CHAPTER 78

FORMERLY

SENATE BILL NO. 107

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 1. Amend § 17-101, Chapter 17, Title 6 of the Delaware Code by redesignating paragraphs "(14)" and "( I 5)" as paragraphs "(15)" and "(16)", respectively, and by adding a new paragraph designated as paragraph "( I4)" in its appropriate numerical order to read as follows: "(14) ."Personal representative" means, as to a natural person, the executor, administrator, guardian, conservator or other legal representative thereof and, as to a person other than a natural person, the legal representative or successor thereof."

Section 2. Amend § 17-104(a)(2), Chapter 17, Title 6 of the Delaware Code by inserting after the words "a domestic corporation," the words "or a domestic limited partnership, or a domestic limited liability company, or a domestic business trust," and by inserting after the words "a foreign corporation" the words: ", or a foreign limited partnership, or a foreign limited liability company".

Section 3. Amend § 17-104(a)(2), Chapter 17, Title 6 of the Delaware Code by inserting immediately before the words "or the limited partnership itself', the words "which is generally open during normal business hours to accept service of process and otherwise perform the functions of a registered agent,".

Section 4. Amend § 17-106(a), Chapter 17, Title 6 of the Delaware Code by deleting such subsection in its entirety and inserting in lieu thereof the following: "(a) A limited partnership may carry on any lawful business, purpose or activity, whether or not for profit, with the exception of the business of granting policies of insurance, or assuming insurance risks or banking as defined in § 126 of Title 8."

Section 5. Amend § 17-109(d), Chapter 17, Title 6 of the Delaware Code by deleting the following words: ", or the exclusivity of arbitration in," and inserting after the words the State of Delaware," the words ", or the exclusivity of arbitration in a specified jurisdiction or the State of Delaware,".

Section 6, Amend § 17-110, Chapter 17, Title 6 of the Delaware Code by adding in the first sentence of subsection (a) immediately before the word "withdrawal" the words "removal or other" and by inserting immediately following the words "right of any person" the words "to become or continue", and by adding in the second sentence of subsection (a), immediately following the words "any such application," the words "the limited partnership shall be named as a party, and", and by adding in the first sentence of subsection (b), immediately before the word "withdrawal" the words "removal or other", and by deleting the word "Service" the first time that it appears in the second sentence of subsection (b) and substituting in lieu thereof the words "In any such application, the limited partnership shall be named as a party, and service".

Section 7. Amend § 17-203, Chapter 17, Title 6 of the Delaware Code by (I) deleting the words "or at any other time there are no limited partners," in the first sentence, (2) adding immediately prior to the "." at the end of the first sentence the words ", or upon the conversion of a domestic limited partnership approved in accordance with § 17-219 of this title", and (3) deleting the words "at any other time there are no limited partners" in the second sentence and substituting in lieu thereof the words "upon the conversion of a domestic limited partnership approved in accordance with § 17-219 of this title.

Section 8. Amend § 17-204(a)(1), Chapter 17, Title 6 of the Delaware Code by deleting the words and a certificate of transfer" and by inserting in lieu thereof the words", a certificate of transfer and a certificate of transfer and continuance."

Section 9. Amend § 17-206(a), Chapter 17, Title 6 of the Delaware Code by adding immediately following the words any certificate of transfer" the words ", any certificate of transfer and continuance."

Section 10. Amend § 17-206(a)(1), Chapter 17, Title 6 of the Delaware Code by adding immediately following the words "certificate of transfer", the words ", the certificate of transfer and continuance".

Section 11. Amend § 17-206(b), Chapter 17, Title 6 of the Delaware Code by adding the following sentence at the end thereof.

Upon the filing of a certificate of transfer and continuance, or upon the future effective date or time of a certificate of transfer and continuance, as provided for therein, the. limited partnership filing the certificate of transfer and continuance shall continue to exist as a limited partnership of the State of Delaware with the effect provided in Section 17-216 of this title."

