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CSSB 198(L&C): "An Act relating to partnerships; amending Rules 25(c), 79, and 82, Alaska Rules of Civil Procedure; and providing for an effective date."

00CS FOR SENATE BILL NO. 198(L&C) 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 of business the 09 partnership business or business of the kind carried on by the partnership binds the 10 partnership, unless the partner does not have authority to act for the partnership in the 11 particular matter and the person with whom the partner is dealing knows or has 12 received a 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 of business the partnership business or business of the kind carried on 15 by the partnership does not bind the partnership unless the act was authorized by the 16 other 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, and notwithstanding AS 09.17.080, all partners are liable jointly 23 and severally for all obligations of the partnership unless otherwise agreed by the 24 claimant or provided by law. 25  (b) A person admitted as a partner into an existing partnership is not 26 personally liable for a partnership obligation incurred before the person's admission 27 as a partner. 28  (c) An obligation of a partnership incurred while the partnership is a limited 29 liability partnership, whether arising in contract, in tort, or otherwise, is solely the 30 obligation of the partnership. A partner is not personally liable, directly or indirectly, 31 by way of contribution or otherwise, for the obligation solely by reason of being or

01 acting as a partner. This subsection applies even if inconsistent with a partnership 02 agreement provision that exists immediately before the vote required to become a 03 limited liability partnership under AS 32.06.911(b). 04  Sec. 32.06.307. Actions by and against partnership and partners. (a) A 05 partnership may sue and be sued in the name of the partnership. 06  (b) An action may be brought against a partnership and, to the extent not 07 inconsistent with AS 32.06.306, any or all of the partners in the same action or in 08 separate actions. 09  (c) A judgment against a partnership is not by itself a judgment against a 10 partner. A judgment against a partnership may not be satisfied from a partner's assets 11 unless there is also a judgment against the partner. 12  (d) A judgment creditor of a partner may not execute against the assets of the 13 partner to satisfy a judgment based on a claim against the partnership unless the 14 partner is personally liable for the claim under AS 32.06.306 and 15  (1) a judgment based on the same claim has been obtained against the 16 partnership and a writ of execution on the judgment has been returned unsatisfied in 17 whole or in part; 18  (2) the partnership is a debtor in bankruptcy; 19  (3) the partner has agreed that the creditor is not required to exhaust 20 partnership assets; 21  (4) a court grants permission to the judgment creditor to execute against 22 the assets of a partner based on a finding that partnership assets subject to execution 23 are clearly insufficient to satisfy the judgment, that exhaustion of partnership assets is 24 excessively burdensome, or that the grant of permission is an appropriate exercise of 25 the court's equitable powers; or 26  (5) liability is imposed on the partner by law or contract independent 27 of the existence of the partnership. 28  (e) This section applies to any partnership liability or obligation resulting from 29 a representation by a partner or purported partner under AS 32.06.308. 30  Sec. 32.06.308. Liability of purported partner. (a) If a person, by words 31 or conduct, purports to be a partner, or consents to being represented by another as a

01 partner, in a partnership or with one or more persons who are not partners, the 02 purported partner is liable to a person to whom the representation is made if that 03 person, relying on the representation, enters into a transaction with the actual or 04 purported partnership. If the representation, either by the purported partner or by a 05 person with the purported partner's consent, is made in a public manner, the purported 06 partner is liable to a person who relies upon the purported partnership even if the 07 purported partner is not aware of being held out as a partner to the claimant. If 08 partnership liability results, the purported partner is liable with respect to the liability 09 as if the purported partner were a partner. Notwithstanding AS 09.17.080, if 10 partnership liability does not result, the purported partner is liable with respect to the 11 liability jointly and severally with any other person consenting to the representation. 12  (b) If under (a) of this section a person is represented to be a partner in an 13 existing partnership, or with one or more persons who are not partners, the purported 14 partner is an agent of the persons consenting to the representation to bind those 15 persons to the same extent and in the same manner as if the purported partner were 16 a partner with respect to persons who enter into transactions in reliance upon the 17 representation. If all of the partners of the existing partnership consent to the 18 representation, a partnership act or obligation results. Notwithstanding AS 09.17.080, 19 if fewer than all of the partners of the existing partnership consent to the 20 representation, the person acting and the partners consenting to the representation are 21 jointly and severally liable. 22  (c) A person is not liable as a partner merely because the person is named by 23 another in a statement of partnership authority. 24  (d) A person does not continue to be liable as a partner merely because of a 25 failure to file a statement of dissociation or to amend a statement of partnership 26 authority to indicate the partner's dissociation from the partnership. 27  (e) Except as otherwise provided in (a) and (b) of this section, persons who 28 are not partners as to each other are not liable as partners to other persons. 29 Article 3. Relations of Partners to Each Other 30 and to Partnership. 31  Sec. 32.06.401. Partner's rights and duties. (a) Each partner is considered

01 to have an account that is 02  (1) credited with an amount equal to 03  (A) the money and the value of any other property, net of the 04 amount of any liabilities, the partner contributes to the partnership; and 05  (B) the partner's share of the partnership profits; and 06  (2) charged with an amount equal to 07  (A) the money and the value of any other property, net of the 08 amount of any liabilities, distributed by the partnership to the partner; and 09  (B) the partner's share of the partnership losses. 10  (b) Each partner is entitled to an equal share of the partnership profits and is 11 chargeable with a share of the partnership losses in proportion to the partner's share 12 of the profits. 13  (c) A partnership shall reimburse a partner for payments made and indemnify 14 a partner for liabilities incurred by the partner in the ordinary course of the business 15 of the partnership or for the preservation of the partnership's business or property. 16  (d) A partnership shall reimburse a partner for an advance to the partnership 17 beyond the amount of capital the partner agreed to contribute. 18  (e) A payment or advance made by a partner that results in a partnership 19 obligation under (c) or (d) of this section constitutes a loan to the partnership that 20 accrues interest from the date of the payment or advance. 21  (f) Each partner has equal rights in the management and conduct of the 22 partnership business. 23  (g) A partner may use or possess partnership property only on behalf of the 24 partnership. 25  (h) A partner is not entitled to remuneration for services performed for the 26 partnership, except for reasonable compensation for services rendered in winding up 27 the business of the partnership. 28  (i) A person may become a partner only with the consent of all the partners. 29  (j) A difference arising as to a matter in the ordinary course of business of a 30 partnership may be decided by a majority of the partners. An act outside the ordinary 31 course of business of a partnership and an amendment to the partnership agreement

01 may be undertaken only with the consent of all the partners. 02  (k) This section does not affect the obligations of a partnership to other 03 persons under AS 32.06.301. 04  Sec. 32.06.402. Distributions in kind. A partner does not have a right to 05 receive, and may not be required to accept, a distribution in kind. 06  Sec. 32.06.403. Partner's rights and duties with respect to information. 07 (a) A partnership shall keep its records, if any, at its chief executive office. 08  (b) A partnership shall provide partners and their agents and attorneys access 09 to its records. It shall provide former partners and their agents and attorneys access 10 to records pertaining to the period during which they were partners. The right of 11 access provides the opportunity to inspect and copy records during ordinary business 12 hours. A partnership may impose a reasonable charge covering the costs of labor and 13 material for copies of documents furnished. 14  (c) Each partner and the partnership shall furnish to a partner, and to the legal 15 representative of a deceased partner or partner under legal disability 16  (1) without demand, any information concerning the partnership's 17 business and affairs reasonably required for the proper exercise of the partner's rights 18 and duties under the partnership agreement or this chapter; and 19  (2) on demand, any other information concerning the partnership's 20 business and affairs, except to the extent the demand or the information demanded is 21 unreasonable or otherwise improper under the circumstances. 22  Sec. 32.06.404. General standards of partner's conduct. (a) The only 23 fiduciary duties a partner owes to the partnership and the other partners are the duty 24 of loyalty and the duty of care stated in (b) and (c) of this section. 25  (b) A partner's duty of loyalty to the partnership and the other partners is 26 limited to the following: 27  (1) to account to the partnership and hold as trustee for it any property, 28 profit, or benefit derived by the partner in the conduct and winding up of the 29 partnership business or derived from a use by the partner of partnership property, 30 including the appropriation of a partnership opportunity; 31  (2) to refrain from dealing with the partnership in the conduct or

