, however, that if the limited partners are winding up the limited partnership's affairs, a certificate of cancellation need be signed only by a majority of the limited partners; and"

Section 11. Amend subsection (a) of §17-204 by adding thereto a new subsection (4)

reading as follows:

"(1) If a domestic limited partnership Is filing a certificate of merger or
consolidation, the certificate of merger or consolidation must be signed by at least 1 general partner of the domestic limited partnership, or If the certificate of merger or consolidation is being filed by an other business entity (as defined in §17-211(a) of this title), the certificate of merger or consolidation must be signed by a person authorized by such other business entity."

Section 12. Amend subsection (b) of §17-204 by deleting the subsection in its entirety and substituting in lieu thereof the following:

"(b) Unless otherwise provided in the partnership agreement, any person may sign any certificate or amendment thereof or enter into a partnership agreement or amendment thereof by an agent, including an attorney-in-fact. An authorization, including a power of attorney, to sign any certificate or amendment thereof or to enter Into a partnership agreement or amendment thereof need not be In writing, need not be sworn to, verified or acknowledged, and need not be filed In the Office of the Secretary of State, but if in writing, must be retained by a general partner."

Section 13. Amend subsection (a) of §17-206 by adding after "(or of any judicial decree of amendment or cancellation)", the following: and of any certificate of merger or consolidation"; and by adding after "prerequisite to filing.", the following: "Any signature on any certificate authorized to be filed with the Secretary of State under any provision of this Chapter may be a facsimile."

Section 14. Amend subsection (1) of §17-206(a) by adding after "(or of any judicial decree of amendment or cancellation)", the following:

the certificate of merger or consolidation".

Section 15. Amend subsection (b) of §17-206 by deleting therefrom the last sentence of the subsection and substituting in lieu thereof the following:

"Upon the filing of a certificate of cancellation (or a judicial decree thereof), or a certificate of merger or consolidation which acts as a certificate of cancellation, or upon the future effective date or time of a certificate of cancellation (or a judicial decree thereof), or of a certificate of merger or consolidation which acts as a certificate of cancellation, as provided for therein, or as specified In §17-104(d) of this title, the certificate of limited partnership is cancelled."

Section 16. Amend subsection (c) of §17-206 by adding after "a certificate of cancellation", the following:

a certificate of merger or consolidation".

Section 17. Amend §17-208 by adding after "through (3)", the following: and by §17-202(f)".

Section 18. Amend subsection (b) of §17-210 by adding after "a new general partner" and before and flied", the following:

but If the restated certificate reflects the withdrawal of a general partner as a general partner, such restated certificate of limited partnership need not be signed by that former general partner,",

Section 19. Amend §17-211 by deleting the section In Its entirety and substituting In

lieu thereof the following:

117-211. Merger and,Consolidation.

(a) As used in this section, "other business entity" means a corporation, a business trust or association, a real estate investment trust, a common law trust, or an unincorporated business, including a partnership (whether general or limited, but excluding a domestic limited partnership).

(b) Pursuant to an agreement of merger or consolidation, a domestic limited
partnership may merge or consolidate with or into 1 or more domestic limited partnerships or other business entities formed or organized under the laws of the State of Delaware or any other state or the United States or any foreign country or other foreign jurisdiction, with such domestic limited partnership or other business entity as the agreement shall provide being the surviving or resulting domestic limited

partnership or other business entity. Unless otherwise provided in the partnership agreement, a merger or consolidation shall be approved by each domestic limited partnership which is to merge or consolidate (1) by all general partners, and (2) by the limited partners or, if there is more than one class or group of limited partners, then by each class or group of limited partners, in either case, by limited partners who own more than 50 percent of the then current percentage or other interest in the profits of the domestic limited partnership owned by all of the limited partners or by the limited partners in each class or group, as appropriate. Notwithstanding prior approval, an agreement of merger or consolidation may be terminated or amended pursuant to a provision for such termination or amendment contained in the agreement of merger or consolidation.

