HB472 By Representative Poole RFD Judiciary Rd 1 06-APR-17

SYNOPSIS: Under existing law, the Alabama Partnership Act governs the formation, powers, governance, and dissolution of partnerships in the state.

This bill would revise the Alabama Partnership Act and would specify that the procedures for formation, powers, governance, and dissolution are applicable to limited liability limited partnerships, limited liability partnerships, foreign limited liability partnerships, and foreign limited liability partnerships that function in the state. This bill would make conforming changes elsewhere in the business entities law.

A BILL TO BE ENTITLED AN ACT

Relating to business entities; to amend Section 10A-1-1.02, Section 10A-1-1.03, as amended by Act 2016-379, 2016 Regular Session, Sections 10A-1-1.06, 10A-1-1.08, 10A-1-1.12, 10A-1-2.02, 10A-1-3.06, 10A-1-3.17, 10A-1-3.32, 10A-1-3.33, 10A-1-3.41, 10A-1-4.01, 10A-1-4.02, 10A-1-4.25, 10A-1-4.31, 10A-1-5.01, 10A-1-5.02, 10A-1-5.03, 10A-1-5.04, 10A-1-5.05, 10A-1-5.06, and 10A-1-5.08; to add Section 10A-1-5.10; to amend Sections 10A-1-5.11, 10A-1-5.12, 10A-1-5.31, 10A-1-5.32, 10A-1-5.33, 10A-1-7.01, 10A-1-7.02, 10A-1-7.03, 10A-1-7.04, 10A-1-7.05, and 10A-1-7.06, Section 10A-1-7.07, as amended by Act 2016-379, 2016 Regular Session, 10A-1-7.11, 10A-1-7.12, 10A-1-7.13, 10A-1-7.14, 10A-1-7.22, 10A-1-7.23, 10A-1-7.24, 10A-1-7.31, 10A-1-7.32, 10A-1-7.34, 10A-1-7.36, 10A-1-7.37, 10A-1-8.01, 10A-1-8.02, and 10A-1-8.03, to amend and renumber Section 10A-1-9.01 as 10A-1-9.02, to add a new Section 10A-1-9.01, and to amend Sections 10A-1-9.21, 10A-1-9.22, 10A-5A-1.02, 10A-5A-1.06, 10A-9A-1.07, and 10A-17-1.02 of the Code of Alabama 1975, to revise and replace the Alabama Partnership Act; and to provide that the procedures for formation, powers, governance, and dissolution are applicable to limited liability limited partnerships, limited liability partnerships, foreign limited liability partnerships, and foreign limited liability limited partnerships that function in the state; to repeal Sections 10A-1-5.07, 10A-1-7.33, and Chapter 8 of Title 10A, comprised of Sections 10A-8-1.01 to 10A-8-11.04, inclusive, Code of Alabama 1975; and to add Chapter 8A to Title 10A of the Code of Alabama 1975.

BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:Section 1. Section 10A-1-1.02, Section 10A-1-1.03, as amended by Act 2016-379, 2016 Regular Session, Sections 10A-1-1.06, 10A-1-1.08, 10A-1-1.12, 10A-1-2.02, 10A-1-3.06, 10A-1-3.17, 10A-1-3.32, 10A-1-3.33, 10A-1-3.41, 10A-1-4.01, 10A-1-4.02, 10A-1-4.25, 10A-1-4.31, 10A-1-5.01, 10A-1-5.02, 10A-1-5.03, 10A-1-5.04, 10A-1-5.05, 10A-1-5.06, and 10A-1-5.08 of the Code of Alabama 1975, are amended to read as follows:

§10A-1-1.02.

"(a) All provisions of this chapter shall apply to all entities formed under or governed by Chapters 2 to 11, inclusive, except to the extent, if any, that any provision of this chapter is inconsistent with or as otherwise provided by the provisions of this title or other statutory or constitutional provisions specifically applicable to the entity.

"(b) The provisions of this chapter shall apply to entities formed under or governed by Chapter 16, Chapter 17, Chapter 20, and Chapter 30 only as provided therein or expressly provided in this chapter.

"(c) If a provision of this chapter conflicts with a provision in another chapter of this title, the provision of the other chapter, to the extent of the conflict, supersedes the provision of this chapter.

"(d) Any section of any act enacted at the 2009 and 2010 Regular Sessions in substantive conflict with any provision of Act 2009-513 shall prevail over Act 2009-513 whether enacted before or after Act 2009-513.

"(e) When codifying Act 2009-513 and acts of the 2009 and 2010 Regular Sessions or any special session occurring before the 2011 Regular Session, the Code Commissioner shall place the provisions of other acts relating to the subject of Act 2009-513 within the structure of Title 10A as specified by Act 2009-513. Actions taken by the Code Commissioner in complying with this requirement shall include, but not be limited to, placing a section that is amended and renumbered by Act 2009-513 into the code in the substantive form as amended by the other act but assigning it the code section number contained in Act 2009-513 and assigning a section number based on the numbering system contained in Act 2009-513 for any section amended by another act that is repealed by Act 2009-513.

§10A-1-1.03.

"As used in this title, unless the context otherwise requires, the following terms mean:

"(1) AFFILIATE. A person who controls, is controlled by, or is under common control with another person. An affiliate of an individual includes the spouse, or a parent or sibling thereof, of the individual, or a child, grandchild, sibling, parent, or spouse of any thereof, of the individual, or an individual having the same home as the individual, or a trust or estate of which an individual specified in this sentence is a substantial beneficiary; a trust, estate, incompetent, conservatee, protected person, or minor of which the individual is a fiduciary; or an entity of which the individual is director, general partner, agent, employee or the governing authority or member of the governing authority.

"(2) ASSOCIATE. When used to indicate a relationship with:

"(A) a domestic or foreign entity or organization for which the person is:

"(i) an officer or governing person; or

"(ii) a beneficial owner of 10 percent or more of a class of voting ownership interests or similar securities of the entity or organization;

"(B) a trust or estate in which the person has a substantial beneficial interest or for which the person serves as trustee or in a similar fiduciary capacity;

"(C) the person's spouse or a relative of the person related by consanguinity or affinity within the fifth degree who resides with the person; or

"(D) a governing person or an affiliate or officer of the person.

"(3) ASSOCIATION. Includes, but is not limited to, an unincorporated nonprofit association as defined in Section 10A-17-1.02(2) Chapter 17 and an unincorporated professional association as defined in Section 10A-30-1.01(2) Article 1 of Chapter 30.

"(4) BUSINESS CORPORATION. A domestic or foreign corporation within the meaning of Section 10A-2-1.40(3) or Section 10A-2-1.40(9) as defined in Chapter 2.

"(5) BUSINESS TRUST. A business trust within the meaning of Section 10A-16-1.01 as defined in Chapter 16.

"(6) CERTIFICATE OF DISSOLUTION. Any document such as a certificate of dissolution, statement of dissolution, or articles of dissolution, required or permitted to be filed publicly with respect to an entity's dissolution and winding up of its business, activity, activities, not for profit activity, or affairs.

"(6) (7) CERTIFICATE OF FORMATION.

"(A) the document required to be filed publicly under Article 3, Chapter 5A or Chapter 9A to form a filing entity; and

"(B) if appropriate, a restated certificate of formation and all amendments of an original or restated certificate of formation.

"(7) (8) CERTIFICATE OF OWNERSHIP. An instrument evidencing an ownership interest or membership interest in an entity.

"(8) CERTIFICATE OF TERMINATION. Any document, such as articles of dissolution in the case of a corporation, or certificate of cancellation, in the case of a limited partnership, required by law to be filed publicly with respect to an entity's dissolution and the winding up of its affairs or the end of its existence. In the case of an entity whose separate existence ceases as a result of a merger, the articles of merger shall constitute the certificate of termination.

"(9) CERTIFICATED OWNERSHIP INTEREST. An ownership interest of a domestic entity represented by a certificate issued in bearer or registered form.

"(10) CERTIFICATION. Duly authenticated by the proper officer of the state or county under the laws of which a domestic or foreign entity is formed or filing officer of the jurisdiction the laws of which govern the internal affairs of an entity.

"(11) CONTRIBUTION. A tangible or intangible benefit that a person transfers to an entity in consideration for an ownership interest in the entity or otherwise in the person's capacity as an owner or a member. In the case of an entity to which Section 234 of the Constitution of Alabama of 1901, now appearing as Section 234 of the Official Recompilation of the Constitution of Alabama of 1901, as amended, applies, the benefit that may constitute a contribution transferred in exchange for an ownership interest or transferred in the transferor's capacity as an owner or member shall be limited to money, work or labor done, or property actually received. For entities to which Section 234 does not apply, the A benefit that may constitute a contribution transferred in exchange for an ownership interest or transferred in the transferor's capacity as an owner or member may include cash, property, services rendered, a contract for services to be performed, a promissory note or other obligation of a person to pay cash or transfer property to the entity, or securities or other interests in or obligations of an entity. In either case, the benefit does not include cash or property received by the entity:

"(A) with respect to a promissory note or other obligation to the extent that the agreed value of the note or obligation has previously been included as a contribution; or

"(B) that the person intends to be a loan to the entity.

"(12) CONVERSION.

"(A) the continuance of a domestic entity as a foreign entity of any type;

"(B) the continuance of a foreign entity as a domestic entity of any type; or

"(C) the continuance of a domestic entity of one type as a domestic entity of another type.

"(13) CONVERTED ENTITY. An entity resulting from a conversion. The term converted entity is synonymous with the term resulting entity.

"(14) CONVERTING ENTITY. An entity as the entity existed before the entity's conversion.

"(15) COOPERATIVE. Includes an employee cooperative within the meaning of Section 10A-11-1.02(2) as defined in Chapter 11.

"(16) CORPORATION. Includes a domestic or foreign business corporation within the meaning of Section 10A-2-1.40(3) or Section 10A-2-1.40(9), a as defined in Chapter 2, a domestic or foreign nonprofit corporation within the meaning of Section 10A-3-1.02(7) or Section 10A-3-1.02(4), a as defined in Chapter 3, a domestic or foreign professional corporation within the meaning of Section 10A-4-1.03(3) or Section 10A-4-1.03(4) as defined in Chapter 4, and those entities specified in Chapter 20 as corporate.

"(17) COURT. Every court and judge having jurisdiction in a case.

"(18) DAY. When used in the computation of time excludes the first day and includes the last day of the period so computed, unless the last day is a Saturday, Sunday, or legal holiday, in which event the period runs until the end of the next day that is not a Saturday, a Sunday, or a legal holiday. When the period of time to be computed is less than 7 days, intermediate Saturdays, Sundays, and legal holidays shall be excluded.

"(19) DEBTOR IN BANKRUPTCY. A person who is the subject of:

"(A) an order for relief under the United States bankruptcy laws, Title 11, United States Code, or comparable order under a successor statute of general application; or

"(B) a comparable order under federal, state, or foreign law governing insolvency.

"(20) DIRECTOR. An individual who serves on the board of directors, by whatever name known, of a foreign or domestic corporation.

"(21) DISTRIBUTION. A transfer of property, including cash, from an entity to an owner or member of the entity in the owner's or member's capacity as an owner or member. The term includes a dividend, a redemption or purchase of an ownership interest, or a liquidating distribution.

"(22) DOMESTIC. With respect to an entity, that the entity is formed and exists under this title.

"(23) DOMESTIC ENTITY. An organization formed and existing under this title.

"(24) EFFECTIVE DATE OF THIS TITLE. January 1, 2011.

"(25) ELECTRONIC SIGNATURE. An electronic signature as that term is defined in the Alabama Electronic Transactions Act, Chapter 1A of Title 8, or any successor statute.

"(26) ENTITY. A domestic entity or foreign entity.

"(27) FILING ENTITY. A domestic entity that is a corporation, limited partnership, including a limited liability partnership, limited liability company, professional association, employee cooperative corporation, or real estate investment trust.

"(28) FILING INSTRUMENT. An instrument, document, or statement that is required or authorized by this title to be filed by or for an entity with the filing officer in accordance with Article 4.

"(29) FILING OFFICER. The officer with whom a filing instrument is required or permitted to be filed under Article 4 or under any other provision of this title.

"(30) FOREIGN. With respect to an entity, that the entity is formed and existing under the laws of a jurisdiction other than this state.

"(31) FOREIGN ENTITY. An organization formed and existing under the laws of a jurisdiction other than this state.

"(32) FOREIGN FILING ENTITY. A foreign entity that registers or is required to register as a foreign entity under Section 10A-1-7.01(a)(1) Article 7.

"(33) FOREIGN GOVERNMENTAL AUTHORITY. A governmental official, agency, or instrumentality of a jurisdiction other than this state.

"(34) FOREIGN LIMITED LIABILITY LIMITED PARTNERSHIP. A foreign limited liability limited partnership as defined in Chapter 9A.

"(35) FOREIGN LIMITED LIABILITY PARTNERSHIP. A foreign limited liability partnership as defined in Chapter 8A.

"(34) (36) FOREIGN LIMITED PARTNERSHIP. A foreign limited partnership within the meaning of Section 10A-9A-1.02(4) as defined in Chapter 9A.

"(35) (37) FOREIGN NONFILING ENTITY. A foreign entity that is not a foreign filing entity.

"(36) (38) FUNDAMENTAL BUSINESS TRANSACTION. A merger, interest exchange, conversion, or sale of all or substantially all of an entity's assets.

"(37) (39) GENERAL PARTNER.

"(A) each partner in a general partnership; or

"(B) a person who is admitted to a limited partnership as a general partner in accordance with the governing documents of the limited partnership.

"(38) (40) GENERAL PARTNERSHIP. A partnership within the meaning of Section 10A-8-1.02(3) as defined in Chapter 8A. The term includes a registered limited liability partnership within the meaning of Section 10A-8-1.02(7) as defined in Chapter 8A.

"(39) (41) GOVERNING AUTHORITY. A person or group of persons who are entitled to manage and direct the affairs of an entity under this title and the governing documents of the entity, except that if the governing documents of the entity or this title divide the authority to manage and direct the affairs of the entity among different persons or groups of persons according to different matters, governing authority means the person or group of persons entitled to manage and direct the affairs of the entity with respect to a matter under the governing documents of the entity or this title. The term includes the board of directors of a corporation, by whatever name known, or other persons authorized to perform the functions of the board of directors of a corporation, the general partners of a general partnership or limited partnership, the managers of a limited liability company that is managed by managers, the members the persons who have direction and oversight of a limited liability company, that is managed by members who are entitled to manage the company, and the trust managers of a real estate investment trust. The term does not include an officer who is acting in the capacity of an officer.

"(40) (42) GOVERNING DOCUMENTS.

"(A) in the case of a domestic entity:

"(i) the certificate of formation for a domestic filing entity or the document or agreement under which a domestic nonfiling entity is formed; and

"(ii) the other documents or agreements, including bylaws, partnership agreements of limited partnerships, operating limited liability company agreements of limited liability companies, or similar documents, adopted by the entity under this title to govern the formation or the internal affairs of the entity; or

"(B) in the case of a foreign entity, the instruments, documents, or agreements adopted under the law of its jurisdiction of formation to govern the formation or the internal affairs of the entity.

"(41) (43) GOVERNING PERSON. A person serving as part of the governing authority of an entity.

"(42) (44) INDIVIDUAL. A natural person and the estate of an incompetent or deceased natural person.

"(43) (45) INSOLVENCY. The inability of a person to pay the person's debts as they become due in the usual course of business or affairs.

"(44) (46) INSOLVENT. A person who is unable to pay the person's debts as they become due in the usual course of business or affairs.

"(45) (47) JUDGE OF PROBATE. The judge of probate of the county in which a domestic entity's certificate of formation is filed, or, with respect to partnership statements provided for in Section 10A-8-1.06 a statement of authority under Chapter 8A, which is to be filed in the real property records of a particular county, the judge of probate of the county in which a that statement is filed.

"(46) (48) JURISDICTION OF FORMATION.

"(A) in the case of a domestic filing entity, this state;

"(B) in the case of a foreign filing entity, the jurisdiction in which the entity's certificate of formation or similar organizational instrument is filed,; or or if no certificate of formation or similar organizational instrument is filed, then the laws of the jurisdiction which govern the initial affairs of the foreign entity;

"(C) in the case of a general partnership which has filed a statement of partnership, a statement of not for profit partnership, or a statement of limited liability partnership in accordance with Chapter 8A, this state;

"(D) in the case of a foreign limited liability partnership, the laws of the jurisdiction which govern the filing of the foreign limited liability partnership's statement of limited liability partnership or such filing in that jurisdiction; and

"(E) in the case of a foreign or domestic nonfiling entity other than those entities described in subsections (C) or (D):

"(C) in the case of a foreign or domestic nonfiling entity:

"(i) the jurisdiction the laws of which are chosen in the entity's governing documents to govern its internal affairs if that jurisdiction bears a reasonable relation to the owners or members or to the domestic or foreign nonfiling entity's business and affairs under the principles of this state that otherwise would apply to a contract among the owners or members; or

"(ii) if subparagraph (i) does not apply, the jurisdiction in which the entity has its principal place of business.

"(47) (49) LAW. Unless the context requires otherwise, both statutory and common law.

"(48) (50) LICENSE. A license, certificate of registration, or other legal authorization.

"(49) (51) LICENSING AUTHORITY. The state court, state regulatory licensing board, or other like agency which has the power to issue a license or other legal authorization to render professional services.

"(50) (52) LIMITED LIABILITY COMPANY. A limited liability company within the meaning of as defined in Chapter 5A.

"(53) LIMITED LIABILITY LIMITED PARTNERSHIP. A limited liability limited partnership as defined in Chapter 9A.

"(54) LIMITED LIABILITY PARTNERSHIP. A limited liability partnership as defined in Chapter 8A.

"(51) (55) LIMITED PARTNER. A person who has been admitted to a limited partnership as a limited partner as provided by:

"(A) in the case of a domestic limited partnership, Section 10A-9-3.01 or Section 10A-9A-3.01, as applicable Chapter 9A; or

"(B) in the case of a foreign limited partnership, the laws of its jurisdiction of formation.

"(52) (56) LIMITED PARTNERSHIP. A limited partnership within the meaning of Section 10A-9-1.02(11) or 10A-9A-1.02(8), as applicable as defined in Chapter 9A. The term includes a limited liability limited partnership as defined in Chapter 9A.

"(53) (57) MANAGERIAL OFFICIAL. An officer or a governing person.

"(54) (58) MEMBER.

"(A) a person defined as a member under Chapter 5A;

"(B) in the case of a nonprofit corporation governed by Article Chapter 3, a person having membership rights in a corporation in accordance with its governing documents as provided in Section 10A-3-1.02(5) Chapter 3;

"(C) in the case of an employee cooperative corporation governed by Chapter 11, a natural person who, as provided in Section 10A-11-1.02(5) Chapter 11, has been accepted for membership in and owns a membership share in an employee cooperative;

"(D) in the case of a nonprofit association, a person who, as provided in Section 10A-17-1.02(1) Chapter 17, may participate in the selection of persons authorized to manage the affairs of the nonprofit association or in the development of its policy.

"(55) (59) MERGER.

"(A) the division of a domestic entity into two or more new domestic entities or other organizations or into a surviving domestic entity and one or more new domestic or foreign entities or non-code organizations; or

"(B) the The combination of one or more domestic entities with one or more domestic entities or non-code organizations resulting in:

"(i) (A) one or more surviving domestic entities or non-code organizations;

"(ii) (B) the creation of one or more new domestic entities or non-code organizations, or one or more surviving domestic entities or non-code organizations; or

"(iii) (C) one or more surviving domestic entities or non-code organizations and the creation of one or more new domestic entities or non-code organizations.

"(56) (60) NON-CODE ORGANIZATION. An organization other than a domestic entity.

"(57) (61) NONFILING ENTITY. A domestic entity that is not a filing entity. The term includes a domestic general partnership, a registered limited liability partnership, and a nonprofit association.

"(58) (62) NONPROFIT ASSOCIATION. An unincorporated nonprofit association within the meaning of Section 10A-17-1.02(2) as defined in Chapter 17. The term does not include a general partnership which has filed a statement of not for profit partnership in accordance with Chapter 8A, a limited partnership which is carrying on a not for profit purpose, or a limited liability company which is carrying on a not for profit purpose.

"(59) (63) NONPROFIT CORPORATION. A domestic or foreign nonprofit corporation within the meaning of Section 10A-3-1.02(7) or Section 10A-3-1.02(4) as defined in Chapter 3.

"(60) (64) NONPROFIT ENTITY. An entity that is a nonprofit corporation, nonprofit association, or other entity that is organized solely for one or more nonprofit purposes.

"(61) (65) OFFICER. An individual elected, appointed, or designated as an officer of an entity by the entity's governing authority or under the entity's governing documents.

"(62) (66) ORGANIZATION. A corporation, limited partnership, or general partnership, limited liability company, business trust, real estate investment trust, joint venture, joint stock company, cooperative, association, bank, insurance company, credit union, savings and loan association, or other organization, regardless of whether the organization is for profit, not for profit, nonprofit, domestic, or foreign.

"(63) (67) ORGANIZER. A person, who need not be an owner or member of the entity, who, having the capacity to contract, is authorized to execute documents in connection with the formation of the entity.

"(64) (68) OWNER.

"(A) with respect to a foreign or domestic business corporation or real estate investment trust, a shareholder;

"(B) with respect to a foreign or domestic partnership, a partner;

"(C) with respect to a foreign or domestic limited liability company or association, a member; and

"(D) with respect to another foreign or domestic entity, an owner of an equity interest in that entity.

"(65) (69) OWNERSHIP INTEREST. An owner's interest in an entity. The term includes the owner's share of profits and losses or similar items and the right to receive distributions. The term does not include an owner's right to participate in management or participate in the direction or oversight of the entity. An ownership interest is personal property.

"(66) (70) PARENT ENTITY or PARENT ORGANIZATION. An entity or organization that:

"(A) owns at least 50 percent of the ownership or membership interest of a subsidiary; or

"(B) possesses at least 50 percent of the voting power of the owners or members of a subsidiary.

"(67) (71) PARTNER. A limited partner or general partner.

"(68) (72) PARTNERSHIP. Includes a general partnership, a registered limited liability partnership, a foreign registered limited liability partnership, a limited partnership, a foreign limited partnership, a limited liability limited partnership within the meaning of Section 10A-9-1.02(9) and Section 10A-9A-1.02(6), and a foreign limited liability limited partnership within the meaning of Section 10A-9-1.02(6) and Section 10A-9A-1.02(3).

"(69) (73) PARTNERSHIP AGREEMENT. Any agreement (whether referred to as a partnership agreement or otherwise), written, oral or implied, of the partners as to the activities and affairs of a general partnership or a limited partnership. The partnership agreement includes any amendments to the partnership agreement. In the case of limited partnerships formed prior to October 1, 1998, partnership agreement includes the certificate of partnership.

"(70) PARTNERSHIP INTEREST. In the case of a general partnership the meaning set forth in Section 10A-8-1.02(5).

"(71) (74) PARTY TO THE MERGER. A domestic entity or non-code organization that under a plan of merger is divided or combined by a merger. The term does not include a domestic entity or non-code organization that is not to be divided or combined into or with one or more domestic entities or non-code organizations, regardless of whether ownership interests of the entity are to be issued under the plan of merger.

"(72) (75) PERSON. An individual or an organization, whether created by the laws of this state or another state or foreign country, including, without limitation, a general partnership, registered limited liability partnership, limited partnership, limited liability limited partnership, limited liability company, corporation, professional corporation, professional association, trustee, personal representative, fiduciary, as defined in Section 19-3-150 or person performing in any similar capacity, business trust, estate, trust, association, joint venture, government, governmental subdivision, agency, or instrumentality, or any other legal or commercial entity.

"(73) (76) PRESIDENT.

"(A) the individual designated as president of an entity under the entity's governing documents; or

"(B) the officer or committee of persons authorized to perform the functions of the principal executive officer of an entity without regard to the designated name of the officer or committee.

"(74) (77) PROFESSIONAL ASSOCIATION. A professional association within the meaning of Section 10A-30-1.01 as defined in Chapter 30.

"(75) (78) PROFESSIONAL CORPORATION. A domestic or foreign professional corporation within the meaning of Section 10A-4-1.03(2) or Section 10A-4-1.03(3) as defined in Chapter 4.

"(76) (79) PROFESSIONAL ENTITY. A professional association or and a professional corporation.

"(77) (80) PROFESSIONAL SERVICE. Any type of service that may lawfully be performed only pursuant to a license issued by a state court, state regulatory licensing board, or other like agency pursuant to state laws.

"(78) (81) PROPERTY. Includes all property, whether real, personal, or mixed, or tangible and or intangible, property and an or any right or interest in that property therein.

"(79) (82) REAL ESTATE INVESTMENT TRUST. An unincorporated trust, association, or other entity within the meaning of Section 10A-10-1.02(1) as defined in Chapter 10.

"(80) REGISTERED LIMITED LIABILITY PARTNERSHIP. A registered limited liability partnership within the meaning of Section 10A-8-1.02(7).

"(81) (83) SECRETARY.

"(A) the individual designated as secretary of an entity under the entity's governing documents; or

"(B) the officer or committee of persons authorized to perform the functions of secretary of an entity without regard to the designated name of the officer or committee.

"(82) (84) SECRETARY OF STATE. The Secretary of State of the State of Alabama.

"(83) (85) SIGNATURE. Any symbol executed or adopted by a person with present intention to authenticate a writing. Unless the context requires otherwise, the term includes an electronic signature and a facsimile of a signature.

"(84) (86) STATE. Includes, when referring to a part of the United States, a state or commonwealth, and its agencies and governmental subdivisions, and a territory or possession, and its agencies and governmental subdivisions, of the United States.

"(85) (87) SUBSCRIBER. A person who agrees with or makes an offer to an entity to purchase by subscription an ownership interest in the entity.

"(86) (88) SUBSCRIPTION. An agreement between a subscriber and an entity, or a written offer made by a subscriber to an entity before or after the entity's formation, in which the subscriber agrees or offers to purchase a specified ownership interest in the entity.

"(87) (89) SUBSIDIARY. An entity or organization at least 50 percent of:

"(A) the ownership or membership interest of which is owned by a parent entity or parent organization; or

"(B) the voting power of which is possessed by a parent entity or parent organization.

"(88) (90) TREASURER.

"(A) the individual designated as treasurer of an entity under the entity's governing documents; or

"(B) the officer or committee of persons authorized to perform the functions of treasurer of an entity without regard to the designated name of the officer or committee.

"(89) (91) TRUSTEE. A person who serves as a trustee of a trust, including a real estate investment trust.

"(90) (92) UNCERTIFICATED OWNERSHIP INTEREST. An ownership interest in a domestic entity that is not represented by a certificate in bearer or registered form.

"(91) (93) VICE PRESIDENT.

"(A) the individual designated as vice president of an entity under the governing documents of the entity; or

"(B) the officer or committee of persons authorized to perform the functions of the president of the entity on the death, absence, or resignation of the president or on the inability of the president to perform the functions of office without regard to the designated name of the officer or committee.

"(92) (94) WRITING or WRITTEN. Information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.

§10A-1-1.06.

"To the extent not inconsistent with the Constitution of Alabama of 1901, and other statutes of this state wherein the terms may be found, and as the context requires, in this title or any other statute of this state:

"(1) a reference to certificate of formation includes, in the case of a corporation, articles of incorporation, certificate of incorporation, and charter; in the case of limited partnership, a certificate of limited partnership and a certificate of formation; in the case of a limited liability company, certificate of formation and articles of organization; and in the case of a business trust or a real estate investment trust, declaration of trust and, similarly, a reference to articles of incorporation, certificate of incorporation, charter, certificate of limited partnership, or articles of organization includes a certificate of formation;

"(2) a reference to certificate of termination includes, in the case of a corporation or a limited liability company, articles of dissolution and statement of dissolution, and in the case of a limited partnership, a certificate of cancellation and a statement of dissolution; similarly, a reference to articles of dissolution, includes statement of dissolution, or certificate of cancellation includes certificate of termination and certificate of dissolution, and, similarly, a reference to certificate of termination statement of dissolution includes articles of dissolution, statement of dissolution, and certificate of dissolution, and similarly, a reference to a statement certificate of dissolution includes articles of dissolution, certificate of termination, and certificate and statement of dissolution;

"(3) a reference to certificate of merger includes articles of merger and statement of merger and similarly, a reference to articles of merger includes certificate of merger and statement of merger, and similarly, a reference to statement of merger includes certificate of merger and articles of merger;

"(4) a reference to authorized capital stock includes authorized shares;

"(5) a reference to capital stock includes authorized and issued shares, issued shares, and stated capital;

"(6) a reference to a certificate of registration, certificate of authority, statement of foreign limited liability partnership, and permit to do transact business includes registration;

"(7) a reference to stock and shares of stock includes shares;

"(8) a reference to stockholder includes shareholder; and

"(9) a reference to no par stock includes shares without par value.

§10A-1-1.08.

"(a) The provisions of this title as described by this section may be cited as provided by this section.

"(b) Chapter 2 and the provisions of Chapter 1 to the extent applicable to business corporations may be cited as the Alabama Business Corporation Law.

"(c) Chapter 3 and the provisions of Chapter 1 to the extent applicable to nonprofit corporations may be cited as the Alabama Nonprofit Corporation Law.

"(d) Chapter 4 and the provisions of Chapter 1 to the extent applicable to professional corporations may be cited as the Alabama Professional Corporation Law.

"(e) Chapter 5A and the provisions of Chapter 1 to the extent applicable to limited liability companies may be cited as the Alabama Limited Liability Company Law of 2014.

"(f) Chapter 8 8A and the provisions of Chapter 1 to the extent applicable to general partnerships may be cited as the Alabama Uniform Partnership Law.

"(g) Chapter 9 and the provisions of Chapter 1 to the extent applicable to limited partnerships may be cited as the Alabama Uniform Limited Partnership Law. Chapter 9A and the provisions of Chapter 1 to the extent applicable to limited partnerships may be cited as the Alabama Limited Partnership Law.

"(h) Chapter 10 and the provisions of Chapter 1 to the extent applicable to real estate investment trusts may be cited as the Alabama Real Estate Investment Trust Law.

"(i) Chapter 11 and the provisions of Chapter 1 and Chapter 2 to the extent applicable to employee cooperative corporations may be cited as the Alabama Employee Cooperative Corporations Law.

