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92nd General Assembly

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Public Act 92-0740

SB2049 Enrolled                                LRB9216008DJgc

    AN ACT concerning partnerships.

    Be it  enacted  by  the  People  of  the  State  of  Illinois,
represented in the General Assembly:


                          ARTICLE 1
                     GENERAL PROVISIONS

    Section 100.  Short title.  This Act may be cited as  the
Uniform Partnership Act (1997).

    Section 101. Definitions. In this Act:
    (a)  "Business"  includes  every  trade,  occupation, and
profession.
    (b)  "Debtor in bankruptcy" means a  person  who  is  the
subject of:
         (1)  an  order  for  relief  under  Title  11 of the
    United  States  Code  or  a  comparable  order  under   a
    successor statute of general application; or
         (2)  a  comparable  order  under  federal, state, or
    foreign law governing insolvency.
    (c)  "Distribution" means a transfer of  money  or  other
property  from  a  partnership  to a partner in the partner's
capacity as a partner or to the partner's transferee.
    (d)  "Foreign  limited  liability  partnership"  means  a
partnership that:
         (1)  is formed under laws other  than  the  laws  of
    this State; and
         (2)  has   the   status   of   a  limited  liability
    partnership under those laws.
    (e)  "Limited liability partnership" means a  partnership
that  has  filed  a  statement of qualification under Section
1001 and does not have a similar statement in effect  in  any
other jurisdiction.
    (f)  "Partnership"  means  an  association  of  2 or more
persons to carry on as co-owners a business for profit formed
under Section 202 of this Act, predecessor law, or comparable
law of another jurisdiction.
    (g)  "Partnership agreement" means the agreement, whether
written, oral, or implied, among the partners concerning  the
partnership,   including   amendments   to   the  partnership
agreement.
    (h)  "Partnership at will" means a partnership  in  which
the  partners  have  not  agreed to remain partners until the
expiration  of  a  definite  term  or  the  completion  of  a
particular undertaking.
    (i)  "Partnership interest" or "partner's interest in the
partnership" means  all  of  a  partner's  interests  in  the
partnership,  including  the  partner's transferable interest
and all management and other rights.
    (j)  "Person" means an individual, corporation,  business
trust,   estate,   trust,   partnership,  association,  joint
venture, government,  governmental  subdivision,  agency,  or
instrumentality, or any other legal or commercial entity.
    (k)  "Property"  means  all  property, real, personal, or
mixed, tangible or intangible, or any interest therein.
    (l)  "State" means a state  of  the  United  States,  the
District of Columbia, the Commonwealth of Puerto Rico, or any
territory  or  insular possession subject to the jurisdiction
of the United States.
    (m)  "Statement"  means  a   statement   of   partnership
authority  under  Section  303  of  this  Act, a statement of
denial under Section 304, a statement of  dissociation  under
Section  704, a statement of dissolution under Section 805, a
statement of merger under Section 907 or 908, a statement  of
qualification  under  Section 1001, a statement of withdrawal
under  Section  1001  or  1102,  a   statement   of   foreign
qualification   under   Section  1102,  or  an  amendment  or
cancellation of any of the foregoing.
    (n)  "Transfer"  includes  an   assignment,   conveyance,
lease, mortgage, deed, and encumbrance.

    Section 102. Knowledge and notice.
    (a)  A  person  knows  a  fact  if  the person has actual
knowledge of it.
    (b)  A person has notice of a fact if the person:
         (1)  knows of it;
         (2)  has received a notification of it; or
         (3)  has reason to know it exists from  all  of  the
    facts known to the person at the time in question.
    (c)  A person notifies or gives a notification to another
by  taking  steps  reasonably  required  to  inform the other
person in ordinary course, whether or not  the  other  person
learns of it.
    (d)  A   person   receives   a   notification   when  the
notification:
         (1)  comes to the person's attention; or
         (2)  is duly delivered  at  the  person's  place  of
    business  or at any other place held out by the person as
    a place for receiving communications.
    (e)  Except as otherwise provided in  subsection  (f),  a
person  other  than  an  individual  knows,  has  notice,  or
receives   a  notification  of  a  fact  for  purposes  of  a
particular transaction when  the  individual  conducting  the
transaction  knows, has notice, or receives a notification of
the fact, or in any event  when  the  fact  would  have  been
brought  to  the  individual's  attention  if  the person had
exercised  reasonable   diligence.   The   person   exercises
reasonable  diligence if it maintains reasonable routines for
communicating  significant  information  to  the   individual
conducting the transaction and there is reasonable compliance
with  the  routines. Reasonable diligence does not require an
individual acting for the person to  communicate  information
unless  the communication is part of the individual's regular
duties  or  the  individual  has  reason  to  know   of   the
transaction  and  that  the  transaction  would be materially
affected by the information.
    (f)  A partner's  knowledge,  notice,  or  receipt  of  a
notification  of  a  fact  relating  to  the  partnership  is
effective  immediately as knowledge by, notice to, or receipt
of a notification by the partnership, except in the case of a
fraud on the partnership committed by or with the consent  of
that partner.

    Section    103.    Effect   of   partnership   agreement;
nonwaivable provisions.
    (a)  Except as  otherwise  provided  in  subsection  (b),
relations among the partners and between the partners and the
partnership are governed by the partnership agreement. To the
extent  the partnership agreement does not otherwise provide,
this Act governs relations among the partners and between the
partners and the partnership.
    (b)  The partnership agreement may not:
         (1)  vary the rights and duties  under  Section  105
    except  to  eliminate  the  duty  to  provide  copies  of
    statements to all of the partners;
         (2)  unreasonably  restrict  the  right of access to
    books and records under Section 403(b);
         (3)  eliminate  or  reduce  a  partner's   fiduciary
    duties, but may:
              (i)  identify  specific  types or categories of
         activities that do not violate these duties, if  not
         manifestly unreasonable; and
              (ii)  specify   the  number  or  percentage  of
         partners that may authorize or  ratify,  after  full
         disclosure  of all material facts, a specific act or
         transaction  that  otherwise  would  violate   these
         duties;
         (4)  eliminate  or  reduce  the  obligation  of good
    faith and fair dealing  under  Section  404(d),  but  the
    partnership  agreement  may  prescribe  the  standards by
    which  the  performance  of  the  obligation  is  to   be
    measured,   if   the   standards   are   not   manifestly
    unreasonable;
         (5)  vary the power to dissociate as a partner under
    Section  602(a),  except  to  require  the  notice  under
    Section 601(1) to be in writing;
         (6)  vary the right of a court to expel a partner in
    the events specified in Section 601(5);
         (7)  vary the requirement to wind up the partnership
    business  in  cases  specified in Section 801(4), (5), or
    (6);
         (8)  vary the law applicable to a limited  liability
    partnership under Section 106(b); or
         (9)  restrict  the  rights of a person, other than a
    partner  and  transferee  of  a  partner's   transferable
    interest under this Act.

    Section 104. Supplemental principles of law.
    (a)  Unless  displaced  by  particular provisions of this
Act, the principles of law and equity supplement this Act.
    (b)  If an obligation to pay interest arises  under  this
Act and the rate is not specified, the rate is that specified
in Section 4 of the Interest Act.

    Section   105.   Execution,   filing,  and  recording  of
statements.
    (a)  A statement may  be  filed  in  the  office  of  the
Secretary  of  State. A certified copy of a statement that is
filed in an office in another  State  may  be  filed  in  the
office  of  the  Secretary  of  State.  Either filing has the
effect provided in  this  Act  with  respect  to  partnership
property located in or transactions that occur in this State.
    (b)  A  certified copy of a statement that has been filed
in the office of the Secretary of State and recorded  in  the
office  for  recording  transfers  of  real  property has the
effect provided  for  recorded  statements  in  this  Act.  A
recorded  statement  that  is  not  a  certified  copy  of  a
statement  filed in the office of the Secretary of State does
not have the effect provided for recorded statements in  this
Act.
    (c)  A  statement filed by a partnership must be executed
by at least 2 partners. Other statements must be executed  by
a  partner  or  other  person  authorized  by  this  Act.  An
individual  who  executes  a statement as, or on behalf of, a
partner or other person named as a  partner  in  a  statement
shall  personally  declare  under penalty of perjury that the
contents of the statement are accurate.
    (d)  A person authorized by this Act to file a  statement
may  amend  or cancel the statement by filing an amendment or
cancellation  that  names  the  partnership,  identifies  the
statement, and states  the  substance  of  the  amendment  or
cancellation.
    (e)  A  person  who  files  a  statement pursuant to this
Section shall promptly send a copy of the statement to  every
nonfiling  partner and to any other person named as a partner
in the statement.  Failure to send a copy of a statement to a
partner or other person does not limit the  effectiveness  of
the statement as to a person not a partner.
    (f)  The  Secretary of State may collect a fee for filing
or providing a certified copy of a statement as  provided  in
Section  108. The officer responsible for recording transfers
of real property may collect a fee for recording a statement.
    Section 106. Governing law.
    (a)  Except as otherwise provided in subsection (b),  the
law  of the jurisdiction in which a partnership has its chief
executive office governs relations  among  the  partners  and
between the partners and the partnership.
    (b)  The  law  of  this State governs relations among the
partners and between the partners and the partnership and the
liability  of  partners  for  an  obligation  of  a   limited
liability partnership.

    Section  107. Partnership subject to amendment  or repeal
of Act.  A partnership governed by this Act is subject to any
amendment to or repeal of this Act.

    Section 108. Fees.
    (a)  The Secretary of State shall charge and  collect  in
accordance   with  the  provisions  of  this  Act  and  rules
promulgated under its authority:
         (1)  fees for filing documents;
         (2)  miscellaneous charges; and
         (3)  fees for the sale of lists of  filings,  copies
    of  any  documents,  and  the  sale  or  release  of  any
    information.
    (b)  The Secretary of State shall charge and collect:
         (1)  for  furnishing a copy or certified copy of any
    document, instrument, or paper relating to  a  registered
    limited  liability partnership, $1 per page, but not less
    than $25, and $25 for the certificate  and  for  affixing
    the seal to the certificate;
         (2)  for  the  transfer  of  information by computer
    process media to any purchaser, fees established by rule;
         (3)  for   filing   a   statement   of   partnership
    authority, $25;
         (4)  for filing a statement of denial, $25;
         (5)  for filing a statement of dissociation, $25;
         (6)  for filing a statement of dissolution, $100;
         (7)  for filing a statement of merger, $100;
         (8)  for filing a statement of qualification  for  a
    limited liability partnership organized under the laws of
    this  State, $100 for each partner, but in no event shall
    the fee be less than $200 or exceed $5,000;
         (9)  for   filing    a    statement    of    foreign
    qualification, $500;
         (10)  for  filing  a renewal statement for a limited
    liability partnership organized under the  laws  of  this
    State,  $100  for each partner, but in no event shall the
    fee be less than $200 or exceed $5,000;
         (11)  for filing a renewal statement for  a  foreign
    limited liability partnership, $300.
         (12)  for  filing  an amendment or cancellation of a
    statement, $25;
         (13)  for filing a statement of withdrawal, $100;
         (14)  for the purposes of  changing  the  registered
    agent name or registered office, or both, $25.
    (c)  All  fees  collected  pursuant  to this Act shall be
deposited into the Division of Corporations Limited Liability
Partnership Fund.
    (d)  There is hereby continued in the  State  treasury  a
special  fund  to  be  known  as the Division of Corporations
Limited Liability Partnership Fund. Moneys deposited into the
Fund shall, subject to appropriation, be used by the Business
Services Division of the Office of the Secretary of State  to
administer  the  responsibilities  of the Secretary of  State
under this Act. The balance of the Fund at  the  end  of  any
fiscal  year  shall  not  exceed  $200,000, and any amount in
excess thereof shall be transferred to  the  General  Revenue
Fund.
    Section  109.  Illinois Administrative Procedure Act. The
Illinois Administrative Procedure Act  is  expressly  adopted
and  incorporated in Articles 10 and 11 of this Act as if all
of the provisions of the  Illinois  Administrative  Procedure
Act  were  included in Articles 10 and 11 of this Act, except
that the provisions of subsection (c) of Section 10-65 of the
Illinois Administrative Procedure Act, which provides that at
a hearing the licensee has the right to show compliance  with
all  lawful  requirements  for  retention,  continuation,  or
renewal of the license, is specifically excluded, and for the
purposes of this Act, the notice required under Section 10-25
of  the  Illinois  Administrative    Procedure  Act is deemed
sufficient when mailed to the last known address of a party.