(c) If a domestic limited partnership is merging or consolidating under this section, the domestic limited partnership or other business entity surviving or resulting in or from the merger or consolidation shall file a certificate of merger or consolidation In the Office of the Secretary of State. The certificate of merger or
consolidation shall state:

(1) the name and jurisdiction of formation or organization of each of the
domestic limited partnerships or other business entities which is to merge or consolidate;

(2) that an agreement of merger or consolidation has been approved and
executed by each of the domestic limited partnerships or other business entities which Is to merge or consolidate;

(3) the name of the surviving or resulting domestic limited partnership or
other business entity;

(4) the future effective date or time (which shall be a date or time certain)
of the merger or consolidation if it is not to be effective upon the filing of the certificate of merger or consolidation;

(1) that the agreement of merger or consolidation is on file at a place of business of the surviving or resulting domestic limited partnership or other business entity, and shall state the address thereof;

(1) that a copy of the agreement of merger or consolidation will be furnished by the surviving or resulting domestic limited partnership or other business entity, on request and without cost, to any partner of any domestic limited partnership or any person holding an Interest in any other business entity which is to merge or consolidate; and

(1) if the surviving or resulting entity is not a domestic limited partnership or corporation organized under the laws of the State of Delaware, a statement that such surviving or resulting other business entity agrees that It may be served with process in the State of Delaware In any action, suit or proceeding for the enforcement of any obligation of any domestic limited partnership which is to merge or consolidate, irrevocably appointing the Secretary of State as its agent to accept service of process in any such action, suit or proceeding and specifying the address to which a copy of such process shall be mailed to it by the Secretary of State. In the event of service hereunder upon the Secretary of State, the
procedures set forth in §17-911(c) of this title shall be applicable, except that the plaintiff in any such action, suit or proceeding shall furnish the Secretary of State with the address specified in the certificate of merger or consolidation provided for in this section and any other address which the plaintiff may elect to furnish, together with copies of such process as required by the Secretary of State, and the Secretary of State shall notify such surviving or resulting other business entity at all such addresses furnished by the plaintiff In accordance with the procedures set forth In §17-911(c) of this title.

with a merger or consolidation pursuant to this section which was effective prior to September 1, 1988, shall not affect the validity or effectiveness of any such merger or consolidation.

(d) Any failure to file a certificate of merger or consolidation in connection

(e) Unless a future effective date or time Is provided in a certificate of merger or consolidation, in which event a merger or consolidation shall be effective at any such future effective date or time, a merger or consolidation shall be effective upon the filing in the Office of the Secretary of State of a certificate of merger or consolidation.

(a) A certificate of merger or consolidation shall act as a certificate of
cancellation for a domestic limited partnership which is not the surviving or resulting entity In the merger or consolidation.

(a) When any merger or consolidation shall have become effective under this
section, for all purposes of the laws of the State of Delaware, all of the rights, privileges and powers of each of the domestic limited partnerships and other business entities that have merged or consolidated, and all property, real, personal and mixed, and all debts due to any of said domestic limited partnerships and other business entities, as well as all other things and causes of action belonging to each of such domestic limited partnerships and other business entitles, shall be vested in the surviving or resulting domestic limited partnership or other business entity, and shall hereafter be the property of the surviving or resulting domestic limited partnership or other business entity as they were of each of the domestic limited partnerships and other business entities that have merged or consolidated, and the title to any real property vested by deed or otherwise, under the laws of the State of Delaware, in any of such domestic limited partnerships and other business entitles, shall not revert or be in any way impaired by reason of this chapter; but all rights of creditors and all liens upon any property of any of said domestic limited partnerships and other business entities shall be preserved unimpaired, and all debts, liabilities and duties of each of the said domestic limited partnerships and other business entities that have merged or consolidated shall thenceforth attach to the surviving or resulting domestic limited partnership or other business entity, and may be enforced against It to the same extent as if said debts, liabilities and duties had been incurred or contracted by It. Unless
otherwise agreed, a merger or consolidation of a domestic limited partnership, Including a domestic limited partnership which is not surviving or resulting entity in the merger or consolidation, shall not require such domestic limited partnership to wind up its affairs under §17-803 of this title or pay its liabilities and distribute Its assets under §17-804 of this title."

