45-13 Partnerships in General
Download pdf
Loading PDF...
<![CDATA[CHAPTER 45-13PARTNERSHIPS IN GENERAL45-13-01. (101) Definitions. For the purposes of chapters 45-13 through 45-21 unlessthe context otherwise requires:1."Address" means:a.In the case of a registered office or principal executive office, the mailing<br>address, including the zip code, of the actual office location, which may not be<br>only a post-office box; andb.In any other case, the mailing address, including the zip code.2."Authenticated electronic communication" means:a.That the electronic communication is delivered:(1)To the principal place of business of the partnership; or(2)To a managing partner or agent of the partnership authorized by the<br>partnership to receive the electronic communication; andb.That the electronic communication sets forth information from which the<br>partnership can reasonably conclude that the electronic communication was<br>sent by the purported sender.3."Ballot" means a written ballot or a ballot transmitted by electronic communication.4."Business" includes every trade, occupation, and profession.5."Debtor in bankruptcy" means a person that is the subject of:a.An order for relief under title 11 of the United States Code or a comparable<br>order under a successor statute of general application; orb.A comparable order under federal, state, or foreign law governing insolvency.6."Distribution" means a transfer of money or other property from a partnership to a<br>partner in the capacity of the partner as a partner or to the transferee of the partner.7."Domestic organization" means an organization created under the laws of this state.8."Electronic" means relating to technology having electrical, digital, magnetic,<br>wireless, optical, electromagnetic, or similar capabilities.9."Electronic communication" means any form of communication, not directly involving<br>the physical transmission of paper:a.That creates a record that may be retained, retrieved, and reviewed by a<br>recipient of the communication; andb.That may be directly reproduced in paper form by the recipient through an<br>automated process.10."Electronic record" means a record created, generated, sent, communicated,<br>received, or stored by electronic means.Page No. 111."Electronic signature" means an electronic sound, symbol, or process attached to or<br>logically associated with a record and signed or adopted by a person with the intent<br>to sign the record.12."Filed with the secretary of state" means, except as otherwise permitted by law or<br>rule:a.That a record meeting the applicable requirements of this chapter together with<br>the fees provided in section 45-13-05 was delivered or communicated to the<br>secretary of state by a method or medium of communication acceptable by the<br>secretary of state and was determined by the secretary of state to conform to<br>law.b.That the secretary of state did then:(1)Record the actual date on which the record was filed, and if different, the<br>effective date of filing; and(2)Record the record in the office of the secretary of state.13."Foreign limited liability partnership" means a partnership that is formed under laws<br>other than the laws of this state and has the status of a limited liability partnership<br>under those laws.14."Foreign organization" means an organization created under laws other than the<br>laws of this state for a purpose for which an organization may be created under the<br>laws of this state.15."Limited liability partnership" means a partnership that filed a registration under<br>chapter 45-22 and does not have a similar statement in effect in any other<br>jurisdiction.16."Managing partner" means a partner charged with the management of the<br>partnership in this state and if no partners are specifically so designated, then all<br>partners.17."Notice":a.Is given to a partnership:(1)When in writing and mailed or delivered to the principal executive office<br>of the partnership; or(2)When given by a form of electronic communication consented to by a<br>managing partner to which the notice is given if by:(a)Facsimile communication, when directed to a telephone number at<br>which the managing partner has consented to receive notice.(b)Electronic mail, when directed to an electronic mail address at<br>which the managing partner has consented to receive notice.