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HB 549: "An Act relating to partnerships; and providing for an effective date."

00HOUSE BILL NO. 549 01 "An Act relating to partnerships; and providing for an effective date." 02 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 03 * Section 1. AS 32.05.010(a) is amended to read: 04 (a) A partnership is an association of two or more persons to carry on as 05 co-owners a business for profit, and includes a registered limited liability 06 partnership. 07 * Sec. 2. AS 32.05.030 is amended by adding a new subsection to read: 08 (e) A registered limited liability partnership shall hold title to all partnership 09 property in the name of the registered limited liability partnership. 10 * Sec. 3. AS 32.05.100 is amended to read: 11 Sec. 32.05.100. JOINT AND SEVERAL LIABILITY OF PARTNERS. 12 Except as provided in (b) of this section, all [ALL] partners are liable 13 (1) jointly and severally for everything chargeable to the partnership 14 under AS 32.05.080 and 32.05.090;

01 (2) jointly for all other debts and obligations of the partnership; but any 02 partner may enter into a separate obligation to perform a partnership contract. 03 * Sec. 4. AS 32.05.100 is amended by adding new subsections to read: 04 (b) A partner in a registered limited liability partnership that is in substantial 05 compliance with AS 32.05.416 and 32.05.500 - 32.05.860 is not liable, directly or 06 indirectly, including through indemnification, contribution, assessment, or other 07 manner, for the debts, obligations, and liabilities of, or chargeable to, the partnership, 08 whether in tort, in contract, or under another theory, that arise from negligence, 09 wrongful acts, wrongful omissions, malpractice, or misconduct committed by another 10 partner or by an employee or agent of the partnership 11 (1) while the partnership is a registered limited liability partnership; and 12 (2) in the course of the partnership business. 13 (c) The liability limitation in (b) of this section does not affect the liability of 14 a partner in a registered limited liability partnership for the 15 (1) partner's own negligence, wrongful acts, wrongful omissions, 16 malpractice, or misconduct; 17 (2) negligence, wrongful acts, wrongful omissions, malpractice, or 18 misconduct in the course of the partnership business of a person under the partner's 19 direct supervision and control; or 20 (3) loans, leases, and other ordinary commercial debts and obligations 21 entered into by the partnership or by a partner with apparent authority to bind the 22 partnership, even if the partner lacked actual authority or acted in breach of the 23 partnership agreement or of a duty owed to the partnership or other partners, unless 24 the creditor knew, or in the exercise of reasonable diligence should have known, that 25 the partner was acting without actual authority or in breach of the partnership 26 agreement or of a duty owed to the partnership or other partners. 27 (d) The liability limitation in (b) of this section may be waived by a registered 28 limited liability partnership. The waiver may not be made unless made by the 29 agreement of at least a majority in interest of the partners, or in a manner otherwise 30 provided in a written partnership agreement. The waiver is valid and binding upon all 31 partners, and may be relied upon by a person dealing with the partnership under

01 AS 32.05.040(a). The waiver may be modified or revoked by the agreement of at least 02 a majority in interest of the partners, or in a manner otherwise provided in a written 03 partnership agreement, except that the modification or revocation does not affect the 04 liability of a partner for the debts, obligations, or liabilities incurred, created, or 05 assumed by the partnership before the modification or revocation. 06 * Sec. 5. AS 32.05.130 is amended to read: 07 Sec. 32.05.130. RULES DETERMINING RIGHTS AND DUTIES OF 08 PARTNERS. The rights and duties of the partners in relation to the partnership shall 09 be determined, subject to any agreement between them, by the following rules: 10 (1) each partner shall be repaid the partner's contributions, whether by 11 way of capital or advances to the partnership property, and shares [SHARE] equally 12 in the profits and surplus remaining after all liabilities, including those to partners, are 13 satisfied; and, except as provided in AS 32.05.100(b), shall contribute towards the 14 losses, whether of capital or otherwise, sustained by the partnership according to the 15 partner's share in the profits; 16 (2) the partnership shall indemnify every partner in respect of payments 17 made and personal liabilities reasonably incurred by the partner in the ordinary and 18 proper conduct of its business, or for the preservation of its business or property; 19 (3) a partner who in aid of the partnership makes a payment or advance 20 beyond the amount of capital that the partner agreed to contribute shall be paid interest 21 from the date of the payment or advance; 22 (4) a partner shall receive interest on the capital contributed by the 23 partner only from the date when repayment should be made; 24 (5) all partners have equal rights in the management and conduct of the 25 partnership business; 26 (6) a partner is not entitled to remuneration for acting in the partnership 27 business, except that a surviving partner is entitled to reasonable compensation for 28 services in winding up the partnership affairs; 29 (7) a person may not become a member of a partnership without the 30 consent of all the partners; 31 (8) any difference arising as to ordinary matters connected with the