01 winding up of the partnership business as or on behalf of a party having an interest 02 adverse to the partnership; and 03  (3) to refrain from competing with the partnership in the conduct of the 04 partnership business before the dissolution of the partnership. 05  (c) A partner's duty of care to the partnership and the other partners in the 06 conduct and winding up of the partnership business is limited to refraining from 07 engaging in grossly negligent or reckless conduct, intentional misconduct, or a 08 knowing violation of law. 09  (d) A partner shall discharge the duties to the partnership and the other 10 partners under this chapter and the duties under the partnership agreement and exercise 11 any rights in accordance with the obligation of good faith and fair dealing. 12  (e) Each partner does not violate a duty or obligation under this chapter or 13 under the partnership agreement merely because the partner's conduct furthers the 14 partner's own interest. 15  (f) A partner may lend money to and transact other business with the 16 partnership, and the rights and obligations of the partner are the same with regard to 17 the loan or transaction as the rights and obligations of a person who is not a partner, 18 subject to other applicable law. 19  (g) This section applies to a person winding up the partnership business as the 20 personal or legal representative of the last surviving partner as if the person were a 21 partner. 22  Sec. 32.06.405. Actions by partnership and partners. (a) A partnership 23 may maintain an action against a partner for a breach of the partnership agreement, or 24 for the violation of a duty to the partnership, causing harm to the partnership. 25  (b) A partner may maintain an action against the partnership or another partner 26 for legal or equitable relief, with or without an accounting of partnership business, to 27 enforce 28  (1) the partner's rights under the partnership agreement; 29  (2) the partner's rights under this chapter, including the partner's 30  (A) rights under AS 32.06.401, 32.06.403, or 32.06.404; 31  (B) right on dissociation to have the partner's interest in the

01 partnership purchased under AS 32.06.701 or to enforce any other right under 02 AS 32.06.601 - 32.06.603 or 32.06.701 - 32.06.705; or 03  (C) right to compel a dissolution and winding up of the 04 partnership business under AS 32.06.801 or to enforce another right under 05 AS 32.06.801 - 32.06.807; or 06  (3) the rights and otherwise protect the interests of the partner, 07 including rights and interests arising independently of the partnership relationship. 08  (c) The accrual of, and any time limitation on, a right of action for a remedy 09 under this section are governed by other law. A right to an accounting upon a 10 dissolution and winding up does not revive a claim barred by law. 11  Sec. 32.06.406. Continuation of partnership beyond definite term or 12 particular undertaking. (a) If a partnership for a definite term or particular 13 undertaking is continued, without an express agreement, after the expiration of the term 14 or completion of the undertaking, the rights and duties of the partners remain the same 15 as they were at the expiration or completion to the extent consistent with a partnership 16 at will. 17  (b) If the partners, or the partners who habitually acted in the business during 18 the term or undertaking, continue the business without a settlement or liquidation of 19 the partnership, the partners continuing the business are presumed to have agreed that 20 the partnership will continue. 21 Article 4. Transferees and Creditors of Partners. 22  Sec. 32.06.501. Partner not co-owner of partnership property. A partner 23 is not a co-owner of partnership property and does not have an interest in partnership 24 property that can be transferred, either voluntarily or involuntarily. 25  Sec. 32.06.502. Partner's transferable interest in partnership. The only 26 transferable interest of a partner in the partnership is the partner's share of the profits 27 and losses of the partnership and the partner's right to receive distributions. The 28 interest is personal property. 29  Sec. 32.06. 503. Transfer of partner's transferable interest. (a) A transfer, 30 in whole or in part, of a partner's transferable interest in the partnership 31  (1) is permissible;

01  (2) does not by itself cause the partner's dissociation or a dissolution 02 and winding up of the partnership business; and 03  (3) does not, as against the other partners or the partnership, entitle the 04 transferee during the continuance of the partnership to participate in the management 05 or conduct of the partnership business, to require access to information concerning 06 partnership transactions, or to inspect or copy the partnership records. 07  (b) A transferee of a partner's transferable interest in the partnership has a 08 right to 09  (1) receive, in accordance with the transfer, distributions to which the 10 transferor would otherwise be entitled; 11  (2) receive upon the dissolution and winding up of the partnership 12 business, in accordance with the transfer, the net amount otherwise distributable to the 13 transferor; and 14  (3) seek under AS 32.06.801(6) a judicial determination that it is 15 equitable to wind up the partnership business. 16  (c) In a dissolution and winding up, a transferee is entitled to an account of 17 partnership transactions only from the date of the latest account agreed to by all of the 18 partners. 19  (d) Upon transfer, the transferor retains the rights and duties of a partner other 20 than the interest in distributions transferred. 21  (e) A partnership is not required to give effect to a transferee's rights under 22 this section until it has notice of the transfer. 23  (f) A transfer of a partner's transferable interest in the partnership in violation 24 of a restriction on transfer contained in the partnership agreement is ineffective as to 25 a person having notice of the restriction at the time of transfer. 26  Sec. 32.06.504. Partner's transferable interest subject to charging order. 27 (a) On application by a judgment creditor of a partner or of a partner's transferee, a 28 court having jurisdiction may charge the transferable interest of the judgment debtor 29 to satisfy the judgment. The court may appoint a receiver of the share of the 30 distributions due or to become due to the judgment debtor in respect of the partnership 31 and make all other orders, directions, accounts, and inquiries the judgment debtor

01 might have made or that the circumstances of the case may require. 02  (b) A charging order constitutes a lien on the judgment debtor's transferable 03 interest in the partnership. The court may order a foreclosure of the interest subject 04 to the charging order at any time. The purchaser at the foreclosure sale has the rights 05 of a transferee. 06  (c) At any time before foreclosure, an interest charged may be redeemed 07  (1) by the judgment debtor; 08  (2) with property other than partnership property by one or more of the 09 other partners; or 10  (3) with partnership property by one or more of the other partners with 11 the consent of all of the partners whose interests are not charged. 12  (d) This chapter does not deprive a partner of a right under exemption laws 13 with respect to the partner's interest in the partnership. 14  (e) This section provides the exclusive remedy by which a judgment creditor 15 of a partner or partner's transferee may satisfy a judgment out of the judgment debtor's 16 transferable interest in the partnership. 17 Article 5. Partner's Dissociation. 18  Sec. 32.06.601. Events causing partner's dissociation. A partner is 19 dissociated from a partnership upon the occurrence of any of the following events: 20  (1) when the partnership has notice of the partner's express will to 21 withdraw as a partner unless a later date is specified by the partner; 22  (2) an event agreed to in the partnership agreement as causing the 23 partner's dissociation; 24  (3) the partner's expulsion under the partnership agreement; 25  (4) the partner's expulsion by the unanimous vote of the other partners 26 if 27  (A) it is unlawful to carry on the partnership business with that 28 partner; 29  (B) there has been a transfer of all or substantially all of that 30 partner's transferable interest in the partnership, other than a transfer for 31 security purposes, or a court order charging the partner's interest that has not

01 been foreclosed; 02  (C) within 90 days after the partnership notifies a corporate 03 partner that it will be expelled because the corporate partner has filed a 04 certificate of dissolution or the equivalent, the corporate partner's charter has 05 been revoked, or the corporate partner's right to conduct business has been 06 suspended by the jurisdiction of its incorporation, the certificate of dissolution 07 is not revoked or the charter or right to conduct business is not reinstated; or 08  (D) the partner is a partnership that has been dissolved and its 09 business is being wound up; 10  (5) on application by the partnership or another partner, the partner's 11 expulsion by judicial determination because the partner 12  (A) engaged in wrongful conduct that adversely and materially 13 affected the partnership business; 14  (B) wilfully or persistently committed a material breach of the 15 partnership agreement or of a duty owed to the partnership or the other partners 16 under AS 32.06.404; or 17  (C) engaged in conduct relating to the partnership business that 18 makes it not reasonably practicable to carry on the business in partnership with 19 the partner; 20  (6) the partner 21  (A) becomes a debtor in bankruptcy; 22  (B) executes an assignment for the benefit of creditors; 23  (C) seeks, consents to, or acquiesces in the appointment of a 24 trustee, receiver, or liquidator of that partner or of all or substantially all of that 25 partner's property; or 26  (D) fails, within 90 days after the appointment, to have vacated 27 or stayed the appointment of a trustee, receiver, or liquidator of the partner or 28 of all or substantially all of the partner's property, obtained without the 29 partner's consent or acquiescence, or fails within 90 days after the expiration 30 of a stay to have the appointment vacated; 31  (7) in the case of a partner who is an individual,