(c)Posting on an electronic network on which the managing partner<br>has consented to receive notice, together with separate notice to<br>the managing partner of the specific posting, upon the later of:[1]The posting; or[2]The giving of the separate notice.Page No. 2(d)Any other form of electronic communication by which a managing<br>partner has consented to receive notice, when directed to the<br>partnership.b.Is given to a partner of the partnership:(1)When in writing and mailed or delivered to the partner at the principal<br>executive office address of the partnership; or(2)When given by a form of electronic communication consented to by the<br>partner to which the notice is given if by:(a)Facsimile communication, when directed to a telephone number at<br>which the partner has consented to receive notice;(b)Electronic mail, when directed to an electronic mail address at<br>which the partner has consented to receive notice;(c)Posting on an electronic network on which the partner has<br>consented to receive notice, together with separate notice to the<br>partner of the specific posting, upon the later of:[1]The posting; or[2]The giving of the separate notice; or(d)Any other form of electronic communication by which the partner<br>has consented to receive notice, when directed to the partner.c.Is given in all other cases:(1)When mailed to the person at an address designated by the person or at<br>the last-known address of the person;(2)When deposited with a nationally recognized overnight delivery service<br>for overnight delivery, if overnight delivery to the person is not available,<br>for delivery as promptly as practicable, to the person at an address<br>designated by the person or at the last-known address of the person;(3)When handed to the person;(4)When left at the office of the person with a clerk or other person in<br>charge of the office or:(a)If there is no one in charge, when left in a conspicuous place in the<br>office; or(b)If the office is closed or the person to be notified has no office,<br>when left at the dwelling, house, or other usual place of abode of<br>the person with some person of suitable age and discretion<br>residing there;(5)When given by a form of electronic communication consented to by the<br>person to whom the notice is given if by:(a)Facsimile communication, when directed to a telephone number at<br>which the person has consented to receive notice;Page No. 3(b)Electronic mail, when directed to an electronic mail address at<br>which the person has consented to receive notice;(c)Posting on an electronic network on which the person has<br>consented to receive notice, together with separate notice to the<br>person of the specific posting, upon the later of:[1]The posting; or[2]The giving of the separate notice; or(d)Any other form of electronic communication by which the person<br>has consented to receive notice, when directed to the person; or(6)When the method is fair and reasonable when all circumstances are<br>considered.d.Is given by mail when deposited in the United States mail with sufficient<br>postage affixed.e.Is given by deposit for delivery when deposited for delivery as provided in<br>paragraph 2 of subdivision c, after having made sufficient arrangements for<br>payment by the sender.f.Is deemed received when given.18."Organization":a.Means, whether a domestic or foreign, a corporation, limited liability company,<br>partnership, limited partnership, limited liability partnership, limited liability<br>limited partnership, and any other person subject to a governing statute; butb.Excludes:(1)A nonprofit corporation, whether a domestic nonprofit corporation which<br>is incorporated under chapter 10-33 or a foreign nonprofit corporation<br>which is incorporated in another jurisdiction; or(2)Any nonprofit limited liability company, whether a domestic nonprofit<br>limited liability company which is organized under chapter 10-36 or a<br>foreign nonprofit limited liability company which is organized in another<br>jurisdiction.19."Partnership" means an association of two or more persons to carry on as coowners<br>a business for profit formed under section 45-14-02, predecessor law, or comparable<br>law of another jurisdiction.20."Partnership agreement" means the agreement, whether written, oral, or implied,<br>among the partners concerning the partnership, including amendments to the<br>partnership agreement.21."Partnership at will" means a partnership in which the partners have not agreed to<br>remain partners until the expiration of a definite term or the completion of a particular<br>undertaking.22."Partnership interest" or "partner's interest in the partnership" means all of the<br>interests of a partner in the partnership, including the transferable interest of the<br>partner and all management and other rights.Page No. 423."Principal executive office" means an office from which the partnership conducts<br>business.24."Property" means all property, real, personal, or mixed, tangible or intangible, or any<br>interest therein.25."Record" means information that is inscribed on a tangible medium or that is stored<br>in an electronic or other medium and is retrievable in perceivable form.26."Signed" means:a.That the signature of a person, which may be a facsimile