Section 12. Amend § 17-206(c), Chapter 17, Title 6 of the Delaware Code by adding immediately following the words "certificate of transfer" the words ", certificate of transfer and continuance".

Section 13. Amend § 17-207(a), Chapter 17, Title 6 of the Delaware Code by adding immediately following the words "certificate of transfer" the words ", certificate of transfer and continuance".

Section 14. Amend § 17-213, Chapter 17, Title 6 of the Delaware Code by (1) designating the existing section as subsection "(a)" and deleting the words "corrected certificate" at two places in the last sentence thereof and substituting in lieu thereof the words "certificate of correction" and (2) adding the following sentences as a new subsection "(b)": "(b) In lieu of filing a certificate of correction, a certificate may be corrected by filing with the Secretary of State a corrected certificate which shall be executed and filed as if the corrected certificate were the certificate being corrected, and a fee equal to the fee payable to the Secretary of State if the certificate being corrected were then being filed shall be paid to and collected by the Secretary of State for the use of the State of Delaware in connection with the filing of the corrected certificate. The corrected certificate shall be specifically designated as such in its heading, shall specify the inaccuracy or defect to be corrected, and shall set forth the entire certificate in corrected form. A certificate corrected in accordance with this section shall be effective as of the date the original certificate was filed, except as to those persons who are substantially and adversely affected by the correction and as to those persons the certificate as corrected shall be effective from the filing date."

Section 15. Amend § 17-214(a), Chapter 17, Title 6 of the Delaware Code by adding the word "and" following the ";" appearing at the end of subsection (1), by deleting subsection (2) in its entirety, and by deleting "(3)" and substituting in lieu thereof "(2)".

Section 16. Amend § 17-215(g), Chapter 17, Title 6 of the Delaware Code by deleting the words "a partnership agreement" and substituting in lieu thereof the words "the domestication" and (2) adding immediately prior to the ";" the following: ", and a partnership agreement shall be approved by the same authorization required to approve the domestication".

Section 17. Amend § 17-216, Chapter 17, Title 6 of the Delaware Code by deleting said section in its entirety and substituting in lieu thereof the following:

"§ 17-216. TRANSFER OR CONTINUANCE OF DOMESTIC LIMITED PARTNERSHIPS.

(a) Upon compliance with the provisions of this section, any limited partnership may transfer to or domesticate in any jurisdiction, other than any state, that permits the transfer to or domestication in such jurisdiction of a limited partnership and, in connection therewith, may elect to continue its existence as a limited partnership in the State of Delaware.

(b) Notwithstanding anything to the contrary in this chapter or a partnership agreement, the transfer or domestication or continuance described in subsection (a) of this section shall be approved in writing by all of the partners. If all of the partners of the limited partnership shall approve the transfer or domestication described in subsection (a) of this section, a certificate of transfer if the limited partnership's existence as a limited partnership of the State of Delaware is to cease, or a certificate of transfer and continuance if the limited partnership's existence as a limited partnership in the State of Delaware is to continue, executed in accordance with § 17-204 of this title, shall be filed in the Office of the Secretary of State in accordance with § 17-206 of this title. The certificate of transfer or the certificate of transfer and continuance shall state:

(1) The name of the limited partnership and, if it has been changed, the name under which its certificate of limited partnership was originally filed;

(2) The date of the filing of its original certificate of limited partnership with the Secretary of State;

(3) The jurisdiction to which the limited partnership shall be transferred or in which it shall be domesticated;

(4) The future effective date or time (which shall be a date or time certain) of the transfer or domestication to the jurisdiction specified in subsection (b)(3) of this section if it is not to be effective upon the filing of the certificate of transfer or the certificate of transfer and continuance;

(5) That the transfer or domestication or continuance of the limited partnership has been approved in accordance with the provisions of this section;