01  (A) the partner's death; 02  (B) the appointment of a guardian or general conservator for the 03 partner; or 04  (C) a judicial determination that the partner has otherwise 05 become incapable of performing the partner's duties under the partnership 06 agreement; 07  (8) in the case of a partner that is a trust or is acting as a partner by 08 virtue of being a trustee of a trust, distribution of the trust's entire transferable interest 09 in the partnership, but the substitution of a successor trustee does not by itself qualify 10 as a distribution under this paragraph; 11  (9) in the case of a partner that is an estate or is acting as a partner by 12 virtue of being a personal representative of an estate, distribution of the estate's entire 13 transferable interest in the partnership, but the substitution of a successor personal 14 representative does not by itself qualify as a distribution under this paragraph; or 15  (10) termination of a partner who is not an individual, a partnership, 16 a corporation, a trust, or an estate. 17  Sec. 32.06.602. Partner's power to dissociate; wrongful dissociation. (a) 18 A partner has the power to dissociate at any time, rightfully or wrongfully, by express 19 will under AS 32.06.601(1). 20  (b) A partner's dissociation is wrongful only if 21  (1) the dissociation breaches an express provision of the partnership 22 agreement; or 23  (2) in the case of a partnership for a definite term or particular 24 undertaking, before the expiration of the term or the completion of the undertaking, 25  (A) the partner withdraws by express will, unless the withdrawal 26 follows within 90 days after another partner's dissociation by death or 27 otherwise under AS 32.06.601(6) - (10) or wrongful dissociation under this 28 subsection; 29  (B) the partner is expelled by judicial determination under 30 AS 32.06.601(5); 31  (C) the partner is dissociated by becoming a debtor in

01 bankruptcy; or 02  (D) in the case of a partner who is not an individual, a trust 03 other than a business trust, or an estate, the partner is expelled or otherwise 04 dissociated because it wilfully dissolved or terminated. 05  (c) A partner who wrongfully dissociates is liable to the partnership and to the 06 other partners for damages caused by the dissociation. The liability is in addition to 07 any other obligation of the partner to the partnership or to the other partners. 08  Sec. 32.06.603. Effect of partner's dissociation. (a) If a partner's 09 dissociation results in a dissolution and winding up of the partnership business, 10 AS 32.06.801 - 32.06.807 apply, otherwise AS 32.06.701 - 32.06.705 apply. 11  (b) Upon a partner's dissociation, the partner's 12  (1) right to participate in the management and conduct of the 13 partnership business terminates, except as otherwise provided in AS 32.06.803; 14  (2) duty of loyalty under AS 32.06.404(b)(3) terminates; and 15  (3) duty of loyalty under AS 32.06.404(b)(1) and (2) and duty of care 16 under AS 32.06.404(c) continue only with regard to matters arising and events 17 occurring before the partner's dissociation unless the partner participates in winding 18 up the partnership's business under AS 32.06.803. 19 Article 6. Partner's Dissociation when Business not Wound Up. 20  Sec. 32.06.701. Purchase of dissociated partner's interest. (a) If a partner 21 is dissociated from a partnership without resulting in a dissolution and winding up of 22 the partnership business under AS 32.06.801, the partnership shall cause the dissociated 23 partner's interest in the partnership to be purchased for a buy-out price determined 24 under (b) of this section. 25  (b) The buy-out price of a dissociated partner's interest is the amount that 26 would have been distributable to the dissociating partner under AS 32.06.807(b) if, on 27 the date of dissociation, the assets of the partnership were sold at a price equal to the 28 greater of the liquidation value or the value based on a sale of the entire business as 29 a going concern without the dissociated partner and if the partnership were wound up 30 as of that date. Interest must be paid from the date of dissociation to the date of 31 payment.

01  (c) Damages for wrongful dissociation under AS 32.06.602(b), and all other 02 amounts owing, whether or not presently due, from the dissociated partner to the 03 partnership must be offset against the buy-out price. Interest must be paid from the 04 date the amount owed becomes due to the date of payment. 05  (d) A partnership shall indemnify against all partnership liabilities a dissociated 06 partner whose interest is being purchased, whether the liabilities are incurred before 07 or after the dissociation, except liabilities incurred by an act of the dissociated partner 08 under AS 32.06.702. 09  (e) If an agreement for the purchase of a dissociated partner's interest is not 10 reached within 120 days after a written demand for payment, the partnership shall pay, 11 or cause to be paid, in cash to the dissociated partner the amount the partnership 12 estimates to be the buy-out price and accrued interest, reduced by any offsets and 13 accrued interest under (c) of this section. 14  (f) If a deferred payment is authorized under (h) of this section, the partnership 15 may tender a written offer to pay the amount it estimates to be the buy-out price and 16 accrued interest, reduced by any offsets under (c) of this section, stating the time of 17 payment, the amount and type of security for payment, and the other terms and 18 conditions of the obligation. 19  (g) The payment or tender required by (e) or (f) of this section must be 20 accompanied by 21  (1) a statement of partnership assets and liabilities as of the date of 22 dissociation; 23  (2) the latest available partnership balance sheet and income statement, 24 if any; 25  (3) an explanation of how the estimated amount of the payment was 26 calculated; and 27  (4) written notice that the payment is in full satisfaction of the 28 obligation to purchase unless, within 120 days after the written notice, the dissociated 29 partner commences an action to determine the buy-out price, any offsets under (c) of 30 this section, or other terms of the obligation to purchase. 31  (h) A partner who wrongfully dissociates before the expiration of a definite

01 term or the completion of a particular undertaking is not entitled to payment of any 02 portion of the buy-out price until the expiration of the term or completion of the 03 undertaking unless the partner establishes to the satisfaction of a court that earlier 04 payment will not cause undue hardship to the business of the partnership. A deferred 05 payment must be adequately secured and bear interest. 06  (i) A dissociated partner may maintain an action against the partnership under 07 AS 32.06.405(b)(2)(B) to determine the buy-out price of that partner's interest, any 08 offsets under (c) of this section, or other terms of the obligation to purchase. The 09 action must be commenced within 120 days after the partnership has tendered payment 10 or an offer to pay or within one year after written demand for payment if a payment 11 or offer to pay is not tendered. The court shall determine the buy-out price of the 12 dissociated partner's interest, any offset due under (c) of this section, and accrued 13 interest and enter judgment for any additional payment or refund. If deferred payment 14 is authorized under (h) of this section, the court shall also determine the security for 15 payment and other terms of the obligation to purchase. The court may assess 16 reasonable attorney fees and the fees and expenses of appraisers or other experts for 17 a party to the action, in amounts the court finds equitable, against a party that the court 18 finds acted arbitrarily, vexatiously, or not in good faith. The finding may be based on 19 the partnership's failure to tender payment or an offer to pay or to comply with (g) of 20 this section. 21  Sec. 32.06.702. Dissociated partner's power to bind and liability to 22 partnership. (a) For two years after a partner dissociates without the dissociation 23 resulting in a dissolution and winding up of the partnership business, the partnership, 24 including a surviving partnership under AS 32.06.902 - 32.06.908, is bound by an act 25 of the dissociated partner that would have bound the partnership under AS 32.06.301 26 before dissociation only if at the time of entering into the transaction the other party 27  (1) reasonably believed that the dissociated partner was then a partner; 28  (2) did not have notice of the partner's dissociation; and 29  (3) is not considered to have had knowledge under AS 32.06.303(e) or 30 notice under AS 32.06.704(c). 31  (b) A dissociated partner is liable to the partnership for damage that is caused

