Usa Alabama

USA Statutes : alabama
Title : Title 10 CORPORATIONS, PARTNERSHIPS AND ASSOCIATIONS.
Chapter : Chapter 8A UNIFORM PARTNERSHIP ACT (1996)
Section 10-8A-1002

Section 10-8A-1002
Name of registered limited liability partnership.

(a) The name of a registered limited liability partnership shall contain the words "Registered Limited Liability Partnership" or the abbreviation "L.L.P." or "LLP" as the last words or letters of its name.

(b) If a person purports to enter into a contract or other undertaking on behalf of a partnership that is a registered limited liability partnership and does not disclose to the other party that part of the registered limited liability partnership's name that complies with subsection (a) of this Section 10-8A-1002, then that person is personally liable on the contract or undertaking, unless that person can show that in making the contract or accepting the undertaking the other party did not rely on the partnership being a partnership without registered limited liability partnership status. Any partner of a registered limited liability partnership who consents to a person not making the disclosure described in this subsection is also personally liable on the contract or undertaking, unless that partner can make the showing described in this subsection.



(Acts 1996, No. 96-528, p. 685, §1.)Section 10-8A-1003

Section 10-8A-1003
Registered office and registered agent.

(a) Each foreign registered limited liability partnership registered pursuant to this chapter and any registered limited liability partnership which does not maintain a place of business in this state, shall continuously maintain in this state:

(1) A registered office that may be the same as any of its places of business; and

(2) A registered agent who may be (i) an individual who is a resident of this state and whose business office is identical with the registered office, (ii) a domestic corporation or a domestic nonprofit corporation whose business office is identical with the registered office, (iii) a foreign corporation authorized to transact business in this state or a foreign nonprofit corporation authorized to conduct affairs in this state whose business office is identical with the registered office, (iv) a registered limited liability partnership with a principal office in this state whose business office is identical with the registered office, (v) a domestic limited liability company whose business office is identical with the registered office, (vi) an Alabama partnership with a principal office in this state whose business office is identical with the registered office, (vii) an Alabama limited partnership whose business office is identical with the registered office, and (viii) any other Alabama business entity with a principal office in this state whose business office is identical with the registered office.

(b) The sole duty of the registered agent is to forward to the foreign registered limited liability partnership or the registered limited liability partnership at its last known address any process or notice that is served on the registered agent.



(Acts 1996, No. 96-528, p. 685, §1.)Section 10-8A-1004

Section 10-8A-1004
Admissibility of registration information.

If a person is included as a partner of a registered limited liability partnership or a foreign registered limited liability partnership set forth in a registration or in a notice as a registered limited liability partnership, or as a foreign registered limited liability partnership, the inclusion of such person shall not be admissible as evidence in any action, suit or proceeding, whether civil, criminal, administrative or investigative, for the purpose of determining whether such person is liable as a partner of such registered limited liability partnership or foreign registered limited liability partnership.



(Acts 1996, No. 96-528, p. 685, §1.)Section 10-8A-1005

Section 10-8A-1005
Cancellation of a registered limited liability partnership.

(a) A registered limited liability partnership registered under this chapter may cancel its registration by filing with the judge of probate in the county in which the registration was filed and with the Secretary of State a statement of cancellation of registration as a registered limited liability partnership, which shall set forth:

(1) The name of the registered limited liability partnership;

(2) The date and place of filing of the initial registration;

(3) The reason for filing the statement of cancellation of registration;

(4) The effective date (which shall be a date certain) of cancellation of registration if it is not to be effective on the filing of the statement of cancellation, provided that any effective date other than the date of filing of the statement of cancellation must be a date subsequent to the filing; and

(5) Any other information the partners determine to include therein.

(b) The filing of a statement of cancellation of registration by or on behalf of a partnership pursuant to this Section 10-8A-1005 shall be effective only to cancel the partnership's registration as a registered limited liability partnership, and shall not, unless specifically so provided, indicate the dissolution of the partnership.



(Acts 1996, No. 96-528, p. 685, §1.)Section 10-8A-1006

Section 10-8A-1006
Registration of foreign registered limited liability partnerships.

(a) Before transacting business in this state as such, a foreign registered limited liability partnership shall (i) comply with any statutory or administrative registration or filing requirements governing the specific type of business in which the partnership is engaged, and (ii) file a registration with the Secretary of State, on such forms as the Secretary of State shall provide stating: the name of the foreign registered limited liability partnership and, if different, the name under which the foreign registered limited liability partnership proposes to transact business in this state (the name under which such foreign registered limited liability partnership proposes to transact business in this state shall comply with Section 10-8A-1002(a)); the jurisdiction and the laws which govern its partnership agreement and under which it is registered as a limited liability partnership; the street (and mailing, if different) address of its principal office; if the partnership's principal office is not located in the state, the street (and mailing, if different) address of a registered office and the name and address of a registered agent for service of process in this state, which the partnership will be required to maintain; a brief statement of the business in which the partnership engages; any other information that the partnership determines to include; a statement that the partnership is a registered limited liability partnership; and a certificate of status from the filing office in the jurisdiction in which the foreign registered limited liability partnership is registered.

(b) The registration shall be executed by one or more partners authorized to execute a registration.

(c) The registration shall be accompanied by a fee of $40.00 for the Secretary of State.

(d) The Secretary of State shall register as a qualified foreign registered limited liability partnership any foreign registered limited liability partnership that submits a completed registration with the required registration fee.

(e) A qualified foreign registered limited liability partnership registered under this section shall pay each year following the year in which its registration is filed, on a date specified by the Secretary of State, an annual fee of $70.00. The fee must be accompanied by a notice, on a form provided by the Secretary of State, which shall set forth any material changes in the information required to be contained in the partnership's registration.

(f) The registration is effective immediately on the date the registration is filed with the Secretary of State or at any later date or time specified in the registration, and remains effective until: (i) it is voluntarily withdrawn by filing with the Secretary of State, a written withdrawal notice executed by one or more partners authorized to execute a withdrawal notice; or (ii) 180 days after receipt by the partnership of a notice from the Secretary of State (which notice shall be sent by certified mail, return receipt requested) that the partnership has failed to make timely filing of the annual notice and the payment of the annual fee specified in subsection (e), unless the notice is filed and the fee is paid within such 180-day period.

(g) A foreign registered limited liability partnership becomes a qualified foreign registered limited liability partnership on the date a registration is filed with the Secretary of State or at any later date or time specified in the registration if, in either case, there has been substantial compliance with the requirements of this chapter. A partnership continues as a qualified foreign registered limited liability partnership if there has been substantial compliance with the requirements of this chapter. The status of the partnership as a qualified foreign registered limited liability partnership and the liability of a partner of such qualified foreign registered limited liability partnership shall not be adversely affected by error or subsequent changes in the information stated in the registration under subsection (a) of this section or notice under subsection (e) of this section.

(h) The fact that a registration or notice is on file with the Secretary of State is notice that the partnership is a qualified foreign registered limited liability partnership and as notice of all other facts set forth in the registration or notice.

(i) If a qualified foreign registered limited liability partnership dissolves and its business or a portion of its business is continued without liquidation of all of the partnership affairs, a partnership which is a successor to such qualified foreign registered limited liability partnership shall not be required to file a new registration or annual notice but shall thereafter be required to file annual notices and pay the annual fees pursuant to subsection (e) of this section and shall be deemed to have filed any documents and paid all necessary fees required or permitted under this section which were filed by the predecessor partnership.

(j) The Secretary of State may provide forms for registration or notice of a qualified foreign registered limited liability partnership.



(Acts 1996, No. 96-528, p. 685, §1.)Section 10-8A-1007

Section 10-8A-1007
Withdrawal of a qualified foreign registered limited liability partnership.

A qualified foreign registered limited liability partnership may withdraw from this state by filing with the Secretary of State a statement of cancellation of registration as a qualified foreign registered limited liability partnership, which shall set forth:

(a) The name of the qualified foreign registered limited liability partnership and the state or other jurisdiction under whose jurisdiction it was registered as a limited liability partnership and the laws of which govern the partnership agreement pursuant to which it was formed;

(b) That the qualified foreign registered limited liability partnership is not transacting business in this state and that it surrenders its registration to transact business in this state;

(c) That the qualified foreign registered limited liability partnership revokes the authority of its registered agent in this state to accept service of process and appoints the Secretary of State as its agent for service of process in any action, suit, or proceeding based upon any cause of action arising during the time the qualified foreign registered limited liability partnership was authorized to transact business in this state; and

(d) A mailing address to which the Secretary of State may mail a copy of any process served on the Secretary of State under subsection (c).