                          ARTICLE 2
                    NATURE OF PARTNERSHIP

    Section 201. Partnership as entity.
    (a)  A  partnership  is  an  entity  distinct  from   its
partners.
    (b)  A  limited liability partnership continues to be the
same entity that existed before the filing of a statement  of
qualification under Section 1001 of this Act.

    Section 202. Formation of partnership.
    (a)  Except  as otherwise provided in subsection (b), the
association of 2 or more persons to carry on as  co-owners  a
business  for  profit forms a partnership, whether or not the
persons intend to form a partnership.
    (b)  An association formed under  a  statute  other  than
this  Act,  a predecessor statute, or a comparable statute of
another jurisdiction is not a partnership under this Act.
    (c)  In determining whether a partnership is formed,  the
following rules apply:
         (1)  Joint  tenancy,  tenancy  in common, tenancy by
    the entireties, joint property, common property, or  part
    ownership  does  not  by  itself establish a partnership,
    even if the co-owners share profits made by  the  use  of
    the property.
         (2)  The sharing of gross returns does not by itself
    establish a partnership, even if the persons sharing them
    have a joint or common right or interest in property from
    which the returns are derived.
         (3)  A person who receives a share of the profits of
    a  business  is presumed to be a partner in the business,
    unless the profits were received in payment:
              (i)  of a debt by installments or otherwise;
              (ii)  for services as an independent contractor
         or of wages or other compensation to an employee;
              (iii)  of rent;
              (iv)  of an  annuity  or  other  retirement  or
         health  benefit to a beneficiary, representative, or
         designee of a deceased or retired partner;
              (v)  of interest or other  charge  on  a  loan,
         even  if  the  amount  of  payment  varies  with the
         profits of  the  business,  including  a  direct  or
         indirect   present   or   future  ownership  of  the
         collateral,  or  rights  to  income,  proceeds,   or
         increase in value derived from the collateral; or
              (vi)  for   the  sale  of  the  goodwill  of  a
         business  or  other  property  by  installments   or
         otherwise.

    Section 203. Partnership property. Property acquired by a
partnership  is  property  of  the partnership and not of the
partners individually.

    Section 204. When property is partnership property.
    (a)  Property is partnership property if acquired in  the
name of:
         (1)  the partnership; or
         (2)  one  or more partners with an indication in the
    instrument transferring title  to  the  property  of  the
    person's  capacity  as a partner or of the existence of a
    partnership but without an indication of the name of  the
    partnership.
    (b)  Property  is acquired in the name of the partnership
by a transfer to:
         (1)  the partnership in its name; or
         (2)  one or  more  partners  in  their  capacity  as
    partners   in   the  partnership,  if  the  name  of  the
    partnership is indicated in the  instrument  transferring
    title to the property.
    (c)  Property  is  presumed to be partnership property if
purchased with partnership assets, even if  not  acquired  in
the  name  of the partnership or of one or more partners with
an indication in the instrument  transferring  title  to  the
property  of  the  person's  capacity  as a partner or of the
existence of a partnership.
    (d)  Property acquired in the name of one or more of  the
partners,   without   an   indication   in   the   instrument
transferring  title  to the property of the person's capacity
as a partner or of the existence of a partnership and without
use  of  partnership  assets,  is  presumed  to  be  separate
property, even if used for partnership purposes.

                          ARTICLE 3
                  RELATIONS OF PARTNERS TO
              PERSONS DEALING WITH PARTNERSHIP

    Section 301. Partner agent of partnership. Subject to the
effect of a statement of partnership authority under  Section
303 of this Act:
         (1)  Each partner is an agent of the partnership for
    the  purpose  of  its  business.  An  act  of  a partner,
    including  the  execution  of  an   instrument   in   the
    partnership  name,  for  apparently  carrying  on  in the
    ordinary course the partnership business or  business  of
    the   kind  carried  on  by  the  partnership  binds  the
    partnership, unless the partner had no authority  to  act
    for  the  partnership  in  the  particular matter and the
    person with whom the partner  was  dealing  knew  or  had
    received   a   notification   that   the  partner  lacked
    authority.
         (2)  An act of a partner which is not apparently for
    carrying  on  in  the  ordinary  course  the  partnership
    business or business  of  the  kind  carried  on  by  the
    partnership  binds  the  partnership  only if the act was
    authorized by the other partners.

    Section 302. Transfer of partnership property.
    (a)  Partnership property may be transferred as follows:
         (1)  Subject  to  the  effect  of  a  statement   of
    partnership  authority  under  Section  303  of this Act,
    partnership property held in the name of the  partnership
    may  be transferred by an instrument of transfer executed
    by a partner in the partnership name.
         (2)  Partnership property held in the name of one or
    more  partners  with  an  indication  in  the  instrument
    transferring the property to them of  their  capacity  as
    partners  or  of  the  existence  of  a  partnership, but
    without an indication of the name of the partnership, may
    be transferred by an instrument of transfer  executed  by
    the persons in whose name the property is held.
         (3)  Partnership property held in the name of one or
    more  persons  other  than  the  partnership,  without an
    indication in the instrument transferring the property to
    them of their capacity as partners or of the existence of
    a partnership, may be transferred  by  an  instrument  of
    transfer  executed  by  the  persons  in  whose  name the
    property is held.
    (b)  A partnership may recover partnership property  from
a  transferee  only  if  it  proves  that  execution  of  the
instrument  of  initial transfer did not bind the partnership
under Section 301 and:
         (1)  as to a subsequent transferee  who  gave  value
    for  property transferred under subsection (a)(1) and (2)
    of this Section, proves that  the  subsequent  transferee
    knew  or  had received a notification that the person who
    executed  the  instrument  of  initial  transfer   lacked
    authority to bind the partnership; or
         (2)  as  to a transferee who gave value for property
    transferred under  subsection  (a)(3),  proves  that  the
    transferee  knew  or had received a notification that the
    property was partnership property and that the person who
    executed  the  instrument  of  initial  transfer   lacked
    authority to bind the partnership.
    (c)  A  partnership  may not recover partnership property
from a subsequent transferee if  the  partnership  would  not
have  been entitled to recover the property, under subsection
(b), from any earlier transferee of the property.
    (d)  If a person holds all of the partners' interests  in
the  partnership,  all  of  the partnership property vests in
that person. The person may execute a document in the name of
the partnership to evidence vesting of the property  in  that
person and may file or record the document.

    Section 303. Statement of partnership authority.
    (a)  A  partnership  may  file a statement of partnership
authority, which:
         (1)  must include:
              (i)  the name of the partnership;
              (ii)  the street address of its chief executive
         office and of one office in this State, if there  is
         one;
              (iii)  the  names  and mailing addresses of all
         of  the  partners  or  of  an  agent  appointed  and
         maintained by the partnership  for  the  purpose  of
         subsection (b); and
              (iv)  the  names  of the partners authorized to
         execute an  instrument  transferring  real  property
         held in the name of the partnership; and
         (2)  may  state the authority, or limitations on the
    authority, of some or all of the partners to  enter  into
    other  transactions  on behalf of the partnership and any
    other matter.
    (b)  If a statement of  partnership  authority  names  an
agent,  the  agent  shall  maintain  a  list of the names and
mailing  addresses  of  all  of  the  partners  and  make  it
available to any person on request for good cause shown.
    (c)  If a filed statement  of  partnership  authority  is
executed  pursuant  to  Section 105(c) and states the name of
the partnership  but  does  not  contain  all  of  the  other
information  required  by subsection (a) of this Section, the
statement nevertheless operates with respect to a person  not
a partner as provided in subsections (d) and (e).
    (d)  Except  as  otherwise  provided in subsection (g) of
this Section, a  filed  statement  of  partnership  authority
supplements   the  authority  of  a  partner  to  enter  into
transactions on behalf of the partnership as follows:
         (1)  Except for transfers of real property, a  grant
    of   authority   contained   in   a  filed  statement  of
    partnership authority is conclusive in favor of a  person
    who  gives  value  without  knowledge to the contrary, so
    long as and to the  extent  that  a  limitation  on  that
    authority   is   not  then  contained  in  another  filed
    statement.  A  filed  cancellation  of  a  limitation  on
    authority revives the previous grant of authority.
         (2)  A grant of authority to transfer real  property
    held  in  the  name  of  the  partnership  contained in a
    certified  copy  of  a  filed  statement  of  partnership
    authority recorded in the office for recording  transfers
    of  that real property is conclusive in favor of a person
    who gives value without knowledge  to  the  contrary,  so
    long  as  and  to  the  extent that a certified copy of a
    filed statement containing a limitation on that authority
    is not  then  of  record  in  the  office  for  recording
    transfers  of  that  real  property. The recording in the
    office for recording transfers of that real property of a
    certified copy of a filed cancellation of a limitation on
    authority revives the previous grant of authority.
    (e)  A person not a  partner  is  deemed  to  know  of  a
limitation  on  the  authority  of a partner to transfer real
property held in the name of the partnership if  a  certified
copy  of  the  filed  statement  containing the limitation on
authority is of record in the office for recording  transfers
of that real property.
    (f)  Except  as otherwise provided in subsections (d) and
(e) of this Section and Sections 704 and 805 of this  Act,  a
person not a partner is not deemed to know of a limitation on
the  authority  of a partner merely because the limitation is
contained in a filed statement.
    (g)  Unless  earlier  canceled,  a  filed  statement   of
partnership authority is canceled by operation of law 5 years
after  the  date  on  which the statement, or the most recent
amendment, was filed with the Secretary of State.

    Section 304. Statement of  denial.  A  partner  or  other
person named as a partner in a filed statement of partnership
authority  or  in  a  list maintained by an agent pursuant to
Section 303(b) may file a statement  of  denial  stating  the
name  of  the  partnership and the fact that is being denied,
which may include denial of a person's authority or status as
a partner. A statement of denial is a limitation on authority
as provided in Section 303(d) and (e).

    Section 305. Partnership liable for partner's  actionable
conduct.
    (a)  A partnership is liable for loss or injury caused to
a  person,  or  for  a  penalty  incurred,  as  a result of a
wrongful act or omission, or other actionable conduct,  of  a
partner  acting  in  the  ordinary  course of business of the
partnership or with authority of the partnership.
    (b)  If, in the course of the partnership's  business  or
while  acting  with  authority  of the partnership, a partner
receives or  causes  the  partnership  to  receive  money  or
property of a person not a partner, and the money or property
is misapplied by a partner, the partnership is liable for the
loss.

    Section 306. Partner's liability.
    (a)  Except  as otherwise provided in subsections (b) and
(c) of this Section, all  partners  are  liable  jointly  and
severally  for  all  obligations  of  the  partnership unless
otherwise agreed by the claimant or provided by law.
    (b)  A person admitted as  a  partner  into  an  existing
partnership  is  not  personally  liable  for any partnership
obligation  incurred  before  the  person's  admission  as  a
partner.
    (c)  An obligation of a partnership  incurred  while  the
partnership  is  a  limited  liability  partnership,  whether
arising  in  contract,  tort,  or  otherwise,  is  solely the
obligation of the partnership. A partner  is  not  personally
liable,  directly  or  indirectly,  by way of contribution or
otherwise, for such an obligation solely by reason  of  being
or   so   acting   as  a  partner.  This  subsection  applies
notwithstanding  anything  inconsistent  in  the  partnership
agreement that existed immediately before the  vote  required
to  become  a  limited  liability  partnership  under Section
1001(b) of this Act.

