SB 198: "An Act relating to partnerships; amending Rules 25(c), 79, and 82, Alaska Rules of Civil Procedure; and providing for an effective date."
00SENATE BILL NO. 198 01 "An Act relating to partnerships; amending Rules 25(c), 79, and 82, Alaska Rules 02 of Civil Procedure; and providing for an effective date." 03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 04 * Section 1. AS 09.40.240 is amended to read: 05 Sec. 09.40.240. Appointment of receivers. A receiver may be appointed by 06 the court in any action or proceeding except an action for the recovery of specific 07 personal property 08 (1) provisionally, before judgment, on the application of either party, 09 when the party's right to the property that [WHICH] is the subject of the action or 10 proceeding and that [WHICH] is in the possession of an adverse party is probable, and 11 where it is shown that the property or its rents or profits are in danger of being lost 12 or materially injured or impaired; 13 (2) after judgment, to carry the judgment into effect; 14 (3) after judgment, to dispose of the property according to the judgment
01 or to preserve it during the pendency of an appeal, or when an execution has been 02 returned unsatisfied and the debtor refuses to apply the debtor's property in satisfaction 03 of the judgment; 04 (4) in the cases when a corporation has been dissolved, or is insolvent 05 or in imminent danger of insolvency, or has forfeited its corporate rights; 06 (5) in the cases when a debtor has been declared insolvent; 07 (6) under AS 32.06.504(a). 08 * Sec. 2. AS 32 is amended by adding a new chapter to read: 09 Chapter 6. Partnerships and Limited Liability Partnerships. 10 Article 1. Nature of Partnership. 11 Sec. 32.06.201. Partnership as entity. (a) A partnership is an entity distinct 12 from its partners. 13 (b) A limited liability partnership continues to be the same entity that existed 14 before the filing of a statement of qualification under AS 32.06.911. 15 Sec. 32.06.202. Formation of partnership. (a) Except as otherwise provided 16 in (b) of this section, the association of two or more persons to carry on as co-owners 17 a business for profit forms a partnership, whether or not the persons intend to form a 18 partnership. 19 (b) An association formed under a statute other than this chapter, a predecessor 20 statute, or a comparable statute of another jurisdiction is not a partnership under this 21 chapter. 22 (c) In determining whether a partnership is formed, the following rules apply: 23 (1) joint tenancy, tenancy in common, tenancy by the entireties, joint 24 property, common property, or part ownership does not by itself establish a 25 partnership, even if the co-owners share profits made by the use of the property; 26 (2) the sharing of gross returns does not by itself establish a 27 partnership, even if the persons sharing them have a joint or common right or interest 28 in property from which the returns are derived; 29 (3) a person who receives a share of the profits of a business is 30 presumed to be a partner in the business, unless the profits are received in payment 31 (A) of a debt by installments or otherwise;
01 (B) for services as an independent contractor, or of wages or 02 other compensation to an employee; 03 (C) of rent; 04 (D) of an annuity or other retirement or health benefit provided 05 to a beneficiary, representative, or designee of a deceased or retired partner; 06 (E) of interest or other charge on a loan, even if the amount of 07 payment varies with the profits of the business, including a direct or indirect 08 present or future ownership of the collateral, or rights to income, proceeds, or 09 increase in value derived from the collateral; or 10 (F) for the sale of the good will of a business or other property 11 by installments or otherwise. 12 Sec. 32.06.203. Partnership property. Property acquired by a partnership is 13 property of the partnership and not of the partners individually. 14 Sec. 32.06.204. When property is partnership property. (a) Property is 15 partnership property if acquired in the name of 16 (1) the partnership; or 17 (2) one or more partners with an indication in the instrument 18 transferring title to the property of the person's capacity as a partner or of the 19 existence of a partnership but without an indication of the name of the partnership. 20 (b) Property is acquired in the name of the partnership by a transfer to 21 (1) the partnership in its name; or 22 (2) one or more partners in their capacity as partners in the partnership 23 if the name of the partnership is indicated in the instrument transferring title to the 24 property. 25 (c) Property is presumed to be partnership property if purchased with 26 partnership assets, even if not acquired in the name of the partnership or of one or 27 more partners with an indication in the instrument transferring title to the property of 28 the person's capacity as a partner or of the existence of a partnership. 29 (d) Property acquired in the name of one or more of the partners, without an 30 indication in the instrument transferring title to the property of the person's capacity 31 as a partner or of the existence of a partnership and without use of partnership assets,
01 is presumed to be separate property even if used for partnership purposes. 02 Article 2. Relations of Partners to 03 Persons Dealing with Partnership. 04 Sec. 32.06.301. Partner as agent of partnership. Subject to the effect of a 05 statement of partnership authority under AS 32.06.303, 06 (1) each partner is an agent of the partnership for the purpose of its 07 business; an act of a partner, including the execution of an instrument in the 08 partnership name, for apparently carrying on in the ordinary course the partnership 09 business or business of the kind carried on by the partnership binds the partnership, 10 unless the partner does not have authority to act for the partnership in the particular 11 matter and the person with whom the partner is dealing knows or has received a 12 notification that the partner lacks authority; 13 (2) an act of a partner that is not apparently for carrying on in the 14 ordinary course the partnership business or business of the kind carried on by the 15 partnership does not bind the partnership unless the act was authorized by the other 16 partners. 17 Sec. 32.06.302. Transfer of partnership property. (a) Subject to the effect 18 of a statement of partnership authority under AS 32.06.303, partnership property held 19 in the name of the partnership may be transferred by an instrument of transfer executed 20 by a partner in the partnership name. 21 (b) Partnership property held in the name of one or more partners, with an 22 indication in the instrument transferring the property to them of their capacity as 23 partners or of the existence of a partnership, but without an indication of the name of 24 the partnership, may be transferred by an instrument of transfer executed by the 25 persons in whose name the property is held. 26 (c) Partnership property held in the name of one or more persons other than 27 the partnership, without an indication in the instrument transferring the property to 28 them of their capacity as partners or of the existence of a partnership, may be 29 transferred by an instrument of transfer executed by the persons in whose name the 30 property is held. 31 (d) A partnership may recover partnership property from a transferee only if
01 the partnership proves that execution of the instrument of initial transfer did not bind 02 the partnership under AS 32.06.301 and 03 (1) as to a subsequent transferee who gave value for property 04 transferred under (a) or (b) of this section, that the subsequent transferee knew or had 05 received a notification that the person who executed the instrument of initial transfer 06 lacked authority to bind the partnership; or 07 (2) as to a transferee who gave value for property transferred under (c) 08 of this section, that the transferee knew or had received a notification that the property 09 was partnership property, and that the person who executed the instrument of initial 10 transfer lacked authority to bind the partnership. 11 (e) A partnership may not recover partnership property from a subsequent 12 transferee if the partnership would not have been entitled to recover the property under 13 (d) of this section from an earlier transferee of the property. 14 (f) If a person holds all of the partners' interests in the partnership, all of the 15 partnership property vests in the person. The person may execute a document in the 16 name of the partnership to evidence vesting of the property in the person and may file 17 or record the document. 18 Sec. 32.06.303. Statement of partnership authority. (a) A partnership may 19 file a statement of partnership authority that 20 (1) must include 21 (A) the name of the partnership; 22 (B) the street address of its chief executive office and an office 23 in this state, if there is one; 24 (C) the names and mailing addresses of all of the partners or an 25 agent appointed and maintained by the partnership for the purpose of (b) of this 26 section; and 27 (D) the names of the partners authorized to execute an 28 instrument transferring real property held in the name of the partnership; and 29 (2) may state 30 (A) the authority, or limitations on the authority, of some or all 31 of the partners to enter into other transactions on behalf of the partnership; and
