Chap. 216.—An ACT to make uniform the law relating to limited partner-
ships. {S B 243]
Approved March 14, 1918.

Be it enacted by the general assembly of Virginia as follows:

Section 1. Limited partnership defined.—A Timited partnership
is a partnership formed by two or more persons under the provisions
of section two, having as members one or more general partners and
oue or more limited partners. The limited partners as such shall
not be bound by the obligations of the partnership.

See. 2. Formation.—(1) Two or more persons desiring to form
a limited partnership shall ;

(a) Sign and swear to a certificate, which shall state

I. The name of the partnership,

II. ‘The character of the business,

III. The location of the principal place of business,

IV. The name and place of residence of each member general
and limited partners being respectively designated.
V. The term for which the partnership is to exist,

VI. The amount of cash and a description of and the agreec
value of the other property contributed by each limited partner,

VII. The additional contributions, if any, agreed to be made by
each limited partner and the times at which or events on the hap
pening of which they shall be made, _

Vii. The time, if agreed upon, when the contribution of eack
limited partner is to be returned,

IX. The share of the profits or the other compensation by wa}
of income which each limited partner shall receive by reason of hi:
contribution,

X. The right, if given, of a limited partner to substitute an as
signee as contributor in his place, and the terms and conditions o:
the substitution,

X¥. The right, if given, of the partnerships to admit additiona
limited partners,

XII. The right, if given, of one or more of the limited part
ners to priority over other limited partners, as to contributions 01
as to compensation by way of income, and the nature of such pri

orit
X01. The right, if given, of the remaining general partner o1
partners to continue the business on the death, retirement or insan
ity of a general partner, and

XIV. The right, if given, of a limited partner to demand anc
receive property other than cash in return for his contribution.

(b) File for recerd the certificate in the clerk’s office of the
county or city in which a charter for the conduct of such busines:
would be required to be recorded, ,

(2) A lmited partnership is formed if there has been substan.
tial compliance in good faith with the requirements of paragrapt

Sec? 8. Business which may be carried on.—A limited partner
ship may carry on any business which a partnership without lim.
ited partners may carry on. :

Sec. 4. Character of limited partner’s contribution.—The con
tributions of a limited partner may be cash or other property, but
not services.

Sec. 5. A name not to contain surname of limited partner.
exceptions.—(1) The surname of a limited partner shall not appea
in the partnership name, unless

(a) It is also the surname of a general partner, or

(b) Prior to the time when the limited partner became such
the business had been carried on under a name in which his sur.
name appeared.

(2) A limited partner whose name appears in a partnershir
name contrary to the provisions of paragraph (1) is liable as a gen-
eral partner to partnership creditors who extend credit to the part.
nership without actual knowledge that he is not a general partner

Sec. 6. Liability for false statements in certificate—If the cer.
tificate contains a false statement, one who suffers loss by reliance
on such statement may hold liable any party to the certificate wh
knew the statement to be false

(a) At the time he signed the certificate, or

(b) Subsequently, but within in a sufficient time before th
statement was relied upon to enable him to cancel or amend th
certificate, or to file a petition for its cancellation or amendmen
as provided in section twenty-five (3).

Sec. 7. Limited partner not liable to creditors.—A limited part
ner shall not become liable as a general partner unless, in additiot
to the exercise of his rights and powers as a limited partner, h
takes part in the control of the business.

Sec. 8. Admission of additional limited partners.—After th
formation of a limited partnership, additional limited partners may
be admitted upon filing an amendment to the original certificate i
accordance with the requirements of section twenty-five.

Sec. 9. Rights, powers and liabilities of a general partner.— (1)
A general partner shall have all the rights and powers and be sub
ject to all the restrictions and liabilities of a partner in a partner.
ship without limited partners, except that without the written con.
sent or ratification of the specific act by all the limited partners, s
general partner or all of the general partners have no authority tc

(a2) Do any act in contravention of the certificate,

(b) Do any act which would make it impossible to carry on
the ordinary business of the partnership,

c) Confess a judgment against the partnership,

d) Possess partnership property, or assign their rights in spe-
cific partnership property, for other than a partnership purpose,

e) Admit a person as a general partner,

f) Admit a person as a limited partner, unless the right so to
do is given in the certificate,

(a) Continue the business with partnership property on the
death, retirement or insanity of a general partner, unless the right
so to do is given in the certificate.