01 partnership business may be decided by a majority of the partners; but an act in 02 contravention of an agreement between the partners may not be done rightfully without 03 the consent of all the partners. 04 * Sec. 6. AS 32.05.290 is amended to read: 05 Sec. 32.05.290. PARTNER'S RIGHT TO CONTRIBUTION FROM 06 COPARTNERS AFTER DISSOLUTION. Where the dissolution is caused by the act, 07 death, or bankruptcy of a partner, each partner is liable to the copartners for the 08 partner's share of any liability created by a partner acting for the partnership as if the 09 partnership had not been dissolved unless 10 (1) the dissolution being by act of a partner, the partner acting for the 11 partnership had knowledge of the dissolution; [OR] 12 (2) the dissolution being by the death or bankruptcy of a partner, the 13 partner acting for the partnership had knowledge or notice of the death or bankruptcy; 14 or 15 (3) the liability is for a debt, obligation, or liability for which the 16 partner is not liable under AS 32.05.100(b). 17 * Sec. 7. AS 32.05.310(d) is amended to read: 18 (d) The individual property of a deceased partner is liable for the [ALL] 19 obligations of the partnership incurred while the decedent was a partner and for which 20 the partner is liable under AS 32.05.100 but subject to the prior payment of the 21 decedent's separate debts. 22 * Sec. 8. AS 32.05.350 is amended to read: 23 Sec. 32.05.350. RULES FOR SETTLING ACCOUNTS FOLLOWING 24 DISTRIBUTION. In settling accounts between the partners after dissolution, the 25 following rules shall be observed, subject to any agreement to the contrary: 26 (1) the assets of the partnership are 27 (A) the partnership property; 28 (B) the contributions of the partners as [NECESSARY FOR 29 THE PAYMENT OF ALL THE LIABILITIES] specified in (4) [(2)] of this 30 section; 31 (2) the liabilities of the partnership [SHALL] rank in order of payment

01 as follows: 02 (A) those owing to creditors other than partners; 03 (B) those owing to partners other than for capital and profits; 04 (C) those owing to partners in respect of capital; 05 (D) those owing to partners in respect of profits; 06 (3) the assets shall be applied in the order of their declaration in (1) of 07 this section to the satisfaction of the liabilities; 08 (4) except to the extent the liability of a partner is limited under 09 AS 32.05.100(b), 10 (A) the partners shall contribute, as provided by 11 AS 32.05.130(1), the amount necessary to satisfy the liabilities; 12 (B) [, BUT] if any, but not all, of the partners is [ARE] 13 insolvent, or not being subject to process, refuses [REFUSE] to contribute, the 14 other partners shall contribute their share of the liabilities, and, in the relative 15 proportions in which they share the profits the additional amount necessary to 16 pay the liabilities; 17 (5) an assignee for the benefit of creditors or any person appointed by 18 the court may enforce the contributions specified in (4) of this section; 19 (6) a partner or the legal representative of a partner may enforce the 20 contributions specified in (4) of this section, to the extent of the amount that the 21 partner has paid in excess of the partner's share of the liability; 22 (7) the individual property of a deceased partner is liable for the 23 contributions specified in (4) of this section; 24 (8) when partnership property and the individual properties of the 25 partners are in the possession of a court for distribution, partnership creditors shall 26 have priority on partnership property and separate creditors on individual property, 27 saving the rights of lien or secured creditors as heretofore; 28 (9) where a partner has become bankrupt or the estate of a partner is 29 insolvent the claims against the partner's separate property [SHALL] rank in the 30 following order: 31 (A) those owing to separate creditors;

01 (B) those owing to partnership creditors; 02 (C) those owing to partners by way of contribution. 03 * Sec. 9. AS 32.05 is amended by adding a new section to read: 04 Sec. 32.05.405. COMMERCE OUTSIDE THE STATE. (a) A partnership that 05 is formed and operates under an agreement governed by this chapter may conduct its 06 business, carry on its operations, and has and may exercise the powers granted by this 07 chapter in a state, territory, district, or possession of the United States or in a foreign 08 country. 09 (b) It is the intent of this chapter that the legal existence of a partnership be 10 recognized outside the boundaries of the state and that a partnership transacting 11 business outside the state be granted the protection of art. IV, sec. 1, Constitution of 12 the United States, subject to a reasonable requirement of registration. 13 (c) The liability of the partners in a partnership for the debts, obligations, and 14 liabilities of the partnership shall at all times be determined solely and exclusively by 15 the laws of this state. 16 (d) In this section, "partnership" means a partnership that is formed and 17 operates under an agreement governed by this chapter. 18 * Sec. 10. AS 32.05 is amended by adding a new section to read: 19 Sec. 32.05.416. FINANCIAL RESPONSIBILITY. (a) A registered limited 20 liability partnership shall at all times have and maintain liability insurance or 21 qualifying assets in an amount of value not less than $1,000,000 to satisfy liabilities 22 described in AS 32.05.100(b). To the extent the partnership maintains liability 23 insurance that is subject to a deductible, it shall maintain qualifying assets in the 24 deductible amount, but the sum of the liability insurance and the qualifying assets is 25 not required to exceed $1,000,000. 26 (b) A foreign limited liability partnership may conduct business in this state 27 under this chapter if it has and maintains liability insurance or qualifying assets in an 28 amount of value not less than $1,000,000 to satisfy liabilities that arise from acts or 29 omissions in this state of the type described in AS 32.05.100(b). 30 (c) To the extent that a registered limited liability partnership or a foreign 31 limited liability partnership maintains liability insurance or qualifying assets under the

