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S1295................................................by JUDICIARY AND RULES
UNIFORM PARTNERSHIP ACT - Repeals and adds to existing law to enact the
Uniform Partnership Act of 1996, to become effective on January 1, 2001.
The existing Uniform Partnership Act will remain in effect until July 1,
2001.
01/19 Senate intro - 1st rdg - to printing
01/20 Rpt prt - to Jud
02/09 Rpt out - rec d/p - to 2nd rdg
02/10 2nd rdg - to 3rd rdg
02/17 3rd rdg - PASSED - 34-0-1
AYES--Andreason, Boatright, Branch, Bunderson, Burtenshaw, Cameron,
Crow, Danielson, Darrington, Deide, Dunklin, Frasure, Geddes, Hansen,
Hawkins, Ingram, Ipsen, Keough, King, Lee, McLaughlin, Noh, Parry,
Richardson, Riggs, Risch, Sandy, Schroeder, Stennett, Sweeney,
Thorne, Twiggs, Wheeler, Whitworth
NAYS--None
Absent and excused--Sorensen
Floor Sponsor - Risch
Title apvd - to House
02/18 House intro - 1st rdg - to Jud
03/06 Rpt out - rec d/p - to 2nd rdg
03/09 2nd rdg - to 3rd rdg
03/12 3rd rdg - PASSED - 64-0-6
AYES -- Alltus, Barraclough, Barrett, Bell, Bieter, Black(15),
Black(23), Boe, Bruneel, Campbell, Chase, Clark, Crane, Cuddy, Deal,
Denney, Ellsworth, Field(13), Field(20), Gagner, Geddes, Gould,
Hadley, Hansen, Henbest, Hornbeck, Jaquet, Jones(22), Judd, Kellogg,
Kempton, Kendell, Kjellander, Kunz, Lake, Linford, Loertscher, Mader,
Marley, McKague, Meyer, Miller, Mortensen, Newcomb, Pomeroy,
Reynolds, Richman, Ridinger, Robison, Sali, Schaefer, Stevenson,
Stoicheff, Stone, Stubbs, Taylor, Tilman, Tippets, Trail, Watson,
Wheeler, Wood, Zimmermann, Mr Speaker
NAYS -- None
Absent and excused -- Bivens, Callister, Crow, Jones(9), Jones(20),
Pischner
Floor Sponsor - Sali
Title apvd - to Senate
03/13 To enrol
03/16 Rpt enrol - Pres signed
03/16 Sp signed
03/17 To Governor
03/18 Governor signed
Session Law Chapter 65
Effective:
Sec 1 - 07/01/2001
Sec 2 - 01/01/2001
S1295|||| LEGISLATURE OF THE STATE OF IDAHO |||| Fifty-fourth Legislature Second Regular Session - 1998IN THE SENATE SENATE BILL NO. 1295 BY JUDICIARY AND RULES COMMITTEE 1 AN ACT 2 RELATING TO THE UNIFORM PARTNERSHIP ACT; REPEALING CHAPTER 3, TITLE 53, IDAHO 3 CODE; AMENDING TITLE 53, IDAHO CODE, BY THE ADDITION OF A NEW CHAPTER 3, 4 TITLE 53, IDAHO CODE, TO PROVIDE DEFINITIONS, TO PROVIDE FOR KNOWLEDGE AND 5 NOTICE, TO PROVIDE THE EFFECT OF A PARTNERSHIP AGREEMENT AND TO SPECIFY 6 NONWAIVABLE PROVISIONS, TO PROVIDE SUPPLEMENTAL PRINCIPLES OF LAW, TO PRO- 7 VIDE FOR EXECUTION AND FILING OF STATEMENTS, TO PROVIDE FEES, TO PROVIDE 8 GOVERNING LAW, TO PROVIDE THAT A PARTNERSHIP IS SUBJECT TO ANY AMENDMENT 9 OR REPEAL OF THE ACT, TO PROVIDE THAT A PARTNERSHIP IS AN ENTITY, TO PRO- 10 VIDE FOR THE FORMATION OF A PARTNERSHIP, TO PROVIDE THAT PROPERTY ACQUIRED 11 BY A PARTNERSHIP IS PROPERTY OF THE PARTNERSHIP, TO PROVIDE WHEN PROPERTY 12 IS PARTNERSHIP PROPERTY, TO PROVIDE THAT A PARTNER IS AN AGENT OF A PART- 13 NERSHIP, TO PROVIDE FOR TRANSFER OF PARTNERSHIP PROPERTY, TO PROVIDE FOR A 14 STATEMENT OF PARTNERSHIP AUTHORITY, TO PROVIDE FOR A STATEMENT OF DENIAL, 15 TO PROVIDE THAT A PARTNERSHIP IS LIABLE FOR A PARTNER'S ACTIONABLE CON- 16 DUCT, TO PROVIDE A PARTNER'S LIABILITY, TO PROVIDE FOR ACTIONS BY AND 17 AGAINST A PARTNERSHIP AND PARTNERS, TO PROVIDE FOR LIABILITY OF A PUR- 18 PORTED PARTNER, TO PROVIDE A PARTNER'S RIGHTS AND DUTIES, TO PROVIDE FOR 19 DISTRIBUTIONS IN KIND, TO PROVIDE A PARTNER'S RIGHTS AND DUTIES WITH 20 RESPECT TO INFORMATION, TO PROVIDE GENERAL STANDARDS OF A PARTNER'S CON- 21 DUCT, TO PROVIDE FOR ACTIONS BY A PARTNERSHIP AND PARTNERS, TO PROVIDE FOR 22 CONTINUATION OF A PARTNERSHIP BEYOND A DEFINITE TERM OR PARTICULAR UNDER- 23 TAKING, TO PROVIDE THAT A PARTNER IS NOT CO-OWNER OF PARTNERSHIP PROPERTY, 24 TO SPECIFY A PARTNER'S TRANSFERABLE INTEREST IN A PARTNERSHIP, TO PROVIDE 25 FOR TRANSFER OF A PARTNER'S TRANSFERABLE INTEREST, TO PROVIDE WHEN A 26 PARTNER'S TRANSFERABLE INTEREST IS SUBJECT TO A CHARGING ORDER, TO PROVIDE 27 THE EVENTS CAUSING A PARTNER'S DISSOCIATION, TO PROVIDE FOR A PARTNER'S 28 POWER TO DISSOCIATE AND WRONGFUL DISSOCIATION, TO PROVIDE THE EFFECT OF A 29 PARTNER'S DISSOCIATION, TO PROVIDE FOR THE PURCHASE OF A DISSOCIATED 30 PARTNER'S INTEREST, TO PROVIDE FOR DISSOLUTION WITHIN NINETY DAYS AFTER 31 DISSOCIATION, TO PROVIDE FOR A DISSOCIATED PARTNER'S POWER TO BIND THE 32 PARTNERSHIP AND THE PARTNER'S LIABILITY TO THE PARTNERSHIP, TO PROVIDE FOR 33 A DISSOCIATED PARTNER'S LIABILITY TO OTHER PERSONS, TO PROVIDE FOR A 34 STATEMENT OF DISSOCIATION, TO PROVIDE FOR CONTINUED USE OF A PARTNERSHIP 35 NAME, TO SPECIFY THE EVENTS CAUSING DISSOLUTION AND WINDING UP OF PARTNER- 36 SHIP BUSINESS, TO PROVIDE FOR CONTINUATION OF THE PARTNERSHIP AFTER DISSO- 37 LUTION, TO PROVIDE FOR RIGHTS TO WIND UP PARTNERSHIP BUSINESS, TO PROVIDE 38 FOR A PARTNER'S POWER TO BIND A PARTNERSHIP AFTER DISSOLUTION, TO PROVIDE 39 FOR A STATEMENT OF DISSOLUTION, TO PROVIDE FOR A PARTNER'S LIABILITY TO 40 OTHER PARTNERS AFTER DISSOLUTION, TO PROVIDE FOR A SETTLEMENT OF ACCOUNTS 41 AND CONTRIBUTIONS AMONG PARTNERS, TO PROVIDE DEFINITIONS, TO PROVIDE FOR 42 CONVERSION OF A PARTNERSHIP TO A LIMITED PARTNERSHIP, TO PROVIDE FOR CON- 43 VERSION OF A LIMITED PARTNERSHIP TO A PARTNERSHIP, TO PROVIDE THE EFFECT 44 OF CONVERSION, TO PROVIDE FOR MERGER OF PARTNERSHIPS, TO PROVIDE THE 45 EFFECT OF MERGER, TO PROVIDE FOR A STATEMENT OF MERGER, TO PROVIDE THAT 46 THE PROVISIONS OF THE ACT AS TO CONVERSION OR MERGER ARE NOT EXCLUSIVE, TO 2 1 PROVIDE FOR A STATEMENT OF QUALIFICATION OF A PARTNERSHIP TO BECOME A LIM- 2 ITED LIABILITY PARTNERSHIP, TO PROVIDE FOR A CONSOLIDATED STATEMENT OF 3 PARTNERSHIP AUTHORITY AND QUALIFICATION, TO PROVIDE FOR A CHANGE OF REGIS- 4 TERED AGENT, TO STATE REQUIREMENTS FOR THE NAME OF A LIMITED LIABILITY 5 PARTNERSHIP, TO PROVIDE FOR AN ANNUAL REPORT, TO PROVIDE FOR REVOCATION OF 6 A STATEMENT OF QUALIFICATION, TO PROVIDE THE LAW GOVERNING A FOREIGN LIM- 7 ITED LIABILITY PARTNERSHIP, TO PROVIDE FOR A STATEMENT OF FOREIGN QUALIFI- 8 CATION, TO PROVIDE THE EFFECT OF A FAILURE TO QUALIFY, TO SPECIFY THE 9 ACTIVITIES OF A FOREIGN LIMITED LIABILITY PARTNERSHIP WHICH DO NOT CON- 10 STITUTE TRANSACTING BUSINESS, TO PROVIDE FOR ACTION BY THE ATTORNEY GEN- 11 ERAL, TO PROVIDE FOR UNIFORMITY OF APPLICATION AND CONSTRUCTION, TO PRO- 12 VIDE A SHORT TITLE, TO PROVIDE A SEVERABILITY CLAUSE, TO PROVIDE FOR 13 APPLICABILITY OF THE ACT AND TO PROVIDE A SAVINGS CLAUSE; AND PROVIDING 14 EFFECTIVE DATES. 15 Be It Enacted by the Legislature of the State of Idaho: 16 SECTION 1. That Chapter 3, Title 53, Idaho Code, be, and the same is 17 hereby repealed. 18 SECTION 2. That Title 53, Idaho Code, be, and the same is hereby amended 19 by the addition thereto of a NEW CHAPTER , to be known and desig- 20 nated as Chapter 3, Title 53, Idaho Code, and to read as follows: 21 CHAPTER 3 22 UNIFORM PARTNERSHIP ACT 23 PART 1 24 GENERAL PROVISIONS 25 53-3-101. DEFINITIONS. In this act: 26 (1) "Business" includes every trade, occupation and profession. 27 (2) "Debtor in bankruptcy" means a person who is the subject of: 28 (i) An order for relief under title 11 of the United States Code or a 29 comparable order under a successor statute of general application; or 30 (ii) Comparable order under federal, state, or foreign law governing 31 insolvency. 32 (3) "Distribution" means a transfer of money or other property from a 33 partnership to a partner in the partner's capacity as a partner or to the 34 partner's transferee. 35 (4) "Execution" means any signature, mark or symbol affixed to a writing 36 with the intent to authenticate the writing. It includes an electronically 37 transmitted signature or symbol. 38 (5) "Foreign limited liability partnership" means a partnership that: 39 (i) Is formed under laws other than the laws of this state; and 40 (ii) Has the status of a limited liability partnership under those laws. 41 (6) "Legal entity" means an association of one (1) or more persons cre- 42 ated pursuant to statute for the purpose of transacting business, whether for 43 profit or otherwise. It includes, but is not limited to, a corporation, a lim- 44 ited liability company, a partnership or a limited liability partnership. 45 (7) "Limited liability partnership" means a partnership that has filed a 46 statement of qualification under section 53-3-1001, Idaho Code, and does not 47 have a similar statement in effect in any other jurisdiction. 48 (8) "Partnership" means an association of two (2) or more persons to 49 carry on as co-owners a business for profit formed under section 53-3-202, 3 1 Idaho Code, predecessor law, or comparable law of another jurisdiction. 2 (9) "Partnership agreement" means the agreement, whether written, oral, 3 or implied, among the partners concerning the partnership, including amend- 4 ments to the partnership agreement. 5 (10) "Partnership at will" means a partnership in which the partners have 6 not agreed to remain partners until the expiration of a definite term or the 7 completion of a particular undertaking. 8 (11) "Partnership interest" or "partner's interest in the partnership" 9 means all of a partner's interests in the partnership, including the partner's 10 transferable interest and all management and other rights. 11 (12) "Person" means an individual, corporation, business trust, estate, 12 trust, partnership, limited partnership, association, joint venture, limited 13 liability company, government, governmental subdivision, agency, or instrumen- 14 tality, or any other legal or commercial entity. 15 (13) "Property" means all property, real, personal, or mixed, tangible or 16 intangible, or any interest therein. 17 (14) "State" means a state of the United States, the District of Columbia, 18 the Commonwealth of Puerto Rico, or any territory or insular possession sub- 19 ject to the jurisdiction of the United States. 20 (15) "Statement" means a statement of partnership authority under section 21 53-3-303, Idaho Code, a statement of denial under section 53-3-304, Idaho 22 Code, a statement of dissociation under section 53-3-704, Idaho Code, a state- 23 ment of dissolution under section 53-3-805, Idaho Code, a statement of merger 24 under section 53-3-907, Idaho Code, a statement of qualification under section 25 53-3-1001, Idaho Code, a statement of foreign qualification under section 26 53-3-1102, Idaho Code, or an amendment or cancellation of any of the forego- 27 ing. 28 (16) "Transfer" includes an assignment, conveyance, lease, mortgage, deed 29 and encumbrance. 30 53-3-102. KNOWLEDGE AND NOTICE. (a) A person knows a fact if the person 31 has actual knowledge of it. 32 (b) A person has notice of a fact if the person: 33 (1) Knows of it; 34 (2) Has received a notification of it; or 35 (3) Has reason to know it exists from all of the facts known to the per- 36 son at the time in question. 37 (c) A person notifies or gives a notification to another by taking steps 38 reasonably required to inform the other person in ordinary course, whether or 39 not the other person knows of it. 40 (d) A person receives a notification when: 41 (1) The person knows of the notification; or 42 (2) The notification is duly delivered at the person's place of business 43 or at any other place held out by the person as a place for receiving com- 44 munications. 45 (e) Except as otherwise provided in subsection (f) of this section, a 46 person other than an individual knows, has notice, or receives a notification 47 of a fact for purposes of a particular transaction when the individual con- 48 ducting the transaction knows, has notice, or receives a notification of the 49 fact, or in any event when the fact would have been brought to the 50 individual's attention if the person had exercised reasonable diligence. The 51 person exercises reasonable diligence if it maintains reasonable routines for 52 communicating significant information to the individual conducting the trans- 53 action and there is reasonable compliance with the routines. Reasonable dili- 54 gence does not require an individual acting for the person to communicate 4 1 information unless the communication is part of the individual's regular 2 duties or the individual has reason to know of the transaction and that the 3 transaction would be materially affected by the information. 4 (f) A partner's knowledge, notice, or receipt of a notification of a fact 5 relating to the partnership is effective immediately as knowledge by, notice 6 to, or receipt of a notification by the partnership, except in the case of a 7 fraud on the partnership committed by or with the consent of that partner. 8 53-3-103. EFFECT OF PARTNERSHIP AGREEMENT -- NONWAIVABLE PROVISIONS. 