    Section 307.  Actions  by  and  against  partnership  and
partners.
    (a)  A partnership may sue and be sued in the name of the
partnership.
    (b)  An  action  may  be  brought against the partnership
and, to the extent not inconsistent with Section 306 of  this
Act,  any  or  all  of  the partners in the same action or in
separate actions.
    (c)  A judgment against a partnership is not by itself  a
judgment  against a partner. A judgment against a partnership
may not be satisfied from a partner's assets unless there  is
also a judgment against the partner.
    (d)  A  judgment  creditor  of  a  partner  may  not levy
execution against the assets of  the  partner  to  satisfy  a
judgment  based on a claim against the partnership unless the
partner is personally liable for the claim under Section  306
and:
         (1)  a  judgment  based  on  the same claim has been
    obtained against the partnership and a writ of  execution
    on the judgment has been returned unsatisfied in whole or
    in part;
         (2)  the partnership is a debtor in bankruptcy;
         (3)  the  partner  has agreed that the creditor need
    not exhaust partnership assets;
         (4)  a  court  grants  permission  to  the  judgment
    creditor to  levy  execution  against  the  assets  of  a
    partner  based  on  a  finding  that  partnership  assets
    subject  to execution are clearly insufficient to satisfy
    the judgment, that exhaustion of  partnership  assets  is
    excessively  burdensome,  or that the grant of permission
    is an  appropriate  exercise  of  the  court's  equitable
    powers; or
         (5)  liability  is  imposed on the partner by law or
    contract independent of the existence of the partnership.
    (e)  This Section applies to any partnership liability or
obligation resulting from a representation by  a  partner  or
purported partner under Section 308 of this Act.

    Section 308. Liability of purported partner.
    (a)  If  a  person, by words or conduct, purports to be a
partner, or consents to being represented  by  another  as  a
partner,  in  a  partnership  or with one or more persons not
partners, the purported partner is liable to a person to whom
the representation is made, if that person,  relying  on  the
representation,  enters into a transaction with the actual or
purported partnership. If the representation, either  by  the
purported partner or by a person with the purported partner's
consent, is made in a public manner, the purported partner is
liable  to a person who relies upon the purported partnership
even if the purported partner is not aware of being held  out
as  a  partner  to  the  claimant.  If  partnership liability
results, the purported partner is liable with respect to that
liability as if the purported partner were a partner.  If  no
partnership  liability  results,  the  purported  partner  is
liable  with  respect to that liability jointly and severally
with any other person consenting to the representation.
    (b)  If a person is thus represented to be a  partner  in
an  existing  partnership,  or  with  one or more persons not
partners, the  purported  partner  is  an  agent  of  persons
consenting  to  the  representation  to bind them to the same
extent and in the same manner as  if  the  purported  partner
were  a  partner,  with  respect  to  persons  who enter into
transactions in reliance upon the representation. If  all  of
the  partners  of  the  existing  partnership  consent to the
representation, a partnership act or obligation  results.  If
fewer  than  all  of the partners of the existing partnership
consent to the representation,  the  person  acting  and  the
partners  consenting  to  the  representation are jointly and
severally liable.
    (c)  A person is not liable as a partner  merely  because
the  person is named by another in a statement of partnership
authority.
    (d)  A person does not continue to be liable as a partner
merely  because  of  a  failure  to  file  a   statement   of
dissociation or to amend a statement of partnership authority
to indicate the partner's dissociation from the partnership.
    (e)  Except  as otherwise provided in subsections (a) and
(b) of this Section, persons who are not partners as to  each
other are not liable as partners to other persons.

                          ARTICLE 4
             RELATIONS OF PARTNERS TO EACH OTHER
                     AND TO PARTNERSHIP

    Section 401. Partner's rights and duties.
    (a)  Each partner is deemed to have an account that is:
         (1)  credited with an amount equal to the money plus
    the value of any other property, net of the amount of any
    liabilities,  the  partner contributes to the partnership
    and the partner's share of the partnership profits; and
         (2)  charged with an amount equal to the money  plus
    the value of any other property, net of the amount of any
    liabilities,   distributed  by  the  partnership  to  the
    partner  and  the  partner's  share  of  the  partnership
    losses.
    (b)  Each partner is entitled to an equal  share  of  the
partnership  profits  and  is  chargeable with a share of the
partnership losses in proportion to the  partner's  share  of
the profits.
    (c)  A partnership shall reimburse a partner for payments
made  and indemnify a partner for liabilities incurred by the
partner in  the  ordinary  course  of  the  business  of  the
partnership  or  for  the  preservation  of  its  business or
property.
    (d)  A partnership  shall  reimburse  a  partner  for  an
advance  to  the partnership beyond the amount of capital the
partner agreed to contribute.
    (e)  A payment or advance made by a partner  which  gives
rise  to a partnership obligation under subsection (c) or (d)
of this Section constitutes a loan to the  partnership  which
accrues interest from the date of the payment or advance.
    (f)  Each  partner has equal rights in the management and
conduct of the partnership business.
    (g)  A partner may use or  possess  partnership  property
only on behalf of the partnership.
    (h)  A  partner  is  not  entitled  to  remuneration  for
services performed for the partnership, except for reasonable
compensation for services rendered in winding up the business
of the partnership.
    (i)  A  person may become a partner only with the consent
of all of the partners.
    (j)  A difference arising as to a matter in the  ordinary
course  of  business  of  a  partnership  may be decided by a
majority of the partners. An act outside the ordinary  course
of  business  of  a  partnership  and  an  amendment  to  the
partnership agreement may be undertaken only with the consent
of all of the partners.
    (k)  This  Section  does  not affect the obligations of a
partnership to other persons under Section 301 of this Act.

    Section 402. Distributions in  kind.  A  partner  has  no
right  to  receive,  and  may  not  be  required to accept, a
distribution in kind.

    Section 403. Partner's rights and duties with respect  to
information.
    (a)  A  partnership  shall keep its books and records, if
any, at its chief executive office.
    (b)  A  partnership  shall  provide  partners  and  their
agents and attorneys access to  its  books  and  records.  It
shall  provide former partners and their agents and attorneys
access to books and records pertaining to the  period  during
which  they  were  partners. The right of access provides the
opportunity to inspect and  copy  books  and  records  during
ordinary   business   hours.   A  partnership  may  impose  a
reasonable charge, covering the costs of labor and  material,
for copies of documents furnished.
    (c)  Each  partner and the partnership shall furnish to a
partner, and  to  the  legal  representative  of  a  deceased
partner or partner under legal disability:
         (1)  without  demand, any information concerning the
    partnership's business and  affairs  reasonably  required
    for  the  proper  exercise  of  the  partner's rights and
    duties under the partnership agreement or this Act; and
         (2)  on demand, any other information concerning the
    partnership's business and affairs, except to the  extent
    the demand or the information demanded is unreasonable or
    otherwise improper under the circumstances.

    Section 404. General standards of partner's conduct.
    (a)  The   fiduciary   duties   a  partner  owes  to  the
partnership and  the  other  partners  include  the  duty  of
loyalty and the duty of care set forth in subsections (b) and
(c) of this Section.
    (b)  A  partner's  duty of loyalty to the partnership and
the other partners includes the following:
         (1)  to account  to  the  partnership  and  hold  as
    trustee  for  it any property, profit, or benefit derived
    by the partner in the  conduct  and  winding  up  of  the
    partnership business or derived from a use by the partner
    of partnership property, including the appropriation of a
    partnership opportunity;
         (2)  to  act  fairly  when  a partner deals with the
    partnership  in  the  conduct  or  winding  up   of   the
    partnership business as or on behalf of a party having an
    interest adverse to the partnership; and
         (3)  to  refrain from competing with the partnership
    in the conduct of the  partnership  business  before  the
    dissolution of the partnership.
    (c)  A  partner's duty of care to the partnership and the
other  partners  in  the  conduct  and  winding  up  of   the
partnership  business  is limited to refraining from engaging
in  grossly  negligent  or  reckless   conduct,   intentional
misconduct, or a knowing violation of law.
    (d)  A  partner  shall discharge his or her duties to the
partnership and the other partners under this  Act  or  under
the  partnership agreement and exercise any rights consistent
with the obligation of good faith and fair dealing.
    (e)  A partner does not  violate  a  duty  or  obligation
under  this  Act  or  under  the partnership agreement merely
because the partner's  conduct  furthers  the  partner's  own
interest.
    (f)  This  Section  applies  to  a  person winding up the
partnership business as the personal or legal  representative
of  the  last  surviving  partner  as  if  the  person were a
partner.

    Section 405. Actions by partnership and partners.
    (a)  A partnership  may  maintain  an  action  against  a
partner for a breach of the partnership agreement, or for the
violation  of  a duty to the partnership, causing harm to the
partnership.
    (b)  A  partner  may  maintain  an  action  against   the
partnership or another partner for legal or equitable relief,
with or without an accounting as to partnership business, to:
         (1)  enforce   the   partner's   rights   under  the
    partnership agreement;
         (2)  enforce the partner's rights  under  this  Act,
    including:
              (i)  the  partner's  rights  under Section 401,
         403, or 404;
              (ii)  the partner's right  on  dissociation  to
         have  the  partner's  interest  in  the  partnership
         purchased  pursuant  to  Section  701 or enforce any
         other right under Article 6 or 7; or
              (iii)  the  partner's   right   to   compel   a
         dissolution   and  winding  up  of  the  partnership
         business under or  enforce  any  other  right  under
         Article 8; or
         (3)  enforce  the  rights  and otherwise protect the
    interests of the partner, including rights and  interests
    arising independently of the partnership relationship.
    (c)  The  accrual of, and any time limitation on, a right
of action for a remedy under  this  Section  is  governed  by
other  law.  A  right to an accounting upon a dissolution and
winding up does not revive a claim barred by law.

    Section 406. Continuation of partnership beyond  definite
term or particular undertaking.
    (a)  If  a  partnership for a definite term or particular
undertaking is continued, without an express agreement, after
the expiration of the term or completion of the  undertaking,
the rights and duties of the partners remain the same as they
were at the expiration or completion, so far as is consistent
with a partnership at will.
    (b)  If  the  partners,  or  those of them who habitually
acted  in  the  business  during  the  term  or  undertaking,
continue the business without any settlement  or  liquidation
of the partnership, they are presumed to have agreed that the
partnership will continue.

                          ARTICLE 5
            TRANSFEREES AND CREDITORS OF PARTNER

    Section   501.   Partner   not  co-owner  of  partnership
property. A partner is not a co-owner of partnership property
and has no interest in  partnership  property  which  can  be
transferred, either voluntarily or involuntarily.

    Section   502.   Partner's   transferable   interest   in
partnership.  The  only transferable interest of a partner in
the partnership is the partner's share  of  the  profits  and
losses  of the partnership and the partner's right to receive
distributions.  The interest is personal property.

