CHAPTER 153. LIMITED PARTNERSHIPS
BUSINESS ORGANIZATIONS CODE
TITLE 4. PARTNERSHIPS
CHAPTER 153. LIMITED PARTNERSHIPS
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 153.001. DEFINITION. In this chapter, "other limited
partnership provisions" means the provisions of Title 1 and
Chapters 151 and 154, to the extent applicable to limited
partnerships.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 153.002. CONSTRUCTION. (a) This chapter and the other
limited partnership provisions shall be applied and construed to
effect its general purpose to make uniform the law with respect
to limited partnerships among states that have similar laws.
(b) The rule that a statute in derogation of the common law is
to be strictly construed does not apply to this chapter and the
other limited partnership provisions.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 153.003. APPLICABILITY OF OTHER LAWS. (a) Except as
provided by Subsection (b), in a case not provided for by this
chapter and the other limited partnership provisions, the
provisions of Chapter 152 governing partnerships that are not
limited partnerships and the rules of law and equity govern.
(b) The powers and duties of a limited partner shall not be
governed by a provision of Chapter 152 that would be inconsistent
with the nature and role of a limited partner as contemplated by
this chapter.
(c) A limited partner shall not have any obligation or duty of a
general partner solely by reason of being a limited partner.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 153.004. NONWAIVABLE TITLE 1 PROVISIONS. (a) Except as
provided by this section, the following provisions of Title 1 may
not be waived or modified in the partnership agreement of a
limited partnership:
(1) Chapter 1, if the provision is used to interpret a provision
or define a word or phrase contained in a section listed in this
subsection;
(2) Chapter 2, other than Section 2.104(c)(2), 2.104(c)(3), or
2.113;
(3) Chapter 3, other than Subchapters C and E of that chapter
and Section 3.151 (provided, that in all events a partnership
agreement may not validly waive or modify Sections 153.551 and
153.552); or
(4) Chapter 4, 5, 10, 11, or 12, other than Section 11.058.
(b) A provision listed in Subsection (a) may be waived or
modified in the partnership agreement if the provision that is
waived or modified authorizes the limited partnership to waive or
modify the provision in the limited partnership's governing
documents.
(c) A provision listed in Subsection (a) may be modified in the
partnership agreement if the provision that is modified
specifies:
(1) the person or group of persons who are entitled to approve a
modification; or
(2) the vote or other method by which a modification is required
to be approved.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 153.005. WAIVER OR MODIFICATION OF RIGHTS OF THIRD PARTIES.
A provision in this title or in that part of Title 1 applicable
to a limited partnership that grants a right to a person, other
than a general partner, a limited partner, or assignee of a
partnership interest in a limited partnership, may be waived or
modified in the partnership agreement of the limited partnership
only if the person consents to the waiver or modification.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
SUBCHAPTER B. SUPPLEMENTAL PROVISIONS REGARDING AMENDMENT TO
CERTIFICATE OF FORMATION
Sec. 153.051. REQUIRED AMENDMENT TO CERTIFICATE OF FORMATION.
(a) A general partner shall file a certificate of amendment
reflecting the occurrence of one or more of the following events
not later than the 30th day after the date on which the event
occurred:
(1) the admission of a new general partner;
(2) the withdrawal of a general partner;
(3) a change in the name of the limited partnership; or
(4) except as provided by Section 5.202, a change in:
(A) the address of the registered office; or
(B) the name or address of the registered agent of the limited
partnership.
(b) A general partner who becomes aware that a statement in a
certificate of formation was false when made or that a matter
described in the certificate has changed, making the certificate
false in any material respect, shall promptly amend the
certificate to make it accurate.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 153.052. DISCRETIONARY AMENDMENT TO CERTIFICATE OF
FORMATION. (a) A certificate of formation may be amended at any
time for a proper purpose as determined by the general partners.
(b) A certificate of formation may be amended to state the name,
mailing address, and street address of the business or residence
of each person winding up the limited partnership's affairs if,
after an event requiring the winding up of a limited partnership
but before the limited partnership is reconstituted or a
certificate of termination is filed as provided by Section
11.101:
(1) the certificate of formation has been amended to reflect the
withdrawal of all general partners; or
(2) a person who is not shown on the certificate of formation as
a general partner is carrying out the winding up of a limited
partnership's affairs.
(c) If the certificate of formation is amended under Subsection
(b), each person winding up the limited partnership's affairs
shall execute and file the certificate of amendment. A person
winding up the partnership's affairs is not subject to liability
as a general partner because of the filing of the certificate of
amendment.