"(j) Chapter 17 may be cited as the Alabama Unincorporated Nonprofit Association Law.

§10A-1-1.12.

"If For entities other than general partnerships, if the formation of an entity does not occur when a certificate of formation or similar instrument filed with the Secretary of State or the judge of probate, as the case may be, or with a foreign governmental authority takes effect, the law governing the entity's formation and internal affairs is the law of the entity's jurisdiction of formation.

§10A-1-2.02.

"A domestic entity may not engage in a business, or activity, not for profit activity, or any other activity, whether or not for profit, that:

"(A) is expressly unlawful or prohibited by a law of this state;

"(B) cannot lawfully be engaged in by that entity under a law of this state; or

"(C) may not be engaged in by an entity without first obtaining a license under the laws of this state to engage in that business, or activity, not for profit activity, or any other activity, whether or not for profit, and a license cannot lawfully be granted to the entity.

§10A-1-3.06.

"The formation and existence of a domestic filing entity that is a converted entity in a conversion or that is to be created under a plan of merger takes effect and commences on the effectiveness of the conversion or merger, as appropriate.

§10A-1-3.17.

"(a) A restated certificate of formation must accurately state the text of the previous certificate of formation, regardless of whether the certificate of formation is an original, corrected, or restated certificate, and include:

"(1) each previous amendment to the certificate being restated that is carried forward; and

"(2) each new amendment to the certificate being restated.

"(b) A restated certificate of formation may omit:

"(1) the name and address of each organizer other than the name and address of each general partner of a limited partnership; and

"(2) any other information that may be omitted under the provisions of this title applicable to the filing entity.

"(c) A restated certificate of formation that does not make new amendments requiring owner approval to the certificate of formation being restated must be accompanied by:

"(1) a statement that (i) the restated certificate of formation accurately states the text of the certificate of formation being restated, as amended, restated, and corrected, except for information omitted under subsection (b) and that , (ii) the restated certificate does not make new amendments requiring owner approval, and, if it does not, that (iii) the governing persons have adopted the restatement in the manner required by this title and the governing documents of the entity; and

"(2) any other information required by other provisions of this title applicable to the filing entity.

"(d) A restated certificate of formation that makes new amendments requiring owner approval to the certificate of formation being restated must:

"(1) be accompanied by a statement that each new amendment has been made in accordance with this title;

"(2) identify by reference or description each added, altered, or deleted provision;

"(3) be accompanied by a statement that each amendment has been approved in the manner required by this title and the governing documents of the entity, including any information required by this article to be set forth in an amendment to the certificate of formation as to the owner approval of the amendment;

"(4) be accompanied by a statement that the restated certificate of formation:

"(A) accurately states the text of the certificate of formation being restated and each amendment to the certificate of formation being restated that is in effect, as further amended by the restated certificate of formation; and

"(B) does not contain any other change in the certificate of formation being restated except for information omitted under subsection (b); and

"(5) include any other information required by the chapter of this title applicable to the entity.

§10A-1-3.32.

"(a) This section applies to entities other than (i) corporations formed under Chapter 2 and, professional corporations formed under Chapter 4, and real estate investment trusts governed by Chapter 10, each of which is governed by the separate recordkeeping requirements and record inspections provisions of Chapter 2, and (ii) limited liability companies formed under Chapter 5A, partnerships governed by Chapter 8A, and limited partnerships formed under Chapter 9A, each of which are governed by the separate recordkeeping requirements and record inspection provisions of Chapter 2 rather than by this section set forth in each entity's respective chapter governing that entity.

"(b) With respect to an entity covered by this section, the books and records maintained under the chapter of this title applicable to the entity and any other books and records of the entity, wherever situated, are subject to inspection and copying at the reasonable request, and at the expense of, any owner or member or the owner's or member's agent or attorney during regular business hours. The right of access extends to the legal representative of a deceased owner or member or owner or member under legal disability. The entity shall also provide former owners and members with access to its books and records pertaining to the period during which they were owners or members.

"(c) The governing documents of the entity may not unreasonably restrict an owner's or member's right to information or access to books and records.

"(d) Any agent or governing person of an entity who, without reasonable cause, refuses to allow any owner or member or the owner's or member's agent or legal counsel to inspect any books or records of the entity shall be personally liable to the agent or member for a penalty in an amount not to exceed 10 percent of the fair market value of the ownership interest of the owner or member, in addition to any other damages or remedy.

§10A-1-3.33.

"(a) An entity covered by Section 10A-1-3.32 shall provide governing persons and their agents and attorneys access to its books and records, including the books and records required to be maintained under the chapter of this title applicable to the entity and other books and records of the entity for any purpose reasonably related to the governing person's service as a governing person. The right of access shall include the right to inspect and copy books and records during ordinary business hours. An entity may impose a reasonable charge covering the costs of labor and material for copies of documents furnished.

"(b) An entity covered by Section 10A-1-3.32 shall furnish to a governing person:

"(1) Without demand, any information concerning the entity's business and affairs reasonably required for the proper exercise of the governing person's rights and duties under the entity's governing documents or this title; and

"(2) On demand, any other information concerning the entity's business and affairs, except to the extent the demand or the information demanded is unreasonable or otherwise improper under the circumstances.

"(c) A court may require an entity covered by Section 10A-1-3.32 to open the books and records of the entity, including the books and records required to be maintained by the entity under the chapter of this title applicable to the entity, to permit a governing person to inspect, make copies of, or take extracts from the books and records or may require an entity to furnish the governing person with information concerning the entity's business and affairs on a showing by the governing person that:

"(1) the person is a governing person of the entity;

"(2) the person's purpose for inspecting the entity's books and records under subsection (a) or in obtaining information as to the entity's business and affairs under subsection (b)(1) is reasonably related to the person's service as a governing person or, in the case of information as to the entity's business and affairs demanded under subsection (b)(2), that neither the demand nor the information demanded is unreasonable or otherwise improper under the circumstances;

"(3) in the case of information as to the entity's business and affairs described in subsection (b)(2), the person has made demand for the information; and

"(4) the entity refused the person's access to the books and records or to furnish information as to the entity's business and affairs.

"(d) A court may award a governing person attorney fees and any other proper relief in a suit under subsection (c) to require an entity to open its books and records.

§10A-1-3.41.

"(a) Ownership interests in a domestic entity may be certificated or uncertificated.

"(b) The ownership interests in a business corporation, real estate investment trust, or professional corporation must be certificated unless the governing documents of the entity or a resolution adopted by the governing authority of the entity states that the ownership interests are uncertificated. If a domestic entity changes the form of its ownership interests from certificated to uncertificated, a certificated ownership interest subject to the change becomes an uncertificated ownership interest only after the certificate is surrendered to the domestic entity.

"(c) Ownership interests in a domestic entity, other than a domestic entity described in subsection (b), are uncertificated unless this title or the governing documents of the domestic entity state that the interests are certificated.

"(d) Unless an entity's chapter specially provides otherwise, no certificate of a certificated ownership interest shall be issued in bearer form.

§10A-1-4.01.

"(a) A filing instrument must be:

"(1) signed by the person or persons required by this title or the applicable chapter to execute, and to verify, if required by the applicable chapter, the filing instrument; and

"(2) delivered, together with one exact or conformed copy and the additional exact or conformed copies as required by Section 10A-1-4.02(b) or (e) or other provision of this title, to the judge of probate or Secretary of State, as the case may be under the provisions of Section 10A-1-4.02, in person or by mail or courier, or, if permitted by the respective filing officer, by facsimile or electronic transmission or any other comparable form of delivery.

"(b) A person authorized by this title to sign a filing instrument for an entity is not required to show evidence of the person's authority as a requirement for filing.

"(c) The execution of a filing instrument constitutes an affirmation by each person executing the instrument that the facts therein are true, under penalties for perjury prescribed by Section 13A-10-103 or its successor.

"(d) If a person required by this title to execute any filing instrument fails or refuses to do so, any person who is adversely affected by the failure or refusal may petition the circuit court for the judicial circuit in which the county is located where under this title the filing instrument would be filed, or if it would be filed with the Secretary of State, in the circuit court in the county in which the registered agent is located, and if no registered agent is required, in the circuit court in the county in which the entity has it principal place of business in this state, and if the entity does not have a place of business in this state, in the Circuit Court of Montgomery County, to direct the execution of the filing instrument. If the court finds that it is proper for the filing instrument to be executed and that any person so designated has failed or refused to execute the filing instrument, it shall order the judge of probate of the county or the Secretary of State, as the case may be, to record an appropriate filing instrument.

§10A-1-4.02.

"(a) The following filing instruments shall be delivered to the judge of probate for filing, except as the chapter applicable to an entity or other provision of this title provides for filing by the Secretary of State or another filing officer:

"(2) certificates of termination dissolution, other than a statement of dissolution of a general partnership or a statement of cancellation by a limited liability partnership;

"(3) certificates of revocation of termination;

"(4) certificates of correction to any filing instrument required to be delivered to the office of the judge of probate for filing; and

"(5) any other filing instrument required or permitted under this title to be delivered to the judge of probate for filing.

"(b) Any of the following filing instruments delivered to the office of the judge of probate for filing shall be accompanied by an additional exact or conformed copy to permit the judge of probate to transmit to the Secretary of State a certified copy thereof as required by subsection (g):

"(1) certificates of formation;

"(2) amendments to certificates of formation that alter the name of any entity;

"(3) restated certificates of formation;

"(4) certificates of termination dissolution;

"(5) certificates of revocation of termination; and

"(6) certificates of correction correcting any of the foregoing filing instruments.

"(c) The following filing instruments shall be delivered to the Secretary of State for filing:

"(1) certificates, or articles, or statements of merger, statements of conversion, and articles of share exchange;

"(2) registration statements or registrations of a foreign entity for authority to transact business in this state and any statements, notices or certificates of withdrawal or termination or statements, notices, or certificates evidencing the same or required or authorized under Article 7 of this chapter;

"(3) the annual report of a business corporation, which may be made as provided in Section 10A-2-16.22 by filing with the Department of Revenue the public record information required by Chapter 14A of Title 40, together with the prescribed fee for the annual report;

"(4) for corporations created by an act of the Legislature prior to the adoption of the Constitution of Alabama of 1901, or for entities which have resulted from a merger, share exchange, or conversion, all filing instruments required by this title to be delivered to the judge of probate for filing shall be delivered to the Secretary of State for filing;

"(5) any other filing instrument required or permitted under this title to be delivered to the Secretary of State for filing;

"(6) articles of correction of any filing instrument required or permitted to be delivered to the Secretary of State for filing; and

"(7) statements and any other document required or permitted to be delivered to the Secretary of State for filing under Chapter 8A; and

"(7) (8) any other filing instrument required or permitted to be filed under this title and not expressly required or permitted to be delivered to the Secretary of State or judge of probate or other designated filing office for filing.

"(d) The filing of partnership statements shall be as provided in Section 10A-8-1.06.

"(e) (d) Certificates of merger, articles, or statements of merger or articles of share exchange, and statements of conversion delivered to the Secretary of State for filing shall be accompanied by the additional number of exact or conformed copies of articles as may be required for purposes of subsection (g) (f) hereof.

"(f) (e) If the judge of probate or Secretary of State, as the case may be, finds that a filing instrument delivered under this section and Section 10A-1-4.01 substantially conforms to the provisions of this title that apply to the entity and that all required fees have been paid, and if, in the case of a certificate of formation or an amendment to a certificate of formation that would change the name of the entity, the judge of probate finds that the name of the entity has been reserved under Section 10A-1-5.11 Article 5 of this chapter, the judge of probate or Secretary of State, as the case may be, shall file it immediately upon delivery by:

"(1) endorsing "filed," together with his or her name and official title and the date and time of receipt on the instrument and all copies required hereunder and on the receipt for the filing fee;

"(2) accepting it into the filing system adopted by the judge of probate or Secretary of State and assigning the instrument a date of filing; and

"(3) delivering a copy thereof, endorsed as provided in subdivision (1), with the filing fee receipt, or acknowledgment of receipt of the instrument if no filing fee is required, to the entity or its representative.

"(g) (f) In the case of any of the filing instruments described in subsection (b), the judge of probate shall within 10 days transmit a certified copy of the filing instrument to the Secretary of State. In the case of certificates, or articles, or statements of merger, statements of conversion, or articles of share exchange, the Secretary of State shall promptly transmit a certified copy thereof to the office of the judge of probate of the county in which each domestic entity's certificate of formation, if any, is filed.

"(h) (g) If the judge of probate or Secretary of State, as the case may be, refuses to file a filing instrument, he or she shall return it to the domestic or foreign entity or its representative within seven days after the filing instrument was delivered, together with a brief, written explanation of the reason for his or her refusal.

"(i) (h) The judge of probate's or Secretary of State's duty to file filing instruments under this title is ministerial. His or her filing or refusing to file a filing instrument does not:

"(1) affect the validity or invalidity of the filing instrument in whole or in part;

"(2) relate to the correctness or incorrectness of information contained in the filing instrument; or

"(3) create a presumption that the filing instrument is valid or invalid or that information contained in the filing instrument is correct or incorrect.

"(j) (i) The Secretary of State shall keep an alphabetical list of domestic and foreign entities, the certificates of formation, the statements under Chapter 8A, or statements or registrations for authority to transact business in this state, for which are filed in his or her office, together with the data contained in the filing instruments.

§10A-1-4.25.

"(a) After the Secretary of State or the judge of probate, as the case may be, files the certificate of correction, the filing instrument is considered to have been corrected on the date the filing instrument was originally filed, except as otherwise provided by subsection (b).

"(b) As to a person who acted in reliance on the filing instrument prior to its correction and who is adversely affected by the that correction, the filing instrument is considered to have been corrected on the date the certificate of correction is filed.

"(c) An acknowledgment of filing or a similar instrument issued by the Secretary of State or judge of probate, as the case may be, before a filing instrument is corrected, with respect to the effect of filing the original filing instrument, applies to the corrected filing instrument as of the date the corrected filing instrument is considered to have been filed under this section.

§10A-1-4.31.

"(a) The judge of probate or the Secretary of State, as the case may be, shall collect the following fees when the filing instruments described in this title are delivered to him or her for filing:

"FILING INSTRUMENT FEE FOR STATE OF ALABAMA FEE FOR THE JUDGE OF PROBATE "(1) Certificate of formation and restated certificate of formation $100 $50 "(2) Amendment to certificate of formation $50 $25 "(3) Name reservations "A. less than 24 hours $25 No fee "B. 24 hours or more $10 No fee "(4) Certificate of termination dissolution (other than a statement of dissolution or cancellation under Chapter 8A) $100 $50 "(5) Certificate, articles, or statement of merger; statement of conversion, articles of consolidation or share exchange $100 $50 "(6) Foreign entity registration including registration a statement of foreign limited liability partnership $150 No fee "(7) Certificate of existence "A. Less than 24 hours $25 No fee "B. 24 hours or more $10 No fee " (8) Registered limited liability partnership registration $100 $50 "(9) Registered limited liability partnership annual report (8) Statements and any document required or permitted to be filed with the Secretary of State under Chapter 8A $100 No fee "(10) Partnership statement (filing or certifying) (9) Certified statements and any document required or permitted to be filed with the judge of probate under Chapter 8A $25 $25 $100 "(11) (10) Any other filing instrument required or permitted to be filed under this title $25 $25

"(b) When appropriate, two checks shall accompany a filing instrument delivered to the judge of probate or the Secretary of State for filing, one payable to the judge of probate for all charges for the judge of probate, and one payable to the State of Alabama covering all charges for the Secretary of State. In the case of any filing instrument delivered for filing to the judge of probate accompanied by a check for the charges for the Secretary of State, the check for the Secretary of State shall be forwarded by the judge of probate to the Secretary of State. In the case of any filing instrument delivered for filing to the Secretary of State accompanied by a check for the judge of probate, the check for the judge of probate shall be forwarded by the Secretary of State to the judge of probate.

"(c) There is hereby established in the State Treasury a fund to be known and designated as the Secretary of State Entity Fund. All funds, fees, charges, costs, and collections accruing to or collected by the Secretary of State under the foregoing provisions of this section or any other fees collected by the Secretary of State relating to entities shall be deposited into the State Treasury to the credit of the Secretary of State Entity Fund except as so provided in subsection (e).

"(d) All funds now or hereafter deposited in the State Treasury to the credit of the Secretary of State Entity Fund shall not be expended for any purpose whatsoever unless the same shall have been allotted and budgeted in accordance with the provisions of Article 4 of Chapter 4 of Title 41, and only in the amounts and for the purposes provided by the Legislature in the general appropriation bill or this section.

"(e) Seventy percent of funds collected by the Secretary of State in relation to entities during the fiscal year shall be deposited to the credit of the State General Fund.

"(f) The fees herein imposed for the office of the judge of probate shall be charged and paid into the appropriate county treasury or to the judge of probate as may be authorized or required by law.

"(g) The Secretary of State shall collect the following fees for copying and certifying the copy of any filing instrument relating to a domestic or foreign entity:

"(1) One dollar fifty cents ($1.50) Two dollars ($2.00) a page for copying; and

"(2) Five dollars ($5) Ten dollars ($10) for the certificate.

"(h) The judge of probate shall collect the following fees for copying and certifying the copy of any filing instrument relating to an entity:

"(1) One dollar fifty cents ($1.50) Two dollars ($2.00) a page for copying; and

"(2) Five dollars ($5) Ten dollars ($10) for the certificate.

"(i) For requests of immediate expedition of documents to be obtained in less than 24 hours, other than name reservations and certificates of existence, by the Secretary of State regarding document filings, certifications, and certificates in addition to required fees, a one hundred dollar ($100) surcharge shall be imposed.

§10A-1-5.01.

"The filing of a certificate of formation by a filing entity under this title, an application for registration or statement of foreign limited liability partnership by a foreign filing entity under this title, or an application for reservation or registration of a name under this article does not authorize the use of a name in this state in violation of a right of another under:

"(1) the Trademark Act of 1946, as amended, 15 U.S.C. Section 1051 et seq.; or

"(2) Chapter 12 of Title 8; or

"(3) Common law.

§10A-1-5.02.

"A filing domestic entity, and or a foreign filing entity registered to transact business in this state with registration under Article 7, may not have a name that contains any word phrase that indicates or implies that the entity is engaged in a business that the entity is not authorized by law to pursue.

§10A-1-5.03.

"(a) A filing domestic entity may not have a name and a foreign filing entity may not register to transact business in this state under a name that is the same as or not distinguishable on the records of the Secretary of State from:

"(1) the name of another existing filing entity or registered a general partnership that has an effective statement of partnership, statement of not for profit partnership, or limited liability partnership with an effective current registration under Chapter 8A;

"(2) the name of a foreign filing entity that is registered has a registration under Article 7;

"(3) a name that is reserved under Division B.

"(b) Subsection (a) does not apply if the other entity or the person for whom the name is reserved consents in writing to the use of a name not distinguishable on the records of the Secretary of State, and submits an undertaking in form satisfactory to the Secretary of State to change its name to a name that is distinguishable on the records of the Secretary of State from the name for which application was made.

"(c) In determining whether a name is the same as or not distinguishable on the records of the Secretary of State from the name of another entity, words, phrases, or abbreviations indicating the type of entity, such as "corporation," "corp.," "general partnership," "GP," "G.P.," not for profit general partnership, "NGP," "N.G.P.," "incorporated," "Inc.," "limited liability company," "LLC," "L.L.C." "limited partnership," "LP," "L.P.," "Ltd.," "limited liability limited partnership," "LLLP," "L.L.L.P." "limited liability partnership," "LLP," or "L.L.P." "registered limited liability partnership," "RLLP," "limited liability company," or "LLC" shall not be taken into account unless waived in writing by the incumbent holder of the name.

§10A-1-5.04.

"(a) The name of a corporation or foreign corporation registered to transact business in this state must contain:

"(1) the word "corporation" or "incorporated"; or

"(2) an abbreviation of one of those words.

"(b) Subsection (a) does not apply to a nonprofit corporation or foreign nonprofit corporation, or to banks, trust companies, savings and loan associations, or insurance companies.

"(c) In lieu of a word or abbreviation required by subsection (a), the name of a professional corporation must comply with the requirements of Section 10A-1-5.08.

"(d) The requirements of subsection (a) do not apply to any corporation organized before January 1, 1981.

§10A-1-5.05.

"(a) The name of a limited partnership or a foreign limited partnership registered to transact business in this state may contain the name of any partner.

"(b) The name of a limited partnership that is not a limited liability limited partnership must contain the phrase "limited partnership" or "Limited," or the abbreviation "L.P.," "LP," or "Ltd." and must not contain the phrase "limited liability limited partnership" or the abbreviation "LLLP" or "L.L.L.P."

"(c) The name of a limited liability limited partnership must contain the phrase "limited liability limited partnership" or the abbreviation "LLLP" or "L.L.L.P." and must not contain the abbreviation "L.P.," "LP," or "Ltd."

"(d) Subject to Section 10A-1-7.07, this section applies to any foreign limited partnership transacting business in this state, having a certificate of authority to transact business in this state, or applying for a certificate of authority.

"(e) The name of a limited partnership may not contain the following words: "bank," "banking," "banker," "trust," "insurance," "insurer," "corporation," "incorporated," or any abbreviation of such words.

§10A-1-5.06.

"The name of a limited liability company or a foreign limited liability company doing registered to transact business in this state must contain the words "Limited Liability Company" or the abbreviation "L.L.C." or "LLC".

§10A-1-5.08.

"The name of a domestic professional corporation or of a foreign professional corporation registered to transact business in Alabama this state must contain the words "professional corporation" or the abbreviation "P.C." or "PC" and shall otherwise conform to any rule promulgated by a licensing authority having jurisdiction of a professional service described in the certificate of formation of the corporation."

Section 2. Section 10A-1-5.10 is added to the Code of Alabama 1975, to read as follows:

(a) The name of a general partnership that has filed a statement of partnership in accordance with Section 10A-8A-2.02 must include the words "general partnership" or the abbreviation "G.P." or "GP".

(b) The name of a general partnership that has filed a statement of not for profit partnership in accordance with Section 10A-8A-2.02 must include the words "not for profit general partnership" or the abbreviation "N.G.P." or "NGP".Section 3. Sections 10A-1-5.11, 10A-1-5.12, 10A-1-5.31, 10A-1-5.32, 10A-1-5.33, 10A-1-7.01, 10A-1-7.02, 10A-1-7.03, 10A-1-7.04, 10A-1-7.05, and 10A-1-7.06, Section 10A-1-7.07, as amended by Act 2016-379, 2016 Regular Session, 10A-1-7.11, 10A-1-7.12, 10A-1-7.13, 10A-1-7.14, 10A-1-7.22, 10A-1-7.23, 10A-1-7.24, 10A-1-7.31, 10A-1-7.32, 10A-1-7.34, 10A-1-7.36, 10A-1-7.37, 10A-1-8.01, 10A-1-8.02, 10A-1-8.03, 10A-1-9.01, and 10A-1-9.02 of the Code of Alabama 1975, are amended to read as follows:

§10A-1-5.11.

"(a) A person shall To reserve the exclusive use of an entity name, including a fictitious name for a foreign entity whose name is not available, by delivering a person must deliver an application to the Secretary of State for filing. Any person may file an application with the Secretary of State to reserve the exclusive use of a name under this article.

"(b) The application must set forth the name and address of the applicant and the name proposed to be reserved and must be:

"(1) accompanied by any required filing fee; and

"(2) signed by the applicant or by the agent or attorney of the applicant.

"(c) The name may also be reserved by electronic means, subject to the requirements as the Secretary of State may establish for reservation of names by means, including requirements for payment of the fee for name reservation.

§10A-1-5.12.

"(a) The Secretary of State may not reserve a name that is the same as, or not distinguishable on the records of the Secretary of State from:

"(1) the name of an existing filing entity or registered; the name of a general partnership that has an effective statement of partnership, statement of not for profit partnership, or statement of limited liability partnership with an effective registration on file with the Secretary of State under Chapter 8A;

"(2) the name of a foreign filing entity that is registered has a registration under Article 7; or

"(3) a name that is reserved under this division.

"(b) Subsection (a) does not apply if the other entity or the person for whom the name is reserved consents in writing to the subsequent reservation of a name not distinguishable on the records of the Secretary of State, and submits an undertaking in form satisfactory to the Secretary of State to change its name to a name that is distinguishable on the records of the Secretary of State from the name applied for or, if the conflict is with a reserved or registered name, transfers its reservation to the applicant pursuant to Section 10A-1-5.16.

§10A-1-5.31.

"(a) Each filing entity, each foreign filing entity, each foreign registered limited liability partnership registered pursuant to Article 7, and any registered with a registration under Article 7, and each general partnership that has an effective statement of partnership, statement of not for profit partnership, or statement of limited liability partnership that does not maintain a place of business in this state on file with the Secretary of State in accordance with Chapter 8A, shall designate and continuously maintain in this state:

"(1) a registered agent; and

"(2) a registered office.

"(b) A registered agent:

"(1) is an agent of the entity on which may be served any process, notice, or demand required or permitted by law to be served on the entity;

"(2) may be:

"(A) an individual who is a resident of this state; or

"(B) a domestic entity or a foreign entity that is registered to do transact business in this state; and

"(3) must maintain a business office at the same address as the entity's registered office.

"(c) The registered office:

"(1) must be located at a street address where process may be personally served on the entity's registered agent;

"(2) is not required to be a place of business of the filing entity or foreign filing entity; and

"(3) may not be solely a mailbox service or a telephone answering service.

§10A-1-5.32.

"(a) A filing An entity, registered limited liability partnership required to maintain a registered office and registered agent under Section 10A-1-5.31(a), or foreign filing entity or other foreign entity required to register in this state pursuant to Section 10A-1-7.01, may change its registered office, its registered agent, or both, by delivering to the Secretary of State for filing a statement of the change in accordance with the procedures in Article 4.

"(b) The statement must contain:

"(1) the name of the entity;

"(2) the name of the entity's registered agent;

"(3) the street address of the entity's registered agent;

"(4) if the change relates to the registered agent, the name of the entity's new registered agent and the new registered agent's written consent to the appointment, either on the statement or attached to it;

"(5) if the change relates to the registered office, the street address of the entity's new registered office;

"(6) a recitation that the change specified in the statement is authorized by the entity; and

"(7) a recitation that the street address of the registered office and the street address of the registered agent's business are the same.

"(c) On acceptance of the statement by the Secretary of State, the statement is:

"(1) in the case of a domestic filing entity, effective to change the designation of the entity's registered agent or registered office, or both, without the necessity of amending the entity's certificate of formation;

"(2) in the case of a domestic registered general partnership with an effective statement of partnership, statement of not for profit partnership, or statement of limited liability partnership on file with the Secretary of State under Chapter 8A, effective to change its registered agent or registered office, or both, without the necessity of amending its registration as a statement of partnership, statement of not for profit partnership, or statement of limited liability partnership filed under Section 10A-8-10.01 Chapter 8A;

"(3) in the case of a foreign filing entity other than a foreign limited liability partnership, effective to change the designation of the entity's registered agent or registered office, or both, and effective as an amendment of its application for registration as a foreign entity under Article 7; or

"(4) in the case of a foreign registered limited liability partnership, effective to change the designation of its registered agent or registered office, or both, without the necessity of amending its registration as a statement of foreign limited liability partnership filed under Section 10A-8-10.01, and effective as an amendment to its application for registration as a foreign entity under Article 7.

§10A-1-5.33.

"(a) The registered agent of any entity required by Section 10A-1-5.31 to designate and maintain a registered agent or registered office may change its name, its address as the address of the entity's registered office, or both, by delivering to the Secretary of State for filing a statement of the change in accordance with the procedures in Article 4.

"(b) The statement must be signed by the registered agent, or a person authorized to sign the statement on behalf of the registered agent, and must contain:

"(1) the name of the entity represented by the registered agent;

"(2) the name of the entity's registered agent and the address at which the registered agent maintained the entity's registered office;

"(3) if the change relates to the name of the registered agent, the new name of that agent;

"(4) if the change relates to the address of the registered office, the new address of that office; and

"(5) a recitation that written notice of the change was given to the entity at least 10 days before the date the statement is filed.

"(c) On acceptance of the statement by the Secretary of State, the statement is:

"(1) in the case of a domestic filing entity, effective to make the change set forth in the statement without the necessity of amending the entity's certificate of formation;

"(2) in the case of a domestic registered general partnership with an effective statement of partnership, statement of not for profit partnership, or statement of limited liability partnership on file with the Secretary of State, effective to make the change set forth in the statement its registered agent or registered office, or both, without the necessity of amending its registration as a statement of partnership, statement of not for profit partnership, or statement of limited liability partnership filed under Section 10A-8-10.01 Chapter 8A;

"(3) in the case of a foreign filing entity, effective to make the change set forth in the statement, and effective as an amendment of its application for registration as a foreign entity under Article 7; or

"(4) in the case of a foreign registered limited liability partnership, effective to make the change set forth in the statement, and effective as an amendment to its application for registration as a statement of foreign entity limited liability partnership under Article 7.

"(d) A registered agent may file a statement under this section that applies to more than one entity.

§10A-1-7.01.

"(a)(1) For purposes of this Article 7, the terms register, registering, and registered include (i) a foreign entity other than a foreign limited liability partnership delivering to the Secretary of State for filing an application for registration and the Secretary of State filing the application for registration, and (ii) a foreign limited liability partnership delivering to the Secretary of State for filing a statement of foreign limited liability partnership and the Secretary of State filing the statement of foreign limited liability partnership.

"(2) For purposes of this Article 7, the term registration includes (i) a filed application for registration and (ii) a filed statement of foreign limited liability partnership.

"(3) For purposes of this Article 7, the terms transact business and transacting business shall include conducting a business, activity, not for profit activity, and any other activity, whether or not for profit.

"(a) (b) To transact business in this state, a foreign entity must register under this chapter if the foreign entity:

"(1) is a foreign entity, the formation of which, if formed in this state, would require the filing under Article 3 of a certificate of formation; or

"(2) is a foreign limited liability partnership; or

"(2) (3) affords limited liability under the law of its jurisdiction of formation for any owner or member.

"(b) (c) A foreign entity described by subsection (a) (b) must maintain the entity's registration while transacting business in this state.

§10A-1-7.02.