01 (B) any other matter. 02 (b) If a statement of partnership authority names an agent, the agent shall 03 maintain a list of the names and mailing addresses of all of the partners and make it 04 available to any person on request for good cause shown. 05 (c) If a filed statement of partnership authority is executed under 06 AS 32.06.970(c) and states the name of the partnership but does not contain all of the 07 other information required by (a) of this section, the statement nevertheless operates 08 with respect to a person who is not a partner as provided in (d) and (e) of this section. 09 (d) Except as otherwise provided in (g) of this section, a filed statement of 10 partnership authority supplements the authority of a partner to enter into transactions 11 on behalf of the partnership as follows: 12 (1) except for transfers of real property, a grant of authority contained 13 in a filed statement of partnership authority is conclusive in favor of a person who 14 gives value without knowledge to the contrary, so long as and to the extent that a 15 limitation on the grant of authority is not then contained in another filed statement; a 16 filed cancellation of a limitation on authority revives the previous grant of authority; 17 (2) a grant of authority to transfer real property held in the name of the 18 partnership and contained in a certified copy of a filed statement of partnership 19 authority recorded in the office for recording transfers of the real property is 20 conclusive in favor of a person who gives value without knowledge to the contrary, 21 so long as and to the extent that a certified copy of a filed statement containing a 22 limitation on the grant of authority is not then of record in the office for recording 23 transfers of that real property; the recording, in the office for recording transfers of that 24 real property, of a certified copy of a filed cancellation of a limitation on authority 25 revives the previous grant of authority. 26 (e) A person who is not a partner is considered to know of a limitation on the 27 authority of a partner to transfer real property held in the name of the partnership if 28 a certified copy of the filed statement containing the limitation on authority is of 29 record in the office for recording transfers of that real property. 30 (f) Except as otherwise provided in (d) and (e) of this section and in 31 AS 32.06.704 and 32.06.805, a person who is not a partner is not considered to know
01 of a limitation on the authority of a partner merely because the limitation is contained 02 in a filed statement. 03 (g) Unless earlier cancelled, a filed statement of partnership authority is 04 cancelled by operation of law five years after the date on which the statement or the 05 most recent amendment is filed with the department. 06 Sec. 32.06.304. Statement of denial. A partner or other person named as a 07 partner in a filed statement of partnership authority or in a list maintained by an agent 08 under AS 32.06.303(b) may file a statement of denial stating the name of the 09 partnership and the fact that is being denied, which may include denial of a person's 10 authority or status as a partner. A statement of denial is a limitation on authority 11 under AS 32.06.303(d) and (e). 12 Sec. 32.06.305. Partnership liable for partner's actionable conduct. (a) 13 A partnership is liable for loss or injury caused to a person, or for a penalty incurred, 14 as a result of a wrongful act or omission, or other actionable conduct, of a partner 15 acting in the ordinary course of business of the partnership or with authority of the 16 partnership. 17 (b) If, in the course of the partnership's business or while acting with authority 18 of the partnership, a partner receives or causes the partnership to receive money or 19 property of a person who is not a partner and the money or property is misapplied by 20 a partner, the partnership is liable for the loss. 21 Sec. 32.06.306. Partner's liability. (a) Except as otherwise provided in (b) 22 and (c) of this section, all partners are liable jointly and severally for all obligations 23 of the partnership unless otherwise agreed by the claimant or provided by law. 24 (b) A person admitted as a partner into an existing partnership is not 25 personally liable for a partnership obligation incurred before the person's admission 26 as a partner. 27 (c) An obligation of a partnership incurred while the partnership is a limited 28 liability partnership, whether arising in contract, in tort, or otherwise, is solely the 29 obligation of the partnership. A partner is not personally liable, directly or indirectly, 30 by way of contribution or otherwise, for the obligation solely by reason of being or 31 acting as a partner. This subsection applies even if inconsistent with a partnership
01 agreement provision that exists immediately before the vote required to become a 02 limited liability partnership under AS 32.06.911(b). 03 Sec. 32.06.307. Actions by and against partnership and partners. (a) A 04 partnership may sue and be sued in the name of the partnership. 05 (b) An action may be brought against a partnership and, to the extent not 06 inconsistent with AS 32.06.306, any or all of the partners in the same action or in 07 separate actions. 08 (c) A judgment against a partnership is not by itself a judgment against a 09 partner. A judgment against a partnership may not be satisfied from a partner's assets 10 unless there is also a judgment against the partner. 11 (d) A judgment creditor of a partner may not execute against the assets of the 12 partner to satisfy a judgment based on a claim against the partnership unless the 13 partner is personally liable for the claim under AS 32.06.306 and 14 (1) a judgment based on the same claim has been obtained against the 15 partnership and a writ of execution on the judgment has been returned unsatisfied in 16 whole or in part; 17 (2) the partnership is a debtor in bankruptcy; 18 (3) the partner has agreed that the creditor is not required to exhaust 19 partnership assets; 20 (4) a court grants permission to the judgment creditor to execute against 21 the assets of a partner based on a finding that partnership assets subject to execution 22 are clearly insufficient to satisfy the judgment, that exhaustion of partnership assets is 23 excessively burdensome, or that the grant of permission is an appropriate exercise of 24 the court's equitable powers; or 25 (5) liability is imposed on the partner by law or contract independent 26 of the existence of the partnership. 27 (e) This section applies to any partnership liability or obligation resulting from 28 a representation by a partner or purported partner under AS 32.06.308. 29 Sec. 32.06.308. Liability of purported partner. (a) If a person, by words 30 or conduct, purports to be a partner, or consents to being represented by another as a 31 partner, in a partnership or with one or more persons who are not partners, the
01 purported partner is liable to a person to whom the representation is made if that 02 person, relying on the representation, enters into a transaction with the actual or 03 purported partnership. If the representation, either by the purported partner or by a 04 person with the purported partner's consent, is made in a public manner, the purported 05 partner is liable to a person who relies upon the purported partnership even if the 06 purported partner is not aware of being held out as a partner to the claimant. If 07 partnership liability results, the purported partner is liable with respect to the liability 08 as if the purported partner were a partner. If partnership liability does not result, the 09 purported partner is liable with respect to the liability jointly and severally with any 10 other person consenting to the representation. 11 (b) If under (a) of this section a person is represented to be a partner in an 12 existing partnership, or with one or more persons who are not partners, the purported 13 partner is an agent of the persons consenting to the representation to bind those 14 persons to the same extent and in the same manner as if the purported partner were 15 a partner with respect to persons who enter into transactions in reliance upon the 16 representation. If all of the partners of the existing partnership consent to the 17 representation, a partnership act or obligation results. If fewer than all of the partners 18 of the existing partnership consent to the representation, the person acting and the 19 partners consenting to the representation are jointly and severally liable. 20 (c) A person is not liable as a partner merely because the person is named by 21 another in a statement of partnership authority. 22 (d) A person does not continue to be liable as a partner merely because of a 23 failure to file a statement of dissociation or to amend a statement of partnership 24 authority to indicate the partner's dissociation from the partnership. 25 (e) Except as otherwise provided in (a) and (b) of this section, persons who 26 are not partners as to each other are not liable as partners to other persons. 27 Article 3. Relations of Partners to Each Other 28 and to Partnership. 29 Sec. 32.06.401. Partner's rights and duties. (a) Each partner is considered 30 to have an account that is 31 (1) credited with an amount equal to
01 (A) the money and the value of any other property, net of the 02 amount of any liabilities, the partner contributes to the partnership; and 03 (B) the partner's share of the partnership profits; and 04 (2) charged with an amount equal to 05 (A) the money and the value of any other property, net of the 06 amount of any liabilities, distributed by the partnership to the partner; and 07 (B) the partner's share of the partnership losses. 08 (b) Each partner is entitled to an equal share of the partnership profits and is 09 chargeable with a share of the partnership losses in proportion to the partner's share 10 of the profits. 11 (c) A partnership shall reimburse a partner for payments made and indemnify 12 a partner for liabilities incurred by the partner in the ordinary course of the business 13 of the partnership or for the preservation of the partnership's business or property. 14 (d) A partnership shall reimburse a partner for an advance to the partnership 15 beyond the amount of capital the partner agreed to contribute. 16 (e) A payment or advance made by a partner that results in a partnership 17 obligation under (c) or (d) of this section constitutes a loan to the partnership that 18 accrues interest from the date of the payment or advance. 19 (f) Each partner has equal rights in the management and conduct of the 20 partnership business. 21 (g) A partner may use or possess partnership property only on behalf of the 22 partnership. 23 (h) A partner is not entitled to remuneration for services performed for the 24 partnership, except for reasonable compensation for services rendered in winding up 25 the business of the partnership. 26 (i) A person may become a partner only with the consent of all the partners. 27 (j) A difference arising as to a matter in the ordinary course of business of a 28 partnership may be decided by a majority of the partners. An act outside the ordinary 29 course of business of a partnership and an amendment to the partnership agreement 30 may be undertaken only with the consent of all the partners. 31 (k) This section does not affect the obligations of a partnership to other