(Acts 1996, No. 96-528, p. 685, §1.)Section 10-8A-1008

Section 10-8A-1008
Effect of failure of foreign registered limited liability partnership to register.

The failure of a foreign registered limited liability partnership to file a statement of registration or a notice pursuant to Section 10-8A-1006 or to appoint and maintain a registered agent in this state shall not impair the validity of any contract or act of the foreign registered limited liability partnership and shall not prevent the foreign registered limited liability partnership from defending any action or proceeding in any court of this state, but the foreign registered limited liability partnership shall not maintain any action or proceeding in any court of this state until it has filed an application for registration. A foreign registered limited liability partnership, by transacting business in this state without registration, 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 in this state. The liability of the partners of a foreign registered limited liability partnership is governed by the laws of the state or other jurisdiction under whose laws it was formed, and any limitations on that liability are not waived solely by reason of having transacted business in this state without registration. The Attorney General may bring an action to restrain a foreign limited liability partnership from transacting business in this state in violation of this chapter.



(Acts 1996, No. 96-528, p. 685, §1.)Section 10-8A-1009

Section 10-8A-1009
Applicability of article to foreign and interstate commerce.

(a) A partnership, including a registered limited liability partnership, formed and existing pursuant to an agreement governed by this chapter, may conduct its business, carry on its operations, and have and exercise the powers granted by this chapter in any state, territory, district, or possession of the United States or in any foreign country.

(b) It is the intent of the Legislature that the legal existence of registered limited liability partnerships formed and existing pursuant to an agreement governed by this chapter be recognized outside the boundaries of this state and that the laws of this state governing such registered limited liability partnerships transacting business outside this state be granted the protection of full faith and credit under the Constitution of the United States.

(c) Notwithstanding Section 10-8A-106, it is the policy of this state that the internal affairs of registered limited liability partnerships, including the liability of partners for debts, obligations and liabilities of, or chargeable to, the partnership or another partner or partners, shall be subject to and governed by the laws of this state.

(d) Subject to any statutes for the regulation and control of specific types of business, foreign registered limited liability partnerships may do business in this state.

(e) Notwithstanding Section 10-8A-106, it is the policy of this state that the internal affairs of foreign registered limited liability partnerships, including the liability of partners for debts, obligations and liabilities of, or chargeable to, the partnership or another partner or partners, shall be subject to and governed by the laws of the jurisdiction in which such foreign registered limited liability partnership was formed.



(Acts 1996, No. 96-528, p. 685, §1.)Section 10-8A-101

Section 10-8A-101
Definitions.

In this chapter:

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

(2) "Debtor in bankruptcy" means a person who is the subject of:

(i) an order for relief under Title 11 of the United States Code or a comparable order under a successor statute of general application; or

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

(3) "Distribution" means a transfer of money or other property from a partnership to a partner in the partner's capacity as a partner or to the partner's transferee.

(4) "Foreign registered limited liability partnership" means a partnership formed pursuant to a partnership agreement governed by the laws of any state or jurisdiction other than this state and registered as a registered limited liability partnership or a limited liability partnership or a partnership in which no partner is personally liable for such partnership's debts, obligations, or liabilities, under the laws of such state or jurisdiction.

(5) "Partnership" means an association of two or more persons to carry on as co-owners a business for profit formed under Section 10-8A-202, predecessor law, or comparable law of another jurisdiction, and includes, for all purposes of the laws of this state, a registered limited liability partnership.

(6) "Partnership agreement" means the agreement, written or oral, among the partners concerning the partnership, including amendments to the partnership agreement.

(7) "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.

(8) "Partnership interest" or "partner's interest in the partnership" means all of a partner's interests in the partnership, including the partner's transferable interest and all management and other rights.

(9) "Person" means an individual, corporation, business trust, estate, trust, partnership, limited partnership, limited liability company, association, joint venture, government, governmental subdivision, agency, or instrumentality, or any other legal or commercial entity. "Person" also includes fiduciaries permitted to participate in partnerships pursuant to Sections 19-3-150 through 19-3-152, as amended from time to time.

(10) "Property" means all property, real, personal, or mixed, tangible or intangible, or any interest therein.

(11) "Qualified Foreign Registered Limited Liability Partnership" means a foreign registered limited liability partnership registered under Section 10-8A-1006.

(12) "Registered limited liability partnership" means a partnership formed pursuant to a partnership agreement governed by the laws of this state, registered under Section 10-8A-1001.

(13) "Secretary of State" means the Secretary of State of the State of Alabama.

(14) "State" means a state of the United States, the District of Columbia, the Commonwealth of Puerto Rico, or any territory or insular possession subject to the jurisdiction of the United States.

(15) "Statement" means a statement of partnership authority under Section 10-8A-303, a statement of denial under Section 10-8A-304, a statement of dissociation under Section 10-8A-704, a statement of dissolution under Section 10-8A-805, a statement of merger under Section 10-8A-907, a registration as a registered limited liability partnership, or an annual notice thereof, under Section 10-8A-1001, a registration as a qualified foreign registered limited liability partnership, or an annual notice thereof, under Section 10-8A-1006, a statement of cancellation as a registered limited liability partnership under Section 10-8A-1005, a statement of cancellation as a qualified registered limited liability partnership under Section 10-8A-1007, or an amendment or cancellation of any of the foregoing.

(16) "Transfer" includes an assignment, conveyance, lease, mortgage, deed, and encumbrance.



(Acts 1996, No. 96-528, p. 685, §1.)Section 10-8A-1010

Section 10-8A-1010
Professional registered limited liability partnership provisions.

(a) Every individual who renders professional services as a partner or an employee of a registered limited liability partnership shall be liable for any negligence 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.

(b) Except as provided in subsection (a) of this Section 10-8A-1010, the personal liability of a partner solely by reason of being such a partner or acting (or omitting to act) in such capacity of a registered limited liability partnership engaged in providing professional services shall be governed by Section 10-8A-306.

(c) Notwithstanding Section 10-8A-106 and except as otherwise provided in this chapter, the personal liability of a partner solely by reason of being such a partner or acting (or omitting to act) in such capacity of a foreign registered limited liability partnership formed to render professional services shall be determined under the laws of the state or jurisdiction under which it was formed.

(d) Nothing in this chapter 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 chapter shall restrict or limit any law, rule or regulation pertaining to the standards of professional conduct.

(e) Nothing in this chapter shall limit the authority of a licensing authority to impose requirements in addition to those stated in this chapter on any registered limited liability partnership or foreign registered limited liability partnership rendering professional services within the jurisdiction of the licensing authority.

(f) A registered limited liability partnership formed to render professional services under this chapter may only render professional services and services ancillary thereto within a single profession and may not engage in any business other than rendering the professional services which it was formed to render, and services ancillary to such professional services. In addition, a registered limited liability partnership formed to render professional services shall be subject to the restrictions imposed on professional corporations by the Revised Alabama Professional Corporation Act, Sections 10-4-380 through 10-4-404 inclusive, or any successor provision.

(g) A registered limited liability partnership or a foreign registered limited liability partnership formed to render professional services, may render professional services in this state only through individuals permitted to render those services in this state; but nothing in this chapter shall be construed to require that any individual who is employed by or who is an agent of a registered limited liability partnership or foreign registered limited liability partnership rendering professional services be licensed to perform services for which no license is otherwise required or to prohibit the rendering of professional services by a licensed individual acting in an individual capacity, notwithstanding that the individual may be a partner, employee or agent of a registered limited liability partnership or a foreign registered limited liability partnership rendering professional services.

(h) A partner's interest in a registered limited liability partnership formed to render professional services may be voluntarily transferred only to a person who is licensed or registered to render the professional services for which the partnership was formed.

(i) Upon the death of a partner of a registered limited liability partnership formed to render professional services, or if a partner's license or registration to perform professional services for which the registered limited liability partnership was formed is terminated or suspended for a period of more than 12 months, or if a partnership interest in a registered limited liability partnership formed to render professional services is transferred by operation of law or court decree to a person who is not licensed or registered to render the professional services for which the registered limited liability partnership was formed, the partnership interest of such partner may be transferred to a person who is licensed or registered to render the professional services for which the registered limited liability partnership was formed and, if not so transferred, shall be purchased or redeemed by the registered limited liability partnership formed to render professional services to the extent of funds which may be legally made available for such purchase, all in accordance with the applicable provisions of such partnership's partnership agreement which requires the purchase of such partner's interest in such event and if the partnership agreement does not provide for the purchase of such partner's interest in such event, then in accordance with the procedures set forth in Section 10-4-389, or any successor provision, as though such partner was a shareholder in a professional corporation and the registered limited liability partnership formed to render professional services was a domestic professional corporation.



