National Conference of Commissioners on Uniform State Laws

211 E. Ontario St., Suite 1300, Chicago, IL 60611
tel 312-915-0195, fax 312-915-0187

For Immediate Release

NEW UNIFORM LIMITED PARTNERSHIP ACT APPROVED

August 16, 2001— The National Conference of Commissioners on Uniform State Laws (NCCUSL), at its 110th Annual Meeting in West Virginia, today approved a new, more flexible version of the Uniform Limited Partnership Act (ULPA). These changes to the ULPA, which governs in every state except Louisiana, were necessary to reflect modern business practices and developments in the law. The ULPA originally dates back to 1916, and since that time has set the standard for limited partnership law in this country. It was extensively revised in 1976 and amended in 1985.

"Modern businesses require ever-greater sophistication in the organizational structures governing their practices," says Howard J. Swibel, chair of the committee that drafted the new ULPA. "The new Uniform Limited Partnership Act recognizes modern-day uses of limited partnerships by providing greater flexibility and protection. The changes also were needed to keep pace with the evolution of other related laws, including NCCUSL's uniform act governing general partnerships, which was promulgated in 1997, and the tax laws."

A limited partnership is distinguished from a general partnership by the existence of limited partners who invest in the partnership; in return for limited liability, the limited partner usually relinquishes any right of control or management of partnership affairs. However, the general partner of a limited partnership traditionally receives no direct liability protection.

When ULPA was last revised, limited partnerships were used extensively within the business community. Today, limited liability partnerships (LLPs) and limited liability companies (LLCs) can meet many of the needs formerly met only by limited partnerships. Limited partnerships are now used primarily in two ways: for family limited partnerships in estate planning arrangements, and for highly-sophisticated, manager-controlled limited partnerships.

Under the new ULPA, limited partnerships may opt to become limited liability limited partnerships (LLLP), simply by so stating in the limited partnership agreement, and in the publicly filed certificate. The primary reason for a limited partnership to elect LLLP-status is to provide direct protection from liability for debts and obligations of the partnership to the general partner of the limited partnership.

ULPA is a default statute: the act governs relations among the partners and between the partners and the partnership only when the partnership agreement does not do so. The new Act also addresses other issues, such as allocating power between general partners and limited partners; and setting fiduciary duties owed by general partners to other general and limited partners.

The drafting committee to revise the Uniform Limited Partnership Act was chaired by Howard J. Swibel of Chicago, Illinois. Other committee members included: Ann Conaway Anker, Wilmington, Delaware; Rex Blackburn, Boise, Idaho; Harry J. Haynsworth, IV, St. Paul, Minnesota; Harriet Lansing, St. Paul, Minnesota; Reed L. Martineau, Salt Lake City, Utah; Thomas A. Shiels, Dover, Delaware; David S. Walker, Des Moines, Iowa. Daniel S. Kleinberger of St. Paul, Minnesota, served as the committee's reporter.

The National Conference of Commissioners on Uniform State Laws is› now in its 110th year. The organization comprises more than 300 lawyers, judges, and law professors, appointed by the states as well as the District of Columbia, Puerto Rico, and the US Virgin Islands, to draft proposals for uniform and model laws and work toward their enactment in their legislatures. Since its inception in 1892, the group has promulgated more than 200 acts, among them such bulwarks of state statutory law as the Uniform Commercial Code, the Uniform Probate Code, and the Uniform Partnership Act.

For further information, please contact John McCabe or Katie Robinson at (312) 915-0195 or Gabrielle Bamberger at (212)333-5222. Also check the NCCUSL website at www.nccusl.org