affixed, engraved,<br>printed,placed,stampedwithindelibleink,transmittedbyfacsimiletelecommunication or electronically, or in any other manner reproduced on the<br>record, is placed on a record with the present intention to authenticate that<br>record; andb.With respect to a record required by this chapter to be filed with the secretary of<br>state, that:(1)The record is signed by a person authorized to do so by this chapter or<br>by a resolution approved by the affirmative vote of the required<br>proportion or number of partners; and(2)The signature and the record are communicated by a method or medium<br>of communication acceptable by the secretary of state.27."State" means a state of the United States, the District of Columbia, the<br>Commonwealth of Puerto Rico, or any territory or insular possession subject to the<br>jurisdiction of the United States.28."Statement" means:a.A statement of partnership authority under section 45-15-03;b.A statement of denial under section 45-15-04;c.A statement of dissociation under section 45-19-04;d.A statement of dissolution under section 45-20-05;e.A statement of conversion under section 45-21-04;f.A statement of merger under section 45-21-07; org.An amendment or cancellation of any of the foregoing.29."Surviving organization" means an organization into which one or more other<br>organizations are merged and which:a.May preexist the merger; orb.Are created by the merger.30."Transfer" includes an assignment, conveyance, lease, mortgage, deed, and<br>encumbrance.45-13-01.1. Legal recognition of electronic records and electronic signatures. Forpurposes of this chapter:Page No. 51.A record of signature may not be denied legal effect or enforceability solely because<br>it is in electronic form;2.A contract may not be denied legal effect or enforceability solely because an<br>electronic record was used in its formation;3.If a provision requires a record to be in writing, an electronic record satisfies the<br>requirement;4.If a provision requires a signature, an electronic signature satisfies the requirement;<br>and5.The provisions of this chapter relating to electronic records and electronic<br>transactions do not limit or supersede chapter 9-16.45-13-02. (102) Knowledge and notice.1.A person knows a fact if the person has actual knowledge of it. A person does not<br>know or have knowledge of a fact merely because the person has reason to know or<br>have knowledge of the fact.2.A person has notice of a fact if the person:a.Knows of the fact;b.Has received notice of the fact as provided in subsection 17 of section<br>45-13-01; orc.Has reason to know the fact exists from all of the facts known to the person at<br>the time in question.3.A person notifies or gives a notification to another by taking the steps provided in<br>subsection 17 of section 45-13-01, whether or not the other person learns of it.4.A person receives a notification as provided in subsection 17 of section 45-13-01.5.Except as otherwise provided in subsection 6, and except as otherwise provided in<br>subsection 17 of section 45-13-01, a person other than an individual knows, has<br>notice, or receives a notification of a fact for purposes of a particular transaction<br>when the individual conducting the transaction for the person knows, has notice, or<br>receives a notification of the fact, or in any event when the fact would have been<br>brought to the attention of the individual if the person had exercised reasonable<br>diligence.a.A person other than an individual exercises reasonable diligence if it maintains<br>reasonable routines for communicating significant information to the individual<br>conducting the transaction for the person and there is reasonable compliance<br>with the routines.b.Reasonable diligence does not require an individual acting for the person to<br>communicate information unless the communication is part of the regular duties<br>of the individual or the individual has reason to know of the transaction and that<br>the transaction would be materially affected by the information.6.Knowledge, notice, or receipt of a notification of a fact relating to the partnership by a<br>managing partner is effective immediately as knowledge by, notice to, or receipt of a<br>notification by the partnership, except in the case of a fraud on the partnership<br>committed by or with the consent of that partner.Page No. 67.With respect to notice given by a form of electronic communication:a.Consent by a managing partner to notice given by electronic communication<br>may be given in writing or by authenticated electronic communication. The<br>partnership is entitled to rely on any consent so given until revoked by the<br>managing partner. However, no revocation affects the validity of any notice<br>given before receipt by the partnership of revocation