(Acts 1996, No. 96-528, p. 685, §1.)Section 10-8A-102

Section 10-8A-102
Knowledge and notice.

(a) A person knows a fact if the person has actual knowledge of it.

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

(1) knows of it;

(2) has received a notification of it; or

(3) has reason to know it exists from all of the facts known to the person at the time in question.

(c) A person notifies or gives a notification to another by taking steps reasonably required to inform the other person in ordinary course, whether or not the other person learns of it.

(d) A person receives a notification when the notification:

(1) comes to the person's attention; or

(2) is duly delivered at the person's place of business or at any other place held out by the person as a place for receiving communications.

(e) Except as provided in subsection (f), a person other than an individual knows, has notice, or receives a notification of a fact for purposes of a particular transaction when the individual conducting the transaction knows, has notice, or receives a notification of the fact, or in any event when the fact would have been brought to the individual's attention if the person had exercised reasonable diligence. The person exercises reasonable diligence if it maintains reasonable routines for communicating significant information to the individual conducting the transaction and there is reasonable compliance with the routines. Reasonable diligence does not require an individual acting for the person to communicate information unless the communication is part of the individual's regular duties or the individual has reason to know of the transaction and that the transaction would be materially affected by the information.

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



(Acts 1996, No. 96-528, p. 685, §1.)Section 10-8A-103

Section 10-8A-103
Effect of partnership agreement; nonwaivable provisions.

(a) Except as provided in subsection (b), relations among the partners and between the partners and the partnership are governed by the partnership agreement. To the extent the partnership agreement does not otherwise provide, this chapter governs relations among the partners and between the partners and the partnership.

(b) The partnership agreement may not:

(1) vary the rights and duties under Section 10-8A-105 except to eliminate the duty to provide copies of statements to all of the partners;

(2) unreasonably restrict the right of access to books and records under Section 10-8A-403(b);

(3) eliminate the duty of loyalty under Section 10-8A-404(b) or 10-8A-603(b)(3), but:

(i) the partnership agreement may identify types or categories of activities that do not violate the duty of loyalty; or

(ii) all of the partners or a number or percentage specified in the partnership agreement may authorize or ratify, after full disclosure of all material facts, a specific act or transaction that otherwise would violate the duty of loyalty;

(4) unreasonably reduce the duty of care under Section 10-8A-404(c) or 10-8A-603(b)(3);

(5) eliminate the obligation of good faith and fair dealing under Section 10-8A-404(d), but the partnership agreement may prescribe the standards by which the performance of the obligation is to be measured, if the standards are not manifestly unreasonable;

(6) vary the power to dissociate as a partner under Section 10-8A-602(a), except to require the notice under Section 10-8A-601(1) to be in writing;

(7) vary the right of a court to expel a partner in the events specified in Section 10-8A-601(5);

(8) vary the requirement to wind up the partnership business in cases specified in Section 10-8A-801(4), (5), or (6); or

(9) restrict rights of third parties under this chapter.



(Acts 1996, No. 96-528, p. 685, §1.)Section 10-8A-104

Section 10-8A-104
Supplemental principles of law.

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

(b) 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.

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



(Acts 1996, No. 96-528, p. 685, §1.)Section 10-8A-105

Section 10-8A-105
Execution, filing, and recording of statements.

(a) A statement may be filed in the office of the judge of probate in the county where the partnership has its chief executive office. If the chief executive office is located outside the State of Alabama the statement is filed with the Secretary of State. A certified copy of a statement that is filed in an office in another state may be filed in the office of the Secretary of State. Either filing has the effect provided in this chapter with respect to partnership property located in or transactions that occur in this state. In filing a statement with the judge of probate under the first sentence of this subsection, duplicate originals should be presented to the filing office, one of which is to be filed by the judge of probate, and the other of which will be forwarded by the judge of probate to the office of the Secretary of State, as provided below in subsection (g).

(b) A statement filed in the office of the judge of probate of the county in which the partnership has its chief executive office shall, without more, have the effect of a recorded statement under this chapter with respect to real property located in that county. A certified copy of a statement filed in the office of the Secretary of State and recorded in the office of an appropriate judge of probate, or a certified copy of a statement filed in the office of the judge of probate in the county in which the partnership has its chief executive office and recorded in the office of the judge of probate of another county, shall have the effect provided for recorded statements in this chapter with respect to real property located in the county in which the certified copy of the statement is recorded. Any statement recorded under the preceding sentence that is not a certified copy of a statement filed in the office of the Secretary of State, or of the judge of probate in the county where the partnership has its chief executive office, does not have the effect provided for recorded statements 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 nonfiling partner and to any other person named as a partner 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 judge of probate or the Secretary of State, as the case may be, may collect a fee for filing or providing a certified copy of a statement. The office of the judge of probate may collect a fee for recording a statement.

(g) In the case of any statement filed with the office of the judge of probate in the county where the partnership has its chief executive office, as permitted under subsection (a), the judge of probate shall within 10 days transmit one of the duplicate originals filed with him to the office of the Secretary of State.



(Acts 1996, No. 96-528, p. 685, §1.)Section 10-8A-106

Section 10-8A-106
Law governing internal relations.

Except as specifically provided otherwise in this chapter, the law of the jurisdiction in which a partnership has its chief executive office governs the relations among the partners and between the partners and the partnership.



(Acts 1996, No. 96-528, p. 685, §1.)Section 10-8A-107

Section 10-8A-107
Partnership subject to amendment or repeal of chapter.

A partnership governed by this chapter is subject to any amendment to or repeal of this chapter.



(Acts 1996, No. 96-528, p. 685, §1.)Section 10-8A-1101

Section 10-8A-1101
Uniformity of application and construction.

This chapter shall be applied and construed to effectuate its general purpose to make uniform the law with respect to the subject of this chapter among states enacting it.



(Acts 1996, No. 96-528, p. 685, §1.)Section 10-8A-1102

Section 10-8A-1102
Short title.

This chapter may be cited as the Alabama Uniform Partnership Act (1996).



(Acts 1996, No. 96-528, p. 685, §1.)Section 10-8A-1103

Section 10-8A-1103
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.



(Acts 1996, No. 96-528, p. 685, §1.)Section 10-8A-1104

Section 10-8A-1104
Effective date.

This chapter takes effect January 1, 1997.



(Acts 1996, No. 96-528, p. 685, §1.)Section 10-8A-1105

Section 10-8A-1105
Repeals.

Effective January 1, 2001, the following sections and all amendments thereto and all other sections and parts of sections in the Code of Alabama (1975) inconsistent herewith are repealed: 10-8-1 through 10-8-7; 10-8-20 and 10-8-21; 10-8-40 through 10-8-56; 10-8-70 through 10-8-73; and 10-8-90 through 10-8-103.

No partnership may be formed under the foregoing provisions after December 31, 1996.



(Acts 1996, No. 96-528, p. 685, §1.)Section 10-8A-1106

Section 10-8A-1106
Applicability.

(a) Before January 1, 2001, this chapter governs only a partnership formed:

(1) after the effective date of this chapter, unless that partnership is continuing the business of a dissolved partnership under Section 10-8-102 of the Alabama Partnership Act (1971); and

(2) before the effective date of this chapter, that elects, as provided by subsection (c), to be governed by this chapter.

(b) After December 31, 2000, this chapter governs all partnerships.

(c) Before January 1, 2001, a partnership voluntarily may elect, in the manner provided in its partnership agreement or by law for amending the partnership agreement, to be governed by this chapter. The provisions of this chapter relating to the liability of the partnership's partners to third parties apply to limit those partners' liability to a third party who had done business with the partnership within one year preceding the partnership's election to be governed by this chapter, only if the third party knows or has received a notification of the partnership's election to be governed by this chapter.



(Acts 1996, No. 96-528, p. 685, §1.)Section 10-8A-1107

Section 10-8A-1107
Savings clause.

This chapter does not affect an action or proceeding commenced or right accrued before this chapter takes effect.



(Acts 1996, No. 96-528, p. 685, §1.)Section 10-8A-1108

Section 10-8A-1108
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, registered limited liability partnership or qualified foreign limited liability partnership, 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.



(Acts 1996, No. 96-528, p. 685, §1.)Section 10-8A-1109

Section 10-8A-1109
Taxation of registered limited liability partnership.

A registered limited liability partnership and a foreign registered 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 such registered limited liability partnership and a foreign registered limited liability partnership maintaining its status as a partnership under federal income tax law.



(Acts 1996, No. 96-528, p. 685, §1.)Section 10-8A-201

Section 10-8A-201
Partnership as entity.

A partnership is an entity distinct from its partners.



(Acts 1996, No. 96-528, p. 685, §1.)Section 10-8A-202

Section 10-8A-202
Formation of partnership.