    Section 503. Transfer of partner's transferable interest.
    (a)  A transfer, in whole or  in  part,  of  a  partner's
transferable interest in the partnership:
         (1)  is permissible;
         (2)  does   not   by   itself  cause  the  partner's
    dissociation or a  dissolution  and  winding  up  of  the
    partnership business; and
         (3)  does  not, as against the other partners or the
    partnership,   entitle   the   transferee,   during   the
    continuance of the partnership,  to  participate  in  the
    management  or  conduct  of  the partnership business, to
    require  access  to  information  concerning  partnership
    transactions, or to inspect or copy the partnership books
    or records.
    (b)  A transferee of a partner's transferable interest in
the partnership has a right:
         (1)  to receive, in accordance  with  the  transfer,
    distributions  to which the transferor would otherwise be
    entitled;
         (2)  to receive upon the dissolution and winding  up
    of  the  partnership  business,  in  accordance  with the
    transfer, the net amount otherwise distributable  to  the
    transferor; and
         (3)  to  seek under a judicial determination that it
    is equitable to wind up the partnership business.
    (c)  In a dissolution and winding  up,  a  transferee  is
entitled  to an account of partnership transactions only from
the date of the latest  account  agreed  to  by  all  of  the
partners.
    (d)  Upon transfer, the transferor retains the rights and
duties  of a partner other than the interest in distributions
transferred.
    (e)  A partnership need not give effect to a transferee's
rights  under  this  Section  until  it  has  notice  of  the
transfer.
    (f)  A transfer of a partner's transferable  interest  in
the  partnership  in  violation  of a restriction on transfer
contained in the partnership agreement is ineffective as to a
person having notice  of  the  restriction  at  the  time  of
transfer.

    Section  504.  Partner's transferable interest subject to
charging order.
    (a)  On application by a judgment creditor of  a  partner
or of a partner's transferee, a court having jurisdiction may
charge  the  transferable  interest of the judgment debtor to
satisfy the judgment. The court may appoint a receiver of the
share of the distributions  due  or  to  become  due  to  the
judgment  debtor  in  respect of the partnership and make all
other  orders,  directions,  accounts,  and   inquiries   the
judgment debtor might have made or which the circumstances of
the case may require.
    (b)  A  charging order constitutes a lien on the judgment
debtor's transferable interest in the partnership. The  court
may  order  a  foreclosure  of  the  interest  subject to the
charging order at any time. The purchaser at the  foreclosure
sale has the rights of a transferee.
    (c)  At  any time before foreclosure, an interest charged
may be redeemed:
         (1)  by the judgment debtor;
         (2)  with property other than partnership  property,
    by one or more of the other partners; or
         (3)  with  partnership  property,  by one or more of
    the other  partners  with  the  consent  of  all  of  the
    partners whose interests are not so charged.
    (d)  This Act does not deprive a partner of a right under
exemption  laws with respect to the partner's interest in the
partnership.
    (e)  This Section provides the exclusive remedy by  which
a  judgment creditor of a partner or partner's transferee may
satisfy a judgment out of the judgment debtor's  transferable
interest in the partnership.

                          ARTICLE 6
                   PARTNER'S DISSOCIATION
    Section  601.  Events  causing  partner's dissociation. A
partner is dissociated from a partnership upon the occurrence
of any of the following events:
         (1)  the  partnership's   having   notice   of   the
    partner's  express  will to withdraw as a partner or on a
    later date specified by the partner;
         (2)  an event agreed to in the partnership agreement
    as causing the partner's dissociation;
         (3)  the  partner's  expulsion   pursuant   to   the
    partnership agreement;
         (4)  the  partner's  expulsion by the unanimous vote
    of the other partners if:
              (i)  it is unlawful to carry on the partnership
         business with that partner;
              (ii)  there has  been  a  transfer  of  all  or
         substantially  all  of  that  partner's transferable
         interest in the partnership, other than  a  transfer
         for security purposes, or a court order charging the
         partner's interest, which has not been foreclosed;
              (iii)  within  90  days  after  the partnership
         notifies  a  corporate  partner  that  it  will   be
         expelled  because  it  has  filed  a  certificate of
         dissolution or the equivalent, its charter has  been
         revoked,  or  its right to conduct business has been
         suspended by the jurisdiction of its  incorporation,
         there   is  no  revocation  of  the  certificate  of
         dissolution or no reinstatement of  its  charter  or
         its right to conduct business; or
              (iv)  a  partnership that is a partner has been
         dissolved and its business is being wound up;
         (5)  on application by the  partnership  or  another
    partner,    the    partner's    expulsion   by   judicial
    determination because:
              (i)  the partner engaged  in  wrongful  conduct
         that   adversely   and   materially   affected   the
         partnership business;
              (ii)  the  partner  willfully  or  persistently
         committed  a  material  breach  of  the  partnership
         agreement  or  of  a duty owed to the partnership or
         the other partners under Section 404 of this Act; or
              (iii)  the partner engaged in conduct  relating
         to  the  partnership  business  which  makes  it not
         reasonably practicable to carry on the  business  in
         partnership with the partner;
         (6)  the partner's:
              (i)  becoming a debtor in bankruptcy;
              (ii)  executing  an  assignment for the benefit
         of creditors;
              (iii)  seeking, consenting to,  or  acquiescing
         in  the  appointment  of  a  trustee,  receiver,  or
         liquidator   of   that   partner   or   of   all  or
         substantially all of that partner's property; or
              (iv)  failing,  within  90   days   after   the
         appointment,   to   have   vacated   or  stayed  the
         appointment of a trustee, receiver, or liquidator of
         the partner or of all or substantially all   of  the
         partner's  property  obtained  without the partner's
         consent or acquiescence, or failing within  90  days
         after   the   expiration  of  a  stay  to  have  the
         appointment vacated;
         (7)  in the case of a partner who is an individual:
              (i)  the partner's death;
              (ii)  the appointment of a guardian or  general
         conservator for the partner; or
              (iii)  a   judicial   determination   that  the
         partner has otherwise become incapable of performing
         the   partner's   duties   under   the   partnership
         agreement;
         (8)  in the case of a partner that is a trust or  is
    acting  as  a  partner  by virtue of being a trustee of a
    trust, distribution of the  trust's  entire  transferable
    interest  in the partnership, but not merely by reason of
    the substitution of a successor trustee;
         (9)  in the case of a partner that is an  estate  or
    is  acting  as  a  partner  by virtue of being a personal
    representative of an estate, distribution of the estate's
    entire transferable interest in the partnership, but  not
    merely  by  reason  of  the  substitution  of a successor
    personal representative; or
         (10)  termination  of  a  partner  who  is  not   an
    individual, partnership, corporation, trust, or estate.

    Section  602.  Partner's  power  to  dissociate; wrongful
dissociation.
    (a)  A partner has the power to dissociate at  any  time,
rightfully or wrongfully, by express will pursuant to Section
601(1) of this Act.
    (b)  A partner's dissociation is wrongful only if:
         (1)  it  is in breach of an express provision of the
    partnership agreement; or
         (2)  in the case of a  partnership  for  a  definite
    term  or particular undertaking, before the expiration of
    the term or the completion of the undertaking:
              (i)  the partner  withdraws  by  express  will,
         unless  the  withdrawal follows within 90 days after
         another partner's dissociation by death or otherwise
         under  Section  601(6)  through  (10)  or   wrongful
         dissociation under this subsection;
              (ii)  the   partner  is  expelled  by  judicial
         determination under Section 601(5);
              (iii)  the partner is dissociated by becoming a
         debtor in bankruptcy; or
              (iv)  in the case of a partner who  is  not  an
         individual,  trust  other  than a business trust, or
         estate,  the  partner  is  expelled   or   otherwise
         dissociated   because   it  willfully  dissolved  or
         terminated.
    (c)  A partner who wrongfully dissociates  is  liable  to
the  partnership and to the other partners for damages caused
by the dissociation. The liability  is  in  addition  to  any
other  obligation of the partner to the partnership or to the
other partners.

    Section 603. Effect of partner's dissociation.
    (a)  If a partner's dissociation results in a dissolution
and winding up of the partnership business, Article 8 of this
Act applies; otherwise, Article 7 applies.
    (b)  Upon a partner's dissociation:
         (1)  the  partner's  right  to  participate  in  the
    management  and  conduct  of  the  partnership   business
    terminates, except as otherwise provided in Section 803;
         (2)  except  as  provided  in  clause  (3)  of  this
    subsection, a partner's duties terminate; and
         (3)  the  partner's  duty  of  loyalty under Section
    404(b)(1) and (2) and duty of care under  Section  404(c)
    continue  only  with regard to matters arising and events
    occurring before the partner's dissociation,  unless  the
    partner  participates  in  winding  up  the partnership's
    business pursuant to Section 803.

                          ARTICLE 7
      PARTNER'S DISSOCIATION WHEN BUSINESS NOT WOUND UP

    Section 701. Purchase of dissociated partner's interest.
    (a)  If a  partner  is  dissociated  from  a  partnership
without  resulting  in  a  dissolution  and winding up of the
partnership business under  Section  801  of  this  Act,  the
partnership shall cause the dissociated partner's interest in
the partnership to be purchased for a buyout price determined
pursuant to subsection (b) of this Section.
    (b)  The buyout price of a dissociated partner's interest
is  the  amount  that  would  have  been distributable to the
dissociating partner under Section 807(b) if, on the date  of
dissociation,  the  assets  of the partnership were sold at a
price equal to the greater of the liquidation  value  or  the
value  based  on  a  sale  of  the entire business as a going
concern without the dissociated partner and  the  partnership
were wound up as of that date. Interest must be paid from the
date of dissociation to the date of payment.
    (c)  Damages  for  wrongful  dissociation  under  Section
602(b), and all other amounts owing, whether or not presently
due, from the dissociated partner to the partnership, must be
offset  against  the buyout price. Interest must be paid from
the date the amount owed becomes due to the date of payment.
    (d)  A partnership shall indemnify a dissociated  partner
whose  interest  is  being  purchased against all partnership
liabilities,   whether   incurred   before   or   after   the
dissociation, except liabilities incurred by an  act  of  the
dissociated partner under Section 702.
    (e)  If  no  agreement  for the purchase of a dissociated
partner's interest is reached within 120 days after a written
demand for payment, the partnership shall pay, or cause to be
paid, in cash to  the  dissociated  partner  the  amount  the
partnership  estimates  to  be  the  buyout price and accrued
interest, reduced by any offsets and accrued  interest  under
subsection (c).
    (f)  If a deferred payment is authorized under subsection
(h),  the  partnership  may tender a written offer to pay the
amount it estimates  to  be  the  buyout  price  and  accrued
interest,  reduced  by  any  offsets  under  subsection  (c),
stating  the time of payment, the amount and type of security
for payment, and  the  other  terms  and  conditions  of  the
obligation.
    (g)  The  payment or tender required by subsection (e) or
(f) must be accompanied by the following:
         (1)  a   statement   of   partnership   assets   and
    liabilities as of the date of dissociation;
         (2)  the latest available partnership balance  sheet
    and income statement, if any;
         (3)  an  explanation  of how the estimated amount of
    the payment was calculated; and
         (4)  written notice that  the  payment  is  in  full
    satisfaction of the obligation to purchase unless, within
    120  days  after  the  written  notice,  the  dissociated
    partner  commences  an  action  to  determine  the buyout
    price, any offsets under subsection (c), or  other  terms
    of the obligation to purchase.
    (h)  A  partner  who  wrongfully  dissociates  before the
expiration  of  a  definite  term  or  the  completion  of  a
particular undertaking is not  entitled  to  payment  of  any
portion  of the buyout price until the expiration of the term
or  completion  of  the  undertaking,  unless   the   partner
establishes  to  the  satisfaction  of the court that earlier
payment will not cause undue hardship to the business of  the
partnership.  A  deferred  payment must be adequately secured
and bear interest.
    (i)  A dissociated partner may maintain an action against
the  partnership,  pursuant  to  Section  405(b)(2)(ii),   to
determine  the  buyout  price of that partner's interest, any
offsets  under  subsection  (c),  or  other  terms   of   the
obligation  to  purchase. The action must be commenced within
120 days after the partnership has  tendered  payment  or  an
offer  to  pay  or  within  one year after written demand for
payment if no payment or offer to pay is tendered. The  court
shall determine the buyout price of the dissociated partner's
interest,  any  offset  due  under  subsection  (c)  of  this
Section,  and  accrued  interest,  and enter judgment for any
additional  payment  or  refund.  If  deferred   payment   is
authorized   under  subsection  (h),  the  court  shall  also
determine the security for payment and  other  terms  of  the
obligation  to  purchase.  The  court  may  assess reasonable
attorney's fees and the fees and expenses  of  appraisers  or
other experts for a party to the action, in amounts the court
finds  equitable,  against a party that the court finds acted
arbitrarily, vexatiously, or not in good faith.  The  finding
may  be  based on the partnership's failure to tender payment
or an offer to pay or to comply with subsection (g).