"(a) A foreign entity not described by Section 10A-1-7.01(a) (b) may transact business in this state without registering under this chapter.

"(b) Subsection (a) does not relieve a foreign entity from the duty to comply with applicable requirements under other law to file or register.

"(c) A foreign entity is not required to register under this chapter if other law of this state or of federal law authorizes the foreign entity to transact the particular business authorized by law in this state.

"(d) A foreign unincorporated nonprofit association is not required to register under this chapter.

"(e) A foreign entity which is exempt from the requirements of Chapter 46 of Title 16, is not required to register under this chapter.

§10A-1-7.03.

"A foreign entity that is eligible under other law of this state to register to transact business in this state, but that is not registered under that law, may register under this chapter unless that registration registering is prohibited by the other law. The A registration under this chapter confers only the authority provided by this chapter.

§10A-1-7.04.

"(a) A foreign filing entity registers by filing an application for registration as provided by Article 4. (1) A foreign entity described in Section 10A-1-7.01(b) other than a foreign limited liability partnership, registers by delivering to the Secretary of State for filing an application for registration in accordance with the procedures in Article 4.

"(2) A foreign limited liability partnership registers by delivering to the Secretary of State for filing a statement of foreign limited liability partnership in accordance with the procedures in Article 4.

"(b) The application for registration of a foreign entity described in Section 10A-1-7.01(b) other than a foreign limited liability partnership must state:

"(1) the foreign entity's name or, if that name is not available for use in this state or otherwise would not comply with Article 5, a name that satisfies the requirements of Section 10A-1-7.07 under which the entity will transact business in this state;

"(2) the foreign entity's type;

"(3) the foreign entity's jurisdiction of formation;

"(4) the date of the foreign entity's formation;

"(5) that the foreign entity exists as a valid foreign filing entity of the stated type under the laws of the foreign entity's jurisdiction of formation;

"(6) the date the foreign entity began or will begin to transact business in this state;

"(7) the street address and mailing address, if different, of the principal office of the foreign filing entity and;

"(8) the street address and mailing address, if different, of the initial registered office and the name of the initial registered agent for service of process which Article 5 requires to be maintained at that office.

"(c) A foreign filing entity may register regardless of any differences between the law of the entity's jurisdiction and of this state applicable to the governing of the internal affairs or to the liability of an owner, member, or managerial official. Notwithstanding the foregoing, no foreign filing entity may carry on in this state any business of a character that may not lawfully be carried on by a domestic filing entity of the same type.

"(d) In the case of a foreign corporation filing an application pursuant to this section, the foreign corporation shall also, to the extent required by the Constitution of Alabama of 1901, file a copy of its articles or certificate of incorporation or association or other certificate of formation and all amendments thereto duly certified by the Secretary of State or other official having custody of corporate records in the state or other jurisdiction under whose law it is incorporated.

"(c) The statement of foreign limited liability partnership must state:

"(1) the foreign limited partnership's name or, if that name is not available for use in this state or otherwise would not comply with Article 5, a name that satisfies the requirements of Section 10A-1-7.07 under which the foreign entity will transact business in this state;

"(2) the jurisdiction which governs the foreign limited liability partnership's partnership agreement and under which it is a limited liability partnership;

"(3) the date of the foreign limited liability partnership's formation;

"(4) that the foreign limited liability partnership exists as a valid foreign limited liability partnership under the laws of the jurisdiction which governs the foreign limited liability partnership's partnership agreement and under which it is a limited liability partnership;

"(5) the date the foreign limited liability partnership will begin to transact business in this state;

"(6) the street address and mailing address, if different, of the principal office of the foreign limited liability partnership;

"(7) the street address and mailing address, if different, of the initial registered office and the name of the initial registered agent for service of process which Article 5 requires to be maintained at that office;

"(d) The application for registration of a foreign entity described in Section 10A-1-7.01(b) other than a foreign limited liability partnership shall be executed by one or more persons authorized to execute an application for registration. The statement of foreign limited liability partnership shall be executed by one or more partners authorized to execute a statement of foreign limited liability partnership.

"(e) The status of the foreign entity after registration and the liability of its owners, managers, members, or managerial officials shall not be adversely affected by error or subsequent changes in the information stated in the application for registration or statement of foreign limited liability partnership, as applicable.

"(f) The fact that an application for registration or a statement of foreign limited liability partnership, as applicable, is on file with the Secretary of State is notice that the foreign entity is authorized to transact business in this state and as notice of all facts required to be set forth in the application for registration or the statement of foreign limited liability partnership, as applicable.

"(g) A foreign entity may register regardless of any differences between the law of the foreign entity's jurisdiction and of this state applicable to the governing of the internal affairs or to the liability of an owner, member, or managerial official. Notwithstanding the foregoing, no foreign entity may carry on in this state any business of a character that may not lawfully be carried on by a domestic entity of the same type.

"(h) A statement of foreign limited liability partnership is a filing instrument.

§10A-1-7.05.

"(a) The application for registration of a foreign entity and the statement of foreign limited liability partnership takes effect in accordance with Article 4 of this chapter. The registration of a foreign entity is effective when the application filed under Article 4 takes effect. The registration remains in effect until the registration terminates, is withdrawn, or is revoked.

"(b) Except in a proceeding to revoke the registration of a foreign entity or as otherwise provided by the law of Alabama, the Secretary of State's issuance of an acknowledgment that the foreign entity has filed an application for registration or a statement of foreign limited liability partnership, as applicable, is conclusive evidence of the authority of the foreign filing entity to transact business in this state under the foreign entity's name or under another name stated in the application, for registration in accordance with Section 10A-1-7.04(b)(1) or stated in the statement of foreign limited liability partnership in accordance with Section 10A-1-7.04(c)(1), as applicable.

§10A-1-7.06.

"(a) If any statement in the an application for registration of a or a statement of foreign entity limited liability partnership was false when made or any arrangements or other facts described have changed, making the application for registration or statement of foreign limited liability partnership, as applicable, inaccurate in any respect, the foreign entity shall file with the Secretary of State an amendment correcting the false or inaccurate statement. A foreign filing entity must amend its registration to change its name if the name has changed. If the entity's name of a foreign entity as changed is not available in this state or otherwise does not satisfy the requirements of Article 5, the foreign entity, pursuant to the requirements of Section 10A-1-7.07, must adopt a name that complies with Article 5 under which it will transact business in this state.

"(b) A foreign filing entity may amend its application for registration or statement of foreign limited liability partnership by filing an application for amendment of registration as provided by Article 4.

"(c) The application for amendment must be filed promptly on the discovery that any statement in the application for registration or statement of foreign limited liability partnership, as applicable, was false when made, but not later than 60 days after the discovery. The application for amendment must be filed promptly after any arrangements other facts described in the application have changed, making the application inaccurate in any respect, but not later than 90 days after the change.

§10A-1-7.07.

"If the name of a foreign entity does not satisfy the requirements of Article 5, the foreign entity, for use in this state, may:

"(1) if a corporation, add to its corporate name the word "corporation" or "incorporated" or an abbreviation of one of the words;

"(2) if a banking corporation, add to its corporate name the words "bank," "banking," or "bankers";

"(3) if a limited partnership that is not a limited liability limited partnership, add to its partnership name the word "limited" or the abbreviation "Ltd." or the phrase "limited partnership" or the abbreviation "L.P." or "LP" but its name must not contain the phrase "limited liability limited partnership" or the abbreviation "LLLP" or "L.L.L.P.";

"(4) if a limited partnership that is a limited liability limited partnership, add to its partnership name the phrase "limited liability limited partnership" or the abbreviation "LLLP" or "L.L.L.P." and must not contain the abbreviation "Ltd.," "L.P.," or "LP."

"(5) if a limited liability company, add to its company name the phrase "limited liability company" or the abbreviation "L.L.C." or "LLC";

"(6) if a professional corporation, add to its corporate name the phrase "professional corporation" or the abbreviation "P.C." or "PC";

"(7) if a registered limited liability partnership, add to its partnership name the phrase "registered limited liability partnership" or the abbreviation "L.L.P." or "LLP"; and

"(8) if a general partnership that is authorized by the laws of the jurisdiction that govern its partnership agreement to file the equivalent of a statement of partnership as provided under Chapter 8A, add to its name the phrase "general partnership" or the abbreviation "G.P." or "GP";

"(9) if a general partnership that is authorized by the laws of the jurisdiction that govern its partnership agreement to file the equivalent of a statement of not for profit partnership as provided under Chapter 8A, add to its name the phrase "not for profit general partnership" or the abbreviation "N.G.P." or "NGP"; and

"(8) (10) use a fictitious name available for use in this state that satisfies the requirements of Article 5, if it delivers to the Secretary of State for filing a copy of the resolution of its governing authority, certified by its secretary, adopting the fictitious name.

§10A-1-7.11.

"(a) A foreign filing entity registered in this state may withdraw the foreign entity's registration at any time by filing a certificate of withdrawal as provided in Article 4.

"(b) A certificate of withdrawal for a foreign entity described must state:

"(1) the name of the foreign filing entity as registered in this state set forth on its registration;

"(2) the type of entity and the entity's jurisdiction of formation, and in the case of a foreign limited liability partnership, the jurisdiction which laws govern the foreign limited liability partnership and its partnership agreement;

"(3) the street address and mailing address, if different, of the principal office of the foreign filing entity;

"(4) that the foreign filing entity no longer is transacting business in this state;

"(5) that the foreign filing entity:

"(A) revokes the authority of the foreign entity's registered agent in this state to accept service of process; and

"(B) consents that service of process in any action, suit, or proceeding stating a cause of action arising in this state during the time the foreign filing entity was authorized to transact business in this state may be made on the foreign filing entity in accordance with the Alabama Rules of Civil Procedure and any other notice or demand required or permitted by law to be served on the foreign entity may be served in a manner similar to the procedure provided for the service of process by the Alabama Rules of Civil Procedure;

"(6)(A) a mailing address to which process may be mailed pursuant to the applicable service of process procedures of the Alabama Rules of Civil Procedure and to which any notice or demand required or permitted by law to be served on the foreign entity may be mailed; and

"(B) a commitment by the foreign entity that if the mailing address stated in the certificate of withdrawal under paragraph (A) changes, the foreign entity will promptly amend the certificate of withdrawal to update the address; and

"(7) that any money due or accrued to the state has been paid or describes the provisions that have been made for the payment of that money.

"(c) A certificate from the Alabama Department of Revenue that all applicable taxes and fees have been paid must be filed with the certificate of withdrawal.

"(d) If the existence or separate existence of a foreign filing entity registered in this state terminates because of dissolution, termination, merger, conversion, or other circumstances, a certificate by an authorized governmental official of the entity's jurisdiction of formation that evidences the termination shall be filed with the Secretary of State.

"(e) The registration of the foreign filing entity in this state terminates when a certificate of withdrawal under this section or a certificate evidencing termination under subsection (d) is filed.

§10A-1-7.12.

"The Secretary of State may commence a proceeding under Section 10A-1-7.13 to revoke the registration of a foreign entity authorized to transact business in this state if:

"(1) the foreign entity does not deliver its annual report, if required by law, to the Secretary of State within 180 days after it is due;

"(2) the foreign entity does not pay within 180 days after they are due any applicable privilege or corporation share tax, qualification fee or admission tax, or interest or penalties imposed by this title or other law;

"(3) the foreign entity is without a registered agent or registered office in this state for 60 days or more;

"(4) the foreign entity does not file a statement of change of registered agent or registered office with the Secretary of State under Section 10A-1-5.32 within 60 days of the change or its registered agent does not file a change of name or change of address of the registered office with the Secretary of State under Section 10A-1-5.33 within 60 days of the change;

"(5) an organizer, governing person, or agent of the foreign entity signed a document he or she knew was false in any material respect with intent that the document be delivered to the Secretary of State for filing; or

"(6) the Secretary of State receives a duly authenticated certificate from the Secretary of State or other official having custody of entity records in the state or country under whose laws the foreign entity is formed or is governed stating that it the foreign entity has been dissolved or disappeared as the result of a merger terminated.

§10A-1-7.13.

"(a) If the Secretary of State determines that one or more grounds exist under Section 10A-1-7.12 for revocation of a registration, he or she the Secretary of State shall serve the foreign entity with written notice of his or her the determination of the Secretary of State by serving its the foreign entity's registered agent, which service may be by registered mail, or, if the foreign entity has no registered agent or its registered agent cannot with reasonable diligence be served, by serving the foreign entity by any method permitted under Sections 10A-1-5.35 and 10A-1-5.36.

"(b) If the foreign entity does not correct each ground for revocation or demonstrate to the reasonable satisfaction of the Secretary of State that each ground determined by the Secretary of State does not exist within 60 days after service of the notice is perfected under subsection (a), the Secretary of State may revoke the foreign entity's registration by signing a certificate of revocation that recites the ground or grounds for revocation and its effective date. The Secretary of State shall file the original of the certificate and serve a copy on the foreign entity by serving its registered agent, which service may be by registered mail, or, if the foreign entity has no registered agent or its registered agent cannot with reasonable diligence be served, by serving the foreign entity by any method permitted under Sections 10A-1-5.35 and 10A-1-5.36.

"(c) The authority of a foreign entity to transact business in this state ceases on the date shown on the certificate revoking its certificate of authority registration.

"(d) Revocation of a foreign entity's registration does not terminate the authority of the registered agent of the foreign entity. Service of process in any action, suit, or proceeding stating a cause of action arising in this state during the time the foreign entity was authorized to transact business in this state may be made on the foreign entity whose registration has been suspended by service on the registered agent or by serving the entity by any method permitted under Sections 10A-1-5.35 and 10A-1-5.36.

§10A-1-7.14.

"(a) A foreign entity may appeal the Secretary of State's revocation of its registration to the Circuit Court of Montgomery County within 30 days after service of the certificate of revocation is perfected under Section 10A-1-7.13. The foreign entity appeals by petitioning the court to set aside the revocation and attaching to the petition copies of the Secretary of State's acknowledgment of its application for registration, if any, or statement of foreign limited liability partnership, as applicable and the Secretary of State's certificate of revocation.

"(b) The court may summarily order the Secretary of State to reinstate the certificate of authority registration, may order a trial de novo, or may take any other action the court considers appropriate.

"(c) The court's final decision may be appealed as in other civil proceedings.

§10A-1-7.22.

"(a) The failure of a foreign filing entity to register to transact business in this state or to appoint and maintain a registered agent in this state shall not impair the validity of any contract or act of the foreign entity and shall not prevent the foreign entity from defending any action or proceeding in any court of this state, but the foreign entity shall not maintain any action or proceeding in any court of this state until it has delivered to the Secretary of State for filing an application for registration or a statement of foreign limited liability partnership, as applicable, in accordance with Section 10A-1-7.04. A foreign filing entity, by transacting business in this state without filing an application for registration or a statement of foreign limited liability partnership, as applicable, appoints the Secretary of State as its agent for service of process with respect to causes of action arising out of the transaction of business or activities in this state. The liability of the owners, members, and managerial officials of a foreign filing entity is governed by the laws of the jurisdiction under whose laws it was formed or under which it is governed, and any limitations on that liability are not waived solely by reason of having transacted business in this state without filing an application for registration or a statement of foreign limited liability partnership, as applicable.

"(b) The Attorney General may bring an action to restrain a foreign entity from transacting business in this state in violation of this title.

§10A-1-7.23.

"The Secretary of State may collect from a foreign filing entity a late filing fee equal to the application for registration fee for the or the statement of foreign limited liability partnership fee, as applicable, for the foreign filing entity for each year of delinquency if the foreign filing entity has transacted business in this state for more than 90 days. The Secretary of State may condition the effectiveness of a registration on the payment of the late filing fee.

§10A-1-7.24.

"This article does not excuse a foreign filing entity from complying with duties imposed under other law, including other chapters of this title, relating to filing or registration registering requirements.

§10A-1-7.31.

"A foreign entity may not conduct in this state a business, or activity, not for profit activity, or any other activity, whether or not for profit, that is not permitted by this title to be transacted by the domestic entity to which it most closely corresponds, unless other law of this state authorizes the entity to conduct the business, or activity, not for profit activity or any other activity, whether or not for profit.

§10A-1-7.32.

"A foreign nonfiling entity or a foreign filing entity registered entity with a registration under this article enjoys the same but no greater rights and privileges as the domestic entity to which it most closely corresponds.

§10A-1-7.34.

"A vote cast or consent provided by a foreign filing entity with respect to its ownership or membership interest in a domestic entity of which the foreign filing entity is a lawful owner or member, and the foreign filing entity's participation in the management and control of the business and affairs of the domestic entity to the extent of the participation of other owners or members, are not invalidated if the foreign filing entity does not register to transact business in this state, subject to all law governing a domestic entity, including the antitrust law of this state.

§10A-1-7.36.

"Foreign entities that have complied with the constitution and laws of this state as to doing transacting business herein in this state shall have the same right of eminent domain and the same remedies for enforcing the rights as domestic entities of like kind and character possess.

§10A-1-7.37.

"Any foreign entity which has complied with the constitution and laws of this state for doing transacting business herein in this state and which is engaged in constructing or operating a streetcar, electric light, telegraph, telephone or power lines, pipelines, or works in an adjoining state may extend its lines, tracks, ways, pipelines, or works into this state and connect with other lines, pipelines, ways or works of similar or like character and, for that purpose, may have and exercise the same rights, privileges, immunities and remedies as to right of eminent domain and condemnation proceedings as are had and exercised by domestic entities engaged in like or similar business.

§10A-1-8.01.

"(a) A conversion of an entity may be accomplished as provided in this section:

"(1) CORPORATIONS.

"a. The terms and conditions of a conversion of a corporation other than a nonprofit corporation must be approved by all of the corporation's shareholders except or as otherwise provided in the corporation's governing documents; but in no case may the vote required for shareholder approval be set at less than a majority of the votes entitled to be cast by each voting group entitled by law to vote separately on the conversion. If the governing documents provide for approval of a conversion by less than all of a corporation's shareholders, approval of the conversion shall constitute corporate action subject to dissenter's rights pursuant to Article 13 of Chapter 2 of the Alabama Business Corporation Law. No conversion of a corporation to a general or limited partnership may be effected without the consent in writing of each shareholder who will have personal liability with respect to the converted entity, notwithstanding any provision in the governing documents of the converting corporation providing for less than unanimous shareholder approval for the conversion.

"b. The terms and conditions of a conversion of a nonprofit corporation must be approved by all the corporation's members entitled to vote thereon, if it is a nonprofit corporation with members with voting rights, except or as otherwise provided in the corporation's governing documents; but in no case may the governing documents provide for approval by less than a majority of the members entitled to vote thereon. If the converting nonprofit corporation has no members, or no members entitled to vote thereon, the terms and conditions of the conversion must be approved by a unanimous vote of the board of directors of the converting nonprofit corporation, except or as otherwise provided in the governing documents; but in no case may the governing documents provide for approval by less than a majority of the board of directors.

"(2) LIMITED PARTNERSHIPS. The terms and conditions of a conversion of a limited partnership must be approved by all of the partners or as otherwise provided in the partnership agreement. No conversion of a limited partnership to a general partnership may be effected without the consent in writing of each limited partner who will have personal liability with respect to the converted entity, notwithstanding any provision in the limited partnership agreement of the converting limited partnership providing for approval of the conversion by less than all partners.

"(3) LIMITED LIABILITY COMPANIES. The terms and conditions of a conversion of a limited liability company must be approved by all of the limited liability company's members or as otherwise provided in the limited liability company's governing documents. No conversion of a limited liability company to a general or limited partnership may be effected without the consent in writing of each member who will have personal liability with respect to the converted entity, notwithstanding any provision in the governing documents of the converting limited liability company providing for less than unanimous member approval for the conversion.

"(4) GENERAL PARTNERSHIPS, INCLUDING REGISTERED LIMITED LIABILITY PARTNERSHIPS. The terms and conditions of a conversion of a general partnership must be approved by all of the partners or as otherwise provided in the partnership agreement. No conversion of a registered limited liability partnership to a general or limited partnership may be effected without the consent in writing of each partner who will have personal liability with respect to the converted entity, notwithstanding any provision in the partnership agreement of the converting registered limited liability partnership providing for less than unanimous partner approval for the conversion.

"(5) REAL ESTATE INVESTMENT TRUST. The terms and conditions of a conversion of a real estate investment trust must be approved by all of the trust's shareholders except or as otherwise provided in the trust's declaration of trust; but in no case may the vote required for shareholder approval be set at less than a majority of all the votes entitled to be cast. No conversion of a real estate investment trust to a general or limited partnership may be effected without the consent in writing of each shareholder who will have personal liability with respect to the converted entity, notwithstanding any provision in the declaration of trust of the converting real estate investment trust providing for less than unanimous shareholder approval for the conversion.

"(6) OTHER ENTITY. The terms and conditions of a conversion of any entity not specified above must be approved by all owners of the converting entity. No conversion of any entity shall be effected without the consent in writing of any owner of the converting entity who has limited liability and who shall become an owner without limited liability protection of the converted entity.

"(7) ENTITY WITHOUT OWNERS. If the converting entity does not have owners, the terms and conditions of the conversion must be unanimously approved by the governing authority of the converting entity.

"(b) After the conversion is approved pursuant to subsection (a), the following documentation and filing requirements apply:

"(1) If the conversion is to a corporation, limited liability company, limited partnership, real estate investment trust, or other entity required to file a certificate of formation, the statement of conversion, when filed in accordance with Section 10A-1-4.02(c)(1), shall be deemed to:

"a. constitute a certificate of formation or amended and restated certificate of formation, as the case may be, for the converted entity; and

"b. shall satisfy the requirements of Section 10A-1-4.02(a).

"(2) In addition to any information or statements otherwise required by law to be included in a certificate of formation for a filing entity, a statement of conversion shall include the following:

"a. The name and type of entity of the converted entity and the jurisdiction of its governing statute and its unique identifying number or other designation as assigned by the Secretary of State, if any.

"b. The former name of the converting entity.

"c. A statement that the converting entity has been converted into the converted entity.

"d. The public office where the certificate of formation, if any, of the converting entity is filed and the date of the filing thereof.

"e. If the converted entity is one in which one or more owners lack limited liability protection, a statement that each owner of the converting entity who is to become an owner without limited liability protection of the resulting converted entity has consented in writing to the conversion as required by this section.

"f. A statement that the conversion was approved pursuant to this section and, if either the converting entity or the converted entity is a foreign entity, that the conversion was approved as required by the governing statute of such foreign entity.

"(3) After the conversion has become effective in accordance with subsection (c), then, as provided in Section 10A-1-4.02(c)(4), all filing instruments with respect to the converted entity that would otherwise be required by this title to be delivered to the judge of probate for filing shall instead be delivered to the Secretary of State for filing.

"(c) A conversion takes effect as follows:

"(1) Upon the filing of the statement of conversion in accordance with Section 10A-1-4.02(c)(1), except as otherwise provided in subdivision (2).

"(2) Upon any delayed effective date if, but only if, each of the following requirements is satisfied:

"a. A delayed effective date is specified in the statement of conversion; and

"b. If either the converted entity or the converting entity is a foreign entity, then any filing required under the governing statute of such foreign entity to effectuate the conversion is filed before the effective date specified in the statement of conversion.

"(3) If a delayed effective date is specified, and the conditions of subdivision (2) are met, the conversion is effective at the close of business, unless a different hour is specified, on that date.

"(d) Conversion has the following effects:

"(1)a. Any other entity that has been converted pursuant to this article is for all purposes the same entity that existed before the conversion and the conversion shall constitute a continuation of the existence of the converting entity in the form of the converted entity. The conversion shall not be deemed to constitute a dissolution or termination of the converting entity.

"b. If the Secretary of State has assigned a unique identifying number or other designation to the converting entity, that number or designation shall continue to be assigned to the converted entity.

"(2)a. All property, real, personal, and mixed owned by the converting entity; all rights, immunities, and franchises of the converting entity, of a public as well as a private nature; and all debts or obligations due the converting entity, shall remain owned and held by, vested in, and due to, the converted entity, shall not be deemed to have been transferred to the converted entity as a consequence of the conversion, and shall not revert or be in any way impaired by reason of the conversion.

"b. A certified copy of the statement of conversion may be filed in the office of the judge of probate in any county in which the converting entity owned real property, to be recorded without payment and without collection by the judge of probate of any deed or other transfer tax or fee. The judge of probate shall, however, be entitled to collect the filing fees prescribed by Section 12-19-90. Any filing shall evidence chain of title, but lack of filing shall not affect the converted entity's title to the real property.

"(3) All debts, obligations, and other liabilities of the converting entity shall continue as the debts, obligations, and liabilities of the converted entity and the converted entity shall continue to be responsible and liable for all the liabilities and obligations of the converting entity. Neither the rights of creditors, nor any liens upon the property of the converting entity, shall be impaired by the conversion, and an owner of the converted entity shall continue to be liable for all obligations of the converting entity for which the owner was personally liable before the conversion.

"(4) Any claim existing or any action or proceeding of any kind pending by or against the converting entity shall be prosecuted or continued as if the conversion had not occurred.

"(5) a. An owner with limited liability protection remains liable, if at all, for an obligation incurred by the converting entity before the conversion takes effect only to the extent, if any, the owner would have been liable if the conversion had not occurred.

"b. An owner with limited liability protection who becomes an owner without limited liability protection is liable for an obligation of the converted entity incurred after conversion to the extent provided for by the laws applicable to the converted entity.

"(6) An owner without limited liability protection who as a result of a conversion becomes an owner of a converted entity with limited liability protection remains liable for an obligation incurred by the converting entity before the conversion takes effect only to the extent, if any, the owner would have been liable if the conversion had not occurred.

§10A-1-8.02.

"(a) Pursuant to an approved plan of merger, a corporation, limited partnership, limited liability company, general partnership, real estate investment trust, or any other entity may merge with any other entity or entities, whether the other entity or entities are the same or another form of entity, as provided in this section.

"(b) A plan of merger shall include the following:

"(1) The name of each entity that is a party to the merger.

"(2) The name of the surviving entity into which the other entity or entities will merge.

"(3) The form of the surviving entity and the status in the surviving entity of each owner of an entity that is a party to the merger.

"(4) The terms and conditions of the merger.

"(5) The manner and basis of converting the interests of each party to the merger into interests or obligations of the surviving entity, or into money or other property in whole or part.

"(c) A plan of merger may set forth:

"(1) Amendments to the certificate of formation of the surviving entity.

"(2) Other provisions relating to the merger.

"(d) A plan of merger shall be approved as follows:

"(1) CORPORATIONS.

a. In the case of a corporation, other than a nonprofit corporation, that is a party to a merger, the plan of merger must be approved in accordance with the procedures and by the shareholder vote required by Section 10A-2-11.03 or Section 10A-2-11.04. If the governing documents of the corporation provide for approval of a merger by less than all of the corporation's shareholders, approval of the merger shall constitute corporate action subject to dissenter's rights pursuant to Article 13 of Chapter 2. No merger of a corporation into a general or limited partnership may be effected without the consent in writing of each shareholder who will have personal liability with respect to the resulting or surviving entity, notwithstanding any provision in the governing documents of the corporation that is a party to the merger providing for less than unanimous shareholder approval for the conversion.

"b. In the case of a nonprofit corporation, the plan of merger must be approved by all the corporation's members entitled to vote thereon, if it is a nonprofit corporation with members with voting rights, except or as otherwise provided in the corporation's governing documents; but in no case may the governing documents provide for approval by less than a majority of the members entitled to vote thereon. If the nonprofit corporation has no members, or no members entitled to vote thereon, the plan of merger must be approved by a unanimous vote of the board of directors of the nonprofit corporation, except as otherwise provided in the governing documents; but in no case may the governing documents provide for approval by less than a majority of the board of directors.

"(2) LIMITED PARTNERSHIPS. In the case of a limited partnership that is a party to the merger, the plan of merger must be approved in writing by all of the partners or as otherwise provided in the partnership agreement. No merger of a limited partnership with a general partnership in which the general partnership is the surviving or resulting entity may be effected without the consent in writing of each limited partner who will have personal liability with respect to the surviving or resulting entity, notwithstanding any provision in the limited partnership agreement of the merging limited partnership providing for approval of the merger by less than all partners.

"(3) LIMITED LIABILITY COMPANIES. In the case of a limited liability company that is a party to the merger, the plan of merger must be approved in writing by all of the limited liability company's members or as otherwise provided in the limited liability company's governing documents. No merger of a limited liability company with a general or limited partnership that is the surviving or resulting entity may be effected without the consent in writing of each member who will have personal liability with respect to the surviving or resulting entity, notwithstanding any provision in the governing documents of the merging limited liability company providing for less than unanimous shareholder approval for a merger.

"(4) GENERAL PARTNERSHIPS, INCLUDING REGISTERED LIMITED LIABILITY PARTNERSHIPS. In the case of a general partnership that is a party to the merger, the plan of merger must be approved in writing by all of the partners or as otherwise provided in the partnership agreement. No merger of a registered limited liability partnership into a general or limited partnership may be effected without the consent in writing of each partner who will have personal liability with respect to the surviving or resulting entity, notwithstanding any provision in the partnership agreement of the registered limited liability partnership providing for less than unanimous partner approval for a merger.

"(5) REAL ESTATE INVESTMENT TRUST. In the case of a real estate investment trust that is a party to the merger, the plan of merger must be approved in writing by all of the trust's shareholders except or as otherwise provided in the trust's declaration of trust, but in no case may the vote required for shareholder approval be set at less than a majority of all the votes entitled to be cast. No merger of a real estate investment trust with a general or limited partnership that is to be the surviving or resulting entity may be effected without the consent in writing of each shareholder who will have personal liability with respect to the surviving or resulting business entity.

"(6) OTHER ENTITY. In the case of an entity other than a corporation, limited partnership, limited liability company, general partnership, or real estate investment trust that is a party to the merger, by approval in writing of all owners of the entity. No merger of any entity shall be effected without the consent in writing of any owner who has limited liability as an owner of an entity party to the merger, and who will have personal liability with respect to the surviving or resulting entity.

"(e) After a plan of merger is approved and before the merger takes effect, the plan may be amended or abandoned as provided in the plan, or if the plan does not provide for amendment or abandonment, in the same manner as required for the approval of the plan of merger originally.