9 (a) Except as otherwise provided in subsection (b) of this section, relations 10 among the partners and between the partners and the partnership are governed 11 by the partnership agreement. To the extent the partnership agreement does not 12 otherwise provide, this act governs relations among the partners and between 13 the partners and the partnership. 14 (b) The partnership agreement may not: 15 (1) Vary the rights and duties under section 53-3-105, Idaho Code, except 16 to eliminate the duty to provide copies of statements to all of the part- 17 ners; 18 (2) Unreasonably restrict the right of access to books and records under 19 section 53-3-403(b), Idaho Code, or the right to be furnished with infor- 20 mation under section 53-3-403(c), Idaho Code; 21 (3) Eliminate the duty of loyalty under section 53-3-404(b) or section 22 53-3-603(c), Idaho Code, but if not manifestly unreasonable: 23 (i) The partnership agreement may identify specific types or cate- 24 gories of activities that do not violate the duty of loyalty; or 25 (ii) All of the partners or a number or percentage specified in the 26 partnership agreement may authorize or ratify, after full disclosure 27 of all material facts, a specific act or transaction that otherwise 28 would violate the duty of loyalty; 29 (4) Unreasonably reduce the duty of care under section 53-3-404(c) or 30 section 53-3-603(c), Idaho Code; 31 (5) Eliminate the obligation of good faith and fair dealing under section 32 53-3-404(d), Idaho Code, but the partnership agreement may prescribe the 33 standards by which the performance of the obligation is to be measured, if 34 the standards are not manifestly unreasonable; 35 (6) Vary the power to dissociate as a partner under section 53-3-602(a), 36 Idaho Code, except to require the notice under section 53-3-601(1), Idaho 37 Code, to be in writing; 38 (7) Vary the right of a court to expel a partner in the events specified 39 in section 53-3-601(5), Idaho Code; 40 (8) Vary the requirement to wind up the partnership business in cases 41 specified in section 53-3-801(4), (5) or (6), Idaho Code; 42 (9) Vary the law applicable to a limited liability partnership under sec- 43 tion 53-3-106(b), Idaho Code; or 44 (10) Restrict rights of third parties under this act. 45 53-3-104. SUPPLEMENTAL PRINCIPLES OF LAW. (a) Unless displaced by partic- 46 ular provisions of this act, the principles of law and equity supplement this 47 act. 48 (b) If an obligation to pay interest arises under this act and the rate 49 is not specified, the rate is that specified in subsection (1) of section 50 28-22-104, Idaho Code. 51 53-3-105. EXECUTION AND FILING OF STATEMENTS. (a) A statement may be 52 filed in the office of the secretary of state. A filed statement has the 5 1 effect provided in this act with respect to partnership property located in or 2 transactions that occur in this state. 3 (b) A statement filed by a partnership must be executed by at least two 4 (2) partners. Other statements must be executed by a partner or other person 5 authorized by this act. An individual who executes a statement as, or on 6 behalf of, a partner or other person named as a partner in a statement shall 7 personally declare under penalty of perjury that the contents of the statement 8 are accurate. 9 (c) A person authorized by this act to file a statement may amend or can- 10 cel the statement by filing an amendment or cancellation that names the part- 11 nership, identifies the statement, and states the substance of the amendment 12 or cancellation. 13 (d) A person who files a statement pursuant to this section shall 14 promptly send a copy of the statement to every nonfiling partner and to any 15 other person named as a partner in the statement. Failure to send a copy of a 16 statement to a partner or other person does not limit the effectiveness of the 17 statement as to a person not a partner. 18 53-3-105A. FEES. The secretary of state shall collect the following fees 19 for the services described: 20 (a) Filing a statement of partnership authority, a statement of qualifi- 21 cation as a limited liability partnership, or a combined statement of partner- 22 ship authority and qualification as a limited liability partnership....$100.00 23 (b) Filing a statement of qualification of a foreign limited liability 24 partnership............................................................$100.00 25 (c) Filing a statement of amendment, cancellation, limitation of author- 26 ity, cancellation of a limitation of authority, denial, dissociation, dissolu- 27 tion, conversion or merger; filing a statement of partnership authority by a 28 limited liability partnership; filing a statement of qualification as a lim- 29 ited liability partnership by a partnership which has previously filed a 30 statement of partnership authority; or filing a statement not otherwise speci- 31 fied herein............................................................$ 30.00 32 (d) Filing an application for reinstatement following revocation of the 33 statement of qualification of a domestic or foreign limited liability partner- 34 ship...................................................................$ 30.00 35 (e) Filing an annual report of a domestic or foreign limited liability 36 partnership, a statement of resignation of registered agent or a change of 37 registered agent's name or address......................................No fee 38 (f) Issuing a certificate of existence, authorization or other fact 39 .......................................................................$ 10.00 40 (g) Filing of any document when the filing party requires evidence of 41 filing to be returned within eight (8) working hours, a surcharge of...$ 20.00 42 (h) Any nontyped document or any document not on a standard form pre- 43 scribed by the secretary of state, a surcharge of......................$ 20.00 44 53-3-106. GOVERNING LAW. (a) Except as otherwise provided in subsection 45 (b) of this section, the law of the jurisdiction in which a partnership has 46 its chief executive office governs relations among the partners and between 47 the partners and the partnership. 48 (b) The law of this state governs relations among the partners and 49 between the partners and the partnership and the liability of partners for an 50 obligation of a limited liability partnership. 51 53-3-107. PARTNERSHIP SUBJECT TO AMENDMENT OR REPEAL OF ACT. A partner- 52 ship governed by this act is subject to any amendment to or repeal of this 6 1 act. 2 PART 2 3 NATURE OF PARTNERSHIP 4 53-3-201. PARTNERSHIP AS ENTITY. (a) A partnership is an entity distinct 5 from its partners. 6 (b) A limited liability partnership continues to be the same entity that 7 existed before the filing of a statement of qualification under section 8 53-3-1001, Idaho Code. 9 53-3-202. FORMATION OF PARTNERSHIP. (a) Except as otherwise provided in 10 subsection (b) of this section, the association of two (2) or more persons to 11 carry on as co-owners a business for profit forms a partnership, whether or 12 not the persons intend to form a partnership. 13 (b) An association formed under a statute other than this act, a prede- 14 cessor statute, or a comparable statute of another jurisdiction is not a part- 15 nership under this act. 16 (c) In determining whether a partnership is formed, the following rules 17 apply: 18 (1) Joint tenancy, tenancy in common, tenancy by the entireties, joint 19 property, common property, or part ownership does not by itself establish 20 a partnership, even if the co-owners share profits made by the use of the 21 property. 22 (2) The sharing of gross returns does not by itself establish a partner- 23 ship, even if the persons sharing them have a joint or common right or 24 interest in property from which the returns are derived. 25 (3) A person who receives a share of the profits of a business is pre- 26 sumed to be a partner in the business, unless the profits were received in 27 payment: 28 (i) Of a debt by installments or otherwise; 29 (ii) For services as an independent contractor or of wages or other 30 compensation to an employee; 31 (iii) Of rent; 32 (iv) Of an annuity or other retirement or health benefit to a bene- 33 ficiary, representative, or designee of a deceased or retired part- 34 ner; 35 (v) Of interest or other charge on a loan, even if the amount of 36 payment varies with the profits of the business, including a direct 37 or indirect present or future ownership of the collateral, or rights 38 to income, proceeds, or increase in value derived from the collat- 39 eral; or 40 (vi) For the sale of the goodwill of a business or other property by 41 installments or otherwise. 42 53-3-203. PARTNERSHIP PROPERTY. Property acquired by a partnership is 43 property of the partnership and not of the partners individually. 44 53-3-204. WHEN PROPERTY IS PARTNERSHIP PROPERTY. (a) Property is partner- 45 ship property if acquired in the name of: 46 (1) The partnership; or 47 (2) One (1) or more partners with an indication in the instrument trans- 48 ferring title to the property of the person's capacity as a partner or of 49 the existence of a partnership but without an indication of the name of 50 the partnership. 7 1 (b) Property is acquired in the name of the partnership by a transfer to: 2 (1) The partnership in its name; or 3 (2) One (1) or more partners in their capacity as partners in the part- 4 nership, if the name of the partnership is indicated in the instrument 5 transferring title to the property. 6 (c) Property is presumed to be partnership property if purchased with 7 partnership assets, even if not acquired in the name of the partnership or of 8 one (1) or more partners with an indication in the instrument transferring 9 title to the property of the person's capacity as a partner or of the exis- 10 tence of a partnership. 11 (d) Property acquired in the name of one (1) or more of the partners, 12 without an indication in the instrument transferring title to the property of 13 the person's capacity as a partner or of the existence of a partnership and 14 without use of partnership assets, is presumed to be separate property, even 15 if used for partnership purposes. 16 PART 3 17 RELATIONS OF PARTNERS TO 18 PERSONS DEALING WITH PARTNERSHIP 19 53-3-301. PARTNER AGENT OF PARTNERSHIP. Subject to the effect of a state- 20 ment of partnership authority under section 53-3-303, Idaho Code: 21 (1) Each partner is an agent of the partnership for the purpose of its 22 business. An act of a partner, including the execution of an instrument in the 23 partnership name, for apparently carrying on in the ordinary course the part- 24 nership business or business of the kind carried on by the partnership binds 25 the partnership, unless the partner had no authority to act for the partner- 26 ship in the particular matter and the person with whom the partner was dealing 27 knew or had received a notification that the partner lacked authority. 28 (2) An act of a partner which is not apparently for carrying on in the 29 ordinary course the partnership business or business of the kind carried on by 30 the partnership binds the partnership only if the act was authorized by the 31 other partners. 32 53-3-302. TRANSFER OF PARTNERSHIP PROPERTY. (a) Partnership property may 33 be transferred as follows: 34 (1) Subject to the effect of a statement of partnership authority under 35 section 53-3-303, Idaho Code, partnership property held in the name of the 36 partnership may be transferred by an instrument of transfer executed by a 37 partner in the partnership name. 38 (2) Partnership property held in the name of one (1) or more partners 39 with an indication in the instrument transferring the property to them of 40 their capacity as partners or of the existence of a partnership, but with- 41 out an indication of the name of the partnership, may be transferred by an 42 instrument of transfer executed by the persons in whose name the property 43 is held. 44 (3) Partnership property held in the name of one (1) or more persons 45 other than the partnership, without an indication in the instrument trans- 46 ferring the property to them of their capacity as partners or of the exis- 47 tence of a partnership, may be transferred by an instrument of transfer 48 executed by the persons in whose name the property is held. 49 (b) A partnership may recover partnership property from a transferee only 50 if it proves that execution of the instrument of initial transfer did not bind 51 the partnership under section 53-3-301, Idaho Code, and: 52 (1) As to a subsequent transferee who gave value for property transferred 8 1 under subsections (a)(1) and (2) of this section, proves that the subse- 2 quent transferee knew or had received a notification that the person who 3 executed the instrument of initial transfer lacked authority to bind the 4 partnership; or 5 (2) As to a transferee who gave value for property transferred under sub- 6 section (a)(3) of this section, proves that the transferee knew or had 7 received a notification that the property was partnership property and 8 that the person who executed the instrument of initial transfer lacked 9 authority to bind the partnership. 