CHAPTER 103

FORMERLY

HOUSE BILL NO. 200

AN ACT TO AMEND CHAPTER 15, TITLE 6 OF THE DELAWARE CODE RELATING TO THE CREATION, REGULATION, OPERATION AND DISSOLUTION OF DOMESTIC PARTNERSHIPS AND THE REGISTRATION AND REGULATION OF FOREIGN LIMITED LIABILITY PARTNERSHIPS.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE :

Section 1. Amend § 15-101(2), Chapter 15, Title 6 of the Delaware Code by inserting "a certificate of conversion to a non-Delaware entity under § 15-903 of this title," immediately after "under § 15-901 of this title,".

Section 2. Amend § 15-105(a), Chapter 15, Title 6 of the Delaware Code by deleting the word "original" in the first sentence thereof.

Section 3. Amend § 15-105(c), Chapter 15, Title 6 of the Delaware Code by inserting the following sentence immediately after the fifth sentence thereof: "Upon delivery of any statement or certificate, the Secretary of State shall record the date and time of its delivery.".

Section 4. Amend § 15-105(c)(1), Chapter 15, Title 6 of the Delaware Code by deleting the word "hour" in the first sentence thereof and substituting in lieu thereof the word "time", by deleting the ";" at the end thereof and substituting in lieu thereof ".", and by adding the following at the end of such subsection: "Except as provided in subsection (c)(5) or (c)(6) of this section, such date and time of filing of a statement or certificate shall be the date and time of delivery of the statement or certificate;".

Section 5. Amend § 15-105(c)(2), Chapter 15, Title 6 of the Delaware Code by deleting the word "and" at the end thereof.

Section 6. Amend § 15-105(c)(3), Chapter 15, Title 6 of the Delaware Code by deleting the word "original" in each place where it appears therein, by deleting the word "instrument" the first time it appears therein and substituting in lieu thereof "statement or certificate", and by deleting "instrument." at the end of such subsection and substituting in lieu thereof "statement or certificate; and".

Section 7. Amend § 15-105(c), Chapter 15, Title 6 of the Delaware Code by adding new paragraphs (4), (5) and (6) thereto reading as follows:

"(4) Cause to be entered such information from the statement or certificate as the Secretary of State deems appropriate into the Delaware Corporation Information System or any system which is a successor thereto in the office of the Secretary of State, and such information and a copy of such statement or certificate shall be permanently maintained as a public record on a suitable medium. The Secretary of State is authorized to grant direct access to such system to registered agents subject to the execution of an operating agreement between the Secretary of State and such registered agent. Any registered agent granted such access shall demonstrate the existence of policies to ensure that information entered into the system accurately reflects the content of statements or certificates in the possession of the registered agent at the time of entry.

"(5) Upon request made upon or prior to delivery, the Secretary of State may, to the extent deemed practicable, establish as the date and time of filing of a statement or certificate a date and time after its delivery. If the Secretary of State refuses to file any statement or certificate due to an error, omission or other imperfection, the Secretary of State may hold such statement or certificate in suspension, and in such event, upon delivery of a replacement statement or certificate in proper form for filing and tender of the required fees within five business days after notice of such suspension is given to the filer, the Secretary of State shall establish as the date and time of filing of such statement or certificate the date and time that would have been the date and time of filing of the rejected statement or certificate had it been accepted for filing. The Secretary of State shall not issue a certificate of good standing with respect to any partnership with a statement or certificate held in suspension pursuant to this subsection. The Secretary of State may establish as the date and time of filing of a statement or certificate the date and time at which information from such statement or certificate is entered pursuant to subsection (c)(4) of this section if such statement or certificate is delivered on the same date and within four hours after such information is entered.