01 persons under AS 32.06.301. 02 Sec. 32.06.402. Distributions in kind. A partner does not have a right to 03 receive, and may not be required to accept, a distribution in kind. 04 Sec. 32.06.403. Partner's rights and duties with respect to information. 05 (a) A partnership shall keep its records, if any, at its chief executive office. 06 (b) A partnership shall provide partners and their agents and attorneys access 07 to its records. It shall provide former partners and their agents and attorneys access 08 to records pertaining to the period during which they were partners. The right of 09 access provides the opportunity to inspect and copy records during ordinary business 10 hours. A partnership may impose a reasonable charge covering the costs of labor and 11 material for copies of documents furnished. 12 (c) Each partner and the partnership shall furnish to a partner, and to the legal 13 representative of a deceased partner or partner under legal disability 14 (1) without demand, any information concerning the partnership's 15 business and affairs reasonably required for the proper exercise of the partner's rights 16 and duties under the partnership agreement or this chapter; and 17 (2) on demand, any other information concerning the partnership's 18 business and affairs, except to the extent the demand or the information demanded is 19 unreasonable or otherwise improper under the circumstances. 20 Sec. 32.06.404. General standards of partner's conduct. (a) The only 21 fiduciary duties a partner owes to the partnership and the other partners are the duty 22 of loyalty and the duty of care stated in (b) and (c) of this section. 23 (b) A partner's duty of loyalty to the partnership and the other partners is 24 limited to the following: 25 (1) to account to the partnership and hold as trustee for it any property, 26 profit, or benefit derived by the partner in the conduct and winding up of the 27 partnership business or derived from a use by the partner of partnership property, 28 including the appropriation of a partnership opportunity; 29 (2) to refrain from dealing with the partnership in the conduct or 30 winding up of the partnership business as or on behalf of a party having an interest 31 adverse to the partnership; and
01 (3) to refrain from competing with the partnership in the conduct of the 02 partnership business before the dissolution of the partnership. 03 (c) A partner's duty of care to the partnership and the other partners in the 04 conduct and winding up of the partnership business is limited to refraining from 05 engaging in grossly negligent or reckless conduct, intentional misconduct, or a 06 knowing violation of law. 07 (d) A partner shall discharge the duties to the partnership and the other 08 partners under this chapter and the duties under the partnership agreement and exercise 09 any rights in accordance with the obligation of good faith and fair dealing. 10 (e) Each partner does not violate a duty or obligation under this chapter or 11 under the partnership agreement merely because the partner's conduct furthers the 12 partner's own interest. 13 (f) A partner may lend money to and transact other business with the 14 partnership, and the rights and obligations of the partner are the same with regard to 15 the loan or transaction as the rights and obligations of a person who is not a partner, 16 subject to other applicable law. 17 (g) This section applies to a person winding up the partnership business as the 18 personal or legal representative of the last surviving partner as if the person were a 19 partner. 20 Sec. 32.06.405. Actions by partnership and partners. (a) A partnership 21 may maintain an action against a partner for a breach of the partnership agreement, or 22 for the violation of a duty to the partnership, causing harm to the partnership. 23 (b) A partner may maintain an action against the partnership or another partner 24 for legal or equitable relief, with or without an accounting of partnership business, to 25 enforce 26 (1) the partner's rights under the partnership agreement; 27 (2) the partner's rights under this chapter, including the partner's 28 (A) rights under AS 32.06.401, 32.06.403, or 32.06.404; 29 (B) right on dissociation to have the partner's interest in the 30 partnership purchased under AS 32.06.701 or to enforce any other right under 31 AS 32.06.601 - 32.06.603 or 32.06.701 - 32.06.705; or
01 (C) right to compel a dissolution and winding up of the 02 partnership business under AS 32.06.801 or to enforce another right under 03 AS 32.06.801 - 32.06.807; or 04 (3) the rights and otherwise protect the interests of the partner, 05 including rights and interests arising independently of the partnership relationship. 06 (c) The accrual of, and any time limitation on, a right of action for a remedy 07 under this section are governed by other law. A right to an accounting upon a 08 dissolution and winding up does not revive a claim barred by law. 09 Sec. 32.06.406. Continuation of partnership beyond definite term or 10 particular undertaking. (a) If a partnership for a definite term or particular 11 undertaking is continued, without an express agreement, after the expiration of the term 12 or completion of the undertaking, the rights and duties of the partners remain the same 13 as they were at the expiration or completion to the extent consistent with a partnership 14 at will. 15 (b) If the partners, or the partners who habitually acted in the business during 16 the term or undertaking, continue the business without a settlement or liquidation of 17 the partnership, the partners continuing the business are presumed to have agreed that 18 the partnership will continue. 19 Article 4. Transferees and Creditors of Partners. 20 Sec. 32.06.501. Partner not co-owner of partnership property. A partner 21 is not a co-owner of partnership property and does not have an interest in partnership 22 property that can be transferred, either voluntarily or involuntarily. 23 Sec. 32.06.502. Partner's transferable interest in partnership. The only 24 transferable interest of a partner in the partnership is the partner's share of the profits 25 and losses of the partnership and the partner's right to receive distributions. The 26 interest is personal property. 27 Sec. 32.06. 503. Transfer of partner's transferable interest. (a) A transfer, 28 in whole or in part, of a partner's transferable interest in the partnership 29 (1) is permissible; 30 (2) does not by itself cause the partner's dissociation or a dissolution 31 and winding up of the partnership business; and
01 (3) does not, as against the other partners or the partnership, entitle the 02 transferee during the continuance of the partnership to participate in the management 03 or conduct of the partnership business, to require access to information concerning 04 partnership transactions, or to inspect or copy the partnership records. 05 (b) A transferee of a partner's transferable interest in the partnership has a 06 right to 07 (1) receive, in accordance with the transfer, distributions to which the 08 transferor would otherwise be entitled; 09 (2) receive upon the dissolution and winding up of the partnership 10 business, in accordance with the transfer, the net amount otherwise distributable to the 11 transferor; and 12 (3) seek under AS 32.06.801(6) a judicial determination that it is 13 equitable to wind up the partnership business. 14 (c) In a dissolution and winding up, a transferee is entitled to an account of 15 partnership transactions only from the date of the latest account agreed to by all of the 16 partners. 17 (d) Upon transfer, the transferor retains the rights and duties of a partner other 18 than the interest in distributions transferred. 19 (e) A partnership is not required to give effect to a transferee's rights under 20 this section until it has notice of the transfer. 21 (f) A transfer of a partner's transferable interest in the partnership in violation 22 of a restriction on transfer contained in the partnership agreement is ineffective as to 23 a person having notice of the restriction at the time of transfer. 24 Sec. 32.06.504. Partner's transferable interest subject to charging order. 25 (a) On application by a judgment creditor of a partner or of a partner's transferee, a 26 court having jurisdiction may charge the transferable interest of the judgment debtor 27 to satisfy the judgment. The court may appoint a receiver of the share of the 28 distributions due or to become due to the judgment debtor in respect of the partnership 29 and make all other orders, directions, accounts, and inquiries the judgment debtor 30 might have made or that the circumstances of the case may require. 31 (b) A charging order constitutes a lien on the judgment debtor's transferable
01 interest in the partnership. The court may order a foreclosure of the interest subject 02 to the charging order at any time. The purchaser at the foreclosure sale has the rights 03 of a transferee. 04 (c) At any time before foreclosure, an interest charged may be redeemed 05 (1) by the judgment debtor; 06 (2) with property other than partnership property by one or more of the 07 other partners; or 08 (3) with partnership property by one or more of the other partners with 09 the consent of all of the partners whose interests are not charged. 10 (d) This chapter does not deprive a partner of a right under exemption laws 11 with respect to the partner's interest in the partnership. 12 (e) This section provides the exclusive remedy by which a judgment creditor 13 of a partner or partner's transferee may satisfy a judgment out of the judgment debtor's 14 transferable interest in the partnership. 15 Article 5. Partner's Dissociation. 16 Sec. 32.06.601. Events causing partner's dissociation. A partner is 17 dissociated from a partnership upon the occurrence of any of the following events: 18 (1) when the partnership has notice of the partner's express will to 19 withdraw as a partner unless a later date is specified by the partner; 20 (2) an event agreed to in the partnership agreement as causing the 21 partner's dissociation; 22 (3) the partner's expulsion under the partnership agreement; 23 (4) the partner's expulsion by the unanimous vote of the other partners 24 if 25 (A) it is unlawful to carry on the partnership business with that 26 partner; 27 (B) there has been a transfer of all or substantially all of that 28 partner's transferable interest in the partnership, other than a transfer for 29 security purposes, or a court order charging the partner's interest that has not 30 been foreclosed; 31 (C) within 90 days after the partnership notifies a corporate