(d) A general partner who is not winding up the limited
partnership's affairs is not required to execute and file a
certificate of amendment as provided by this section.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Amended by:
Acts 2005, 79th Leg., Ch.
64, Sec. 85, eff. January 1, 2006.
Acts 2007, 80th Leg., R.S., Ch.
688, Sec. 120, eff. September 1, 2007.
Sec. 153.053. RESTATED CERTIFICATE OF FORMATION. (a) The
general partners may adopt at any time a restated certificate of
formation that does not contain an amendment to the certificate
of formation.
(b) A restated certificate of formation that contains an
amendment to the certificate of formation may be adopted at any
time for a proper purpose as determined by the general partners.
Added by Acts 2005, 79th Leg., Ch.
64, Sec. 86, eff. January 1, 2006.
SUBCHAPTER C. LIMITED PARTNERS
Sec. 153.101. ADMISSION OF LIMITED PARTNERS. (a) In connection
with the formation of a limited partnership, a person acquiring a
limited partnership interest becomes a limited partner on the
later of:
(1) the date on which the limited partnership is formed; or
(2) the date stated in the records of the limited partnership as
the date on which the person becomes a limited partner or, if
that date is not stated in those records, the date on which the
person's admission is first reflected in the records of the
limited partnership.
(b) After a limited partnership is formed, a person who acquires
a partnership interest directly from the limited partnership
becomes a new limited partner on:
(1) compliance with the provisions of the partnership agreement
governing admission of new limited partners; or
(2) if the partnership agreement does not contain relevant
admission provisions, the written consent of all partners.
(c) After formation of a limited partnership, an assignee of a
partnership interest becomes a new limited partner as provided by
Section 153.253(a).
(d) A person may be a limited partner unless the person lacks
capacity apart from this chapter and the other limited
partnership provisions.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 153.102. LIABILITY TO THIRD PARTIES. (a) A limited
partner is not liable for the obligations of a limited
partnership unless:
(1) the limited partner is also a general partner; or
(2) in addition to the exercise of the limited partner's rights
and powers as a limited partner, the limited partner participates
in the control of the business.
(b) If the limited partner participates in the control of the
business, the limited partner is liable only to a person who
transacts business with the limited partnership reasonably
believing, based on the limited partner's conduct, that the
limited partner is a general partner.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 153.103. ACTIONS NOT CONSTITUTING PARTICIPATION IN BUSINESS
FOR LIABILITY PURPOSES. For purposes of this section and
Sections 153.102, 153.104, and 153.105, a limited partner does
not participate in the control of the business because the
limited partner has or has acted in one or more of the following
capacities or possesses or exercises one or more of the following
powers:
(1) acting as:
(A) a contractor for or an officer or other agent or employee of
the limited partnership;
(B) a contractor for or an agent or employee of a general
partner;
(C) an officer, director, or stockholder of a corporate general
partner;
(D) a partner of a partnership that is a general partner of the
limited partnership; or
(E) a member or manager of a limited liability company that is a
general partner of the limited partnership;
(2) acting in a capacity similar to that described in
Subdivision (1) with any other person that is a general partner
of the limited partnership;
(3) consulting with or advising a general partner on any matter,
including the business of the limited partnership;
(4) acting as surety, guarantor, or endorser for the limited
partnership, guaranteeing or assuming one or more specific
obligations of the limited partnership, or providing collateral
for borrowings of the limited partnership;
(5) calling, requesting, attending, or participating in a
meeting of the partners or the limited partners;
(6) winding up the business of a limited partnership under
Chapter 11 and Subchapter K of this chapter;
(7) taking an action required or permitted by law to bring,
pursue, settle, or otherwise terminate a derivative action in the
right of the limited partnership;
(8) serving on a committee of the limited partnership or the
limited partners; or
(9) proposing, approving, or disapproving, by vote or otherwise,
one or more of the following matters:
(A) the winding up or termination of the limited partnership;
(B) an election to reconstitute the limited partnership or
continue the business of the limited partnership;
(C) the sale, exchange, lease, mortgage, assignment, pledge, or
other transfer of, or granting of a security interest in, an
asset of the limited partnership;
(D) the incurring, renewal, refinancing, or payment or other
discharge of indebtedness by the limited partnership;
(E) a change in the nature of the business of the limited
partnership;
(F) the admission, removal, or retention of a general partner;
(G) the admission, removal, or retention of a limited partner;
(H) a transaction or other matter involving an actual or
potential conflict of interest;
(I) an amendment to the partnership agreement or certificate of
formation;
(J) if the limited partnership is qualified as an investment
company under the federal Investment Company Act of 1940 (15
U.S.C. Section 80a-1 et seq.), as amended, any matter required by
that Act or the rules and regulations of the Securities and
Exchange Commission under that Act, to be approved by the holders
of beneficial interests in an investment company, including:
(i) electing directors or trustees of the investment company;
(ii) approving or terminating an investment advisory or
underwriting contract;
(iii) approving an auditor; and
(iv) acting on another matter that that Act requires to be
approved by the holders of beneficial interests in the investment
company;
(K) indemnification of a general partner under Chapter 8 or
otherwise;
(L) any other matter stated in the partnership agreement;
(M) the exercising of a right or power granted or permitted to
limited partners under this code and not specifically enumerated
in this section; or
(N) the merger or conversion of a limited partnership.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
688, Sec. 121, eff. September 1, 2007.
