CHAPTER 340

FORMERLY

SENATE BILL NO. 312

AN ACT TO AMEND AN ACT TO AMEND 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(I1)a., Chapter 17, Title 6 of the Delaware Code by deleting the words "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".

Section 2. Amend § 17-101(13), Chapter 17, Title 6 of the Delaware Code by adding the words "limited liability company, foreign limited liability company," after the phrase "(whether general or limited and whether domestic or foreign),".

Section 3. Amend § 17-203, Chapter 17, Title 6 of the Delaware Code by deleting the word "and" appearing at the end of paragraph (4) thereof, by renumbering paragraph (5) as paragraph (6), and by adding a new paragraph (5) in its appropriate numerical order to read as follows: "(5) In the case of the conversion of a domestic limited partnership, the name of the entity to which the domestic limited partnership has been converted; and".

Section 4. Amend § 17-211(6), Chapter 17, Title 6 of the Delaware Code by deleting the first sentence of the said subsection and substituting in lieu thereof the following sentence:

"Pursuant to an agreement of merger or consolidation, 1 or more domestic limited partnerships may merge or consolidate with or into I or more domestic limited partnerships or 1 or more 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, or any combination thereof, 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."

Section 5. Amend § 17-211(c), Chapter 17, Title 6 of the Delaware Code by adding the words "executed by at least one general partner on behalf of the domestic limited partnership when it is the surviving or resulting entity" before the words "in the Office of the Secretary of State" in the first sentence of the subsection.

Section 6. Amend § 17-211(c)(1) and § 17-211(c)(2), Chapter 17, Title 6 of the Delaware Code by deleting the word "or" as it appears in each of the said subsections immediately following the words "domestic limited partnerships", and substituting in lieu thereof the word "and".

Section 7. Amend § 17-211(e), Chapter 17, Title 6 of the Delaware Code by deleting the second sentence of the said subsection and substituting in lieu thereof the following:

"If a certificate of merger or consolidation provides for a future effective date or time and if an agreement of merger or consolidation is amended to change the future effective date or time, or if an agreement of merger or consolidation permits a certificate of merger or consolidation to be amended to change the future effective date or time without an amendment to the agreement of merger or consolidation, or if an agreement of merger or consolidation is amended to change any other matter described in the certificate of merger or consolidation so as to make the certificate of merger or consolidation false in any material respect, as permitted by § 17-21 1(b) of this title prior to the future effective date or time, the certificate of merger or consolidation shall be amended by the filing of a certificate of amendment of a certificate of merger or consolidation which shall identify the certificate of merger or consolidation and the agreement of merger or consolidation, if applicable, which has been amended and shall state that the agreement of merger or consolidation, if applicable, has been amended and shall set forth the amendment to the certificate of merger or consolidation."

Section 8. Amend § 17-211(f), Chapter 17, Title 6 of the Delaware Code by adding a new sentence at the end of said subsection as follows:

"Whenever this section requires the filing of a certificate of merger or consolidation, such requirement shall be deemed satisfied by the filing of an agreement of merger or consolidation containing the information required by this section to be set forth in the certificate of merger or consolidation."

Section 9. Amend § 17-216(6), Chapter 17, Title 6 of the Delaware Code by deleting the words "Notwithstanding anything to the contrary in this chapter or a partnership agreement", and substituting in lieu thereof the words "Unless otherwise provided in a partnership agreement", and by adding, in the second sentence of the said subsection, following the words "If all of the partners of the limited partnership", the words "or such other vote as may be stated in a partnership agreement".

Section 10. Amend § 17-218(6), Chapter 17, Title 6 of the Delaware Code by deleting the words found in the subsection following the word "generally", and substituting in lieu thereof the words: ", any other series thereof, or any general partner not associated with such series, and, unless otherwise provided in the partnership agreement, none of the debts, liabilities, obligations and expenses incurred, contracted for or otherwise existing with respect to the limited partnership generally or any other series thereof shall be enforceable against the assets of such series or a general partner associated with such series.".

Section 11. Amend § 17-218(m), Chapter 17, Title 6 of the Delaware Code by deleting the words found in the subsection following the word "generally", and substituting in lieu thereof the words: ", any other series thereof, or any general partner not associated with such series, and, unless otherwise provided in the partnership agreement, none of the debts, liabilities, obligations and expenses incurred, contracted for or otherwise existing with respect to the foreign limited partnership generally or any other series thereof shall be enforceable against the assets of such series or a general partner associated with such series.".