of the consent.b.An affidavit of a managing partner or an authorized agent of the partnership,<br>that the notice has been given by a form of electronic communication is, in the<br>absence of fraud, prima facie evidence of the facts stated in the affidavit.45-13-02.1. Reservation of legislative right. The legislative assembly reserves theright to amend or repeal the provisions of this chapter. A partnership formed under or governed<br>by this chapter is subject to this reserved right.45-13-03. (103) Effect of partnership agreement - Nonwaivable provisions.1.Except as otherwise provided in subsection 2, relations among the partners and<br>between the partners and the partnership are governed by the partnership<br>agreement. To the extent the partnership agreement does not otherwise provide,<br>chapters 45-13 through 45-21 govern relations among the partners and between the<br>partners and the partnership.2.The partnership agreement may not:a.Vary the rights and duties under section 45-13-05 except to eliminate the duty<br>to provide copies of statements to all of the partners;b.Unreasonably restrict the right of access to books and records under<br>subsection 2 of section 45-16-03;c.Eliminate the duty of loyalty under subsection 2 of section 45-16-04 or<br>subdivision c of subsection 2 of section 45-18-03, but:(1)The partnership agreement may identify specific types or categories of<br>activities that do not violate the duty of loyalty, if not manifestly<br>unreasonable; or(2)All of the partners or a number or percentage specified in the partnership<br>agreement may authorize or ratify, after full disclosure of all material<br>facts, a specific act or transaction that otherwise would violate the duty of<br>loyalty;d.Unreasonably reduce the duty of care under subsection 3 of section 45-16-04<br>or subdivision c of subsection 2 of section 45-18-03;e.Eliminate the obligation of good faith and fair dealing under subsection 4 of<br>section 45-16-04, but the partnership agreement may prescribe the standards<br>by which the performance of the obligation is to be measured, if the standards<br>are not manifestly unreasonable;f.Vary the power to dissociate as a partner under subsection 1 of section<br>45-18-02, except to require the notice under subsection 1 of section 45-18-01 to<br>be in writing;g.Vary the right of a court to expel a partner in the events specified in<br>subsection 5 of section 45-18-01;Page No. 7h.Vary the requirement to wind up the partnership business in cases specified in<br>subsection 4, 5, or 6 of section 45-20-01;i.Vary the law applicable to a limited liability partnership under chapter 45-22; orj.Restrict rights of third parties under chapters 45-13 through 45-21.45-13-04. (104) Supplemental principles of law.1.Unless displaced by particular provisions of chapters 45-13 through 45-21, the<br>principles of law and equity supplement chapters 45-13 through 45-21.2.If an obligation to pay interest arises under chapters 45-13 through 45-21 and the<br>rate is not specified, the rate is that specified in section 47-14-05.45-13-04.1. Partnership name.1.A partnership name filed in a statement under section 45-13-05:a.Must be in the English language or in any other language expressed in English<br>letters or characters;b.May contain the name of any partner;c.May not contain the word "corporation", "company", "incorporated", "limited<br>liability company", "limited partnership", "limited liability partnership", "limited<br>liability limited partnership", or any abbreviation of these words;d.May not contain a word or phrase that indicates or implies that the partnership:(1)Is organized for a purpose other than a lawful purpose for which a<br>partnership may be organized under this chapter; or(2)May not be formed under this chapter; ande.May not be the same as, or deceptively similar to:(1)The name, whether foreign and authorized to do business in this state or<br>domestic, unless filed with the statement is a record which complies with<br>subsection 3 of:(a)Another partnership;(b)A limited liability company;(c)A corporation;(d)A limited partnership;(e)A limited liability partnership; or(f)A limited liability limited partnership;(2)A name, the right of which is, at the time of filing, reserved in the manner<br>providedinsection10-19.1-14,10-32-11,10-33-11,45-10.2-11,45-13-04.2, or 45-22-05;(3)A fictitious name registered in the manner provided in chapter 45-11; orPage No. 8(4)A trade name registered in the manner provided in chapter 47-25.2.The secretary of state shall determine whether a partnership name is deceptively<br>similar to another name for purposes of this chapter.3.If the secretary of state determines a partnership name is deceptively similar to<br>another name for purposes of this chapter, then the partnership name may not