    Section 702. Dissociated  partner's  power  to  bind  and
liability to partnership.
    (a)  For  2  years  after  a  partner dissociates without
resulting in a dissolution and winding up of the  partnership
business,  the partnership, including a surviving partnership
under Article 9 of this Act,  is  bound  by  an  act  of  the
dissociated  partner  which  would have bound the partnership
under Section 301 before dissociation only if at the time  of
entering into the transaction the other party:
         (1)  reasonably   believed   that   the  dissociated
    partner was then a partner;
         (2)  did  not   have   notice   of   the   partner's
    dissociation; and
         (3)  is  not  deemed  to  have  had  knowledge under
    Section 303(e) or notice under Section 704(c).
    (b)  A dissociated partner is liable to  the  partnership
for  any  damage  caused  to  the partnership arising from an
obligation  incurred  by  the   dissociated   partner   after
dissociation  for  which  the  partnership  is  liable  under
subsection (a) of this Section.
    Section  703.  Dissociated  partner's  liability to other
persons.
    (a)  A  partner's  dissociation  does   not   of   itself
discharge   the   partner's   liability   for  a  partnership
obligation  incurred  before  dissociation.   A   dissociated
partner  is  not liable for a partnership obligation incurred
after  dissociation,  except   as   otherwise   provided   in
subsection (b) of this Section.
    (b)  A  partner  who  dissociates  without resulting in a
dissolution and winding up of  the  partnership  business  is
liable  as  a  partner  to  the  other party in a transaction
entered into by the partnership, or a  surviving  partnership
under  Article  9  of  this  Act,  within  2  years after the
partner's dissociation, only if the partner is liable for the
obligation under Section 306 and at the time of entering into
the transaction the other party:
         (1)  reasonably  believed   that   the   dissociated
    partner was then a partner;
         (2)  did   not   have   notice   of   the  partner's
    dissociation; and
         (3)  is not  deemed  to  have  had  knowledge  under
    Section 303(e) or notice under Section 704(c).
    (c)  By  agreement  with the partnership creditor and the
partners continuing the business, a dissociated  partner  may
be released from liability for a partnership obligation.
    (d)  A dissociated partner is released from liability for
a  partnership  obligation  if  a  partnership creditor, with
notice  of  the  partner's  dissociation  but   without   the
partner's  consent,  agrees  to  a material alteration in the
nature or time of payment of a partnership obligation.

    Section 704. Statement of dissociation.
    (a)  A dissociated partner or the partnership may file  a
statement of dissociation stating the name of the partnership
and that the partner is dissociated from the partnership.
    (b)  A  statement  of dissociation is a limitation on the
authority of  a  dissociated  partner  for  the  purposes  of
Section 303(d) and (e).
    (c)  For the purposes of Sections 702(a)(3) and 703(b)(3)
of  this Act, a person not a partner is deemed to have notice
of  the  dissociation  90  days  after   the   statement   of
dissociation is filed.

    Section 705. Continued use of partnership name. Continued
use of a partnership name, or a dissociated partner's name as
part thereof, by partners continuing the business does not of
itself  make the dissociated partner liable for an obligation
of the partners or the partnership continuing the business.

                          ARTICLE 8
               WINDING UP PARTNERSHIP BUSINESS

    Section 801. Events causing dissolution and winding up of
partnership business. A partnership  is  dissolved,  and  its
business must be wound up, only upon the occurrence of any of
the following events:
         (1)  in  a  partnership  at  will, the partnership's
    having notice from a partner, other than a partner who is
    dissociated under Section 601(2) through  (10),  of  that
    partner's  express will to withdraw as a partner, or on a
    later date specified by the partner;
         (2)  in  a  partnership  for  a  definite  term   or
    particular undertaking:
              (i)  within   90   days   after   a   partner's
         dissociation  by  death  or  otherwise under Section
         601(6) through (10) or wrongful  dissociation  under
         Section 602(b), the express will of at least half of
         the  remaining  partners  to wind up the partnership
         business, for which  purpose  a  partner's  rightful
         dissociation   pursuant   to   Section  602(b)(2)(i)
         constitutes the expression of that partner's will to
         wind up the partnership business;
              (ii)  the express will of all of  the  partners
         to wind up the partnership business; or
              (iii)  the   expiration  of  the  term  or  the
         completion of the undertaking;
         (3)  an event agreed to in the partnership agreement
    resulting in the winding up of the partnership business;
         (4)  an event that makes  it  unlawful  for  all  or
    substantially  all  of the business of the partnership to
    be continued, but a cure of  illegality  within  90  days
    after notice to the partnership of the event is effective
    retroactively  to  the  date of the event for purposes of
    this Section;
         (5)  on  application  by  a  partner,   a   judicial
    determination that:
              (i)  the economic purpose of the partnership is
         likely to be unreasonably frustrated;
              (ii)  another  partner  has  engaged in conduct
         relating to the partnership business which makes  it
         not  reasonably practicable to carry on the business
         in partnership with that partner; or
              (iii)  it   is   not    otherwise    reasonably
         practicable  to carry on the partnership business in
         conformity with the partnership agreement; or
         (6)  on application by a transferee of  a  partner's
    transferable  interest,  a judicial determination that it
    is equitable to wind up the partnership business:
              (i)  after  the  expiration  of  the  term   or
         completion  of  the  undertaking, if the partnership
         was for a definite term or particular undertaking at
         the time of the transfer or entry  of  the  charging
         order that gave rise to the transfer; or
              (ii)  at  any  time,  if  the partnership was a
         partnership at will at the time of the  transfer  or
         entry  of  the  charging order that gave rise to the
         transfer.

    Section 802. Partnership continues after dissolution.
    (a)  Subject  to  subsection  (b)  of  this  Section,   a
partnership  continues after dissolution only for the purpose
of winding up its business.  The  partnership  is  terminated
when the winding up of its business is completed.
    (b)  At  any  time after the dissolution of a partnership
and before the winding up of its business is  completed,  all
of  the  partners,  including  any dissociating partner other
than a wrongfully dissociating partner, may waive  the  right
to   have   the  partnership's  business  wound  up  and  the
partnership terminated. In that event:
         (1)  the  partnership  resumes   carrying   on   its
    business  as  if  dissolution had never occurred, and any
    liability incurred by the partnership or a partner  after
    the dissolution and before the waiver is determined as if
    dissolution had never occurred; and
         (2)  the  rights  of  a  third  party accruing under
    Section 804(1) of this Act or arising out of  conduct  in
    reliance  on  the dissolution before the third party knew
    or received a notification  of  the  waiver  may  not  be
    adversely affected.

    Section 803. Right to wind up partnership business.
    (a)  After  dissolution, a partner who has not wrongfully
dissociated may participate in winding up  the  partnership's
business,  but on application of any partner, partner's legal
representative, or transferee,  the  appropriate  court,  for
good  cause  shown,  may  order  judicial  supervision of the
winding up.
    (b)  The  legal  representative  of  the  last  surviving
partner may wind up a partnership's business.
    (c)  A person winding up  a  partnership's  business  may
preserve  the  partnership  business  or  property as a going
concern for a reasonable time, prosecute and  defend  actions
and  proceedings, whether civil, criminal, or administrative,
settle and close the partnership's business, dispose  of  and
transfer    the   partnership's   property,   discharge   the
partnership's  liabilities,  distribute  the  assets  of  the
partnership pursuant  to  Section  807,  settle  disputes  by
mediation or arbitration, and perform other necessary acts.

    Section  804.  Partner's  power to bind partnership after
dissolution.  Subject  to  Section  805  of   this   Act,   a
partnership  is  bound  by  a partner's act after dissolution
that:
         (1)  is appropriate for winding up  the  partnership
    business; or
         (2)  would  have bound the partnership under Section
    301  before  dissolution,  if  the  other  party  to  the
    transaction did not have notice of the dissolution.

    Section 805. Statement of dissolution.
    (a)  After dissolution, a partner who has not  wrongfully
dissociated  may  file a statement of dissolution stating the
name  of  the  partnership  and  that  the  partnership   has
dissolved and is winding up its business.
    (b)  A statement of dissolution cancels a filed statement
of  partnership  authority for the purposes of Section 303(d)
and is a limitation on authority for the purposes of  Section
303(e).
    (c)  For  the  purposes of Sections 301 and 804, a person
not a partner is deemed to have notice of the dissolution and
the limitation on the partners' authority as a result of  the
statement of dissolution 90 days after it is filed.
    (d)  After   filing  and,  if  appropriate,  recording  a
statement of dissolution, a dissolved  partnership  may  file
and,  if  appropriate,  record  a  statement  of  partnership
authority  which  will operate with respect to a person not a
partner  as  provided  in  Section  303(d)  and  (e)  in  any
transaction, whether or not the  transaction  is  appropriate
for winding up the partnership business.

    Section  806. Partner's liability to other partners after
dissolution.
    (a)  Except as otherwise provided in  subsection  (b)  of
this Section and Section 306 of this Act, after dissolution a
partner  is  liable  to  the other partners for the partner's
share of any partnership  liability  incurred  under  Section
804.
    (b)  A  partner  who,  with knowledge of the dissolution,
incurs a partnership liability under Section 804(2) by an act
that is  not  appropriate  for  winding  up  the  partnership
business  is  liable to the partnership for any damage caused
to the partnership arising from the liability.

    Section 807. Settlement  of  accounts  and  contributions
among partners.
    (a)  In  winding  up a partnership's business, the assets
of  the  partnership,  including  the  contributions  of  the
partners  required  by  this  Section,  must  be  applied  to
discharge its obligations to  creditors,  including,  to  the
extent  permitted  by  law,  partners  who are creditors. Any
surplus must be  applied  to  pay  in  cash  the  net  amount
distributable  to  partners in accordance with their right to
distributions under subsection (b) of this Section.
    (b)  Each partner is entitled  to  a  settlement  of  all
partnership   accounts   upon   winding  up  the  partnership
business. In settling accounts among  the  partners,  profits
and   losses   that   result  from  the  liquidation  of  the
partnership assets  must  be  credited  and  charged  to  the
partners' accounts. The partnership shall make a distribution
to  a partner in an amount equal to any excess of the credits
over the charges in the partner's account.  A  partner  shall
contribute  to  the partnership an amount equal to any excess
of the charges over the credits in the partner's account  but
excluding  from  the  calculation  charges attributable to an
obligation for which the partner  is  not  personally  liable
under Section 306 of this Act.
    (c)  If  a  partner  fails  to contribute the full amount
required under subsection (b) of this  Section,  all  of  the
other  partners shall contribute, in the proportions in which
those  partners  share  partnership  losses,  the  additional
amount necessary to satisfy the partnership  obligations  for
which they are personally liable under Section 306. A partner
or  partner's legal representative may recover from the other
partners any contributions the partner makes  to  the  extent
the  amount  contributed  exceeds that partner's share of the
partnership obligations for which the partner  is  personally
liable under Section 306.
    (d)  After the settlement of accounts, each partner shall
contribute,  in  the  proportion  in which the partner shares
partnership  losses,  the   amount   necessary   to   satisfy
partnership  obligations  that  were not known at the time of
the settlement and for which the partner is personally liable
under Section 306.
    (e)  The estate of a deceased partner is liable  for  the
partner's obligation to contribute to the partnership.
    (f)  An  assignee  for  the  benefit  of  creditors  of a
partnership or a partner, or a person appointed by a court to
represent creditors  of  a  partnership  or  a  partner,  may
enforce   a   partner's   obligation  to  contribute  to  the
partnership.