Acts 2009, 81st Leg., R.S., Ch.
84, Sec. 51, eff. September 1, 2009.
Sec. 153.104. ENUMERATION OF ACTIONS NOT EXCLUSIVE. The
enumeration in Section 153.103 does not mean that a limited
partner who has acted or acts in another capacity or possesses or
exercises another power constitutes participation by that limited
partner in the control of the business of the limited
partnership.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 153.105. CREATION OF RIGHTS. Sections 153.103 and 153.104
do not create rights of limited partners. Rights of limited
partners may be created only by:
(1) the certificate of formation;
(2) the partnership agreement;
(3) other sections of this chapter; or
(4) the other limited partnership provisions.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 153.106. ERRONEOUS BELIEF OF CONTRIBUTOR BEING LIMITED
PARTNER. Except as provided by Section 153.109, a person who
erroneously but in good faith believes that the person has made a
contribution to and has become a limited partner in a limited
partnership is not liable as a general partner or otherwise
obligated because of making or attempting to make the
contribution, receiving distributions from the partnership, or
exercising the rights of a limited partner if, within a
reasonable time after ascertaining the mistake, the person:
(1) causes an appropriate certificate of formation or
certificate of amendment to be signed and filed;
(2) files or causes to be filed with the secretary of state a
written statement in accordance with Section 153.107; or
(3) withdraws from participation in future profits of the
enterprise by executing and filing with the secretary of state a
certificate declaring the person's withdrawal under this section.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 153.107. STATEMENT REQUIRED FOR LIABILITY PROTECTION. (a)
A written statement filed under Section 153.106(2) must be
entitled "Filing under Section 153.106(2), Business Organizations
Code," and contain:
(1) the name of the partnership;
(2) the name and mailing address of the person signing the
written statement; and
(3) a statement that:
(A) the person signing the written statement acquired a limited
partnership interest in the partnership;
(B) the person signing the written statement has made an effort
to cause a general partner of the partnership to file an accurate
certificate of formation required by the code and the general
partner has failed or refused to file the certificate; and
(C) the statement is being filed under Section 153.106(2) and
the person signing the written statement is claiming status as a
limited partner of the partnership named in the document.
(b) The statement is effective for 180 days.
(c) A statement filed under Section 153.106(2) may be signed by
more than one person claiming limited partnership status under
this section and Sections 153.106, 153.108, and 153.109.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 153.108. REQUIREMENTS FOR LIABILITY PROTECTION FOLLOWING
EXPIRATION OF STATEMENT. (a) If a certificate described by
Section 153.106(1) has not been filed before the expiration of
the 180-day period described by Section 153.107(b), the person
filing the statement has no further protection from liability
under Section 153.106(2) unless the person complies with this
section. To be protected under Section 153.106 the person must,
not later than the 10th day after the date of expiration of the
180-day period:
(1) withdraw under Section 153.106(3); or
(2) bring an action under Section 153.554 to compel the
execution and filing of a certificate of formation or amendment.
(b) If an action is brought within the applicable period and is
diligently prosecuted to conclusion, the person bringing the
action continues to be protected from liability under Section
153.106(2) until the action is finally decided adversely to that
person.