01 partner that it will be expelled because the corporate partner has filed a 02 certificate of dissolution or the equivalent, the corporate partner's charter has 03 been revoked, or the corporate partner's right to conduct business has been 04 suspended by the jurisdiction of its incorporation, the certificate of dissolution 05 is not revoked or the charter or right to conduct business is not reinstated; or 06 (D) the partner is a partnership that has been dissolved and its 07 business is being wound up; 08 (5) on application by the partnership or another partner, the partner's 09 expulsion by judicial determination because the partner 10 (A) engaged in wrongful conduct that adversely and materially 11 affected the partnership business; 12 (B) wilfully or persistently committed a material breach of the 13 partnership agreement or of a duty owed to the partnership or the other partners 14 under AS 32.06.404; or 15 (C) engaged in conduct relating to the partnership business that 16 makes it not reasonably practicable to carry on the business in partnership with 17 the partner; 18 (6) the partner 19 (A) becomes a debtor in bankruptcy; 20 (B) executes an assignment for the benefit of creditors; 21 (C) seeks, consents to, or acquiesces in the appointment of a 22 trustee, receiver, or liquidator of that partner or of all or substantially all of that 23 partner's property; or 24 (D) fails, within 90 days after the appointment, to have vacated 25 or stayed the appointment of a trustee, receiver, or liquidator of the partner or 26 of all or substantially all of the partner's property, obtained without the 27 partner's consent or acquiescence, or fails within 90 days after the expiration 28 of a stay to have the appointment vacated; 29 (7) in the case of a partner who is an individual, 30 (A) the partner's death; 31 (B) the appointment of a guardian or general conservator for the
01 partner; or 02 (C) a judicial determination that the partner has otherwise 03 become incapable of performing the partner's duties under the partnership 04 agreement; 05 (8) in the case of a partner that is a trust or is acting as a partner by 06 virtue of being a trustee of a trust, distribution of the trust's entire transferable interest 07 in the partnership, but the substitution of a successor trustee does not by itself qualify 08 as a distribution under this paragraph; 09 (9) in the case of a partner that is an estate or is acting as a partner by 10 virtue of being a personal representative of an estate, distribution of the estate's entire 11 transferable interest in the partnership, but the substitution of a successor personal 12 representative does not by itself qualify as a distribution under this paragraph; or 13 (10) termination of a partner who is not an individual, a partnership, 14 a corporation, a trust, or an estate. 15 Sec. 32.06.602. Partner's power to dissociate; wrongful dissociation. (a) 16 A partner has the power to dissociate at any time, rightfully or wrongfully, by express 17 will under AS 32.06.601(1). 18 (b) A partner's dissociation is wrongful only if 19 (1) the dissociation breaches an express provision of the partnership 20 agreement; or 21 (2) in the case of a partnership for a definite term or particular 22 undertaking, before the expiration of the term or the completion of the undertaking, 23 (A) the partner withdraws by express will, unless the withdrawal 24 follows within 90 days after another partner's dissociation by death or 25 otherwise under AS 32.06.601(6) - (10) or wrongful dissociation under this 26 subsection; 27 (B) the partner is expelled by judicial determination under 28 AS 32.06.601(5); 29 (C) the partner is dissociated by becoming a debtor in 30 bankruptcy; or 31 (D) in the case of a partner who is not an individual, a trust
01 other than a business trust, or an estate, the partner is expelled or otherwise 02 dissociated because it wilfully dissolved or terminated. 03 (c) A partner who wrongfully dissociates is liable to the partnership and to the 04 other partners for damages caused by the dissociation. The liability is in addition to 05 any other obligation of the partner to the partnership or to the other partners. 06 Sec. 32.06.603. Effect of partner's dissociation. (a) If a partner's 07 dissociation results in a dissolution and winding up of the partnership business, 08 AS 32.06.801 - 32.06.807 apply, otherwise AS 32.06.701 - 32.06.705 apply. 09 (b) Upon a partner's dissociation, the partner's 10 (1) right to participate in the management and conduct of the 11 partnership business terminates, except as otherwise provided in AS 32.06.803; 12 (2) duty of loyalty under AS 32.06.404(b)(3) terminates; and 13 (3) duty of loyalty under AS 32.06.404(b)(1) and (2) and duty of care 14 under AS 32.06.404(c) continue only with regard to matters arising and events 15 occurring before the partner's dissociation unless the partner participates in winding 16 up the partnership's business under AS 32.06.803. 17 Article 6. Partner's Dissociation when Business not Wound Up. 18 Sec. 32.06.701. Purchase of dissociated partner's interest. (a) If a partner 19 is dissociated from a partnership without resulting in a dissolution and winding up of 20 the partnership business under AS 32.06.801, the partnership shall cause the dissociated 21 partner's interest in the partnership to be purchased for a buy-out price determined 22 under (b) of this section. 23 (b) The buy-out price of a dissociated partner's interest is the amount that 24 would have been distributable to the dissociating partner under AS 32.06.807(b) if, on 25 the date of dissociation, the assets of the partnership were sold at a price equal to the 26 greater of the liquidation value or the value based on a sale of the entire business as 27 a going concern without the dissociated partner and if the partnership were wound up 28 as of that date. Interest must be paid from the date of dissociation to the date of 29 payment. 30 (c) Damages for wrongful dissociation under AS 32.06.602(b), and all other 31 amounts owing, whether or not presently due, from the dissociated partner to the
01 partnership must be offset against the buy-out price. Interest must be paid from the 02 date the amount owed becomes due to the date of payment. 03 (d) A partnership shall indemnify against all partnership liabilities a dissociated 04 partner whose interest is being purchased, whether the liabilities are incurred before 05 or after the dissociation, except liabilities incurred by an act of the dissociated partner 06 under AS 32.06.702. 07 (e) If an agreement for the purchase of a dissociated partner's interest is not 08 reached within 120 days after a written demand for payment, the partnership shall pay, 09 or cause to be paid, in cash to the dissociated partner the amount the partnership 10 estimates to be the buy-out price and accrued interest, reduced by any offsets and 11 accrued interest under (c) of this section. 12 (f) If a deferred payment is authorized under (h) of this section, the partnership 13 may tender a written offer to pay the amount it estimates to be the buy-out price and 14 accrued interest, reduced by any offsets under (c) of this section, stating the time of 15 payment, the amount and type of security for payment, and the other terms and 16 conditions of the obligation. 17 (g) The payment or tender required by (e) or (f) of this section must be 18 accompanied by 19 (1) a statement of partnership assets and liabilities as of the date of 20 dissociation; 21 (2) the latest available partnership balance sheet and income statement, 22 if any; 23 (3) an explanation of how the estimated amount of the payment was 24 calculated; and 25 (4) written notice that the payment is in full satisfaction of the 26 obligation to purchase unless, within 120 days after the written notice, the dissociated 27 partner commences an action to determine the buy-out price, any offsets under (c) of 28 this section, or other terms of the obligation to purchase. 29 (h) A partner who wrongfully dissociates before the expiration of a definite 30 term or the completion of a particular undertaking is not entitled to payment of any 31 portion of the buy-out price until the expiration of the term or completion of the
01 undertaking unless the partner establishes to the satisfaction of a court that earlier 02 payment will not cause undue hardship to the business of the partnership. A deferred 03 payment must be adequately secured and bear interest. 04 (i) A dissociated partner may maintain an action against the partnership under 05 AS 32.06.405(b)(2)(B) to determine the buy-out price of that partner's interest, any 06 offsets under (c) of this section, or other terms of the obligation to purchase. The 07 action must be commenced within 120 days after the partnership has tendered payment 08 or an offer to pay or within one year after written demand for payment if a payment 09 or offer to pay is not tendered. The court shall determine the buy-out price of the 10 dissociated partner's interest, any offset due under (c) of this section, and accrued 11 interest and enter judgment for any additional payment or refund. If deferred payment 12 is authorized under (h) of this section, the court shall also determine the security for 13 payment and other terms of the obligation to purchase. The court may assess 14 reasonable attorney fees and the fees and expenses of appraisers or other experts for 15 a party to the action, in amounts the court finds equitable, against a party that the court 16 finds acted arbitrarily, vexatiously, or not in good faith. The finding may be based on 17 the partnership's failure to tender payment or an offer to pay or to comply with (g) of 18 this section. 19 Sec. 32.06.702. Dissociated partner's power to bind and liability to 20 partnership. (a) For two years after a partner dissociates without the dissociation 21 resulting in a dissolution and winding up of the partnership business, the partnership, 22 including a surviving partnership under AS 32.06.902 - 32.06.908, is bound by an act 23 of the dissociated partner that would have bound the partnership under AS 32.06.301 24 before dissociation only if at the time of entering into the transaction the other party 25 (1) reasonably believed that the dissociated partner was then a partner; 26 (2) did not have notice of the partner's dissociation; and 27 (3) is not considered to have had knowledge under AS 32.06.303(e) or 28 notice under AS 32.06.704(c). 29 (b) A dissociated partner is liable to the partnership for damage that is caused 30 to the partnership by an obligation incurred by the dissociated partner after dissociation 31 and for which the partnership is liable under (a) of this section.