(6) If:

(A) together with the actual delivery of a statement or certificate and tender of the required fees, there is delivered to the Secretary of State a separate affidavit (which in its heading shall be designated as an affidavit of extraordinary condition) attesting, on the basis of personal knowledge of the affiant or a reliable source of knowledge identified in the affidavit, that an earlier effort to deliver such statement or certificate and tender such fees was made in good faith, specifying the nature, date and time of such good faith effort and requesting that the Secretary of State establish such date and time as the date and time of filing of such statement or certificate; or

(B) upon the actual delivery of a statement or certificate and tender of the required fees, the Secretary of State in his or her discretion provides a written waiver of the requirement for such an affidavit stating that it appears to the Secretary of State that an earlier effort to deliver such statement or certificate and tender such fees was made in good faith and specifying the date and time of such effort; and

(C) the Secretary of State determines that an extraordinary condition existed at such date and time, that such earlier effort was unsuccessful as a result of the existence of such extraordinary condition, and that such actual delivery and tender were made within a reasonable period (not to exceed two business days) after the cessation of such extraordinary condition, then the Secretary of State may establish such date and time as the date and time of filing of such statement or certificate. No fee shall be paid to the Secretary of State for receiving an affidavit of extraordinary condition. For purposes of this subsection, an extraordinary condition means: any emergency resulting from an attack on, invasion or occupation by foreign military forces of, or disaster, catastrophe, war or other armed conflict, revolution or insurrection, or rioting or civil commotion in, the United States or a locality in which the Secretary of State conducts its business or in which the good faith effort to deliver the statement or certificate and tender the required fees is made, or the immediate threat of any of the foregoing; or any malfunction or outage of the electrical or telephone service to the Secretary of State's office, or weather or other condition in or about a locality in which the Secretary of State conducts its business, as a result of which the Secretary of State's office is not open for the purpose of the filing of statements and certificates under this chapter or such filing cannot be effected without extraordinary effort. The Secretary of State may require such proof as it deems necessary to make the determination required under clause (C) of this subsection, and any such determination shall be conclusive in the absence of actual fraud. If the Secretary of State establishes the date and time of filing of a statement or certificate pursuant to this subsection, the date and time of delivery of the affidavit of extraordinary condition or the date and time of the Secretary of State's written waiver of such affidavit shall be endorsed on such affidavit or waiver and such affidavit or waiver, so endorsed, shall be attached to the filed statement or certificate to which it relates. Such filed statement or certificate shall be effective as of the date and time established as the date and time of filing by the Secretary of State pursuant to this subsection, except as to those persons who are substantially and adversely affected by such establishment and, as to those persons, the statement or certificate shall be effective from the date and time endorsed on the affidavit of extraordinary condition or written waiver attached thereto.".

Section 8. Amend § 15-105(d), Chapter 15, Title 6 of the Delaware Code by inserting "or a certificate of conversion to a non-Delaware entity," after both appearances of "or a certificate of transfer,"in the fourth sentence thereof and by adding the following immediately prior to the "." at the end of the fifth sentence thereof: ", or upon the filing of a certificate of conversion to a non-Delaware entity".

Section 9. Amend § 15-901(j), Chapter 15, Title 6 of the Delaware Code by adding at the end thereof a new sentence thereto reading as follows:

"For the purpose of subsection (b) of Section 15-306 of this chapter, a person who, at the effective time or date of the conversion of any other entity to a domestic partnership, is a partner of the partnership, shall be deemed admitted as a partner of the partnership at the effective date or time of such conversion.".

Section 10. Amend § 15-902(j), Chapter 15, Title 6 of the Delaware Code by deleting the word "or" at the end of subsection (1)(iii) thereof and inserting the word "or" at the end of subsection (1)(iv) thereof, and by renumbering subsection (2) thereof as subsection (1)(v) and renumbering subsection (3) thereof as subsection (2).

Section 11. Amend § 15-903, Chapter 15, Title 6 of the Delaware Code by striking said section in its entirety and substituting in lieu thereof the following:

"§ 15-903. Approval of conversion of a domestic partnership.

(a) Upon compliance with this section, a domestic partnership may convert to a corporation, a statutory trust, a business trust or association, a real estate investment trust, a common-law trust or any other unincorporated business, including a limited partnership (including a limited liability limited partnership), a foreign partnership or a limited liability company. If a domestic partnership is converting under this section to another business form organized, formed or created under the laws of a jurisdiction other than the State of Delaware and has not filed a statement of partnership existence, then the domestic partnership shall file a statement of partnership existence prior to or at the time of the filing of the certificate of conversion to non-Delaware entity.