01 to the partnership by an obligation incurred by the dissociated partner after dissociation 02 and for which the partnership is liable under (a) of this section. 03  Sec. 32.06.703. Dissociated partner's liability to other persons. (a) A 04 partner's dissociation does not of itself discharge the partner's liability for a 05 partnership obligation incurred before dissociation. A dissociated partner is not liable 06 for a partnership obligation incurred after dissociation, except as otherwise provided 07 in (b) of this section. 08  (b) A partner who dissociates without the dissociation resulting in a dissolution 09 and winding up of the partnership business is liable as a partner to the other party in 10 a transaction entered into by the partnership, or a surviving partnership under 11 AS 32.06.902 - 32.06.908, within two years after the partner's dissociation only if the 12 partner is liable for the obligation under AS 32.06.306 and at the time of entering into 13 the transaction the other party 14  (1) reasonably believed that the dissociated partner was then a partner; 15  (2) did not have notice of the partner's dissociation; and 16  (3) is not considered to have had knowledge under AS 32.06.303(e) or 17 notice under AS 32.06.704(c). 18  (c) By agreement with the partnership creditor and the partners continuing the 19 business, a dissociated partner may be released from liability for a partnership 20 obligation. 21  (d) A dissociated partner is released from liability for a partnership obligation 22 if a partnership creditor, with notice of the partner's dissociation but without the 23 partner's consent, agrees to a material alteration in the nature or time of payment of 24 a partnership obligation. 25  Sec. 32.06.704. Statement of dissociation. (a) A dissociated partner or the 26 partnership may file a statement of dissociation stating the name of the partnership and 27 that the partner is dissociated from the partnership. 28  (b) A statement of dissociation is a limitation on the authority of a dissociated 29 partner for the purposes of AS 32.06.303(d) and (e). 30  (c) In AS 32.06.702(a)(3) and 32.06.703(b)(3), a person who is not a partner 31 is considered to have notice of the dissociation 90 days after the statement of

01 dissociation is filed. 02  Sec. 32.06.705. Continued use of partnership name. Continued use of a 03 partnership name, or of a dissociated partner's name as part of a partnership name, by 04 partners continuing the business does not by itself make the dissociated partner liable 05 for an obligation of the partners or the partnership continuing the business. 06 Article 7. Winding up Partnership Business. 07  Sec. 32.06.801. Events causing dissolution and winding up of partnership 08 business. A partnership is dissolved, and its business must be wound up, only on the 09 occurrence of any of the following events: 10  (1) in a partnership at will, when the partnership has notice from a 11 partner, other than a partner who is dissociated under AS 32.06.601(2) - (10), of that 12 partner's express will to withdraw as a partner, or on a later date specified by the 13 partner; 14  (2) in a partnership for a definite term or particular undertaking, 15  (A) within 90 days after a partner's dissociation by death or by 16 other event under AS 32.06.601(6) - (10) or by wrongful dissociation under 17 AS 32.06.602(b), at least one-half of the remaining partners state their express 18 will to wind up the partnership business; in this subparagraph, a partner's 19 rightful dissociation under AS 32.06.602(b)(2)(A) constitutes the expression of 20 that partner's will to wind up the partnership business; 21  (B) the express will of all of the partners to wind up the 22 partnership business; or 23  (C) the expiration of the term or the completion of the 24 undertaking; 25  (3) an event agreed to in the partnership agreement resulting in the 26 winding up of the partnership business; 27  (4) an event that makes it unlawful for all or substantially all of the 28 business of the partnership to be continued, but a cure of illegality within 90 days after 29 notice to the partnership of the event is effective retroactively to the date of the event 30 for purposes of this section; 31  (5) on application by a partner, a judicial determination that

01  (A) the economic purpose of the partnership is likely to be 02 unreasonably frustrated; 03  (B) another partner has engaged in conduct relating to the 04 partnership business that makes it not reasonably practicable to carry on the 05 business in partnership with that partner; or 06  (C) it is not otherwise reasonably practicable to carry on the 07 partnership business in conformity with the partnership agreement; or 08  (6) on application by a transferee of a partner's transferable interest, 09 a judicial determination that it is equitable to wind up the partnership business 10  (A) after the expiration of the term or completion of the 11 undertaking if the partnership was for a definite term or particular undertaking 12 at the time of the transfer or entry of the charging order that gave rise to the 13 transfer; or 14  (B) at any time if the partnership was a partnership at will at 15 the time of the transfer or entry of the charging order that gave rise to the 16 transfer. 17  Sec. 32.06.802. Partnership continuation after dissolution. (a) Subject to 18 (b) of this section, a partnership continues after dissolution only for the purpose of 19 winding up its business. The partnership is terminated when the winding up of its 20 business is completed. 21  (b) At any time after the dissolution of a partnership and before the winding 22 up of its business is completed, all of the partners, including any dissociating partner 23 other than a wrongfully dissociating partner, may waive the right to have the 24 partnership's business wound up and the partnership terminated. In that event, 25  (1) the partnership resumes carrying on its business as if dissolution 26 had never occurred, and any liability incurred by the partnership or a partner after the 27 dissolution and before the waiver is determined as if dissolution had never occurred; 28 and 29  (2) the rights of a third party accruing under AS 32.06.804(1) or arising 30 out of conduct in reliance on the dissolution before the third party knew or received 31 a notification of the waiver may not be adversely affected.

01  Sec. 32.06.803. Right to wind up partnership business. (a) After 02 dissolution, a partner who has not wrongfully dissociated may participate in winding 03 up the partnership's business, but, on application of a partner, partner's legal 04 representative, or transferee, the superior court, for good cause shown, may order 05 judicial supervision of the winding up. 06  (b) The legal representative of the last surviving partner may wind up a 07 partnership's business. 08  (c) A person winding up a partnership's business may preserve the partnership 09 business or property as a going concern for a reasonable time, prosecute and defend 10 actions and proceedings, whether civil, criminal, or administrative, settle and close the 11 partnership's business, dispose of and transfer the partnership's property, discharge the 12 partnership's liabilities, distribute the assets of the partnership under AS 32.06.807, 13 settle disputes by mediation or arbitration, and perform other necessary acts. 14  Sec. 32.06.804. Partner's power to bind partnership after dissolution. 15 Subject to AS 32.06.805, a partnership is bound by a partner's act after dissolution that 16  (1) is appropriate for winding up the partnership business; or 17  (2) would have bound the partnership under AS 32.06.301 before 18 dissolution if the other party to the transaction did not have notice of the dissolution. 19  Sec. 32.06.805. Statement of dissolution. (a) After dissolution, a partner 20 who has not wrongfully dissociated may file a statement of dissolution stating the 21 name of the partnership and that the partnership has dissolved and is winding up its 22 business. 23  (b) A statement of dissolution cancels a filed statement of partnership authority 24 for the purposes of AS 32.06.303(d) and is a limitation on authority under 25 AS 32.06.303(e). 26  (c) Under AS 32.06.301 and 32.06.804, a person who is not a partner is 27 considered to have notice of the dissolution and the limitation on the partners' 28 authority as a result of the statement of dissolution 90 days after it is filed. 29  (d) After filing and, if appropriate, recording a statement of dissolution, a 30 dissolved partnership may file and, if appropriate, record a statement of partnership 31 authority that will operate with respect to a person who is not a partner under