Sec. 10. Rights of a limited partner.—A limited partner shall
have the same rights as a general partner to

(a) Have the partnership books kept at the principal place of
business of the partnership, and at all times to inspect and copy
any of them,

(b) Have on demand true and full information of all things
affecting the partnership, and a formal account of partnership
affairs whenever circumstances render it just and reasonable, and

c) Have dissolution and winding up by decree of court.

‘S} A limited partner shall have the right to receive a share
of the profits or other compensation by way of income, and to the
return of his contribution as provided in sections fifteen and sixteen.

Sec. 11. Status of person erroneously believing himself a lim-
ited partner.—A person who has contributed to the capital of a
ousiness conducted by a person or partnership erroneously believ-
ng that he has become a limited partner in a limited partnership,

ry e

s not, by reason of his exercise of the rights of a limited partner,
a general partner with the person or in the partnership carrying
on the business, or bound by the obligations of such person or part-
nership; provided that on ascertaining the mistake he promptly
renounces his interest in the profits of the business, or other com-
pensation by way of income.

Sec. 12. One person both general and limited partner.—(1) A
person may be a general partner and a limited partner in the same
partnership at the same time.

(2) A person who is a general, and also at the same time @
limited partner, shall have all the rights and powers and be sub-
ject to all the restrictions of a general partner; except that, in respect
to his contribution, he shall have the rights against the other mem-
bers which he would have had if he were not also a general partner.

Sec. 13. Loans and other business transactions with limited
partner.—(1) A limited partner also may loan money to and trans-
act other business with the partnership, and, unless he is also a gen-
eral partner, receive on account of resulting claims against the part-
nership, with general creditors, a pro rata share of the assets. No
limited partner shall in respect to any such claim

(a) Receive or hold as collateral security any partnership prop-
erty, or

tb) Receive from a general partner or the partnership any pay-
ment, conveyance, or release from liability, if at the time the assets
of the partnership are not sufficient to discharge partnership liabili-
ties to persons not claiming as general or limited partners.

(2) The receiving of collateral security, or a payment, convey-
ance, or release in violation of the provisions of paragraph (1) is
a fraud on the creditors of the partnership.

Sec. 14. Relation of limited partners inter se—Where there are
several limited partners the members may agree that one or more
of the limited partners shall have a priority over other limited
partners as to the return of their contributions, as to their compen-
sation by way of income, or as to any other matter. If such an
agreement is made it shall be stated in the certificate, and in the
absence of such a statment all the limited partners shall stand upon
equal footing.

Sec. 15. Compensation of limited partner.—A limited partner
may receive from the partnership the share of the profits or the
compensation by way of income stipulated for in the certificate;
provided, that after such payment is made, whether from the prop-
erty of the partnership or that of a general partner, the partner-
ship assets are in excess of all liabilities of the partnership except
liabilities to limited partners on account of their contributions and
to general partners.

Sec. 16. Withdrawal or reduction of limited partner’s contribu-
tion.—(1) A limited partner shall not receive from a general part-
ner or out of partnership any property any part of his contribution
unt

(a) All liabilities of the partnership, except liabilities to gen-
eral partners and to limited partners on account of their contribu-
tions, have been paid or there remains property of the partnership
sufficient to pay them,

(b) The consent of all members is had, unless the return of the
contribution may be rightfully demanded under the provisions of
paragraph (2), and

(c) The certificate is cancelled or so amended as to set forth the
withdrawal or reduction.

(2) Subject to the provisions of paragraph (1) a limited part-
ner may rightfully demand the return of his contribution.

a) On the dissolution of a partnership, or

b) When the date specified in the certificate for its return has
arrived, or

(c) After he has given six months’ notice in writing to all
other members, if no time is specified in the certificate either for the
return of the contribution or for the dissolution of the partnership.

(3) In the absence of any statement in the certificate to the
contrary or the consent of all members, a limited partner, irrespec-
tive of the nature of his contribution, has only the mght to demand
and receive cash in return for his contribution.

(4) A limited partner may have the partnership dissolved and
its affairs wound up when

(a) He rightfully but unsuccessfully demands the return of
his contribution, or .

(b) The other habilities of the partnership have not been paid,
or the partnership property is insufficient for their payment as
required by paragraph (1a) and the limited partner would other-
wise be entitled to the return of his contribution.