10 (c) A partnership may not recover partnership property from a subsequent 11 transferee if the partnership would not have been entitled to recover the 12 property, under subsection (b) of this section, from any earlier transferee of 13 the property. 14 (d) If a person holds all of the partners' interests in the partnership, 15 all of the partnership property vests in that person. The person may execute 16 a document in the name of the partnership to evidence vesting of the property 17 in that person and may file or record the document. 18 53-3-303. STATEMENT OF PARTNERSHIP AUTHORITY. (a) A partnership may file 19 a statement of partnership authority, which: 20 (1) Must include: 21 (i) The name of the partnership which shall not include words of 22 organization which deceptively imply that the partnership is a dif- 23 ferent kind of legal entity and shall not be the same as or decep- 24 tively similar to the name of any other legal entity whose organiza- 25 tional documents are filed with the secretary of state, unless such 26 other entity consents in writing to the use of the name; 27 (ii) The street address of its chief executive office and of one (1) 28 office in this state, if there is one; 29 (iii) The names and mailing addresses of all of the partners or of an 30 agent appointed and maintained by the partnership for the purpose of 31 subsection (b) of this section; and 32 (iv) The names of the partners authorized to execute an instrument 33 transferring real property held in the name of the partnership; and 34 (2) May state the authority, or limitations on the authority, of some or 35 all of the partners to enter into other transactions on behalf of the 36 partnership and any other matter. 37 (b) If a statement of partnership authority names an agent, the agent 38 shall maintain a list of the names and mailing addresses of all of the part- 39 ners and make it available to any person on request for good cause shown, and 40 shall be authorized to accept service of process on behalf of the partnership. 41 (c) If a filed statement of partnership authority is executed pursuant to 42 section 53-3-105(b), Idaho Code, and states the name of the partnership but 43 does not contain all of the other information required by subsection (a) of 44 this section, the statement nevertheless operates with respect to a person not 45 a partner as provided in subsections (d) and (e) of this section. 46 (d) A grant of authority contained in a filed statement of partnership 47 authority is conclusive in favor of a person who gives value without knowledge 48 to the contrary, so long as and to the extent that a limitation on that 49 authority is not then contained in another filed statement. A filed cancella- 50 tion of a limitation on authority revives the previous grant of authority. 51 (e) A person not a partner is deemed to know of a limitation on the 52 authority of a partner to transfer real property held in the name of the part- 53 nership if a statement containing the limitation has been filed in the office 54 of the secretary of state. 9 1 (f) Except as otherwise provided in subsections (d) and (e) of this sec- 2 tion and sections 53-3-704 and 53-3-805, Idaho Code, a person not a partner is 3 not deemed to know of a limitation on the authority of a partner merely 4 because the limitation is contained in a filed statement. 5 53-3-304. STATEMENT OF DENIAL. A partner or other person named as a part- 6 ner in a filed statement of partnership authority or in a list maintained by 7 an agent pursuant to section 53-3-303(b), Idaho Code, may file a statement of 8 denial stating the name of the partnership, the date of filing of its state- 9 ment of partnership authority, and the fact that is being denied, which may 10 include denial of a person's authority or status as a partner. A statement of 11 denial is a limitation on authority as provided in section 53-3-303(d) and 12 (e), Idaho Code. 13 53-3-305. PARTNERSHIP LIABLE FOR PARTNER'S ACTIONABLE CONDUCT. (a) A 14 partnership is liable for loss or injury caused to a person, or for a penalty 15 incurred, as a result of a wrongful act or omission, or other actionable con- 16 duct, of a partner acting in the ordinary course of business of the partner- 17 ship or with authority of the partnership. 18 (b) If, in the course of the partnership's business or while acting with 19 authority of the partnership, a partner receives or causes the partnership to 20 receive money or property of a person not a partner, and the money or property 21 is misapplied by a partner, the partnership is liable for the loss. 22 53-3-306. PARTNER'S LIABILITY. (a) Except as otherwise provided in sub- 23 sections (b) and (c) of this section, all partners are liable jointly and sev- 24 erally for all obligations of the partnership unless otherwise agreed by the 25 claimant or provided by law. 26 (b) A person admitted as a partner into an existing partnership is not 27 personally liable for any partnership obligation incurred before the person's 28 admission as a partner. 29 (c) An obligation of a partnership incurred while the partnership is a 30 limited liability partnership, whether arising in contract, tort, or other- 31 wise, is solely the obligation of the partnership. A partner is not personally 32 liable, directly or indirectly, by way of contribution or otherwise, for such 33 an obligation solely by reason of being or so acting as a partner. This sub- 34 section applies notwithstanding anything inconsistent in the partnership 35 agreement that existed immediately before the vote required to become a lim- 36 ited liability partnership under section 53-3-1001(b), Idaho Code. This sub- 37 section shall not affect the liability of a partner in a limited liability 38 partnership for his own omissions, negligence, wrongful acts, misconduct or 39 malpractice or that of any person under his direct supervision and control. 40 53-3-307. ACTIONS BY AND AGAINST PARTNERSHIP AND PARTNERS. (a) A partner- 41 ship may sue and be sued in the name of the partnership. 42 (b) An action may be brought against the partnership and, to the extent 43 not inconsistent with section 53-3-306, Idaho Code, any or all of the partners 44 in the same action or in separate actions. 45 (c) A judgment against a partnership is not by itself a judgment against 46 a partner. A judgment against a partnership may not be satisfied from a 47 partner's assets unless there is also a judgment against the partner. 48 (d) A judgment creditor of a partner may not levy execution against the 49 assets of the partner to satisfy a judgment based on a claim against the part- 50 nership unless the partner is personally liable for the claim under section 51 53-3-306, Idaho Code, and: 10 1 (1) A judgment based on the same claim has been obtained against the 2 partnership and a writ of execution on the judgment has been returned 3 unsatisfied in whole or in part; 4 (2) The partnership is a debtor in bankruptcy; 5 (3) The partner has agreed that the creditor need not exhaust partnership 6 assets; 7 (4) A court grants permission to the judgment creditor to levy execution 8 against the assets of a partner based on a finding that partnership assets 9 subject to execution are clearly insufficient to satisfy the judgment, 10 that exhaustion of partnership assets is excessively burdensome, or that 11 the grant of permission is an appropriate exercise of the court's equita- 12 ble powers; or 13 (5) Liability is imposed on the partner by law or contract independent of 14 the existence of the partnership. 15 (e) This section applies to any partnership liability or obligation 16 resulting from a representation by a partner or purported partner under sec- 17 tion 53-3-308, Idaho Code. 18 53-3-308. LIABILITY OF PURPORTED PARTNER. (a) If a person, by words or 19 conduct, purports to be a partner, or consents to being represented by another 20 as a partner, in a partnership or with one (1) or more persons not partners, 21 the purported partner is liable to a person to whom the representation is 22 made, if that person, relying on the representation, enters into a transaction 23 with the actual or purported partnership. If the representation, either by the 24 purported partner or by a person with the purported partner's consent, is made 25 in a public manner, the purported partner is liable to a person who relies 26 upon the purported partnership even if the purported partner is not aware of 27 being held out as a partner to the claimant. If partnership liability results, 28 the purported partner is liable with respect to that liability as if the pur- 29 ported partner were a partner. If no partnership liability results, the pur- 30 ported partner is liable with respect to that liability jointly and severally 31 with any other person consenting to the representation. 32 (b) If a person is thus represented to be a partner in an existing part- 33 nership, or with one (1) or more persons not partners, the purported partner 34 is an agent of persons consenting to the representation to bind them to the 35 same extent and in the same manner as if the purported partner were a partner, 36 with respect to persons who enter into transactions in reliance upon the rep- 37 resentation. If all of the partners of the existing partnership consent to the 38 representation, a partnership act or obligation results. If fewer than all of 39 the partners of the existing partnership consent to the representation, the 40 person acting and the partners consenting to the representation are jointly 41 and severally liable. 42 (c) A person is not liable as a partner merely because the person is 43 named by another in a statement of partnership authority. 44 (d) A person does not continue to be liable as a partner merely because 45 of a failure to file a statement of dissociation or to amend a statement of 46 partnership authority to indicate the partner's dissociation from the partner- 47 ship. 48 (e) Except as otherwise provided in subsections (a) and (b) of this sec- 49 tion, persons who are not partners as to each other are not liable as partners 50 to other persons. 11 1 PART 4 2 RELATIONS OF PARTNERS TO EACH OTHER 3 AND TO PARTNERSHIP 4 53-3-401. PARTNER'S RIGHTS AND DUTIES. (a) Each partner is deemed to have 5 an account that is: 6 (1) Credited with an amount equal to the money plus the value of any 7 other property, net of the amount of any liabilities, the partner contrib- 8 utes to the partnership and the partner's share of the partnership prof- 9 its; and 10 (2) Charged with an amount equal to the money plus the value of any other 11 property, net of the amount of any liabilities, distributed by the part- 12 nership to the partner and the partner's share of the partnership losses. 13 (b) Each partner is entitled to an equal share of the partnership profits 14 and is chargeable with a share of the partnership losses in proportion to the 15 partner's share of the profits. 16 (c) A partnership shall reimburse a partner for payments made and indem- 17 nify a partner for liabilities incurred by the partner in the ordinary course 18 of the business of the partnership or for the preservation of its business or 19 property. 20 (d) A partnership shall reimburse a partner for an advance to the part- 21 nership beyond the amount of capital the partner agreed to contribute. 22 (e) A payment or advance made by a partner which gives rise to a partner- 23 ship obligation under subsection (c) or (d) of this section constitutes a loan 24 to the partnership which accrues interest from the date of the payment or 25 advance. 26 (f) Each partner has equal rights in the management and conduct of the 27 partnership business. 28 (g) A partner may use or possess partnership property only on behalf of 29 the partnership. 30 (h) A partner is not entitled to remuneration for services performed for 31 the partnership, except for reasonable compensation for services rendered in 32 winding up the business of the partnership. 33 (i) A person may become a partner only with the consent of all of the 34 partners. 