"(f) The merger takes effect as follows:

"(1) Upon the filing of the statement of merger in accordance with Section 10A-1-4.02(c)(1), except as otherwise provided in subdivision (2).

"(2) Upon any delayed effective date if, but only if, each of the following requirements is satisfied:

"a. A delayed effective date is specified in the statement of merger.

"b. If either the converted entity or the merging entity is a foreign entity, then any filing required under the governing statute of such foreign entity to effectuate the merger is filed before the effective date specified in the statement of merger.

"(3) If a delayed effective date is specified and the conditions of subdivision (2) are met, the merger is effective at the close of business, unless a different hour is specified, on that date in accordance with and subject to Section 10A-1-4.12.

"(g) The certificate of merger shall include the following:

"(1) The names of each of the entities which are to merge and their respective unique identifying numbers or other designations as assigned by the Secretary of State, if any.

"(2) The public office where the certificate of formation, if any, of each of the parties to the merger is filed.

"(3) A statement that a plan of merger has been approved by each of the entities which are to merge in the manner set forth in this article.

"(4) If the surviving or resulting entity is one in which one or more owners lack limited liability protection, a statement that each owner of an entity party to the merger who is to be an owner of the surviving or resulting entity without limited liability protection has consented in writing to the merger as required by this article.

"(5) The name of the surviving or resulting entity.

"(6) The date, or date and time, on which the merger becomes effective if it is not to be effective upon the filing of the certificate of merger.

"(7) That the plan of merger is on file at a place of business of the surviving or resulting entity, and shall state the address thereof.

"(8) That a copy of the plan of merger will be furnished by the surviving or resulting entity, on request and without cost, to any owner of any entity which is a party to the merger.

"(9) If the plan of merger includes any amendments to the certificate of formation of the surviving or resulting entity, a statement of all such amendments.

"(h) The certificate of merger shall be filed with the Secretary of State in accordance with Section 10A-1-4.02.

"(i) The merger shall have the following effects:

"(1) Every other entity party to the merger merges into the surviving entity which shall be deemed to be the resulting entity of the merger and the separate existence of every entity, other than the surviving or resulting entity, ceases.

"(2) All property, real, personal, and mixed owned by each of the merged entities; all rights, immunities, and franchises of the merged entities, of a public as well as a private nature; and all debts and obligations due the merged entities, are taken and deemed to be transferred and vested in the surviving or resulting entity without the necessity of any deed or other instrument of conveyance to the surviving or resulting entity and without payment and without collection by any filing officer of any deed or other transfer tax or fee. A certified copy of the certificate of merger may be filed in the real estate records in the office of the judge of probate in any county in which any entity a party to the merger owned real property, to be recorded without payment and without collection by the judge of probate of any deed or other transfer tax or fee. The judge of probate shall, however, be entitled to collect the filing fees prescribed by Section 12-19-90. Any filing shall evidence chain of title, but lack of filing does not affect the resulting entity's title to any real property.

"(3) The surviving or resulting entity shall be responsible and liable for all the liabilities and obligations of the entities that are parties to the merger; however, neither the rights of creditors nor any liens upon the property of the entities that are parties to the merger shall be impaired by the merger.

"(4) Any claim existing or action or proceeding, of any kind, pending by or against an entity that is a party to the merger may be prosecuted or continued as if the merger had not occurred, or the surviving or resulting entity may be substituted as a party to the action or proceeding.

"(5) Service of process in an action or proceeding against a surviving or resulting foreign entity to enforce an obligation of a domestic entity that is a party to a merger may be made by registered mail addressed to the surviving entity at the address set forth in the certificate of merger or by any method provided by the Alabama Rules of Civil Procedure. Any notice or demand required or permitted by law to be served on a domestic entity may be served on the surviving or resulting foreign entity by registered mail addressed to the surviving entity at the address set forth in the certificate of merger or in any other manner similar to the procedure provided by the Alabama Rules of Civil Procedure for the service of process.

"(6) a. An owner of an entity with limited liability protection remains liable, if at all, for an obligation incurred prior to the merger by an entity that ceases to exist as a result of the merger only to the extent, if any, that the owner would have been liable under the laws applicable to owners of the form of entity that ceased to exist if the merger had not occurred.

"b. An owner with limited liability protection who, as a result of the merger, becomes an owner without limited liability protection of the surviving or resulting entity is liable for an obligation of the surviving or resulting entity incurred after merger to the extent provided for by the laws applicable to the surviving or resulting entity.

"(7) An owner without limited liability protection of an entity that ceases to exist as a result of a merger and who as a result of the merger becomes an owner of a surviving or resulting entity with limited liability protection remains liable for an obligation of the entity that ceases to exist incurred before the merger takes effect only to the extent, if any, that the owner would have been liable if the merger had not occurred.

§10A-1-8.03.

"This article is not exclusive but is cumulative to other laws and provisions of this title relating to mergers and conversion. Entities, including corporations, limited partnerships, limited liability companies, general partnerships, and real estate investment trusts, may be converted or merged in any other manner provided by law, including other provisions of this title. This article does not preclude any entity from being converted or merged under law other than this chapter.

Section 4. Section 10A-1-9.01 of the Code of Alabama 1975 is amended and renumbered to read as follows:

"§10A-1-9.01. §10-1-9.02.

"In this article, the following terms have the following meanings:

"(1) CLAIM. A right to payment, damages, or property, whether liquidated or unliquidated, accrued or contingent, matured or unmatured.

"(2) WINDING UP. The process of winding up the business and affairs of a domestic entity as a result of the occurrence of an event requiring winding up."

Section 5. Section 10A-1-9.01 is added to the Code of Alabama 1975 as follows:

§10A-1-9.01.

This article does not apply to limited liability companies, general partnerships, and limited partnerships.Section 6. Sections 10A-1-9.21, 10A-1-9.22, 10A-5A-1.02, 10A-5A-1.06, 10A-9A-1.07, and 10A-17-1.02 of the Code of Alabama 1975, are amended to read as follows:

§10A-1-9.21.

"(a) A dissolved domestic entity, except as otherwise provided in subsection (e), may dispose of the known claims against it by following the procedure described in this section subsection (b) at any time after the effective date of the dissolution of that dissolved domestic entity.

"(b) The A dissolved domestic entity shall notify its known claimants in writing may give notice of the dissolution at any time after its effective date. The written in a writing to the holder of any know claim. The notice must:

"(1) Identify the dissolved domestic entity;

"(1) (2) Describe the information that must required to be included in a claim;

"(2) (3) Provide a mailing address where a to which the claim may is to be sent;

"(3) (4) State the deadline, which may not be fewer than 120 days from the effective date of the written notice, by which the terminated dissolved domestic entity must receive the claim; and

"(4) (5) State that if not sooner barred, the claim will be barred if not received by the deadline.

"(c) Unless sooner barred by any other statute limiting actions, a A claim against a dissolved domestic entity is barred:

"(1) If a claimant who was given written notice under subsection (b) does not deliver the claim to the dissolved domestic entity by the deadline;

"(2) If a claimant whose claim was rejected by the dissolved domestic entity does not commence a proceeding to enforce the claim within 90 days from the effective date of the rejection notice.

"(d) For purposes of this section, "known claim" or "claim" includes unliquidated claims but does not include a contingent liability that has not matured so that there is no immediate right to bring suit, or a claim based on an event occurring after the effective date of dissolution.

"(e) The procedures of Nothing in this section do not apply to the disposition of claims against a general or limited partnership shall be deemed to extend any otherwise applicable statute of limitations.

§10A-1-9.22.

"(a) A dissolved domestic entity, except as otherwise provided in subsection (f), may also publish notice of its dissolution and request that persons with claims against the dissolved domestic entity present them in accordance with the notice.

"(b) The notice authorized by subsection (a) must:

"(1) Be published at least one time in a newspaper of general circulation in the county where in which the dissolved domestic entity's principal office is located, or, if it has none in this state, its in the county in which the dissolved domestic entity's registered office, is or was last located;

"(2) Describe the information that must be included in a claim and provide a mailing address where to which the claim may is to be sent; and

"(3) State that if not sooner barred, a claim against the dissolved domestic entity will be barred unless a proceeding to enforce the claim is commenced within two years after the publication of the notice.

"(c) If the a dissolved domestic entity publishes a newspaper notice in accordance with subsection (b), unless sooner barred by any other statute limiting actions, the claim of each of the following claimants is barred unless the claimant commences a proceeding to enforce the claim against the dissolved domestic entity within two years after the publication date of the newspaper notice:

"(1) A claimant who did not receive written was not given notice under Section 10A-1-9.21;

"(2) A claimant whose claim was timely sent to the dissolved domestic entity but not acted on; by the dissolved domestic entity; and

"(3) A claimant whose claim is contingent or based on an event occurring after the effective date of dissolution at the effective date of the dissolution of the dissolved domestic entity, or is based on an event occurring after the effective date of the dissolution of the dissolved domestic entity.

"(d) A claim may be enforced under this section that is not barred under this section, any other statute limiting actions, or Section 10A-1-9.21 may be enforced:

"(1) Against the a dissolved domestic entity, to the extent of its undistributed assets; or and

"(2) If the assets have been distributed in liquidation, against an owner of the dissolved domestic entity to the extent of his or her pro rata share of the claim or the entity assets distributed to him or her in liquidation, whichever is less, but an owner's total liability for all claims under this section may not exceed the total amount of assets distributed to him or her in liquidation Except as provided in subsection (h), if the assets of a dissolved domestic entity have been distributed after dissolution, against the person or persons owning ownership interests in the dissolved domestic entity to the extent of that person's proportionate share of the claim or of the assets of the dissolved domestic entity distributed to that person after dissolution, whichever is less, but a person's total liability for all claims under subsection (d) may not exceed the total amount of assets distributed to that person after dissolution of the dissolved domestic entity.

"(e) A dissolved domestic entity that published a notice under this section may file an application with the circuit court in the county in which the dissolved domestic entity's principal place of business is located and if the dissolved domestic entity does not have a principal place of business within this state, in the county in which the dissolved domestic entity's most recent registered office is located, for a determination of the amount and form of security to be provided for payment of claims that are contingent or have not been made known to the dissolved domestic entity or that are based on an event occurring after the effective date of the dissolution of the dissolved domestic entity but that, based on the facts known to the dissolved domestic entity, are reasonably estimated to arise after the effective date of the dissolution of the dissolved domestic entity. Provision need not be made for any claim that is or is reasonably anticipated to be barred under subsection (c).

"(f) Within ten days after the filing of the application provided for in subsection (e), notice of the proceeding shall be given by the dissolved domestic entity to each potential claimant as described in subsection (e).

"(g) The circuit court under subsection (e) may appoint a guardian ad litem to represent all claimants whose identities are unknown in any proceeding brought under this section. The reasonable fees and expenses of the guardian, including all reasonable expert witness fees, shall be paid by the dissolved domestic entity.

"(h) Provision by the dissolved domestic entity for security in the amount and the form ordered by the circuit court under subsection (e) shall satisfy the dissolved domestic entity's obligation with respect to claims that are contingent, have not been made known to the dissolved domestic entity, or are based on an event occurring after the effective date of the dissolution of the dissolved domestic entity, and those claims may not be enforced against a person owning an ownership interest to whom assets have been distributed by the dissolved domestic entity after the effective date of the dissolution of the dissolved domestic entity.

"(e) (i) Nothing in this section shall be deemed to extend any otherwise applicable statute of limitations.

"(f) The procedures of this section do not apply to the disposition of claims against a general or limited partnership.

(j) If a claim has been satisfied, disposed of, or barred under Section 10A-1-9.21, this section, or other law, the person or persons designated to wind up the affairs of a dissolved domestic entity, and the owners of the ownership interests receiving assets from the dissolved domestic entity, shall not be liable for that claim.

§10A-5A-1.02.

"Notwithstanding Section 10A-1-1.03, as used in this chapter, unless the context otherwise requires, the following terms mean:

"(a) "Certificate of formation," with respect to a limited liability company, means the certificate provided for by Section 10A-5A-2.01, and the certificate as amended or restated.

"(b) "Constituent limited liability company" means a constituent organization that is a limited liability company.

"(c) "Constituent organization" means an organization that is party to a merger under Article 10.

"(d) "Converted organization" means the organization into which a converting organization converts pursuant to Article 10.

"(e) "Converting limited liability company" means a converting organization that is a limited liability company.

"(f) "Converting organization" means an organization that converts into another organization pursuant to Article 10.

"(g) "Disqualified person" means any person who is not a qualified person.

"(h) "Distribution" except as otherwise provided in Section 10A-5A-4.06(e), means a transfer of money or other property from a limited liability company, or series thereof, to another person on account of a transferable interest.

"(i) "Foreign limited liability company" means a limited liability company governed by the laws of a jurisdiction other than this state which would be a limited liability company if governed by the laws of this state.

"(i) (j) "Governing statute" means the statute that governs an organization's internal affairs.

"(j) (k) "Limited liability company," except in the phrase "foreign limited liability company," means an entity formed or existing under this chapter.

"(k) (l) "Limited liability company agreement" means any agreement (whether referred to as a limited liability company agreement, operating agreement or otherwise), written, oral or implied, of the member or members as to the activities and affairs of a limited liability company or series thereof. The limited liability company agreement of a limited liability company having only one member shall not be unenforceable by reason of there being only one person who is a party to the limited liability company agreement. The limited liability company agreement includes any amendments to the limited liability company agreement.

"(l) (m) "Member" means a person admitted under Section 10A-5A-4.01 and not dissociated under Section 10A-5A-6.02.

"(m) (n) "Organization" means a general partnership, including a limited liability partnership; limited partnership, including a limited liability limited partnership; limited liability company; business trust; corporation; nonprofit corporation; professional corporation; or any other person having a governing statute. The term includes domestic and foreign organizations whether or not organized for profit.

"(n) (o) "Organizational documents" means:

"(1) for a general partnership or foreign general partnership, its partnership agreement and if applicable, its registration as a limited liability partnership or a foreign limited liability partnership;

"(2) for a limited partnership or foreign limited partnership, its certificate of formation and partnership agreement, or comparable writings as provided in its governing statute;

"(3) for a limited liability company or foreign limited liability company, its certificate of formation and limited liability company agreement, or comparable writings as provided in its governing statute;

"(4) for a business or statutory trust or foreign business or statutory trust its agreement of trust and declaration of trust, or comparable writings as provided in its governing statute;

"(5) for a corporation for profit or foreign corporation for profit, its certificate of formation, bylaws, and other agreements among its shareholders that are authorized by its governing statute, or comparable writings as provided in its governing statute;

"(6) for a nonprofit corporation or foreign nonprofit corporation, its certificate of formation, bylaws, and other agreements that are authorized by its governing statute, or comparable writings as provided in its governing statute;

"(7) for a professional corporation or foreign professional corporation, its certificate of formation, bylaws, and other agreements among its shareholders that are authorized by its governing statute, or comparable writings as provided in its governing statute; and

"(8) for any other organization, the basic writings that create the organization and determine its internal governance and the relations among the persons that own it, have an interest in it, or are members of it.

"(o) (p) "Qualified person," with respect to a limited liability company rendering professional services in this state, means a person authorized by this state or a regulatory authority of this state to own a transferrable transferable interest in that limited liability company.

"(p) (q) "Surviving organization" means an organization into which one or more other organizations are merged under Article 10, whether the organization pre-existed the merger or was created pursuant to the merger.

"(q) (r) "Transfer" means an assignment, conveyance, deed, bill of sale, lease, mortgage, security interest, encumbrance, gift, or transfer by operation of law.

"(r) (s) "Transferee" means a person to which all or part of a transferable interest has been transferred, whether or not the transferor is a member.

"(s) (t) "Transferrable Transferable interest" means a member's right to receive distributions from a limited liability company or a series thereof.

§10A-5A-1.06.

"(a) It is the policy of this chapter and this state to give maximum effect to the principles of freedom of contract and to the enforceability of limited liability company agreements.

"(b) Unless displaced by particular provisions of this chapter, the principles of law and equity supplement this chapter.

"(c) The rule that statutes in derogation of the common law are to be strictly construed shall have no application to this chapter.

"(d) The use of any gender shall be applicable to all genders. The captions contained in this chapter are for purposes of convenience only and shall not control or affect the construction of this chapter.

"(e) Sections 7-9A-406 and 7-9A-408 of the Uniform Commercial Code, and all successor statutes thereto, do not apply to any interest in a limited liability company, including all rights, powers, and interests arising under a limited liability company agreement or this chapter. This provision prevails over Sections 7-9A-406 and 7-9A-408 of the Uniform Commercial Code, and all successor statutes thereto, and is expressly intended to permit the enforcement of the provisions of a limited liability company agreement that would otherwise be ineffective under Sections 7-9A-406 and 7-9A-408 of the Uniform Commercial Code, and all successor statutes thereto.

"(f) Division E of Article 3 of Chapter 1 of this title shall have no application to this chapter.

"(g) Sections 10A-1-1.03 (73), (81), (88), and (91) The terms president, vice president, secretary, and treasurer as defined in Chapter 1 shall have no application to this chapter.

"(h) Section 10A-1-2.13(c) shall have no application to this chapter.

§10A-9A-1.07.

"(a) It is the policy of this chapter and this state to give maximum effect to the principles of freedom of contract and to the enforceability of partnership agreements.

"(b) Unless displaced by particular provisions of this chapter, the principles of law and equity supplement this chapter.

"(c) If an obligation to pay interest arises under this chapter and the rate is not specified, the rate is the applicable federal rate as determined from time to time by the United States Treasury pursuant to 26 U.S.C. §1274(d) or any successor law.

"(d) The rule that statutes in derogation of the common law are to be strictly construed shall have no application to this chapter.

"(e) The use of any gender shall be applicable to all genders. The captions contained in this chapter are for purposes of convenience only and shall not control or affect the construction of this chapter.

"(f) Sections 7-9A-406 and 7-9A-408 of the Uniform Commercial Code, and all successor statutes thereto, do not apply to any interest in a limited partnership, including all rights, powers, and interests arising under a partnership agreement or this chapter. This provision prevails over Sections 7-9A-406 and 7-9A-408 of the Uniform Commercial Code, and all successor statutes thereto, and is expressly intended to permit the enforcement of the provisions of a partnership agreement that would otherwise be ineffective under Sections 7-9A-406 and 7-9A-408 of the Uniform Commercial Code, and all successor statutes thereto.

"(g) Division E of Article 3 of Chapter 1 shall have no application to this chapter.

"(h) Sections 10A-1-1.03(73), (81), (88), and (91) The terms president, vice president, secretary, and treasurer as defined in Chapter 1 shall have no application to this chapter.

"(i) Section 10A-1-2.13(c) shall have no application to this chapter.

§10A-17-1.02.

"In this chapter:

"(1) "Member" means a person who, under the rules or practices of a nonprofit association, may participate in the selection of persons authorized to manage the affairs of the nonprofit association or in the development of policy of the nonprofit association.

"(2) "Nonprofit association" means an unincorporated organization consisting of two or more members joined by mutual consent as an association for a stated common, nonprofit purpose, but does not include a limited liability company, general partnership, or limited partnership. In addition,. However, joint tenancy, tenancy in common, or tenancy by the entireties does not by itself establish a nonprofit association, even if the co-owners share use of the property for a nonprofit purpose.

"(3) "Nonprofit purpose" shall be any purpose for which a nonprofit corporation could be organized under the Alabama Nonprofit Corporation Act, as amended, and where no part of income or profit is distributable to its members, directors and officers."

Section 7. Chapter 8A, comprised of Articles 1 to 11 inclusive, is added to Title 10A of the Code of Alabama 1975 as follows:

Article 1. General Provisions.

§10A-8A-1.01. Short title. This chapter and the provisions of Chapter 1 to the extent applicable to partnerships, shall be known and may be cited as the Alabama Partnership Law.

§10A-8A-1.02. Definitions.

Notwithstanding Section 10A-1-1.03, as used in this chapter, unless the context otherwise requires, the following terms mean:

(1) "Business" includes every trade, occupation, and profession for profit.

(2) "Disqualified person" means any person who is not a qualified person.

(3) "Distribution" except as otherwise provided in Section 10A-8A-4.09(f), means a transfer of money or other property from a partnership to another person on account of a transferable interest.

(4) "Foreign limited liability partnership" means a foreign partnership whose partners have limited liability for the debts, obligations, or other liabilities of the foreign partnership under a provision similar to Section 10A-8A-3.06(c).

(5) "Foreign partnership" means a partnership governed by the laws of a jurisdiction other than this state which would be a partnership if governed by the laws of this state. The term includes a foreign limited liability partnership.

(6) "Limited liability partnership", except in the phrase "foreign limited liability partnership", means a partnership that has filed a statement of limited liability partnership under Section 10A-8A-10.01, and does not have a similar statement in effect in any other jurisdiction.

(7) "Not for profit activity" includes every undertaking not for profit.

(8) "Partner" means a person that:

(A) has become a partner in a partnership under Section 10A-8A-4.02 or was a partner in a partnership when the partnership became subject to this chapter; and

(B) has not dissociated as a partner under Section 10A-8A-6.01.

(9) "Partnership" means an association of two or more persons formed under Section 10A-8A-2.01, predecessor statute, or comparable law of another jurisdiction or becomes subject to the laws of this state pursuant to Section 10A-8A-1.06, to carry on any business or not for profit activity, and includes, for all purposes of the laws of this state, a limited liability partnership.

(10) "Partnership agreement" means any agreement (whether referred to as a partnership agreement or otherwise), written, oral or implied, of the partners as to the business or not for profit activity of a partnership. The partnership agreement includes any amendments to the partnership agreement.

(11) "Partnership at will" means a partnership in which the partners have not agreed to remain partners until the expiration of a definite term or the completion of a particular undertaking.

(12) "Person dissociated as a partner" means a person dissociated as a partner of a partnership.

(13) "Qualified person," with respect to a partnership rendering professional services in this state, means a person authorized by this state or a regulatory authority of this state to own a transferable interest in that partnership.

(14) "Required information" means the information that a partnership is required to maintain under Section 10A-8A-1.11.

(15) "Statement" means a statement of partnership under Section 10A-8A-2.02, a statement of not for profit partnership under Section 10A-8A-2.02, a statement of authority under Section 10A-8A-3.03, a statement of denial under Section 10A-8A-3.04, a statement of dissociation under Section 10A-8A-7.04, a statement of dissolution under Section 10A-8A-8.02 or under Section 10A-8A-8.03, a certificate of reinstatement under Section 10A-8A-8.11, a statement of limited liability partnership under Section 10A-8A-10.01, a statement of cancellation under Section 10A-8A-10.01, or any other document required or permitted to be delivered to the Secretary of State for filing under this chapter, or an amendment or cancellation of any of the foregoing.

(16) "Transfer" means an assignment, conveyance, deed, bill of sale, lease, mortgage, security interest, encumbrance, gift, or transfer by operation of law.

(17) "Transferable interest" means a partner's right to receive distributions from a partnership.

(18) "Transferee" means a person to which all or part of a transferable interest has been transferred, whether or not the transferor is a partner.

§10A-8A-1.03. Knowledge and notice.

(a) A person knows a fact when the person:

(1) has actual knowledge of it; or

(2) is deemed to know it under law other than this chapter.

(b) A person has notice of a fact when the person:

(1) knows of it;

(2) receives notice of it;

(3) has reason to know the fact from all of the facts known to the person at the time in question; or

(4) is deemed to have notice of the fact under subsection (d).

(c) A person notifies or gives notice to another person by taking steps reasonably required to inform the other person in ordinary course, whether or not the other person knows the fact.

(d) A person is deemed to have notice of a partnership's:

(1) statement of partnership, 90 days after a statement of partnership under Section 10A-8A-2.02 becomes effective;

(2) statement of not for profit partnership, 90 days after a statement of not for profit partnership under Section 10A-8A-2.02 becomes effective;

(3) statement of authority, with respect to

(i) authority not involving property and

(ii) property other than real property, 90 days after a statement of authority under Section 10A-8A-3.03 becomes effective; and with respect to real property in accordance with Section 10A-8A-3.03(g);

(4) statement of denial, with respect to property other than real property, 90 days after a statement of denial under Section 10A-8A-3.04 becomes effective;

(5) dissociation, 90 days after a statement of dissociation under Section 10A-9A-7.04 becomes effective;

(6) dissolution, 90 days after a statement of dissolution under Section 10A-9A-8.02 or Section 10A-9A-8.03 becomes effective;

(7) reinstatement, 90 days after a certificate of reinstatement under Section 10A-9A-8.11 becomes effective;

(8) merger or conversion under Article 9 or under Article 8 of Chapter 1, 90 days after the statement of merger or conversion becomes effective;

(9) statement of limited liability partnership, 90 days after a statement of limited liability partnership under Section 10A-8A-10.01 becomes effective; or

(10) statement of cancellation, 90 days after a statement of cancellation under Section 10A-8A-10.01 becomes effective.

(e) A partner's knowledge, notice, or receipt of notice of a fact relating to the partnership is effective immediately as knowledge of, notice to, or receipt of notice by the partnership, except in the case of a fraud on the partnership committed by or with the consent of that partner.

§10A-8A-1.04. Nature and purpose.

(a) A partnership is a separate legal entity. A partnership's status for tax purposes shall not affect its status as a separate legal entity formed under this chapter. A partnership is the same entity regardless of whether the partnership has a statement of limited liability partnership under Section 10A-8A-10.01 stating that the partnership is a limited liability partnership. A partner has no interest in any specific property of a partnership.

(b) A partnership may carry on any lawful business and may carry on any lawful not for profit activity if it complies with Section 10A-8A-2.02(b).

§10A-8A-1.05. Powers; indemnification.

(a) A partnership shall possess and may exercise all the powers and privileges granted and enumerated by Chapter 1 or by any other law or by its partnership agreement, together with any powers incidental thereto, including those powers and privileges necessary or convenient to the conduct, promotion, or attainment of the business or not for profit activity of the partnership and including the power to sue, be sued, and defend in its own name and to maintain an action against a partner for harm caused to the partnership by a breach of the partnership agreement or violation of a duty to the partnership.

(b) A partnership may indemnify and hold harmless a partner or other person, pay in advance or reimburse expenses incurred by a partner or other person, and purchase and maintain insurance on behalf of a partner or other person.

§10A-8A-1.06. Governing law.

(a) Except as otherwise provided in subsections (b), (c), and (d) of this section, the law of the jurisdiction in which the partnership has its principal office governs the partnership agreement and the relations among the partners and between the partners and the partnership.

(b) The law of this state governs the (i) internal affairs of a limited liability partnership, including the relations among the partners and between the partners and the partnership, (ii) the liability of a partner as a partner for the debts, obligations, or other liabilities of a limited liability partnership, and (iii) the authority of the partners of a limited liability partnership.

(c) The law of the jurisdiction in which a foreign limited liability partnership has filed its statement of limited liability partnership or similar writing governs the (i) internal affairs of that foreign limited liability partnership, including the relations among the partners and between the partners and the partnership, (ii) the liability of a partner as a partner for the debts, obligations, or other liabilities of a foreign limited liability partnership, and (iii) the authority of the partners of a foreign limited liability partnership.

(d) If (i) a partnership agreement provides for the application of the laws of this state, and (ii) the partnership delivers to the Secretary of State for filing a statement of partnership in accordance with Section 10A-8A-2.02(a), a statement of not for profit partnership in accordance with Section 10A-8A-2.02(b), or a statement of limited liability partnership in accordance with Section 10A-8A-10.01, then the partnership agreement shall be governed by and construed under the laws of this state.

§10A-8A-1.07. Supplemental principles of law; rate of interest.

(a) It is the policy of this chapter and this state to give maximum effect to the principles of freedom of contract and to the enforceability of partnership agreements.

(b) Unless displaced by particular provisions of this chapter, the principles of law and equity supplement this chapter.

(c) If an obligation to pay interest arises under this chapter and the rate is not specified, the rate is the applicable federal rate as determined from time to time by the United States Treasury pursuant to 26 U.S.C. §1274(d) or any successor law.

(d) The rule that statutes in derogation of the common law are to be strictly construed shall have no application to this chapter.

(e) The use of any gender shall be applicable to all genders. The captions contained in this chapter are for purposes of convenience only and shall not control or affect the construction of this chapter.

(f) Sections 7-9A-406 and 7-9A-408 of the Uniform Commercial Code, and all successor statutes thereto, do not apply to any interest in a partnership, including all rights, powers, and interests arising under a partnership agreement or this chapter. This provision prevails over Sections 7-9A-406 and 7-9A-408 of the Uniform Commercial Code, and all successor statutes thereto, and is expressly intended to permit the enforcement of the provisions of a partnership agreement that would otherwise be ineffective under Sections 7-9A-406 and 7-9A-408 of the Uniform Commercial Code, and all successor statutes thereto.

(g) Division E of Article 3 of Chapter 1 shall have no application to this chapter.

(h) The terms president, vice-president, secretary, and treasurer as defined in Chapter 1 shall have no application to this chapter.

(i) Section 10A-1-2.13(c) shall have no application to this chapter.

§10A-8A-1.08. Effect of partnership agreement; nonwaivable provisions.

(a) Except as otherwise provided in subsections (b) and (c):

(1) the partnership agreement governs relations among the partners as partners and between the partners and the partnership; and

(2) to the extent the partnership agreement does not otherwise provide for a matter described in subsection (a)(1), this chapter governs the matter.

(b) (1) To the extent that, at law or in equity, a partner or other person has duties, including fiduciary duties, to a partnership or to another partner or to another person that is a party to or is otherwise bound by a partnership agreement, the partner's or other person's duties may be expanded or restricted or eliminated by provisions in a written partnership agreement, but the implied contractual covenant of good faith and fair dealing may not be eliminated.

(2) A written partnership agreement may provide for the limitation or elimination of any and all liabilities for breach of contract and breach of duties, including fiduciary duties, of a partner or other person to a partnership or to another partner or to another person that is a party to or is otherwise bound by a partnership agreement, but a partnership agreement may not limit or eliminate liability for any act or omission that constitutes a bad faith violation of the implied contractual covenant of good faith and fair dealing.

(3) A partner or other person shall not be liable to a partnership or to another partner or to another person that is a party to or is otherwise bound by a partnership agreement for breach of fiduciary duty for the partner's or other person's good faith reliance on the partnership agreement.