Section 12. Amend § 17-302, Chapter 17, Title 6 of the Delaware Code by adding a new subsection 17-302(f) reading as follows:

"(f) If a partnership agreement provides for the manner in which it may be amended, it may be amended in that manner or with the approval of all the partners or as otherwise permitted by law. If a partnership agreement does not provide for the manner in which it may be amended, the partnership agreement may be amended with the approval of all the partners or as otherwise permitted by law. A limited partner and any class or group of limited partners have the right to vote only on matters as specifically set forth in this chapter, on matters specifically provided by agreement, including a partnership agreement, and on any matter with respect to which a general partner may determine in its discretion to seek a vote of a limited partner or a class or group of limited partners if a vote on such matter is not contrary to a partnership agreement or another agreement to which a general partner or the limited partnership is a party. A limited partner and any class or group of limited partners have no other voting rights. A partnership agreement may provide that any limited partner or class or group of limited partners shall have no voting rights."

Section 13. Amend § 17-302(c), Chapter 17, Title 6 of the Delaware Code by deleting therefrom the words "which grants a right to vote".

Section 14. Amend § 17-405(c), Chapter 17, Title 6 of the Delaware Code by deleting therefrom the words "which grants a right to vote".

Section 15. Amend § 17-604, Chapter 17, Title 6 of the Delaware Code by deleting the existing text of the section in its entirety and substituting in lieu thereof the following: "Except as provided in this subchapter, a partner who withdraws or otherwise ceases for any reason to be a partner is entitled to receive on the terms and conditions provided in a partnership agreement any distribution to which such partner is entitled under the partnership agreement, and if not otherwise provided in the partnership agreement, such partner is entitled to receive, within a reasonable time after the date on which such partner withdrew or otherwise ceased to be a partner, the fair value of such partner's interest in the limited partnership as of the date on which such partner withdrew or otherwise ceased to be a partner based upon such partner's right to share in distributions from the limited partnership."

Section l6. Amend § 17-804, Chapter 17, Title 6 of the Delaware Code by deleting in its entirety subparagraph (b) of the said section and substituting in lieu thereof the following new subparagraph (b), and by adding to the said section new paragraphs (c), (d) and (e) as set forth below:

"(b) A limited partnership which has dissolved (i) shall pay or make reasonable provision to pay all claims and obligations, including all contingent, conditional or unmatured contractual claims, known to the limited partnership, (ii) shall make such provision as will be reasonably likely to be sufficient to provide compensation for any claim against the limited partnership which is the subject of a pending action, suit or proceeding to which the limited partnership is a party and (iii) shall make such provision as will be reasonably likely to be sufficient to provide compensation for claims that have not been made known to the limited partnership or that have not arisen but that, based on facts known to the limited partnership, are likely to arise or to become known to the limited partnership within 10 years after the date of dissolution. 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 of equal priority, ratably to the extent of assets available therefor. Unless otherwise provided in the 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.

(c) A limited partner who receives a distribution in violation of subsection (a) of this section, and who knew at the time of the distribution that the distribution violated subsection (a) of this section, shall be liable to the limited partnership for the amount of the distribution. A limited partner who receives a distribution in violation of subsection (a) of this section, and who did not know at the time of the distribution that the distribution violated subsection (a) of this section, shall not be liable for the amount of the distribution. Subject to subsection (d) of this section, this subsection shall not affect any obligation or liability of a limited partner under an agreement or other applicable law for the amount of a distribution.

(d) Unless otherwise agreed, a limited partner who receives a distribution from a limited partnership to which this section applies shall have no liability under this chapter or other applicable law for the amount of the distribution after the expiration of 3 years from the date of the distribution.

(e) Section 17-607 of this title shall not apply to a distribution to which this section applies."

Section 17. Amend § 17-1001, Chapter 17, Title 6 of the Delaware Code by adding the words "or an assignee of a partnership interest" immediately after the words "limited partner".

Section 18. Amend § 17-1002, Chapter 17, Title 6 of the Delaware Code by adding the words "or an assignee of a partnership interest" immediately after the word "partner" in the three places where the word "partner" appears in that section.

Section 19. This Act shall become effective August 1, 1998.

Approved June 29, 1998