35 (j) A difference arising as to a matter in the ordinary course of busi- 36 ness of a partnership may be decided by a majority of the partners. An act 37 outside the ordinary course of business of a partnership and an amendment to 38 the partnership agreement may be undertaken only with the consent of all of 39 the partners. 40 (k) This section does not affect the obligations of a partnership to 41 other persons under section 53-3-301, Idaho Code. 42 53-3-402. DISTRIBUTIONS IN KIND. A partner has no right to receive, and 43 may not be required to accept, a distribution in kind. 44 53-3-403. PARTNER'S RIGHTS AND DUTIES WITH RESPECT TO INFORMATION. (a) A 45 partnership shall keep its books and records, if any, at its chief executive 46 office. 47 (b) A partnership shall provide partners and their agents and attorneys 48 access to its books and records. It shall provide former partners and their 49 agents and attorneys access to books and records pertaining to the period dur- 50 ing which they were partners. The right of access provides the opportunity to 51 inspect and copy books and records during ordinary business hours. A partner- 52 ship may impose a reasonable charge, covering the costs of labor and material, 12 1 for copies of documents furnished. 2 (c) Each partner and the partnership shall furnish to a partner, and to 3 the legal representative of a deceased partner or partner under legal disabil- 4 ity: 5 (1) Without demand, any information concerning the partnership's business 6 and affairs reasonably required for the proper exercise of the partner's 7 rights and duties under the partnership agreement or this act; and 8 (2) On demand, any other information concerning the partnership's busi- 9 ness and affairs, except to the extent the demand or the information 10 demanded is unreasonable or otherwise improper under the circumstances. 11 53-3-404. GENERAL STANDARDS OF PARTNER'S CONDUCT. (a) The fiduciary 12 duties a partner owes to the partnership and the other partners are the duty 13 of loyalty and the duty of care set forth in subsections (b) and (c) of this 14 section. 15 (b) A partner's duty of loyalty to the partnership and the other partners 16 includes the following: 17 (1) To account to the partnership and hold as trustee for it any prop- 18 erty, profit, or benefit derived by the partner in the conduct and winding 19 up of the partnership business or derived from a use by the partner of 20 partnership property, or information including the appropriation of a 21 partnership opportunity; 22 (2) To refrain from dealing with the partnership in the conduct or wind- 23 ing up of the partnership business as or on behalf of a party having an 24 interest adverse to the partnership; and 25 (3) To refrain from competing with the partnership in the conduct of the 26 partnership business before the dissolution of the partnership. 27 (c) A partner's duty of care to the partnership and the other partners in 28 the conduct and winding up of the partnership business is limited to refrain- 29 ing from engaging in grossly negligent or reckless conduct, intentional mis- 30 conduct, or a knowing violation of law. 31 (d) A partner shall discharge the duties to the partnership and the other 32 partners under this act or under the partnership agreement and exercise any 33 rights consistently with the obligation of good faith and fair dealing. 34 (e) A partner does not violate a duty or obligation under this act or 35 under the partnership agreement merely because the partner's conduct furthers 36 the partner's own interest. 37 (f) A partner may lend money to and transact other business with the 38 partnership, and as to each loan or transaction the rights and obligations of 39 the partner related to performance or enforcement are the same as those of a 40 person who is not a partner, subject to other applicable law. 41 (g) This section applies to a person winding up the partnership business 42 as the personal or legal representative of the last surviving partner as if 43 the person were a partner. 44 53-3-405. ACTIONS BY PARTNERSHIP AND PARTNERS. (a) A partnership may 45 maintain an action against a partner for a breach of the partnership agree- 46 ment, or for the violation of a duty to the partnership, causing harm to the 47 partnership. 48 (b) A partner may maintain an action against the partnership or another 49 partner for legal or equitable relief, with or without an accounting as to 50 partnership business, to: 51 (1) Enforce the partner's rights under the partnership agreement; 52 (2) Enforce the partner's rights under this act, including: 53 (i) The partner's rights under section 53-3-401, 53-3-403 or 13 1 53-3-404, Idaho Code; 2 (ii) The partner's right on dissociation to have the partner's 3 interest in the partnership purchased pursuant to section 53-3-701 or 4 section 53-3-701A, Idaho Code, or enforce any other right under part 5 6 or 7 of this chapter; or 6 (iii) The partner's right to compel a dissolution and winding up of 7 the partnership business under section 53-3-801, Idaho Code, or 8 enforce any other right under part 8 of this chapter; or 9 (3) Enforce the rights and otherwise protect the interests of the part- 10 ner, including rights and interests arising independently of the partner- 11 ship relationship. 12 (c) The accrual of, and any time limitation on, a right of action for a 13 remedy under this section is governed by other law. A right to an accounting 14 upon a dissolution and winding up does not revive a claim barred by law. 15 53-3-406. CONTINUATION OF PARTNERSHIP BEYOND DEFINITE TERM OR PARTICULAR 16 UNDERTAKING. (a) If a partnership for a definite term or particular undertak- 17 ing is continued, without an express agreement, after the expiration of the 18 term or completion of the undertaking, the rights and duties of the partners 19 remain the same as they were at the expiration or completion, so far as is 20 consistent with a partnership at will. 21 (b) If the partners, or those of them who habitually acted in the busi- 22 ness during the term or undertaking, continue the business without any settle- 23 ment or liquidation of the partnership, they are presumed to have agreed that 24 the partnership will continue. 25 PART 5 26 TRANSFEREES AND CREDITORS OF PARTNER 27 53-3-501. PARTNER NOT CO-OWNER OF PARTNERSHIP PROPERTY. A partner is not 28 a co-owner of partnership property and has no interest in partnership property 29 which can be transferred, either voluntarily or involuntarily. 30 53-3-502. PARTNER'S TRANSFERABLE INTEREST IN PARTNERSHIP. The only trans- 31 ferable interest of a partner in the partnership is the partner's share of the 32 profits and losses of the partnership and the partner's right to receive dis- 33 tributions. The interest is personal property. 34 53-3-503. TRANSFER OF PARTNER'S TRANSFERABLE INTEREST. (a) A transfer, in 35 whole or in part, of a partner's transferable interest in the partnership: 36 (1) Is permissible; 37 (2) Does not by itself cause the partner's dissociation or a dissolution 38 and winding up of the partnership business; and 39 (3) Does not, as against the other partners or the partnership, entitle 40 the transferee, during the continuance of the partnership, to participate 41 in the management or conduct of the partnership business, to require 42 access to information concerning partnership transactions, or to inspect 43 or copy the partnership books or records. 44 (b) A transferee of a partner's transferable interest in the partnership 45 has a right: 46 (1) To receive, in accordance with the transfer, distributions to which 47 the transferor would otherwise be entitled; 48 (2) To receive upon the dissolution and winding up of the partnership 49 business, in accordance with the transfer, the net amount otherwise dis- 50 tributable to the transferor; and 14 1 (3) To seek under section 53-3-801(6), Idaho Code, a judicial determina- 2 tion that it is equitable to wind up the partnership business. 3 (c) In a dissolution and winding up, a transferee is entitled to an 4 account of partnership transactions only from the date of the latest account 5 agreed to by all of the partners. 6 (d) Upon transfer, the transferor retains the rights and duties of a 7 partner other than the interest in distributions transferred. 8 (e) A partnership need not give effect to a transferee's rights under 9 this section until it has notice of the transfer. 10 (f) A transfer of a partner's transferable interest in the partnership in 11 violation of a restriction on transfer contained in the partnership agreement 12 is ineffective as to a person having notice of the restriction at the time of 13 transfer. 14 53-3-504. PARTNER'S TRANSFERABLE INTEREST SUBJECT TO CHARGING ORDER. (a) 15 On application by a judgment creditor of a partner or of a partner's trans- 16 feree, a court having jurisdiction may charge the transferable interest of the 17 judgment debtor to satisfy the judgment. The court may appoint a receiver of 18 the share of the distributions due or to become due to the judgment debtor in 19 respect of the partnership and make all other orders, directions, accounts, 20 and inquiries the judgment debtor might have made or which the circumstances 21 of the case may require. 22 (b) A charging order constitutes a lien on the judgment debtor's trans- 23 ferable interest in the partnership. The court may order a foreclosure of the 24 interest subject to the charging order at any time. The purchaser at the 25 foreclosure sale has the rights of a transferee. 26 (c) At any time before foreclosure, an interest charged may be redeemed: 27 (1) By the judgment debtor; 28 (2) With property other than partnership property, by one (1) or more of 29 the other partners; or 30 (3) With partnership property, by one (1) or more of the other partners 31 with the consent of all of the partners whose interests are not so 32 charged. 33 (d) This act does not deprive a partner of a right under exemption laws 34 with respect to the partner's interest in the partnership. 35 (e) This section provides the exclusive remedy by which a judgment credi- 36 tor of a partner or partner's transferee may satisfy a judgment out of the 37 judgment debtor's transferable interest in the partnership. 38 PART 6 39 PARTNER'S DISSOCIATION 40 53-3-601. EVENTS CAUSING PARTNER'S DISSOCIATION. A partner is dissociated 41 from a partnership upon the occurrence of any of the following events: 42 (1) The partnership's having notice of the partner's express will to 43 withdraw as a partner or on a later date specified by the partner; 44 (2) An event agreed to in the partnership agreement as causing the 45 partner's dissociation; 46 (3) The partner's expulsion pursuant to the partnership agreement; 47 (4) The partner's expulsion by the unanimous vote of the other partners 48 if any of the following apply: 49 (i) It is unlawful to carry on the partnership business with that part- 50 ner; 51 (ii) There has been a transfer of all or substantially all of that 52 partner's transferable interest in the partnership, other than a transfer 15 1 for security purposes, or a court order charging the partner's interest, 2 which has not been foreclosed; 3 (iii) Within ninety (90) days after the partnership notifies a corporate 4 partner that it will be expelled because it has filed a certificate of 5 dissolution or the equivalent, its charter has been revoked, or its right 6 to conduct business has been suspended by the jurisdiction of its incorpo- 7 ration, there is no revocation of the certificate of dissolution or no 8 reinstatement of its charter or its right to conduct business; or 9 (iv) A partnership, limited partnership or limited liability company that 10 is a partner has been dissolved and its business is being wound up; 11 (5) On application by the partnership or another partner, the partner's 12 expulsion by judicial determination because of any of the following: 13 (i) The partner engaged in wrongful conduct that adversely and materi- 14 ally affected the partnership business; 15 (ii) The partner willfully or persistently committed a material breach of 16 the partnership agreement or of a duty owed to the partnership or the 17 other partners under section 53-3-404, Idaho Code; or 18 (iii) The partner engaged in conduct relating to the partnership business 19 which makes it not reasonably practicable to carry on the business in 20 partnership with the partner; 21 (6) The partner's action or failure to act in any of the following 22 instances: 23 (i) Becoming a debtor in bankruptcy; 24 (ii) Executing an assignment for the benefit of creditors; 25 (iii) Seeking, consenting to, or acquiescing in the appointment of a 26 trustee, receiver, or liquidator of that partner or of all or substan- 27 tially all of that partner's property; or 28 (iv) Failing, within ninety (90) days after the appointment, to have 29 vacated or stayed the appointment of a trustee, receiver, or liquidator of 30 the partner or of all or substantially all of the partner's property 31 obtained without the partner's consent or acquiescence, or failing within 32 ninety (90) days after the expiration of a stay to have the appointment 33 vacated; 34 (7) In the case of a partner who is an individual, by any of the follow- 35 ing: 36 (i) The partner's death; 37 (ii) The appointment of a guardian or general conservator for the part- 38 ner; or 39 (iii) A judicial determination that the partner has otherwise become inca- 40 pable of performing the partner's duties under the partnership agreement; 41 (8) In the case of a partner that is a trust or is acting as a partner by 42 virtue of being a trustee of a trust, distribution of the trust's entire 43 transferable interest in the partnership, but not merely by reason of the sub- 44 stitution of a successor trustee; 45 (9) In the case of a partner that is an estate or is acting as a partner 46 by virtue of being a personal representative of an estate, distribution of the 47 estate's entire transferable interest in the partnership, but not merely by 48 reason of the substitution of a successor personal representative; or 49 (10) Termination of a partner who is not an individual, partnership, cor- 50 poration, trust, or estate. 