(c) This section and Sections 153.106, 153.107, and 153.109 do
not protect a person from liability that arises under Sections
153.102-153.105.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 153.109. LIABILITY OF ERRONEOUS CONTRIBUTOR. Regardless of
whether Sections 153.106, 153.107, and 153.108 apply, a person
who makes a contribution in the circumstances described by
Section 153.106 is liable as a general partner to a third party
who transacts business with the partnership before an action
taken under Section 153.106 if:
(1) the contributor has knowledge or notice that no certificate
has been filed or that the certificate inaccurately referred to
the contributor as a general partner; and
(2) the third party reasonably believed, based on the
contributor's conduct, that the contributor was a general partner
at the time of the transaction and extended credit to the
partnership in reasonable reliance on the credit of the
contributor.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 153.110. WITHDRAWAL OF LIMITED PARTNER. A limited partner
may withdraw from a limited partnership only at the time or on
the occurrence of an event specified in a written partnership
agreement. The withdrawal of the partner must be made in
accordance with that agreement.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 153.111. DISTRIBUTION ON WITHDRAWAL. Except as otherwise
provided by Section 153.210 or the partnership agreement, on
withdrawal a withdrawing limited partner is entitled to receive,
not later than a reasonable time after withdrawal, the fair value
of that limited partner's interest in the limited partnership as
of the date of withdrawal.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 153.112. RECEIPT OF WRONGFUL DISTRIBUTION. A limited
partner who receives a distribution that is not permitted under
Section 153.210 is not required to return the distribution unless
the limited partner knew that the distribution violated the
prohibition of Section 153.210. This section does not affect an
obligation of the limited partner under the partnership agreement
or other applicable law to return the distribution.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 153.113. POWERS OF ESTATE OF LIMITED PARTNER WHO IS
DECEASED OR INCAPACITATED. If a limited partner who is an
individual dies or a court adjudges the limited partner to be
incapacitated in managing the limited partner's person or
property, the limited partner's executor, administrator,
guardian, conservator, or other legal representative may exercise
all of the limited partner's rights and powers to settle the
limited partner's estate or administer the limited partner's
property, including the power of an assignee to become a limited
partner under the partnership agreement.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
SUBCHAPTER D. GENERAL PARTNERS
Sec. 153.151. ADMISSION OF GENERAL PARTNERS. (a) After a
limited partnership is formed, additional general partners may be
admitted:
(1) in the manner provided by a written partnership agreement;
or
(2) if a written partnership agreement does not provide for the
admission of additional general partners, with the written
consent of all partners.
(b) A person may be a general partner unless the person lacks
capacity apart from this chapter.
(c) A written partnership agreement may provide that a person
may be admitted as a general partner in a limited partnership,
including as a sole general partner, and may acquire a
partnership interest in the limited partnership without:
(1) making a contribution to the limited partnership; or
(2) assuming an obligation to make a contribution to the limited
partnership.
(d) A written partnership agreement may provide that a person
may be admitted as a general partner in a limited partnership,
including as the sole general partner, without acquiring a
partnership interest in the limited partnership.
(e) This section is not a limitation of or does not otherwise
affect Section 153.152.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Amended by:
Acts 2005, 79th Leg., Ch.
64, Sec. 87, eff. January 1, 2006.
Acts 2005, 79th Leg., Ch.
64, Sec. 88, eff. January 1, 2006.
Sec. 153.152. GENERAL POWERS AND LIABILITIES OF GENERAL PARTNER.
(a) Except as provided by this chapter, the other limited
partnership provisions, or a partnership agreement, a general
partner of a limited partnership:
(1) has the rights and powers and is subject to the restrictions
of a partner in a partnership without limited partners; and
(2) has the liabilities of a partner in a partnership without
limited partners to the partnership and to the other partners.