                          ARTICLE 9
                   CONVERSIONS AND MERGERS

    Section 901. Definitions. In this article:
         (1)  "General  partner"  means  a   partner   in   a
    partnership   and   a   general   partner  in  a  limited
    partnership.
         (2)  "Limited partner" means a limited partner in  a
    limited partnership.
         (3)  "Limited    partnership"    means   a   limited
    partnership created under  the  Revised  Uniform  Limited
    Partnership  Act,  predecessor  law, or comparable law of
    another jurisdiction.
         (4)  "Partner" includes both a general partner and a
    limited partner.

    Section  902.  Conversion  of  partnership   to   limited
partnership.
    (a)  A   partnership   may  be  converted  to  a  limited
partnership pursuant to this Section.
    (b)  The terms  and  conditions  of  a  conversion  of  a
partnership  to a limited partnership must be approved by all
of the partners or by a number or  percentage  specified  for
conversion in the partnership agreement.
    (c)  After  the  conversion  is approved by the partners,
the  partnership  shall  file  a   certificate   of   limited
partnership   in   the  jurisdiction  in  which  the  limited
partnership is to be formed. The certificate must include:
         (1)  a statement that the partnership was  converted
    to a limited partnership from a partnership;
         (2)  its former name; and
         (3)  a  statement of the number of votes cast by the
    partners for and against the conversion and, if the  vote
    is less than unanimous, the number or percentage required
    to   approve   the   conversion   under  the  partnership
    agreement.
    (d)  The conversion takes effect when the certificate  of
limited  partnership  is filed or at any later date specified
in the certificate.
    (e)  A general partner who becomes a limited partner as a
result of the conversion remains liable as a general  partner
for  an  obligation  incurred  by  the partnership before the
conversion takes effect. If the other party to a  transaction
with   the   limited  partnership  reasonably  believes  when
entering the  transaction  that  the  limited  partner  is  a
general  partner,  the  limited  partner  is  liable  for  an
obligation incurred by the limited partnership within 90 days
after  the  conversion  takes  effect.  The limited partner's
liability  for  all  other   obligations   of   the   limited
partnership  incurred  after  the  conversion takes effect is
that of a limited partner as provided in the Revised  Uniform
Limited Partnership Act.

    Section   903.   Conversion  of  limited  partnership  to
partnership.
    (a)  A  limited  partnership  may  be  converted   to   a
partnership pursuant to this Section.
    (b)  Notwithstanding  a  provision  to  the contrary in a
limited partnership agreement, the terms and conditions of  a
conversion  of a limited partnership to a partnership must be
approved by all of the partners.
    (c)  After the conversion is approved  by  the  partners,
the  limited  partnership  shall  cancel  its  certificate of
limited partnership.
    (d)  The conversion takes effect when the certificate  of
limited partnership is canceled.
    (e)  A limited partner who becomes a general partner as a
result  of  the  conversion  remains liable only as a limited
partner for an obligation incurred by the limited partnership
before the  conversion  takes  effect.  Except  as  otherwise
provided  in  Section 306, the partner is liable as a general
partner for an obligation of the partnership  incurred  after
the conversion takes effect.

    Section 904. Effect of conversion; entity unchanged.
    (a)  A  partnership  or limited partnership that has been
converted pursuant to this article is for  all  purposes  the
same entity that existed before the conversion.
    (b)  When a conversion takes effect:
         (1)  all    property   owned   by   the   converting
    partnership or limited partnership remains vested in  the
    converted entity;
         (2)  all  obligations  of the converting partnership
    or limited partnership continue  as  obligations  of  the
    converted entity; and
         (3)  an  action  or  proceeding  pending against the
    converting partnership  or  limited  partnership  may  be
    continued as if the conversion had not occurred.

    Section 905. Merger of partnerships.
    (a)  Pursuant to a plan of merger approved as provided in
subsection  (c)  of this Section, a partnership may be merged
with one or more partnerships or limited partnerships.
    (b)  The plan of merger must set forth:
         (1)  the  name  of  each  partnership   or   limited
    partnership that is a party to the merger;
         (2)  the name of the surviving entity into which the
    other partnerships or limited partnerships will merge;
         (3)  whether  the  surviving entity is a partnership
    or a limited partnership and the status of each partner;
         (4)  the terms and conditions of the merger;
         (5)  the  manner  and  basis   of   converting   the
    interests  of  each party to the merger into interests or
    obligations of the surviving entity,  or  into  money  or
    other property in whole or part; and
         (6)  the  street  address  of the surviving entity's
    chief executive office.
    (c)  The plan of merger must be approved:
         (1)  in the case of a partnership that is a party to
    the merger, by all  of  the  partners,  or  a  number  or
    percentage   specified  for  merger  in  the  partnership
    agreement; and
         (2)  in the case of a limited partnership that is  a
    party to the merger, by the vote required for approval of
    a  merger by the law of the State or foreign jurisdiction
    in which the limited partnership is organized and, in the
    absence of such a specifically applicable law, by all  of
    the partners, notwithstanding a provision to the contrary
    in the partnership agreement.
    (d)  After  a  plan  of merger is approved and before the
merger takes effect, the plan may be amended or abandoned  as
provided in the plan.
    (e)  The merger takes effect on the later of:
         (1)  the  approval  of  the  plan  of  merger by all
    parties to the merger, as provided in subsection (c);
         (2)  the filing of all documents required by law  to
    be  filed  as  a  condition  to  the effectiveness of the
    merger; or
         (3)  any effective date specified  in  the  plan  of
    merger.

    Section 906. Effect of merger.
    (a)  When a merger takes effect:
         (1)  the  separate existence of every partnership or
    limited partnership that is a party to the merger,  other
    than the surviving entity, ceases;
         (2)  all  property  owned  by  each  of  the  merged
    partnerships   or   limited  partnerships  vests  in  the
    surviving entity;
         (3)  all obligations of every partnership or limited
    partnership that is a party  to  the  merger  become  the
    obligations of the surviving entity; and
         (4)  an  action  or  proceeding  pending  against  a
    partnership or limited partnership that is a party to the
    merger  may  be  continued  as  if  the  merger  had  not
    occurred, or the surviving entity may be substituted as a
    party to the action or proceeding.
    (b)  The  Secretary  of  State of this State is the agent
for service of process in an action or proceeding  against  a
surviving  foreign  partnership  or  limited  partnership  to
enforce  an  obligation  of a domestic partnership or limited
partnership that is a party to a merger. The surviving entity
shall promptly notify the Secretary of State of  the  mailing
address  of  its  chief executive office and of any change of
address. Upon receipt of  process,  the  Secretary  of  State
shall  mail  a  copy  of the process to the surviving foreign
partnership or limited partnership.
    (c)  A partner of the surviving  partnership  or  limited
partnership is liable for:
         (1)  all  obligations  of  a party to the merger for
    which  the  partner  was  personally  liable  before  the
    merger;
         (2)  all other obligations of the  surviving  entity
    incurred  before the merger by a party to the merger, but
    those obligations may be satisfied only out  of  property
    of the entity; and
         (3)  except  as otherwise provided in Section 306 of
    this  Act,  all  obligations  of  the  surviving   entity
    incurred   after  the  merger  takes  effect,  but  those
    obligations may be satisfied only out of property of  the
    entity if the partner is a limited partner.
    (d)  If  the  obligations incurred before the merger by a
party to the merger are not satisfied out of the property  of
the surviving partnership or limited partnership, the general
partners  of that party immediately before the effective date
of the  merger  shall  contribute  the  amount  necessary  to
satisfy  that party's obligations to the surviving entity, in
the  manner  provided  in  Section  807  or  in  the  Limited
Partnership Act of the jurisdiction in which  the  party  was
formed,  as  the  case  may  be,  as if the merged party were
dissolved.
    (e)  A partner of a party to a merger who does not become
a partner of the surviving partnership or limited partnership
is dissociated from the entity, of which that partner  was  a
partner,  as  of  the  date  the  merger  takes  effect.  The
surviving  entity  shall  cause the partner's interest in the
entity to be purchased under  Section  701  of  this  Act  or
another  statute  specifically  applicable  to that partner's
interest with respect to a merger. The  surviving  entity  is
bound  under  Section  702  by  an  act  of a general partner
dissociated under this subsection, and the partner is  liable
under  Section  703  for  transactions  entered  into  by the
surviving entity after the merger takes effect.

    Section 907. Statement of merger.
    (a)  After a merger, the surviving partnership or limited
partnership  may  file  a  statement   that   one   or   more
partnerships  or  limited  partnerships  have merged into the
surviving entity.
    (b)  A statement of merger must contain:
         (1)  the  name  of  each  partnership   or   limited
    partnership that is a party to the merger;
         (2)  the name of the surviving entity into which the
    other partnerships or limited partnerships were merged;
         (3)  the  street  address  of the surviving entity's
    chief executive office and of an office in this State, if
    any; and
         (4)  whether the surviving entity is  a  partnership
    or a limited partnership.
    (c)  Except  as  otherwise  provided in subsection (d) of
this Section, for the purposes of Section  302,  property  of
the surviving partnership or limited partnership which before
the  merger  was  held  in  the  name of another party to the
merger is property held in the name of the  surviving  entity
upon filing a statement of merger.
    (d)  For  the  purposes  of Section 302, real property of
the surviving partnership or limited partnership which before
the merger was held in the  name  of  another  party  to  the
merger  is  property held in the name of the surviving entity
upon recording a certified copy of the statement of merger in
the office for recording transfers of that real property.
    (e)  A filed and, if appropriate, recorded  statement  of
merger,  executed  and  declared  to  be accurate pursuant to
Section 105(c), stating the name of a partnership or  limited
partnership  that  is  a  party  to  the merger in whose name
property was held before the  merger  and  the  name  of  the
surviving  entity,  but  not  containing  all  of  the  other
information  required  by  subsection  (b)  of  this Section,
operates  with  respect  to  the  partnerships   or   limited
partnerships  named to the extent provided in subsections (c)
and (d).