51 53-3-602. PARTNER'S POWER TO DISSOCIATE -- WRONGFUL DISSOCIATION. (a) A 52 partner has the power to dissociate at any time, rightfully or wrongfully, by 53 express will pursuant to section 53-3-601(1), Idaho Code. 54 (b) A partner's dissociation is wrongful only if any of the following 16 1 apply: 2 (1) It is in breach of an express provision of the partnership agreement; 3 or 4 (2) In the case of a partnership for a definite term or particular under- 5 taking, before the expiration of the term or the completion of the under- 6 taking if any of the following apply: 7 (i) The partner withdraws by express will, unless the withdrawal 8 follows within ninety (90) days after another partner's dissociation 9 by death or otherwise under section 53-3-601(6) through (10), Idaho 10 Code, inclusive, or wrongful dissociation under this subsection; 11 (ii) The partner is expelled by judicial determination under sec- 12 tion 53-3-601(5), Idaho Code; 13 (iii) The partner is dissociated by becoming a debtor in bankruptcy; 14 or 15 (iv) In the case of a partner who is not an individual, trust other 16 than a business trust, or estate, the partner is expelled or other- 17 wise dissociated because it willfully dissolved or terminated. 18 (c) A partner who wrongfully dissociates is liable to the partnership and 19 to the other partners for damages caused by the dissociation. The liability is 20 in addition to any other obligation of the partner to the partnership or to 21 the other partners. 22 53-3-603. EFFECT OF PARTNER'S DISSOCIATION. Upon a partner's dissocia- 23 tion, all of the following apply: 24 (a) The partner's right to participate in the management and conduct of 25 the partnership business terminates. 26 (b) The partner's duty of loyalty under section 53-3-404(b)(3), Idaho 27 Code, terminates. 28 (c) The partner's duty of loyalty under section 53-3-404(b)(1) and (2), 29 Idaho Code, and duty of care under section 53-3-404(c), Idaho Code, continue 30 only with regard to matters arising and events occurring before the partner's 31 dissociation. 32 PART 7 33 PARTNER'S DISSOCIATION WHEN 34 BUSINESS NOT WOUND UP 35 53-3-701. PURCHASE OF DISSOCIATED PARTNER'S INTEREST. Except as otherwise 36 provided in section 53-3-701A, Idaho Code: 37 (a) If a partner is dissociated from a partnership the partnership shall 38 cause the dissociated partner's interest in the partnership to be purchased 39 for a buyout price determined pursuant to subsection (b) of this section. 40 (b) The buyout price of a dissociated partner's interest is the amount 41 that would have been distributable to the dissociating partner under section 42 53-3-807(b), Idaho Code, if, on the date of dissociation, the assets of the 43 partnership were sold at a price equal to the greater of the liquidation value 44 or the value based on a sale of the entire business as a going concern without 45 the dissociated partner and the partnership was wound up as of that date. 46 Interest shall be paid from the date of dissociation to the date of payment. 47 (c) Damages for wrongful dissociation under section 53-3-602(b), Idaho 48 Code, and all other amounts owing, whether or not presently due, from the 49 dissociated partner to the partnership, shall be offset against the buyout 50 price. Interest shall be paid from the date the amount owed becomes due to the 51 date of payment. 52 (d) A partnership shall indemnify a dissociated partner whose interest is 17 1 being purchased against all partnership liabilities, whether incurred before 2 or after the dissociation, except liabilities incurred by an act of the 3 dissociated partner under section 53-3-702, Idaho Code. 4 (e) If no agreement for the purchase of a dissociated partner's interest 5 is reached within one hundred twenty (120) days after a written demand for 6 payment, the partnership shall pay, or cause to be paid, in cash to the 7 dissociated partner the amount the partnership estimates to be the buyout 8 price and accrued interest, reduced by any offsets and accrued interest under 9 subsection (c) of this section. 10 (f) If a deferred payment is authorized under subsection (h) of this sec- 11 tion, the partnership may tender a written offer to pay the amount it esti- 12 mates to be the buyout price and accrued interest, reduced by any offsets 13 under subsection (c) of this section, stating the time of payment, the amount 14 and type of security for payment, and the other terms and conditions of the 15 obligation. 16 (g) The payment or tender required by subsection (e) or (f) of this sec- 17 tion must be accompanied by all of the following: 18 (1) A statement of partnership assets and liabilities as of the date of 19 dissociation; 20 (2) The latest available partnership balance sheet and income statement, 21 if any; 22 (3) An explanation of how the estimated amount of the payment was calcu- 23 lated; and 24 (4) Written notice that the payment is in full satisfaction of the obli- 25 gation to purchase unless, within one hundred twenty (120) days after the 26 written notice, the dissociated partner commences an action to determine 27 the buyout price, any offsets under subsection (c) of this section, or 28 other terms of the obligation to purchase. 29 (h) A partner who wrongfully dissociates before the expiration of a defi- 30 nite term or the completion of a particular undertaking is not entitled to 31 payment of any portion of the buyout price until the expiration of the term or 32 completion of the undertaking, unless the partner establishes to the satisfac- 33 tion of the court that earlier payment will not cause undue hardship to the 34 business of the partnership. A deferred payment shall be adequately secured 35 and bear interest. 36 (i) A dissociated partner may maintain an action against the partnership, 37 pursuant to section 53-3-405(b)(2)(ii), Idaho Code, to determine the buyout 38 price of that partner's interest, any offsets under subsection (c) of this 39 section, or other terms of the obligation to purchase. The action must be 40 commenced within one hundred twenty (120) days after the partnership has ten- 41 dered payment or an offer to pay or within one (1) year after written demand 42 for payment if no payment or offer to pay is tendered. The court shall deter- 43 mine the buyout price of the dissociated partner's interest, any offset due 44 under subsection (c) of this section, and accrued interest, and enter judgment 45 for any additional payment or refund. If deferred payment is authorized under 46 subsection (h) of this section, the court shall also determine the security 47 for payment and other terms of the obligation to purchase. The court may 48 assess reasonable attorney's fees and the fees and expenses of appraisers or 49 other experts for a party to the action, in amounts the court finds equitable, 50 against a party that the court finds acted arbitrarily, vexatiously, or not in 51 good faith. The finding may be based on the partnership's failure to tender 52 payment or an offer to pay or to comply with subsection (g) of this section. 53 53-3-701A. DISSOLUTION WITHIN NINETY DAYS AFTER DISSOCIATION. If a part- 54 nership dissolves under section 53-3-801, Idaho Code, within ninety (90) days 18 1 after a dissociation, then section 53-3-701, Idaho Code, does not apply to 2 dissociations within the ninety (90) days prior to the dissolution and: 3 (a) All partners who dissociated within the ninety (90) days prior to the 4 dissolution shall be treated as partners under section 53-3-807, Idaho Code; 5 and 6 (b) Any damages for wrongful dissociation under section 53-3-602(b), 7 Idaho Code, and all other amounts owing, whether or not presently due, from 8 the dissociated partner to the partnership, shall be taken into account in 9 determining the amount distributable to the dissociated partner under section 10 53-3-807, Idaho Code. 11 53-3-702. DISSOCIATED PARTNER'S POWER TO BIND AND LIABILITY TO PARTNER- 12 SHIP. (a) For two (2) years after a partner dissociates, the partnership, 13 including a surviving partnership under part 9 of this chapter (commencing 14 with section 53-3-901, Idaho Code), is bound by an act of the dissociated 15 partner that would have bound the partnership under section 53-3-301, Idaho 16 Code, before dissociation only if at the time of entering into the transaction 17 all of the following apply to the other party: 18 (1) The other party reasonably believed that the dissociated partner was 19 then a partner; 20 (2) The other party did not have notice of the partner's dissociation; 21 and 22 (3) The other party is not deemed to have had knowledge under section 23 53-3-303(e), Idaho Code, or notice under section 53-3-704(c), Idaho Code. 24 (b) A dissociated partner is liable to the partnership for any damage 25 caused to the partnership arising from an obligation incurred by the 26 dissociated partner after dissociation for which the partnership is liable 27 under subsection (a) of this section. 28 53-3-703. DISSOCIATED PARTNER'S LIABILITY TO OTHER PERSONS. (a) A 29 partner's dissociation does not of itself discharge the partner's liability 30 for a partnership obligation incurred before dissociation. A dissociated 31 partner is not liable for a partnership obligation incurred after dissocia- 32 tion, except as otherwise provided in subsection (b) of this section. 33 (b) A partner who dissociates is liable as a partner to the other party 34 in a transaction entered into by the partnership, or a surviving partnership 35 under part 9 of this chapter, within two (2) years after the partner's disso- 36 ciation, only if the partner is liable for the obligation under section 37 53-3-306, Idaho Code, and at the time of entering into the transaction all of 38 the following apply to the other party: 39 (1) The other party reasonably believed that the dissociated partner was 40 then a partner. 41 (2) The other party did not have notice of the partner's dissociation. 42 (3) The other party is not deemed to have had knowledge under section 43 53-3-303(e), Idaho Code, or notice under section 53-3-704(c), Idaho Code. 44 (c) By agreement with the partnership creditor and the partners continu- 45 ing the business, a dissociated partner may be released from liability for a 46 partnership obligation. 47 (d) A dissociated partner is released from liability for a partnership 48 obligation if a partnership creditor, with notice of the partner's dissocia- 49 tion but without the partner's consent, agrees to a material alteration in the 50 nature or time of payment of a partnership obligation. 51 53-3-704. STATEMENT OF DISSOCIATION. (a) A partnership which has filed a 52 statement of partnership authority, or a dissociated partner thereof, may file 19 1 a statement of dissociation stating the name of the partnership and that the 2 partner is dissociated from the partnership. 