Section 20. Amend §17-30I by deleting the section In its entirety and substituting In

lieu thereof the following:

117-301. Admission of Limited Partners.

(a) In connection with the formation of a limited partnership, a person acquiring
a partnership Interest as a limited partner Is admitted as a limited partner of the limited partnership upon the later to occur of:

(I) The formation of the limited partnership; or

(2) The time provided In and upon compliance with the partnership agreement

or, if the partnership agreement does not so provide, when the person's admission Is reflected In the records of the limited partnership.

(a) After the formation of a limited partnership, a person acquiring a partnership Interest as a limited partner Is admitted as a limited partner of the limited
Partnership:

(I) In the case of a person acquiring a partnership Interest directly from the

limited partnership, at the time provided In and upon compliance with the partnership agreement or, If the partnership agreement does not so provide, upon the consent of ail partners and when the person's admission is reflected In the records of the limited partnership; or

(2) In the case of an assignee of a partnership Interest, as provided In

§11-704(a) of this title and at the time provided in and upon Compliance with the partnership agreement or, if the partnership agreement does not so provide, when any such person's permitted admission is reflected In the records of the limited partnership .

following:

"A partnership agreement may provide for the taking of an action, including the amendment of the partnership agreement, without the vote or approval of any limited partner or class or group of limited partners, including an action to create under the provisions of the partnership agreement a class or group of partnership interest that was not previously outstanding."

Section 21 Amend subsection (a) of §17-302 by adding at the end of the subsection the

Section 22. Amend subsection (b) of §17-302 to delete from the first sentence of the section "(on a per capita or any other basis)", and to add to the end of the subsection the following:

"Voting by limited partners may be on a per capita, number, financial interest, class, group or any other basis."

Section 23. Amend §17-302 by adding thereto a new subsection (d) reading as follows:

"(d) Any right or power, including voting rights, granted to limited partners as permitted under §17-303 of this title shall be deemed to be permitted by §17-302 of this title."

Section 24. Amend subsectton (b) of §17-303 by adding after "powers" and before the

the following:

or having or acting in one or more of the following capacities".

Section 25. Amend subsection (I) of §17-303(b) by deleting the entire subsection and

substituting In lieu thereof the following:

"(I) To be an Independent contractor for or to transact business with, including being a contractor for, or to be an agent or employee of, the limited partnership or a general partner, or to be an officer, director or stockholder of a corporate general partner, or to be a partner of a partnership that Is a general partner of the limited partnership, or to be a fiduciary or beneficiary of an estate or trust which Is a general partner;".

Section 26. Amend subsection (3) of §17-303(b) by deleting the entire subsection and

substituting in lieu thereof the following:

"(3) To act as surety, guarantor or endorser for the limited partnership or a

general partner, to guaranty or assume one or more obligations of the limited partnership or a general partner, to borrow money from the limited partnership or a general partner, to lend money to the limited partnership or a general partner, or to provide collateral for the limited partnership or a general partner;".

Section 27. Amend subsection (6) of §17-303(b) by deleting the word "or" appearing

after the word "bring", by adding after the word "bring" a comma and by adding after the word "pursue" the words "or settle or otherwise terminate".

Section 28. Amend subsection (8) of §17-303(b) to delete the words appearing before the colon and to substitute in lieu thereof the following:

"(8) To act or cause the taking or refraining from the taking of any action,

Including by proposing, approving, consenting or disapproving, by voting or otherwise, with respect to 1 or more of the following matters:".

Section 29. Amend subsection a of §17-303(b)(8) by adding after "limited partnership"

the following:

or an election to continue the limited partnership or an election to continue the business of the limited partnership".