01 AS 32.06.303(d) and (e) in any transaction, whether or not the transaction is 02 appropriate for winding up the partnership business. 03  Sec. 32.06.806. Partner's liability to other partners after dissolution. (a) 04 Except as otherwise provided in (b) of this section, after dissolution, a partner is liable 05 to the other partners for the partner's share of any partnership liability incurred under 06 AS 32.06.804. 07  (b) A partner who, with knowledge of the dissolution, incurs a partnership 08 liability under AS 32.06.804(2) by an act that is not appropriate for winding up the 09 partnership business is liable to the partnership for any damage caused to the 10 partnership arising from the liability. 11  Sec. 32.06.807. Settlement of accounts and contributions among partners. 12 (a) In winding up a partnership's business, the assets of the partnership, including the 13 contributions of the partners required by this section, must be applied to discharge its 14 obligations to creditors, including, to the extent permitted by law, partners who are 15 creditors. Any surplus must be applied to pay in cash the net amount distributable to 16 partners in accordance with their right to distributions under (b) of this section. 17  (b) Each partner is entitled to a settlement of all partnership accounts upon 18 winding up the partnership business. In settling accounts among the partners, the 19 profits and losses that result from the liquidation of the partnership assets must be 20 credited and charged to the partners' accounts. The partnership shall make a 21 distribution to a partner in an amount equal to any excess of the credits over the 22 charges in the partner's account. A partner shall contribute to the partnership an 23 amount equal to any excess of the charges over the credits in the partner's account, but 24 excluding from the calculation charges attributable to an obligation for which the 25 partner is not personally liable under AS 32.06.306. 26  (c) If a partner fails to contribute, all of the other partners shall contribute the 27 full amount required under (b) of this section, in the proportions in which those 28 partners share partnership losses, the additional amount necessary to satisfy the 29 partnership obligations for which the partners are personally liable under AS 32.06.306. 30 A partner or partner's legal representative may recover from the other partners any 31 contributions the partner makes to the extent the amount contributed exceeds that

01 partner's share of the partnership obligations for which the partner is personally liable 02 under AS 32.06.306. 03  (d) After the settlement of accounts, each partner shall contribute, in the 04 proportion in which the partner shares partnership losses, the amount necessary to 05 satisfy partnership obligations that were not known at the time of the settlement and 06 for which the partner is personally liable under AS 32.06.306. 07  (e) The estate of a deceased partner is liable for the partner's obligation to 08 contribute to the partnership. 09  (f) An assignee for the benefit of creditors of a partnership or a partner, or a 10 person appointed by a court to represent creditors of a partnership or a partner, may 11 enforce a partner's obligation to contribute to the partnership. 12 Article 8. Conversions and Mergers. 13  Sec. 32.06.902. Conversion of partnership to limited partnership. (a) A 14 partnership may be converted to a limited partnership under this section. 15  (b) The terms and conditions of a conversion of a partnership to a limited 16 partnership must be approved by all of the partners or by a number or percentage 17 specified for conversion in the partnership agreement. 18  (c) After the conversion is approved by the partners, the partnership shall file 19 a certificate of limited partnership with the department. The certificate must include 20  (1) a statement that the partnership was converted to a limited 21 partnership from a partnership; 22  (2) the partnership's former name; and 23  (3) a statement of the number of votes cast by the partners for and 24 against the conversion and, if the vote is less than unanimous, the number or 25 percentage required to approve the conversion under the partnership agreement. 26  (d) The conversion takes effect when the certificate of limited partnership is 27 filed or at a later date specified in the certificate. 28  (e) A general partner who becomes a limited partner as a result of the 29 conversion remains liable as a general partner for an obligation incurred by the 30 partnership before the conversion takes effect. If the other party to a transaction with 31 the limited partnership reasonably believes when entering the transaction that the

01 limited partner is a general partner, the limited partner is liable for an obligation 02 incurred by the limited partnership within 90 days after the conversion takes effect. 03 The limited partner's liability for all other obligations of the limited partnership 04 incurred after the conversion takes effect is that of a limited partner under AS 32.11. 05  Sec. 32.06.903. Conversion of limited partnership to partnership. (a) A 06 limited partnership may be converted to a partnership under this section. 07  (b) Notwithstanding a provision to the contrary in a limited partnership 08 agreement, the terms and conditions of a conversion of a limited partnership to a 09 partnership must be approved by all of the partners. 10  (c) After the conversion is approved by the partners, the limited partnership 11 shall cancel its certificate of limited partnership. 12  (d) The conversion takes effect when the certificate of limited partnership is 13 canceled. 14  (e) A limited partner who becomes a general partner as a result of the 15 conversion remains liable only as a limited partner for an obligation incurred by the 16 limited partnership before the conversion takes effect. The partner is liable as a 17 general partner for an obligation of the partnership incurred after the conversion takes 18 effect. 19  Sec. 32.06.904. Effect of conversion; entity unchanged. (a) A partnership 20 or limited partnership that has been converted under AS 32.06.902 - 32.06.908 is for 21 all purposes the same entity that existed before the conversion. 22  (b) When a conversion takes effect, 23  (1) all property owned by the converting partnership or limited 24 partnership remains vested in the converted entity; 25  (2) all obligations of the converting partnership or limited partnership 26 continue as obligations of the converted entity; and 27  (3) an action or proceeding pending against the converting partnership 28 or limited partnership may be continued as if the conversion had not occurred. 29  Sec. 32.06.905. Merger of partnerships. (a) Under a plan of merger 30 approved under (c) of this section, a partnership may be merged with one or more 31 partnerships or limited partnerships.

01  (b) The plan of merger must state 02  (1) the name of each partnership or limited partnership that is a party 03 to the merger; 04  (2) the name of the surviving entity into which the other partnerships 05 or limited partnerships will merge; 06  (3) whether the surviving entity is a partnership or a limited partnership 07 and the status of each partner; 08  (4) the terms and conditions of the merger; 09  (5) the manner and basis of converting all or part of the interests of 10 each party to the merger into interests or obligations of the surviving entity or into 11 money or other property; and 12  (6) the street address of the surviving entity's chief executive office. 13  (c) The plan of merger must be approved 14  (1) in the case of a partnership that is a party to the merger, by all of 15 the partners or a number or percentage specified for merger in the partnership 16 agreement; and 17  (2) in the case of a limited partnership that is a party to the merger, by 18 the vote required for approval of a merger by the law of the state or foreign 19 jurisdiction where the limited partnership is organized and, in the absence of such a 20 specifically applicable law, by all of the partners, notwithstanding a provision to the 21 contrary in the partnership agreement. 22  (d) After a plan of merger is approved and before the merger takes effect, the 23 plan may be amended or abandoned as provided in the plan. 24  (e) The merger takes effect on the later of 25  (1) the approval of the plan of merger by all parties to the merger 26 under (c) of this section; 27  (2) the filing of all documents required by law to be filed as a 28 condition to the effectiveness of the merger; or 29  (3) an effective date specified in the plan of merger. 30  Sec. 32.06.906. Effect of merger. (a) When a merger takes effect, 31  (1) the separate existence of every partnership or limited partnership

01 that is a party to the merger, other than the surviving entity, ceases; 02  (2) all property owned by each of the merged partnerships or limited 03 partnerships vests in the surviving entity; 04  (3) all obligations of every partnership or limited partnership that is a 05 party to the merger become the obligations of the surviving entity; and 06  (4) an action or proceeding pending against a partnership or limited 07 partnership that is a party to the merger may be continued as if the merger had not 08 occurred, or the surviving entity may be substituted as a party to the action or 09 proceeding. 10  (b) The commissioner is the agent for service of process in an action or 11 proceeding against a surviving foreign partnership or limited partnership to enforce an 12 obligation of a domestic partnership or limited partnership that is a party to a merger. 13 The surviving entity shall promptly notify the department of the mailing address of its 14 chief executive office and of any change of address. Upon receipt of process, the 15 department shall mail a copy of the process to the surviving foreign partnership or 16 limited partnership. 17  (c) A partner of the surviving partnership or limited partnership is liable for 18  (1) all obligations of a party to the merger for which the partner was 19 personally liable before the merger; 20  (2) all obligations of the surviving entity incurred before the merger by 21 a party to the merger and not covered by (1) of this subsection, but the obligations 22 under this paragraph may be satisfied only out of property of the entity; and 23  (3) except as otherwise provided in AS 32.06.306, all obligations of the 24 surviving entity incurred after the merger takes effect, but the obligations under this 25 paragraph may be satisfied only out of property of the entity if the partner is a limited 26 partner. 27  (d) If the obligations incurred before the merger by a party to the merger are 28 not satisfied out of the property of the surviving partnership or limited partnership, the 29 general partners of the party to the merger immediately before the effective date of the 30 merger shall contribute the amount necessary to satisfy the party's obligations to the 31 surviving entity, in the manner provided in AS 32.06.807, or in the limited partnership

