Corporate Practice Series Portfolio No. 24-4th, Limited Partnerships: Legal Aspects of Organization, Operation, and Dissolution, analyzes the decision to use a limited partnership as the legal entity for a business enterprise rather than a general partnership, corporation, business trust, or limited liability company. It goes on to discuss the factors to be considered in the formation of a limited partnership, including the public filing of a partnership certificate and adoption of a comprehensive written partnership agreement. A limited partner's limited liability is also examined, as are the rights and liabilities generally of limited and general partners, the assignment of partnership interests, dissolution, the effect of bankruptcy on the partnership, and the impact of the federal tax and securities laws.

Portfolio 24-4th: Limited Partnerships: Legal Aspects of Organization, Operation, and Dissolution

I. Introduction
    . Introductory Material
    A. Definition of Limited Partnership; Distinguished from General Partnership
    B. Historical Background
    C. The Decision Whether to Use a Limited Partnership
         1. Extent of liability
         2. Tax consequences
         3. Form of investment
         4. Extent of control
         5. Transferability of interests
    D. Statutory Construction of the Uniform Limited Partnership Acts

II. Formation of Limited Partnerships
    A. Procedural Requirements
         1. Filing of the certificate of limited partnership; agreement of limited partnership
         2. Content of the certificate
         3. The certificate as notice; liability for false statements in the certificate
         4. Execution of the certificate by the partners or by attorneys-in-fact
         5. Where to file the certificate
         6. Time to file the certificate; date of formation
         7. Other procedural requirements: periodic and annual recordings, publications, certificate copies to limited partners, fictitious name statutes
    B. Other Considerations and Requirements
         1. Capacity to be a partner
         2. General partners
         3. Partner may be both a general partner and a limited partner
         4. Name of the partnership
         5. Offices of the partnership; resident agents
         6. Term of the partnership
         7. Business of the partnership
         8. Contributions to the partnership
         9. Conversion of a general partnership to a limited partnership
    C. Consequences of Defective Formation; Right of Renunciation

III. Interstate Activity; Qualifying Foreign Limited Partnerships

IV. Amendment or Restatement of the Certificate
    A. When Amendments Are Necessary, Including Admission of New Partners
    B. Statement of Correction
    C. Restated Certificate
    D. Content of the Amendment
    E. Signatures on Amendments and Restatements
    F. Execution by Judicial Act

V. Rights and Liabilities of Limited Partners
    A. Role of the Partnership Agreement
    B. Admission as a Limited Partner
    C. Liability of Limited Partners for Partnership Obligations Under the RULPA
         1. Active involvement in management
         2. Exercising control over a corporate general partner
         3. Failing business
         4. Possession or exercise of voting rights by limited partners
         5. Consequences of participation in management
    D. Liability of Limited Partner for Partnership Obligations Under the 2001 ULPA
    E. Liability of Limited Partners for Capital Contributions and Distributions
         1. Payment of capital contributions
         2. Liability to return repaid capital contributions and other distributions
    F. Statutory Rights of Limited Partners
         1. Access to books, records, and other information under the RULPA
              a. Standing
              b. Purpose related to interest as limited partner
              c. Contractual right to access to information
         2. Access to books, records, and other information under the 2001 ULPA
         3. Reports and accounting by the general partners
         4. Profits and losses; return of capital
         5. Voting rights and meetings
         6. Right to withdraw or dissociate
         7. Dissolution of the partnership
         8. Death or incapacity
         9. Other statutory rights
    G. Loans and Other Business Transactions with the Partnership
    H. Fiduciary Duties of Limited Partners
         1. Duties under the RULPA
         2. Duties under the 2001 ULPA

VI. Powers, Rights, and Liabilities of General Partners
    . Introductory Material
    A. Admission of General Partners
    B. Right to Manage the Business and Its Limitations
         1. Statutory basis for general partners' authority
         2. Statutory limitations on authority
         3. Consents by power of attorney
         4. Apparent authority of general partners
         5. Appointment of managing general partners and other delegations of authority
    C. Fiduciary Obligations of General Partners
         1. Using partnership property for personal purposes
         2. Self-dealing and fees
         3. Fraud and bad faith
         4. Partnership opportunities
         5. Business judgment
         6. Partnership agreement provisions defining fiduciary duties
    D. Liability of General Partners for Partnership Obligations
         1. Extent of liability
         2. Limitations on liability
              a. Exhaustion of partnership assets
              b. Indemnification and contribution
              c. Corporate general partners
              d. Nonrecourse debt
              e. Limiting liability to the partnership and the partners
              f. Status as limited liability limited partnership
    E. Withdrawal, Dissociation, or Removal of a General Partner
         1. Statutory basis for withdrawal or dissociation
         2. Removal of a general partner
         3. Effect of withdrawal on the general partner
         4. Effect of withdrawal on the partnership
         5. Disposition of the withdrawn general partner's partnership interest
    F. Summary of the 1997 Revised Uniform Partnership Act
         1. Background of the RUPA
         2. Principal partnership law changes made by the RUPA
              a. RUPA Article 1: General provisions
              b. RUPA Article 2: Nature of partnership
              c. RUPA Article 3: Relations of partners to persons dealing with partnership
              d. RUPA Article 4: Relations of partners to each other and to partnership
              e. RUPA Article 5: Transferees and creditors of partner
              f. RUPA Article 6: Partner's dissociation
              g. RUPA Article 7: Partner's dissociation when business not wound up
              h. RUPA Article 8: Winding up partnership business
              i. RUPA Article 9: Conversions and mergers
              j. RUPA Article 10: Limited liability partnership
              k. RUPA Article 11: Foreign limited liability partnership