(a) Except as otherwise provided in subsection (b), the association of two or more persons to carry on as co-owners a business for profit forms a partnership, whether or not the persons intend to form a partnership.

(b) An association formed under a statute other than:

(i) this chapter;

(ii) a predecessor statute;

(iii) a comparable statute of another jurisdiction; or

(iv) any association existing in Alabama prior to January 1, 1972, is not a partnership under this chapter.

(c) In determining whether a partnership is formed, 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.



(Acts 1996, No. 96-528, p. 685, §1.)Section 10-8A-203

Section 10-8A-203
Partnership property.

Property acquired by a partnership is property of the partnership and not of the partners individually.



(Acts 1996, No. 96-528, p. 685, §1.)Section 10-8A-204

Section 10-8A-204
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.



(Acts 1996, No. 96-528, p. 685, §1.)Section 10-8A-301

Section 10-8A-301
Partner agent of partnership.

Subject to the effect of a statement of partnership authority under Section 10-8A-303:

(1) Each partner is an agent of the partnership for the purpose of its business. 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 business 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 received a notification 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 business of the kind carried on by the partnership binds the partnership only if the act was authorized by the other partners.



(Acts 1996, No. 96-528, p. 685, §1.)Section 10-8A-302

Section 10-8A-302
Transfer of partnership property.

(a) Partnership property may be transferred as follows:

(1) Subject to the effect of a statement of partnership authority under Section 10-8A-303, 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 10-8A-301 and:

(1) as to a subsequent transferee who gave value for property transferred under subsection (a)(1) and (2), proves that the subsequent transferee knew or had received a notification 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 received a notification 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.

(d) If a person holds all of the partners' interests in the partnership, all of the partnership property vests in that person. The person may execute a document in the name of the partnership to evidence vesting of the property in that person and may file or record the document.



(Acts 1996, No. 96-528, p. 685, §1.)Section 10-8A-303

Section 10-8A-303
Statement of partnership authority.

(a) A partnership may file a statement of partnership authority, which:

(1) must include:

(i) the name of the partnership;

(ii) the street address of its chief executive office and of one office in this state, if there is one;

(iii) the names and mailing addresses of all of the partners or of an agent appointed and maintained by the partnership for the purpose of subsection (b); and

(iv) the names of the partners authorized to execute an instrument transferring real property held in the name of the partnership; and

(2) may state the authority, or limitations on the authority, of some or all of the partners to enter into other transactions on behalf of the partnership and any other matter.

(b) If a statement of partnership authority names an agent, the agent shall maintain a list of the names and mailing addresses of all of the partners and make it available to any person on request for good cause shown.

(c) If a filed statement of partnership authority is executed pursuant to Section 10-8A-105(c) and states the name of the partnership but does not contain all of the other information required by subsection (a), the statement nevertheless operates with respect to a person not a partner as provided in subsections (d) and (e).

(d) Except as provided in subsection (g), a filed statement of partnership authority supplements the authority of a partner to enter into transactions on behalf of the partnership as follows:

(1) Except for transfers of real property, a grant of authority contained in a filed statement of partnership authority is conclusive in favor of a person who gives value without knowledge to the contrary, so long as and to the extent that a limitation on that authority is not then contained in another filed statement. A filed cancellation of a limitation on authority revives the previous grant of authority.

(2) A grant of authority to transfer real property held in the name of the partnership contained in a statement of partnership authority filed in the office of the judge of probate in the county where the partnership has its chief executive office is, with respect to real property located in such county, conclusive in favor of a person who gives value without knowledge to the contrary, so long as and to the extent that a filed statement containing a limitation on that authority is not then of record in the office of the judge of probate for such county. With regard to real property located in a county other than the county in which the partnership has its chief executive office, and in the case of a partnership whose chief executive office is outside the State of Alabama, a grant of authority to transfer real property held in the name of the partnership contained in a certified copy of a statement of partnership authority filed in the office of the judge of probate in the county where the partnership has its chief executive office or in the office of the Secretary of State, as the case may be, and recorded in the office of the judge of probate for recording transfers of that real property is conclusive in favor of a person who gives value without knowledge to the contrary, so long as and to the extent that a certified copy of a statement filed in the office of the judge of probate in the county where the partnership has its chief executive office or in the office of the Secretary of State, as the case may be, containing a limitation on that authority is not then of record in the office of the judge of probate for recording transfers of that real property. The filing in the office of the judge of probate in the county where the partnership has its chief executive office of a cancellation of a limitation of authority or the recording in the office of another judge of probate of a certified copy of a filed cancellation of a limitation on authority revives the previous grant of authority.

(e) A person not a partner is deemed to know of a limitation on the authority of a partner to transfer real property held in the name of the partnership if a statement containing the limitation of authority or, in the case of real property located in a county other than that where the partnership has its chief executive office or in the case of a partnership whose chief executive office is outside the State of Alabama, a certified copy of the statement containing the limitation on authority filed with the office of the judge of probate in the county where the partnership has its chief executive office or with the office of the Secretary of State, as the case may be, is of record in the office of the judge of probate for recording transfers of that real property.

(f) Except as provided in subsections (d) and (e) and Sections 10-8A-704 and 10-8A-805, a person not a partner is not deemed to know of a limitation on the authority of a partner merely because the limitation is contained in a filed statement.

(g) Unless earlier canceled, a filed statement of partnership authority is canceled by operation of law five years after the date on which the statement, or the most recent amendment, was filed with the office of the judge of probate or the Secretary of State, as the case may be.



(Acts 1996, No. 96-528, p. 685, §1.)Section 10-8A-304

Section 10-8A-304
Statement of denial.

A partner or other person named as a partner in a filed statement of partnership authority or in a list maintained by an agent pursuant to Section 10-8A-303(b) may file a statement of denial stating the name of the partnership and the fact that is being denied, which may include denial of a person's authority or status as a partner. A statement of denial is a limitation on authority as provided in Section 10-8A-303(d) and (e).



(Acts 1996, No. 96-528, p. 685, §1.)Section 10-8A-305

Section 10-8A-305
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 of the partnership or with authority of the partnership.

(b) If, in the ordinary course of business of the partnership's business, 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.



(Acts 1996, No. 96-528, p. 685, §1.)Section 10-8A-306

Section 10-8A-306
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 provided by subsection (d) of this section and subsection (a) of Section 10-8A-1010, a partner in a registered 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 registered 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 registered limited liability partnership.

(d) Notwithstanding the provisions of subsection (c) of this section, all or specified partners of a registered limited liability partnership may be personally liable in their capacity as partners for all or specified debts, obligations or liabilities of a registered limited liability partnership to the extent all of the partners shall have agreed, unless otherwise provided in the partnership agreement. Any agreement regarding any such specified debts, obligations or liabilities of a registered limited liability partnership may be modified or revoked to the extent all of the partners shall have agreed, unless otherwise provided in the partnership agreement; provided, however, that (i) any such modification or revocation shall not affect the personal liability of a partner for any debts, obligations or liabilities of a registered limited liability partnership which occur, are incurred or are assumed by such registered limited liability partnership prior to such modification or revocation and (ii) a partner shall be personally liable for debts, obligations and liabilities of the registered limited liability partnership which occur, are incurred or are assumed after such modification or revocation only in accordance with this chapter. Nothing in this section shall in any way affect or impair the ability of a partner to act as a guarantor or surety for, provide collateral for, or otherwise be personally liable for, the debts, obligations or liabilities of a registered limited liability partnership for which such partner agrees in writing to be personally liable.

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

(f) A partner in a registered limited liability partnership is not a necessary or proper party to a proceeding by or against a registered limited liability partnership, the object of which is to recover any debts, obligations, or liabilities of, or chargeable to, the registered limited liability partnership, unless such partner is personally liable therefor under subsection (d) of this section or under subsection (a) of Section 10-8A-1010.



(Acts 1996, No. 96-528, p. 685, §1.)Section 10-8A-307

Section 10-8A-307
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 10-8A-306, 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 10-8A-306 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 10-8A-308.



(Acts 1996, No. 96-528, p. 685, §1.)Section 10-8A-308

Section 10-8A-308
Liability of purported partner.

Except as provided in Section 10-8A-306:

(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 partnership 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 partnership 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.



(Acts 1996, No. 96-528, p. 685, §1.)Section 10-8A-401

Section 10-8A-401
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 10-8A-306 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 of the partnership or for the preservation of its business or property; provided, however, no partner in a registered limited liability partnership shall be required as a consequence of such indemnification to make any payment on behalf of the registered limited liability partnership to any other partners to the extent that such payment would be inconsistent with Sections 10-8A-306, 10-8A-806 or 10-8A-807.