01 laws of another jurisdiction, the liability insurance or qualifying assets maintained 02 under those laws satisfy (a) - (b) of this section if the amount of the insurance or 03 assets is equal to or greater than the amount required by (a) - (b) of this section. 04 (d) In a court action against a registered limited liability partnership or foreign 05 limited liability partnership in the courts of this state, upon request of a party to the 06 court action and subject to an order of the court, the partnership shall provide a 07 certification stating that the partnership is in compliance with this section, describing 08 the method by which the partnership has complied with (a) - (c) of this section, and 09 identifying the depository institution holding the qualifying assets or insurance carrier 10 issuing the liability insurance specified in (a) - (c) of this section. 11 (e) If a registered limited liability partnership or foreign limited liability 12 partnership fails to maintain the insurance or qualifying assets required by (a) - (c) of 13 this section, the partners are jointly and severally liable for the debts, obligations, and 14 liabilities of the partnership, except that the aggregate amount for which the partners 15 are jointly and severally liable is limited to the amount of insurance or qualifying 16 assets that would have been required to satisfy the requirements of (a) - (c) of this 17 section. 18 (f) In this section, "qualifying assets" means 19 (1) cash, federally insured deposits of a bank or other financial 20 institution, and obligations of the United States or one of its instrumentalities having 21 a maturity of not more than one year, if the partnership segregates the cash, deposits, 22 or obligations from other partnership property and specifically designates the cash, 23 deposits, or obligations for the exclusive purpose of satisfying liabilities described in 24 AS 32.05.100(b); or 25 (2) a letter of credit issued by a federally insured depository institution 26 for the benefit of persons in whose favor a judgment has been entered against the 27 partnership arising from liabilities described in AS 32.05.100(b). 28 * Sec. 11. AS 32.05.420 is amended to read: 29 Sec. 32.05.420. DEFINITIONS. In this chapter, 30 (1) "bankrupt" includes bankrupt under the Federal Bankruptcy Act or 31 insolvent under any state insolvent act;

01 (2) "business" includes every trade, occupation, or profession; 02 (3) "commissioner" means the commissioner of commerce and 03 economic development; 04 (4) "conveyance" includes every assignment, lease, mortgage, or 05 encumbrance; 06 (5) [(4)] "court" includes every court and judge having jurisdiction in 07 the case; 08 (6) "department" means the Department of Commerce and 09 Economic Development; 10 (7) "foreign limited liability partnership" means a partnership that 11 is formed and operates under an agreement governed by the laws of another 12 jurisdiction and that is registered as a limited liability partnership in that 13 jurisdiction; 14 (8) "partnership" includes a registered limited liability partnership, 15 unless the context indicates otherwise; 16 (9) [(5) "PERSON" INCLUDES INDIVIDUALS, PARTNERSHIPS, 17 CORPORATIONS, AND OTHER ASSOCIATIONS; 18 (6)] "real property" includes land and any interest or estate in land; 19 (10) "registered limited liability partnership" means a partnership 20 that is registered under AS 32.05.510 and that is formed and operates under an 21 agreement governed by this chapter. 22 * Sec. 12. AS 32.05 is amended by adding new sections to read: 23 ARTICLE 7. LIMITED LIABILITY PARTNERSHIPS. 24 Sec. 32.05.500. PARTNERSHIP AGREEMENT. The partners of a limited 25 liability partnership may adopt a partnership agreement for the partnership and may 26 amend and repeal the agreement. 27 Sec. 32.05.510. REGISTRATION REQUIRED. A partnership that is formed 28 and operates under an agreement authorized by AS 32.05.500 may not conduct affairs 29 in this state unless it registers as a registered limited liability partnership with the 30 department. To register, the partnership must submit a registration document and the 31 identification code statement required by AS 32.05.530 with the department.

01 Sec. 32.05.520. CONTENTS OF REGISTRATION DOCUMENT. (a) A 02 registration document under AS 32.05.510 must provide 03 (1) the name of the partnership; 04 (2) the address of the partnership's principal office, if the partnership's 05 principal office is not located in this state; 06 (3) the address of the partnership's registered office in this state; 07 (4) the name and address of the partnership's registered agent in the 08 state for the service of process; 09 (5) a brief description of the purpose for which the partnership is 10 formed, which may be stated to be or to include the conduct of all lawful affairs for 11 which a limited liability partnership may be formed under this chapter; 12 (6) the name and address of each general partner maintaining an office 13 in this state; 14 (7) a statement that the general partners executing the registration 15 document acknowledge the responsibility of the partnership under AS 32.05.416; 16 (8) if an election has been made that the existence of the partnership 17 will continue until a certain date or event, a statement of the election and the date or 18 event; 19 (9) a statement that the partnership is applying for registration. 20 (b) A partnership formed under AS 32.05.500 may include other information 21 in the registration document. 22 Sec. 32.05.530. DISCLOSURE OF PARTNERSHIP PURPOSES. An 23 application for registration under this chapter must be accompanied by a separate 24 statement of the codes taken from the identification codes established under 25 AS 10.06.870 that most closely describe the activities in which the corporation intends 26 to engage. 27 Sec. 32.05.540. EFFECTIVE DATE AND DURATION OF REGISTRATION. 28 Registration under AS 32.05.510 is effective immediately when the registration 29 document is filed under AS 32.05.510. The registration remains effective until the 30 earlier of the date when 31 (1) the partnership voluntarily withdraws its registration under