(6) In the case of a certificate of transfer, (i) that the existence of the limited partnership as a limited partnership of the State of Delaware shall cease when the certificate of transfer becomes effective and (ii) the agreement of the limited partnership that it may be served with process in the State of Delaware in any action, suit or proceeding for enforcement of any obligation of the limited partnership arising while it was a limited partnership of the State of Delaware, and that it irrevocably appoints the Secretary of State as its agent to accept service of process in any such action, suit or proceeding;

(7) The address to which a copy of the process referred to in subsection (b)(6) of this section 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 this subsection and any other address that 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 the limited partnership that has transferred or domesticated out of the State of Delaware at all such addresses furnished by the plaintiff in accordance with the procedures set forth in § 17-911(c) of this title; and

(8) In the case of a certificate of transfer and continuance, that the limited partnership will continue to exist as a limited partnership of the State of Delaware after the certificate of transfer and continuance becomes effective.

(c) Upon the filing in the Office of the Secretary of State of the certificate of transfer or upon the future effective date or time of the certificate of transfer and payment to the Secretary of State of all fees prescribed in this chapter, the Secretary of State shall certify that the limited partnership has filed all documents and paid all fees required by this chapter, and thereupon the limited partnership shall cease to exist as a limited partnership of the State of Delaware. Such certificate of the Secretary of State shall be prima facie evidence of the transfer or domestication by such limited partnership out of the State of Delaware.

(d) The transfer or domestication of a limited partnership out of the State of Delaware in accordance with this section and the resulting cessation of its existence as a limited partnership of the State of Delaware pursuant to a certificate of transfer shall not be deemed to affect any obligations or liabilities of the limited partnership incurred prior to such transfer or domestication or the personal liability of any person incurred prior to such transfer or domestication, nor shall it be deemed to affect the choice of law applicable to the limited partnership with respect to matters arising prior to such transfer or domestication.

(e) If a limited partnership files a certificate of transfer and continuance, after the time the certificate of transfer and continuance becomes effective, the limited partnership shall continue to exist as a limited partnership of the State of Delaware, and the laws of the State of Delaware, including the provisions of this chapter, shall apply to the limited partnership, to the same extent as prior to such time."

Section 18. Amend § 17-217(c)(1), Chapter 17, Title 6 of the Delaware Code by deleting the following: ", incorporated".

Section 19. Amend § 17-217(g), Chapter 17, Title 6 of the Delaware Code by adding immediately prior to the "." the words "and shall constitute a continuation of the existence of the converting other entity in the form of a domestic limited partnership".

Section 20. Amend § I7-217(h), Chapter 17, Title 6 of the Delaware Code by (I) deleting the words "a partnership agreement" and substituting in lieu thereof the words the conversion" and (2) adding immediately prior to the ";" the following: ", and a partnership agreement shall be approved by the same authorization required to approve the conversion".

Section 21. Amend § 17-218, Chapter 17, Title 6 of the Delaware Code by adding immediately following the words "limited partners" in the title of such section the words ", general partners".

Section 22. Amend § 17-218(a), Chapter 17, Title 6 of the Delaware Code by adding immediately following the words "series of limited partners" the words ", general partners".

Section 23. Amend § 17-218(b), Chapter 17, Title 6 of the Delaware Code (1) by adding immediately following the words "creates one or more series" the words or states that the liabilities of a general partner are limited to the liabilities of a designated series", (2) by adding immediately following the words ''limitation on liabilities of a series" the words or a general partner, (3) by adding immediately following the words "existing with respect to a particular series" the words or general partner, (4) by adding immediately following the words "enforceable only against the assets of such series" the words or a general partner associated with such series", and (5) by adding immediately prior to the "." the words or any general partner not associated with such series".

Section 24. Amend § 17-218(c), Chapter 17, Title 6 of the Delaware Code (1) by adding immediately prior to the words "referenced in subsection (b)" the words or a general partner as" and (2) by deleting immediately prior to the "." the words of a series".