(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.

(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 of the partnership.

(i) A person may become a partner only with the consent of all of the partners.

(j) A difference arising as to a matter in the ordinary course of business of a partnership may be decided by a majority of the partners. An act outside the ordinary course of business of a partnership and an amendment to the partnership agreement may be undertaken only with the consent of all of the partners.

(k) This section does not affect the obligations of a partnership to other persons under Section 10-8A-301.



(Acts 1996, No. 96-528, p. 685, §1.)Section 10-8A-402

Section 10-8A-402
Distributions in kind.

A partner has no right to receive, and may not be required to accept, a distribution in kind.



(Acts 1996, No. 96-528, p. 685, §1.)Section 10-8A-403

Section 10-8A-403
Partner's rights and duties with respect to information.

(a) A partnership shall keep its books and records, if any, at its chief executive office.

(b) A partnership shall provide partners and their agents and attorneys access to its books and records. It shall provide former partners and their agents and attorneys access to books and records pertaining to the period during which they were partners. The right of access provides the opportunity to inspect and copy books and records during ordinary business hours. A partnership may impose a reasonable charge, covering the costs of labor and material, for copies of documents furnished.

(c) Each partner and the partnership shall furnish to a partner, and to the legal representative of a deceased partner or partner under legal disability:

(1) without demand, any information concerning the partnership's business and affairs 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 affairs, except to the extent the demand or the information demanded is unreasonable or otherwise improper under the circumstances.



(Acts 1996, No. 96-528, p. 685, §1.)Section 10-8A-404

Section 10-8A-404
General standards of partner's conduct.

(a) The only fiduciary duties a partner owes to the partnership and the other partners are the duty of loyalty and the duty of care set forth in subsections (b) and (c).

(b) A partner's duty of loyalty to the partnership and the other partners is limited to the following:

(1) to account to the partnership and hold as trustee for it any property, profit, or benefit derived by the partner in the conduct and winding up of the partnership business 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 business 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 of the partnership business before the dissolution of the partnership.

(c) A partner's duty of care to the partnership and the other partners in the conduct and winding up of the partnership business is limited to 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 the other partners under this chapter or under the partnership agreement and exercise any rights consistently with the obligation 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.

(f) A partner may lend money to and transact other business with the partnership, and as to each loan or transaction rights and obligations of the partner are the same as those of a person who is not a partner, subject to other applicable law.

(g) This section applies to a person winding up the partnership business as the personal or legal representative of the last surviving partner as if the person were a partner.



(Acts 1996, No. 96-528, p. 685, §1.)Section 10-8A-405

Section 10-8A-405
Actions by partnership and partners.

(a) Except as provided in Sections 10-8A-306, 10-8A-806 or 10-8A-807, 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 10-8A-306, 10-8A-806 or 10-8A-807, 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, 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 10-8A-401, 10-8A-403, or 10-8A-404;

(ii) the partner's right on dissociation to have the partner's interest in the partnership purchased pursuant to Section 10-8A-701 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 business under Section 10-8A-801 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.



(Acts 1996, No. 96-528, p. 685, §1.)Section 10-8A-406

Section 10-8A-406
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 during the term or undertaking, continue the business without any settlement or liquidation of the partnership, they are presumed to have agreed that the partnership will continue.



(Acts 1996, No. 96-528, p. 685, §1.)Section 10-8A-501

Section 10-8A-501
Partner not co-owner of partnership property.

A partner is not a co-owner of partnership property and has no interest in partnership property which can be transferred, either voluntarily or involuntarily.



(Acts 1996, No. 96-528, p. 685, §1.)Section 10-8A-502

Section 10-8A-502
Partner's transferable interest in partnership.

The only transferable interest of a partner in the partnership is the partner's share of the profits and losses of the partnership and the partner's right to receive distributions. The interest is personal property.



(Acts 1996, No. 96-528, p. 685, §1.)Section 10-8A-503

Section 10-8A-503
Transfer of partner's transferable interest.

(a) A transfer, in whole or in part, of a partner's transferable interest in the partnership:

(1) is permissible;

(2) does not by itself cause the partner's dissociation or a dissolution and winding up of the partnership business; and

(3) does not, as against the other partners or the partnership, entitle the transferee, during the continuance of the partnership, to participate in the management or conduct of the partnership business, to require access to information concerning or an account of partnership transactions, or to inspect or copy the partnership books or records.

(b) A transferee of a partner's transferable interest in the partnership 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 business, in accordance with the transfer, the net amount otherwise distributable to the transferor; and

(3) to seek under Section 10-8A-801(6) a judicial determination that it is equitable to wind up the partnership business.

(c) In a dissolution and winding up, a transferee is entitled to an accounting only from the date of the latest account agreed to by all of the partners.

(d) Upon transfer, the transferor retains the rights and duties of a partner other than the transferable interest.

(e) A partnership need not give effect to a transferee's rights under this section until it has notice of the transfer.

(f) A transfer of a partner's transferable interest in the partnership in violation of a restriction on transfer contained in the partnership agreement is ineffective as to a person having notice of the restriction at the time of transfer.



(Acts 1996, No. 96-528, p. 685, §1.)Section 10-8A-504

Section 10-8A-504
Partner's transferable interest subject to charging order.

(a) On application by a judgment creditor of a partner or partner's transferee, a court having jurisdiction may charge the transferable interest of the judgment debtor to satisfy the judgment. The court may appoint a receiver of the share of the distributions due or to become due to the judgment debtor in respect of the partnership and make all other orders, directions, accounts, and inquiries the judgment debtor might have made or which the circumstances of the case may require.

(b) A charging order constitutes a lien on the judgment debtor's transferable interest in the partnership. The court may order a foreclosure of the interest subject to the charging order at any time and upon conditions it considers appropriate. The purchaser at the foreclosure sale has the rights of a transferee.

(c) At any time before foreclosure, an interest charged may be redeemed:

(1) by the judgment debtor;

(2) with property other than partnership property, by one or more of the other partners; or

(3) with partnership property, by one or more of the other partners with the consent of all of the partners whose interests are not so charged.

(d) This chapter does not deprive a partner of a right under exemption laws with respect to the partner's interest in the partnership.

(e) This section provides the exclusive remedy by which a judgment creditor of a partner or partner's transferee may satisfy a judgment out of the judgment debtor's transferable interest in the partnership.



(Acts 1996, No. 96-528, p. 685, §1.)Section 10-8A-601

Section 10-8A-601
Events causing partner's dissociation.

A partner is dissociated from a partnership upon the occurrence of any of the following events:

(1) the partnership's having notice of the partner's express will to withdraw as a partner or on a later date specified by the partner;

(2) an event agreed to in the partnership agreement as causing the partner's dissociation;

(3) the partner's expulsion pursuant to the partnership agreement;

(4) the partner's expulsion by the unanimous vote of the other partners if:

(i) it is unlawful to carry on the partnership business with that partner;

(ii) there has been a transfer of all or substantially all of that partner's transferable interest in the partnership, other than a transfer for security purposes, or a court order charging the partner's interest, which has not been foreclosed;

(iii) within 90 days after the partnership notifies a corporate partner that it will be expelled because it has filed a certificate of dissolution or the equivalent, its charter has been revoked, or its right to conduct business has been suspended by the jurisdiction of its incorporation, there is no revocation of the certificate of dissolution or no reinstatement of its charter or its right to conduct business;

(iv) a partnership that is a partner has been dissolved and its business is being wound up; or

(v) a limited liability partnership that is a partner has been dissolved and its business is being wound up;

(5) on application by the partnership or another partner, the partner's expulsion by judicial determination because:

(i) the partner engaged in wrongful conduct that adversely and materially affected the partnership business;

(ii) the partner willfully or persistently committed a material breach of the partnership agreement or of a duty owed to the partnership or the other partners under Section 10-8A-404; or

(iii) the partner engaged in conduct relating to the partnership business which makes it not reasonably practicable to carry on the business in partnership with the partner;

(6) the partner's:

(i) becoming a debtor in bankruptcy;

(ii) executing an assignment for the benefit of creditors;

(iii) seeking, consenting to, or acquiescing in the appointment of a trustee, receiver, or liquidator of that partner or of all or substantially all of that partner's property; or

(iv) failing, within 90 days after the appointment, to have vacated or stayed the appointment of a trustee, receiver, or liquidator of the partner or of all or substantially all of the partner's property obtained without the partner's consent or acquiescence, or failing within 90 days after the expiration of a stay to have the appointment vacated;

(7) in the case of a partner who is an individual:

(i) the partner's death;

(ii) the appointment of a guardian or general conservator for the partner; or

(iii) a judicial determination that the partner has otherwise become incapable of performing the partner's duties under the partnership agreement;

(8) in the case of a partner that is a trust or is acting as a partner by virtue of being a trustee of a trust, distribution of the trust's entire transferable interest in the partnership, but not merely by reason of the substitution of a successor trustee;

(9) in the case of a partner that is an estate or is acting as a partner by virtue of being a personal representative of an estate, distribution of the estate's entire transferable interest in the partnership, but not merely by reason of the substitution of a successor personal representative; or

(10) termination of a partner who is not an individual, partnership, limited liability company, corporation, trust, or estate.