    Section 908. Merger of partnership and limited  liability
company.
    (a)  Under a plan of merger approved under subsection (c)

of  this  Section, any one or more partnerships of this State
may  merge  with  or  into  one  or  more  limited  liability
companies of this  State, any other state or  states  of  the
United  States,  or  the District of Columbia, if the laws of
the other state or states or the District of Columbia  permit
the  merger.  The partnership or partnerships and the limited
liability company or companies  may  merge  with  or  into  a
partnership,  which  may be any one of these partnerships, or
they may merge with or  into  a  limited  liability  company,
which  may  be  any one of these limited liability companies,
which shall be a partnership or limited liability company  of
this  State,  any  other  state  of the United States, or the
District of Columbia, which permits the merger.
    (b)  A  plan  of  merger  must  set  forth  all  of   the
following:
         (1)  The  name of each entity that is a party to the
    merger.
         (2)  The name of the surviving entity into which the
    other entities will merge.
         (3)  The  type  of  organization  of  the  surviving
    entity.
         (4)  The terms and conditions of the merger.
         (5)  The  manner  and  basis  for   converting   the
    interests  of  each  party  to the merger into interests,
    obligations, or other securities of the surviving entity,
    or into money or other property in whole or in part.
         (6)  The street address of  the  surviving  entity's
    principal place of business.
    (c)  The  plan  of  merger  required by subsection (b) of
this Section must be approved by each party to the merger  in
accordance with all of the following:
         (1)  In  the  case  of  a partnership, by all of the
    partners or by the number or percentage of  the  partners
    required to approve a merger specified in the partnership
    agreement.
         (2)  In  the case of a limited liability company, by
    all members or by the number  or  percentage  of  members
    required  to  approve a merger specified in the operating
    agreement.
    (d)  After a plan of merger is approved  and  before  the
merger  takes effect, the plan may be amended or abandoned as
provided in the plan of merger.
    (e)  After approval of the  plan  of  merger  under  this
Section,  unless the merger is abandoned under subsection (d)
of this Section, a statement of  merger  must  be  signed  on
behalf  of  each  party  to  the  merger and delivered to the
Secretary of State of this State for filing. The statement of
merger must set forth all of the following:
         (1)  The  name  and,  in  the  case  of  a   limited
    liability  partnership,  jurisdiction of each partnership
    and the name and jurisdiction  of  organization  of  each
    limited liability company that is a party to the merger.
         (2)  That  a  plan  of  merger has been approved and
    signed by each partnership  and  each  limited  liability
    company that is a party to the merger.
         (3)  The   name   and   address   of  the  surviving
    partnership or surviving limited liability company.
         (4)  The effective date of the merger.
         (5)  If a party to the merger is a  foreign  limited
    liability   company   or   a  foreign  limited  liability
    partnership, the jurisdiction and date of the  filing  of
    its    articles   of   organization   or   statement   of
    qualification, as the case may be, and the date when  its
    application for authority was filed with the Secretary of
    State  of  this  State or, if an application has not been
    filed, a statement to that effect.
         (6)  If the surviving entity is not a partnership or
    limited liability company organized  under  the  laws  of
    this State, an agreement that the surviving entity may be
    served  with  process  in  this  State  and is subject to
    liability in any action or proceeding for the enforcement
    of any liability or  obligation  of  any  partnership  or
    limited  liability company which is a party to the merger
    or which was previously subject to suit  in  this  State,
    and  for the enforcement, as provided in this Act, of the
    right of partners of any partnership or  members  of  any
    limited  liability  company  to receive payment for their
    interests  in  the  partnership  or   limited   liability
    company,  as  the  case  may  be,  against  the surviving
    entity.
    (f)  If a foreign limited liability company or a  foreign
limited  liability  partnership  is the surviving entity of a
merger, it may  not  do  business  in  this  State  until  an
application for that authority is filed with the Secretary of
State.
    (g)  The  surviving  partnership  or  other  entity shall
furnish a copy of the plan of merger, on request, and without
cost, to any person holding an interest in an entity that  is
to merge.
    (h)  To  the  extent  that  the  statement  of  merger is
inconsistent with the articles of organization of  a  limited
liability  company  or  the  statement  of qualification of a
limited liability partnership, the statement of merger  shall
operate  as  an  amendment to the articles of organization or
statement of qualification, as the case may be.
    (i)  The merger is  effective  upon  the  filing  of  the
statement  of  merger  with  the  Secretary  of State of this
State, or on a later date as specified in  the  statement  of
merger not later than 30 days subsequent to the filing of the
statement of merger under subsection (e) of this Section.
    (j)  When   any   merger  becomes  effective  under  this
Section:
         (1)  the separate existence of each partnership  and
    each  limited  liability  company  that is a party to the
    merger, other than the surviving entity, terminates;
         (2)  all property owned by each partnership and each
    limited liability company that is a party to  the  merger
    vests in the surviving entity;
         (3)  all  debts,  liabilities, and other obligations
    of each partnership and each  limited  liability  company
    that  is  a party to the merger become the obligations of
    the surviving entity;
         (4)  an  action  or  proceeding  by  or  against   a
    partnership or limited liability company that  is a party
    to  the  merger may be continued as if the merger had not
    occurred or the surviving entity may be substituted as  a
    party to the action or proceeding; and
         (5)  except  as  prohibited  by  other  law, all the
    rights, privileges, immunities, powers, and  purposes  of
    each  partnership and limited liability company that is a
    party to the merger vest in the surviving entity.
    (k)  The Secretary of State of this State is an agent for
service of process in an action  or  proceeding  against  any
surviving  foreign  entity  to  enforce  an obligation of any
party to a merger if the surviving foreign  entity  fails  to
appoint  or  maintain  an  agent  designated  for  service of
process in this State or the agent  for  service  of  process
cannot  with  reasonable diligence be found at the designated
office. Service is effected under this subsection (k) at  the
earliest of:
         (1)  the  date  the  surviving  entity  receives the
    process notice or demand;
         (2)  the date shown on the return receipt, if signed
    on behalf of the surviving entity; or
         (3)  5 days after its deposit in the mail, if mailed
    postpaid and correctly addressed.
    (l)  Service under subsection (k) of this  Section  shall
be  made by the person instituting the action by doing all of
the following:
         (1)  Serving on  the  Secretary  of  State  of  this
    State,  or  on  any  employee  having  responsibility for
    administering this Act in his or her office,  a  copy  of
    the  process, notice, or demand, together with any papers
    required by  law  to  be  delivered  in  connection  with
    service  and  paying the fee prescribed by Section 108 of
    this Act.
         (2)  Transmitting  notice  of  the  service  on  the
    Secretary of State of  this  State  and  a  copy  of  the
    process, notice, or demand and accompanying papers to the
    surviving entity being served, by registered or certified
    mail at the address set forth in the statement of merger.
         (3)  Attaching  an affidavit of compliance with this
    Section, in substantially the form that the Secretary  of
    State  of  this  State  may  by  rule  prescribe,  to the
    process, notice, or demand.
    (m)  Nothing contained in this  Section  shall  limit  or
affect  the  right  to  serve  any process, notice, or demand
required or permitted by law to be served upon a  partnership
in any other manner now or hereafter permitted by law.
    (n)  The Secretary of State of this State shall keep, for
a period of 5 years from the date of service, a record of all
processes,  notices, and demands served upon him or her under
this Section and shall record the time of the service and the
person's action with reference to the service.
    (o)  Except as provided by agreement  with  a  person  to
whom  a  partner of a partnership is obligated, a merger of a
partnership that has become effective shall  not  affect  any
obligation or liability existing at the time of the merger of
a partner of a partnership that is merging.
    Section  909.  Approval  of  conversion  into  a  limited
liability  company.  A partnership may convert into a limited
liability company organized, formed,  or  created  under  the
laws  of  this  State,  upon  approval  of  the conversion in
accordance with this Section. The terms and conditions  of  a
conversion  of  a  partnership to a limited liability company
must be approved by all of the partners or  by  a  number  or
percentage  of  the  partners  required for conversion in the
partnership agreement.
    After a conversion is  approved,  the  partnership  shall
file  articles of organization in the Office of the Secretary
of State in accordance with subsection (d) of  Section  37-10
of the Limited Liability Company Act.

    Section 910. Nonexclusive. This Article is not exclusive.
Partnerships  or  limited  partnerships  may  be converted or
merged in any other manner provided by law.

                         ARTICLE 10
                LIMITED LIABILITY PARTNERSHIP

    Section 1001. Statement of qualification.
    (a)  A  partnership  may  become  a   limited   liability
partnership pursuant to this Section.
    (b)  The  terms  and  conditions  on  which a partnership
becomes a limited liability partnership must be  approved  by
the vote necessary to amend the partnership agreement except,
in  the  case  of  a  partnership  agreement  that  expressly
considers  obligations  to contribute to the partnership, the
vote necessary to amend those provisions.
    (c)  After the approval required  by  subsection  (b)  of
this  Section,  a  partnership may become a limited liability
partnership by filing a statement of qualification  with  the
Secretary of State. The statement must contain:
         (1)  the name of the partnership;
         (2)  the  street  address of the partnership's chief
    executive office and, if different, the street address of
    an office in this State, if any;
         (3)  the   name   and   street   address   of    the
    partnership's agent for service of process;
         (4)  the number of partners;
         (5)  a  brief statement of the business in which the
    partnership engages;
         (6)  a statement that the  partnership  applies  for
    qualification as a limited liability partnership; and
         (7)  a  deferred  effective  date,  if  any,  of  an
    application   for   status   as   a   limited   liability
    partnership.
    (d)  The  agent  of  a  limited liability partnership for
service of process must be an individual who is a resident of
this State or other person authorized to do business in  this
State.
    (e)  The  status  of a partnership as a limited liability
partnership is effective on the later of the  filing  of  the
statement  or  a  date  specified  in  the  statement and the
receipt by the Secretary of State of the  required  fee.  The
status  remains  effective  for  one  year  after  the date a
statement of qualification is filed, regardless of changes in
the partnership, unless the partnership voluntarily withdraws
by filing a statement  of  withdrawal,  in  which  event  the
status  of the partnership as a limited liability partnership
shall terminate on the date such statement is  filed  or,  if
later, a date specified on the statement.
    (f)  The  status  of a partnership as a limited liability
partnership and the liability of its partners is not affected
by errors or later changes in the information required to  be
contained in the  statement of qualification under subsection
(c) of this Section.
    (g)  The   filing   of   a   statement  of  qualification
establishes that a partnership has satisfied  all  conditions
precedent  to  the  qualification  of  the  partnership  as a
limited liability partnership.
    (h)  An amendment  or  cancellation  of  a  statement  of
qualification  is effective when it is filed or on a deferred
effective date specified in the amendment or cancellation.
    (i)  The Secretary of State shall register as  a  limited
liability   partnership   any   partnership  that  submits  a
completed application with the required fee.
    (j)  The Secretary of State shall provide statements  for
registration   application,   renewal   of  registration  and
voluntary cancellation.

    Section 1002. Name.  The  name  of  a  limited  liability
partnership  must  end  with  "Registered  Limited  Liability
Partnership",  "Limited  Liability  Partnership", "R.L.L.P.",
"L.L.P.", "RLLP", or "LLP".

    Section 1003. Renewal statements.
    (a)  A  limited  liability  partnership,  and  a  foreign
limited liability partnership authorized to transact business
in this State, shall file a renewal statement in  the  Office
of the Secretary of State which contains:
         (1)  the name of the partnership;
         (2)  the  street  address of the partnership's chief
    executive office and, if different, the street address of
    an office in this State, if any;
         (3)  the   name   and   street   address   of    the
    partnership's agent for service of process;
         (4)  if   the  partnership  is  a  domestic  limited
    liability partnership, the number of partners;
         (5)  a brief statement of the business in which  the
    partnership engages; and
         (6)  if   the   partnership  is  a  foreign  limited
    liability partnership, a current certificate of status in
    good  standing  as   a   registered   limited   liability
    partnership under the laws of that state or jurisdiction.
    (b)  Qualification  as  a  limited liability partnership,
whether pursuant  to  an  original  statement  or  a  renewal
statement,  is renewed if, during the 60 day period preceding
the date the initial statement or renewal statement otherwise
would have expired, the partnership files with the  Secretary
of State a renewal statement. A renewal statement expires one
year  after the date an original statement would have expired
if the last renewal of the statement had not occurred.
    (c)  The Secretary of State shall renew the  registration
of  any limited liability partnership of any partnership that
submits a renewal statement with the required fee.

                         ARTICLE 11
            FOREIGN LIMITED LIABILITY PARTNERSHIP

    Section 1101. Law  governing  foreign  limited  liability
partnership.
    (a)  The  law  under  which  a  foreign limited liability
partnership is formed governs relations  among  the  partners
and   between  the  partners  and  the  partnership  and  the
liability of partners for obligations of the partnership.
    (b)  A foreign limited liability partnership may  not  be
denied  a statement of foreign qualification by reason of any
difference between the law under which  the  partnership  was
formed and the law of this State.
    (c)  A   statement  of  foreign  qualification  does  not
authorize a foreign limited liability partnership  to  engage
in  any business or exercise any power that a partnership may
not engage  in  or  exercise  in  this  State  as  a  limited
liability partnership.