(b) Except as provided by this chapter or the other limited
partnership provisions, a general partner of a limited
partnership has the liabilities of a partner in a partnership
without limited partners to a person other than the partnership
and the other partners.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 153.153. POWERS AND LIABILITIES OF PERSON WHO IS BOTH
GENERAL PARTNER AND LIMITED PARTNER. A person who is both a
general partner and a limited partner:
(1) has the rights and powers and is subject to the restrictions
and liabilities of a general partner; and
(2) except as otherwise provided by the partnership agreement,
this chapter, or the other limited partnership provisions, has
the rights and powers and is subject to the restrictions and
liabilities, if any, of a limited partner to the extent of the
general partner's participation in the partnership as a limited
partner.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 153.154. CONTRIBUTIONS BY AND DISTRIBUTIONS TO GENERAL
PARTNER. A general partner of a limited partnership may make a
contribution to, be allocated profits and losses of, and receive
a distribution from the limited partnership as a general partner,
a limited partner, or both.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 153.155. WITHDRAWAL OF GENERAL PARTNER. (a) A person
ceases to be a general partner of a limited partnership on the
occurrence of one or more of the following events of withdrawal:
(1) the general partner withdraws as a general partner from the
limited partnership as provided by Subsection (b);
(2) the general partner ceases to be a general partner of the
limited partnership as provided by Section 153.252(b);
(3) the general partner is removed as a general partner in
accordance with the partnership agreement;
(4) unless otherwise provided by a written partnership
agreement, or with the written consent of all partners, the
general partner:
(A) makes a general assignment for the benefit of creditors;
(B) files a voluntary bankruptcy petition;
(C) becomes the subject of an order for relief or is declared
insolvent in a federal or state bankruptcy or insolvency
proceeding;
(D) files a petition or answer seeking for the general partner a
reorganization, arrangement, composition, readjustment,
liquidation, winding up, termination, dissolution, or similar
relief under law;
(E) files a pleading admitting or failing to contest the
material allegations of a petition filed against the general
partner in a proceeding of the type described by Paragraphs
(A)-(D); or
(F) seeks, consents to, or acquiesces in the appointment of a
trustee, receiver, or liquidator of the general partner or of all
or a substantial part of the general partner's properties;
(5) unless otherwise provided by a written partnership agreement
or with the written consent of all partners, the expiration of:
(A) 120 days after the date of the commencement of a proceeding
against the general partner seeking reorganization, arrangement,
composition, readjustment, liquidation, dissolution, or similar
relief under law if the proceeding has not been previously
dismissed;
(B) 90 days after the date of the appointment, without the
general partner's consent, of a trustee, receiver, or liquidator
of the general partner or of all or a substantial part of the
general partner's properties if the appointment has not
previously been vacated or stayed; or
(C) 90 days after the date of expiration of a stay, if the
appointment has not previously been vacated;
(6) the death of a general partner;
(7) a court adjudicating a general partner who is an individual
mentally incompetent to manage the general partner's person or
property;
(8) unless otherwise provided by a written partnership agreement
or with the written consent of all partners, the commencement of
winding up activities intended to conclude in the termination of
a trust that is a general partner, but not merely the
substitution of a new trustee;
(9) unless otherwise provided by a written partnership agreement
or with the written consent of all partners, the commencement of
winding up activities of a separate partnership that is a general
partner;
(10) unless otherwise provided by a written partnership
agreement or with the written consent of all partners, the:
(A) filing of a certificate of termination or its equivalent for
an entity, other than a nonfiling entity or a foreign nonfiling
entity, that is a general partner; or
(B) termination or revocation of the certificate of formation or
its equivalent of an entity, other than a nonfiling entity or a
foreign nonfiling entity, that is a general partner and the
expiration of 90 days after the date of notice to the entity of
termination or revocation without a reinstatement of its
certificate of formation or its equivalent; or
(11) the distribution by the fiduciary of an estate that is a
general partner of the estate's entire interest in the limited
partnership.
(b) A general partner may withdraw at any time from a limited
partnership and cease to be a general partner under Subsection
(a) by giving written notice to the other partners.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
688, Sec. 122, eff. September 1, 2007.
Sec. 153.156. NOTICE OF EVENT OF WITHDRAWAL. A general partner
who is subject to an event that with the passage of the specified
period becomes an event of withdrawal under Section 153.155(a)(4)
or (5) shall notify the other partners of the event not later
than the 30th day after the date on which the event occurred.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 153.157. WITHDRAWAL OF GENERAL PARTNER IN VIOLATION OF
PARTNERSHIP AGREEMENT. Unless otherwise provided by the
partnership agreement, a withdrawal by a general partner of a
partnership having a period of duration or for a particular
undertaking before the expiration of that period or completion of
that undertaking is a breach of the partnership agreement.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
688, Sec. 123, eff. September 1, 2007.
Sec. 153.158. EFFECT OF WITHDRAWAL. (a) Unless otherwise
provided by a written partnership agreement and subject to the
liability created under Section 153.162, if a general partner
ceases to be a general partner under Section 153.155, the
remaining general partner or partners, or, if there are no
remaining general partners, a majority-in-interest of the limited
partners in a vote that excludes any limited partnership interest
held by the withdrawing general partner, may:
(1) convert that general partner's partnership interest to that
of a limited partner; or
(2) pay to the withdrawn general partner in cash, or secure by
bond approved by a court of competent jurisdiction, the value of
that partner's partnership interest minus the damages caused if
the withdrawal constituted a breach of the partnership agreement.