01 AS 32.05.700; or 02 (2) the partnership's registration is cancelled under AS 32.05.710 - 03 32.05.720. 04 Sec. 32.05.550. AMENDMENT OF REGISTRATION DOCUMENT. (a) A 05 registration document filed under AS 32.05.510 is amended by filing an amended 06 registration document with the department. The document must state 07 (1) the name of the limited liability partnership; 08 (2) the date of the filing of the original document of registration; 09 (3) the amendment to the document. 10 (b) An amendment may be filed at any time for any purpose that the partners 11 determine to be proper. 12 (c) A restated registration document may be executed and filed in the same 13 manner as an amendment. 14 Sec. 32.05.560. STATUS UNAFFECTED BY ERRORS OR SUBSEQUENT 15 CHANGES. The registration status of a registered limited liability partnership is not 16 affected by errors in the information provided in a registration application or by 17 changes that occur in the information provided in the registration application after the 18 application is filed. 19 Sec. 32.05.570. NAME. (a) The name of a registered limited liability 20 partnership must contain the words "Limited Liability Partnership," the abbreviation 21 "L.L.P.," or the abbreviation "LLP," as the last words or letters of its name. 22 (b) The name of a city, borough, or village may be used in a limited liability 23 partnership name; however, the name may not contain the word "city," "borough," or 24 "village," or otherwise imply that the partnership is a municipality. 25 (c) A person may not adopt a name that contains the words "Limited Liability 26 Partnership," the abbreviation "L.L.P.," or the abbreviation "LLP" unless the person 27 has been issued a certificate of registration under this chapter. 28 Sec. 32.05.580. DISTINGUISHABLE NAMES. The name of a limited 29 liability partnership must be distinguishable on the records of the department from 30 (1) the name of a limited liability partnership, limited liability company, 31 limited partnership, or corporation organized under the laws of this state;

01 (2) the name of a foreign limited liability partnership, foreign limited 02 liability company, foreign limited partnership, or foreign corporation authorized to 03 transact business in this state; 04 (3) a name reserved or registered by the department under the 05 provisions of this title or AS 10. 06 Sec. 32.05.590. RIGHT TO RESERVE NAME. The exclusive right to use a 07 name may be reserved by a 08 (1) person intending to register a limited liability partnership and to 09 adopt the name; 10 (2) person intending to register a foreign limited liability partnership 11 under this chapter; 12 (3) limited liability partnership or a foreign limited liability partnership 13 registered under this chapter that intends to change its name. 14 Sec. 32.05.600. APPLICATION TO RESERVE NAME. Reservation of a 15 name under AS 32.05.590 is made by filing an application with the department. If the 16 department finds that the name is available for use by a limited liability partnership, 17 the department shall reserve it for the exclusive use of the applicant for a period of 18 120 days. 19 Sec. 32.05.610. REGISTRATION OF NAME. (a) A foreign limited liability 20 partnership not intending to conduct affairs in this state may register its name if the 21 name is distinguishable on the records of the department. 22 (b) Registration of a name by a foreign limited liability partnership under (a) 23 of this section is made by filing with the department 24 (1) a signed application for registration setting out the name of the 25 partnership, the state or territory under the laws of which it is formed, and the date the 26 partnership was formed; and 27 (2) proof from the jurisdiction where the partnership is formed 28 indicating that the partnership was formed in that jurisdiction. 29 (c) The registration of a name under this section is effective until the close of 30 the calendar year in which the application for registration is filed. 31 (d) The registration of a name under this section may be renewed each year

01 by filing 02 (1) an application for renewal setting out the facts required in an 03 original application; and 04 (2) proof of formation as required by (b)(2) of this section. 05 (e) An application for renewal must be filed between October 1 and 06 December 31 in each year. The renewal extends the registration for the following 07 calendar year. 08 Sec. 32.05.620. USE OF NONDISTINGUISHABLE NAME. Registration or 09 reservation under this chapter gives the person who has registered exclusive right to 10 the use of the name. The person may enjoin the use of a name that is not 11 distinguishable from the name to which the person has the exclusive right, and the 12 person has a cause of action for damages against a person who uses a name that is not 13 distinguishable from the name to which the person has the exclusive right. 14 Sec. 32.05.630. REGISTERED AGENT AND OFFICE. A registered limited 15 liability partnership and a foreign limited liability partnership shall maintain in the 16 state a registered office and an agent for the service of process. 17 Sec. 32.05.640. CHANGE OF REGISTERED OFFICE OR AGENT. (a) A 18 registered limited liability partnership may change its registered office, agent, or both, 19 by filing with the department a verified signed statement that includes 20 (1) the name of the partnership; 21 (2) the address of its registered office; 22 (3) the address of its new registered office if the registered office is to 23 be changed; 24 (4) the name of its registered agent; 25 (5) the name of its new registered agent if the registered agent is to be 26 changed; and 27 (6) a statement that the change was authorized by one or more of the 28 partners. 29 (b) If the department finds that the statement filed under (a) of this section 30 complies with this chapter, the department shall file the statement in the department's 31 office. The change becomes effective when the statement is filed.