    Section 1102. Statement of foreign qualification.
    (a)  Before   transacting   or   continuing  to  transact
business  in  this  State,  a   foreign   limited   liability
partnership  must  file  a  statement  of  qualification or a
renewal statement under Section 1001; provided, however, that
the statement must contain:
         (1)  the  name  of  the  foreign  limited  liability
    partnership which satisfies the requirements of the state
    or other jurisdiction under whose law it  is  formed  and
    ends  with  "Registered  Limited  Liability Partnership",
    "Limited Liability  Partnership",  "R.L.L.P.",  "L.L.P.",
    "RLLP", or "LLP";
         (2)  the  street  address of the partnership's chief
    executive office and, if different, the street address of
    an office of the partnership in this State, if any;
         (3)  the   name   and   street   address   of    the
    partnership's agent for service of process;
         (4)  a  brief statement of the business in which the
    partnership engages;
         (5)  a deferred effective date, if any; and
         (6)  a document or documents  sufficient  under  the
    laws  of  the  state or jurisdiction in which the limited
    liability partnership is organized to constitute official
    certification of current status in  good  standing  as  a
    registered  limited  liability partnership under the laws
    of that state or jurisdiction.
    (b)  A foreign partnership may  not  use  an  assumed  or
fictitious   name   in   the   conduct  of  its  business  to
intentionally misrepresent the geographic origin or  location
of the partnership. This subsection (b) does not apply to any
foreign  limited  liability partnership that has gross annual
revenues in excess of $100,000,000.
    (c)  A person shall not advertise or cause to  be  listed
in  a  telephone  directory an assumed or fictitious business
name that intentionally misrepresents where the  business  is
actually  located  or  operating  or  falsely states that the
business is located or operating in the area covered  by  the
telephone  directory. This subsection (c) does not apply to a
telephone service provider or to the publisher or distributor
of  a  telephone  service  directory,  unless   the   conduct
prescribed  in  this  subsection  (c)  is  on  behalf of that
telephone service provider or that publisher or  distributor.
This  subsection  (c)  does  not apply to any foreign limited
liability partnership  that  has  gross  annual  revenues  in
excess of $100,000,000.
    (d)  A   foreign   limited   liability  partnership  that
violates this Section is guilty of a petty offense  and  must
be  fined  not  less  than  $501  and not more than $1,000. A
foreign  limited  liability  partnership  is  guilty  of   an
additional  offense  for  each additional day in violation of
this Section.
    (e)  The agent of a foreign limited liability partnership
for service of  process  must  be  an  individual  who  is  a
resident  of  this  State  or  other  person authorized to do
business in this State.
    (f)  The status of a partnership  as  a  foreign  limited
liability partnership is effective on the later of the filing
of the statement of foreign qualification or a date specified
in the statement. The status remains effective, regardless of
changes   in   the   partnership,   unless   the  partnership
voluntarily withdraws by filing a statement of withdrawal, in
which event the  status  of  the  partnership  as  a  foreign
limited  liability  partnership  shall  terminate on the date
such statement is filed or, if later, a date specified on the
statement.
    (g)  An amendment  or  cancellation  of  a  statement  of
foreign  qualification  is effective when it is filed or on a
deferred  effective  date  specified  in  the  amendment   or
cancellation.
    (h)  The  Secretary  of State shall register as a limited
liability   partnership   any   foreign   limited   liability
partnership that submits a  completed  application  with  the
required fee.

    Section 1103. Effect of failure to qualify.
    (a)  A  foreign limited liability partnership transacting
business  in  this  State  may  not  maintain  an  action  or
proceeding in this State unless it has in effect a  statement
of foreign qualification.
    (b)  The   failure   of   a   foreign  limited  liability
partnership  to  have  in  effect  a  statement  of   foreign
qualification  does  not impair the validity of a contract or
act of the foreign limited liability partnership or  preclude
it from defending an action or proceeding in this State.
    (c)  A  limitation  on personal liability of a partner is
not waived solely  by  transacting  business  in  this  State
without a statement of foreign qualification.
    (d)  If a foreign limited liability partnership transacts
business  in  this  State  without  a  statement  of  foreign
qualification,  the  Secretary  of  State  is  its  agent for
service of process with respect to a right of action  arising
out of the transaction of business in this State.

    Section  1104.  Activities  not  constituting transacting
business.
    (a)  Activities   of   a   foreign   limited    liability
partnership  which do not constitute transacting business for
the purpose of this Article include:
         (1)  maintaining, defending, or settling  an  action
    or proceeding;
         (2)  holding meetings of its partners or carrying on
    any other activity concerning its internal affairs;
         (3)  maintaining bank accounts;
         (4)  maintaining   offices   or   agencies  for  the
    transfer, exchange, and registration of the partnership's
    own securities or maintaining  trustees  or  depositories
    with respect to those securities;
         (5)  selling through independent contractors;
         (6)  soliciting or obtaining orders, whether by mail
    or  through  employees  or  agents  or  otherwise, if the
    orders require acceptance outside this State before  they
    become contracts;
         (7)  creating  or  acquiring  indebtedness,  with or
    without  a  mortgage,  or  other  security  interest   in
    property;
         (8)  collecting  debts  or  foreclosing mortgages or
    other security interests in property securing the  debts,
    and  holding,  protecting,  and  maintaining  property so
    acquired;
         (9)  conducting  an  isolated  transaction  that  is
    completed within 30 days and is not one in the course  of
    similar transactions; and
         (10)  transacting business in interstate commerce.
    (b)  For  purposes of this Article, the ownership in this
State of income-producing real property or tangible  personal
property,  other  than property excluded under subsection (a)
of this Section, constitutes  transacting  business  in  this
State.
    (c)  This  Section  does  not  apply  in  determining the
contacts or activities that may  subject  a  foreign  limited
liability  partnership  to  service  of process, taxation, or
regulation under any other law of this State.

    Section 1105. Action by Attorney  General.  The  Attorney
General  may maintain an action to restrain a foreign limited
liability partnership from transacting business in this State
in violation of this Article.

                         ARTICLE 12
                  MISCELLANEOUS PROVISIONS

    Section 1201. Uniformity of application and construction.
This Act shall be applied and  construed  to  effectuate  its
general  purpose  to make uniform the law with respect to the
subject of this Act among States enacting it.

    Section 1202. Short title. (See  Section  100  for  short
title.)

    Section  1203.  Severability  clause. If any provision of
this Act or its application to any person or circumstance  is
held invalid, the invalidity does not affect other provisions
or applications of this Act which can be given effect without
the  invalid  provision  or  application, and to this end the
provisions of this Act are severable.

    Section 1204.  Effective  date.  (See  Section  1299  for
effective date.)

    Section 1205. Repealer. (See Section 1290 for repeals.)

    Section 1206. Applicability.
    (a)  Before  January  1,  2008,  this  Act governs only a
partnership formed:
         (1)  on  or  after  January  1,   2003,   except   a
    partnership   that   is  continuing  the  business  of  a
    dissolved partnership under Section 33 of the  superseded
    Uniform Partnership Act; and
         (2)  before   January   1,  2003,  that  elects,  as
    provided  by  subsection  (c)  of  this  Section,  to  be
    governed by this Act.
    (b)  On and after January 1, 2008, this Act  governs  all
partnerships.
    (c)  Before  January  1,  2008, a partnership voluntarily
may  elect,  in  the  manner  provided  in  its   partnership
agreement  or  by law for amending the partnership agreement,
to be governed by  this  Act.  The  provisions  of  this  Act
relating  to  the  liability of the partnership's partners to
third parties apply to limit those partners' liability  to  a
third party who had done business with the partnership within
one  year before the partnership's election to be governed by
this Act only if the third party  knows  or  has  received  a
notification  of the partnership's election to be governed by
this Act.

    Section 1207. Savings clause. This Act does not affect an
action or proceeding commenced or right accrued  before  this
Act takes effect.

    Section  1290.  The Uniform Partnership Act is amended by
adding Part VII as follows:

    (805 ILCS 205/Part VII heading new)
              PART VII.  APPLICABILITY; REPEAL

    (805 ILCS 205/90 new)
    Sec. 90.  Applicability of Act.
    (a)  Except as  provided  in  subsection  (b),  this  Act
governs  a  partnership  formed before January 1, 2003.  This
Act governs a partnership formed after December 31, 2002  and
before January 1, 2008 only if that partnership is continuing
the  business of a dissolved partnership under Section 33.  A
partnership may not be formed under  this  Act  on  or  after
January  1,  2003  unless  it is continuing the business of a
dissolved partnership under Section 33.
    (b)  A partnership formed  before  January  1,  2003  may
voluntarily  elect to be governed, before January 1, 2008, by
the Uniform Partnership Act (1997)  as  provided  in  Section
1206 of that Act.

    (805 ILCS 205/95 new)
    Sec.  95.  Repeal.   This  Act  is repealed on January 1,
2008.

    Section 1295.  The Revised  Uniform  Limited  Partnership
Act  is  amended by changing Sections 201 and 1204 and adding
Section 805 as follows:

    (805 ILCS 210/201) (from Ch. 106 1/2, par. 152-1)
    Sec. 201.  Certificate of Limited Partnership.
    (a)  In  order  to  form   a   limited   partnership,   a
certificate of limited partnership must be executed and filed
in  the  office  of  the Secretary of State in Springfield or
Chicago.   Certificates  may  be  filed  in  such  additional
offices  as  the  Secretary  of  State  may  designate.   The
certificate shall set forth:
         (1)  the name of the limited partnership;
         (2)  the  purposes  for  which  the  partnership  is
    formed, which may be stated to be,  or  to  include,  the
    transaction  of  any  or  all lawful businesses for which
    limited partnerships may be formed under this Act;
         (3)  the address of the office at which the  records
    required to be maintained by Section 104 are kept and the
    name  of  its  registered  agent  and  the address of its
    registered office required to be  maintained  by  Section
    103;
         (4)  the  name  and business address of each general
    partner;
         (5)  the latest date, if any, upon which the limited
    partnership is to dissolve;
         (6)  any other matters  the  partners  determine  to
    include therein; and
         (7)  any  other  information  the Secretary of State
    shall by rule deem necessary to administer this Act.
    (b)  A limited partnership is formed at the time  of  the
filing  of  the  certificate  of  limited  partnership in the
office of the Secretary of State or at any  later  time,  not
more than 60 days subsequent to the filing of the certificate
of  limited  partnership,  specified  in  the  certificate of
limited partnership  if,  in  either  case,  there  has  been
substantial compliance with the requirements of this Section.
    (c)  A  limited partnership may be formed by converting a
partnership to a limited partnership as provided  in  Section
902 of the Uniform Partnership Act (1997).
(Source: P.A. 92-33, eff. 7-1-01.)

    (805 ILCS 210/805 new)
    Sec.   805.  Conversion   to   partnership.    A  limited
partnership may be converted to a partnership as provided  in
Section 903 of the Uniform Partnership Act (1997).

    (805 ILCS 210/1204) (from Ch. 106 1/2, par. 162-4)
    Sec. 1204.  Rules for Cases Not Provided for in this Act.
Before  January 1, 2008, in any case not provided for in this
Act the provisions of the Uniform Partnership Act  govern  if
that Act is otherwise applicable as provided in Section 90 of
that  Act.  After December 31, 2002, in any case not provided
for in this Act, the provisions of  the  Uniform  Partnership
Act  (1997)  govern  if  that  Act is otherwise applicable as
provided in Section 1206 of that Act.
(Source: P.A. 84-1412.)
    Section 1299.  Effective date.  This Act takes effect  on
January 1, 2003.
    Passed in the General Assembly May 08, 2002.
    Approved July 25, 2002.
    Effective January 01, 2003.

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