3 (b) A statement of dissociation is a limitation on the authority of a 4 dissociated partner for the purposes of section 53-3-303(d) and (e), Idaho 5 Code. 6 (c) For the purposes of sections 53-3-702(a)(3) and 53-3-703(b)(3), Idaho 7 Code, a person not a partner is deemed to have notice of the dissociation 8 ninety (90) days after the statement of dissociation is filed. 9 53-3-705. CONTINUED USE OF PARTNERSHIP NAME. Continued use of a partner- 10 ship name, or a dissociated partner's name as part thereof, by partners con- 11 tinuing the business does not of itself make the dissociated partner liable 12 for an obligation of the partners or the partnership continuing the business. 13 PART 8 14 WINDING UP PARTNERSHIP BUSINESS 15 53-3-801. EVENTS CAUSING DISSOLUTION AND WINDING UP OF PARTNERSHIP BUSI- 16 NESS. A partnership is dissolved, and its business shall be wound up, only 17 upon the occurrence of any of the following events: 18 (1) In a partnership at will, by the express will to dissolve and wind up 19 the partnership business of at least half of the partners, including partners, 20 other than wrongfully dissociating partners, who have dissociated within the 21 preceding ninety (90) days and for which purpose a dissociation under section 22 53-3-601(1), Idaho Code, constitutes an expression of that partner's will to 23 dissolve and wind up. 24 (2) In a partnership for a definite term or particular undertaking, when 25 any of the following occurs: 26 (i) After the expiration of ninety (90) days after a partner's dissocia- 27 tion by death or otherwise under section 53-3-601(6) through (10), Idaho 28 Code, or a partner's wrongful dissociation under section 53-3-602(b), 29 Idaho Code, unless before that time a majority in interest of the part- 30 ners, including partners who have rightfully dissociated pursuant to sec- 31 tion 53-3-602(b)(2)(i), Idaho Code, agree to continue the partnership. 32 (ii) The express will of all of the partners to wind up the partnership 33 business. 34 (iii) The expiration of the term or the completion of the undertaking. 35 (3) An event agreed to in the partnership agreement resulting in the 36 winding up of the partnership business. 37 (4) An event that makes it unlawful for all or substantially all of the 38 business of the partnership to be continued, but a cure of illegality within 39 ninety (90) days after notice to the partnership of the event is effective 40 retroactively to the date of the event for purposes of this section. 41 (5) On application by a partner, a judicial determination that any of the 42 following apply: 43 (i) The economic purpose of the partnership is likely to be unreasonably 44 frustrated. 45 (ii) Another partner has engaged in conduct relating to the partnership 46 business which makes it not reasonably practicable to carry on the busi- 47 ness in partnership with that partner. 48 (iii) It is not otherwise reasonably practicable to carry on the partner- 49 ship business in conformity with the partnership agreement. 50 (6) On application by a transferee of a partner's transferable interest, 51 a judicial determination that it is equitable to wind up the partnership busi- 52 ness after the expiration of the term or completion of the undertaking, if the 20 1 partnership was for a definite term or particular undertaking at the time of 2 the transfer or entry of the charging order that gave rise to the transfer. 3 53-3-802. PARTNERSHIP CONTINUES AFTER DISSOLUTION. (a) Subject to subsec- 4 tion (b) of this section, a partnership continues after dissolution only for 5 the purpose of winding up its business. The partnership is terminated when the 6 winding up of its business is completed. 7 (b) At any time after the dissolution of a partnership and before the 8 winding up of its business is completed, all of the partners, including any 9 dissociating partner other than a wrongfully dissociating partner, may waive 10 the right to have the partnership's business wound up and the partnership ter- 11 minated. In that event both of the following apply: 12 (1) The partnership resumes carrying on its business as if dissolution 13 had never occurred, and any liability incurred by the partnership or a 14 partner after the dissolution and before the waiver is determined as if 15 dissolution had never occurred. 16 (2) The rights of a third party accruing under section 53-3-804(1), Idaho 17 Code, or arising out of conduct in reliance on the dissolution before the 18 third party knew or received a notification of the waiver may not be 19 adversely affected. 20 53-3-803. RIGHT TO WIND UP PARTNERSHIP BUSINESS. (a) After dissolution, a 21 partner who has not dissociated may participate in winding up the 22 partnership's business, but on application of any partner, partner's legal 23 representative, or transferee, the court, for good cause shown, may order 24 judicial supervision of the winding up. 25 (b) The legal representative of the last surviving partner may wind up a 26 partnership's business. 27 (c) A person winding up a partnership's business may preserve the part- 28 nership business or property as a going concern for a reasonable time, prose- 29 cute and defend actions and proceedings, whether civil, criminal, or adminis- 30 trative, settle and close the partnership's business, dispose of and transfer 31 the partnership's property, discharge the partnership's liabilities, distrib- 32 ute the assets of the partnership pursuant to section 53-3-807, Idaho Code, 33 settle disputes by mediation or arbitration, and perform other necessary acts. 34 53-3-804. PARTNER'S POWER TO BIND PARTNERSHIP AFTER DISSOLUTION. Subject 35 to section 53-3-805, Idaho Code, a partnership is bound by a partner's act 36 after dissolution that is either of the following: 37 (1) Is appropriate for winding up the partnership business; 38 (2) Would have bound the partnership under section 53-3-301, Idaho Code, 39 before dissolution, if the other party to the transaction did not have notice 40 of the dissolution. 41 53-3-805. STATEMENT OF DISSOLUTION. (a) After dissolution, a partner of a 42 partnership which has filed a statement of partnership authority who has not 43 wrongfully dissociated may file a statement of dissolution stating the name of 44 the partnership and that the partnership has dissolved and is winding up its 45 business. 46 (b) A statement of dissolution cancels a filed statement of partnership 47 authority for the purposes of section 53-3-303(d), Idaho Code, and is a limi- 48 tation on authority for the purposes of section 53-3-303(e), Idaho Code. 49 (c) For the purposes of sections 53-3-301 and 53-3-804, Idaho Code, a 50 person not a partner is deemed to have notice of the dissolution and the limi- 51 tation on the partners' authority as a result of the statement of dissolution 21 1 ninety (90) days after it is filed. 2 (d) After filing a statement of dissolution, a dissolved partnership may 3 file a statement of partnership authority that will operate with respect to a 4 person not a partner as provided in section 53-3-303(d) and (e), Idaho Code, 5 in any transaction, whether or not the transaction is appropriate for winding 6 up the partnership business. 7 53-3-806. PARTNER'S LIABILITY TO OTHER PARTNERS AFTER DISSOLUTION. (a) 8 Except as otherwise provided in subsection (b) of this section and section 9 53-3-306, Idaho Code, after dissolution a partner is liable to the other part- 10 ners for the partner's share of any partnership liability incurred under sec- 11 tion 53-3-804, Idaho Code. 12 (b) A partner who, with knowledge of the dissolution, incurs a partner- 13 ship liability under section 53-3-804(2), Idaho Code, by an act that is not 14 appropriate for winding up the partnership business is liable to the partner- 15 ship for any damage caused to the partnership arising from the liability. 16 53-3-807. SETTLEMENT OF ACCOUNTS AND CONTRIBUTIONS AMONG PARTNERS. (a) In 17 winding up a partnership's business, the assets of the partnership, including 18 the contributions of the partners required by this section, shall be applied 19 to discharge its obligations to creditors, including, to the extent permitted 20 by law, partners who are creditors. Any surplus shall be applied to pay in 21 cash the net amount distributable to partners in accordance with their right 22 to distributions under subsection (b) of this section. 23 (b) Each partner is entitled to a settlement of all partnership accounts 24 upon winding up the partnership business. In settling accounts among the part- 25 ners, profits and losses that result from the liquidation of the partnership 26 assets must be credited and charged to the partners' accounts. The partnership 27 shall make a distribution to a partner in an amount equal to any excess of the 28 credits over the charges in the partner's account. A partner shall contribute 29 to the partnership an amount equal to any excess of the charges over the cre- 30 dits in the partner's account but excluding from the calculation charges 31 attributable to an obligation for which the partner is not personally liable 32 under section 53-3-306, Idaho Code. 33 (c) If a partner fails to contribute the full amount required under sub- 34 section (b) of this section, all of the other partners shall contribute, in 35 the proportions in which those partners share partnership losses, the addi- 36 tional amount necessary to satisfy the partnership obligations for which they 37 are personally liable under section 53-3-306, Idaho Code. A partner or 38 partner's legal representative may recover from the other partners any contri- 39 butions the partner makes to the extent the amount contributed exceeds that 40 partner's share of the partnership obligations for which the partner is per- 41 sonally liable under section 53-3-306, Idaho Code. 42 (d) After the settlement of accounts, each partner shall contribute, in 43 the proportion in which the partner shares partnership losses, the amount nec- 44 essary to satisfy partnership obligations that were not known at the time of 45 the settlement and for which the partner is personally liable under section 46 53-3-306, Idaho Code. 47 (e) The estate of a deceased partner is liable for the partner's obliga- 48 tion to contribute to the partnership. 49 (f) An assignee for the benefit of creditors of a partnership or a part- 50 ner, or a person appointed by a court to represent creditors of a partnership 51 or a partner, may enforce a partner's obligation to contribute to the partner- 52 ship. 22 1 PART 9 2 CONVERSIONS AND MERGERS 3 53-3-901. DEFINITIONS. In this part: 4 (1) "General partner" means a partner in a partnership and a general 5 partner in a limited partnership. 6 (2) "Limited partner" means a limited partner in a limited partnership. 7 (3) "Limited partnership" means a limited partnership created under chap- 8 ter 2, title 53, Idaho Code, predecessor law, or comparable law of another 9 jurisdiction. 10 (4) "Partner" includes both a general partner and a limited partner. 11 53-3-902. CONVERSION OF PARTNERSHIP TO LIMITED PARTNERSHIP. (a) A part- 12 nership may be converted to a limited partnership pursuant to this section. 13 (b) The terms and conditions of a conversion of a partnership to a lim- 14 ited partnership must be approved by all of the partners or by a number or 15 percentage specified for conversion in the partnership agreement. 16 (c) After the conversion is approved by the partners, the partnership 17 shall file a certificate of limited partnership in the jurisdiction in which 18 the limited partnership is to be formed. The certificate must include: 19 (1) A statement that the partnership was converted to a limited partner- 20 ship from a partnership; 21 (2) Its former name; and 22 (3) A statement of the number of votes cast by the partners for and 23 against the conversion and, if the vote is less than unanimous, the number 24 or percentage required to approve the conversion under the partnership 25 agreement. 26 (d) The conversion takes effect when the certificate of limited partner- 27 ship is filed or at any later date specified in the certificate. 28 (e) A general partner who becomes a limited partner as a result of the 29 conversion remains liable as a general partner for an obligation incurred by 30 the partnership before the conversion takes effect. If the other party to a 31 transaction with the limited partnership reasonably believes when entering the 32 transaction that the limited partner is a general partner, the limited partner 33 is liable for an obligation incurred by the limited partnership within ninety 34 (90) days after the conversion takes effect. The limited partner's liability 35 for all other obligations of the limited partnership incurred after the con- 36 version takes effect is that of a limited partner as provided in chapter 2, 37 title 53, Idaho Code. 38 53-3-903. CONVERSION OF LIMITED PARTNERSHIP TO PARTNERSHIP. (a) A limited 39 partnership may be converted to a partnership pursuant to this section. 