(4) A partnership agreement may provide that:

(A) a partner or transferee who fails to perform in accordance with, or to comply with the terms and conditions of, the partnership agreement shall be subject to specified penalties or specified consequences; and

(B) at the time or upon the happening of events specified in the partnership agreement, a partner or transferee may be subject to specified penalties or specified consequences.

(5) A penalty or consequence that may be specified under paragraph (4) of this subsection may include and take the form of reducing or eliminating the defaulting partner's or transferee's proportionate transferable interest in a partnership, subordinating the partner's or transferee's transferable interest to that of non-defaulting partners or transferees, forcing a sale of that transferable interest, forfeiting the defaulting partner's or transferee's transferable interest, the lending by other partners or transferees of the amount necessary to meet the defaulting partner's or transferee's commitment, a fixing of the value of the defaulting partner's or transferee's transferable interest by appraisal or by formula and redemption or sale of the transferable interest at that value, or other penalty or consequence.

(6) A written partnership agreement may supersede, in whole or in part, the provisions of Division C and Division D of Article 3 of Chapter 1.

(c) A partnership agreement may not:

(1) vary the nature of the partnership as a separate legal entity under Section 10A-8A-1.04(a);

(2) vary a partnership's power under Section 10A-8A-1.05 to sue, be sued, and defend in its own name;

(3) vary the law applicable to a limited liability partnership under Section 10A-8A-1.06;

(4) restrict rights under this chapter of a person other than a partner, a dissociated partner, or a transferee;

(5) vary the requirements of Section 10A-8A-2.03;

(6) unreasonably restrict the right of access to books and records under Section 10A-8A-4.10, but the partnership agreement may impose reasonable restrictions on the availability and use of information obtained under those sections and may define appropriate remedies, including liquidated damages, for a breach of any reasonable restriction on use;

(7) eliminate the implied contractual covenant of good faith and fair dealing as provided under Section 10A-8A-1.08(b)(1);

(8) eliminate or limit the liability of a partner or other person for any act or omission that constitutes a bad faith violation of the implied contractual covenant of good faith and fair dealing as provided under Section 10A-8A-1.08(b)(2);

(9) waive the requirements of Section 10A-8A-4.04(e);

(10) reduce the limitations period specified under Section 10A-8A-4.09(e) for an action commenced under other applicable law;

(11) waive the prohibition on issuance of a certificate of a transferable interest in bearer form under Section 10A-8A-5.02(c);

(12) vary the power of a person to dissociate as a partner under Section 10A-8A-6.02(a) except that the partnership agreement may require that the notice under Section 10A-8A-6.01(1) be in a writing or in a specific form thereof;

(13) vary the right of a court to expel a partner in the events specified in Section 10A-8A-6.01(5);

(14) vary the power of a court to decree dissolution in the circumstances specified in Section 10A-9A-8.01(4) or (5);

(15) vary the requirement to wind up the partnership's business or not for profit activity as specified in Section 10A-8A-8.01(4), (5), (6), or (7);

(16) vary the right of a partner to approve or consent to the cancellation of a statement of limited liability partnership as specified in Section 10A-8A-10.01(m); or

(17) vary the rights of a partner under Section 10A-8A-9.10.

§10A-8A-1.09. Partnership agreement; effect on partnership and persons admitted as partners.

(a) A partnership is bound by and may enforce the partnership agreement, whether or not the partnership has itself manifested assent to the partnership agreement.

(b) A person that is admitted as a partner of a partnership becomes a party to and assents to the partnership agreement except as provided in Section 10A-8A-5.02(g).

(c) Two or more persons intending to be the initial partners of a partnership may make an agreement providing that upon the formation of the partnership, the agreement will become the partnership agreement.

§10A-8A-1.10. Partnership agreement; effect on third parties and relationship to writings effective on behalf of partnership.

(a) If a partnership agreement provides for the manner in which it may be amended, including by requiring the approval of a person who is not a party to the partnership agreement or the satisfaction of conditions, it may be amended only in that manner or as otherwise permitted by law, except that the approval of any person may be waived by that person and any conditions may be waived by all persons for whose benefit those conditions were intended.

(b) A partnership agreement may provide rights to any person, including a person who is not a party to the partnership agreement, to the extent set forth in the partnership agreement.

(c) The obligations of a partnership and its partners to a person in the person's capacity as a transferee or dissociated partner are governed by the partnership agreement. A transferee and a dissociated partner are bound by the partnership agreement.

(d) If a writing that has been delivered by a partnership for filing in accordance with Chapter 1 and has become effective conflicts with a provision of the partnership agreement:

(1) the partnership agreement prevails as to partners, dissociated partners, and transferees; and

(2) the writing prevails as to other persons to the extent they reasonably rely on the writing.

§10A-8A-1.11. Required information.

A partnership shall maintain the following information:

(1) A current list of the full name and last known street and mailing address of each partner, in alphabetical order.

(2) Copies of any filed statement.

(3) Copies of the partnership's federal, state, and local income tax returns and reports, if any, for the three most recent years.

(4) Copies of the then effective partnership agreement and any amendment thereto, in each case to the extent made in a writing.

(5) Copies of any financial statement of the partnership for the three most recent years.

(6) Unless contained in a partnership agreement made in a writing, a writing stating:

(A) the amount of cash, and a description and statement of the agreed value of the other benefits, contributed and agreed to be contributed by each partner;

(B) the times at which, or events on the happening of which, any additional contributions agreed to be made by each partner are to be made; and

(C) any events upon the happening of which the partnership is to be dissolved and its business or not for profit activity wound up.

§10A-8A-1.12. Transactions of partner with partnership. A partner may lend money to and transact other business or not for profit activity with the partnership and has the same rights and obligations with respect to the loan or other transaction as a person that is not a partner.

§10A-8A-1.13. Consent and proxies of partners. Action requiring the consent of partners under this chapter may be taken without a meeting, and a partner may appoint a proxy to consent or otherwise act for the partner by signing a writing of appointment, either personally or by the partner's attorney in fact.

Article 2. Formation of Partnership; Property.

§10A-8A-2.01. Formation of partnership.

(a) Except as otherwise provided in subsection (b), the association of two or more persons:

(i) to carry on as co-owners a business for profit forms a partnership, whether or not the persons intend to form a partnership; or

(ii) to carry on any not for profit activity, forms a partnership when (A) the persons intend to form a partnership and (B) the persons deliver to the Secretary of State for filing a statement of not for profit partnership in accordance with Section 10A-8A-2.02(b) setting forth their intention to form a partnership to carry on a not for profit activity.

(b) An association formed under a statute other than this chapter, a predecessor statute, or a comparable statute of another jurisdiction is not a partnership under this chapter.

(c) In determining whether a partnership is formed under Section 10A-8A-2.01(a)(i), the following rules apply:

(1) Joint tenancy, tenancy in common, tenancy by the entireties, joint property, common property, or part ownership does not by itself establish a partnership, even if the co-owners share profits made by the use of the property.

(2) The sharing of gross returns does not by itself establish a partnership, even if the persons sharing them have a joint or common right or interest in property from which the returns are derived.

(3) A person who receives a share of the profits of a business is presumed to be a partner in the business, unless the profits were received in payment:

(i) of a debt by installments or otherwise;

(ii) for services as an independent contractor or of wages or other compensation to an employee;

(iii) of rent;

(iv) of an annuity or other retirement or health benefit to a beneficiary, representative, or designee of a deceased or retired partner;

(v) of interest or other charge on a loan, even if the amount of payment varies with the profits of the business, including a direct or indirect present or future ownership of the collateral, or rights to income, proceeds, or increase in value derived from the collateral; or

(vi) for the sale of the goodwill of a business or other property by installments or otherwise.

§10A-8A-2.02. Statement of partnership; statement of not for profit partnership.

(a) A partnership other than a partnership that has an effective statement of not for profit partnership or an effective statement of limited liability partnership on file with the Secretary of State may deliver to the Secretary of State for filing a statement of partnership for the purpose of having its partnership agreement governed by the laws of this state in accordance with Section 10A-8A-1.06(d) and providing notice of its existence in accordance with Section 10A-8A-1.03(d)(1). A statement of partnership must contain all of the following:

(1) the name of the partnership which name must comply with Article 5 of Chapter 1;

(2) the date that the partnership was formed pursuant to, or became governed by, the laws of this state;

(3) the street and mailing address of its principal office;

(4) the street and mailing address of a registered office and the name of the registered agent at that office for service of process in this state which the partnership shall be required to maintain;

(5) a statement that the partnership was formed for the purpose of carrying out a for profit business;

(6) a statement that the partnership has two or more partners; and

(7) a statement that the partnership agreement is governed by the laws of this state, and if the partnership agreement is a written partnership agreement, a declaration that the written partnership agreement has a provision stating that the partnership agreement is governed by the laws of this state.

(b) A partnership other than a partnership that has an effective statement of partnership or an effective statement of limited liability partnership on file with the Secretary of State may deliver to the Secretary of State for filing a statement of not for profit partnership for the purpose of setting forth the partners' intention to form a partnership to carry on a not for profit activity in accordance with Section 10A-8A-2.01(a)(ii), having its partnership agreement governed by the laws of this state in accordance with Section 10A-8A-1.06(d), and providing notice of its existence in accordance with Section 10A-8A-1.03(d)(2). A statement of not for profit partnership must contain all of the following:

(1) the name of the partnership which name must comply with Article 5 of Chapter 1;

(2) the date that the partnership was formed pursuant to, or became governed by, the laws of this state;

(3) the street and mailing address of its principal office;

(4) the street and mailing address of a registered office and the name of the registered agent at that office for service of process in this state which the partnership shall be required to maintain;

(5) a statement that the partnership was formed for the purpose of carrying out a not for profit activity in accordance with Section 10A-8A-2.01(a)(ii);

(6) a statement that the partnership has two or more partners; and

(7) a statement that the partnership agreement is governed by the laws of this state, and if the partnership agreement is a written partnership agreement, a declaration that the written partnership agreement has a provision stating that the partnership agreement is governed by the laws of this state.

(c) A statement of partnership and a statement of not for profit partnership may be amended or restated from time to time in accordance with Section 10A-1-4.26.

(d) A statement of partnership and a statement of not for profit partnership shall be executed by two or more partners authorized to execute the statement of partnership or statement of not for profit partnership.

(e) A statement of partnership and a statement of not for profit partnership shall be accompanied by a fee for the Secretary of State in the amount prescribed by Section 10A-1-4.31.

(f) If a partnership complies with this section, the Secretary of State shall file the statement of partnership or the statement of not for profit partnership, as applicable.

(g) A statement of partnership or a statement of not for profit partnership, as applicable, takes effect as determined under Article 4 of Chapter 1.

(h) A partnership that has filed a statement of partnership is for all purposes the same entity that existed before the statement of partnership was filed and continues to be a partnership under the laws of this state.

(i) A statement of partnership and a statement of not for profit partnership are filing instruments for the purposes of Chapter 1.

§10A-8A-2.03. Execution, filing, and recording of statements.

(a) A statement may be delivered to the Secretary of State for filing. A certified copy of a statement of authority that was filed by the Secretary of State may be delivered to a judge of probate for filing in accordance with Section 10A-8A-3.03(f) and (g). A certified copy of a statement that is filed in an office in another jurisdiction may be delivered to the Secretary of State for filing, and once filed by the Secretary of State, may, in the case of a statement of authority which is intended to have a similar effect to that of a statement of authority under Section 10A-8A-3.03(f) or (g), be delivered to the judge of probate for filing in accordance with Section 10A-8A-3.03(f) or (g). Either filing has the effect provided in this chapter with respect to partnership property located in or transactions that occur in this state.

(b) A certified copy of statement of authority filed in the office of the Secretary of State and delivered to the judge of probate for filing in the county or counties in which the partnership has real property shall, without more, have the effect of a recorded statement under this chapter with respect to real property located in that county or those counties. Any statement of authority recorded under the preceding sentence that is not a certified copy of a statement of authority filed in the office of the Secretary of State does not have the effect provided for recorded statements of authority in this chapter.

(c) Except as specifically provided otherwise in this chapter, a statement filed by a partnership must be executed by at least two partners. Other statements must be executed by a partner or other person authorized by this chapter. An individual who executes a statement as, or on behalf of, a partner or other person named as a partner in a statement shall personally declare under penalty of perjury that the contents of the statement are accurate.

(d) Except as specifically provided otherwise in this chapter, a person authorized by this chapter to file a statement may amend or cancel the statement by filing an amendment or cancellation that names the partnership, identifies the statement, and states the substance of the amendment or cancellation.

(e) A person who files a statement pursuant to this section shall promptly send a copy of the statement to every partner and to any other person named in the statement. Failure to send a copy of a statement to a partner or other person does not limit the effectiveness of the statement as to a person not a partner.

(f) The Secretary of State may collect a fee for filing or providing a certified copy of a statement in the amount prescribed in Section 10A-1-4.31. The office of the judge of probate may collect a fee for recording a certified copy of statement in the amount prescribed in Section 10A-1-4.31.

(g) Each statement permitted or required under this chapter to be delivered for filing to the Secretary of State or judge of probate is a filing instrument.

§10A-8A-2.04. Partnership property. Property acquired by a partnership is property of the partnership and not of the partners individually.

§10A-8A-2.05. When property is partnership property.

(a) Property is partnership property if acquired in the name of:

(1) the partnership; or

(2) one or more partners with an indication in the instrument transferring title to the property of the person's capacity as a partner or of the existence of a partnership but without an indication of the name of the partnership.

(b) Property is acquired in the name of the partnership by a transfer to:

(1) the partnership in its name; or

(2) one or more partners in their capacity as partners in the partnership, if the name of the partnership is indicated in the instrument transferring title to the property.

(c) Property is presumed to be partnership property if purchased with partnership assets, even if not acquired in the name of the partnership or of one or more partners with an indication in the instrument transferring title to the property of the person's capacity as a partner or of the existence of a partnership.

(d) Property acquired in the name of one or more of the partners, without an indication in the instrument transferring title to the property of the person's capacity as a partner or of the existence of a partnership and without use of partnership assets, is presumed to be separate property, even if used for partnership purposes.

Article 3. Relations of Partners to Persons Dealing with Partnership.

§10A-8A-3.01. Partner agent of partnership.

Subject to the effect of a statement of authority under Section 10A-8A-3.03:

(1) Each partner is an agent of the partnership for the purpose of its business or not for profit activity. An act of a partner, including the execution of an instrument in the partnership name, for apparently carrying on in the ordinary course the partnership business or not for profit activity, or business or not for profit activity of the kind carried on by the partnership, binds the partnership, unless the partner had no authority to act for the partnership in the particular matter and the person with whom the partner was dealing knew or had notice that the partner lacked authority.

(2) An act of a partner which is not apparently for carrying on in the ordinary course the partnership business or not for profit activity, or business or not for profit activity of the kind carried on by the partnership, binds the partnership only if the act was authorized by the other partners.

§10A-8A-3.02. Transfer of partnership property.

(a) Partnership property may be transferred as follows:

(1) Subject to the effect of a statement of authority under Section 10A-8A-3.03, partnership property held in the name of the partnership may be transferred by an instrument of transfer executed by a partner in the partnership name.

(2) Partnership property held in the name of one or more partners with an indication in the instrument transferring the property to them of their capacity as partners or of the existence of a partnership, but without an indication of the name of the partnership, may be transferred by an instrument of transfer executed by the persons in whose name the property is held.

(3) Partnership property held in the name of one or more persons other than the partnership, without an indication in the instrument transferring the property to them of their capacity as partners or of the existence of a partnership, may be transferred by an instrument of transfer executed by the persons in whose name the property is held.

(b) A partnership may recover partnership property from a transferee only if it proves that execution of the instrument of initial transfer did not bind the partnership under Section 10A-8A-3.01 and:

(1) as to a subsequent transferee who gave value for property transferred under subsections (a)(1) and (2), proves that the subsequent transferee knew or had received notice that the person who executed the instrument of initial transfer lacked authority to bind the partnership; or

(2) as to a transferee who gave value for property transferred under subsection (a)(3), proves that the transferee knew or had notice that the property was partnership property and that the person who executed the instrument of initial transfer lacked authority to bind the partnership.

(c) A partnership may not recover partnership property from a subsequent transferee if the partnership would not have been entitled to recover the property, under subsection (b), from any earlier transferee of the property.

§10A-8A-3.03. Statement of Authority.

(a) A partnership may deliver to the Secretary of State for filing a statement of authority, which:

(1) must include the name of the partnership and:

(A) if the partnership has not filed a statement of partnership, a statement of not for profit partnership, or a statement of limited liability partnership, (i) the street and mailing addresses of its principal office and (ii) if the Secretary of State has assigned a unique identifying number or other designation to the partnership, that number or designation; or

(B) if the partnership has filed a statement of partnership, a statement of not for profit partnership, or a statement of limited liability partnership, (i) the street address and mailing address of its principal office, (ii) the name, street address, and mailing address of its registered agent, and (iii) the unique identifying number or other designation assigned to the partnership by the Secretary of State.

(2) with respect to any position that exists in or with respect to the partnership, may state the authority, or limitations on the authority, of all persons holding the position to:

(A) sign an instrument transferring real property held in the name of the partnership; or

(B) enter into other transactions on behalf of, or otherwise act for or bind, the partnership; and

(3) may state the authority, or limitations on the authority, of a specific person to:

(A) sign an instrument transferring real property held in the name of the partnership; or

(B) enter into other transactions on behalf of, or otherwise act for or bind, the partnership.

(b) To amend or cancel a statement of authority filed by the Secretary of State, a partnership must deliver to the Secretary of State for filing an amendment or cancellation stating:

(1) the name of the partnership;

(2) if the partnership has not filed a statement of partnership, a statement of not for profit partnership, or a statement of limited liability partnership, the street and mailing addresses of the partnership's principal office;

(3) if the partnership has filed a statement of partnership, a statement of not for profit partnership, or a statement of limited liability partnership, the name and street and mailing addresses of its registered agent;

(4) the date the statement of authority being affected became effective; and

(5) the contents of the amendment or a declaration that the statement of authority is canceled.

(c) A statement of authority affects only the power of a person to bind a partnership to persons that are not partners.

(d) Subject to subsection (c) and Section 10A-8A-1.03(d)(3) and except as otherwise provided in subsections (f), (g), and (h), a limitation on the authority of a person or a position contained in an effective statement of authority is not by itself evidence of any person's knowledge or notice of the limitation.

(e) Subject to subsection (c), a grant of authority not pertaining to transfers of real property and contained in an effective statement of authority is conclusive in favor of a person that gives value in reliance on the grant, except to the extent that when the person gives value:

(1) the person has knowledge to the contrary;

(2) the statement of authority has been canceled or restrictively amended under subsection (b); or

(3) a limitation on the grant is contained in another statement of authority that became effective after the statement of authority containing the grant became effective.

(f) Subject to subsection (c), an effective statement of authority that grants authority to transfer real property held in the name of the partnership, a certified copy of which statement of authority is recorded in the office of the judge of probate in the county in which the real property is located, is conclusive in favor of a person that gives value in reliance on the grant without knowledge to the contrary, except to the extent that when the person gives value:

(1) the statement of authority has been canceled or restrictively amended under subsection (b), and a certified copy of the cancellation or restrictive amendment has been recorded in the office of the judge of probate in the county in which the real property is located; or

(2) a limitation on the grant is contained in another statement of authority that became effective after the statement of authority containing the grant became effective, and a certified copy of the later-effective statement is recorded in the office of the judge of probate in the county in which the real property is located.

(g) Subject to subsection (c), if a certified copy of an effective statement of authority containing a limitation on the authority to transfer real property held in the name of a partnership is recorded in the office of the judge of probate in the county in which the real property is located, all persons are deemed to know of the limitation with respect to the real property located in that county.

(h) Subject to subsection (i), an effective statement of dissolution is a cancellation of any filed statement of authority for the purposes of subsection (f) and is a limitation on authority for purposes of subsection (g).

(i) After a statement of dissolution becomes effective, a partnership may deliver to the Secretary of State for filing and, if appropriate, may record a statement of authority that is designated as a post-dissolution statement of authority. The statement operates as provided in subsections (f) and (g).

(j) Unless canceled earlier, an effective statement of authority is canceled by operation of law five years after the date on which the statement, or its most recent amendment, becomes effective. The cancellation is effective without recording under subsection (f) or (g).

(k) An effective statement of denial operates as a restrictive amendment under this section and may be recorded by certified copy for purposes of subsection (f)(1).

§10A-8A-3.04. Statement of denial.

A person named in a filed statement of authority granting that person authority may deliver to the Secretary of State for filing a statement of denial that:

(1) provides the name of the partnership and the caption of the statement of authority to which the statement of denial pertains; and

(2) denies the grant of authority.

A statement of denial is a limitation on authority as provided in Section 10A-8A-3.03.

§10A-8A-3.05. Partnership liable for partner's actionable conduct.

(a) A partnership is liable for loss or injury caused to a person, or for a penalty incurred, as a result of a wrongful act or omission, or other actionable conduct, of a partner acting in the ordinary course of business or not for profit activity of the partnership or with authority of the partnership.

(b) If, in the ordinary course of business or not for profit activity of the partnership's business or not for profit activity, or while acting with authority of the partnership, a partner receives or causes the partnership to receive money or property of a person not a partner, and the money or property is misapplied by a partner, the partnership is liable for the loss.

§10A-8A-3.06. Partner's liability.

(a) Except as otherwise provided in subsection (b) or subsection (c), all partners are liable jointly and severally for all obligations of the partnership unless otherwise agreed by the claimant or provided by law.

(b) A person admitted as a partner into an existing partnership is not personally liable for any partnership obligation incurred before the person's admission as a partner.

(c) Except as set forth in subsection (b) of Section 10A-8A-10.02, a debt, obligation, or other liability of a partnership incurred while the partnership is a limited liability partnership is solely the debt, obligation, or other liability of the limited liability partnership. Except as set forth in subsection (b) of Section 10A-8A-10.02, a partner in a limited liability partnership is not personally liable or accountable, directly or indirectly, including by way of indemnification, contribution, assessment, or otherwise, for debts, obligations, and liabilities of, or chargeable to, the limited liability partnership, or another partner or partners, whether arising in tort, contract, or otherwise, solely by reason of being such a partner or acting, or omitting to act, in such capacity, which such debts, obligations and liabilities occur, are incurred or are assumed while the partnership is a limited liability partnership. This subsection applies (1) despite anything inconsistent in the partnership agreement that existed immediately before the partnership becomes a limited liability partnership and (2) regardless of the dissolution of the limited liability partnership.

(d) Subsection (c) of this section shall not affect the liability of a limited liability partnership to the extent of partnership assets for partnership debts, obligations and liabilities.

(e) A partner in a limited liability partnership is not a necessary or proper party to a proceeding by or against a limited liability partnership, the object of which is to recover any debts, obligations, or liabilities of, or chargeable to, the limited liability partnership, unless the partner is personally liable therefor under subsection (b) of Section 10A-8A-10.02.

§10A-8A-3.07. Actions by and against partnership and partners.

(a) A partnership may sue and be sued in the name of the partnership.

(b) An action may be brought against the partnership and, except as provided in Section 10A-8A-3.06, against any or all of the partners in the same action or in separate actions.

(c) A judgment against a partnership is not by itself a judgment against a partner. A judgment against a partnership may not be satisfied from a partner's assets unless there is also a judgment against the partner.

(d) A judgment creditor of a partner may not levy execution against the assets of the partner to satisfy a judgment based on a claim against the partnership unless the claim is for a debt, obligation, or liability for which the partner is personally liable as provided in Section 10A-8A-3.06 and either:

(1) a judgment based on the same claim has been obtained against the partnership and a writ of execution on the judgment has been returned unsatisfied in whole or in part;

(2) the partnership is a debtor in bankruptcy;

(3) the partner has agreed that the creditor need not exhaust partnership assets;

(4) a court grants permission to the judgment creditor to levy execution against the assets of a partner based on a finding that partnership assets subject to execution are clearly insufficient to satisfy the judgment, that exhaustion of partnership assets is excessively burdensome, or that the grant of permission is an appropriate exercise of the court's equitable powers; or

(5) liability is imposed on the partner by law or contract independent of the existence of the partnership.

(e) This section applies to any partnership liability or obligation resulting from a representation by a partner or purported partner under Section 10A-8A-3.08.

§10A-8A-3.08. Liability of purported partner.

Except as provided in Section 10A-8A-3.06: (a) If a person, by words or conduct, purports to be a partner, or consents to being represented by another as a partner, in a partnership or with one or more persons not partners, the purported partner is liable to a person to whom the representation is made, if that person, relying on the representation, enters into a transaction with the actual or purported partnership. If the representation, either by the purported partner or by a person with the purported partner's consent, is made in a public manner, the purported partner is liable to a person who relies upon the purported partnership even if the purported partner is not aware of being held out as a partner to the claimant. If partnership liability results, the purported partner is liable with respect to that liability as if the purported partner were a partner. If no partnership liability results, the purported partner is liable with respect to that liability jointly and severally with any other person consenting to the representation.

(b) If a person is thus represented to be a partner in an existing partnership, or with one or more persons not partners, the purported partner is an agent of persons consenting to the representation to bind them to the same extent and in the same manner as if the purported partner were a partner, with respect to persons who enter into transactions in reliance upon the representation. If all of the partners of the existing partnership consent to the representation, a partnership act or obligation results. If fewer than all of the partners of the existing partnership consent to the representation, the person acting and the partners consenting to the representation are jointly and severally liable.

(c) A person is not liable as a partner merely because the person is named by another in a statement of authority.

(d) A person does not continue to be liable as a partner merely because of a failure to file a statement of dissociation or to amend a statement of authority to indicate the partner's dissociation from the partnership.

(e) Except as otherwise provided in subsections (a) and (b), persons who are not partners as to each other are not liable as partners to other persons.

Article 4. Relations of Partners to Each Other and to Partnership.

§10A-8A-4.01. Partner's rights and duties.

(a) Each partner is deemed to have an account that is:

(1) credited with an amount equal to the money plus the value of any other property, net of the amount of any liabilities, the partner contributes to the partnership and the partner's share of the partnership profits; and

(2) charged with an amount equal to the money plus the value of any other property, net of the amount of any liabilities, distributed by the partnership to the partner and the partner's share of the partnership losses provided that a partner shall not be charged with any share of partnership loss attributable to a debt, obligation or liability for which the partner is not personally liable under Section 10A-8A-3.06 unless the loss is satisfied out of partnership assets.

(b) Each partner is entitled to an equal share of the partnership profits and, subject to the limitations in subsection (a)(2) of this section, is chargeable with a share of the partnership losses in proportion to the partner's share of the profits.

(c) A partnership shall reimburse a partner for payments made and indemnify a partner for liabilities incurred by the partner in the ordinary course of the business or not for profit activity of the partnership or for the preservation of its business or not for profit activity or property; provided, however, no partner in a limited liability partnership shall be required as a consequence of the indemnification to make any payment on behalf of the limited liability partnership to any other partners to the extent that the payment would be inconsistent with Sections 10A-8A-3.06, 10A-8A-8.06, or 10A-8A-8.07.

(d) A partnership shall reimburse a partner for an advance beyond the amount of capital the partner agreed to contribute.

(e) A payment or advance made by a partner which gives rise to a partnership obligation under subsection (c) or (d) constitutes a loan to the partnership which accrues interest from the date of the payment or advance.

(f) Each partner has equal rights in the management and conduct of the partnership business or not for profit activity.

(g) A partner may use or possess partnership property only on behalf of the partnership.

(h) A partner is not entitled to remuneration for services performed for the partnership, except for reasonable compensation for services rendered in winding up the business or not for profit activity of the partnership.

(i) A difference arising as to a matter in the ordinary course of business or not for profit activity of a partnership may be decided by a majority of the partners. An act outside the ordinary course of business or not for profit activity of a partnership and an amendment to the partnership agreement may be undertaken only with the consent of all of the partners.

(j) This section does not affect the obligations of a partnership to other persons under Section 10A-8A-3.01.

§10A-8A-4.02. Admission of partner.

(a) The initial partners of a partnership are admitted as partners upon the formation of the partnership.

(b) After formation, a person is admitted as a partner of the partnership:

(1) as provided in the partnership agreement;

(2) as the result of a transaction effective under Article 9 of this chapter or Article 8 of Chapter 1;

(3) with the consent of all the partners; or

(4) as provided in Section 10A-8A-8.01(6) or 10A-8A-8.01(7).

(c) Each person to be admitted as a partner to a partnership formed under either Section 10A-8A-2.01(a)(i) or 10A-8A-2.01(a)(ii) may be admitted as a partner without:

(1) acquiring a transferable interest; or

(2) making or being obligated to make a contribution to the partnership.

§10A-8A-4.03. Form of contribution. A contribution by a partner may be made to a partnership as agreed by the partners.

§10A-8A-4.04. Liability for contribution.

(a) A partner's obligation to make a contribution to a partnership is not excused by the partner's death, disability, or other inability to perform personally.

(b) If a partner does not make a contribution required by an enforceable promise, the partner or the partner's estate is obligated, at the election of the partnership, to contribute money equal to the value of the portion of the contribution that has not been made. The foregoing election shall be in addition to, and not in lieu of, any other rights, including the right to specific performance, that the partnership may have under the partnership agreement or applicable law.

(c) The obligation of a partner to make a contribution to a partnership may be compromised only by consent of all partners. A conditional obligation of a partner to make a contribution to a partnership may not be enforced unless the conditions of the obligation have been satisfied or waived as to or by that partner. Conditional obligations include contributions payable upon a discretionary call of a partnership before the time the call occurs.

(d) A creditor of a limited liability partnership which extends credit or otherwise acts in reliance on an obligation described in subsection (a), without notice of any compromise under this subsection, may enforce the original obligation.

(e) A promise by a partner to make a contribution to a partnership is not enforceable unless set forth in a writing signed by the partner.

§10A-8A-4.05. Sharing of distributions before dissolution. All partners shall share equally in any distributions made by a partnership before its dissolution and winding up.

§10A-8A-4.06. Interim distributions. Subject to Section 10A-8A-7.01, a partner has a right to a distribution before the dissolution and winding up of a partnership as provided in the partnership agreement. A decision to make a distribution before the dissolution and winding up of the partnership is a decision in the ordinary course of the business or not for profit activity of the partnership.