(b) Until an action described by Subsection (a) is taken, the
owner of the partnership interest of the withdrawn general
partner has the status of an assignee under Subchapter F, Section
153.113, and Section 153.555.
(c) If there are no remaining general partners following the
withdrawal of a general partner, the partnership may be
reconstituted.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 153.159. CONVERSION OF PARTNERSHIP INTEREST AFTER
WITHDRAWAL. If the partners convert the partnership interest
under Section 153.158(a)(1), the limited partnership interest may
be reduced pro rata with all other partners to provide
compensation, an interest in the partnership, or both, to a
replacement general partner.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 153.160. EFFECT OF CONVERSION OF PARTNERSHIP INTEREST. (a)
After an amendment to the certificate of formation reflecting
the general partner's withdrawal as a general partner is filed
under Section 153.051, the withdrawing general partner:
(1) may vote as a limited partner in all matters, to the same
extent as the members of the class of limited partners having the
least voting rights with respect to the matter on which the vote
is taken; and
(2) may not vote on the admission and compensation of a general
partner who replaces the withdrawing general partner.
(b) If the general partner's withdrawal violates the partnership
agreement, the general partner does not have voting rights.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 153.161. LIABILITY OF GENERAL PARTNER FOR DEBT INCURRED
AFTER EVENT OF WITHDRAWAL. (a) Unless otherwise provided by a
written partnership agreement and subject to the liability
created under Section 153.162, a general partner who ceases to be
a general partner under Section 153.155 is not personally liable
in the partner's capacity as a general partner for partnership
debt incurred after that partner ceases to be a general partner
unless the applicable creditor at the time the debt was incurred
reasonably believed that the partner remained a general partner.
(b) A creditor of the partnership has reason to believe that a
partner remains a general partner if:
(1) the creditor had no knowledge or notice of the general
partner's withdrawal and:
(A) was a creditor of the partnership at the time of the general
partner's withdrawal; or
(B) had extended credit to the partnership within two years
before the date of withdrawal; or
(2) the creditor had known that the partner was a general
partner in the partnership before the general partner's
withdrawal and had no knowledge or notice of the withdrawal and
the general partner's withdrawal had not been advertised in a
newspaper of general circulation in each place at which the
partnership business was regularly conducted.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 153.162. LIABILITY FOR WRONGFUL WITHDRAWAL. (a) If a
general partner's withdrawal from a limited partnership violates
the partnership agreement, the partnership may recover damages
from the withdrawing general partner for breach of the
partnership agreement, including the reasonable cost of obtaining
replacement of the services the withdrawn partner was obligated
to perform.
(b) In addition to pursuing any remedy available under
applicable law, the partnership may effect the recovery of
damages under Subsection (a) by offsetting those damages against
the amount otherwise distributable to the withdrawing general
partner, reducing the limited partner interest into which the
withdrawing general partner's interest may be converted under
Section 153.158(a)(1), or both.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
SUBCHAPTER E. FINANCES
Sec. 153.201. FORM OF CONTRIBUTION. The contribution of a
partner may consist of a tangible or intangible benefit to the
limited partnership or other property of any kind or nature,
including:
(1) cash;
(2) a promissory note;
(3) services performed;
(4) a contract for services to be performed; and
(5) another interest in or security of the limited partnership,
another domestic or foreign limited partnership, or other entity.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Amended by:
Acts 2005, 79th Leg., Ch.
64, Sec. 89, eff. January 1, 2006.
Sec. 153.202. ENFORCEABILITY OF PROMISE TO MAKE CONTRIBUTION.
(a) A promise by a limited partner to make a contribution to, or
pay cash or transfer other property to, a limited partnership is
not enforceable unless the promise is in writing and signed by
the limited partner.
(b) Except as otherwise provided by the partnership agreement, a
partner or the partner's legal representative or successor is
obligated to the limited partnership to perform an enforceable
promise to make a contribution to or pay cash or transfer other
property to a limited partnership, notwithstanding the partner's
death, disability, or other change in circumstances.
(c) If a partner or a partner's legal representative or
successor does not make a contribution or other payment of cash
or transfer of other property required by the enforceable
promise, whether as a contribution or with respect to a
contribution previously made, that partner or the partner's legal
representative or successor is obligated, at the option of the
limited partnership, to pay to the partnership an amount of cash
equal to the portion of the agreed value, as stated in the
partnership agreement or in the partnership records required to
be kept under Sections 153.551 and 153.552, of the contribution
represented by the amount of cash that has not been paid or the
value of the property that has not been transferred.