01 law of the jurisdiction where the party was formed, as the case may be, as if the 02 merged party were dissolved. 03  (e) As of the date the merger takes effect, a partner of a party to a merger who 04 does not become a partner of the surviving partnership or limited partnership is 05 dissociated from the entity of which that partner was a partner. The surviving entity 06 shall cause the partner's interest in the entity to be purchased under AS 32.06.701 or 07 another statute specifically applicable to that partner's interest with respect to a merger. 08 The surviving entity is bound under AS 32.06.702 by an act of a general partner 09 dissociated under this subsection, and the partner is liable under AS 32.06.703 for 10 transactions entered into by the surviving entity after the merger takes effect. 11  Sec. 32.06.907. Statement of merger. (a) After a merger, the surviving 12 partnership or limited partnership may file a statement that one or more partnerships 13 or limited partnerships have merged into the surviving entity. 14  (b) A statement of merger must contain 15  (1) the name of each partnership or limited partnership that is a party 16 to the merger; 17  (2) the name of the surviving entity into which the other partnerships 18 or limited partnership are merged; 19  (3) the street address of the surviving entity's chief executive office and 20 of any office in this state; and 21  (4) whether the surviving entity is a partnership or a limited 22 partnership. 23  (c) Except as otherwise provided in (d) of this section, in AS 32.06.302 24 property of the surviving partnership or limited partnership that before the merger was 25 held in the name of another party to the merger is property held in the name of the 26 surviving entity upon filing a statement of merger. 27  (d) In AS 32.06.302, real property of the surviving partnership or limited 28 partnership that before the merger was held in the name of another party to the merger 29 is property held in the name of the surviving entity upon recording a certified copy of 30 the statement of merger in the office for recording transfers of the real property. 31  (e) A filed and, if appropriate, recorded statement of merger, executed and

01 declared to be accurate under AS 32.06.970(c), stating the name of a partnership or 02 limited partnership that is a party to the merger in whose name property was held 03 before the merger and the name of the surviving entity, but not containing all of the 04 other information required by (b) of this section, operates with respect to the 05 partnerships or limited partnerships named to the extent provided in (c) and (d) of this 06 section. 07  Sec. 32.06.908. Nonexclusivity. AS 32.06.902 - 32.06.908 are not exclusive. 08 Partnerships or limited partnerships may be converted or merged in any other manner 09 provided by law. 10  Sec. 32.05.909. Definitions for AS 32.06.902 - 32.06.908. In AS 32.06.902 - 11 32.06.908, 12  (1) "general partner" means a partner in a partnership and a general 13 partner in a limited partnership; 14  (2) "limited partner" means a limited partner in a limited partnership; 15  (3) "limited partnership" means a limited partnership created under 16 AS 32.11, predecessor law, or a comparable law of another jurisdiction; 17  (4) "partner" includes both a general partner and a limited partner. 18 Article 9. Limited Liability Partnerships. 19  Sec. 32.06.911. Statement of qualification. (a) A partnership may become 20 a limited liability partnership under this section. 21  (b) The terms and conditions on which a partnership becomes a limited 22 liability partnership must be approved by the vote necessary to amend the partnership 23 agreement except, in the case of a partnership agreement that expressly considers 24 obligations to contribute to the partnership, by the vote necessary to amend those 25 contribution provisions. 26  (c) After the approval required by (b) of this section, a partnership may 27 become a limited liability partnership by filing a statement of qualification. The 28 statement must contain 29  (1) the name of the partnership; 30  (2) the street address of the partnership's chief executive office and, if 31 different, the street address of an office in this state, if any;

01  (3) if the partnership does not have an office in this state, the name and 02 street address of the partnership's agent for service of process; 03  (4) a statement that the partnership elects to be a limited liability 04 partnership; and 05  (5) a deferred effective date, if any. 06  (d) The agent of a limited liability partnership for service of process must be 07 an individual who is a resident of this state or a person authorized to do business in 08 this state. 09  (e) The status of a partnership as a limited liability partnership is effective on 10 the later of the filing of the statement or a date specified in the statement. The status 11 remains effective, regardless of changes in the partnership, until it is cancelled under 12 AS 32.06.970(d) or revoked under AS 32.06.915. 13  (f) The status of a partnership as a limited liability partnership and the liability 14 of its partners are not affected by errors or later changes in the information required 15 to be contained in the statement of qualification under (c) of this section. 16  (g) The filing of a statement of qualification establishes that a partnership has 17 satisfied all conditions precedent to the qualification of the partnership as a limited 18 liability partnership. 19  (h) An amendment or cancellation of a statement of qualification is effective 20 when it is filed or on a deferred effective date specified in the amendment or 21 cancellation. 22  Sec. 32.06.912. Name. The name of a limited liability partnership must end 23 with "Registered Limited Liability Partnership," "Limited Liability Partnership," 24 "R.L.L.P.," "L.L.P.," "RLLP," or "LLP." 25  Sec. 32.06.913. Biennial report. (a) A biennial report shall be filed with the 26 department and is due before January 2 of the filing year. A limited liability 27 partnership and a foreign limited liability partnership filing a statement of qualification 28 under AS 32.06.911 during an even-numbered year shall file the biennial report each 29 even-numbered year. A limited liability partnership and a foreign limited liability 30 partnership filing a statement of qualification under AS 32.06.911 during an odd- 31 numbered year shall file the biennial report each odd-numbered year. The biennial report is

01 delinquent if not filed before February 1 of each odd- or even-numbered year as provided in 02 this subsection. 03  (b) A biennial report must contain 04  (1) the name of the limited liability partnership and the state or other 05 jurisdiction under whose laws the foreign limited liability partnership is formed; 06  (2) the street address of the partnership's chief executive office and, if 07 different, the street address of an office of the partnership in this state, if any; and 08  (3) if the partnership does not have an office in this state, the name and 09 street address of the partnership's current agent for service of process. 10  Sec. 32.06.915. Biennial report; revocation of qualification. (a) The 11 department may revoke the statement of qualification of a partnership that fails to file 12 a biennial report when due or pay the required filing fee. To revoke, the department 13 shall provide the partnership at least 60 days' written notice of intent to revoke the 14 statement. The notice must be mailed to the partnership at its chief executive office 15 stated in the last filed statement of qualification or biennial report. The notice must 16 specify the biennial report that has not been filed or the fee that has not been paid, and 17 the effective date of the revocation. The revocation is not effective if the biennial 18 report is filed and the fee is paid before the effective date of the revocation. 19  (b) A revocation under (a) of this section only affects a partnership's status as 20 a limited liability partnership and is not an event of dissolution of the partnership. 21  (c) A partnership whose statement of qualification has been revoked may apply 22 to the department for reinstatement within two years after the effective date of the 23 revocation. The application must state 24  (1) the name of the partnership and the effective date of the revocation; 25 and 26  (2) that the ground for revocation either did not exist or has been 27 corrected. 28  (d) A reinstatement under (c) of this section relates back to and takes effect 29 on the effective date of the revocation, and the partnership's status as a limited liability 30 partnership continues as if the revocation had never occurred. 31  Sec. 32.06.921. Law governing foreign limited liability partnerships. (a)