VII. Mergers and Conversions of Limited Partnerships
    A. Mergers
         1. Mergers under the uniform acts
         2. Mergers under state versions of the RULPA
    B. Conversions
         1. Conversions under the uniform acts
         2. Conversions under state versions of the RULPA

VIII. Assignment or Transfer of Partnership Interests
    . Introductory Material
    A. Common Restrictions on Assignment or Transfer
    B. Status of Assignees or Transferees Who Do Not Become Limited Partners
    C. Status of Assignees or Transferees Who Become Limited Partners
    D. Creditors of Partners as Assignees or Transferees
    E. Representatives of Deceased Partners

IX. Dissolution and Termination of Limited Partnerships
    A. Causes of Dissolution
         1. Expiration of the term of the partnership
         2. The happening of an event specified in the partnership agreement
         3. Agreement of the parties
         4. Legal disability or withdrawal of a general partner
         5. Bankruptcy
         6. Court order
         7. Administrative dissolution
    B. Consequences of Dissolution
         1. Under the RULPA
         2. Under the 2001 ULPA
    C. Resolution of Claims Against the Limited Partnership
    D. Distribution of Partnership Assets upon Dissolution
         1. Under the RULPA
         2. Under the 2001 ULPA
    E. Termination by Merger or Conversion

X. Legal Actions By and Against Limited Partners
    . Introductory Material
    A. The Role of Limited Partners in Partnership Litigation
    B. Direct Actions by Limited Partners
    C. Derivative Actions
    D. Class Actions

XI. Choice of Laws

XII. Master Limited Partnerships

XIII. Federal Income Tax Law: Assuring Partnership Classification
    . Introductory Material
    A. The Check-the-Box Rules
    B. Partnership Classification Prior to 1997
         1. Continuity of life
         2. Centralized management
         3. Limited liability
         4. Free transferability of interests
         5. Additional factors

XIV. Securities Law Issues
    . Introductory Material
    A. Definition of a Security Under the Federal Securities Laws
    B. Registration Under the Securities Act
         1. Registration requirements
         2. Violation of the federal securities laws
    C. Exemptions from Registration Under the Securities Act
         1. The intrastate offering exemption
         2. Regulation A
         3. Section 4(6): The accredited investor exemption
         4. Section 4(2): Statutory private placement
         5. Regulation D
    D. Federal Registration of Brokers and Dealers
         1. The intrastate exemption
         2. Rule 3a4-1
    E. Resales of Partnership Interests
    
XV. Regulation of Limited Partnership Rollup Transactions
    . Introductory Material
    A. Limited Partnership Rollup Reform Act of 1993
         1. Disclosure to investors
         2. Procedural protections
         3. Communications among investors
         4. Minimum solicitation
         5. Access to investor lists
         6. Fairness opinions
         7. Dissenters’ rights
    B. SEC Regulation of Rollup Transactions Prior to Rollup Reform Act
         1. Subpart 900 of SEC Regulation S-K
         2. SEC interpretive release
    C. NASD Rule Changes
    D. NASAA Rollup Guidelines
    E. State Regulation of Rollups

XVI. Effect of Bankruptcy
    . Introductory Material
    A. Bankruptcy of Limited Partnerships
    B. Bankruptcy of General Partners
    C. Bankruptcy of Limited Partners
 

Portfolio 24-4th: Limited Partnerships: Legal Aspects of Organization, Operation, and Dissolution

Wks. 1 1976 Revised Uniform Limited Partnership Act (with 1985 amendments) *

Wks. 2 2001 Uniform Limited Partnership Act *

Wks. 3 Uniform Partnership Act (1914) *

Wks. 4 Revised Uniform Partnership Act (1997) *

Wks. 5 State-by-State Summary of Limited Partnership Statutes as of December, 2010

Wks. 6 State-by-State Summary of Statutes Relating to Limited Partnership Mergers and Conversions as of December, 2010 1

Wks. 7 Certificate of Limited Partnership for RULPA (1985) State

Wks. 8 Certificate of Amendment to Certificate of Limited Partnership for RULPA (1985) State

Wks. 9 Certificate of Limited Partnership for 2001 ULPA State

Wks. 10 Certificate of Limited Partnership for a Limited Liability Limited Partnership for 2001 ULPA State

Wks. 11 Certificate of Amendment to Certificate of Limited Partnership for 2001 ULPA State

Wks. 12 Basic Limited Partnership Agreement

Wks. 13 Plan of Merger for 2001 ULPA State

Wks. 14 Articles of Merger for 2001 ULPA State Filed by a Limited Partnership Merging with Another Organization Pursuant to Article 11 of the 2001 ULPA

Wks. 15 Certificate of Merger for Delaware Limited Partnership

Wks. 16 Articles of Conversion for 2001 ULPA State Filed by a Limited Partnership Converting to Another Form of Organization Pursuant to Article 11 of the 2001 ULPA

Wks. 17 Certificate of Limited Partnership for 2001 ULPA State Filed by an Entity Converting into a Limited Partnership Pursuant to Article 11 of the 2001 ULPA

Wks. 18 Certificate of Cancellation for RULPA (1985) State

Wks. 19 Certificate of Limited Partnership Termination for 2001 ULPA State
 

Roger D. Anderson
Smith, Katzenstein & Jenkins LLP
Wilmington, Delaware

Craig B. Smith
Smith, Katzenstein & Jenkins LLP
Wilmington, Delaware