Section 25. Amend § 17-218(f), Chapter 17, Title 6 of the Delaware Code by adding immediately prior to the "." at the end of the second sentence of such subsection the words or cause the termination of the series, regardless of whether such limited partner was the last remaining limited partner associated with such series".

Section 26. Amend § 17-218(g), Chapter 17, Title 6 of the Delaware Code by deleting the words "(h) and (j)" and substituting in lieu thereof the words "(i) and (k)".

Section 27. Amend § 17-218(i), Chapter 17, Title 6 of the Delaware Code by adding a new sentence immediately after the last sentence of the subsection to read as follows: "A series is terminated and its affairs shall be wound up upon the dissolution of the limited partnership under § 17-801 of this chapter or otherwise upon the first to occur of the following:

(1) At the time specified in the partnership agreement;

(2) Upon the happening of events specified in the partnership agreement;

(3) Unless otherwise provided in the partnership agreement, upon the written consent of (a) all general partners associated with such series and (b) the limited partners associated with such series or, if there is more than one class or group of limited partners associated with such series, then by each class or group of limited partners associated with such series, in either case, by limited partners associated with such series who own more than two-thirds of the then current percentage or other interest in the profits of the limited partnership associated with such series owned by all of the limited partners associated with such series or by the limited partners in each class or group associated with such series, as appropriate;

(4) An event of withdrawal of a general partner associated with the series unless at the time there is at least one other general partner associated with the series and the partnership agreement permits the business of the series to be carried on by the remaining general partner and that partner does so, but the series is not terminated and is not required to be wound up by reason of any event of withdrawal if (i) within 90 days or such other period as is provided for in the partnership agreement after the withdrawal either (A) if provided for in the partnership agreement, the then current percentage or other interest in the profits of the series specified in the partnership agreement owned by the remaining partners associated with the series agree in writing or vote to continue the business of the series and to appoint, effective as of the date of withdrawal, one or more additional general partners for the series if necessary or desired, or (B) if no such right to agree or vote to continue the business of the series of the limited partnership and to appoint one or more additional general partners for such series is provided for in the partnership agreement, then more than 50% of the then current percentage or other interest in the profits of the series owned by the remaining partners associated with the series or, if there is more than one class or group of remaining partners associated with the series, then more than 50% of the then current percentage or other interest in the profits of the series owned by each class or classes or group or groups of remaining partners associated with the series, agree in writing or vote to continue the business of the series and to appoint, effective as of the date of withdrawal, one or more additional general partners for the series if necessary or desired, or (ii) the business of the series is continued pursuant to a right to continue stated in the partnership agreement and the appointment, effective as of the date of withdrawal, of 1 or more additional general partners to be associated with the series if necessary or desired;

(5) At the time there are no limited partners associated with the series, provided that, unless otherwise provided in the partnership agreement, the series is not terminated and is not required to be wound up if, within 90 days or such other period as is provided for in the partnership agreement after the occurrence of the event that caused the last limited partner associated with the series to cease to be a limited partner associated with the series, the personal representative of the last limited partner associated with the series and all of the general partners associated with the series agree in writing or vote to continue the business of the series and to the admission of the personal representative of such limited partner or its nominee or designee to the limited partnership as a limited partner associated with the series, effective as of the occurrence of the event that caused the last limited partner associated with the series to cease to be a limited partner associated with the series; or

(6) The termination of such series under subsection (I) of this section."

Section 28. Amend § 17-218(j), Chapter 17, Title 6 of the Delaware Code by deleting the word "legal" and substituting in lieu thereof the word "personal".