be<br>used unless there is filed with the statement:a.The written consent of the holder of the rights to the name to which the<br>proposed name is determined to be deceptively similar; orb.A certified copy of a judgment of a court in this state establishing the earlier<br>right of the applicant to the use of the name in this state.4.This section does not affect the right of a partnership existing on July 1, 1999, or a<br>foreign partnership authorized to do business in this state on July 1, 1999, to<br>continue the use of the foreign partnership's name.5.This section and section 45-13-04.2 do not:a.Abrogate or limit the law of unfair competition or unfair practices; chapter 47-25;<br>the laws of the United States with respect to the right to acquire and protect<br>copyrights, trade names, trademarks, service names, service marks; or any<br>other rights to the exclusive use of a name or symbol.b.Derogate the common law or any principle of equity.6.A partnership that is the surviving organization in a merger with one or more other<br>organizations, or that acquires by sale, lease, or other disposition to or exchange<br>with an organization all or substantially all of the assets of another organization<br>including its name, may have the same name, subject to the requirements of<br>subsection 1, as that used in this state by any of the other organizations if the other<br>organization whose name is sought to be used:a.Is formed under the laws of this state;b.Is authorized to transact business or conduct activities in this state;c.Holds a reserved name in the manner provided in section 10-19.1-14,<br>10-32-11, 10-33-11, 45-10.2-11, 45-13-04.2, or 45-22-05;d.Holds a fictitious name registered in the manner provided in chapter 45-11; ore.Holds a trade name registered in the manner provided in chapter 47-25.7.The use of a name by a partnership in violation of this section does not affect or<br>vitiate the partnership existence of the partnership. However, a court in this state<br>may, upon application of the state or of an interested or affected person, enjoin the<br>partnership from doing business under a name assumed in violation of this section,<br>although a statement may have been filed with the secretary of state.8.If the period of existence of the partnership is expired or a statement of a partnership<br>filed under section 45-13-05 is expired, then the partnership may reacquire the right<br>to use that name by refiling a statement pursuant to section 45-13-05, unless the<br>name was adopted for use or reserved by another person, in which case the filing<br>must be rejected unless the filing is accompanied by a written consent or judgment<br>pursuant to subsection 3.A partnership that cannot reacquire the use of itsPage No. 9partnership name shall adopt a new partnership name that complies with this<br>section.45-13-04.2. Reserved name.1.The exclusive right to the use of a partnership name otherwise permitted by section<br>45-13-04.1 may be reserved by any person.2.The reservation is made by filing with the secretary of state a request that the name<br>be reserved together with the fees provided in section 45-13-05.a.If the name is available for use by the applicant, the secretary of state shall<br>reserve the name for the exclusive use of the applicant for a period of twelve<br>months.b.The reservation may be renewed for successive twelve-month periods.3.The right to the exclusive use of a partnership name reserved pursuant to this<br>section may be transferred to another person by or on behalf of the applicant for<br>whom the name was reserved by filing with the secretary of state a notice of the<br>transfer and specifying the name and address of the transferee.4.The right to the exclusive use of a partnership name reserved pursuant to this<br>section may be canceled by or on behalf of the applicant for whom the name was<br>reserved by filing with the secretary of state a notice of the cancellation.5.The secretary of state may destroy any reserved name request and any index of<br>reserved names one year after expiration.45-13-05. (105) Execution, filing, and recording of statements.1.A statement may be filed in the office of the secretary of state. A certified copy of a<br>statement that is filed in an office in another state may be filed in the office of the<br>secretary of state. Either filing has the effect provided in chapters 45-13 through<br>45-21 with respect to partnership property located in or transactions that occur in this<br>state.2.A certified copy of a statement that has been filed in the office of the secretary of<br>state and recorded in the office for recording transfers of real property has the effect<br>provided for recorded statements in chapters 45-13 through 45-21.A recordedstatement that is not a certified copy of a statement