(b) If the partnership agreement specifies the manner of authorizing a conversion of the partnership, the conversion shall be authorized as specified in the partnership agreement. If the partnership agreement does not specify the manner of authorizing a conversion of the partnership and does not prohibit a conversion of the partnership, the conversion shall be authorized in the same manner as is specified in the partnership agreement for authorizing a merger or consolidation that involves the partnership as a constituent party to the merger or consolidation. If the partnership agreement does not specify the manner of authorizing a conversion of the partnership or a merger or consolidation that involves the partnership as a constituent party and does not prohibit a conversion of the partnership, the conversion shall be authorized by the approval by all the partners.

(c) Unless otherwise agreed, the conversion of a domestic partnership to another business form pursuant to this section shall not require such partnership to wind up its affairs under subchapter VIII of this chapter or pay its liabilities and distribute its assets under subchapter VIII.

(d) In connection with a conversion of a domestic partnership to another business form pursuant to this section, rights or securities of or interests in the domestic partnership which is to be converted may be exchanged for or converted into cash, property, rights or securities of or interests in the business form into which the domestic partnership is being converted or, in addition to or in lieu thereof, may be exchanged for or converted into cash, property, rights or securities of or interests in another business form.

(e) If a partnership shall convert in accordance with this section to another business form organized, formed or created under the laws of a jurisdiction other than the State of Delaware, a certificate of conversion to non-Delaware entity executed in accordance with § 15-105 of this title shall be filed in the office of the Secretary of State in accordance with § 15-105 of this title. The certificate of conversion to non-Delaware entity shall state:

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

(2) The date of the filing of its original statement of partnership existence with the Secretary of State;

(3) The jurisdiction in which the business form, to which the partnership shall be converted, is organized, formed or created;

(4) The future effective date or time (which shall be a date or time certain) of the conversion if it is not to be effective upon the filing of the certificate of conversion to non-Delaware entity;

(5) That the conversion has been approved in accordance with this section;

(6) The agreement of the 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 partnership arising while it was a 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 (e)(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 § 15-112(b) 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 (e)(7) 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 partnership that has converted out of the State of Delaware at all such addresses furnished by the plaintiff in accordance with the procedures set forth in § 15-112(b) of this title.

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

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

Section 12. Amend § 15-904(k), Chapter 15, Title 6 of the Delaware Code by adding at the end thereof a new sentence thereto reading as follows:

"For the purpose of subsection (b) of Section 15-306 of this chapter, a person who, at the effective time or date of the domestication of any non-United States entity as a domestic partnership, is a partner of the partnership, shall be deemed admitted as a partner of the partnership at the effective date or time of such domestication.".

Section 13. Amend § 15-905(a), Chapter 15, Title 6 of the Delaware Code by deleting "that permits the transfer to or domestication in such jurisdiction of a partnership" and by adding at the end thereof a new sentence thereto reading as follows:

"If a domestic partnership is transferring or domesticating or continuing under this section and has not filed a statement of partnership existence, then the domestic partnership shall file a statement of partnership existence prior to or at the time of the filing of the certificate of transfer or certificate of transfer and continuance.".

Section 14. Amend § 15-905(b)(1), Chapter 15, Title 6 of the Delaware Code by inserting "and, if it has been changed, the name under which its statement of partnership existence was originally filed" immediately prior to the ";" at the end thereof.

Section 15. Amend § 15-905(b)(2), Chapter 15, Title 6 of the Delaware Code by deleting ", if any".

Section 16. Amend § 15-905(e), Chapter 15, Title 6 of the Delaware Code by deleting "(i) at the time of the filing of the certificate of transfer and continuance, the partnership shall file a statement of partnership existence that complies with Section 15-303 of this chapter and has been executed in accordance with Section 15-105 of this chapter, if not previously filed, and (ii)".

Section 17. This Act shall become effective August 1, 2003.

Approved June 30, 2003