(Acts 1996, No. 96-528, p. 685, §1.)Section 10-8A-602

Section 10-8A-602
Partner's power to dissociate; wrongful dissociation.

(a) A partner has the power to dissociate at any time, rightfully or wrongfully, by express will pursuant to Section 10-8A-601(1).

(b) A partner'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:

(i) the partner withdraws by express will, unless the withdrawal follows the dissociation of another partner and results in a right to dissolve the partnership under Section 10-8A-801(2)(i);

(ii) the partner is expelled by judicial determination under Section 10-8A-601(5);

(iii) the partner is dissociated by becoming a debtor in bankruptcy; or

(iv) in the case of a partner who is not an individual, trust other than a business trust, or estate, the partner is expelled or otherwise dissociated because it willfully dissolved or terminated.

(c) A partner who wrongfully dissociates is liable to the partnership and to the other partners for damages caused by the dissociation. The liability is in addition to any other obligation of the partner to the partnership or to the other partners.



(Acts 1996, No. 96-528, p. 685, §1.)Section 10-8A-603

Section 10-8A-603
Effect of partner's dissociation.

(a) If a partner's dissociation results in a dissolution and winding up of the partnership business, Article 8 applies; otherwise, Article 7 applies.

(b) Upon a partner's dissociation:

(1) the partner's right to participate in the management and conduct of the partnership business terminates, except as provided in Section 10-8A-803;

(2) the partner's duty of loyalty under Section 10-8A-404(b)(3) terminates; and

(3) the partner's duty of loyalty under Section 10-8A-404(b)(1) and (2) and duty of care under Section 10-8A-404(c) continue only with regard to matters arising and events occurring before the partner's dissociation, unless the partner participates in winding up the partnership's business pursuant to Section 10-8A-803.



(Acts 1996, No. 96-528, p. 685, §1.)Section 10-8A-701

Section 10-8A-701
Purchase of dissociated partner's interest.

(a) If a partner is dissociated from a partnership without resulting in a dissolution and winding up of the partnership business under Section 10-8A-801, the partnership shall cause the dissociated partner's interest in the partnership to be purchased for a buyout price determined pursuant to subsection (b).

(b) The buyout price of a dissociated partner's interest shall be the fair value of the dissociated partner's interest in the partnership as of the date of dissociation.

(c) Damages for wrongful dissociation under Section 10-8A-602(b), and all other amounts owing, whether or not presently due, from the dissociated partner to the partnership, must be offset against the buyout price. Interest must be paid from the date the amount owed becomes due to the date of payment.

(d) A partnership shall indemnify a dissociated partner whose interest is being purchased against all partnership liabilities, whether incurred before or after the dissociation, except liabilities incurred by an act of the dissociated partner under Section 10-8A-702.

(e) If no agreement for the purchase of a dissociated partner's interest is reached within 120 days after a written demand for payment, the partnership shall pay, or cause to be paid, in cash to the dissociated 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 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) an explanation of how the estimated amount of the payment was calculated; and

(4) written notice that the payment is in full satisfaction of the obligation to purchase unless, within 120 days after the written notice, the dissociated partner commences an action to determine the buyout price, any offsets under subsection (c), or other terms of the obligation to purchase.

(h) A partner who wrongfully dissociates 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 partner establishes to the satisfaction of the court that earlier payment will not cause undue hardship to the business of the partnership. A deferred payment must be adequately secured and bear interest.

(i) A dissociated partner may maintain an action against the partnership, pursuant to Section 10-8A-405(b)(2)(ii), to determine the buyout price of that partner's interest, 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 the dissociated partner's interest, 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 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).



(Acts 1996, No. 96-528, p. 685, §1.)Section 10-8A-702

Section 10-8A-702
Dissociated partner's power to bind and liability to partnership.

(a) For two years after a partner dissociates without resulting in a dissolution and winding up of the partnership business, the partnership, including a surviving partnership under Article 9, is bound by an act of the dissociated partner which would have bound the partnership under Section 10-8A-301 before dissociation only if at the time of entering into the transaction the other party:

(1) reasonably believed that the dissociated partner was then a partner;

(2) did not have notice of the partner's dissociation; and

(3) is not deemed to have had knowledge under Section 10-8A-303(e) or notice under Section 10-8A-704(c).

(b) A dissociated partner is liable to the partnership for any damage caused to the partnership arising from an obligation incurred by the dissociated partner after dissociation for which the partnership is liable under subsection (a).



(Acts 1996, No. 96-528, p. 685, §1.)Section 10-8A-703

Section 10-8A-703
Dissociated partner's liability to other persons.

(a) A partner's dissociation does not of itself discharge the partner's liability for a partnership obligation incurred before dissociation. A dissociated partner is not liable for a partnership obligation incurred after dissociation, except as provided in subsection (b).

(b) A partner who dissociates without resulting in a dissolution and winding up of the partnership business is liable as a partner to the other party in a transaction entered into by the partnership, or a surviving partnership under Article 9, within two years after the partner's dissociation, only if the obligation is one for which such partner is personally liable under Section 10-8A-306 and at the time of entering into the transaction the other party:

(1) reasonably believed that the dissociated partner was then a partner;

(2) did not have notice of the partner's dissociation; and

(3) is not deemed to have had knowledge under Section 10-8A-303(e) or notice under Section 10-8A-704(c).

(c) By agreement with the partnership creditor and the partners continuing the business, a dissociated partner may be released from liability for a partnership obligation for which such partner is personally liable under Section 10-8A-306.

(d) A dissociated partner is released from liability for a partnership obligation if a partnership creditor, with notice of the partner's dissociation but without the partner's consent, agrees to a material alteration in the nature or time of payment of a partnership obligation for which such partner is personally liable under Section 10-8A-306.



(Acts 1996, No. 96-528, p. 685, §1.)Section 10-8A-704

Section 10-8A-704
Statement of dissociation.

(a) A dissociated partner or the partnership may file a statement of dissociation stating the name of the partnership and that the partner is dissociated from the partnership.

(b) A statement of dissociation is a limitation on the authority of a dissociated partner for the purposes of Section 10-8A-303(d) and (e).

(c) For the purposes of Sections 10-8A-702(a)(3) and 10-8A-703(b)(3), a person not a partner is deemed to have notice of the dissociation 90 days after the statement of dissociation is filed.



(Acts 1996, No. 96-528, p. 685, §1.)Section 10-8A-705

Section 10-8A-705
Continued use of partnership name.

Continued use of a partnership name, or a dissociated partner's name as part thereof, by partners continuing the business does not of itself make the dissociated partner liable for an obligation of the partners or the partnership continuing the business.



(Acts 1996, No. 96-528, p. 685, §1.)Section 10-8A-801

Section 10-8A-801
Events causing dissolution and winding up of partnership business.

A partnership is dissolved, and its business must be wound up, only upon the occurrence of any of the following:

(1) in a partnership at will, the partnership's having notice from a partner, other than a partner who is dissociated under Section 10-8A-601(2) through (10), of that partner's express will to withdraw as a partner, or on a later date specified by the partner;

(2) in a partnership for a definite term or particular undertaking:

(i) within 90 days after a partner's wrongful dissociation under Section 10-8A-602(b) or a partner's dissociation by death or otherwise under Section 10-8A-601(6) through (10), the express will of at least half of the remaining partners to wind up the partnership business, for which purpose a partner's rightful dissociation pursuant to Section 10-8A-602(b)(2)(i) constitutes the expression of that partner's will;

(ii) the express will of all of the partners to wind up the partnership business; or

(iii) the expiration of the term or the completion of the undertaking;

(3) an event agreed to in the partnership agreement resulting in the winding up of the partnership business;

(4) an event that makes it unlawful for all or substantially all of the business of the partnership to be continued, but a cure of illegality within 90 days after notice to the partnership of the event is effective retroactively to the date of the event for purposes of this section;

(5) on application by a partner, a judicial determination that:

(i) the economic purpose of the partnership is likely to be unreasonably frustrated;

(ii) another partner has engaged in conduct relating to the partnership business which makes it not reasonably practicable to carry on the business in partnership with that partner; or

(iii) it is not otherwise reasonably practicable to carry on the partnership business in conformity with the partnership agreement; or

(6) on application by a transferee of a partner's transferable interest, a judicial determination that it is equitable to wind up the partnership business:

(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 entry of the charging order that gave rise to the transfer; or

(ii) at any time, if the partnership was a partnership at will at the time of the transfer or entry of the charging order that gave rise to the transfer.