Section 29. Amend § 17-218, Chapter 17, Title 6 of the Delaware Code by redesignating subsections "(g)" through "(k)" as subsections "(h)" through "(I)", respectively, and by adding a new subsection designated as subsection "(g)" in its appropriate alphabetical order to read as follows: "(g) Section 17-602 of this title shall apply to a general partner with respect to any series with which the general partner is associated. A general partner shall cease to be a general partner with respect to a series and to have the power to exercise any rights or powers of a general partner with respect to such series upon an event of withdrawal of the general partner with respect to such series. Except as otherwise provided in a partnership agreement, either of the following events or any event in a partnership agreement that causes a general partner to cease to be associated with a series shall not, in itself, cause such general partner to cease to be associated with any other series or to be a general partner of the limited partnership:

(1) The general partner withdraws with respect to the series in accordance with § 17-602 of this title; or

(2) The general partner assigns all of his partnership interest with respect to the series."

Section 30. Amend § 17-218, Chapter 17, Title 6 of the Delaware Code to amend newly designated § 17-218(1) by deleting the word "dissolution" and substituting in lieu thereof the word "termination".

Section 31. Amend § 17-218, Chapter 17, Title 6 of the Delaware Code by adding a new subsection designated as subsection "(In)" in its appropriate alphabetical order to read as follows: "(m) If a foreign limited partnership that is registering to do business in the State of Delaware in accordance with § 17-902 of this chapter is governed by a partnership agreement that establishes or provides for the establishment of designated series of limited partners, general partners or partnership interests having separate rights, powers or duties with respect to specified property or obligations of the foreign limited partnership or profits and losses associated with specified property or obligations, that fact shall be so stated on the application for registration as a foreign limited partnership. In addition, the foreign limited partnership shall state on such application whether the debts, liabilities and obligations incurred, contracted for or otherwise existing with respect to a particular series, if any, or general partner associated with such series shall be enforceable only against the assets of such series or any general partner associated with such series, and not against the assets of the foreign limited partnership generally or any general partner not associated with such series."

Section 32. Amend § 17-301, Chapter 17, Title 6 of the Delaware Code by redesignating paragraph "(c)" as paragraph "(d)", and by adding a new paragraph designated as paragraph "(c)" in its appropriate alphabetical order to read as follows: "(c) In connection with the domestication of a non-United States entity (as defined in § 17-215 of this title) as a limited partnership in the State of Delaware in accordance with § 17-215 of this title or the conversion of an other entity (as defined in § 17-217 of this title) to a domestic limited partnership in accordance with § 17-217 of this title, a person is admitted as a limited partner of the limited partnership at the time provided in and upon compliance with the partnership agreement."

Section 33. Amend § 17-301, Chapter 17, Title 6 of the Delaware Code by adding a new sentence at the end of newly designated § 17-301(d) to read as follows: "Unless otherwise provided in a partnership agreement, a person may be admitted as the sole limited partner of a limited partnership without making a contribution or being obligated to make a contribution to the limited partnership or without acquiring a partnership interest in the limited partnership."

Section 34. Amend § 17-302, Chapter 17, Title 6 of the Delaware Code by adding a new § 17-302(e) to read as follows: "(e) Unless otherwise provided in a partnership agreement, on any matter that is to be voted on by limited partners, the limited partners may take such action without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by the limited partners having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting. Unless otherwise provided in a partnership agreement, on any matter that is to be voted on by limited partners, the limited partners may vote in person or by proxy."

Section 35. Amend § 17-401(a), Chapter 17, Title 6 of the Delaware Code by adding a new sentence immediately prior to the last sentence of § 17-401(a) to read as follows: "Unless otherwise provided in a partnership agreement, a person may be admitted as the sole general partner of a limited partnership without making a contribution or being obligated to make a contribution to the limited partnership or without acquiring a partnership interest in the limited partnership."

Section 36. Amend § 17-403(c), Chapter 17, Title 6 of the Delaware Code by adding after the word "agents" appearing in the first sentence thereof the word ", officers".

Section 37. Amend § 17-405, Chapter 17, Title 6 of the Delaware Code by adding a new § 17-405(d) to read as follows: "(d) Unless otherwise provided in a partnership agreement, on any matter that is to be voted on by general partners, the general partners may take such action without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by the general partners having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting. Unless otherwise provided in a partnership agreement, on any matter that is to be voted on by general partners, the general partners may vote in person or by proxy."

