1998 Legislation
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SENATE BILL NO. 1295 – Uniform Partnership Act

SENATE BILL NO. 1295

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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

Bill Text


S1295


                                                                        
 ||||              LEGISLATURE OF THE STATE OF IDAHO             ||||
Fifty-fourth Legislature                 Second Regular Session - 1998
                                                                        

                                      IN 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 / Fiscal Impact


    





                            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
    
    S1295