(Acts 1996, No. 96-528, p. 685, §1.)Section 10-8A-802

Section 10-8A-802
Partnership continues after dissolution.

(a) Subject to subsection (b), a partnership continues after dissolution only for the purpose of winding up its business. The partnership is terminated when the winding up of its business is completed.

(b) At any time after the dissolution of a partnership and before the winding up of its business is completed, all of the partners, including any dissociating partner other than a wrongfully dissociating partner, may waive the right to have the partnership's business wound up and the partnership terminated. In that event:

(1) the partnership resumes carrying on its business as if dissolution had never occurred, and any liability incurred by the partnership or a partner after the dissolution and before the waiver is determined as if dissolution had never occurred; and

(2) the rights of a third party accruing under Section 10-8A-804(1) or arising out of conduct in reliance on the dissolution before the third party knew or received a notification of the waiver may not be adversely affected.



(Acts 1996, No. 96-528, p. 685, §1.)Section 10-8A-803

Section 10-8A-803
Right to wind up partnership business.

(a) After dissolution, a partner who has not wrongfully dissociated may participate in winding up the partnership's business, but on application of any partner, partner's legal representative, or transferee, the circuit court having jurisdiction, for good cause shown, may order judicial supervision of the winding up.

(b) The legal representative of the last surviving partner may wind up a partnership's business.

(c) A person winding up a partnership's business may preserve the partnership business or property as a going concern for a reasonable time, prosecute and defend actions and proceedings, whether civil, criminal, or administrative, settle and close the partnership's business, dispose of and transfer the partnership's property, discharge the partnership's liabilities, distribute the assets of the partnership pursuant to Section 10-8A-807, settle disputes by mediation or arbitration, and perform other necessary acts.



(Acts 1996, No. 96-528, p. 685, §1.)Section 10-8A-804

Section 10-8A-804
Partner's power to bind partnership after dissolution.

Subject to Section 10-8A-805, a partnership is bound by a partner's act after dissolution that:

(1) is appropriate for winding up the partnership business; or

(2) would have bound the partnership under Section 10-8A-301 before dissolution, if the other party to the transaction did not have notice of the dissolution.



(Acts 1996, No. 96-528, p. 685, §1.)Section 10-8A-805

Section 10-8A-805
Statement of dissolution.

(a) After dissolution, a partner who has not wrongfully dissociated may file a statement of dissolution stating the name of the partnership and that the partnership has dissolved and is winding up its business.

(b) A statement of dissolution cancels a filed statement of partnership authority for the purposes of Section 10-8A-303(d) and is a limitation on authority for the purposes of Section 10-8A-303(e).

(c) For the purposes of Sections 10-8A-301 and 10-8A-804, a person not a partner is deemed to have notice of the dissolution and the limitation on the partners' authority as a result of the statement of dissolution 90 days after it is filed.

(d) After filing and, if appropriate, recording a statement of dissolution, a dissolved partnership may file and, if appropriate, record a statement of partnership authority which will operate with respect to a person not a partner as provided in Section 10-8A-303(d) and (e) in any transaction, whether or not the transaction is appropriate for winding up the partnership business.



(Acts 1996, No. 96-528, p. 685, §1.)Section 10-8A-806

Section 10-8A-806
Partner's liability to other partners after dissolution.

(a) Except as provided in subsection (b) of this Section 10-8A-806 or in Section 10-8A-306, after dissolution a partner is liable to the other partners for the partner's share of any partnership liability incurred under Section 10-8A-804.

(b) A partner who, with knowledge of the dissolution, incurs a partnership liability under Section 10-8A-804(2) by an act that is not appropriate for winding up the partnership business is liable to the partnership for any damage caused to the partnership arising from the liability.



(Acts 1996, No. 96-528, p. 685, §1.)Section 10-8A-807

Section 10-8A-807
Settlement of accounts and contributions among partners.

(a) In winding up a partnership's business, the assets of the partnership, including the contributions of the partners required by this section, must be applied to discharge its obligations to creditors, including, to the extent permitted by law, partners who are creditors. Any surplus must be applied to pay in cash the net amount distributable to partners in accordance with their right to distributions under subsection (b).

(b) Each partner is entitled to a settlement of all partnership accounts upon winding up the partnership business. In settling accounts among the partners, the profits and losses that result from the liquidation of the partnership assets must be credited and charged to the partners' accounts. The partnership shall make a distribution to a partner in an amount equal to any excess of the credits over the charges in the partner's account. A partner shall contribute to the partnership an amount equal to any excess of the charges over the credits in the partner's account.

(c) Except as provided in Section 10-8A-306,

(1) If a partner fails to contribute, all of the other partners shall contribute, in the proportions in which those partners share partnership losses, the additional amount necessary to satisfy the partnership obligations; and

(2) A partner or partner's legal representative may recover from the other partners any contributions the partner makes to the extent the amount contributed exceeds that partner's share of the partnership obligations.

(d) After the settlement of accounts, each partner shall contribute, in the proportion in which the partner shares partnership losses, the amount necessary to satisfy partnership obligations for which such partner was personally liable under Section 10-8A-306 and that were not known at the time of the settlement.

(e) Except as provided in Section 10-8A-306, the estate of a deceased partner is liable for the partner's obligation to contribute to the partnership.

(f) 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 partner's obligation to contribute to the partnership.



(Acts 1996, No. 96-528, p. 685, §1.)Section 10-8A-901

Section 10-8A-901
Definitions.

In this article:

(1) "Business entity" means a corporation, limited liability company, partnership, limited partnership, registered limited liability partnership, or other entity organized to engage in business, whether created under the laws of the State of Alabama, predecessor law, or comparable law of another jurisdiction.

(2) "Corporation" means a corporation created under the Alabama Business Corporation Act, predecessor law, or comparable law of another jurisdiction.

(3) "Equity owner" means any person having an ownership interest in a business entity.

(4) "General partner" means a partner in a partnership, a general partner in a limited partnership and a general partner in a registered limited liability partnership.

(5) "Limited liability company" means a limited liability company created under the Alabama Limited Liability Company Act, predecessor law, or comparable law of another jurisdiction.

(6) "Limited partner" means a limited partner in a limited partnership.

(7) "Limited partnership" means a limited partnership created under the Alabama Limited Partnership Act of 1983, predecessor law, or comparable law of another jurisdiction.

(8) "Member" means a person reflected in the required records of a limited liability company as the owner of some governance rights of a membership interest in the limited liability company.

(9) "Partner" includes both a general partner and a limited partner.

(10) "Shareholder" means the person, in whose name the units into which proprietary interests in a corporation are divided, are registered in the records of the corporation or the beneficiary owner of such units to the extent of the rights granted by a nominee certificate on file with a corporation.



(Acts 1996, No. 96-528, p. 685, §1.)Section 10-8A-902

Section 10-8A-902
Conversion of partnership to limited partnership, corporation or limited liability company.

(a) A partnership may be converted to a limited partnership, corporation or limited liability company pursuant to this section.

(b) The terms and conditions of a conversion of a partnership to a limited partnership, corporation or limited liability company must be approved by all of the partners or as otherwise provided in the partnership agreement.

(c) After the conversion is approved by the partners, a certificate of limited partnership, articles (or certificate) of incorporation, or articles of organization shall be filed in the jurisdiction in which the limited partnership, corporation or limited liability company is to be formed. The certificate or articles must include:

(1) a statement that the partnership was converted to a limited partnership, corporation or limited liability company from a partnership;

(2) its former name; and

(3) a statement that the conversion was approved by all of the partners or a statement of the requirements of the partnership agreement for a conversion and a statement of compliance with those requirements.

(d) The conversion takes effect when the certificate of limited partnership, articles (or certificate) of incorporation, or articles of organization is filed or at any later date specified in the certificate or articles.

(e) A general partner who becomes a limited partner, shareholder or member as a result of the conversion remains liable as a general partner for an obligation incurred by the partnership before the conversion takes effect. If the other party to a transaction with a limited partnership, corporation or limited liability company reasonably believes when entering the transaction that the limited partner, shareholder or member is a general partner, the limited partner, shareholder or member is liable for an obligation for which such partner would be personally liable under Section 10-8A-306, incurred by the limited partnership, corporation or limited liability company within 90 days after the conversion takes effect. The limited partner's, shareholder's or member's liability for all other obligations of the limited partnership, corporation or limited liability company incurred after the conversion takes effect is that of a limited partner, shareholder or member as provided in the jurisdiction in which the limited partnership, corporation or limited company is formed.