Sec. 17. Liability of limited partner to partnership.—(1) A
limited partner is liable to the partnership

(a) For the difference between his contribution as actually
made and that stated in the certificate as having been made, and

(b) For any unpaid contribution which he agreed in the cer-
tificate to make in the future at the time and on the conditions
stated in the certificate.

(2) <A limited partner holds as trustee for the partnership

(a) Specific property stated in the certificate as contributed by
him, but which was not contributed or which has been wrongfully
returned, and

(b) Money or other property wrongfully paid or conveyed to
him on account of his contribution.

(3) The habilities of a limited partner as set forth in this sec-
tion can be waived or compromised only by the consent of all mem-
bers; but a waiver or compromise shall not affect the right of a
creditor of a partnership, who extended credit or whose claim arose
after the filing and before a cancellation or amendment of the cer.
tificate, to enforce such liabilities.

(4) When a contributor has rightfully received the return ir
whole or in part of the capital of his contribution, he is neverthe.
less liable to the partnership for any sum, not in excess of suck
return with interest, necessary to discharge its liabilities to all cred.
itors who extended credit or whose claims arose before such return.

Sec. 18. Nature of limited partner’s interest in partnership.—A
limited partner’s interest in the partnership is personal property.

Sec. 19. Assignment of limited partner’s interest.—(1) A lim-
ited partner’s interest, is assignable.

(2) A substituted limited partner is a person admitted to all
the rights of a limited partner who has died or has assigned his
interest in a partnership.

(3) An assignee, who does not become a substituted limited
partner, has no right to require any information or account of the
partnership transactions or to inspect the partnership books; he is
only entitled to receive the share of the profits or other compen-
sation by way of income, or the return of his contribution, to which
his assignor would otherwise be entitled.

(4) An assignee shall have the right to become a substituted
limited partner if all the members (except the assignor) consent
thereto or if the assignor, being thereunto empowered by the cer-
tificate, gives the assignee that right.

(5) An assignee becomes a substituted limited partner when
the certificate is appropriately amended in accordance with section
twenty-five.

(6) The substituted limited partner has all the rights and pow-
ers, and is subject to all the restrictions and liabilities of his assignor,
except those liabilities of which he was ignorant at the time he
became a limited partner and which could not be ascertained from
the certificate.

(7) The substitution of the assignee as a limited partner does
not release the assignor from lability to the partnership under sec-
tions six and seventeen.

Sec. 20. Effect of retirement, death or insanity of a general
partner.—The retirement, death or insanity of a general partner
dissolves the partnership, unless the business is continued by the
remaining general partners

fs Under a right so to do stated in the certificate, or

b) With the consent of all members.

Sec. 21. Death of limited partner.—(1) On the death of a lim-
ited partner his executor or administrator shall have all the rights
of a limited partner for the purpose of settling his estate, and such
power as the deceased had to constitute his assignee a substituted
limited partner.

(2) The estate of a deceased limited partner shall be liable for
all his liabilities as a limited partner.

Sec. 22. Rights of creditors of limited partner.—(1) On due
application to a court of competent jurisdiction by any judgment
creditor of a limited partner, the court may charge the interest of
the indebted limited partner with payment of the unsatisfied amount
>f the judgment debt; and may appoint a receiver, and make all
other orders, directions, and inquiries which the cimcumstances of
che case may require.

(2) The interest may be redeemed with the separate property of
any general partner, but may not be redeemed with partnershiy
property.

(3) The remedies conferred by paragraph (1) shall not b
deemed exclusive of others which may exist.

(4) Nothing in this act shall be held to deprive a limited part:
ner of his statutory exemption.

Sec. 23. Distribution of assets—(1) In settling accounts afte1
dissolution the liabilities of the partnership shall be entitled to pay.
ment in the following order:

(a) Those to creditors, in the order of priority as provided by
law, except those to limited partners on account of their contribu.
tions, and to general partners,

b) Those to limited partners in respect to their share of the
profits and other compensation by way of income on their contri.
butions,

(c) Those to limited partners in respect to the capital of thei
contributions,

d) Those to general partners other than for capital and profits

$} Those to general partners in respect to profits,

tb Those to general partners in respect to capital.

2) Subject to any statement in the certificate or to subsequen
agreement, limited partners share in the partnership assets in respect
to their claims for capital, and in respect to their claims for profit:
or for compensation by way of income on their contributions respect
ively, in proportion to the respective amounts of such claims.