Section 30. Amend subsection h of §17-303(b)(8) by deleting "or," appearing at the end of the subsection, by amending subsection I of §17-303(b)(8) by deleting the letter "1", and substituting therefor the letter "I", and by adding the following new subsections after subsection h:

"1. The merger or consolidation of a limited partnership;

j. In respect of a limited partnership which Is registered as an Investment

company under the Investment Company Act of 1940, as amended, any matter required by the Investment Company Act of 1940, as amended, or the rules and regulations of the Securities and Exchange Commission thereunder, to be approved by the holders of beneficial Interests In an Investment company, including the electing of directors or trustees of the Investment company, the approving or terminating of investment advisory or underwriting contracts, and the approving of auditors;

k. The indemnification of any partner or other person; or".

Section 31. Amend current subsection i of §17-303(b)(8) by adding after "agreement" and before the ";", the words "or in any other agreement or In writing".

Section 32. Amend subsection (c) of §17-303 by adding after "powers", and before "by", the following:

"or having or acting In other capacities".

Section 33. Amend subsection (d) of §17-303 by deleting the entire subsection and

substituting in lieu thereof the following:

"(d) A limited partner does not participate in the control of the business within the meaning of subsection (a) of this section by virtue of the fact that all or any part of the name of such limited partner is included In the name of the limited partnership."

Section 34. Amend §17-303 by adding at the end of the section the following new

subsection (e):

"(a) This section does not create rights or powers of limited partners. Such
rights and powers may be created only by a certificate of limited partnership, a partnership agreement or any other agreement or In writing, or other sections of this chapter."

Section 35. Amend §17-305 by designating the existing section as subsection "(a)", by amending subsection (a) of newly designated §17-305(a) by adding after "reasonable standards", the following: "(Including standards governing what information and documents are to be furnished, at what time and location and at whose expense)", by amending subsection (4) of newly designated §17-305(a) by deleting the word "the" which is the fourth word of the subsection and substituting In lieu thereof the words "any written", and by adding the word "written" before the word "powers", and by adding at the end of the section the following new subsections (b), (c), (d) and (e):

"(b) A general partner shall have the right to keep confidential from limited

partners for such period of time as the general partner deems reasonable, any information which the general partner reasonably believes to be in the nature of trade secrets or other information the disclosure of which the general partner In good faith believes is not In the best Interest of the limited partnership or could damage the limited partnership or its business or which the limited partnership is required by law or by agreement with a third party to keep confidential.

(c) A limited partnership may maintain Its records In other than a written form If such form IS capable of conversion Into written form within a reasonable time.

(d) Any demand under this section shall be In writing and shall state the purpose of such demand.

(e) Any action to enforce any right arising under this section shall be brought In the Court of Chancery."

Section 36. Amend §17-306 by deleting the section In Its entirety. Section 37. Amend §I7-401 by deleting therefrom the word "specific".

Section 38. Amend §17-402 by designating the existing section as subsection "(a)", and

by adding at the end of the section the following new subsection (b):

"(b) A general partner who suffers an event that with the passage of the specified period becomes an event of withdrawal under §17-402(a)(4) or (5) of this title shall notify each other general partner, or In the event that there Is no other general partner, each limited partner, of the occurrence of the event within 30 days after the date of occurrence of the event of withdrawal."

Section 39. Amend subsection (2) of newly designated §17-402(a) by deleting the word

'member", and substituting In lieu thereof the words "general partner".

Section 40. Amend subsection (4) of newly designated §17-402(a) by deleting therefrom he word "specific".

Section 41. Amend subsection (5) of newly designated §17-402(a) by deleting therefrom the word "specific".

Section 42. Amend subsection (9) of newly designated §17-402(a) by adding after

"charter", and before the ";", the words and the expiration of 90 days after the date of notice to the corporation of revocation without a reinstatement of Its charter".

Section 43. Amend subsection (10) of newly designated §17-402(a) by adding at the

beginning of the subsection the words "Unless otherwise provided in the partnership agreement, or with the written consent of all partners,", and by changing the word "in", which follows the foregoing, to read "tn".