40 (b) Notwithstanding a provision to the contrary in a limited partnership 41 agreement, the terms and conditions of a conversion of a limited partnership 42 to a partnership must be approved by all of the partners. 43 (c) After the conversion is approved by the partners, the limited part- 44 nership shall cancel its certificate of limited partnership. 45 (d) The conversion takes effect when the certificate of limited partner- 46 ship is cancelled. 47 (e) A limited partner who becomes a general partner as a result of the 48 conversion remains liable only as a limited partner for an obligation incurred 49 by the limited partnership before the conversion takes effect. Except as 50 otherwise provided in section 53-3-306, Idaho Code, the partner is liable as a 51 general partner for an obligation of the partnership incurred after the con- 52 version takes effect. 23 1 53-3-904. EFFECT OF CONVERSION -- ENTITY UNCHANGED. (a) A partnership or 2 limited partnership that has been converted pursuant to this part is for all 3 purposes the same entity that existed before the conversion. 4 (b) When a conversion takes effect: 5 (1) All property owned by the converting partnership or limited partner- 6 ship remains vested in the converted entity; 7 (2) All obligations of the converting partnership or limited partnership 8 continue as obligations of the converted entity; and 9 (3) An action or proceeding pending against the converting partnership or 10 limited partnership may be continued as if the conversion had not 11 occurred. 12 53-3-905. MERGER OF PARTNERSHIPS. (a) Pursuant to a plan of merger 13 approved as provided in subsection (c) of this section, a partnership may be 14 merged with one (1) or more partnerships or limited partnerships. 15 (b) The plan of merger must set forth: 16 (1) The name of each partnership or limited partnership that is a party 17 to the merger; 18 (2) The name of the surviving entity into which the other partnerships or 19 limited partnerships will merge; 20 (3) Whether the surviving entity is a partnership or a limited partner- 21 ship and the status of each partner; 22 (4) The terms and conditions of the merger; 23 (5) The manner and basis of converting the interests of each party to the 24 merger into interests or obligations of the surviving entity, or into 25 money or other property in whole or part; and 26 (6) The street address of the surviving entity's chief executive office. 27 (c) The plan of merger must be approved: 28 (1) In the case of a partnership that is a party to the merger, by all of 29 the partners, or a number or percentage specified for merger in the part- 30 nership agreement; and 31 (2) In the case of a limited partnership that is a party to the merger, 32 by the vote required for approval of a merger by the law of the state or 33 foreign jurisdiction in which the limited partnership is organized and, in 34 the absence of such a specifically applicable law, by all of the partners, 35 notwithstanding a provision to the contrary in the partnership agreement. 36 (d) After a plan of merger is approved and before the merger takes 37 effect, the plan may be amended or abandoned as provided in the plan. 38 (e) The merger takes effect on the later of: 39 (1) The approval of the plan of merger by all parties to the merger, as 40 provided in subsection (c) of this section; 41 (2) The filing of all documents required by law to be filed as a condi- 42 tion to the effectiveness of the merger; or 43 (3) Any effective date specified in the plan of merger. 44 53-3-906. EFFECT OF MERGER. (a) When a merger takes effect: 45 (1) The separate existence of every partnership or limited partnership 46 that is a party to the merger, other than the surviving entity, ceases; 47 (2) All property owned by each of the merged partnerships or limited 48 partnerships vests in the surviving entity; 49 (3) All obligations of every partnership or limited partnership that is a 50 party to the merger become the obligations of the surviving entity; and 51 (4) An action or proceeding pending against a partnership or limited 52 partnership that is a party to the merger may be continued as if the 53 merger had not occurred, or the surviving entity may be substituted as a 24 1 party to the action or proceeding. 2 (b) Service of process in an action or proceeding against a surviving 3 foreign partnership or limited partnership to enforce an obligation of a 4 domestic partnership or limited partnership that is a party to a merger shall 5 be made by mailing the process by registered or certified mail, return receipt 6 requested, to the registered agent of the surviving entity, if any, or to a 7 partner of the surviving entity. 8 (c) A partner of the surviving partnership or limited partnership is lia- 9 ble for: 10 (1) All obligations of a party to the merger for which the partner was 11 personally liable before the merger; 12 (2) All other obligations of the surviving entity incurred before the 13 merger by a party to the merger, but those obligations may be satisfied 14 only out of property of the entity; and 15 (3) Except as otherwise provided in section 53-3-306, Idaho Code, all 16 obligations of the surviving entity incurred after the merger takes 17 effect, but those obligations may be satisfied only out of property of the 18 entity if the partner is a limited partner. 19 (d) If the obligations incurred before the merger by a party to the 20 merger are not satisfied out of the property of the surviving partnership or 21 limited partnership, the general partners of that party immediately before the 22 effective date of the merger shall contribute the amount necessary to satisfy 23 that party's obligations to the surviving entity, in the manner provided in 24 section 53-3-807, Idaho Code, or in the limited partnership act of the juris- 25 diction in which the party was formed, as the case may be, as if the merged 26 party were dissolved. 27 (e) A partner of a party to a merger who does not become a partner of the 28 surviving partnership or limited partnership is dissociated from the entity, 29 of which that partner was a partner, as of the date the merger takes effect. 30 The surviving entity shall cause the partner's interest in the entity to be 31 purchased under section 53-3-701, Idaho Code, or another statute specifically 32 applicable to that partner's interest with respect to a merger. The surviving 33 entity is bound under section 53-3-702, Idaho Code, by an act of a general 34 partner dissociated under this subsection, and the partner is liable under 35 section 53-3-703, Idaho Code, for transactions entered into by the surviving 36 entity after the merger takes effect. 37 53-3-907. STATEMENT OF MERGER. (a) After a merger which involves as a 38 party thereto at least one (1) partnership which has filed a statement of 39 partnership authority or a statement of qualification, the surviving partner- 40 ship or limited partnership may file a statement that one (1) or more partner- 41 ships or limited partnerships have merged into the surviving entity. 42 (b) A statement of merger must contain: 43 (1) The name of each partnership or limited partnership that is a party 44 to the merger; 45 (2) The name of the surviving entity into which the other partnerships or 46 limited partnerships were merged; 47 (3) The street address of the surviving entity's chief executive office 48 and of an office in this state, if any; and 49 (4) Whether the surviving entity is a partnership or a limited partner- 50 ship. 51 (c) Except as otherwise provided in subsection (d) of this section, for 52 the purposes of section 53-3-302, Idaho Code, property of the surviving part- 53 nership or limited partnership which before the merger was held in the name of 54 another party to the merger is property held in the name of the surviving 25 1 entity upon filing a statement of merger. 2 (d) For the purposes of section 53-3-302, Idaho Code, real property of 3 the surviving partnership or limited partnership which before the merger was 4 held in the name of another party to the merger is property held in the name 5 of the surviving entity upon recording: 6 (1) A certified copy of the statement of merger in the office for record- 7 ing transfers of that real property, if a statement of merger was previ- 8 ously filed with the office of the secretary of state; or 9 (2) An original statement of merger in the office for recording transfers 10 of real property, if a statement of merger was not previously filed with 11 the office of the secretary of state. 12 (e) A properly filed statement of merger, executed and declared to be 13 accurate pursuant to section 53-3-105(b), Idaho Code, stating the name of a 14 partnership or limited partnership that is a party to the merger in whose name 15 property was held before the merger and the name of the surviving entity, but 16 not containing all of the other information required by subsection (b) of this 17 section, operates with respect to the partnerships or limited partnerships 18 named to the extent provided in subsections (c) and (d) of this section. 19 53-3-908. NONEXCLUSIVE. This part is not exclusive. Partnerships or lim- 20 ited partnerships may be converted or merged in any other manner provided by 21 law. 22 PART 10 23 LIMITED LIABILITY PARTNERSHIP 24 53-3-1001. STATEMENT OF QUALIFICATION. (a) A partnership may become a 25 limited liability partnership pursuant to this section. 26 (b) The terms and conditions on which a partnership becomes a limited 27 liability partnership must be approved by the vote necessary to amend the 28 partnership agreement except, in the case of a partnership agreement that 29 expressly considers obligations to contribute to the partnership, the vote 30 necessary to amend those provisions. 31 (c) After the approval required by subsection (b) of this section, a 32 partnership may become a limited liability partnership by filing a statement 33 of qualification pursuant to section 53-3-105, Idaho Code. The statement must 34 contain: 35 (1) The name of the partnership and, if the partnership has previously 36 filed a statement of partnership authority, the name it used in that 37 statement and the date of its filing; 38 (2) The street address of the partnership's chief executive office; 39 (3) If the partnership does not have an office in this state, the name 40 and street address of the partnership's agent for service of process; 41 (4) The mailing address to which the secretary of state may send mail to 42 the partnership; 43 (5) A statement that the partnership elects to be a limited liability 44 partnership; and 45 (6) A deferred effective date, if any. 46 (d) The agent of a limited liability partnership for service of process 47 must be an individual who is a resident of this state or other person autho- 48 rized to do business in this state. 49 (e) The status of a partnership as a limited liability partnership is 50 effective on the later of the filing of the statement or a date specified in 51 the statement. The status remains effective, regardless of changes in the 52 partnership, until it is cancelled pursuant to section 53-3-105(c), Idaho 26 1 Code, or revoked pursuant to section 53-3-1003A, Idaho Code. 2 (f) The status of a partnership as a limited liability partnership and 3 the liability of its partners is not affected by errors or later changes in 4 the information required to be contained in the statement of qualification 5 under subsection (c) of this section. 6 (g) The filing of a statement of qualification establishes that a part- 7 nership has satisfied all conditions precedent to the qualification of the 8 partnership as a limited liability partnership. 9 (h) An amendment or cancellation of a statement of qualification is 10 effective when it is filed or on a deferred effective date specified in the 11 amendment or cancellation. 12 53-3-1001A. CONSOLIDATED STATEMENT OF PARTNERSHIP AUTHORITY AND QUALIFI- 13 CATION. (a) A partnership may file a single statement which serves as both a 14 statement of partnership authority and a statement of qualification as a lim- 15 ited liability partnership. 16 (b) The consolidated statement shall contain all of the information 17 required for both statements which it replaces. 18 53-3-1001B. CHANGE OF REGISTERED AGENT. (a) A limited liability partner- 19 ship may change its registered agent, or the address of its registered agent, 20 by filing with the office of the secretary of state a statement of change of 21 registered agent, or by specifying in its annual report the change of regis- 22 tered agent or new address of registered agent. 