§10A-8A-4.07. Distribution in kind. A partner does not have a right to demand and receive a distribution from a partnership in any form other than money. Except as otherwise provided in Section 10A-8A-8.07, a partnership may distribute an asset in kind if each partner receives a percentage of the asset in proportion to the partner's share of distributions.

§10A-8A-4.08. Right to distribution. If a partner becomes entitled to receive a distribution, the partner has the status of, and is entitled to all remedies available to, a creditor of the partnership with respect to the distribution. However, the partnership's obligation to make a distribution is subject to offset for any amount owed to the partnership by the partner or dissociated partner on whose account the distribution is made.

§10A-8A-4.09. Limitations on distribution and liability for improper distributions.

(a) A limited liability partnership shall not make a distribution to a partner to the extent that at the time of the distribution, after giving effect to the distribution, all liabilities of the limited liability partnership, other than liabilities to partners on account of their transferable interests and liabilities for which the recourse of creditors is limited to specific property of the limited liability partnership, exceed the fair value of the assets of the limited liability partnership, except that the fair value of the property that is subject to a liability for which recourse of creditors is limited shall be included in the assets of the limited liability partnership only to the extent that the fair value of the property exceeds that liability.

(b) A partner who consents to a distribution in violation of subsection (a) or the partnership agreement, and who knew at the time of the distribution that the distribution violated subsection (a) or the partnership agreement, shall be liable to the limited liability partnership for the amount of that distribution.

(c) A partner who receives a distribution in violation of subsection (a) or the partnership agreement, and who knew at the time of the distribution that the distribution violated subsection (a) or the partnership agreement, shall be liable to the limited liability partnership for the amount of the distribution received by that partner. A partner who receives a distribution in violation of subsection (a) or the partnership agreement, and who did not know at the time of the distribution that the distribution violated subsection (a) or the partnership agreement, shall not be liable for the amount of the distribution received by that partner.

(d) Except as provided in subsection (e), this section shall not affect any obligation or liability of a partner under other applicable law for the amount of a distribution.

(e) An action under this section or other applicable law is barred if not commenced within two years after the distribution.

(f) For purposes of subsection (a), "distribution" does not include amounts constituting reasonable compensation for present or past services or reasonable payments made in the ordinary course of the limited liability partnership's business or not for profit activity under a bona fide retirement plan or other benefits program.

(g) This section shall not apply to distributions made in accordance with Section 10A-8A-8.09.

§10A-8A-4.10. Right of partner and former partner to information.

Notwithstanding Sections 10A-1-3.32 and 10A-1-3.33:

(a) Subject to subsection (f), a partner, without having any particular purpose for seeking the information, may inspect and copy during regular hours at a reasonable location specified by the partnership, required information and any other records maintained by the partnership regarding the partnership's business or not for profit activity and financial condition.

(b) Subject to subsection (f), each partner and the partnership shall furnish to a partner:

(1) without demand, any information concerning the partnership's business or not for profit activity reasonably required for the proper exercise of the partner's rights and duties under the partnership agreement or this chapter; and

(2) on demand, any other information concerning the partnership's business or not for profit activity, except to the extent the demand or the information demanded is unreasonable or otherwise improper under the circumstances.

(c) Subject to subsections (e) and (f), on 10 days' demand made in a writing received by the partnership, a person dissociated as a partner may have access to the information and records described in subsection (a) at the location specified in subsection (a) if:

(1) the information or writing pertains to the period during which the person was a partner;

(2) the person seeks the information or record in good faith; and

(3) it is determined that:

(i) the person seeks the information for a purpose reasonably related to the person's interest as a partner;

(ii) the person's demand describes with reasonable particularity the information sought and the purpose for seeking the information; and

(iii) the information sought is directly connected to the person's purpose.

(d) Within 10 days after receiving a demand pursuant to subsection (c), the partnership in a writing shall inform the person that made the demand:

(1) what information the partnership will provide in response to the demand;

(2) when and where the partnership will provide the information;

(3) if the partnership declines to provide any demanded information, the partnership's reasons for declining; and

(4) what, if any, restrictions will be imposed pursuant to the partnership agreement or subsection (f).

(e) If a partner dies, Section 10A-8A-5.04 applies.

(f) In addition to any restriction or condition stated in its partnership agreement, a partnership, as to a matter within the ordinary course of its business or not for profit activity, may:

(1) impose reasonable restrictions and conditions on access to and use of information to be furnished under this section, including designating information confidential and imposing nondisclosure and safeguarding obligations on the recipient; and

(2) keep confidential from the partners and any other person, for such period of time as the partnership deems reasonable, any information that the partnership reasonably believes to be in the nature of trade secrets or other information the disclosure of which the partnership in good faith believes is not in the best interest of the partnership or could damage the partnership or its business or not for profit activity, or that the partnership is required by law or by agreement with a third party to keep confidential.

In any dispute concerning the reasonableness of a restriction under this subsection, the partnership has the burden of proving reasonableness.

(g) A partnership may charge a person that makes a demand under this section reasonable costs of copying, limited to the costs of labor and material.

(h) A partner or person dissociated as a partner may exercise the rights under this section through an attorney or other agent. Any restriction imposed under subsection (f) or by the partnership agreement applies both to the attorney or other agent and to the partner or person dissociated as a partner.

(i) The rights under this section do not extend to a person as transferee, but the rights under subsection (c) of a person dissociated as a partner may be exercised by the legal representative of an individual who dissociated as a partner under Section 10A-8A-6.01(6).

(j) Any partner who, without reasonable cause, refuses to allow any partner or person dissociated as a partner, or their agent or attorney to inspect or copy any records of the partnership to which such partner or person dissociated as a partner is entitled under this section, shall be personally liable to the partner or person dissociated as a partner for a penalty in an amount not to exceed 10 percent of the fair market value of the transferable interest of the partner or person dissociated as a partner, in addition to any other damages or remedy.

§10A-8A-4.11. General standards of partner's conduct.

(a) The duties that a partner has to the partnership and to the other partners include the duty of loyalty and the duty of care as described in subsections (b) and (c).

(b) A partner's duty of loyalty to the partnership and to the other partners includes each of the following:

(1) to account to the partnership and to hold as trustee for it any property, profit, or benefit derived by the partner in the conduct or winding up of the partnership's business or not for profit activity or derived from a use by the partner of partnership property, including the appropriation of a partnership opportunity;

(2) to refrain from dealing with the partnership in the conduct or winding up of the partnership's business or not for profit activity as or on behalf of a party having an interest adverse to the partnership; and

(3) to refrain from competing with the partnership in the conduct or winding up of the partnership's business or not for profit activity.

(c) A partner's duty of care to the partnership and to the other partners in the conduct or winding up of the partnership's business or not for profit activity includes refraining from engaging in grossly negligent or reckless conduct, intentional misconduct, or a knowing violation of law.

(d) A partner shall discharge the duties to the partnership and to the other partners under this chapter and under the partnership agreement and exercise any rights consistently with the implied contractual covenant of good faith and fair dealing.

(e) A partner does not violate a duty or obligation under this chapter or under the partnership agreement merely because the partner's conduct furthers the partner's own interest.

§10A-8A-4.12. Reliance on reports and information. A partner of a partnership shall be fully protected in relying in good faith upon the records of the partnership and upon information, opinions, reports, or statements presented by another partner or agent of the partnership, or by any other person as to matters the partner reasonably believes are within that other person's professional or expert competence, including information, opinions, reports, or statements as to the value and amount of the assets, liabilities, profits, or losses of the partnership, or the value and amount of assets or reserves or contracts, agreements, or other undertakings that would be sufficient to pay claims and obligations of the partnership, or to make reasonable provision to pay those claims and obligations, or any other facts pertinent to the existence and amount of assets from which distributions to partners or creditors might properly be paid.

§10A-8A-4.13. Actions by partnership and partners.

(a) Except as provided in Sections 10A-8A-3.06, 10A-8A-8.06, or 10A-8A-8.07, a partnership may maintain an action against a partner for a breach of the partnership agreement, or for the violation of a duty to the partnership, causing harm to the partnership.

(b) Except as provided in Sections 10A-8A-3.06, 10A-8A-8.06, or 10A-8A-8.07, a partner may maintain an action against the partnership or another partner for legal or equitable relief, with or without an accounting as to partnership business or not for profit activity, to:

(1) enforce the partner's rights under the partnership agreement;

(2) enforce the partner's rights under this chapter, including:

(i) the partner's rights under Sections 10A-8A-4.01, 10A-8A-4.03, or 10A-8A-4.04;

(ii) the partner's right on dissociation to have the partner's transferable interest in the partnership purchased pursuant to Section 10A-8A-7.01 or enforce any other right under Article 6 or 7; or

(iii) the partner's right to compel a dissolution and winding up of the partnership's business or not for profit activity under Section 10A-8A-8.01 or enforce any other right under Article 8; or

(3) enforce the rights and otherwise protect the interests of the partner, including rights and interests arising independently of the partnership relationship.

(c) The accrual of, and any time limitation on, a right of action for a remedy under this section is governed by other law. A right to an accounting upon a dissolution and winding up does not revive a claim barred by law.

§10A-8A-4.14. Continuation of partnership beyond definite term or particular undertaking.

(a) If a partnership for a definite term or particular undertaking is continued, without an express agreement, after the expiration of the term or completion of the undertaking, the rights and duties of the partners remain the same as they were at the expiration or completion, so far as is consistent with a partnership at will.

(b) If the partners, or those of them who habitually acted in the business or not for profit activity during the term or undertaking, continue the business or not for profit activity without any settlement or liquidation of the partnership, they are presumed to have agreed that the partnership will continue.

Article 5. Transferees and Creditors of Partners.

§10A-8A-5.01. Partner's transferable interest in partnership. The only interest of a partner which is transferable is the partner's transferable interest. A transferable interest is personal property.

§10A-8A-5.02. Transfer of partner's transferable interest.

(a) A transfer, in whole or in part, of a partner's transferable interest:

(1) is permissible;

(2) does not by itself cause the partner's dissociation;

(3) does not by itself cause a dissolution and winding up of the partnership; and

(4) subject to Section 10A-8A-5.05, does not entitle the transferee to:

(A) participate in the management or conduct of the partnership's business or not for profit activity; or

(B) except as otherwise provided in subsection (d), have access to required information, records, or other information concerning the partnership's business or not for profit activity.

(b) A transferee has a right:

(1) to receive, in accordance with the transfer, distributions to which the transferor would otherwise be entitled;

(2) to receive upon the dissolution and winding up of the partnership, in accordance with the transfer, the net amount otherwise distributable to the transferor; and

(3) to seek under Section 10A-8A-8.01(5) a judicial determination that it is equitable to wind up the partnership business or not for profit activity.

(c) A transferable interest may be evidenced by a certificate of transferable interest issued by the partnership. A partnership agreement may provide for the transfer of the transferable interest represented by the certificate and make other provisions with respect to the certificate. No certificate of transferable interest shall be issued in bearer form.

(d) In a dissolution and winding up, a transferee is entitled to an account of the partnership's transactions only from the date of dissolution.

(e) Except as otherwise provided in Sections 10A-8A-6.01(4), 10A-8A-6.01(11), and 10A-9A-6.01(12), when a partner transfers a transferable interest, the transferor retains the rights of a partner other than the right to distributions transferred and retains all duties and obligations of a partner.

(f) A partnership need not give effect to a transferee's rights under this section until the partnership has notice of the transfer.

(g) When a partner transfers a transferable interest to a person that is admitted as a partner with respect to the transferred interest, the transferee is liable for the partner's obligations under Sections 10A-8A-4.04 and 10A-8A-4.09 to the extent that the obligations are known to the transferee when the transferee voluntarily accepts admission as a partner.

§10A-8A-5.03. Rights of creditor of partner or transferee.

(a) On application to a court of competent jurisdiction by any judgment creditor of a partner or transferee, the court may charge the transferable interest of the judgment debtor with payment of the unsatisfied amount of the judgment with interest. To the extent so charged and after the partnership has been served with the charging order, the judgment creditor has only the right to receive any distribution or distributions to which the judgment debtor would otherwise be entitled in respect of the transferable interest.

(b) The partnership, after being served with a charging order and its terms, shall be entitled to pay or deposit any distribution or distributions to which the judgment debtor would otherwise be entitled in respect of the charged transferable interest into the hands of the clerk of the court so issuing the charging order, and the payment or deposit shall discharge the partnership and the judgment debtor from liability for the amount so paid or deposited and any interest that might accrue thereon. Upon receipt of the payment or deposit, the clerk of the court shall notify the judgment creditor of the receipt of the payment or deposit. The judgment creditor shall, after any payment or deposit into the court, petition the court for payment of so much of the amount paid or deposited as is held by the court as may be necessary to pay the judgment creditor's judgment. To the extent the court has excess amounts paid or deposited on hand after the payment to the judgment creditor, the excess amounts paid or deposited shall be distributed to the judgment debtor and the charging order shall be extinguished. The court, may in its discretion, order the clerk to deposit, pending the judgment creditor's petition, any money paid or deposited with the clerk, in an interest bearing account at a bank authorized to receive deposits of public funds.

(c) A charging order constitutes a lien on the judgment debtor's transferable interest.

(d) Subject to subsection (c):

(1) a judgment debtor that is a partner retains the rights of a partner and remains subject to all duties and obligations of a partner; and

(2) a judgment debtor that is a transferee retains the rights of a transferee and remains subject to all duties and obligations of a transferee.

(e) This chapter does not deprive any partner or transferee of the benefit of any exemption laws applicable to the partner's or transferee's transferable interest.

(f) This section provides the exclusive remedy by which a judgment creditor of a partner or transferee may satisfy a judgment out of the judgment debtor's transferable interest and the judgment creditor shall have no right to foreclose, under this chapter or any other law, upon the charging order, the charging order lien, or the judgment debtor's transferable interest. A judgment creditor of a partner or transferee shall have no right to obtain possession of, or otherwise exercise legal or equitable remedies with respect to, the property of a partnership. Court orders for actions or requests for accounts and inquiries that the judgment debtor might have made, are not available to the judgment creditor attempting to satisfy the judgment out of the judgment debtor's transferable interest and may not be ordered by a court.

§10A-8A-5.04. Power of personal representative of deceased partner.

If a partner dies, the deceased partner's personal representative or other legal representative may:

(a) for the period of time that the deceased partner's personal representative or other legal representative holds the deceased partner's transferable interest:

(1) exercise the rights of a holder of transferable interests under this chapter;

(2) exercise the rights of a transferee under Section 10A-8A-5.02; and

(3) for purposes of settling the estate, exercise the rights of a current partner under Section 10A-8A-4.10; and

(b) for the period of time that the deceased partner's personal representative or other legal representative does not hold the deceased partner's transferable interest, for purposes of settling the estate, exercise the rights of a person dissociated as a partner under Section 10A-8A-4.10.

Article 6. Partner's Dissociation.

§10A-8A-6.01. Events causing partner's dissociation.

A person is dissociated from a partnership as a partner upon the occurrence of any of the following events:

(1) the partnership has notice of the person's express will to dissociate as a partner, except that if the person specifies a dissociation date later than the date the partnership had notice, then the person is dissociated as a partner on that later date;

(2) an event stated in the partnership agreement as causing the person's dissociation as a partner occurs;

(3) the person is expelled as a partner pursuant to the partnership agreement;

(4) the person is expelled as a partner by the unanimous consent of the other partners if:

(A) it is unlawful to carry on the partnership's business or not for profit activity with the person as a partner;

(B) there has been a transfer of all of the person's transferable interest in the partnership, other than a transfer for security purposes;

(C) the person is an organization and, within 90 days after the partnership notifies the person that it will be expelled as a partner because it has filed a statement of dissolution or the equivalent, or its right to conduct business or not for profit activity has been suspended by its jurisdiction of formation, the statement of dissolution or the equivalent has not been revoked or its right to conduct business or not for profit activity has not been reinstated; or

(D) the person is an organization and, within 90 days after the partnership notifies the person that it will be expelled as a partner because the person has been dissolved and its business or not for profit activity is being wound up, the organization has not been reinstated or the dissolution and winding up have not been revoked or cancelled;

(5) on application by the partnership, the person is expelled as a partner by judicial order because the person:

(A) has engaged, or is engaging, in wrongful conduct that has adversely and materially affected, or will adversely and materially affect, the partnership's business or not for profit activity;

(B) has willfully or persistently committed, or is willfully or persistently committing, a material breach of the partnership agreement or the person's duty or obligation under this chapter or other applicable law; or

(C) has engaged, or is engaging, in conduct relating to the business or not for profit activity of the partnership that makes it not reasonably practicable to carry on the business or not for profit activity with the person as partner;

(6) in the case of a person who is an individual, the person dies, there is appointed a guardian or general conservator for the person or there is a judicial determination that the person has otherwise become incapable of performing the person's duties as a partner under this chapter or the partnership agreement;

(7) the person becomes a debtor in bankruptcy, executes an assignment for the benefit of creditors, or seeks, consents, or acquiesces to the appointment of a trustee, receiver, or liquidator of the person or of all or substantially all of the person's property;

(8) in the case of a person that is a trust or is acting as a partner by virtue of being a trustee of a trust, the trust's entire transferable interest in the partnership is distributed, but not solely by reason of the substitution of a successor trustee;

(9) in the case of a person that is an estate or is acting as a partner by virtue of being a personal representative of an estate, the estate's entire transferable interest in the partnership is distributed, but not solely by reason of the substitution of a successor personal representative;

(10) in the case of a person that is not an individual, the legal existence of the person otherwise terminates;

(11) the transfer of a partner's entire remaining transferable interest to another partner;

(12) the transfer of a partner's entire remaining transferable interest to a transferee upon the transferee's becoming a partner; or

(13) the partnership's participation in a conversion or merger under Article 9, or Article 8 of Chapter 1 of this title if the partnership:

(A) is not the converted or surviving entity; or

(B) is the converted or surviving entity but, as a result of the conversion or merger, the person ceases to be a partner.

§10A-8A-6.02. Partner's power to dissociate; wrongful dissociation.

(a) A person has the power to dissociate as a partner at any time, rightfully or wrongfully, by express will pursuant to Section 10A-8A-6.01(1).

(b) A person's dissociation is wrongful only if:

(1) it is in breach of an express provision of the partnership agreement; or

(2) in the case of a partnership for a definite term or particular undertaking, before the expiration of the term or the completion of the undertaking if any of the following apply:

(A) the person dissociates as a partner by express will, unless the dissociation follows not later than 90 days after another person's dissociation by death or otherwise under Section 10A-8A-6.01(6) through (10) or wrongful dissociation under this subsection;

(B) the person is expelled as a partner by judicial order under Section 10A-8A-6.01(5);

(C) the person is dissociated under Section 10A-8A-6.01(7); or

(D) in the case of a person that is not a trust other than a business trust, an estate, or an individual, the person is expelled or otherwise dissociated because it willfully dissolved or terminated.

(c) A person that wrongfully dissociates as a partner is liable to the partnership and to the other partners for damages caused by the dissociation. The liability is in addition to any debt, obligation, or other liability of the partner to the partnership or the other partners.

§10A-8A-6.03. Effect of partner's dissociation.

(a) If a person's dissociation results in a dissolution and winding up of the partnership business or not for profit activity, Article 8 applies; otherwise, Article 7 applies.

(b) Upon a person's dissociation as a partner:

(1) the person's right to participate in the management and conduct of the partnership business or not for profit activity terminates, except as provided in Section 10A-8A-8.03;

(2) the person's duty of loyalty under Section 10A-8A-4.11 (b)(3) terminates; and

(3) the person's duty of loyalty under Section 10A-8A-4.11 (b)(1) and (2) and duty of care under Section 10A-8A-4.11

(c) continue only with regard to matters arising and events occurring before the person's dissociation, unless the partner participates in winding up the partnership's business or not for profit activity pursuant to Section 10A-8A-.03.

Article 7. Person's Dissociation as a Partner when Business or Not for Profit Activity Not Wound up.

§10A-8A-7.01. Purchase of transferable interest of a person dissociated as a partner.

(a) If a person is dissociated as a partner from a partnership without resulting in a dissolution and winding up of the partnership business or not for profit activity under Section 10A-8A-8.01, the partnership shall cause that person's transferable interest in the partnership owned by that person at the time of dissociation to be purchased for a buyout price determined pursuant to subsection (b).

(b) The buyout price of the transferable interest owned by the person at the time of dissociation as a partner is an amount equal to the fair value of that person's transferable interest as of the date of dissociation. Interest on the buyout price must be paid from the date of dissociation to the date of payment.

(c) Damages for wrongful dissociation under Sections 10A-8A-6.02(b) and (c), and all other amounts owing, whether or not presently due, from the person dissociated as a partner to the partnership, must be offset against the buyout price. Interest on damages for wrongful dissociation must be paid from the date of the wrongful dissociation to the date of payment. Interest on all other amounts, whether or not presently due, must be paid from the date the amount owed becomes due to the date of payment.

(d) A partnership shall indemnify a person dissociated as a partner whose transferable interest is being purchased against all partnership liabilities, whether incurred before or after the dissociation, except liabilities incurred by an act of the person dissociated as a partner under Section 10A-8A-7.02.

(e) If no agreement for the purchase of the transferable interests of a person dissociated as a partner is reached within 120 days after a written demand for payment, the partnership shall pay, or cause to be paid, in cash to the person dissociated as a partner the amount the partnership estimates to be the buyout price and accrued interest, reduced by any offsets and accrued interest under subsection (c).

(f) If a deferred payment is authorized under subsection (h), the partnership may tender a written offer to pay the amount it estimates to be the buyout price and accrued interest, reduced by any offsets under subsection (c), stating the time of payment, the amount and type of security for payment, and the other terms and conditions of the obligation.

(g) The payment or tender required by subsection (e) or (f) must be accompanied by the following:

(1) a written statement of partnership assets and liabilities as of the date of dissociation;

(2) the latest available partnership balance sheet and income statement, if any;

(3) a written explanation of how the estimated amount of the payment was calculated; and

(4) written notice which shall state that the payment is in full satisfaction of the obligation to purchase unless, within 120 days after the written notice, the person dissociated as a partner commences an action to determine the buyout price of that person's transferable interest, any offsets under subsection (c), or other terms of the obligation to purchase.

(h) A person that wrongfully dissociates as a partner before the expiration of a definite term or the completion of a particular undertaking is not entitled to payment of any portion of the buyout price until the expiration of the term or completion of the undertaking, unless the person establishes to the satisfaction of the court that earlier payment will not cause undue hardship to the business or not for profit activity of the partnership. A deferred payment under this subsection must bear interest and, to the extent it would not cause undue hardship to the business or not for profit activity of the partnership, be adequately secured.

(i) A person dissociated as a partner may maintain an action against the partnership, pursuant to Section 10A-8A-4.13(b)(2)(ii), to determine the buyout price of that person's transferable interest under subsection (b), any offsets under subsection (c), or other terms of the obligation to purchase. The action must be commenced within 120 days after the partnership has tendered payment or an offer to pay or within one year after written demand for payment if no payment or offer to pay is tendered. The court shall determine the buyout price of that person's transferable interest under subsection (b), any offset due under subsection (c), and accrued interest, and enter judgment for any additional payment or refund. If deferred payment is authorized under subsection (h), the court shall also determine the security, if any, for payment and other terms of the obligation to purchase. The court may assess reasonable attorney's fees and the fees and expenses of appraisers or other experts for a party to the action, in amounts the court finds equitable, against a party that the court finds acted arbitrarily, vexatiously, or not in good faith. The finding may be based on the partnership's failure to tender payment or an offer to pay or to comply with subsection (g).

§10A-8A-7.02. Power to bind and liability of person dissociated as a partner.

(a) For one year after a person dissociates as a partner without resulting in a dissolution and winding up of the partnership business or not for profit activity, the partnership, including a surviving partnership or other surviving entity under Article 9 of this chapter and Article 8 of Chapter 1, is bound by an act of the person dissociated as a partner which would have bound the partnership under Section 10A-8A-3.01 before dissociation only if at the time of entering into the transaction the other party:

(1) reasonably believed that the person dissociated as a partner was then a partner and reasonably relied on such belief in entering into the transaction;

(2) did not have notice of the person's dissociation as a partner; and

(3) is not deemed to have had knowledge or notice under Section 10A-8A-1.03.

(b) A person dissociated as a partner is liable to the partnership for any damage caused to the partnership arising from an obligation incurred by the person dissociated as a partner after dissociation for which the partnership is liable under subsection (a).

§10A-8A-7.03. Liability of person dissociated as a partner to other persons.

(a) A person's dissociation as a partner does not of itself discharge that person's liability for a partnership obligation incurred before dissociation. A person dissociated as a partner is not liable for a partnership obligation incurred after dissociation, except as provided in subsection (b).

(b) A person that dissociates as a partner without resulting in a dissolution and winding up of the partnership business or not for profit activity is liable as a partner to the other party in a transaction entered into by the partnership, or a surviving partnership or other surviving entity under Article 9 of this chapter or Article 8 of Chapter 1, within one year after the partner's dissociation, only if the partner is liable for the obligation under Section 10A-8A-3.06 and at the time of entering into the transaction the other party:

(1) reasonably believed that the person dissociated as a partner was then a partner and reasonably relied on such belief in entering into the transaction;

(2) did not have notice of the person's dissociation; and

(3) is not deemed to have had knowledge or notice under Section 10A-8A-1.03 of the person's dissociation.

(c) By agreement with the partnership creditor and the partners continuing the business or not for profit activity, a person dissociated as a partner may be released from liability for a partnership obligation.

(d) A person dissociated as a partner is released from liability for a partnership obligation if a partnership creditor, with notice of the person's dissociation but without the person's consent, agrees to a material alteration in the nature or time of payment of a partnership obligation.

§10A-8A-7.04. Statement of dissociation.

(a) A person dissociated as a partner or the partnership may file a statement of dissociation stating the name of the partnership and that the person is dissociated as a partner from the partnership.

(b) A statement of dissociation is a limitation on the authority of a person dissociated as a partner for the purposes of Section10A-8A-3.03.

§10A-8A-7.05. Continued use of partnership name. Continued use of a partnership name, or a person's name that is dissociated as a partner as part thereof, by partners continuing the business or not for profit activity does not of itself make the person dissociated as a partner liable for an obligation of the partners or the partnership continuing the business or not for profit activity.

Article 8. Dissolution and Winding Up.

§10A-8A-8.01. Events of dissolution.

A partnership is dissolved, and its business or not for profit activity must be wound up, upon the occurrence of the first of the following events:

(1) in a partnership at will, the partnership knows or has notice of a person's express will to dissociate as a partner, other than a partner that has dissociated under Section 10A-8A-6.01(2) through (10), but, if the person has specified a dissociation date later than the date the partnership knew or had notice, on the later date;

(2) in a partnership for a definite term or particular undertaking:

(i) within 90 days after a partner's dissociation by death or otherwise under Section 10A-8A-6.01(6) through (10), or a partner's wrongful dissociation under Section 10A-8A-6.02(b), at least half of the remaining partners affirmatively consent to dissolve the partnership and wind up the partnership business or not for profit activity, for which purpose a partner's rightful dissociation pursuant to Section 10A-8A-6.02(b)(2)(A) constitutes the expression of that partner's will to wind up the business or not for profit activity of the partnership;

(ii) the consent of all of the partners to dissolve and wind up the partnership's business or not for profit activity; or

(iii) the expiration of the term or the completion of the undertaking;

(3) an event or circumstance that the partnership agreement states causes dissolution;

(4) on application by a partner, the entry of an order by a court of competent jurisdiction dissolving the partnership on the grounds that it is not reasonably practicable to carry on the partnership's business or not for profit activity in conformity with the partnership agreement;

(5) on application by a transferee of a partner's transferable interest, a judicial determination that it is equitable to wind up the partnership business or not for profit activity:

(i) after the expiration of the term or completion of the undertaking, if the partnership was for a definite term or particular undertaking at the time of the transfer; or

(ii) at any time, if the partnership was a partnership at will at the time of the transfer;

(6) the passage of 90 consecutive days during which the partnership does not have at least two partners, unless either of the following applies:

(i) The remaining partner agrees in writing within 90 days after the dissociation of the last partner, to continue the business or not for profit activity of the partnership and to admit one or more new partners; or

(ii) The business or not for profit activity of the partnership is continued and one or more new partners are admitted in the manner stated in the partnership agreement; or

(7) the passage of 90 consecutive days during which the partnership does not have any remaining partners, unless either of the following applies:

(i) The holders of all of the transferable interests in the partnership agree in writing, within 90 days after the dissociation of the last partner, to continue the business or not for profit activity of the partnership and to admit two or more new partners; or

(ii) The business or not for profit activity of the partnership is continued and two or more new partners are admitted in the manner stated in the partnership agreement.

§10A-8A-8.02. Effect of dissolution.

Notwithstanding Section 10A-1-9.12:

(a) A dissolved partnership continues its existence as a partnership but may not carry on any business or not for profit activity except as is appropriate to wind up and liquidate its business or not for profit activity, including:

(1) collecting its assets;

(2) disposing of its properties that will not be distributed in kind to persons owning transferable interests;

(3) discharging or making provisions for discharging its liabilities;

(4) distributing its remaining property in accordance with Section 10A-8A-8.09; and

(5) doing every other act necessary to wind up and liquidate its business or not for profit activity.

(b) In winding up its business or not for profit activity, a partnership may:

(1) deliver to the Secretary of State for filing a statement of dissolution setting forth:

(A) The name of the partnership;

(B) If the partnership has filed a statement of partnership, a statement of not for profit partnership, a statement of authority, or a statement of limited liability partnership, the date of filing its statement of partnership, statement of not for profit partnership, statement of authority, or statement of limited liability partnership, and all amendments and restatements thereof, and the office or offices where filed;

(C) That the partnership has dissolved;

(D) The name, street address, and mailing address of the partner who will be winding up the business or not for profit activity of the partnership pursuant to Section 10A-8A-8.03(a), and if none, the name, street address, and mailing address of the person appointed pursuant to Section 10A-8A-8.03(b) or (c) to wind up the business or not for profit activity of the partnership;

(E) If the partnership has filed a statement of partnership, a statement of not for profit partnership, or a statement of limited liability partnership, the name, street address, and mailing address of the partnership's registered agent; and

(F) Any other information the partnership deems appropriate;

(2) preserve the partnership's business or not for profit activity as a going concern for a reasonable time;

(3) prosecute, defend, or settle actions or proceedings whether civil, criminal or administrative;

(4) transfer the partnership's assets;

(5) resolve disputes by mediation or arbitration; and

(6) merge or convert in accordance with Article 9 of this chapter or Article 8 of Chapter 1.