Section 44. Amend subsection (a) of §17-405 by adding at the end of the subsection the following:

"A partnership agreement may provide for the taking of an action, including the amendment of the partnership agreement, without the vote or approval of any general partner or class or group of general partners, including an action to create under the provisions of the partnership agreement a class or group of partnership interests that was not previously outstanding."

Section 45. Amend subsection (b) of §17-405 to delete from the first sentence of the section "(on a per capita or any other basis)", and to add to the end of the section the following:

"Voting by general partners may be on a per capita, number, financial Interest, class, group or any other basis."

Section 46. Amend subsection (a) of §17-502 by adding at the end of the subsection the following:

"The foregoing option shall be In addition to, and not In lieu of, any other rights, including the right to specific performance, that the limited partnership may have against such partner under the partnership agreement or applicable law."

Section 47. Amend the second sentence of subsection (b) of §17-502 by deleting

therefrom ", or whose claim arises.", and by adding thereto after "contribution", the words "or return".

Section 48. Amend subsection (b) of §17-502 by adding at the end of the subsection the following:

"A conditional obligation of a partner to make a contribution or return money or other property to a limited partnership may not be enforced unless the conditions to be obligation have been satisfied or waived as to or by such partner. Conditional obligations include contributions payable upon a discretionary call of a limited partnership or a general partner prior to the time the call occurs."

Section 49. Amend subsection (c) of §17-502 by adding after "reducing", the words "or eliminating".

Section 50. Amend §17-601 by deleting the section in its entirety and substituting In

lieu thereof the following:

"§17-601. interim Distributions.

Except as provided in this subchapter, to the extent and at the times or upon the happening of the events specified in the partnership agreement, a partner is entitled to receive from a limited partnership distributions before his withdrawal from the limited partnership and before the dissolution and winding up thereof."

Section 51. Amend §17-602 by deleting the section in Its entirety and substituting in

lieu thereof the following:

"§17-602. Withdrawal of General Partner.

A partnership agreement may provide that a general partner shall not have the right to withdraw as a general partner of a limited partnership. Notwithstanding that a partnership agreement provides that a general partner does not have the right to

withdraw as a general partner of a limited partnership, a general partner may withdraw from a limited partnership at any time by giving written notice to the other partners. If the withdrawal of a general partner violates a partnership agreement, In addition to any remedies otherwise available under applicable law, the limited partnership may recover from the withdrawing general partner damages for breach of the partnership agreement and offset the damages against the amount otherwise distributable to the withdrawing general partner."

Section 52. Amend §17-603 by adding at the end of the section the following:

"Notwithstanding anything to the contrary set forth in this chapter, a partnership agreement may provide that a limited partner may not withdraw from a limited partnership or assign a partnership Interest In a limited partnership prior to the dissolution and winding up of the limited partnership."

Section 53. Amend §17-606 by adding after "title,", the words "and unless otherwise

provided In the partnership agreement,".

Section 54. Amend §17-606 by adding at the end of the section the following:

"A partnership agreement may provide for the establishment of a record date with respect to allocations and distributions by a limited partnership."

Section 55. Amend §17-607 by deleting the section in Its entirety and substituting In lieu thereof the following:

"§17-607. Limitations on Distribution.

<a) A limited partnership shall not make a distribution to a partner to the extent that at the time of the distribution, after giving effect to the distribution, all liabilities of the limited partnership, other than liabilities to partners on account of their partnership Interests and liabilities for which the recourse of creditors is limited to specified property of the limited partnership, exceed the fair value of the assets of the limited partnership, except that the fair value of property that is subject to a liability for which the recourse of creditors Is limited shall be Included In the assets of the limited partnership only to the extent that the fair value of that property exceeds that liability.