01 Sec. 32.06.703. Dissociated partner's liability to other persons. (a) A 02 partner's dissociation does not of itself discharge the partner's liability for a 03 partnership obligation incurred before dissociation. A dissociated partner is not liable 04 for a partnership obligation incurred after dissociation, except as otherwise provided 05 in (b) of this section. 06 (b) A partner who dissociates without the dissociation resulting in a dissolution 07 and winding up of the partnership business is liable as a partner to the other party in 08 a transaction entered into by the partnership, or a surviving partnership under 09 AS 32.06.902 - 32.06.908, within two years after the partner's dissociation only if the 10 partner is liable for the obligation under AS 32.06.306 and at the time of entering into 11 the transaction the other party 12 (1) reasonably believed that the dissociated partner was then a partner; 13 (2) did not have notice of the partner's dissociation; and 14 (3) is not considered to have had knowledge under AS 32.06.303(e) or 15 notice under AS 32.06.704(c). 16 (c) By agreement with the partnership creditor and the partners continuing the 17 business, a dissociated partner may be released from liability for a partnership 18 obligation. 19 (d) A dissociated partner is released from liability for a partnership obligation 20 if a partnership creditor, with notice of the partner's dissociation but without the 21 partner's consent, agrees to a material alteration in the nature or time of payment of 22 a partnership obligation. 23 Sec. 32.06.704. Statement of dissociation. (a) A dissociated partner or the 24 partnership may file a statement of dissociation stating the name of the partnership and 25 that the partner is dissociated from the partnership. 26 (b) A statement of dissociation is a limitation on the authority of a dissociated 27 partner for the purposes of AS 32.06.303(d) and (e). 28 (c) In AS 32.06.702(a)(3) and 32.06.703(b)(3), a person who is not a partner 29 is considered to have notice of the dissociation 90 days after the statement of 30 dissociation is filed. 31 Sec. 32.06.705. Continued use of partnership name. Continued use of a
01 partnership name, or of a dissociated partner's name as part of a partnership name, by 02 partners continuing the business does not by itself make the dissociated partner liable 03 for an obligation of the partners or the partnership continuing the business. 04 Article 7. Winding up Partnership Business. 05 Sec. 32.06.801. Events causing dissolution and winding up of partnership 06 business. A partnership is dissolved, and its business must be wound up, only on the 07 occurrence of any of the following events: 08 (1) in a partnership at will, when the partnership has notice from a 09 partner, other than a partner who is dissociated under AS 32.06.601(2) - (10), of that 10 partner's express will to withdraw as a partner, or on a later date specified by the 11 partner; 12 (2) in a partnership for a definite term or particular undertaking, 13 (A) within 90 days after a partner's dissociation by death or by 14 other event under AS 32.06.601(6) - (10) or by wrongful dissociation under 15 AS 32.06.602(b), at least one-half of the remaining partners state their express 16 will to wind up the partnership business; in this subparagraph, a partner's 17 rightful dissociation under AS 32.06.602(b)(2)(A) constitutes the expression of 18 that partner's will to wind up the partnership business; 19 (B) the express will of all of the partners to wind up the 20 partnership business; or 21 (C) the expiration of the term or the completion of the 22 undertaking; 23 (3) an event agreed to in the partnership agreement resulting in the 24 winding up of the partnership business; 25 (4) an event that makes it unlawful for all or substantially all of the 26 business of the partnership to be continued, but a cure of illegality within 90 days after 27 notice to the partnership of the event is effective retroactively to the date of the event 28 for purposes of this section; 29 (5) on application by a partner, a judicial determination that 30 (A) the economic purpose of the partnership is likely to be 31 unreasonably frustrated;
01 (B) another partner has engaged in conduct relating to the 02 partnership business that makes it not reasonably practicable to carry on the 03 business in partnership with that partner; or 04 (C) it is not otherwise reasonably practicable to carry on the 05 partnership business in conformity with the partnership agreement; or 06 (6) on application by a transferee of a partner's transferable interest, 07 a judicial determination that it is equitable to wind up the partnership business 08 (A) after the expiration of the term or completion of the 09 undertaking if the partnership was for a definite term or particular undertaking 10 at the time of the transfer or entry of the charging order that gave rise to the 11 transfer; or 12 (B) at any time if the partnership was a partnership at will at 13 the time of the transfer or entry of the charging order that gave rise to the 14 transfer. 15 Sec. 32.06.802. Partnership continuation after dissolution. (a) Subject to 16 (b) of this section, a partnership continues after dissolution only for the purpose of 17 winding up its business. The partnership is terminated when the winding up of its 18 business is completed. 19 (b) At any time after the dissolution of a partnership and before the winding 20 up of its business is completed, all of the partners, including any dissociating partner 21 other than a wrongfully dissociating partner, may waive the right to have the 22 partnership's business wound up and the partnership terminated. In that event, 23 (1) the partnership resumes carrying on its business as if dissolution 24 had never occurred, and any liability incurred by the partnership or a partner after the 25 dissolution and before the waiver is determined as if dissolution had never occurred; 26 and 27 (2) the rights of a third party accruing under AS 32.06.804(1) or arising 28 out of conduct in reliance on the dissolution before the third party knew or received 29 a notification of the waiver may not be adversely affected. 30 Sec. 32.06.803. Right to wind up partnership business. (a) After 31 dissolution, a partner who has not wrongfully dissociated may participate in winding
01 up the partnership's business, but, on application of a partner, partner's legal 02 representative, or transferee, the superior court, for good cause shown, may order 03 judicial supervision of the winding up. 04 (b) The legal representative of the last surviving partner may wind up a 05 partnership's business. 06 (c) A person winding up a partnership's business may preserve the partnership 07 business or property as a going concern for a reasonable time, prosecute and defend 08 actions and proceedings, whether civil, criminal, or administrative, settle and close the 09 partnership's business, dispose of and transfer the partnership's property, discharge the 10 partnership's liabilities, distribute the assets of the partnership under AS 32.06.807, 11 settle disputes by mediation or arbitration, and perform other necessary acts. 12 Sec. 32.06.804. Partner's power to bind partnership after dissolution. 13 Subject to AS 32.06.805, a partnership is bound by a partner's act after dissolution that 14 (1) is appropriate for winding up the partnership business; or 15 (2) would have bound the partnership under AS 32.06.301 before 16 dissolution if the other party to the transaction did not have notice of the dissolution. 17 Sec. 32.06.805. Statement of dissolution. (a) After dissolution, a partner 18 who has not wrongfully dissociated may file a statement of dissolution stating the 19 name of the partnership and that the partnership has dissolved and is winding up its 20 business. 21 (b) A statement of dissolution cancels a filed statement of partnership authority 22 for the purposes of AS 32.06.303(d) and is a limitation on authority under 23 AS 32.06.303(e). 24 (c) Under AS 32.06.301 and 32.06.804, a person who is not a partner is 25 considered to have notice of the dissolution and the limitation on the partners' 26 authority as a result of the statement of dissolution 90 days after it is filed. 27 (d) After filing and, if appropriate, recording a statement of dissolution, a 28 dissolved partnership may file and, if appropriate, record a statement of partnership 29 authority that will operate with respect to a person who is not a partner under 30 AS 32.06.303(d) and (e) in any transaction, whether or not the transaction is 31 appropriate for winding up the partnership business.
01 Sec. 32.06.806. Partner's liability to other partners after dissolution. (a) 02 Except as otherwise provided in (b) of this section, after dissolution, a partner is liable 03 to the other partners for the partner's share of any partnership liability incurred under 04 AS 32.06.804. 05 (b) A partner who, with knowledge of the dissolution, incurs a partnership 06 liability under AS 32.06.804(2) by an act that is not appropriate for winding up the 07 partnership business is liable to the partnership for any damage caused to the 08 partnership arising from the liability. 09 Sec. 32.06.807. Settlement of accounts and contributions among partners. 10 (a) In winding up a partnership's business, the assets of the partnership, including the 11 contributions of the partners required by this section, must be applied to discharge its 12 obligations to creditors, including, to the extent permitted by law, partners who are 13 creditors. Any surplus must be applied to pay in cash the net amount distributable to 14 partners in accordance with their right to distributions under (b) of this section. 15 (b) Each partner is entitled to a settlement of all partnership accounts upon 16 winding up the partnership business. In settling accounts among the partners, the 17 profits and losses that result from the liquidation of the partnership assets must be 18 credited and charged to the partners' accounts. The partnership shall make a 19 distribution to a partner in an amount equal to any excess of the credits over the 20 charges in the partner's account. A partner shall contribute to the partnership an 21 amount equal to any excess of the charges over the credits in the partner's account, but 22 excluding from the calculation charges attributable to an obligation for which the 23 partner is not personally liable under AS 32.06.306. 24 (c) If a partner fails to contribute, all of the other partners shall contribute the 25 full amount required under (b) of this section, in the proportions in which those 26 partners share partnership losses, the additional amount necessary to satisfy the 27 partnership obligations for which the partners are personally liable under AS 32.06.306. 28 A partner or partner's legal representative may recover from the other partners any 29 contributions the partner makes to the extent the amount contributed exceeds that 30 partner's share of the partnership obligations for which the partner is personally liable 31 under AS 32.06.306.
01 (d) After the settlement of accounts, each partner shall contribute, in the 02 proportion in which the partner shares partnership losses, the amount necessary to 03 satisfy partnership obligations that were not known at the time of the settlement and 04 for which the partner is personally liable under AS 32.06.306. 05 (e) The estate of a deceased partner is liable for the partner's obligation to 06 contribute to the partnership. 07 (f) An assignee for the benefit of creditors of a partnership or a partner, or a 08 person appointed by a court to represent creditors of a partnership or a partner, may 09 enforce a partner's obligation to contribute to the partnership. 10 Article 8. Conversions and Mergers. 11 Sec. 32.06.902. Conversion of partnership to limited partnership. (a) A 12 partnership may be converted to a limited partnership under this section. 13 (b) The terms and conditions of a conversion of a partnership to a limited 14 partnership must be approved by all of the partners or by a number or percentage 15 specified for conversion in the partnership agreement. 16 (c) After the conversion is approved by the partners, the partnership shall file 17 a certificate of limited partnership with the department. The certificate must include 18 (1) a statement that the partnership was converted to a limited 19 partnership from a partnership; 20 (2) the partnership's former name; and 21 (3) a statement of the number of votes cast by the partners for and 22 against the conversion and, if the vote is less than unanimous, the number or 23 percentage required to approve the conversion under the partnership agreement. 24 (d) The conversion takes effect when the certificate of limited partnership is 25 filed or at a later date specified in the certificate. 26 (e) A general partner who becomes a limited partner as a result of the 27 conversion remains liable as a general partner for an obligation incurred by the 28 partnership before the conversion takes effect. If the other party to a transaction with 29 the limited partnership reasonably believes when entering the transaction that the 30 limited partner is a general partner, the limited partner is liable for an obligation 31 incurred by the limited partnership within 90 days after the conversion takes effect.