(c) The dissolution of a partnership does not:

(1) transfer title to the partnership's property;

(2) prevent the commencement of a proceeding by or against the partnership in its partnership name;

(3) terminate, abate or suspend a proceeding pending by or against the partnership on the effective date of dissolution;

(4) terminate the authority of its registered agent; or

(5) abate, suspend or otherwise alter the application of Section 10A-8A-3.06.

(d) A statement of dissolution is a filing instrument under Chapter 1.

§10A-8A-8.03. Right to wind up business or not for profit activity.

(a) If a dissolved partnership has a partner or partners that have not dissociated, that partner or those partners shall wind up the business or not for profit activity of the partnership and shall have the powers set forth in Section 10A-8A-8.04. A person whose dissociation as a partner resulted in the dissolution of the partnership may participate in the winding up as if still a partner, unless the dissociation was wrongful.

(b) If a dissolved partnership does not have a partner and no person has the right to participate in winding up under subsection (a), the personal or legal representative of the last person to have been a partner may wind up the partnership's business or not for profit activity. If the representative does not exercise that right, a person to wind up the partnership's business or not for profit activity may be appointed by the affirmative vote or consent of transferees owning a majority of the transferable interests at the time the consent is to be effective.

(c) A court of competent jurisdiction may order judicial supervision of the winding up of a dissolved partnership, including the appointment of a person to wind up the partnership's business or not for profit activity:

(1) on application of a partner or any person entitled under the last sentence of subsection (a) to participate in the winding up of the dissolved partnership, if the applicant establishes good cause;

(2) on application of a transferee, if the partnership does not have a partner and within a reasonable time following the dissolution no person having the authority to wind up the business or not for profit activity of the partnership has been appointed pursuant to subsection (b);

(3) on application of a transferee, if the partnership does not have a partner and within a reasonable time following the dissolution the person appointed pursuant to subsection (b) is not winding up the business or not for profit activity of the partnership; or

(4) in connection with a proceeding under Section 10A-8A-8.01(4) or (5).

(d) A person appointed under subsection (b) or (c) is not a partner but:

(1) has the powers of a partner under Section 10A-8A-8.04 but is not liable for the debts, liabilities, and other obligations of the partnership solely by reason of having or exercising those powers or otherwise acting to wind up the business or not for profit activity of the dissolved partnership; and

(2) shall promptly deliver to the Secretary of State for filing a statement of dissolution setting forth the items listed in Section 10A-8A-8.02(b)(1) and the following:

(A) that the partnership does not have a partner;

(B) the name, street address, and mailing address of each person that has been appointed to wind up the business or not for profit activity of the partnership;

(C) that each person has been appointed pursuant to subsection (b) or (c), as applicable, to wind up the business or not for profit activity of the partnership; and

(D) pursuant to this section, that each person has the powers of a partner under Section 10A-8A-8.04 but is not liable for the debts, liabilities, and other obligations of the partnership solely by reason of having or exercising those powers or otherwise acting to wind up the business or not for profit activity of the dissolved partnership.

§10A-8A-8.04. Power to bind partnership after dissolution.

(a) After dissolution, a partnership is bound by the act of a partner or by the act of a dissociated partner acting as a partner under Section 10A-8A-8.03(a) which:

(1) is appropriate for winding up the partnership's business or not for profit activity; or

(2) would have bound the partnership under Section 10A-8A-3.01 before dissolution, if, at the time the other party enters into the transaction, the other party does not have notice of the dissolution.

(b) Subject to subsection (a), a person dissociated as a partner binds a partnership through an act occurring after dissolution only if:

(1) at the time the other party enters into the transaction the other party does not have notice of the dissociation and reasonably believes that the person is a partner; and

(2) the act:

(A) is appropriate for winding up the partnership's business or not for profit activity; or

(B) would have bound the partnership under Section 10A-8A-3.01 before dissolution and at the time the other party enters into the transaction the other party does not have notice of the dissolution.

§10A-8A-8.05. Liability after dissolution of partner and person dissociated as partner; other partners, and persons dissociated as partners.

(a) If a partner having knowledge of the dissolution causes a partnership to incur an obligation under Section 10A-8A-8.04(a) by an act that is not appropriate for winding up the partnership's business or not for profit activity, the partner is liable:

(1) to the partnership for any damage caused to the partnership arising from the obligation; and

(2) if another partner or a person dissociated as a partner is liable for the obligation, to that other partner or person for any damage caused to that other partner or person arising from the liability.

(b) If a person dissociated as a partner causes a partnership to incur an obligation under Section 10A-8A-8.04(b), the person is liable:

(1) to the partnership for any damage caused to the partnership arising from the obligation; and

(2) if a partner or another person dissociated as a partner is liable for the obligation, to the partner or other person for any damage caused to the partner or other person arising from the liability.

(c) A person dissociated as a partner is not liable under subsection (b) if:

(1) the last sentence of Section 10A-8A-8.03(a) permits the person to participate in winding up; and

(2) the act that causes the partnership to be bound under Section 10A-8A-8.04(b) is appropriate for winding up the partnership's business or not for profit activity.

§10A-8A-8.06. Known claims against dissolved partnership.

Notwithstanding Sections 10A-1-9.01 and 10A-1-9.21:

(a) A dissolved partnership may dispose of any known claims against it by following the procedures described in subsection (b) at any time after the effective date of the dissolution of the partnership.

(b) A dissolved partnership may give notice of the dissolution in writing to the holder of any known claim. The notice must:

(1) identify the dissolved partnership;

(2) describe the information required to be included in a claim;

(3) provide a mailing address to which the claim is to be sent;

(4) state the deadline, which may not be fewer than 120 days from the effective date of the notice, by which the dissolved partnership must receive the claim;

(5) state that if not sooner barred, the claim will be barred if not received by the deadline; and

(6) unless the partnership has been throughout its existence a limited liability partnership, state that the barring of a claim against the partnership will also bar any corresponding claim against any partner or person dissociated as a partner which is based on Section 10A-8A-3.06.

(c) Unless sooner barred by any other statute limiting actions, a claim against a dissolved partnership is barred:

(1) if a claimant who was given notice under subsection (b) does not deliver the claim to the dissolved partnership by the deadline; or

(2) if a claimant whose claim was rejected by the dissolved partnership, does not commence a proceeding to enforce the claim within 90 days from the effective date of the rejection notice.

(d) For purposes of this section, "known claim" or "claim" includes unliquidated claims, but does not include a contingent liability that has not matured so that there is no immediate right to bring suit or a claim based on an event occurring after the effective date of dissolution.

(e) Nothing in this section shall be deemed to extend any otherwise applicable statute of limitations.

§10A-8A-8.07. Other claims against dissolved partnership.

Notwithstanding Sections 10A-1-9.01 and 10A-1-9.22:

(a) A dissolved partnership may publish notice of its dissolution and request that persons with claims against the dissolved partnership present them in accordance with the notice.

(b) The notice authorized by subsection (a) must:

(1) be published at least one time in a newspaper of general circulation in the county in which the dissolved partnership's principal place of business or not for profit activity in this state is located, and if none, was last located;

(2) describe the information that must be included in a claim and provide a mailing address to which the claim is to be sent;

(3) state that if not sooner barred, a claim against the dissolved partnership will be barred unless a proceeding to enforce the claim is commenced within two years after the publication of the notice; and

(4) unless the partnership has been throughout its existence a limited liability partnership, state that the barring of a claim against the partnership will also bar any corresponding claim against any partner or person dissociated as a partner which is based on Section 10A-8A-3.06.

(c) If a dissolved partnership publishes a newspaper notice in accordance with subsection (b), unless sooner barred by any other statute limiting actions, the claim of each of the following claimants is barred unless the claimant commences a proceeding to enforce the claim against the dissolved partnership within two years after the publication date of the newspaper notice:

(1) a claimant who was not given notice under Section 10A-8A-8.06;

(2) a claimant whose claim was timely sent to the dissolved partnership but not acted on by the dissolved partnership; and

(3) a claimant whose claim is contingent at the effective date of the dissolution of the partnership, or is based on an event occurring after the effective date of the dissolution of the partnership.

(d) A claim that is not barred under this section, any other statute limiting actions, or Section 10A-8A-8.06 may be enforced:

(1) against a partnership, to the extent of its undistributed assets;

(2) except as provided in subsection (h), if the assets of a dissolved partnership have been distributed after dissolution, against the person or persons owning the transferable interests to the extent of that person's proportionate share of the claim or of the assets distributed to that person after dissolution, whichever is less, but a person's total liability for all claims under subsection (d) may not exceed the total amount of assets distributed to that person after dissolution of the partnership; or

(3) against any person liable on the claim under Section 10A-8A-3.06, 10A-8A-7.03 and 10A-8A-8.05.

(e) A dissolved partnership that published a notice under this section may file an application with a court of competent jurisdiction for a determination of the amount and form of security to be provided for payment of claims that are contingent or have not been made known to the dissolved partnership or that are based on an event occurring after the effective date of the dissolution of the partnership but that, based on the facts known to the dissolved partnership, are reasonably estimated to arise after the effective date of the dissolution of the partnership. Provision need not be made for any claim that is or is reasonably anticipated to be barred under subsection (c).

(f) Within 10 days after the filing of the application provided for in subsection (e), notice of the proceeding shall be given by the dissolved partnership to each potential claimant as described in subsection (e).

(g) The court under subsection (e) may appoint a guardian ad litem to represent all claimants whose identities are unknown in any proceeding brought under this section. The reasonable fees and expenses of the guardian, including all reasonable expert witness fees, shall be paid by the dissolved partnership.

(h) Provision by the dissolved partnership for security in the amount and the form ordered by the court under subsection (e) shall satisfy the dissolved partnership's obligation with respect to claims that are contingent, have not been made known to the dissolved partnership, or are based on an event occurring after the effective date of the dissolution of the partnership, and those claims may not be enforced against a person owning a transferable interest to whom assets have been distributed by the dissolved partnership after the effective date of the dissolution of the partnership.

(i) Nothing in this section shall be deemed to extend any otherwise applicable statute of limitations.

(j) If a claim has been satisfied, disposed of, or barred under Section 10A-8A-8.06, this section, or other law, the person or persons designated to wind up the business or not for profit activity of a partnership, and the owners of the transferable interests receiving assets from the partnership, shall not be liable for that claim.

§10A-8A-8.08. Liability of partner and person dissociated as partner when claim against partnership. If a claim against a dissolved partnership is barred under Section 10A-8A-8.06 or 10A-8A-8.07, any corresponding claim under Section 10A-8A-3.06, 10A-8A-7.03 and 10A-8A-8.05 is also barred.

§10A-8A-8.09. Disposition of assets, when contributions required.

Notwithstanding Section 10A-1-9.12, upon the winding up of a partnership, the assets of the partnership, including any obligation under Section 10A-8A-4.03, 10A-8A-4.04, and 10A-8A-4.09, and any contribution required by this section, shall be applied as follows:

(a) Payment, or adequate provision for payment, shall be made to creditors, including, to the extent permitted by law, partners who are creditors, in satisfaction of liabilities of the partnership.

(b) After a partnership complies with subsection (a), any surplus must be distributed:

(1) first, to each person owning a transferable interest that reflects contributions made on account of the transferable interest and not previously returned, an amount equal to the value of the person's unreturned contributions; and

(2) then to each person owning a transferable interest in the proportions in which the owners of transferable interests share in distributions before dissolution.

(c) If the partnership does not have sufficient surplus to comply with subsection (b)(1), any surplus must be distributed among the owners of transferable interests in proportion to the value of their respective unreturned contributions.

(d) If a partnership's assets are insufficient to satisfy all of its obligations under subsection (a), with respect to each unsatisfied obligation incurred when the partnership was not a limited liability partnership, the following rules apply:

(1) Each person that was a partner when the obligation was incurred and that has not been released from the obligation under Section 10A-8A-7.03(c) and (d) shall contribute to the partnership for the purpose of enabling the partnership to satisfy the obligation. The contribution due from each of those persons is in proportion to the right to receive distributions in the capacity of partner in effect for each of those persons when the obligation was incurred.

(2) If a person does not contribute the full amount required under paragraph (1) with respect to an unsatisfied obligation of the partnership, the other persons required to contribute by paragraph (1) on account of the obligation shall contribute the additional amount necessary to discharge the obligation. The additional contribution due from each of those other persons is in proportion to the right to receive distributions in the capacity of partner in effect for each of those other persons when the obligation was incurred.

(3) If a person does not make the additional contribution required by paragraph (2), further additional contributions are determined and due in the same manner as provided in that paragraph.

(e) A person that makes an additional contribution under subsection (d)(2) or (3) may recover from any person whose failure to contribute under subsection (d)(1) or (2) necessitated the additional contribution. A person may not recover under this subsection more than the amount additionally contributed. A person's liability under this subsection may not exceed the amount the person failed to contribute.

(f) The estate of a deceased individual is liable for the person's obligations under this section.

(g) An assignee for the benefit of creditors of a partnership or a partner, or a person appointed by a court to represent creditors of a partnership or a partner, may enforce a person's obligation to contribute under subsection (d).

§10A-8A-8.10. Reinstatement after dissolution.

Notwithstanding Sections 10A-1-9.31 and 10A-1-9.32, a partnership that has been dissolved may be reinstated upon compliance with the following conditions:

(a) the consent shall have been obtained from the partners or other persons entitled to consent at the time that is:

(1) required for reinstatement under the partnership agreement; or

(2) if the partnership agreement does not state the consent required for reinstatement, sufficient for dissolution under the partnership agreement; or

(3) if the partnership agreement neither states the consent required for reinstatement nor for dissolution, sufficient for dissolution under this chapter;

(b) in the case of a written objection to reinstatement having been delivered to the partnership before or at the time of the consent required by subsection (a) by the partners or other persons having authority under the partnership agreement to bring about or prevent dissolution of the partnership, those partners or persons withdrawing that written objection effective at the time of the consent required by subsection (a);

(c) in the case of a partnership dissolved in a judicial proceeding initiated by one or more of the partners pursuant to Section 10A-8A-8.01(4), the consent of each of those partners shall have been obtained and shall be included in the consent required by subsection (a);

(d) in the case of a partnership dissolved in a judicial proceeding initiated by one or more of transferees pursuant to Section 10A-8A-8.01(5), the consent of each of those transferees shall have been obtained and shall be included in the consent required by subsection (a); and

(e) in the case of a partnership that has filed a statement of dissolution, the filing of a certificate of reinstatement in accordance with Section 10A-8A-8.11.

§10A-8A-8.11. Certificate of reinstatement.

A partnership that has dissolved, has filed a statement of dissolution, and is seeking to reinstate in accordance with Section 10A-8A-8.10, shall deliver to the Secretary of State for filing a certificate of reinstatement in accordance with the following:

(a) A certificate of reinstatement shall be delivered to the Secretary of State for filing. The certificate of reinstatement shall state:

(1) the name of the partnership before reinstatement;

(2) the name of the partnership following reinstatement, which partnership name shall comply with Section 10A-8A-8.12;

(3) the date of formation of the partnership;

(4) the date of filing its statement of dissolution, and all amendments and restatements thereof, and the office or offices where filed;

(5) if the partnership has filed a statement of partnership, a statement of not for profit partnership, a statement of authority, or a statement of limited liability partnership, the date of filing its statement of partnership, statement of not for profit partnership, statement of authority, or statement of limited liability partnership, and all amendments and restatements thereof, and the office or offices where filed;

(6) the date of dissolution of the partnership, if known;

(7) a statement that all applicable conditions of Section 10A-8A-8.10 have been satisfied; and

(8) the address of the registered office and the name of the registered agent at that address in compliance with Article 5 of Chapter 1.

(b) A partnership shall deliver to the Secretary of State for filing a statement of dissolution prior to or simultaneously with the certificate of reinstatement. If a partnership has not filed a statement of partnership, a statement of not for profit partnership, or a statement of limited liability partnership prior to filing its statement of dissolution, the partnership must also deliver to the Secretary of State for filing a statement of partnership, a statement of not for profit partnership, or a statement of limited liability partnership, simultaneously with the certificate of reinstatement.

(c) A certificate of reinstatement is a filing instrument under Chapter 1.

§10A-8A-8.12. Partnership name upon reinstatement.

The name of a partnership following the filing of a certificate of reinstatement shall be determined as follows:

(a) if the partnership is listed in the Secretary of State's records as a partnership that has been dissolved, then the name of a partnership following reinstatement shall be that partnership name at the time of reinstatement if that partnership name complies with Article 5 of Chapter 1 at the time of reinstatement; and

(b) if that partnership name does not comply with Article 5 of Chapter 1, the name of the partnership following reinstatement shall be that partnership name followed by the word "reinstated."

§10A-8A-8.13. Effect of reinstatement.

(a) Subject to subsection (b), upon reinstatement, the partnership shall be deemed for all purposes to have continued its business or not for profit activity as if dissolution had never occurred; and each right inuring to, and each debt, obligation, and liability incurred by, the partnership after the dissolution shall be determined as if the dissolution had never occurred.

(b) The rights of persons acting in reliance on the dissolution before those persons had notice of the reinstatement shall not be adversely affected by the reinstatement.

Article 9. Conversions and Mergers.

§10A-8A-9.01. Definitions.

Notwithstanding Section 10A-1-1.03, as used in this article, unless the context otherwise requires, the following terms mean:

(1) "Constituent partnership" means a constituent organization that is a partnership.

(2) "Constituent organization" means an organization that is party to a merger under this article.

(3) "Converted organization" means the organization into which a converting organization converts pursuant to this article.

(4) "Converting partnership" means a converting organization that is a partnership.

(5) "Converting organization" means an organization that converts into another organization pursuant to this article.

(6) "Governing statute" of an organization means the statute that governs the organization's internal affairs.

(7) "Organization" means a partnership, including a limited liability partnership; limited partnership, including a limited liability limited partnership; limited liability company; business trust; corporation; nonprofit corporation; professional corporation; or any other person having a governing statute. The term includes domestic and foreign organizations whether or not organized for profit.

(8) "Organizational documents" means:

(A) (i) for a partnership, its partnership agreement and, if applicable, its statement of partnership, statement of not for profit partnership, or statement of limited liability partnership; (ii) for a foreign partnership, its partnership agreement and, if applicable, its statement of foreign limited liability partnership;

(B) for a limited partnership or foreign limited partnership, its certificate of formation and partnership agreement, or comparable writings as provided in its governing statute;

(C) for a limited liability company or foreign limited liability company, its certificate of formation and limited liability company agreement, or comparable writings as provided in its governing statute;

(D) for a business or statutory trust or foreign business or statutory trust its agreement of trust and declaration of trust, or comparable writings as provided in its governing statute;

(E) for a corporation for profit or foreign corporation for profit, its certificate of formation, bylaws, and other agreements among its shareholders that are authorized by its governing statute, or comparable writings as provided in its governing statute;

(F) for a nonprofit corporation or foreign nonprofit corporation, its certificate of formation, bylaws, and other agreements that are authorized by its governing statute, or comparable writings as provided in its governing statute;

(G) for a professional corporation or foreign professional corporation, its certificate of formation, bylaws, and other agreements among its shareholders that are authorized by its governing statute, or comparable writings as provided in its governing statute; and

(H) for any other organization, the basic writings that create the organization and determine its internal governance and the relations among the persons that own it, have an interest in it, or are members of it.

(9) "Surviving organization" means an organization into which one or more other organizations are merged under this article, whether the organization pre-existed the merger or was created pursuant to the merger.

§10A-8A-9.02. Conversion.

(a) An organization other than a partnership may convert to a partnership, and a partnership may convert to an organization other than a partnership pursuant to this section, Sections 10A-8A-9.03 through 10A-8A-9.05, and a plan of conversion, if:

(1) the governing statute of the organization that is not a partnership authorizes the conversion;

(2) the law of the jurisdiction governing the converting organization and the converted organization does not prohibit the conversion; and

(3) the converting organization and the converted organization each comply with the governing statute and organizational documents applicable to that organization in effecting the conversion.

(b) A plan of conversion must be in writing and must include:

(1) the name, type of organization, and mailing address of the principal office of the converting organization before conversion;

(2) the name, type of organization, and mailing address of the principal office of the converted organization after conversion;

(3) the terms and conditions of the conversion, including the manner and basis for converting interests in the converting organization into any combination of money, interests in the converted organization, and other consideration allowed in Section 10A-8A-9.02(c); and

(4) the organizational documents of the converted organization.

(c) In connection with a conversion, rights or securities of or interests in the converting organization may be exchanged for or converted into cash, property, or rights or securities of or interests in the converted organization, or, in addition to or in lieu thereof, may be exchanged for or converted into cash, property, or rights or securities of or interests in another organization or may be cancelled.

(d) If a partnership is the converting organization and that partnership does not have an effective statement of partnership, statement of not for profit partnership, or statement of limited liability partnership on file with the Secretary of State, then that partnership must, before proceeding with a conversion deliver to the Secretary of State for filing, a statement of partnership, statement of not for profit partnership, or statement of limited liability partnership simultaneously with the delivery to the Secretary of State for filing, of a statement of conversion.

(e) If an organization is converting to a partnership, the converting organization must deliver to the Secretary of State for filing a statement of partnership, statement of not for profit partnership, or a statement of limited liability partnership in accordance with Section 10A-8A-9.04.

§10A-8A-9.03. Action on plan of conversion by converting partnership.

(a) Subject to Section 10A-8A-9.10, a plan of conversion must be consented to by all the partners of a converting partnership.

(b) Subject to Section 10A-8A-9.10 and any contractual rights, after a conversion is approved, and at any time before a filing is made under Section 10A-8A-9.04, a converting partnership may amend the plan or abandon the planned conversion:

(1) as provided in the plan; and

(2) except as prohibited by the plan, by the same consent as was required to approve the plan.

§10A-8A-9.04. Filings required for conversion; effective date.

(a) After a plan of conversion is approved:

(1) if the converting organization is an organization formed under, or its internal affairs are governed by, the laws of this state, the converting organization shall file a statement of conversion in accordance with subsection (c), which statement of conversion must be signed in accordance with Section 10A-8A-2.03 and which must include:

(A) the name of the converting organization;

(B) the date of the filing of the certificate of formation of the converting organization, if any, and all prior amendments and the filing office or offices, if any, where such is filed;

(C) a statement that the converting organization has been converted into the converted organization;

(D) the name and type of organization of the converted organization and the jurisdiction of its governing statute;

(E) the street and mailing address of the principal office of the converted organization;

(F) the date the conversion is effective under the governing statute of the converted organization;

(G) a statement that the conversion was approved as required by this chapter;

(H) a statement that the conversion was approved as required by the governing statute of the converted organization; and

(I) if the converted organization is a foreign organization not authorized to conduct business or not for profit activity in this state, the street and mailing address of an office for the purposes of Section 10A-8A-9.05(b); and

(2) if the converted organization is a partnership, the converting organization shall deliver to the Secretary of State for filing a statement of partnership, statement of not for profit partnership, or statement of limited liability partnership, as applicable, which statement of partnership, statement of not for profit partnership, or statement of limited liability partnership must include, in addition to the information required by Section10A-8A-2.02 or Section 10A-8A-10.01, as applicable:

(A) a statement that the partnership was converted from the converting organization;

(B) the name and type of organization of the converting organization and the jurisdiction of the converting organization's governing statute; and

(C) a statement that the conversion was approved in a manner that complied with the converting organization's governing statute.

(3) if the converting organization is a partnership and that partnership does not have an effective statement of partnership, statement of not for profit partnership, or statement of limited liability partnership on file with the Secretary of State, then the converting organization must deliver to the Secretary of State for filing, a statement of partnership, statement of not for profit partnership, or statement of limited liability partnership simultaneously with the delivery to the Secretary of State for filing, of a statement of conversion.

(b) A conversion becomes effective:

(1) if the converted organization is a partnership, when the statement of partnership, statement of not for profit partnership, or statement of limited liability partnership takes effect; and

(2) if the converted organization is not a partnership, as provided by the governing statute of the converted organization.

(c) If the converting organization is an organization formed under, or its internal affairs are governed by, the laws of this state, then the converting organization shall file the statement of conversion required under subsection (a)(1) and the statement, if any, required under subsection (a)(3) with the Secretary of State in accordance with Section 10A-1-4.02(c)(1).

(d) If the converted organization is a partnership, then, notwithstanding Section 10A-1-4.02(b), the converting organization shall file a statement of partnership, statement of not for profit partnership, or statement of limited liability partnership required under subsection (a)(2) with the Secretary of State in accordance with Section 10A-1-4.02(c)(5), along with the fees specified in Section 10A-1-4.31 subject to subsections (f)(3) and (f)(4).

(e) If the converting organization is required to file a statement of conversion and a statement of partnership, statement of not for profit partnership, or statement of limited liability partnership with the Secretary of State, then the converting organization shall file the statement of conversion and the statement of partnership, statement of not for profit partnership, or statement of limited liability partnership with the Secretary of State simultaneously.

(f) In the case of a statement of conversion that is to be filed with the Secretary of State pursuant to subsection (c):

(1) if the converting organization has a certificate of formation filed with the judge of probate, the Secretary of State shall within 10 days transmit a certified copy of the statement of conversion to the office of the judge of probate in the county in which the certificate of formation for such converting organization was filed along with the proper fee for the judge of probate.

(2) if the converting organization did not file its certificate of formation with the judge of probate, but rather in accordance with this title filed its certificate of formation with the Secretary of State, the Secretary of State shall not transmit a certified copy of the statement of conversion to the office of the judge of probate and shall not collect any fee for the judge of probate.

(3) if the converting organization is, immediately prior to the conversion becoming effective, an organization described in Section 10A-1-4.02(c)(4), but is not required under this title to file its organizational documents with the judge of probate, the Secretary of State shall not transmit a certified copy of the statement of conversion to the office of the judge of probate and shall not collect any fee for the judge of probate.

(4) if the converting organization is a partnership, the Secretary of State shall not transmit a certified copy of the statement of conversion to the office of the judge of probate and shall not collect any fee for the judge of probate.

(g) In the case of a statement of partnership, statement of not for profit partnership, or statement of limited liability partnership that is to be filed with the Secretary of State pursuant to subsection (d), the Secretary of State shall not transmit a certified copy of the statement of partnership, statement of not for profit partnership, or statement of limited liability partnership to the office of the judge of probate and shall not collect any fee for the judge of probate, but shall collect the fee provided for the Secretary of State in Section 10A-1-4.31(a)(1).

(h) After a conversion becomes effective, if the converted organization is a partnership, then all filing instruments required to be filed under this title regarding that converted organization shall be filed with the Secretary of State.

(i) If:

(1) the converting organization is a filing entity, a partnership with an effective statement of partnership, statement of not for profit partnership, or statement of limited liability partnership on file with the Secretary of State, a foreign filing entity registered to conduct business or not for profit activity in this state or a qualified foreign limited liability partnership;

(2) the converted organization will be a filing entity, a partnership with an effective statement of partnership, statement of not for profit partnership, or statement of limited liability partnership on file with the Secretary of State, a foreign filing entity registered to conduct business or not for profit activity in this state or a qualified foreign limited liability partnership;

(3) the name of the converting organization and the converted organization are to be the same, other than words, phrases or abbreviations indicating the type of entity; and

(4) the name of the converted organization complies with Division A of Article 5 of Chapter 1 or Section 10A-1-7.07, as the case may be; then notwithstanding Division B of Article 5 of Chapter 1, no name reservation shall be required and the converted organization shall for all purposes of this title be entitled to utilize the name of the converting organization without any further action by the converting organization or the converted organization.

(j) A certified copy of any document required to be filed under this section may be filed in the real estate records in the office of the judge of probate in any county in which the converting organization owned real property, without payment and without collection by the judge of probate of any deed or other transfer tax or fee. The judge of probate shall, however, be entitled to collect a filing fee of five dollars ($5). Any such filing shall evidence chain of title, but lack of filing shall not affect the converted organization's title to such real property.

(k) A statement of conversion is a filing instrument under Chapter 1.

(l) Except as set forth in subsections (f)(2), (f)(3), and (f)(4), the filing fees for a statement of conversion shall be the same fee as provided in Section 10A-1-4.31(a)(5).

§10A-8A-9.05. Effect of conversion.

(a) When a conversion takes effect:

(1) all property owned by the converting organization remains vested in the converted organization without reservation or impairment and the title to any property vested by deed or otherwise in the converting organization shall not revert or be in any way impaired by reason of the conversion;

(2) all debts, obligations, or other liabilities of the converting organization continue as debts, obligations, or other liabilities of the converted organization and neither the rights of creditors, nor the liens upon the property of the converting organization shall be impaired by the conversion;

(3) an action or proceeding pending by or against the converting organization continues as if the conversion had not occurred;

(4) except as prohibited by law other than this chapter, all of the rights, privileges, immunities, powers, and purposes of the converting organization remain vested in the converted organization;

(5) except as otherwise provided in the plan of conversion, the terms and conditions of the plan of conversion take effect;

(6) except as otherwise agreed, for all purposes of the laws of this state, the converting organization shall not be required to wind up its business or not for profit activity or pay its liabilities and distribute its assets, and the conversion shall not be deemed to constitute a dissolution of the converting organization;

(7) for all purposes of the laws of this state, the rights, privileges, powers, interests in property, debts, liabilities and duties of the converting organization, shall be the rights, privileges, powers, interests in property, debts, liabilities and duties of the converted organization, and shall not be deemed as a consequence of the conversion, to have been transferred to the converted organization;

(8) if the converted organization is a partnership, for all purposes of the laws of this state, the partnership shall be deemed to be the same organization as the converting organization, and the conversion shall constitute a continuation of the existence of the converting organization in the form of a partnership;

(9) if the converted organization is a partnership, the existence of the partnership shall be deemed to have commenced on the date the converting organization commenced its existence in the jurisdiction in which the converting organization was first created, formed, organized, incorporated, or otherwise came into being;

(10) the conversion shall not affect the choice of law applicable to matters arising prior to conversion; and

(11) If the Secretary of State has assigned a unique identifying number or other designation to the converting organization and

(i) the converted organization is formed pursuant to, or governed by, the laws of this state or

(ii) the converted organization is, within 30 days after the effective date of the conversion, registered to transact business in this state, then that unique identifying number or other designation shall continue to be assigned to the converted organization.