filed in the office of the secretary<br>of state does not have the effect provided for recorded statements in chapters 45-13<br>through 45-21.3.A statement filed by a partnership must be executed by at least two partners. Other<br>statements must be executed by a partner or other person authorized by chapters<br>45-13 through 45-21. An individual who executes a statement as, or on behalf of, a<br>partner or other person named as a partner in a statement shall personally declare<br>under penalty of perjury that the contents of the statement are accurate.4.A person authorized by chapters 45-13 through 45-21 to file a statement may amend<br>or cancel the statement by filing an amendment or cancellation that names the<br>partnership, identifies the statement, and states the substance of the amendment or<br>cancellation.5.A person who files a statement pursuant to this section shall promptly send a copy of<br>the statement to every nonfiling partner and to any other person named as a partner<br>in the statement. Failure to send a copy of a statement to a partner or other person<br>does not limit the effectiveness of the statement as to a person not a partner.Page No. 106.Any statement filed under this section must be renewed every five years from the<br>date of the initial filing. A statement of renewal must be executed by the partnership<br>in the same manner as previously executed. If the secretary of state finds that the<br>statement of renewal conforms to the requirements of this section, and the proper<br>filing fee has been paid, the secretary of state shall file the statement of renewal. If<br>the secretary of state finds that the statement of renewal does not so conform, the<br>secretary of state shall return the statement of renewal to the partnership for any<br>necessary corrections. If the statement of renewal is not returned corrected within<br>thirty days after the statement of renewal was returned for correction, the statement<br>is subject to cancellation. If any partnership fails to file the statement of renewal, the<br>secretary of state shall cancel the initial statement and shall mail notice of the<br>cancellation to the last address of the principal executive office as recorded in the<br>office of the secretary of state.7.A partnership shall notify the secretary of state in writing upon a change in address<br>of the partnership's principal executive office. A statement of renewal filed by the<br>secretary of state which reflects a change of address of the principal executive office<br>of the partnership may serve as a notice under this subsection.8.a.The secretary of state shall charge and collect a fee for:(1)Filing a statement under this section, one hundred dollars.(2)Filing an amendment under this section, forty dollars.(3)Filing a cancellation under this section, twenty-five dollars.(4)Filing a renewal under this section, forty dollars.(5)Filing a request to reserve a partnership name, ten dollars.(6)Filing a notice of transfer of a reserved partnership name, ten dollars.(7)Filing a cancellation of reserved partnership name, ten dollars.(8)Filing a statement of conversion or abandonment of conversion, fifty<br>dollars and:(a)If the organization resulting from the conversion will be a domestic<br>organization governed by the laws of this state, then the fees<br>provided by the governing laws to establish or register a new<br>organization like the organization resulting from the conversion; or(b)If the organization resulting from the conversion will be a foreign<br>organization that will transact business in this state, then the fees<br>provided by the governing laws to obtain a certificate of authority or<br>register an organization like the organization resulting from the<br>conversion.(9)Filing a statement of merger, fifty dollars.(10)Any record submitted for approval before the actual time of submission<br>for filing, half of the fee provided in this section for filing the record.b.The officer responsible for recording transfers of real property may collect a fee<br>for recording a statement.45-13-06. (106) Law governing internal relations.Page No. 111.Except as otherwise provided in subsection 2, the law of the jurisdiction in which the<br>principal executive office of the partnership is located governs relations among the<br>partners and between the partners and the partnership.2.The law of this state governs relations among the partners and between the partners<br>and the partnership and the liability of partners for an obligation of a limited liability<br>partnership.45-13-07. (107) Partnership subject to amendment or repeal. A partnership governedby chapters 45-13 through 45-21 is subject to any amendment to or repeal of chapters 45-13<br>through 45-21.Page No. 12Document Outlinechapter 45-13 partnerships in general]]>