01 The limited partner's liability for all other obligations of the limited partnership 02 incurred after the conversion takes effect is that of a limited partner under AS 32.11. 03 Sec. 32.06.903. Conversion of limited partnership to partnership. (a) A 04 limited partnership may be converted to a partnership under this section. 05 (b) Notwithstanding a provision to the contrary in a limited partnership 06 agreement, the terms and conditions of a conversion of a limited partnership to a 07 partnership must be approved by all of the partners. 08 (c) After the conversion is approved by the partners, the limited partnership 09 shall cancel its certificate of limited partnership. 10 (d) The conversion takes effect when the certificate of limited partnership is 11 canceled. 12 (e) A limited partner who becomes a general partner as a result of the 13 conversion remains liable only as a limited partner for an obligation incurred by the 14 limited partnership before the conversion takes effect. The partner is liable as a 15 general partner for an obligation of the partnership incurred after the conversion takes 16 effect. 17 Sec. 32.06.904. Effect of conversion; entity unchanged. (a) A partnership 18 or limited partnership that has been converted under AS 32.06.902 - 32.06.908 is for 19 all purposes the same entity that existed before the conversion. 20 (b) When a conversion takes effect, 21 (1) all property owned by the converting partnership or limited 22 partnership remains vested in the converted entity; 23 (2) all obligations of the converting partnership or limited partnership 24 continue as obligations of the converted entity; and 25 (3) an action or proceeding pending against the converting partnership 26 or limited partnership may be continued as if the conversion had not occurred. 27 Sec. 32.06.905. Merger of partnerships. (a) Under a plan of merger 28 approved under (c) of this section, a partnership may be merged with one or more 29 partnerships or limited partnerships. 30 (b) The plan of merger must state 31 (1) the name of each partnership or limited partnership that is a party
01 to the merger; 02 (2) the name of the surviving entity into which the other partnerships 03 or limited partnerships will merge; 04 (3) whether the surviving entity is a partnership or a limited partnership 05 and the status of each partner; 06 (4) the terms and conditions of the merger; 07 (5) the manner and basis of converting all or part of the interests of 08 each party to the merger into interests or obligations of the surviving entity or into 09 money or other property; and 10 (6) the street address of the surviving entity's chief executive office. 11 (c) The plan of merger must be approved 12 (1) in the case of a partnership that is a party to the merger, by all of 13 the partners or a number or percentage specified for merger in the partnership 14 agreement; and 15 (2) in the case of a limited partnership that is a party to the merger, by 16 the vote required for approval of a merger by the law of the state or foreign 17 jurisdiction where the limited partnership is organized and, in the absence of such a 18 specifically applicable law, by all of the partners, notwithstanding a provision to the 19 contrary in the partnership agreement. 20 (d) After a plan of merger is approved and before the merger takes effect, the 21 plan may be amended or abandoned as provided in the plan. 22 (e) The merger takes effect on the later of 23 (1) the approval of the plan of merger by all parties to the merger 24 under (c) of this section; 25 (2) the filing of all documents required by law to be filed as a 26 condition to the effectiveness of the merger; or 27 (3) an effective date specified in the plan of merger. 28 Sec. 32.06.906. Effect of merger. (a) When a merger takes effect, 29 (1) the separate existence of every partnership or limited partnership 30 that is a party to the merger, other than the surviving entity, ceases; 31 (2) all property owned by each of the merged partnerships or limited
01 partnerships vests in the surviving entity; 02 (3) all obligations of every partnership or limited partnership that is a 03 party to the merger become the obligations of the surviving entity; and 04 (4) an action or proceeding pending against a partnership or limited 05 partnership that is a party to the merger may be continued as if the merger had not 06 occurred, or the surviving entity may be substituted as a party to the action or 07 proceeding. 08 (b) The commissioner is the agent for service of process in an action or 09 proceeding against a surviving foreign partnership or limited partnership to enforce an 10 obligation of a domestic partnership or limited partnership that is a party to a merger. 11 The surviving entity shall promptly notify the department of the mailing address of its 12 chief executive office and of any change of address. Upon receipt of process, the 13 department shall mail a copy of the process to the surviving foreign partnership or 14 limited partnership. 15 (c) A partner of the surviving partnership or limited partnership is liable for 16 (1) all obligations of a party to the merger for which the partner was 17 personally liable before the merger; 18 (2) all obligations of the surviving entity incurred before the merger by 19 a party to the merger and not covered by (1) of this subsection, but the obligations 20 under this paragraph may be satisfied only out of property of the entity; and 21 (3) except as otherwise provided in AS 32.06.306, all obligations of the 22 surviving entity incurred after the merger takes effect, but the obligations under this 23 paragraph may be satisfied only out of property of the entity if the partner is a limited 24 partner. 25 (d) If the obligations incurred before the merger by a party to the merger are 26 not satisfied out of the property of the surviving partnership or limited partnership, the 27 general partners of the party to the merger immediately before the effective date of the 28 merger shall contribute the amount necessary to satisfy the party's obligations to the 29 surviving entity, in the manner provided in AS 32.06.807, in AS 32.11, or in the 30 limited partnership law of the jurisdiction where the party was formed, as the case may 31 be, as if the merged party were dissolved.
01 (e) As of the date the merger takes effect, a partner of a party to a merger who 02 does not become a partner of the surviving partnership or limited partnership is 03 dissociated from the entity of which that partner was a partner. The surviving entity 04 shall cause the partner's interest in the entity to be purchased under AS 32.06.701 or 05 another statute specifically applicable to that partner's interest with respect to a merger. 06 The surviving entity is bound under AS 32.06.702 by an act of a general partner 07 dissociated under this subsection, and the partner is liable under AS 32.06.703 for 08 transactions entered into by the surviving entity after the merger takes effect. 09 Sec. 32.06.907. Statement of merger. (a) After a merger, the surviving 10 partnership or limited partnership may file a statement that one or more partnerships 11 or limited partnerships have merged into the surviving entity. 12 (b) A statement of merger must contain 13 (1) the name of each partnership or limited partnership that is a party 14 to the merger; 15 (2) the name of the surviving entity into which the other partnerships 16 or limited partnership are merged; 17 (3) the street address of the surviving entity's chief executive office and 18 of any office in this state; and 19 (4) whether the surviving entity is a partnership or a limited 20 partnership. 21 (c) Except as otherwise provided in (d) of this section, in AS 32.06.302 22 property of the surviving partnership or limited partnership that before the merger was 23 held in the name of another party to the merger is property held in the name of the 24 surviving entity upon filing a statement of merger. 25 (d) In AS 32.06.302, real property of the surviving partnership or limited 26 partnership that before the merger was held in the name of another party to the merger 27 is property held in the name of the surviving entity upon recording a certified copy of 28 the statement of merger in the office for recording transfers of the real property. 29 (e) A filed and, if appropriate, recorded statement of merger, executed and 30 declared to be accurate under AS 32.06.970(c), stating the name of a partnership or 31 limited partnership that is a party to the merger in whose name property was held
01 before the merger and the name of the surviving entity, but not containing all of the 02 other information required by (b) of this section, operates with respect to the 03 partnerships or limited partnerships named to the extent provided in (c) and (d) of this 04 section. 05 Sec. 32.06.908. Nonexclusivity. AS 32.06.902 - 32.06.908 are not exclusive. 06 Partnerships or limited partnerships may be converted or merged in any other manner 07 provided by law. 08 Sec. 32.05.909. Definitions for AS 32.06.902 - 32.06.908. In AS 32.06.902 - 09 32.06.908, 10 (1) "general partner" means a partner in a partnership and a general 11 partner in a limited partnership; 12 (2) "limited partner" means a limited partner in a limited partnership; 13 (3) "limited partnership" means a limited partnership created under 14 AS 32.11, predecessor law, or a comparable law of another jurisdiction; 15 (4) "partner" includes both a general partner and a limited partner. 16 Article 9. Limited Liability Partnerships. 17 Sec. 32.06.911. Statement of qualification. (a) A partnership may become 18 a limited liability partnership under this section. 19 (b) The terms and conditions on which a partnership becomes a limited 20 liability partnership must be approved by the vote necessary to amend the partnership 21 agreement except, in the case of a partnership agreement that expressly considers 22 obligations to contribute to the partnership, by the vote necessary to amend those 23 contribution provisions. 24 (c) After the approval required by (b) of this section, a partnership may 25 become a limited liability partnership by filing a statement of qualification. The 26 statement must contain 27 (1) the name of the partnership; 28 (2) the street address of the partnership's chief executive office and, if 29 different, the street address of an office in this state, if any; 30 (3) if the partnership does not have an office in this state, the name and 31 street address of the partnership's agent for service of process;
01 (4) a statement that the partnership elects to be a limited liability 02 partnership; and 03 (5) a deferred effective date, if any. 04 (d) The agent of a limited liability partnership for service of process must be 05 an individual who is a resident of this state or a person authorized to do business in 06 this state. 07 (e) The status of a partnership as a limited liability partnership is effective on 08 the later of the filing of the statement or a date specified in the statement. The status 09 remains effective, regardless of changes in the partnership, until it is cancelled under 10 AS 32.06.970(d) or revoked under AS 32.06.913. 11 (f) The status of a partnership as a limited liability partnership and the liability 12 of its partners are not affected by errors or later changes in the information required 13 to be contained in the statement of qualification under (c) of this section. 14 (g) The filing of a statement of qualification establishes that a partnership has 15 satisfied all conditions precedent to the qualification of the partnership as a limited 16 liability partnership. 17 (h) An amendment or cancellation of a statement of qualification is effective 18 when it is filed or on a deferred effective date specified in the amendment or 19 cancellation. 20 Sec. 32.06.912. Name. The name of a limited liability partnership must end 21 with "Registered Limited Liability Partnership," "Limited Liability Partnership," 22 "R.L.L.P.," "L.L.P.," "RLLP," or "LLP." 23 Sec. 32.06.913. Annual report; revocation of qualification. (a) A limited 24 liability partnership, and a foreign limited liability partnership authorized to transact 25 business in this state, shall file with the department an annual report that contains 26 (1) the name of the limited liability partnership and the state or other 27 jurisdiction under whose laws the foreign limited liability partnership is formed; 28 (2) the street address of the partnership's chief executive office and, if 29 different, the street address of an office of the partnership in this state, if any; and 30 (3) if the partnership does not have an office in this state, the name and 31 street address of the partnership's current agent for service of process.