(b) A limited partner who receives a distribution in violation of §17-607(a) of
this title, and who knew at the time of the distribution that the distribution violated §11-601(a) of this title, shall be liable to the limited partnership for the amount of the distribution. A limited partner who receives a distribution In violation of
§17-607(a) of this title, and who did not know at the time of the distribution that the distribution violated §17-607(a) of this title, shall not be liable for the amount of the distribution. Subject to §17-607(c) of this title, this §17-607(b) shall not affect
any obligation or liability of a limited partner under a partnership agreement or other applicable law for the amount of distribution.

(a) Unless otherwise agreed, a limited partner who receives a distribution from a limited partnership shall have no liability under this chapter or other applicable law for the amount of the distribution after the expiration of three years from the date of the distribution."

Section 56. Amend §11-608 by deleting the section In Its entirety.

Section 51. Amend §11-102 by adding thereto a new subsection (c) reading as follows:

"(c) Unless otherwise provided in a partnership agreement and except to the extent assumed by agreement, until an assignee of a partnership Interest becomes a partner, the assignee shall have no liability as a partner solely as a result of the assignment."

Section 58. Amend subsection (h) of §11-704 by deleting the subsection in Its entirety and substituting In lieu thereof the following:

"(b) An assignee who has become a limited partner has, to the extent assigned, the rights and powers, and Is subject to the restrictions and liabilities, of a limited partner under the partnership agreement and this chapter. Notwithstanding the foregoing, unless otherwise provided In the partnership agreement, an assignee who becomes a limited partner is liable for the obligations of his assignor to make contributions as provided In §11-502 of this title, but shall not be liable for the obligations of his assignor under subchapter VI of this chapter. However, the assignee is not obligated for liabilities, including the obligations of his assignor to make contributions as provided In §17-502 of this title, unknown to the assignee at the time he became a limited partner and which could not be ascertained from the partnership agreement."

Section 59. Amend subsection (c) of §17-704 by deleting If an assignee of a

partnership interest becomes a limited partner", and substituting in lieu thereof the following:

"Whether or not an assignee of a partnership interest becomes a limited partner".

Section 60. Amend subsection (a) of §17-803 by adding after "If none, the limited

partners", the words or a person approved by the limited partners or, if there is more than one class or group of limited partners, then by each class or group of limited partners, in either case, by limited partners who own more than 50 percent of the then current percentage or other interest in the profits of the limited partnership owned by all of the limited partners or by the limited partners in each class or group, as appropriate".

Section 61. Amend subsection (b) of §17-803 by adding after "discharge", the words "or make reasonable provision for", and by adding after all without affecting the liability of limited partners", the words and without imposing the liability of a general partner on a liquidating trustee'.

Section 62. Amend §17-804 by designating the existing section as subsection "(a)", and by adding at the end of the section the following new subsection (b):

"(b) A limited partnership which has dissolved shall pay or make reasonable

provision to pay all claims and obligations, including all contingent, conditional or unmatured claims and obligations, known to the limited partnership and all claims and obligations which are known to the limited partnership but for which the identity of the claimant is unknown. If there are sufficient assets, such claims and obligations shall be paid In full and any such provision for payment made shall be made In full. If there are insufficient assets, such claims and obligations shall be paid or provided for according to their priority and, among claims and obligations of equal priority, ratably to the extent of assets available therefor. Unless otherwise provided in a partnership agreement, any remaining assets shall be distributed as provided In this chapter. Any liquidating trustee winding up a limited partnership's affairs who has complied with this section shall not be personally liable to the claimants of the dissolved limited partnership by reason of such person's actions In winding up the limited partnership."

Section 63. Amend subsection (1) of newly designated §17-804(a) by deleting "by

establishment of reserves", and substituting in lieu thereof the following:

"the making of reasonable provision for payment thereof".

Section 64. Amend subsection (1) of newly designated §17-804(a) by adding after "other than liabilities", the words for which reasonable provision for payment has been made and liabilities".

Section 65. Amend §17-902 by designating the existing section as subsection "(a)", and by adding at the end of the section the following new subsection (b):

"(b) A foreign limited partnership or a partnership or corporation formed or

organized under the laws of any foreign country or other foreign jurisdiction or the laws of any state other than the State of Delaware shall not be deemed to be doing business In the State of Delaware solely by reason of its being a partner in a domestic limited partnership."