(d) A partnership agreement may provide that the partnership
interest of a partner who fails to make a payment of cash or
transfer of other property to the partnership, whether as a
contribution or with respect to a contribution previously made,
required by an enforceable promise is subject to specified
consequences, which may include:
(1) a reduction of the defaulting partner's percentage or other
interest in the limited partnership;
(2) subordination of the partner's partnership interest to the
interest of nondefaulting partners;
(3) a forced sale of the partner's partnership interest;
(4) forfeiture of the partner's partnership interest;
(5) the lending of money to the defaulting partner by other
partners of the amount necessary to meet the defaulting partner's
commitment;
(6) a determination of the value of the defaulting partner's
partnership interest by appraisal or by formula and redemption or
sale of the partnership interest at that value; or
(7) another penalty or consequence.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 153.203. RELEASE OF OBLIGATION TO PARTNERSHIP. Unless
otherwise provided by the partnership agreement, the obligation
of a partner or the legal representative or successor of a
partner to make a contribution, pay cash, transfer other
property, or return cash or property paid or distributed to the
partner in violation of this chapter or the partnership agreement
may be compromised or released only by consent of all of the
partners.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 153.204. ENFORCEABILITY OF OBLIGATION. (a)
Notwithstanding a compromise or release under Section 153.203, a
creditor of a limited partnership who extends credit or otherwise
acts in reasonable reliance on an obligation described by Section
153.203 may enforce the original obligation if:
(1) the obligation is reflected in a document signed by the
partner; and
(2) the document is not amended or canceled to reflect the
compromise or release.
(b) Notwithstanding the compromise or release, a general partner
remains liable to persons other than the partnership and the
other partners, as provided by Sections 153.152(a)(2) and (b).
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 153.205. REQUIREMENTS TO ENFORCE CONDITIONAL OBLIGATION.
(a) An obligation of a limited partner of a limited partnership
that is subject to a condition may be enforced by the partnership
creditor described by Section 153.204 only if the condition is
satisfied or waived by or with respect to the limited partner.
(b) A conditional obligation of a limited partner of a limited
partnership includes a contribution payable on a discretionary
call of the limited partnership before the time the call occurs.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 153.206. ALLOCATION OF PROFITS AND LOSSES. (a) The
profits and losses of a limited partnership shall be allocated
among the partners in the manner provided by a written
partnership agreement.
(b) If a written partnership agreement does not provide for the
allocation of profits and losses, the profits and losses shall be
allocated:
(1) in accordance with the current percentage or other interest
in the partnership stated in partnership records of the kind
described by Section 153.551(a); or
(2) if the allocation of profits and losses is not provided for
in partnership records of the kind described by Section
153.551(a), in proportion to capital accounts.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 153.207. RIGHT TO DISTRIBUTION. Subject to Section
153.210, when a partner becomes entitled to receive a
distribution, the partner has with respect to the distribution
the status of and is entitled to all remedies available to a
creditor of the limited partnership.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 153.208. SHARING OF DISTRIBUTIONS. (a) A distribution of
cash or another asset of a limited partnership shall be made to a
partner in the manner provided by a written partnership
agreement.
(b) If a written partnership agreement does not provide
otherwise, a distribution that is a return of capital shall be
made on the basis of the agreed value, as stated in the
partnership records required to be maintained under Section
153.551(a), of the contribution made by each partner to the
extent that the contribution has not been returned. A
distribution that is not a return of capital shall be made in
proportion to the allocation of profits as determined under
Section 153.206.
(c) Unless otherwise defined by a written partnership agreement,
in this section, "return of capital" means a distribution to a
partner to the extent that the partner's capital account,
immediately after the distribution, is less than the amount of
that partner's contribution to the partnership as reduced by a
prior distribution that was a return of capital.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 153.209. INTERIM DISTRIBUTIONS. Except as otherwise
provided by this section and Section 153.210, a partner is
entitled to receive a distribution from a limited partnership to
the extent and at the time or on the occurrence of an event
specified in the partnership agreement before:
(1) the partner withdraws from the partnership; and
(2) the winding up of the partnership business.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 153.210. LIMITATION ON DISTRIBUTION. (a) Unless the
distribution is made in compliance with Chapter 11, a limited
partnership may not make a distribution to a partner if,
immediately after giving effect to the distribution and despite
any compromise of a claim referred to by Sections 153.203 and
153.204, all liabilities of the limited partnership, other than
liabilities to partners with respect to their partnership
interests and liabilities for which the recourse of creditors is
limited to specified property of the limited partnership, exceed
the fair value of the partnership assets. The fair value of
property that is subject to a liability for which recourse of
creditors is limited shall be included in the partnership assets
for purposes of this subsection only to the extent that the fair
value of that property exceeds that liability.