(b) A converted organization that is a foreign entity consents to the jurisdiction of the courts of this state to enforce any debt, obligation or other liability for which the converting partnership is liable if, before the conversion, the converting partnership was subject to suit in this state on the debt, obligation or other liability. If a converted organization that is a foreign entity fails to designate or maintain a registered agent, or the designated registered agent cannot with reasonable diligence be served, then service of process on that converted organization for the purposes of enforcing a debt, obligation, or other liability under this subsection may be made in the same manner and has the same consequences as provided in Section 10A-1-5.35.

§10A-8A-9.06. Merger.

(a) A partnership may merge with one or more other constituent organizations pursuant to this section, Sections 10A-8A-9.07 through 10A-8A-9.09, and a plan of merger, if:

(1) the governing statute of each of the other organizations authorizes the merger;

(2) the merger is not prohibited by the law of a jurisdiction that enacted any of those governing statutes; and

(3) each of the other organizations complies with its governing statute in effecting the merger.

(b) A plan of merger must be in writing and must include:

(1) the name, type of organization, and mailing address of the principal office of each constituent organization;

(2) the name, type of organization, and mailing address of the principal office of the surviving organization and, if the surviving organization is to be created pursuant to the merger, a statement to that effect;

(3) the terms and conditions of the merger, including the manner and basis for converting the interests in each constituent organization into any combination of money, interests in the surviving organization, and other consideration as allowed by subsection (c);

(4) if the surviving organization is to be created pursuant to the merger, the surviving organization's organizational documents; and

(5) if the surviving organization is not to be created pursuant to the merger, any amendments to be made by the merger to the surviving organization's organizational documents.

(c) In connection with a merger, rights or securities of or interests in a constituent organization may be exchanged for or converted into cash, property, or rights or securities of or interests in the surviving organization, or, in addition to or in lieu thereof, may be exchanged for or converted into cash, property, or rights or securities of or interests in another organization or may be cancelled.

§10A-8A-9.07. Action on plan of merger by constituent partnership.

(a) Subject to Section 10A-8A-9.10, a plan of merger must be consented to by all the partners of a constituent partnership.

(b) Subject to Section 10A-8A-9.10 and any contractual rights, after a merger is approved, and at any time before a filing is made under Section 10A-8A-9.08, a constituent partnership may amend the plan or abandon the merger:

(1) as provided in the plan; and

(2) except as prohibited by the plan, with the same consent as was required to approve the plan.

§10A-8A-9.08. Filings required for merger; effective date.

(a) After each constituent organization has approved the plan of merger, a statement of merger must be signed on behalf of:

(1) each constituent partnership, as provided in Section 10A-8A-2.03(a); and

(2) each other constituent organization, as provided by its governing statute.

(b) A statement of merger under this section must include:

(1) the name, type of organization, and mailing address of the principal office of each constituent organization and the jurisdiction of its governing statute;

(2) the name, type of organization, and mailing address of the principal office of the surviving organization, the jurisdiction of its governing statute, and, if the surviving organization is created pursuant to the merger, a statement to that effect;

(3) the date of the filing of the certificate of formation, if any, and all prior amendments and the filing office or offices, if any, and where such is filed of each constituent organization which was formed under the laws of this state;

(4) the date of the filing of the statement of partnership, statement of not for profit partnership, or statement of limited liability partnership, if any, and all prior amendments and the filing office or offices, if any, and where such is filed of each constituent organization which is a partnership;

(5) the date the merger is effective under the governing statute of the surviving organization;

(6) if the surviving organization is to be created pursuant to the merger:

(A) if it will be a partnership, the partnership's statement of partnership, statement of not for profit partnership, or statement of limited liability partnership; or

(B) if it will be an organization other than a partnership, any organizational document that creates the organization that is required to be in a public writing;

(7) if the surviving organization exists before the merger, any amendments provided for in the plan of merger for the organizational document that are required to be in a public writing;

(8) a statement as to each constituent organization that the merger was approved as required by the organization's governing statute;

(9) if the surviving organization is a foreign organization not authorized to conduct business or not for profit activity in this state, the street and mailing address of an office for the purposes of Section 10A-8A-9.09(b); and

(10) any additional information required by the governing statute of any constituent organization.

(c) Prior to the statement of merger being delivered for filing to the Secretary of State in accordance subsection (d), all constituent organizations that are partnerships, other than a partnership that is created pursuant to the merger, must have on file with the Secretary of State a statement of partnership, statement of not for profit partnership, or statement of limited liability partnership.

(d) The statement of merger shall be delivered for filing to the Secretary of State in accordance with Section 10A-1-4.02(c)(1), along with the fees specified in Section 10A-1-4.31, subject to the last two sentences of this subsection. For each constituent organization which is formed under the laws of this state pursuant to a certificate of formation and which is not, immediately prior to the merger becoming effective, an organization described in Section 10A-1-4.02(c)(4), the Secretary of State shall within 10 days transmit a certified copy of the statement of merger to the office of the judge of probate in the county in which the certificate of formation for each such constituent organization was filed along with the proper fee for the judge of probate. For each constituent organization which is formed under the laws of this state pursuant to a certificate of formation, which is, immediately prior to the merger becoming effective, an organization described in Section 10A-1-4.02(c)(4), but which has a certificate of formation filed with the judge of probate, the Secretary of State shall transmit a certified copy of the statement of merger to the office of the judge of probate in the county in which the certificate of formation for each such constituent organization was filed along with the proper fee for the judge of probate. For each constituent organization which (1) is formed under the laws of this state pursuant to a certificate of formation, (2) is, immediately prior to the merger becoming effective, an organization described in Section 10A-1-4.02(c)(4), and (3) did not file its certificate of formation with the judge of probate, but rather in accordance with this title filed its certificate of formation with the Secretary of State, the Secretary of State shall not transmit a certified copy of the statement of merger to the office of the judge of probate and shall not collect any fee for the judge of probate. For each constituent organization which is a partnership, the Secretary of State shall not transmit a certified copy of the statement of merger to the office of the judge of probate and shall not collect any fee for the judge of probate.

(e) A merger becomes effective under this article:

(1) if the surviving organization is a partnership, upon the later of:

(A) the filing of the statement of merger with the Secretary of State; or

(B) as specified in the statement of merger; or

(2) if the surviving organization is not a partnership, as provided by the governing statute of the surviving organization.

(f) After a merger becomes effective, if the surviving organization is a partnership, then all filing instruments required to be filed under this title regarding that surviving organization shall be filed with the Secretary of State.

(g) A certified copy of the statement of merger required to be filed under this section may be filed in the real estate records in the office of the judge of probate in any county in which any constituent organization owned real property, without payment and without collection by the judge of probate of any deed or other transfer tax or fee. The judge of probate, however, shall be entitled to collect the filing fee of five dollars ($5). Any such filing shall evidence chain of title, but lack of filing shall not affect the surviving organization's title to such real property.

(h) A statement of merger is a filing instrument under Chapter 1.

(i) Except as provided in the last two sentences of subsection (d), the filing fees for a statement of merger shall be the same fees as provided in Section 10A-1-4.31(a)(5).

§10A-8A-9.09. Effect of merger.

(a) When a merger becomes effective:

(1) the surviving organization continues or, in the case of a surviving organization created pursuant to the merger, comes into existence;

(2) each constituent organization that merges into the surviving organization ceases to exist as a separate entity;

(3) all property owned by each constituent organization that ceases to exist vests in the surviving organization without reservation or impairment and the title to any property vested by deed or otherwise in the surviving organization shall not revert or be in any way impaired by reason of the merger;

(4) all debts, obligations or other liabilities of each constituent organization that ceases to exist continue as debts, obligations or other liabilities of the surviving organization and neither the rights of creditors, nor any liens upon the property of any constituent organization, shall be impaired by the merger;

(5) an action or proceeding pending by or against any constituent organization continues as if the merger had not occurred;

(6) except as prohibited by law other than this chapter, all of the rights, privileges, immunities, powers, and purposes of each constituent organization vest in the surviving organization;

(7) except as otherwise provided in the plan of merger, the terms and conditions of the plan of merger take effect;

(8) except as otherwise agreed, if a constituent partnership ceases to exist, the merger does not dissolve the partnership;

(9) if the surviving organization is created pursuant to the merger:

(A) if it is a partnership, the statement of partnership, statement of not for profit partnership or statement of limited liability partnership becomes effective; or

(B) if it is an organization other than a partnership, the organizational document that creates the organization becomes effective; and

(10) if the surviving organization existed before the merger, any amendments provided for in the statement of merger for the organizational document of that organization become effective.

(b) A surviving organization that is a foreign entity consents to the jurisdiction of this state to enforce any debt, obligation, or other liability owed by a constituent organization, if before the merger the constituent organization was subject to suit in this state on the debt, obligation, or other liability. If a surviving organization that is a foreign entity fails to designate or maintain a registered agent, or the designated registered agent cannot with reasonable diligence be served, then the service of process on that surviving organization for the purposes of enforcing a debt, obligation, or other liability under this subsection may be made in the same manner and has the same consequences as provided in Section 10A-1-5.35.

§10A-8A-9.10. Restrictions on approval of mergers, conversions and on relinquishing LLP status.

(a) If a partner of a converting or constituent partnership will have personal liability with respect to a converted or surviving organization, approval and amendment of a plan of conversion or plan of merger are ineffective without that partner's consent to the plan.

(b) A statement of cancellation of the statement of limited liability partnership filed in connection with a conversion or merger is ineffective without each partner's written consent to such amendment.

(c) A partner does not give the consent required by subsection (a) or (b) merely by consenting to a provision of the partnership agreement that permits the partnership agreement to be amended with the consent of fewer than all the partners.

§10A-8A-9.11. Liability of partner after conversion or merger.

(a) A conversion or merger under this article does not discharge any liability under Sections 10A-8A-3.06, 10A-8A-7.02, or 10A-8A-7.03 of a person that was a partner in or dissociated as a partner from a converting or constituent partnership, but:

(1) the provisions of this chapter pertaining to the collection or discharge of the liability continue to apply to the liability;

(2) for the purposes of applying those provisions, the converted or surviving organization is deemed to be the converting or constituent partnership; and

(3) if a person is required to pay any amount under this subsection:

(A) the person has a right of contribution from each other person that was liable as a partner under Section 10A-8A-3.06 when the obligation was incurred and has not been released from the obligation under Sections 10A-8A-7.02 or 10A-8A-7.03; and

(B) the contribution due from each of those persons is in proportion to the right to receive distributions in the capacity of partner in effect for each of those persons when the obligation was incurred.

(b) In addition to any other liability provided by law:

(1) a person that immediately before a conversion or merger became effective was a partner in a converting or constituent partnership that was not a limited liability partnership is personally liable for each obligation of the converted or surviving organization arising from a transaction with a third party after the conversion or merger becomes effective, if, at the time the third party enters into the transaction, the third party:

(A) does not have notice of the conversion or merger; and

(B) reasonably believes that:

(i) the converted or surviving business is the converting or constituent partnership;

(ii) the converting or constituent partnership is not a limited liability partnership; and

(iii) the person is a partner in the converting or constituent partnership; and

(2) a person that was dissociated as a partner from a converting or constituent partnership before the conversion or merger became effective is personally liable for each obligation of the converted or surviving organization arising from a transaction with a third party after the conversion or merger becomes effective, if:

(A) immediately before the conversion or merger became effective the converting or surviving partnership was not a limited liability partnership; and

(B) at the time the third party enters into the transaction the third party:

(i) does not have notice of the dissociation;

(ii) does not have notice of the conversion or merger; and

(iii) reasonably believes that the converted or surviving organization is the converting or constituent partnership, the converting or constituent partnership is not a limited liability partnership, and the person is a partner in the converting or constituent partnership.

§10A-8A-9.12. Power of partners and persons dissociated as partners to bind organization after conversion or merger.

(a) An act of a person that immediately before a conversion or merger became effective was a partner in a converting or constituent partnership binds the converted or surviving organization after the conversion or merger becomes effective, if:

(1) before the conversion or merger became effective, the act would have bound the converting or constituent partnership under Section 10A-8A-3.01; and

(2) at the time the third party enters into the transaction, the third party:

(A) does not have notice of the conversion or merger; and

(B) reasonably believes that the converted or surviving organization is the converting or constituent partnership and that the person is a partner in the converting or constituent partnership.

(b) An act of a person that before a conversion or merger became effective was dissociated as a partner from a converting or constituent partnership binds the converted or surviving organization after the conversion or merger becomes effective, if:

(1) before the conversion or merger became effective, the act would have bound the converting or constituent partnership under Section 10A-8A-3.01 if the person had been a partner; and

(2) at the time the third party enters into the transaction, the third party:

(A) does not have notice of the dissociation;

(B) does not have notice of the conversion or merger; and

(C) reasonably believes that the converted or surviving organization is the converting or constituent partnership and that the person is a partner in the converting or constituent partnership.

(c) If a person having knowledge of the conversion or merger causes a converted or surviving organization to incur an obligation under subsection (a) or (b), the person is liable:

(1) to the converted or surviving organization for any damage caused to the organization arising from the obligation; and

(2) if another person is liable for the obligation, to that other person for any damage caused to that other person arising from the liability.

§10A-8A-9.13. Article not exclusive. This article is not exclusive. This article does not preclude an entity from being converted or merged under law other than this chapter.

Article 10. Limited Liability Partnership.

§10A-8A-10.01. Limited liability partnerships; statements; cancellations.

(a) A partnership may be formed as, or may become, a limited liability partnership pursuant to this section.

(b) In order to form a limited liability partnership, the original partnership agreement of the partnership shall state that the partnership is formed as a limited liability partnership, and the partnership shall deliver to the Secretary of State for filing a statement of limited liability partnership in accordance with subsection (d) of this section.

(c) In order for an existing partnership to become a limited liability partnership, the terms and conditions on which the partnership becomes a limited liability partnership must be approved by the affirmative approval necessary to amend the partnership agreement and, in the case of a partnership agreement that expressly considers obligations to contribute to the partnership, also the affirmative approval necessary to amend those provisions, and after such approval, the partnership shall deliver to the Secretary of State for filing a statement of limited liability partnership in accordance with subsection (d).

(d) A statement of limited liability partnership must contain all of the following:

(1) the name of the limited liability partnership which must comply with Article 5 of Chapter 1;

(2) the street, and mailing, if different, address of its principal office.

(3) the street and mailing address of a registered office and the name of the registered agent at that office for service of process in this state which the partnership shall be required to maintain;

(4) a statement that the partnership was formed as a limited liability partnership in accordance with subsection (b) or a statement that the statement of limited liability partnership was approved in accordance with subsection (c); and

(5) a statement that the partnership is a limited liability partnership.

(e) A statement of limited liability partnership may be amended or restated from time to time in accordance with Section 10A-1-4.26.

(f) The statement of limited liability partnership shall be executed by one or more partners authorized to execute the statement of limited liability partnership.

(g) The statement of limited liability partnership shall be accompanied by a fee for the Secretary of State in the respective amounts prescribed by Section 10A-1-4.31.

(h) The Secretary of State shall file the statement of limited liability partnership of any partnership as a limited liability partnership that submits a completed statement of limited liability partnership with the required fees. The filing by the Secretary of State of a statement of limited liability partnership is conclusive evidence that the partnership has satisfied all conditions required to be a limited liability partnership.

(i) The statement of limited liability partnership is effective, and a partnership becomes a limited liability partnership, immediately on the date the statement of limited liability partnership is filed with the Secretary of State or at any later date or time specified in the statement of limited liability partnership in compliance with Article 4 of Chapter 1. The status as a limited liability partnership remains effective, regardless of changes in the partnership, and partnership continues as a limited liability partnership until a statement of cancellation is voluntarily filed in accordance with subsection (m).

(j) The fact that a statement of limited liability partnership is on file with the Secretary of State is notice that the partnership is a limited liability partnership and as notice of the facts required to be set forth in the statement of limited liability partnership.

(k) A partnership that has filed a statement of limited liability partnership as a limited liability partnership is for all purposes, except as provided in Section 10A-8-3.06, the same entity that existed before the statement of limited liability partnership was filed and continues to be a partnership under the laws of this state subject to the limited liability partnership provisions of this chapter. If a limited liability partnership dissolves and its business or not for profit activity, or a portion of its business or not for profit activity is continued without the complete winding up of partnership's business or not for profit activity, a partnership which is a successor to the limited liability partnership shall not be required to file a new statement of limited liability partnership.

(l) The status of the partnership as a limited liability partnership and the liability of a partner of the limited liability partnership shall not be adversely affected by error or subsequent changes in the information stated in the statement of limited liability partnership under subsection (d).

(m) The decision to file a statement of cancellation shall require the approval of all of the partners of the partnership. The statement of cancellation must be delivered for filing to the Secretary of State and must contain the following:

(1) the name of the limited liability partnership;

(2) the date and office or offices in which it filed its statement of limited liability partnership, and all amendments and restatements thereof;

(3) the street and mailing address of its principal office;

(4) the street and mailing address of its registered office and the name of the registered agent at that office for service of process in this state which the partnership was required to maintain;

(5) a statement that the statement of cancellation was approved in accordance with this subsection; and

(6) any other information that the partners determine to include.

(n) A statement of cancellation must executed by one or more partners authorized to execute the statement of cancellation.

(o) The statement of cancellation is effective, and a partnership ceases to be a limited liability partnership, immediately on the date the statement of cancellation is delivered to the Secretary of State for filing or at any later date or time specified in the statement of cancellation in compliance with Article 4 of Chapter 1. The statement of cancellation shall not cause the dissolution of the partnership.

(p) The filing of a statement of cancellation of a limited liability partnership does not affect the limited liability of partners for debts, obligations or liabilities of the partnership which occur or were incurred prior to the filing of the statement of cancellation.

(q) A dissolved limited liability partnership shall continue its status as a limited liability partnership unless a statement of cancellation is voluntarily filed in accordance with subsection (m).

(r) The statement of limited liability partnership and the statement of cancellation are filing instruments for the purposes of Chapter 1.

§10A-8A-10.02. Special rules for limited liability partnerships performing professional services.

(a) A limited liability partnership shall have the power to render professional services if it complies with the rules of the licensing authority for such profession.

(b) Every individual who renders professional services as a partner or as an employee of a limited liability partnership shall be liable for any negligent or wrongful act or omission in which the individual personally participates to the same extent the individual would be liable if the individual rendered the services as a sole practitioner.

(c) Except as otherwise provided in subsection (b), the personal liability of a partner of any limited liability partnership engaged in providing professional services shall be governed by Section 10A-8A-3.06.

(d) The personal liability of a partner or employee of a foreign limited liability partnership engaged in providing professional services shall be determined under the law of the jurisdiction which governs the foreign limited liability partnership.

(e) Nothing in this article shall restrict or limit in any manner the authority or duty of a licensing authority with respect to individuals rendering a professional service within the jurisdiction of the licensing authority. Nothing in this article shall restrict or limit any law, rule, or regulation pertaining to standards of professional conduct.

(f) Nothing in this article shall limit the authority of a licensing authority to impose requirements in addition to those stated in this chapter on any limited liability partnership or foreign limited liability partnership rendering professional services within the jurisdiction of the licensing authority.

(g) A partner's transferable interest in a limited liability partnership organized to render professional services may be voluntarily transferred only to a qualified person.

§10A-8A-10.03. Death or disqualification of partner.

(a) In the case of a limited liability partnership performing professional services, upon the death of a partner, upon a partner becoming a disqualified person, or upon a transferable interest being transferred by operation of law or court decree to a disqualified person, the transferable interest of the deceased partner or of the disqualified person may be transferred to a qualified person and, if not so transferred, subject to Section 10A-8A-4.09, shall be purchased by the limited liability partnership as provided in this section.

(b) If the price of the transferable interest is not fixed by the partnership agreement, the limited liability partnership, within six months after the death or 30 days after the disqualification or transfer, as the case may be, shall make a written offer to pay to the holder of the transferable interest a specified price deemed by the limited liability partnership to be the fair value of the transferable interest as of the date of the death, disqualification or transfer. The offer shall be given to the personal representative of the estate of the deceased partner, the disqualified person, or the transferee, as the case may be, and shall be accompanied by a balance sheet of the limited liability partnership, as of the latest available date and not more than 12 months prior to the making of the offer, and a profit and loss statement of the limited liability partnership for the 12-month period ended on the date of the balance sheet.

(c) If within 30 days after the date of the written offer from the limited liability partnership the fair value of the transferable interest is agreed upon between the personal representative of the estate of the deceased partner, the disqualified person, or the transferee, as the case may be, and the limited liability partnership, payment therefor shall be made within 90 days, or such other period as the parties may agree, after the date of the offer. Upon payment of the agreed value, the personal representative of the estate of the deceased partner, the disqualified person, or the transferee, as the case may, be shall cease to have any interest in, or claim to, the transferable interest.

(d) If within 30 days from the date of the written offer from the limited liability partnership, the personal representative of the estate of the deceased partner, the disqualified person, or the transferee, as the case may be, and the limited liability partnership do not so agree as to the fair value of the transferable interest, then either party may commence a civil action in the circuit court in the county in which the limited liability partnership's principal place of business or not for profit activity within this state is located, and if the limited liability partnership does not have a principal place of business or not for profit activity within this state, then the circuit court for the county in which the limited liability partnership's most recent registered office is located requesting that the fair value of the transferable interest be found and determined. The personal representative of the estate of the deceased partner, the disqualified person, or the transferee, as the case may be, wherever residing, shall be made a party to the proceeding as an action against that person's transferable interest quasi in rem. Service shall be made in accordance with the rules of civil procedure. The personal representative of the estate of the deceased partner, the disqualified person, or the transferee, as the case may be, shall be entitled to a judgment against the limited liability partnership for the amount of the fair value of that person's transferable interest as of the date of death, disqualification, or transfer. The court may, in its discretion, order that the judgment be paid in installments and with interest and on terms as the court may determine. The court may, if it so elects, appoint one or more persons as appraisers to receive evidence and recommend a decision on the question of fair value. The appraisers shall have the power and authority as shall be specified in the order of their appointment or an amendment thereof.

(e) The judgment shall include an allowance for interest at the rate the court finds to be fair and equitable in all the circumstances, from the date of death, disqualification, or transfer.

(f) The costs and expenses of any proceeding shall be determined by the court and shall be assessed against the parties in a manner the court deems equitable.

(g) The expenses shall include reasonable compensation for and reasonable expenses of the appraisers and a reasonable attorney's fee but shall exclude the fees and expenses of counsel for and of experts employed by any party; but:

(1) if the fair value of the transferable interest as determined materially exceeds the amount which the limited liability partnership offered to pay therefor, or if no offer was made by the limited liability partnership, the court in its discretion may award to the personal representative of the estate of the deceased partner, the disqualified person, or the transferee, as the case may be, the sum the court determines to be reasonable compensation to any expert or experts employed by the personal representative of the estate of the deceased partner, the disqualified person, or the transferee, as the case may be, in the proceeding; and

(2) if the offer of the limited liability partnership for the transferable interest materially exceeds the amount of the fair value of the transferable interest as determined, the court in its discretion may award to the limited liability partnership the sum the court determines to be reasonable compensation to any expert or experts employed by the limited liability partnership, in the proceeding.

(h) If the purchase or transfer of the transferable interest of a deceased partner, a disqualified person or a transferee is not completed within 12 months after the death of the deceased partner or 12 months after the disqualification or transfer, as the case may be, the limited liability partnership shall forthwith cancel the transferable interest on its books and the personal representative of the estate of the deceased partner, the disqualified person, or the transferee, as the case may be, shall have no further interest in the transferable interest other than that person's right to payment for the transferable interest under this section.

(i) This section shall not require a limited liability partnership to purchase a transferable interest of a disqualified person if the disqualification is for less than 12 months from the date of disqualification. A limited liability partnership may require the disqualified person to sell the disqualified person's transferable interest to the limited liability partnership upon any disqualification.

(j) Any provision of a partnership agreement regarding the purchase or transfer of a transferable interest of a limited liability partnership performing professional services shall be specifically enforceable in the courts of Alabama.

(k) Nothing in this section shall prevent or relieve a limited liability partnership from paying pension benefits or other deferred compensation

Article 11. Transition Rules and Miscellaneous Provisions.

§10A-8A-11.01. Application to existing relationships.

(a) Beginning January 1, 2018, this chapter governs all partnerships and all foreign partnerships.

(b) With respect to a partnership formed before January 1, 2018, and governed by the laws of this state, the following rules apply:

(1) a registration of a limited liability partnership which is current and effective as of December 31, 2017, shall remain effective without further action on the part of the limited liability partnership, and a partnership having the status of a limited liability partnership, under predecessor law, shall have the status of a limited liability partnership under this chapter and to the extent such partnership has not filed a statement of limited liability partnership pursuant to this chapter, the registration or latest annual notice filed by such partnership under predecessor law shall constitute a statement of limited liability partnership filed under this chapter;

(2) a partnership's partnership agreement existing as of December 31, 2017, shall be deemed to be that partnership's partnership agreement under this chapter;

(3) a statement of partnership authority is deemed to be a statement of authority and each statement of partnership authority existing as of December 31, 2017, shall remain effective without further action on the part of the partnership for the remainder of the period of time authorized under predecessor law, unless earlier amended, in which case, such statement of partnership authority shall comply with Section 10A-8A-3.03;

(4) a statement of denial, statement of dissociation, and statement of dissolution existing as of December 31, 2017, shall be deemed to be a statement of denial, statement of dissociation, and statement of dissolution under this chapter respectively;

(5) a registration of a foreign limited liability partnership which is current and effective as of December 31, 2017, shall remain effective without further action on the part of the foreign limited liability partnership, and a foreign limited liability partnership having the status of a qualified foreign limited liability partnership, under predecessor law, shall have the status of a qualified foreign limited liability partnership under this chapter and to the extent such partnership has not filed a statement of foreign limited liability partnership pursuant to this chapter, the registration or latest annual notice filed by such partnership under predecessor law shall constitute a statement of foreign limited liability partnership filed under this chapter; and

(6) if a limited liability partnership or foreign limited liability partnership is using the phrase "registered limited liability partnership" or the abbreviation "RLLP" or "R.L.L.P.," in its name as of December 31, 2017, such phrase or abbreviation shall continue to comply with Article 5 of Chapter 1 unless and until it changes or amends, by whatever means, its name on or after January 1, 2018, at which point it may only use the term "limited liability partnership" or the abbreviation "LLP" or "L.L.P.," in its name in compliance with Article 5 of Chapter 1. No limited liability partnership which is formed or elects to become a limited liability partnership on or after January 1, 2018, and no foreign limited liability partnership which delivers to the Secretary of State of filing, a statement of foreign limited liability partnership, may use the phrase "registered limited liability partnership" or the abbreviation "RLLP" or "R.L.L.P.," in its name.

§10A-8A-11.02. Severability clause. If any provision of this chapter or its application to any person or circumstance is held invalid, the invalidity does not affect other provisions or applications of this chapter which can be given effect without the invalid provision or application, and to this end the provisions of this chapter are severable.

§10A-8A-11.03. Relation to Electronic Signatures in Global and National Commerce Act. This chapter modifies, limits, or supersedes the federal Electronic Signatures in Global and National Commerce Act, 15 U.S.C. Section 7001 et seq., but this chapter does not modify, limit, or supersede Section 101(c) of that act or authorize electronic delivery of any of the notices described in Section 103(b) of that act.

§10A-8A-11.04. Effective date. This chapter takes effect January 1, 2018.

§10A-8A-11.05. Repeals. Effective January 1, 2018, the following parts of the Code of Alabama 1975, are repealed: Sections 10A-1-5.07, 10A-1-7.33, and Sections 10A-8-1.01 to 10A-8-11.04, inclusive, as amended and in effect immediately before the effective date of this act.

§10A-8A-11.06. Savings clause.

(a) Except as provided in subsection (b), the repeal of a statute by this chapter does not affect:

(1) the operation of the statute or any action taken under it before its repeal;

(2) any ratification, right, remedy, privilege, obligation, or liability acquired, accrued, or incurred under the statute before its repeal;

(3) any violation of the statute, or any penalty, forfeiture, or punishment incurred because of the violation, before its repeal; or

(4) any proceeding, reorganization, or dissolution commenced under the statute before its repeal, and the proceeding, reorganization, or dissolution may be completed in accordance with the statute as if it had not been repealed.

(b) If a penalty or punishment imposed for violation of a statute repealed by this chapter is reduced by this chapter, the penalty or punishment if not already imposed shall be imposed in accordance with this chapter.

§10A-8A-11.07. Composite returns. The Alabama Department of Revenue shall promulgate rules and regulations similar to those provided under Section 40-18-176, relating to Alabama S corporations, to permit the filing of annual composite income tax returns for one or more nonresident partners, who are individuals, of a partnership, limited liability partnership or foreign limited liability partnership with an effective statement of foreign limited liability partnership on file with the Secretary of State, as well as one or more nonresident members, who are individuals, of a limited liability company or foreign limited liability company and one or more nonresident beneficiaries, who are individuals, of a business trust, organized under or recognized by the laws of this state.

§10A-8A-11.08. Taxation of limited liability partnership. A limited liability partnership and a foreign limited liability partnership shall be taxed as a partnership in accordance with Section 40-18-24, as amended from time to time, will file partnership returns as required by Section 40-18-28, as amended from time to time, and shall for all other tax purposes be taxed as a partnership, all being subject to the limited liability partnership and a foreign limited liability partnership maintaining its status as a partnership under federal income tax law.

§10A-8A-11.09. Reserved power of the state to alter or repeal chapter. All provisions of this chapter may be altered from time to time or repealed and all rights of partners, partnerships, and agents are subject to this reservation. Unless expressly stated to the contrary in this chapter, all amendments of this chapter shall apply to partners, partnerships, and agents whether or not existing as such at the time of the enactment of any such amendment.

§10A-8A-11.10. Interstate application. A limited liability partnership governed by this chapter may conduct its business or not for profit activity, carry on its operations, and have and exercise the powers granted by this chapter in any state, foreign country, or other jurisdiction.

Section 8. This act shall become effective on January 1, 2018.

Business Entities

Partnerships

Alabama Partnership Act

Code Repealed

Code Added

Code Amended