Section 66. Amend subsection (2) of §17-1104(f) by deleting the "." after "17-501", and

substituting in lieu thereof the word "and", and by deleting therefrom and 17-608".

Section 67. Amend subsection (3) of §17-1107(a) by adding after "a certificate of

cancellation under §17-203 of this title", the words ", a certificate of merger or consolidation under §17-211 of this title".

Section 68. Amend §17-1107 by relettering current subsections (b), (c) and (d) thereof as subsections (c), (d) and (e), respectively, and by adding a new subsection (b) reading as follows:

"(b) In addition to those fees charged under subsection (a) of this section, there

shall be collected by and paid to the Secretary of State for the use of the State of Delaware the following:

(1) for all services described in subsection (a) of this section that are
requested to be completed within the same day as the day of the request, the additional sum of up to $100; and

(2) for all services described in subsection (a) of this section that are
requested to be completed within a 24-hour period from the time of the request, the additional sum of up to $50.

The Secretary of State shall establish (and may from time to time amend) a schedule of specific fees payable pursuant to this subsection (b)."

Section 69. Amend Subchapter XI of Chapter 17, Title 6 by adding thereto, immediately following §17-1108, a new §17-1109 reading as follows:

"§17-1109. Annual Tax of Domestic Limited Partnership and Foreign Limited Partnership.

(a) Every domestic limited partnership and every foreign limited partnership registered to do business in the State of Delaware shall pay an annual tax, for the use of the State of Delaware, in the amount of $100.

(a) The annual tax shall be due and payable on the first day of June following the close of the calendar year or upon the cancellation of a certificate of limited partnership. The Secretary of State shall receive the annual tax and pay over all taxes collected to the Department of Finance of the State of Delaware. If the annual tax
remains unpaid after the due date established by this §17-1109(c). the tax shall bear Interest at the rate of 1% for each month or portion thereof until fully paid.

(a) The Secretary of State shall, at least 60 days prior to the first day of June of each year, cause to be mailed to each domestic limited partnership and foreign limited partnership required to comply with the provisions of this §17-1109 in care of Its registered agent in the State of Delaware an annual statement for the tax to be paid hereunder.

(b) In the event of neglect, refusal or failure on the part of any domestic limited partnership or foreign limited partnership to pay the annual tax to be paid hereunder on or before the first day of June in any year, such domestic limited partnership or foreign limited partnership shall pay the sum of $100 to be recovered by adding that amount to the annual tax, and such additional sum shall become a part of the tax and shall be collected In the same manner and subject to the same penalties.

(c) In case any domestic limited partnership or foreign limited partnership shall fall to pay the annual tax due within the time required by this §17-1109, and in case the agent in charge of the registered office of any domestic limited partnership or foreign limited partnership upon whom process against such domestic limited partnership or foreign limited partnership may be served shall die, resign, refuse to act as such, remove from the State of Delaware or cannot with due diligence be found, it shall be lawful while default continues to serve process against such domestic limited

partnership or foreign limited partnership upon the Secretary of State. Such service upon the Secretary of State shall be made in the manner and shall have the effect stated in §17-105 of this title In the case of a domestic limited partnership and §17-910 of this title in the case of a foreign limited partnership and shall be governed in all respects by said sections.

(d) The annual ta. shall be a debt due from a domestic limited partnership or foreign limited partnership to the State of Delaware, for which an action at law may be maintained after the Same shall have been in arrears for a period of one month. The tax shall also be a preferred debt In the case of insolvency.

(a) A domestic limited partnership or foreign limited partnership that neglects,
refuses or falls to pay the annual tax when due shall, after written demand therefor, mailed on or before the first day of September of the year in which such tax is due, by the Secretary of State to such domestic limited partnership or foreign limited partnership In care of Its registered agent, cease to be in good standing as a domestic limited partnership or registered as a foreign limited partnership in the State of Delaware on the first day of November of the year in which such tax is due unless such tax and all penalties and Interest thereon are paid in full before the first day of November of the year in which such tax is due.