01 (c) A registered agent of a limited liability partnership may change the location 02 of the agent's office from one address to another in this state. The agent may change 03 the registered office for each limited liability partnership for which the person is acting 04 as registered agent by filing in the department a statement setting out the name of the 05 agent, the address of the agent's office before change, the address to which the office 06 is changed, and a list of companies for which the person is the registered agent. The 07 statement shall be executed by the registered agent in the individual name of the agent, 08 or, if the agent is a corporation, it shall be executed and verified by its president or 09 vice-president. The statement shall be delivered to the department and the limited 10 liability partnership, and, if the department finds that the statement complies with this 11 chapter, the department shall file it. The change becomes effective when the statement 12 is filed. 13 Sec. 32.05.650. RESIGNATION BY REGISTERED AGENT. A registered 14 agent may resign by filing a written notice and an exact copy of the notice with the 15 department. The written notice of resignation must set out the latest address of the 16 principal office of the partnership and the names and addresses of the general partners 17 known by the agent. The department shall immediately mail a copy of the notice to 18 the partnership at its principal office. The resignation becomes effective 30 days after 19 the filing of the written notice unless the partnership appoints a successor registered 20 agent before the resignation becomes effective. 21 Sec. 32.05.660. SERVICE OF PROCESS. (a) The registered agent of a 22 registered limited liability partnership is an agent upon whom process, notice, or 23 demand required or permitted by law to be served upon the partnership may be served. 24 (b) If a limited liability partnership fails to appoint or maintain a registered 25 agent in this state or if its registered agent cannot with reasonable diligence be found 26 at the registered office, the commissioner is an agent of the partnership upon whom 27 the process, notice, or demand may be served. A person may serve the commissioner 28 under this subsection by 29 (1) serving on the commissioner or the designee of the commissioner 30 a copy of the process, notice, or demand, with any papers required by law to be 31 delivered in connection with the service, and a fee established by the department by

01 regulation; 02 (2) sending to the partnership being served by certified mail a notice 03 that service has been made on the commissioner under this subsection and a copy of 04 the process, notice, or demand and accompanying papers; notice to the partnership 05 shall be sent to the address 06 (A) of the last registered office of the partnership as shown by 07 the records on file in the department; and 08 (B) the use of which the person initiating the proceedings 09 knows or, on the basis of reasonable inquiry, has reason to believe is most 10 likely to result in actual notice; and 11 (3) filing with the appropriate court or other body, as part of the return 12 of service, the return receipt of mailing and an affidavit of the person initiating the 13 proceedings that this subsection has been complied with. 14 (c) The commissioner shall keep a record of processes, notices, and demands 15 served upon the commissioner under this section. 16 (d) This section does not affect the right to serve process, notice, or demand 17 required or permitted by law to be served upon a limited liability partnership in 18 another permitted manner. 19 Sec. 32.05.670. BIENNIAL REPORT REQUIRED. A registered limited 20 liability partnership and a foreign limited liability partnership shall file a biennial 21 report within the time established by AS 32.05. 22 Sec. 32.05.680. CONTENTS OF BIENNIAL REPORT. A biennial report 23 required under AS 32.05.670 must state 24 (1) the name of the limited liability partnership and the state or country 25 where it was formed; 26 (2) the address of the registered office of the partnership in this state, 27 the name of its registered agent in this state at that address, and, in the case of a 28 foreign limited liability partnership, the address of its principal office in the state or 29 country where it was formed; and 30 (3) the names and addresses of the partners. 31 Sec. 32.05.690. FILING OF BIENNIAL REPORT. (a) A biennial report