Bee, 24. When certificates shall be cancelled or amended.—(1)
The certificate shall be cancelled when the partnership is dissolvec
or all limited partners cease to be such.

2) A certificate shall be amended when
a) ‘There is a change in the name of the partnership or 11
the amount or character of the contribution of any limited partner

b) A person is substituted as a limited partner,

c) An additional limited partner is admitted,

d) <A person is admitted as a general partner,

e) A general partner retires, dies or becomes insane, and the
business is continued under section twenty, 7

(f) There is a change in the character of the business of th
partnership, ,

(g) ‘There is a false or erroneous statement in the certificate,

(h) There is a change in the time as stated in the certificat
for the dissolution of the partnership or for the return of a con
tribution,

(i) A time is fixed for the dissolution of the partnership, or thi
return of a contribution, no time having been specified in the cer
tificate, or

(j) The members desire to make a change in any other state
ment in the certificate in order that it shall accurately represent th
agreement between them.

Sec. 25. Requirements for amendment and for cancellation o
certificate—(1) The writing to amend a certificate shall
(a) Conform to the requirements of section two (1a) as far
as necessary to set forth clearly the change in the certificate which
it is desired to make, and

(b) Be signed and sworn to by all members, and an amend-
ment substituting a limited partner or adding a limited or general
partner shall be signed also by the member to be substituted or
added, and when a limited partner is to be substituted, the amend-
ment shall also be signed by the assigning limited partner.

(2) The writing to cancel a certificate shall be signed by all
members.

(3) <A person desiring the concellation or amendment of a cer-
tificate, if any person designated in paragraphs (1) and (2) as a
person who must execute the writing refuses to do so, may petition
the court in whose clerk’s office the certificate was recorded to direct
a cancellation or amendment thereof.

(4) If the court finds that the petitioner has a right to have
the writing to amend or cancel the certificate executed by a person
who refuses to do so, it shall order the cancellation or amendment
of the certificate to be recorded in the clerk’s office, setting forth in
its decree the terms of any such amendment.

(5) A certificate is amended or canceled when there is filed
for record in the office designated in section two (1)b

(a) A writing in accordance with the provisions of paragraph
(1), or (2) of this section, <

(b) A certified copy of the order of court in accordance with
the provisions of paragraph (4) of this section.

(6) After the certificate is duly amended in accordance with
this section, the amended certificate shall thereafter be for all pur-
poses the certificate provided for by this act.

Sec. 26. Parties to actions——A contributor, unless he is a gen-
eral partner, is not a proper party to proceedings by or against a
partnership except where the object is to enforce a limited partner’s
right against or liability to the partnership.

Sec. 27. Name of act.—This act may be cited as the uniform
limited partnership act. :

Sec. 28. Rules of construction.—(1) The rule that statutes in
derogation of the common law as to be strictly construed shall have
no application to this act.

(2) This act shall be so interpreted and construed as to effect
its general purpose to make uniform the law of those States which
enact it.

(3) This act shall not be so construed as to impair the obli-
gations of any contract existing when the act goes into effect, nor
to affect any action or proceedings begun or right accrued before
this act takes effect.

Sec. 29. Rules for cases not provided for in this act.—In any
case not provided for in this act the rules of law and equity, includ-
ing the law merchant, shall govern.

Sec. 80. Provisions for existing limited partnerships.—(1) A
limited partnership or partnership association formed under any
statute of this State prior to the adoption of this act, may become
a limited partnership under this act by complying with the provis-
ions of section two; provided the certificate sets forth

(a) The amount of the original contribution of each limited
partner, and the time when the contribution was made, and |

(b) That the property of the partnership exceeds the amount
sufficient to discharge its liabilities to persons not claiming as gen-
eral or limited partners by an amount greater than the sum of the
contributions of its limited partners.

(2) A limited partnership or partnership association formed
under any statute of this State prior to the adoption of this act,
until or unless it becomes a limited partnership under this act, shall
continue to be governed by the provisions of chapter one hundred
and thirty-five of the Code, except that such partnership shall not
be renewed unless so provided in the original agreement.

Sec. 31. Acts repealed.—Except as affecting existing limited
partnerships or partnership associations to the extent set forth in
section thirty, chapter one hundred and thirty-five of the Code is
hereby repealed.