01 The law under which a foreign limited liability partnership is formed governs relations 02 between and among the partners and between the partners and the partnership and the 03 liability of partners for obligations of the partnership. 04  (b) A foreign limited liability partnership may not be denied a statement of 05 foreign qualification by reason of any difference between the law under which the 06 partnership was formed and the law of this state. 07  (c) A statement of foreign qualification does not authorize a foreign limited 08 liability partnership to engage in a business or exercise a power that a partnership may 09 not engage in or exercise in this state as a limited liability partnership. 10  Sec. 32.06.922. Statement of foreign qualification. (a) Before transacting 11 business in this state, a foreign limited liability partnership must file a statement of 12 foreign qualification. The statement must contain 13  (1) the name of the foreign limited liability partnership that satisfies the 14 requirements of the state or other jurisdiction under whose law it is formed and ends 15 with "Registered Limited Liability Partnership," "Limited Liability Partnership," 16 "R.L.L.P.," "L.L.P.," "RLLP," or "LLP"; 17  (2) the street address of the partnership's chief executive office and, if 18 different, the street address of an office of the partnership in this state, if any; 19  (3) if there is not an office of the partnership in this state, the name and 20 street address of the partnership's agent for service of process; and 21  (4) a deferred effective date, if any. 22  (b) The agent of a foreign limited liability company for service of process 23 must be an individual who is a resident of this state or a person authorized to do 24 business in this state. 25  (c) The status of a partnership as a foreign limited liability partnership is 26 effective on the later of the filing of the statement of foreign qualification or a date 27 specified in the statement. The status remains effective, regardless of changes in the 28 partnership, until it is cancelled under AS 32.06.970(d) or revoked under 29 AS 32.06.915. 30  (d) An amendment or cancellation of a statement of foreign qualification is 31 effective when it is filed or on a deferred effective date specified in the amendment

01 or cancellation. 02  Sec. 32.06.923. Effect of failure to qualify. (a) A foreign limited liability 03 partnership transacting business in this state may not maintain an action or proceeding 04 in this state unless it has in effect a statement of foreign qualification. 05  (b) The failure of a foreign limited liability partnership to have in effect a 06 statement of foreign qualification does not impair the validity of a contract or act of 07 the foreign limited liability partnership or preclude it from defending an action or 08 proceeding in this state. 09  (c) A limitation on personal liability of a partner is not waived solely by 10 transacting business in this state without a statement of foreign qualification. 11  (d) If a foreign limited liability partnership transacts business in this state 12 without a statement of foreign qualification, the commissioner is its agent for service 13 of process with respect to a right of action arising out of the transaction of business 14 in this state. 15  Sec. 32.06.924. Activities not constituting transacting business. (a) 16 Activities of a foreign limited liability partnership that do not constitute transacting 17 business under AS 32.06.921 - 32.06.925 include 18  (1) maintaining, defending, or settling an action or proceeding; 19  (2) holding meetings of its partners or carrying on another activity 20 concerning its internal affairs; 21  (3) maintaining bank accounts; 22  (4) maintaining offices or agencies for the transfer, exchange, and 23 registration of the partnership's own securities or maintaining trustees or depositories 24 for those securities; 25  (5) selling through independent contractors; 26  (6) soliciting or obtaining orders, whether by mail or through 27 employees or agents or by another method, if the orders require acceptance outside this 28 state before they become contracts; 29  (7) creating or acquiring indebtedness, with or without a mortgage, or 30 other security interest in property; 31  (8) collecting debts or foreclosing mortgages or other security interests

01 in property securing the debts, and holding, protecting, and maintaining property so 02 acquired; 03  (9) conducting an isolated transaction that is completed within 30 days 04 and is not one transaction in the course of similar transactions; and 05  (10) transacting business in interstate commerce. 06  (b) In AS 32.06.921 - 32.06.925, the ownership in this state of income- 07 producing real property or tangible personal property, other than property excluded under (a) 08 of this section, constitutes transacting business in this state. 09  (c) This section does not apply in determining the contacts or activities that 10 may subject a foreign limited liability partnership to service of process, taxation, or 11 regulation under another law of this state. 12  Sec. 32.06.925. Action by attorney general. The attorney general may 13 maintain an action to restrain a foreign limited liability partnership from transacting 14 business in this state in violation of AS 32.06.921 - 32.06.925. 15 Article 10. Miscellaneous Provisions. 16  Sec. 32.06.955. Knowledge and notice. (a) A person knows a fact if the 17 person has actual knowledge of it. 18  (b) A person has notice of a fact if the person 19  (1) knows of it; 20  (2) has received a notification of it; or 21  (3) has reason to know it exists from all of the facts known to the 22 person at the time in question. 23  (c) A person notifies or gives a notification to another person by taking steps 24 reasonably required to inform the other person in the ordinary course of business, 25 whether or not the other person learns of it. 26  (d) A person receives a notification when the notification 27  (1) comes to the person's attention; or 28  (2) is duly delivered at the person's place of business or at any other 29 place held out by the person as a place for receiving communications. 30  (e) Except as otherwise provided in (f) of this section, a person other than an 31 individual knows, has notice, or receives a notification of a fact for purposes of a

01 particular transaction when the individual conducting the transaction knows, has notice 02 of, or receives a notification of the fact, or in any event when the fact would have 03 been brought to the individual's attention if the person had exercised reasonable 04 diligence. The person exercises reasonable diligence if the person maintains 05 reasonable routines for communicating significant information to the individual 06 conducting the transaction and there is reasonable compliance with the routines. 07 Reasonable diligence does not require an individual acting for the person to 08 communicate information unless the communication is part of the individual's regular 09 duties or the individual has reason to know of the transaction and that the transaction 10 would be materially affected by the information. 11  (f) A partner's knowledge, notice, or receipt of a notification of a fact relating 12 to the partnership is effective immediately as knowledge by, notice to, or receipt of a 13 notification by the partnership, except in the case of a fraud on the partnership 14 committed by or with the consent of that partner. 15  Sec. 32.06.960. Effect of partnership agreement; nonwaivable provisions. 16 (a) Except as otherwise provided in (b) of this section, relations between and among 17 the partners and between the partners and the partnership are governed by the 18 partnership agreement. To the extent the partnership agreement does not otherwise 19 provide, this chapter governs relations between and among the partners and between 20 the partners and the partnership. 21  (b) The partnership agreement may not 22  (1) vary the rights and duties under AS 32.06.970 except to eliminate 23 the duty to provide copies of statements to all of the partners; 24  (2) unreasonably restrict the right of access to records under 25 AS 32.06.403(b); 26  (3) eliminate the duty of loyalty under AS 32.06.404(b) or 27 32.06.603(b)(3), but 28  (A) the partnership agreement may identify specific types or 29 categories of activities that do not violate the duty of loyalty, if not manifestly 30 unreasonable; or 31  (B) all of the partners or a number or percentage specified in

01 the partnership agreement may authorize or ratify, after full disclosure of all 02 material facts, a specific act or transaction that otherwise would violate the 03 duty of loyalty; 04  (4) unreasonably reduce the duty of care under AS 32.06.404(c) or 05 32.06.603(b)(3); 06  (5) eliminate the obligation of good faith and fair dealing under 07 AS 32.06.404(d), but the partnership agreement may prescribe the standards by which 08 the performance of the obligation is to be measured, if the standards are not manifestly 09 unreasonable; 10  (6) vary the power to dissociate as a partner under AS 32.06.602(a), 11 except to require the notice under AS 32.06.601(1) to be in writing; 12  (7) vary the right of a court to expel a partner in the events specified 13 in AS 32.06.601(5); 14  (8) vary the requirement to wind up the partnership business in cases 15 under AS 32.06.801(4), (5), or (6); 16  (9) vary the law applicable to a limited liability partnership under 17 AS 32.06.975(b); or 18  (10) restrict rights of third parties under this chapter. 19  Sec. 32.06.965. Supplemental principles of law. (a) Unless displaced by 20 particular provisions of this chapter, the principles of law and equity supplement this 21 chapter. 22  (b) If an obligation to pay interest arises under this chapter and the rate is not 23 specified, the rate is governed by AS 45.45.010. 24  Sec. 32.06.970. Execution, filing, and recording of statements. (a) A 25 statement may be filed with the department. A certified copy of a statement that is 26 filed in an office in another state may be filed with the department. Either filing has 27 the effect provided in this chapter with respect to partnership property located in or 28 transactions that occur in this state. 29  (b) A certified copy of a statement that has been filed with the department and 30 recorded in the office for recording transfers of real property has the effect provided 31 for recorded statements in this chapter. A recorded statement that is not a certified