01 required by AS 32.05.670 shall be filed with the department and is due before 02 January 2 of the filing year. A domestic limited liability partnership and a foreign 03 limited liability partnership registering during an even-numbered year shall file the 04 biennial report each even-numbered year. A domestic limited liability partnership and 05 a foreign limited liability partnership registering during an odd-numbered year shall 06 file the biennial report each odd-numbered year. The biennial report is delinquent if 07 not filed before February 1 of each odd- or even-numbered year as provided in this 08 subsection. 09 (b) Proof to the satisfaction of the department that on or before February 1 the 10 report was deposited in the United States mail in a sealed envelope, properly addressed 11 with postage prepaid, satisfies the deadline of (a) of this section. 12 (c) The department shall file the report if it conforms to the requirements of 13 this chapter. If the department finds that the report does not conform to the 14 requirements of this chapter, the report shall promptly be returned to the partnership 15 for necessary corrections. 16 Sec. 32.05.700. VOLUNTARY WITHDRAWAL OF REGISTRATION. A 17 registered limited liability partnership may withdraw its registration by filing with the 18 department a written withdrawal notice that is signed by a partner authorized to 19 execute the withdrawal notice. 20 Sec. 32.05.710. CANCELLATION OF REGISTRATION UPON 21 DISSOLUTION. The registration of a registered limited liability partnership shall be 22 cancelled upon the dissolution and the commencement of winding up of the 23 partnership. A notice of cancellation shall be filed with the department and must state 24 (1) the name of the registered limited liability partnership; 25 (2) the date of filing of its initial registration; 26 (3) the reason for cancellation; 27 (4) the effective date, which must be a date certain, of cancellation if 28 the cancellation is not to be effective upon the filing of the application; and 29 (5) other information the general partners determine to be appropriate. 30 Sec. 32.05.720. INVOLUNTARY CANCELLATION. (a) A registered limited 31 liability partnership's registration may be cancelled involuntarily by the commissioner

01 if 02 (1) the partnership is delinquent six months in filing its biennial report 03 or in paying a fee or penalty; 04 (2) the partnership has failed for 30 days to appoint and maintain a 05 registered agent in the state; 06 (3) the partnership has failed for 30 days after change of its registered 07 office or registered agent to file in the office of the commissioner a statement of the 08 change; or 09 (4) a misrepresentation of material facts has been made in an 10 application, report, affidavit, or other document submitted under this chapter. 11 (b) Before a registration may be cancelled under this section, the commissioner 12 shall give the partnership written notice of its delinquency, failure, or misrepresentation 13 by certified mail addressed to its registered agent, registered office, or partners at the 14 last known address as shown by the records of the commissioner. If the partnership 15 fails, within 60 days after the notice is sent by certified mail, to contest the alleged 16 delinquency, failure, or misrepresentation, the partnership may be dissolved under (d) 17 of this section. 18 (c) If a registered limited liability partnership contests the proposed 19 cancellation, the partnership may request a hearing. If, following a hearing, the 20 commissioner decides there are grounds, under (a) of this section, for involuntary 21 cancellation under this section, the partnership may appeal the decision to the superior 22 court. 23 (d) If the registration of a registered limited liability partnership is subject to 24 cancellation under (a) - (c) of this section, the partnership fails to correct the 25 delinquency, failure, or misrepresentation as provided in this section, and there is no 26 controlling order of the superior court, the commissioner shall cancel the partnership 27 by issuing a certificate of involuntary cancellation. The certificate must contain a 28 statement that the partnership's registration has been cancelled, and the date and the 29 reason for the cancellation. The original certificate shall be placed in the department's 30 files and a copy of it mailed to the partnership at its registered office or in care of its 31 registered agent, at the last known address shown on the records of the department.

01 Upon the issuance of the certificate of involuntary cancellation, the existence of the 02 partnership ceases, except as otherwise provided in this chapter, and its name shall be 03 available for use and may be adopted by another limited liability partnership on a date 04 that is six months or more after the cancellation. 05 (e) If the registration of a registered limited liability partnership is cancelled 06 under this section, the registration may be reinstated within two years from the date 07 of the certificate of cancellation if it is established to the satisfaction of the 08 commissioner that in fact (1) there was no cause for the cancellation, or the 09 delinquency, failure, or misrepresentation resulting in cancellation has been corrected; 10 and (2) the partnership pays two times the amount of any delinquent fee and the 11 amount the partnership would have paid had it not been cancelled during the two-year 12 period. Unless the partnership being reinstated amends its registration to change its 13 name to comply with AS 32.05.570 - 32.05.620, reinstatement may not be authorized 14 if the name of the partnership is not distinguishable in the records of the department. 15 Sec. 32.05.730. FOREIGN LIMITED LIABILITY PARTNERSHIPS. (a) In 16 addition to the requirements of AS 32.05.416, before a foreign limited liability 17 partnership conducts affairs in this state, the partnership must submit to the department 18 an application for registration. 19 (b) Subject to the constitution of this state, and except that a partner in the 20 partnership is liable for acts and omissions in this state of the type described in 21 AS 32.05.100(c), the law of the state or other jurisdiction under which a foreign 22 limited partnership is formed governs the affairs of the partnership. 23 (c) The department may not deny registration to a foreign limited liability 24 partnership because of differences between the law of this state and the law of the state 25 or other jurisdiction under which the foreign limited liability partnership is formed. 26 Sec. 32.05.740. CONTENTS OF REGISTRATION APPLICATION. (a) An 27 application for the registration of a foreign limited liability partnership must state 28 (1) the name of the foreign limited liability partnership and, if different, 29 the name the partnership proposes to use in this state; 30 (2) the state or other jurisdiction where the partnership was formed and 31 the date of its formation;