23 (b) A registered agent may resign as the registered agent for a limited 24 liability partnership by filing with the secretary of state a statement of 25 resignation of registered agent. The secretary of state shall send notice of 26 the resignation to any partner of the limited liability partnership. The res- 27 ignation shall be effective thirty (30) days after filing of the notice of 28 resignation. 29 53-3-1002. NAME. The name of a limited liability partnership must end 30 with "Registered Limited Liability Partnership," "Limited Liability Partner- 31 ship," "R.L.L.P.," "L.L.P.," "RLLP" or "LLP." 32 53-3-1003. ANNUAL REPORT. (a) A limited liability partnership, and a for- 33 eign limited liability partnership authorized to transact business in this 34 state, shall file an annual report in the office of the secretary of state 35 which contains: 36 (1) The name of the limited liability partnership and the state or other 37 jurisdiction under whose laws the foreign limited liability partnership is 38 formed; 39 (2) The street address of the partnership's chief executive office and, 40 if different, the mailing address of an office of the partnership to which 41 mail may be sent; and 42 (3) The name and street address of the partnership's current agent for 43 service of process. 44 (b) An annual report must be filed between January 1 and November 30 of 45 each year following the calendar year in which a partnership files a statement 46 of qualification or a foreign partnership becomes authorized to transact busi- 47 ness in this state. 48 53-3-1003A. REVOCATION OF STATEMENT OF QUALIFICATION. (a) The secretary 49 of state may revoke the statement of qualification of a partnership that fails 50 to file an annual report when due or to maintain a registered agent for ser- 27 1 vice of process in this state. To do so, the secretary of state shall provide 2 the partnership at least sixty (60) days' written notice of intent to revoke 3 the statement. The notice must be mailed to the partnership at its chief exec- 4 utive office set forth in the last filed statement of qualification or annual 5 report. The notice must specify the annual report that has not been filed or 6 that the registered agent has resigned or cannot be found, and the prospective 7 effective date of the revocation. The revocation is not effective if the 8 annual report or an appointment of registered agent, as appropriate, is filed 9 before the effective date of the revocation. 10 (b) A revocation under subsection (a) of this section only affects a 11 partnership's status as a limited liability partnership and is not an event of 12 dissolution of the partnership. 13 (c) A partnership whose statement of qualification has been revoked may 14 apply to the secretary of state for reinstatement within two (2) years after 15 the effective date of the revocation. The application must: 16 (1) State the name of the partnership and the effective date of the revo- 17 cation; 18 (2) State that the ground for revocation either did not exist or has been 19 corrected; and 20 (3) Be accompanied by a current annual report or appointment of regis- 21 tered agent, as appropriate. 22 (d) A reinstatement under subsection (c) of this section relates back to 23 and takes effect as of the effective date of the revocation, and the 24 partnership's status as a limited liability partnership continues as if the 25 revocation had never occurred. 26 PART 11 27 FOREIGN LIMITED LIABILITY PARTNERSHIP 28 53-3-1101. LAW GOVERNING FOREIGN LIMITED LIABILITY PARTNERSHIP. (a) The 29 law under which a foreign limited liability partnership is formed governs 30 relations among the partners and between the partners and the partnership and 31 the liability of partners for obligations of the partnership. 32 (b) A foreign limited liability partnership may not be denied a statement 33 of foreign qualification by reason of any difference between the law under 34 which the partnership was formed and the law of this state. 35 (c) A statement of foreign qualification does not authorize a foreign 36 limited liability partnership to engage in any business or exercise any power 37 that a partnership may not engage in or exercise in this state as a limited 38 liability partnership. 39 53-3-1102. STATEMENT OF FOREIGN QUALIFICATION. (a) Before transacting 40 business in this state, a foreign limited liability partnership must file a 41 statement of foreign qualification. The statement must contain: 42 (1) The name of the foreign limited liability partnership which satisfies 43 the requirements of the state or other jurisdiction under whose law it is 44 formed and ends with "Registered Limited Liability Partnership," "Limited 45 Liability Partnership," "R.L.L.P.," "L.L.P.," "RLLP" or "LLP"; 46 (2) The street address of the partnership's chief executive office and, 47 if different, the mailing address to which mail may be sent; 48 (3) The name and street address of the partnership's agent for service of 49 process; and 50 (4) A deferred effective date, if any. 51 (b) The agent of a foreign limited liability partnership for service of 52 process must be an individual who is a resident of this state or other person 28 1 authorized to do business in this state. 2 (c) The status of a partnership as a foreign limited liability partner- 3 ship is effective on the later of the filing of the statement of foreign qual- 4 ification or a date specified in the statement. The status remains effective, 5 regardless of changes in the partnership, until it is cancelled pursuant to 6 section 53-3-105(c), Idaho Code, or revoked pursuant to section 53-3-1003A, 7 Idaho Code. 8 (d) An amendment or cancellation of a statement of foreign qualification 9 is effective when it is filed or on a deferred effective date specified in the 10 amendment or cancellation. 11 53-3-1103. EFFECT OF FAILURE TO QUALIFY. (a) A foreign limited liability 12 partnership transacting business in this state may not maintain an action or 13 proceeding in this state unless it has in effect a statement of foreign quali- 14 fication. 15 (b) The failure of a foreign limited liability partnership to have in 16 effect a statement of foreign qualification does not impair the validity of a 17 contract or act of the foreign limited liability partnership or preclude it 18 from defending an action or proceeding in this state. 19 (c) A limitation on personal liability of a partner is not waived solely 20 by transacting business in this state without a statement of foreign qualifi- 21 cation. 22 (d) If a foreign limited liability partnership transacts business in this 23 state without a statement of foreign qualification, service of process with 24 respect to a right of action arising out of the transaction of business in 25 this state may be made by registered or certified mail, return receipt 26 requested, addressed to any partner or to the registered agent, if any, in the 27 jurisdiction under whose laws the partnership was organized. 28 53-3-1104. ACTIVITIES NOT CONSTITUTING TRANSACTING BUSINESS. (a) Activi- 29 ties of a foreign limited liability partnership which do not constitute trans- 30 acting business for the purpose of this part include: 31 (1) Maintaining, defending, or settling an action or proceeding; 32 (2) Holding meetings of its partners or carrying on any other activity 33 concerning its internal affairs; 34 (3) Maintaining bank accounts; 35 (4) Maintaining offices or agencies for the transfer, exchange, and reg- 36 istration of the partnership's own securities or maintaining trustees or 37 depositories with respect to those securities; 38 (5) Selling through independent contractors; 39 (6) Soliciting or obtaining orders, whether by mail or through employees 40 or agents or otherwise, if the orders require acceptance outside this 41 state before they become contracts; 42 (7) Creating or acquiring indebtedness, with or without a mortgage, or 43 other security interest in property; 44 (8) Collecting debts or foreclosing mortgages or other security interests 45 in property securing the debts, and holding, protecting, and maintaining 46 property so acquired; 47 (9) Conducting an isolated transaction that is completed within thirty 48 (30) days and is not one in the course of similar transactions; and 49 (10) Transacting business in interstate commerce. 50 (b) For purposes of this part, the ownership in this state of income- 51 producing real property or tangible personal property, other than property 52 excluded under subsection (a) of this section, constitutes transacting busi- 53 ness in this state. 29 1 (c) This section does not apply in determining the contacts or activities 2 that may subject a foreign limited liability partnership to service of proc- 3 ess, taxation, or regulation under any other law of this state. 4 53-3-1105. ACTION BY ATTORNEY GENERAL. The attorney general may maintain 5 an action to restrain a foreign limited liability partnership from transacting 6 business in this state in violation of this part. 7 PART 12 8 MISCELLANEOUS PROVISIONS 9 53-3-1201. UNIFORMITY OF APPLICATION AND CONSTRUCTION. This act shall be 10 applied and construed to effectuate its general purpose to make uniform the 11 law with respect to the subject of this act among states enacting it. 12 53-3-1202. SHORT TITLE. This act may be cited as the "Uniform Partnership 13 Act (1996)." 14 53-3-1203. SEVERABILITY CLAUSE. If any provision of this act or its 15 application to any person or circumstance is held invalid, the invalidity does 16 not affect other provisions or applications of this act which can be given 17 effect without the invalid provision or application, and to this end the pro- 18 visions of this act are severable. 19 53-3-1204. APPLICABILITY. (a) Before July 1, 2001, this act governs only 20 a partnership formed: 21 (1) After January 1, 2001, except a partnership that is continuing the 22 business of a dissolved partnership under section 53-341, Idaho Code, of 23 the superseded Uniform Partnership Law; and 24 (2) Before January 1, 2001, that elects, as provided by subsection (c) of 25 this section, to be governed by this act. 26 (b) On and after July 1, 2001, this act governs all partnerships. 27 (c) Before July 1, 2001, a partnership voluntarily may elect, in the man- 28 ner provided in its partnership agreement or by law for amending the partner- 29 ship agreement, to be governed by this act. The provisions of this act relat- 30 ing to the liability of the partnership's partners to third parties apply to 31 limit those partners' liability to a third party who had done business with 32 the partnership within one (1) year before the partnership's election to be 33 governed by this act only if the third party knows or has received a notifica- 34 tion of the partnership's election to be governed by this act. 35 53-3-1205. SAVINGS CLAUSE. This act does not affect an action or proceed- 36 ing commenced or right accrued before this act takes effect. 37 SECTION 3. Section 1 of this act shall be in full force and effect on and 38 after July 1, 2001. Section 2 of this act shall be in full force and effect on 39 and after January 1, 2001.
STATEMENT OF PURPOSE
RS 07571
This legislation enacts the Uniform Partnership Act. Except for minor revisions by the Office of
the Secretary of State, and a committee of Idaho lawyers, the Act was drafted and approved by the
National Conference of Commissioners on Uniform State Laws and is recommended by the Idaho
Uniform Law Commission for adoption in Idaho. The act has been approved by the American Bar
Association. This act revises the Uniform Partnership Act of 1914. The act establishes a partnership as a
separate legal entity, and not merely as an aggregate of partners. It recognizes the primacy of the
partnership agreement over statutory rules, except for specific rules protecting specific partner interests
in the partnership. The act explicitly addresses the fiduciary responsibilities of partners to each other,
providing for express obligations of loyalty, due care, and good faith. The act also provides limited
liability for partners in a limited liability partnership.
FISCAL NOTE: This act will have no fiscal impact on the general fund.
CONTACT PERSON:
Rex Blackburn, Uniform Law Commissioner
Evans, Keane LLP
1100 West River Street, Suite 200
P. O. Box 959
Boise, Idaho 83701-0959
Tel: (208) 384-1800
Fax: (208) 345-3514
Email: ekrex@micron.net
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