Section 38. Amend § 17-705, Chapter 17, Title 6 of the Delaware Code by (I) deleting the words "executor, administrator, guardian, conservator or other legal representative" and substituting in lieu thereof the words "personal representative and (2) deleting the words "legal representative or successor" and substituting in lieu thereof the words "personal representative".

Section 39. Amend § 17-801(2), Chapter 17, Title 6 of the Delaware Code by deleting the said subsection in its entirety and substituting in lieu thereof "(2) Unless otherwise provided in a partnership agreement, upon the written consent of (a) all general partners and (b) the limited partners of a limited partnership 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 two-thirds 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 40. Amend § 17-801(3), Chapter 17, Title 6 of the Delaware Code (1) by deleting the words ", within 90 days after the withdrawal, not less than a majority in interest of the remaining partners agree in writing to continue the business of the limited partnership and to and by substituting in lieu thereof the words "(i) within 90 days or such other period as is provided for in a partnership agreement after the withdrawal either (A) if provided for in the partnership agreement, the then current percentage or other interest in the profits of the limited partnership specified in the partnership agreement owned by the remaining partners agree in writing or vote to continue the business of the limited partnership and to appoint, effective as of the date of withdrawal, one or more additional general partners if necessary or desired, or (B) if no such right to agree or vote to continue the business of the limited partnership and to appoint one or more additional general partners is provided for in the partnership agreement, then more than 50% of the then current percentage or other interest in the profits of the limited partnership owned by the remaining partners or, if there is more than one class or group of remaining partners, then more than 50% of the then current percentage or other interest in the profits of the limited partnership owned by each class or classes or group or groups of remaining partners, agree in writing or vote to continue the business of the limited partnership and to appoint, effective as of the date of withdrawal, one or more additional general partners if necessary or desired, or (ii) the business of the limited partnership is continued pursuant to a right to continue stated in the partnership agreement and;" and (2) by deleting the word "or" as the last word of the subsection.

Section 41. Amend § 17-801, Chapter 17, Title 6 of the Delaware Code by redesignating paragraph "(4)" as paragraph "(5)", and by adding a new paragraph designated as paragraph "(4)" in its appropriate numerical order to read as follows: "(4) At the time there are no limited partners, provided that, unless otherwise provided in a partnership agreement, the limited partnership is not dissolved and is not required to be wound up if, within 90 days or such other period as is provided for in a partnership agreement after the occurrence of the event that caused the last limited partner to cease to be a limited partner, the personal representative of the last limited partner and all of the general partners agree in writing or vote to continue the business of the limited partnership and to the admission of the personal representative of such limited partner or its nominee or designee to the limited partnership as a limited partner, effective as of the occurrence of the event that caused the last limited partner to cease to be a limited partner; or".

Section 42. Amend § 17-803(a), Chapter 17, Title 6 of the Delaware Code by deleting the word "legal" and substituting in lieu thereof the word "personal".

Section 43. Amend § 17-904(6)(2), Chapter 17, Title 6 of the Delaware Code by inserting after the words "a domestic corporation", the words "or a domestic limited partnership, or a domestic limited liability company, or a domestic business trust," and by inserting after the words "a foreign corporation" the words: ", or a foreign limited partnership, or a foreign limited liability company".

Section 44. Amend § 17-904(6)(2), Chapter 17, Title 6 of the Delaware Code by inserting at the end of said subsection immediately before the "." the words ", which is generally open during normal business hours to accept service of process and otherwise perform the functions of a registered agent".

Section 45. Amend § 17-1107(a)(3), Chapter 17, Title 6 of the Delaware Code by adding after the words "certificate of transfer" the words "or a certificate of transfer and continuance."

Section 46. This Act shall become effective August 1, 1997.

Approved June 25, 1997