01 copy of a statement filed with the department does not have the effect provided for 02 recorded statements in this chapter. 03  (c) A statement filed by a partnership must be executed by at least two 04 partners. Other statements must be executed by a partner or other person authorized 05 by this chapter. An individual who executes a statement as, or on behalf of, a partner 06 or other person named as a partner in a statement shall personally declare under 07 penalty of perjury that the contents of the statement are accurate. 08  (d) A person authorized by this chapter to file a statement may amend or 09 cancel the statement by filing an amendment or cancellation that names the 10 partnership, identifies the statement, and states the substance of the amendment or 11 cancellation. 12  (e) A person who files a statement under this section shall promptly send a 13 copy of the statement to every nonfiling partner and to any other person named as a 14 partner in the statement. Failure to send a copy of a statement to a partner or other 15 person does not limit the effectiveness of the statement as to a person who is not a 16 partner. 17  (f) The department may collect a fee for filing or providing a certified copy 18 of a statement. 19  Sec. 32.06.975. Governing law. (a) Except as otherwise provided in (b) of 20 this section, the law of the jurisdiction where a partnership has its chief executive 21 office governs the relations between and among the partners and between the partners 22 and the partnership. 23  (b) The law of this state governs relations between and among the partners and 24 between the partners and the partnership and the liability of partners for an obligation 25 of a limited liability partnership. 26  Sec. 32.06.985. Partnership subject to amendment or repeal of chapter. 27 A partnership governed by this chapter is subject to an amendment or repeal of this 28 chapter. 29 Article 11. General Provisions. 30  Sec. 32.06.990. Uniformity of application and construction. This chapter 31 shall be applied and construed to effectuate its general purpose to make uniform the

01 law with respect to the subject of this chapter among states enacting it. 02  Sec. 32.06.995. Definitions. In this chapter, unless the context indicates 03 otherwise, 04  (1) "business" includes a trade, an occupation, or a profession; 05  (2) "commissioner" means the commissioner of commerce and 06 economic development; 07  (3) "debtor in bankruptcy" means a person who is the subject of 08  (A) an order for relief under 11 U.S.C. (Bankruptcy Code) or 09 a comparable order under a successor statute of general application; or 10  (B) a comparable order under federal, state, or foreign law 11 governing insolvency; 12  (4) "department" means the Department of Commerce and Economic 13 Development; 14  (5) "distribution" means a transfer of money or other property from a 15 partnership to a partner in the partner's capacity as a partner or to the partner's 16 transferee; 17  (6) "foreign limited liability partnership" means a partnership that 18  (A) is formed under laws other than the laws of this state; and 19  (B) has the status of a limited liability partnership under those 20 laws; 21  (7) "limited liability partnership" means a partnership that has filed a 22 statement of qualification under AS 32.06.911 and does not have a similar statement 23 in effect in another jurisdiction; 24  (8) "partnership" means an association of two or more persons to carry 25 on as co-owners a business for profit formed under AS 32.06.202, predecessor law, or 26 a comparable law of another jurisdiction; 27  (9) "partnership agreement" means the agreement, whether written, oral, 28 or implied, among the partners concerning the partnership, including amendments to 29 the partnership agreement; 30  (10) "partnership at will" means a partnership in which the partners 31 have not agreed to remain partners until the expiration of a definite term or the

01 completion of a particular undertaking; 02  (11) "partnership interest" or "partner's interest in the partnership" 03 means all of a partner's interests in the partnership, including the partner's transferable 04 interest and all management and other rights; 05  (12) "person" means an individual, corporation, business trust, estate, 06 trust, partnership, association, joint venture, government, governmental subdivision, 07 agency, or instrumentality, or any other legal or commercial entity; 08  (13) "property" means all property, including real, personal, mixed, 09 tangible, or intangible property, or an interest in property; 10  (14) "state" means a state of the United States, the District of 11 Columbia, the Commonwealth of Puerto Rico, or a territory or insular possession 12 subject to the jurisdiction of the United States; 13  (15) "statement" means a statement of partnership authority under 14 AS 32.06.303, a statement of denial under AS 32.06.304, a statement of dissociation 15 under AS 32.06.704, a statement of dissolution under AS 32.06.805, a statement of 16 merger under AS 32.06.907, a statement of qualification under AS 32.06.911, a 17 statement of foreign qualification under AS 32.06.922, or an amendment or 18 cancellation of any of the foregoing; 19  (16) "transfer" includes an assignment, conveyance, lease, mortgage, 20 deed, and encumbrance. 21  Sec. 32.06.997. Short title. This chapter may be cited as the "Uniform 22 Partnership Act." 23 * Sec. 3. AS 32.11.890 is amended to read: 24  Sec. 32.11.890. Rules for conversions and other cases not covered by 25 chapter. In a case not provided for in this chapter, including conversion of a limited 26 partnership to a partnership, the provisions of AS 32.06 [AS 32.05] govern. 27 * Sec. 4. AS 32.05 is repealed. 28 * Sec. 5. COURT RULES. (a) AS 32.06.701(i), enacted by sec. 2 of this Act, changes 29 (1) Rule 79, Alaska Rules of Civil Procedure, by allowing a court to award 30 expert fees and expenses against certain parties, rather than awarding the costs expressly 31 allowed by Rule 79;

01 (2) Rule 82, Alaska Rules of Civil Procedure, by allowing for attorney fees 02 that may be awarded against parties, including nonprevailing parties, that are different from 03 the fees allowed by Rule 82. 04 (b) AS 32.06.906(a)(4), enacted by sec. 2 of this Act, changes Rule 25(c), Alaska 05 Rules of Civil Procedure, by allowing certain substitutions of parties as a right without being 06 subject to any court discretion under Rule 25(c). 07 * Sec. 6. APPLICABILITY. (a) Before January 1, 2003, secs. 1 - 3 of this Act do not 08 apply to a partnership or limited liability partnership unless the partnership or limited liability 09 partnership is formed 10 (1) on or after January 1, 1999, but this paragraph does not apply to a 11 partnership or limited liability partnership that is continuing the business of a partnership or 12 limited liability partnership dissolved under AS 32.05; or 13 (2) before January 1, 1999, and the partnership or limited liability partnership 14 elects, under (c) of this section, to be governed by secs. 1 - 3 of this Act. 15 (b) On and after January 1, 2003, secs. 1 - 3 of this Act apply to all partnerships and 16 limited liability partnerships. 17 (c) On or after January 1, 1999, and before January 1, 2003, partnerships and limited 18 liability partnerships may voluntarily elect, in the manner provided in its partnership 19 agreement and by law for amending the partnership agreement, to be governed by secs. 1 - 20 3 of this Act. The provisions of secs. 1 - 3 of this Act relating to the liability of those 21 partnership's partners to third parties do not apply to limit the partners' liability to a third 22 party who does business with the partnership before the partnership's election to be governed 23 by secs. 1 - 3 of this Act unless the third party knows or has received a notification of the 24 partnership's election to be governed by secs. 1 - 3 of this Act. 25 (d) If, under (a) or (b) of this section, secs. 1 - 3 of this Act apply to a partnership 26 or limited partnership, AS 09.40.240, as amended by this Act, AS 32.05, and AS 32.11.890, 27 as amended by this Act, do not apply to the partnership or limited partnership. 28 (e) In this section, "limited liability partnership" and "partnership" have the meanings 29 given in AS 32.06.995, enacted by sec. 2 of this Act. 30 * Sec. 7. SAVINGS CLAUSE. Sections 1 - 5 of this Act do not affect an action or 31 proceeding begun or right accrued before January 1, 1999.

01 * Sec. 8. AS 32.06.701(i) and 32.06.906(a)(4), enacted by sec. 2 of this Act, take effect 02 only if sec. 5 of this Act receives the two-thirds majority vote of each house required by 03 art. IV, sec. 15, Constitution of the State of Alaska. 04 * Sec. 9. Section 4 of this Act takes effect January 1, 2003. 05 * Sec. 10. Except for sec. 4 of this Act, this Act takes effect January 1, 1999.