(a) A domestic limited partnership that has ceased to be in good standing or a
foreign limited partnership that has ceased to be registered by reason of the failure to pay an annual tax shall be restored to and have the status of a domestic limited partnership in good standing or a foreign limited partnership that is registered in the

State of Delaware upon the payment of the annual tax and all penalties and Interest thereon for each year for which such domestic limited partnership or foreign limited partnership neglected, refused or failed to pay an annual tax.

(I) The Attorney General, either on his own motion or upon request of the

Secretary of State, whenever any annual tax due under this chapter from any domestic limited partnership or foreign limited partnership shall have remained In arrears for a period of three months after the tax shall have become payable, may apply to the Court of Chancery, by petition In the name of the State of Delaware, on five days notice to such domestic limited partnership or foreign limited partnership, which notice may be served In such manner as the Court may direct, for an injunction to restrain such domestic limited partnership or foreign limited partnership from the transaction of any business within the State of Delaware or elsewhere, until the payment of the annual tax, and all penalties and interest due thereon and the cost of the application, which shall be fixed by the Court. The Court of Chancery may grant the injunction, If a proper case appears, and upon granting and service of the injunction, such domestic limited partnership or foreign limited partnership thereafter shall not transact any business until the injunction shall be dissolved.

(j) A domestic limited partnership that has ceased to be In good standing by
reason of its neglect, refusal or failure to pay an annual tax shall remain a domestic limited partnership formed under this chapter. The Secretary of State shall not accept
for filing any certificate required or permitted by this chapter to be filed In respect of any domestic limited partnership or foreign limited partnership which has neglected, refused or failed to pay an annual tax, and shall not issue any certificate of good standing with respect to such domestic limited partnership or foreign limited
partnership, unless and until such domestic limited partnership or foreign limited partnership shall have been restored to and have the status of a domestic limited partnership In good standing or a foreign limited partnership duly registered In the State of Delaware.

(a) A domestic limited partnership that has ceased to be In good standing or a foreign limited partnership that has ceased to be registered In the State of Delaware by reason of Its neglect, refusal or failure to pay an annual tax may not maintain any action, suit or proceeding In any court of the State of Delaware until such domestic limited partnership or foreign limited partnership has been restored to and has the status of a domestic limited partnership or foreign limited partnership In good standing or duly registered In the State of Delaware. An action, suit or proceeding may not be maintained In any court of the State of Delaware by any successor or assignee of such domestic limited partnership or foreign limited partnership on any right, claim or demand arising out of the transaction of business by such domestic limited partnership after It has ceased to be In good standing or a foreign limited partnership that has ceased to be registered In the State of Delaware until such domestic limited partnership or foreign limited partnership, or any person that has acquired all or substantially all of its assets, has paid any annual tax then due and payable, together with penalties and interest thereon.

(1) The neglect, refusal or failure of a domestic limited partnership or foreign

limited partnership to pay an annual tax shall not impair the validity of any contract, deed, mortgage, security Interest, lien or act of such domestic limited partnership or foreign limited partnership or prevent such domestic limited partnership or foreign limited partnership from defending any action, suit, or proceeding In any court of the State of Delaware.

(m) A limited partner of a domestic limited partnership or foreign limited

partnership is not liable as a general partner of such domestic limited partnership or foreign limited partnership solely by reason of the neglect, refusal or failure of such domestic limited partnership or foreign limited partnership to pay an annual tax or by reason of such domestic limited partnership or foreign limited partnership ceasing to be In good standing or duly registered."

Section 70. If any provision of this bill or Its application to any person or

circumstance is held invalid, the invalidity does not affect other provisions or applications of the bill which can be given effect without the invalid provision or application, and to this end the provisions of this bill are severable.

Section 71. This bill shall become effective on September I, 1988.