01 (3) the name and address of its registered agent; 02 (4) that the department is appointed the agent of the partnership for 03 service of process if the foreign limited liability partnership fails to appoint or maintain 04 a registered agent; 05 (5) the address of the office that is required by the state or other 06 jurisdiction of the partnership's formation to be maintained in that state or other 07 jurisdiction, or, if the state or other jurisdiction does not require an office to be 08 maintained in that state or other jurisdiction, the principal office of the partnership; 09 (6) the purpose the partnership proposes to pursue in the conduct of its 10 affairs in this state and the codes from the identification code established under 11 AS 10.06.870 that most closely describe the activities in which the partnership intends 12 to engage in this state; and 13 (7) the names and addresses of the general partners. 14 (b) In addition to the information required by (a) of this section, an application 15 must include proof from the jurisdiction where the partnership was formed that 16 indicates that the partnership was formed in that jurisdiction. 17 Sec. 32.05.750. NAME OF FOREIGN LIMITED LIABILITY 18 PARTNERSHIP. The department may not file the application for registration of a 19 foreign limited liability partnership unless the name of the partnership satisfies the 20 requirements of AS 32.05.570 - 32.05.620. If the name under which a foreign limited 21 liability partnership is formed does not satisfy the requirements of AS 32.05.570 - 22 32.05.620, the partnership may register under AS 32.05.730 if the partnership uses an 23 assumed name that is available to the partnership under this chapter and that satisfies 24 the requirements of AS 32.05.570 - 32.05.620. 25 Sec. 32.05.760. AMENDMENT OF REGISTRATION OF FOREIGN 26 LIMITED LIABILITY PARTNERSHIP. (a) A foreign limited liability partnership 27 may amend its registration by filing an amendment of registration with the department 28 that is signed by a partner authorized to execute the amendment. 29 (b) The amendment of registration filed by a foreign limited liability 30 partnership must state 31 (1) the name of the partnership;

01 (2) the date the original registration was filed; and 02 (3) the amendment. 03 (c) The application for registration may be amended if the application for 04 registration as amended contains only provisions that this chapter allows to be 05 contained in an application for registration at the time the partnership amends the 06 registration. 07 Sec. 32.05.770. REVOCATION OF REGISTRATION OF FOREIGN 08 LIMITED LIABILITY PARTNERSHIP. (a) The registration of a foreign limited 09 liability partnership authorizing the partnership to conduct affairs in this state may be 10 revoked by the commissioner if 11 (1) the partnership is delinquent for six months in filing its biennial 12 report or in paying a fee or penalty imposed under this chapter; 13 (2) the partnership has failed for 30 days to appoint and maintain a 14 registered agent in the state; 15 (3) the partnership has failed for 30 days after change of its registered 16 office or registered agent to file in the office of the commissioner a statement of the 17 change; or 18 (4) a misrepresentation of material facts has been made in an 19 application, report, affidavit, or other document submitted under this chapter. 20 (b) Before a registration may be revoked under this section, the commissioner 21 shall give the partnership written notice of its delinquency, failure, or misrepresentation 22 by certified mail addressed to its registered agent, registered office, or partners at the 23 last known address as shown by the records of the commissioner. If the partnership 24 fails, within 60 days after the notice is sent by certified mail, to contest the alleged 25 delinquency, failure, or misrepresentation, the registration may be revoked under (d) 26 of this section. 27 (c) If a partnership contests the proposed cancellation, the partnership may 28 request a hearing. If, following a hearing, the commissioner decides there are grounds 29 for revocation under this section, the partnership may appeal the decision to the 30 superior court. 31 (d) If the registration of a foreign limited liability partnership is subject to

01 revocation under (a) - (c) of this section, the partnership fails to correct the 02 delinquency, failure, or misrepresentation as provided in this section, and there is no 03 controlling order of the superior court, the commissioner shall revoke the partnership 04 by issuing a certificate of revocation containing a statement that the partnership's 05 registration has been revoked, and the date and the reason for the revocation. Upon 06 cancellation, the original certificate of cancellation shall be placed in the department's 07 files and a copy of the certificate mailed to the partnership at its registered office or 08 in care of its registered agent at the last known address shown on the records of the 09 department. Upon the issuance of the certificate of revocation, the foreign limited 10 liability partnership's authority to conduct affairs in this state ceases. 11 Sec. 32.05.780. VOLUNTARY WITHDRAWAL OF FOREIGN LIMITED 12 LIABILITY PARTNERSHIP. (a) A foreign limited liability partnership registered in 13 this state may withdraw its registration by filing an application for withdrawal with the 14 department. 15 (b) An application for withdrawal filed by a foreign limited liability 16 partnership must state 17 (1) the name of the partnership and the state or other jurisdiction where 18 the partnership was formed; 19 (2) that the partnership is no longer conducting affairs in this state; 20 (3) that the partnership is withdrawing; 21 (4) that the partnership revokes the authority of its registered agent for 22 service of process in this state and agrees that service of process may subsequently be 23 made on the partnership by service on the commissioner for a cause of action arising 24 in this state during the time the partnership was registered in this state; and 25 (5) an address for mailing a copy of the process to the partnership. 26 (c) The application for withdrawal must be in the form and manner designated 27 by the department and shall be signed on behalf of the foreign limited liability 28 partnership by a partner authorized to execute the application for withdrawal. 29 Sec. 32.05.790. CONDUCTING AFFAIRS WITHOUT REGISTRATION. (a) 30 A foreign limited liability partnership conducting affairs in this state may not maintain 31 an action or other proceeding in a court of this state until it has registered in this state.