01 (b) An annual report must be filed between January 1 and April 1 of each year 02 following the calendar year when a partnership files a statement of qualification or a 03 foreign partnership becomes authorized to transact business in this state. 04 (c) The department may revoke the statement of qualification of a partnership 05 that fails to file an annual report when due or pay the required filing fee. To revoke, 06 the department shall provide the partnership at least 60 days' written notice of intent 07 to revoke the statement. The notice must be mailed to the partnership at its chief 08 executive office stated in the last filed statement of qualification or annual report. The 09 notice must specify the annual report that has not been filed or the fee that has not 10 been paid, and the effective date of the revocation. The revocation is not effective if 11 the annual report is filed and the fee is paid before the effective date of the revocation. 12 (d) A revocation under (c) of this section only affects a partnership's status as 13 a limited liability partnership and is not an event of dissolution of the partnership. 14 (e) A partnership whose statement of qualification has been revoked may apply 15 to the department for reinstatement within two years after the effective date of the 16 revocation. The application must state 17 (1) the name of the partnership and the effective date of the revocation; 18 and 19 (2) that the ground for revocation either did not exist or has been 20 corrected. 21 (f) A reinstatement under (e) of this section relates back to and takes effect on 22 the effective date of the revocation, and the partnership's status as a limited liability 23 partnership continues as if the revocation had never occurred. 24 Sec. 32.06.921. Law governing foreign limited liability partnerships. (a) 25 The law under which a foreign limited liability partnership is formed governs relations 26 between and among the partners and between the partners and the partnership and the 27 liability of partners for obligations of the partnership. 28 (b) A foreign limited liability partnership may not be denied a statement of 29 foreign qualification by reason of any difference between the law under which the 30 partnership was formed and the law of this state. 31 (c) A statement of foreign qualification does not authorize a foreign limited
01 liability partnership to engage in a business or exercise a power that a partnership may 02 not engage in or exercise in this state as a limited liability partnership. 03 Sec. 32.06.922. Statement of foreign qualification. (a) Before transacting 04 business in this state, a foreign limited liability partnership must file a statement of 05 foreign qualification. The statement must contain 06 (1) the name of the foreign limited liability partnership that satisfies the 07 requirements of the state or other jurisdiction under whose law it is formed and ends 08 with "Registered Limited Liability Partnership," "Limited Liability Partnership," 09 "R.L.L.P.," "L.L.P.," "RLLP," or "LLP"; 10 (2) the street address of the partnership's chief executive office and, if 11 different, the street address of an office of the partnership in this state, if any; 12 (3) if there is not an office of the partnership in this state, the name and 13 street address of the partnership's agent for service of process; and 14 (4) a deferred effective date, if any. 15 (b) The agent of a foreign limited liability company for service of process 16 must be an individual who is a resident of this state or a person authorized to do 17 business in this state. 18 (c) The status of a partnership as a foreign limited liability partnership is 19 effective on the later of the filing of the statement of foreign qualification or a date 20 specified in the statement. The status remains effective, regardless of changes in the 21 partnership, until it is cancelled under AS 32.06.970(d) or revoked under 22 AS 32.06.913. 23 (d) An amendment or cancellation of a statement of foreign qualification is 24 effective when it is filed or on a deferred effective date specified in the amendment 25 or cancellation. 26 Sec. 32.06.923. Effect of failure to qualify. (a) A foreign limited liability 27 partnership transacting business in this state may not maintain an action or proceeding 28 in this state unless it has in effect a statement of foreign qualification. 29 (b) The failure of a foreign limited liability partnership to have in effect a 30 statement of foreign qualification does not impair the validity of a contract or act of 31 the foreign limited liability partnership or preclude it from defending an action or
01 proceeding in this state. 02 (c) A limitation on personal liability of a partner is not waived solely by 03 transacting business in this state without a statement of foreign qualification. 04 (d) If a foreign limited liability partnership transacts business in this state 05 without a statement of foreign qualification, the commissioner is its agent for service 06 of process with respect to a right of action arising out of the transaction of business 07 in this state. 08 Sec. 32.06.924. Activities not constituting transacting business. (a) 09 Activities of a foreign limited liability partnership that do not constitute transacting 10 business under AS 32.06.921 - 32.06.925 include 11 (1) maintaining, defending, or settling an action or proceeding; 12 (2) holding meetings of its partners or carrying on another activity 13 concerning its internal affairs; 14 (3) maintaining bank accounts; 15 (4) maintaining offices or agencies for the transfer, exchange, and 16 registration of the partnership's own securities or maintaining trustees or depositories 17 for those securities; 18 (5) selling through independent contractors; 19 (6) soliciting or obtaining orders, whether by mail or through 20 employees or agents or by another method, if the orders require acceptance outside this 21 state before they become contracts; 22 (7) creating or acquiring indebtedness, with or without a mortgage, or 23 other security interest in property; 24 (8) collecting debts or foreclosing mortgages or other security interests 25 in property securing the debts, and holding, protecting, and maintaining property so 26 acquired; 27 (9) conducting an isolated transaction that is completed within 30 days 28 and is not one transaction in the course of similar transactions; and 29 (10) transacting business in interstate commerce. 30 (b) In AS 32.06.921 - 32.06.925, the ownership in this state of income- 31 producing real property or tangible personal property, other than property excluded under (a)
01 of this section, constitutes transacting business in this state. 02 (c) This section does not apply in determining the contacts or activities that 03 may subject a foreign limited liability partnership to service of process, taxation, or 04 regulation under another law of this state. 05 Sec. 32.06.925. Action by attorney general. The attorney general may 06 maintain an action to restrain a foreign limited liability partnership from transacting 07 business in this state in violation of AS 32.06.921 - 32.06.925. 08 Article 10. Miscellaneous Provisions. 09 Sec. 32.06.955. Knowledge and notice. (a) A person knows a fact if the 10 person has actual knowledge of it. 11 (b) A person has notice of a fact if the person 12 (1) knows of it; 13 (2) has received a notification of it; or 14 (3) has reason to know it exists from all of the facts known to the 15 person at the time in question. 16 (c) A person notifies or gives a notification to another person by taking steps 17 reasonably required to inform the other person in ordinary course, whether or not the 18 other person learns of it. 19 (d) A person receives a notification when the notification 20 (1) comes to the person's attention; or 21 (2) is duly delivered at the person's place of business or at any other 22 place held out by the person as a place for receiving communications. 23 (e) Except as otherwise provided in (f) of this section, a person other than an 24 individual knows, has notice, or receives a notification of a fact for purposes of a 25 particular transaction when the individual conducting the transaction knows, has notice 26 of, or receives a notification of the fact, or in any event when the fact would have 27 been brought to the individual's attention if the person had exercised reasonable 28 diligence. The person exercises reasonable diligence if the person maintains 29 reasonable routines for communicating significant information to the individual 30 conducting the transaction and there is reasonable compliance with the routines. 31 Reasonable diligence does not require an individual acting for the person to
01 communicate information unless the communication is part of the individual's regular 02 duties or the individual has reason to know of the transaction and that the transaction 03 would be materially affected by the information. 04 (f) A partner's knowledge, notice, or receipt of a notification of a fact relating 05 to the partnership is effective immediately as knowledge by, notice to, or receipt of a 06 notification by the partnership, except in the case of a fraud on the partnership 07 committed by or with the consent of that partner. 08 Sec. 32.06.960. Effect of partnership agreement; nonwaivable provisions. 09 (a) Except as otherwise provided in (b) of this section, relations between and among 10 the partners and between the partners and the partnership are governed by the 11 partnership agreement. To the extent the partnership agreement does not otherwise 12 provide, this chapter governs relations between and 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 AS 32.06.970 except to eliminate 16 the duty to provide copies of statements to all of the partners; 17 (2) unreasonably restrict the right of access to records under 18 AS 32.06.403(b); 19 (3) eliminate the duty of loyalty under AS 32.06.404(b) or 20 32.06.603(b)(3), but 21 (A) the partnership agreement may identify specific types or 22 categories of activities that do not violate the duty of loyalty, if not manifestly 23 unreasonable; or 24 (B) all of the partners or a number or percentage specified in 25 the partnership agreement may authorize or ratify, after full disclosure of all 26 material facts, a specific act or transaction that otherwise would violate the 27 duty of loyalty; 28 (4) unreasonably reduce the duty of care under AS 32.06.404(c) or 29 32.06.603(b)(3); 30 (5) eliminate the obligation of good faith and fair dealing under 31 AS 32.06.404(d), but the partnership agreement may prescribe the standards by which
01 the performance of the obligation is to be measured, if the standards are not manifestly 02 unreasonable; 03 (6) vary the power to dissociate as a partner under AS 32.06.602(a), 04 except to require the notice under AS 32.06.601(1) to be in writing; 05 (7) vary the right of a court to expel a partner in the events specified 06 in AS 32.06.601(5); 07 (8) vary the requirement to wind up the partnership business in cases 08 under AS 32.06.801(4), (5), or (6); 09 (9) vary the law applicable to a limited liability partnership under 10 AS 32.06.975(b); or 11 (10) restrict rights of third parties under this chapter. 12 Sec. 32.06.965. Supplemental principles of law. (a) Unless displaced by 13 particular provisions of this chapter, the principles of law and equity supplement this 14 chapter. 15 (b) If an obligation to pay interest arises under this chapter and the rate is not 16 specified, the rate is governed by AS 45.45.010. 17 Sec. 32.06.970. Execution, filing, and recording of statements. (a) A 18 statement may be filed with the department. A certified copy of a statement that is 19 filed in an office in another state may be filed with the department. Either filing has 20 the effect provided in this chapter with respect to partnership property located in or 21 transactions that occur in this state. 22 (b) A certified copy of a statement that has been filed with the department and 23 recorded in the office for recording transfers of real property has the effect provided 24 for recorded statements in this chapter. A recorded statement that is not a certified 25 copy of a statement filed with the department does not have the effect provided for 26 recorded statements in this chapter. 27 (c) A statement filed by a partnership must be executed by at least two 28 partners. Other statements must be executed by a partner or other person authorized 29 by this chapter. An individual who executes a statement as, or on behalf of, a partner 30 or other person named as a partner in a statement shall personally declare under 31 penalty of perjury that the contents of the statement are accurate.