(Acts 1996, No. 96-528, p. 685, §1.)Section 10-8A-903

Section 10-8A-903
Conversion of limited partnership, corporation or limited liability company to partnership.

(a) A limited partnership, corporation or limited liability company may be converted to a partnership pursuant to this section.

(b) Notwithstanding a provision to the contrary in a limited partnership agreement, articles (or certificate) of incorporation, by-laws, articles of organization, operating agreement, regulations or other agreements, the terms and conditions of a conversion of a limited partnership, corporation or limited liability company to a partnership must be approved by all of the partners, shareholders or members.

(c) After the conversion is approved by the partners, shareholders or members, the limited partnership, corporation or limited liability company shall cancel its certificate of limited partnership in the case of a limited partnership, and file articles of dissolution in the case of a corporation or limited liability company. The cancellation of certificates of limited partnership or articles of dissolution must include:

(1) a statement that the limited partnership, corporation or limited liability company was converted to a partnership; and

(2) the name of the partnership.

(d) The conversion takes effect when the certificate of limited partnership is canceled in the case of a limited partnership or articles of dissolution are filed in the case of a corporation or limited liability company.

(e) A limited partner, shareholder or member who becomes a general partner as a result of the conversion remains liable only as a limited partner, shareholder or member for an obligation incurred by the limited partnership, corporation or limited liability company before the conversion takes effect. Subject to the provisions of Section 10-8A-306, a limited partner, shareholder or member who becomes a general partner as a result of the conversion is liable as a general partner for an obligation of the partnership incurred after the conversion takes effect.



(Acts 1996, No. 96-528, p. 685, §1.)Section 10-8A-904

Section 10-8A-904
Effect of conversion; entity unchanged.

(a) A partnership, limited partnership, corporation or limited liability company that has been converted pursuant to this article is for all purposes the same entity that existed before the conversion.

(b) When a conversion takes effect:

(1) all property owned by the converting partnership, limited partnership, corporation or limited liability company remains vested in the converted entity;

(2) all obligations of the converting partnership, limited partnership, corporation or limited liability company continue as obligations of the converted entity; and

(3) an action or proceeding pending by or against the converting partnership, limited partnership, corporation or limited liability company may be continued as if the conversion had not occurred.



(Acts 1996, No. 96-528, p. 685, §1.)Section 10-8A-905

Section 10-8A-905
Merger of partnerships and business entities.

(a) Pursuant to a plan of merger approved as provided in subsection (c), a partnership may be merged with one or more business entities, including another partnership.

(b) The plan of merger must set forth:

(1) the name of each business entity that is a party to the merger;

(2) the name of the surviving entity into which the other business entities will merge;

(3) the type of business entity of the surviving business entity and the status in the surviving business entity of each equity owner of a business 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 business entity, or into money or other property in whole or part; and

(6) the street address of the surviving business entity's chief executive office.

(c) The plan of merger must be approved:

(1) in the case of a partnership that is a party to the merger, by all of the partners or as otherwise provided in the partnership agreement;

(2) in the case of a business entity other than a partnership that is a party to the merger when the surviving business entity is a partnership, by the vote required for approval of a merger by the law of the state or foreign jurisdiction in which the business entity is organized and, in the absence of such a specifically applicable law, by all of the equity owners who are to become partners, notwithstanding a provision to the contrary in the organizational documents of the business entity; and

(3) in the case of a business entity other than a partnership that is a party to the merger when the surviving business entity is not a partnership, by the vote required for approval of a merger by the law of the state or foreign jurisdiction in which the business entity is organized and, in the absence of such a specifically applicable law, in accordance with the organization documents of the business entity.

(d) 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.

(e) The merger takes effect on the later of:

(1) the approval of the plan of merger by all parties to the merger, as provided in subsection (c);

(2) the filing of all documents required by law to be filed as a condition to the effectiveness of the merger; or

(3) any effective date specified in the plan of merger.



(Acts 1996, No. 96-528, p. 685, §1.)Section 10-8A-906

Section 10-8A-906
Effect of merger.

(a) When a merger takes effect:

(1) the separate existence of every business entity that is a party to the merger, other than the surviving business entity, ceases;

(2) all property owned by each of the merged business entities vests in the surviving business entity;

(3) all obligations of every business entity that is a party to the merger become the obligations of the surviving business entity; and

(4) an action or proceeding pending by or against a business entity that is a party to the merger may be continued as if the merger had not occurred, or the surviving business entity may be substituted as a party to the action or proceeding.

(b) The Secretary of State of this state is the agent for service of process in an action or proceeding against a surviving foreign business entity to enforce an obligation of a domestic business entity that is a party to a merger. The surviving entity shall promptly notify the Secretary of State of the mailing address of its chief executive office and any change of address. Upon receipt of process, the Secretary of State shall mail a copy of the process to the business entity.

(c) Subject to the provisions of Section 10-8A-306, an equity owner of the surviving business entity is liable for:

(1) all obligations of a party to the merger for which such person was personally liable before the merger;

(2) all other obligations of the surviving business entity, if the surviving business entity is a partnership or limited partnership, incurred before the merger by a party to the merger, but those obligations may be satisfied only out of property of the surviving business entity; and

(3) all obligations of the surviving business entity incurred after the merger takes effect if the surviving business entity is a partnership or limited partnership and the equity owner is a general partner.

(d) Subject to the provisions of Section 10-8A-306, if the obligations incurred before the merger by a party to the merger that is a partnership or limited partnership to the merger are not satisfied out of the property of the surviving business entity, the general partners of a partnership or limited partnership that is a party to the merger immediately before the effective date of the merger shall contribute to the surviving business entity the amount necessary to satisfy that party's obligations in the manner provided in Section 10-8A-807 or in the limited partnership act of the jurisdiction in which the limited partnership was formed, as the case may be, as if the merged party were dissolved.

(e) A partner of a partnership that is a party to a merger who does not become an equity owner of the surviving business entity is dissociated from the partnership, of which that partner was a partner, as of the date the merger takes effect. The surviving business entity shall cause the partner's interest in the partnership to be purchased under Section 10-8A-701 or another statute specifically applicable to that partner's interest in connection with the merger. The surviving business entity is bound under Section 10-8A-702 by an act of a general partner dissociated under this subsection, and the partner is liable under Section 10-8A-703 for transactions entered into by the surviving business entity after the merger takes effect.



(Acts 1996, No. 96-528, p. 685, §1.)Section 10-8A-907

Section 10-8A-907
Statement of conversion or merger.

(a) After a conversion or merger, the converting entity or surviving business entity may file a statement that one or more entities have converted or merged into the converted entity or surviving business entity and must file such statement if any party to the conversion or merger is a business entity other than a partnership.

(b) A statement of conversion or merger must contain:

(1) the name of each party to the conversion or merger;

(2) the name of the converted entity or surviving business entity into which the other parties were converted or merged;

(3) the street address of the converted entity or surviving business entity's chief executive office and of an office in this state, if any;

(4) the type of business entity of the converted entity or surviving business entity; and

(5) such other information as may be required for conversions or mergers of entities other than partnerships.

(c) Except as provided in subsection (d), for the purposes of Section 10-8A-302, property of the converted or surviving partnership or limited partnership which before the conversion or merger was held in the name of another party to the conversion or merger is property in the name of the converted or surviving partnership or limited partnership upon filing a statement of conversion or merger.

(d) For the purposes of Section 10-8A-302, real property of the surviving business entity, which before the conversion or merger was held in the name of a party to the conversion or merger, is property held in the name of the surviving business entity. A certified copy of the statement of conversion or merger may be filed in the office of the judge of probate in the county for recording transfers of the real property. The certificate shall be recorded in the deed records. The filing will evidence chain of title, but lack of filing does not affect the validity of the transfer.

(e) A filed and, if appropriate, recorded statement of conversion or merger, executed and declared to be accurate pursuant to Section 10-8A-105(c), stating the name of a business entity that is a party to the conversion or merger in whose name property was held before the conversion or merger and the name of the surviving entity, but not containing all of the other information required by subsection (b), operates with respect to the business entity named to the extent provided in subsections (c) and (d).



(Acts 1996, No. 96-528, p. 685, §1.)Section 10-8A-908

Section 10-8A-908
Nonexclusive.

This article is not exclusive. Business entities that may be converted or merged under this article may be converted or merged in any other manner provided by law.



(Acts 1996, No. 96-528, p. 685, §1.)

USA Statutes : alabama