01 (b) A foreign limited liability partnership that conducts affairs in this state 02 without registration is subject to a civil penalty payable to the state not to exceed 03 $10,000 for each calendar year, including a partial year, that the partnership conducts 04 affairs in this state without being registered under this chapter. The civil penalty 05 imposed may be recovered in an action brought in the superior court by the attorney 06 general. 07 (c) The failure of a foreign limited liability partnership to register in this state 08 does not 09 (1) impair the validity of a contract or act of the partnership; 10 (2) affect the right of another party to a contract of the partnership to 11 maintain a suit or proceeding on the contract; or 12 (3) prevent the partnership from defending an action or other 13 proceeding in a court of this state. 14 Sec. 32.05.800. TRANSACTIONS NOT CONSTITUTING CONDUCTING 15 AFFAIRS. The activities of a foreign limited liability partnership that are not 16 considered to be conducting affairs in this state for the purposes of AS 32.05.720 17 include 18 (1) maintaining, defending, or settling a court action or other 19 proceeding or claim; 20 (2) holding partnership meetings in this state; 21 (3) maintaining bank accounts; 22 (4) selling through independent contractors; 23 (5) soliciting or procuring orders by mail, through employees, agents, 24 or other persons if the orders require acceptance outside the state before becoming 25 binding contracts; 26 (6) creating as borrower or lender, or acquiring, indebtedness or 27 mortgages or other security interests in real or personal property; 28 (7) securing or collecting debts, or enforcing rights in property securing 29 debts; 30 (8) conducting an isolated transaction that is completed within 30 days 31 and that is not part of a course of repeated transactions of a similar nature; or

01 (9) conducting affairs in interstate commerce. 02 Sec. 32.05.810. EXECUTION OF DOCUMENTS. A registration document 03 filed under AS 32.05.510 or a biennial report filed under AS 32.05.670 shall be 04 executed by a partner authorized to execute the registration document or biennial 05 report. 06 Sec. 32.05.820. SUBMISSION OF DOCUMENTS TO THE DEPARTMENT. 07 When a document is required or allowed to be delivered to or filed with the 08 department under AS 32.05.500 - 32.05.860, the person delivering the document shall 09 deliver to the department the required fee, the original signed document, and an exact 10 copy of the document. 11 Sec. 32.05.830. FILING OF DOCUMENTS BY THE DEPARTMENT. (a) 12 If the department determines that a document filed under AS 32.05.500 - 32.05.860 13 conforms to the filing requirements of AS 32.05.500 - 32.05.860, the department shall 14 (1) mark on the original signed document and on the exact copy the 15 word "filed" and the date of the document's acceptance for filing; 16 (2) retain the exact copy in the department's files; and 17 (3) return the original signed document to the person who filed the 18 document or to that person's representative. 19 (b) The department may not file a document that does not meet the 20 requirements of this section. 21 Sec. 32.05.840. DISAPPROVAL OF WRITING BY DEPARTMENT; 22 APPEAL. If the department fails to approve applications for registration, amendment, 23 cancellation, or withdrawal, or another document required by AS 32.05.500 - 32.05.860 24 to be approved by the department, the department shall, within 10 days after the 25 delivery of the document to the department, give written notice of disapproval to the 26 person delivering the document. The notice must specify the reasons for disapproval. 27 The person may appeal the disapproval to the superior court. 28 Sec. 32.05.850. FILING AND OTHER FEES. The department shall charge 29 fees established by the department by regulation for the following under AS 32.05.500 30 - 32.05.860: 31 (1) filing applications for registration;

01 (2) filing amendments to registration; 02 (3) filing applications for cancellation or withdrawal; 03 (4) issuing a document not otherwise covered by this section; 04 (5) furnishing a copy of a document; 05 (6) accepting an application for reservation or registration of a name; 06 (7) filing a statement of change of registered agent or registered office; 07 (8) accepting service of a process, notice, or demand upon the 08 department; 09 (9) filing another document allowed or required under this chapter. 10 Sec. 32.05.860. DEPARTMENT FORMS. The department may provide forms 11 for filing documents under AS 32.05.500 - 32.05.850. 12 * Sec. 13. ADOPTION OF REGULATIONS. The department of Commerce and Economic 13 Development may adopt regulations to implement AS 32.05.660(b)(1), added by sec. 12 of 14 this Act. The regulations take effect under AS 44.62, but not before the effective date of 15 AS 32.05.660. 16 * Sec. 14. A foreign limited liability partnership conducting affairs in this state shall 17 comply with AS 32.05.730(a), added by sec. 12 of this Act, on or before 30 days after the 18 effective date of sec. 12 of this Act. 19 * Sec. 15. Section 13 of this Act takes effect immediately under AS 01.10.070(c). 20 * Sec. 16. Sections 1 - 12 and 14 of this Act take effect January 1, 1997.