01 (d) A person authorized by this chapter to file a statement may amend or 02 cancel the statement by filing an amendment or cancellation that names the 03 partnership, identifies the statement, and states the substance of the amendment or 04 cancellation. 05 (e) A person who files a statement under this section shall promptly send a 06 copy of the statement to every nonfiling partner and to any other person named as a 07 partner in the statement. Failure to send a copy of a statement to a partner or other 08 person does not limit the effectiveness of the statement as to a person who is not a 09 partner. 10 (f) The department may collect a fee for filing or providing a certified copy 11 of a statement. 12 Sec. 32.06.975. Governing law. (a) Except as otherwise provided in (b) of 13 this section, the law of the jurisdiction where a partnership has its chief executive 14 office governs the relations between and among the partners and between the partners 15 and the partnership. 16 (b) The law of this state governs relations between and among the partners and 17 between the partners and the partnership and the liability of partners for an obligation 18 of a limited liability partnership. 19 Sec. 32.06.985. Partnership subject to amendment or repeal of chapter. 20 A partnership governed by this chapter is subject to an amendment or repeal of this 21 chapter. 22 Article 11. General Provisions. 23 Sec. 32.06.990. Uniformity of application and construction. This chapter 24 shall be applied and construed to effectuate its general purpose to make uniform the 25 law with respect to the subject of this chapter among states enacting it. 26 Sec. 32.06.995. Definitions. In this chapter, unless the context indicates 27 otherwise, 28 (1) "business" includes a trade, an occupation, or a profession; 29 (2) "commissioner" means the commissioner of commerce and 30 economic development; 31 (3) "debtor in bankruptcy" means a person who is the subject of
01 (A) an order for relief under 11 U.S.C. (Bankruptcy Code) or 02 a comparable order under a successor statute of general application; or 03 (B) a comparable order under federal, state, or foreign law 04 governing insolvency; 05 (4) "department" means the Department of Commerce and Economic 06 Development; 07 (5) "distribution" means a transfer of money or other property from a 08 partnership to a partner in the partner's capacity as a partner or to the partner's 09 transferee; 10 (6) "foreign limited liability partnership" means a partnership that 11 (A) is formed under laws other than the laws of this state; and 12 (B) has the status of a limited liability partnership under those 13 laws; 14 (7) "limited liability partnership" means a partnership that has filed a 15 statement of qualification under AS 32.06.911 and does not have a similar statement 16 in effect in another jurisdiction; 17 (8) "partnership" means an association of two or more persons to carry 18 on as co-owners a business for profit formed under AS 32.06.202, predecessor law, or 19 a comparable law of another jurisdiction; 20 (9) "partnership agreement" means the agreement, whether written, oral, 21 or implied, among the partners concerning the partnership, including amendments to 22 the partnership agreement; 23 (10) "partnership at will" means a partnership in which the partners 24 have not agreed to remain partners until the expiration of a definite term or the 25 completion of a particular undertaking; 26 (11) "partnership interest" or "partner's interest in the partnership" 27 means all of a partner's interests in the partnership, including the partner's transferable 28 interest and all management and other rights; 29 (12) "person" means an individual, corporation, business trust, estate, 30 trust, partnership, association, joint venture, government, governmental subdivision, 31 agency, or instrumentality, or any other legal or commercial entity;
01 (13) "property" means all property, including real, personal, mixed, 02 tangible, or intangible property, or an interest in property; 03 (14) "state" means a state of the United States, the District of 04 Columbia, the Commonwealth of Puerto Rico, or a territory or insular possession 05 subject to the jurisdiction of the United States; 06 (15) "statement" means a statement of partnership authority under 07 AS 32.06.303, a statement of denial under AS 32.06.304, a statement of dissociation 08 under AS 32.06.704, a statement of dissolution under AS 32.06.805, a statement of 09 merger under AS 32.06.907, a statement of qualification under AS 32.06.911, a 10 statement of foreign qualification under AS 32.06.922, or an amendment or 11 cancellation of any of the foregoing; 12 (16) "transfer" includes an assignment, conveyance, lease, mortgage, 13 deed, and encumbrance. 14 Sec. 32.06.997. Short title. This chapter may be cited as the "Uniform 15 Partnership Act." 16 * Sec. 3. AS 32.11.890 is amended to read: 17 Sec. 32.11.890. Rules for conversions and other cases not covered by 18 chapter. In a case not provided for in this chapter, including conversion of a 19 partnership to a limited partnership and conversion of a limited partnership to 20 a partnership, the provisions of AS 32.06 [AS 32.05] govern. 21 * Sec. 4. AS 32.05 is repealed. 22 * Sec. 5. COURT RULES. (a) AS 32.06.701(i), enacted by sec. 2 of this Act, changes 23 (1) Rule 79, Alaska Rules of Civil Procedure, by allowing a court to award 24 expert fees and expenses against certain parties, rather than awarding the costs allowed by 25 Rule 79; 26 (2) Rule 82, Alaska Rules of Civil Procedure, by allowing for attorney fees 27 that may be awarded against parties, including nonprevailing parties, that are different from 28 the fees allowed by Rule 82. 29 (b) AS 32.06.906(a)(4), enacted by sec. 2 of this Act, changes Rule 25(c), Alaska 30 Rules of Civil Procedure, by allowing certain substitutions of parties as a right without being 31 subject to any court discretion under Rule 25(c).
01 * Sec. 6. APPLICABILITY. (a) Before January 1, 2003, secs. 1 - 3 of this Act do not 02 apply to a partnership or limited liability partnership unless the partnership or limited liability 03 partnership is formed 04 (1) on or after January 1, 1998, but this paragraph does not apply to a 05 partnership or limited liability partnership that is continuing the business of a partnership or 06 limited liability partnership dissolved under AS 32.05; or 07 (2) before January 1, 1998, and the partnership or limited liability partnership 08 elects, under (c) of this section, to be governed by secs. 1 - 3 of this Act. 09 (b) On and after January 1, 2003, secs. 1 - 3 of this Act apply to all partnerships and 10 limited liability partnerships. 11 (c) On or after January 1, 1998, and before January 1, 2003, partnerships and limited 12 liability partnerships may voluntarily elect, in the manner provided in its partnership 13 agreement or by law for amending the partnership agreement, to be governed by secs. 1 - 3 14 of this Act. The provisions of secs. 1 - 3 of this Act relating to the liability of those 15 partnership's partners to third parties do not apply to limit the partners' liability to a third 16 party who does business with the partnership within one year preceding the partnership's 17 election to be governed by secs. 1 - 3 of this Act unless the third party knows or has received 18 a notification of the partnership's election to be governed by secs. 1 - 3 of this Act; the one- 19 year period may not extend back to before January 1, 1998. 20 (d) If, under (a) or (b) of this section, secs. 1 - 3 of this Act apply to a partnership 21 or limited partnership, AS 09.40.240, as amended by this Act, AS 32.05, and AS 32.11.890, 22 as amended by this Act, do not apply to the partnership or limited partnership. 23 (e) In this section, "limited liability partnership" and "partnership" have the meanings 24 given in AS 32.06.995, enacted by sec. 2 of this Act. 25 * Sec. 7. SAVINGS CLAUSE. Sections 1 - 5 of this Act do not affect an action or 26 proceeding begun or right accrued before January 1, 1998. 27 * Sec. 8. AS 32.06.701(i) and 32.06.906(a)(4), enacted by sec. 2 of this Act, take effect 28 only if sec. 5 of this Act receives the two-thirds majority vote of each house required by 29 art. IV, sec. 15, Constitution of the State of Alaska. 30 * Sec. 9. Section 4 of this Act takes effect January 1, 2003. 31 * Sec. 10. Except for sec. 4 of this Act, this Act takes effect January 1, 1998.