(b) For purposes of this section, "distribution" does not
include an amount constituting reasonable compensation for
present or past services or a reasonable payment made in the
ordinary course of business under a bona fide retirement plan or
other benefits program.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Amended by:
Acts 2009, 81st Leg., R.S., Ch.
84, Sec. 52, eff. September 1, 2009.
SUBCHAPTER F. PARTNERSHIP INTEREST
Sec. 153.251. ASSIGNMENT OF PARTNERSHIP INTEREST. (a) Except
as otherwise provided by the partnership agreement, a partnership
interest is assignable wholly or partly.
(b) Except as otherwise provided by the partnership agreement,
an assignment of a partnership interest:
(1) does not require the winding up of a limited partnership;
(2) does not entitle the assignee to become, or to exercise
rights or powers of, a partner; and
(3) entitles the assignee to be allocated income, gain, loss,
deduction, credit, or similar items and to receive distributions
to which the assignor was entitled to the extent those items are
assigned.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
688, Sec. 124, eff. September 1, 2007.
Sec. 153.252. RIGHTS OF ASSIGNOR. (a) Except as otherwise
provided by the partnership agreement, until the assignee becomes
a partner, the assignor partner continues to be a partner in the
limited partnership. The assignor partner may exercise any rights
or powers of a partner, except to the extent those rights or
powers are assigned.
(b) Except as otherwise provided by the partnership agreement,
on the assignment by a general partner of all of the general
partner's rights as a general partner, the general partner's
status as a general partner may be terminated by the affirmative
vote of a majority-in-interest of the limited partners.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 153.253. RIGHTS OF ASSIGNEE. (a) An assignee of a
partnership interest, including the partnership interest of a
general partner, may become a limited partner if and to the
extent that:
(1) the partnership agreement provides; or
(2) all partners consent.
(b) An assignee who becomes a limited partner, to the extent of
the rights and powers assigned, has the rights and powers and is
subject to the restrictions and liabilities of a limited partner
under a partnership agreement and this code.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 153.254. LIABILITY OF ASSIGNEE. (a) Until an assignee of
the partnership interest in a limited partnership becomes a
partner, the assignee does not have liability as a partner solely
as a result of the assignment.
(b) Unless otherwise provided by a written partnership
agreement, an assignee who becomes a limited partner:
(1) is liable for the obligations of the assignor to make
contributions as provided by Sections 153.202-153.204;
(2) is not obligated for liabilities unknown to the assignee at
the time the assignee became a limited partner and that could not
be ascertained from a written partnership agreement; and
(3) is not liable for the obligations of the assignor under
Sections 153. 105, 153.112, and 153.162.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 153.255. LIABILITY OF ASSIGNOR. Regardless of whether an
assignee of a partnership interest becomes a limited partner, the
assignor is not released from the assignor's liability to the
limited partnership under Subchapter E and Sections 153.105,
153.112, and 153.162.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 153.256. PARTNER'S PARTNERSHIP INTEREST SUBJECT TO CHARGING
ORDER. (a) On application by a judgment creditor of a partner or
of any other owner of a partnership interest, a court having
jurisdiction may charge the partnership interest of the judgment
debtor to satisfy the judgment.
(b) To the extent that the partnership interest is charged in
the manner provided by Subsection (a), the judgment creditor has
only the right to receive any distribution to which the judgment
debtor would otherwise be entitled in respect of the partnership
interest.
(c) A charging order constitutes a lien on the judgment debtor's
partnership interest. The charging order lien may not be
foreclosed on under this code or any other law.
(d) The entry of a charging order is the exclusive remedy by
which a judgment creditor of a partner or of any other owner of a
partnership interest may satisfy a judgment out of the judgment
debtor's partnership interest.
(e) This section does not deprive a partner or other owner of a
partnership interest of a right under exemption laws with respect
to the judgment debtor's partnership interest.
(f) A creditor of a partner or of any other owner of a
partnership interest does not have the right to obtain possession
of, or otherwise exercise legal or equitable remedies with
respect to, the property of the limited partnership.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
688, Sec. 125, eff. September 1, 2007.
Acts 2009, 81st Leg., R.S., Ch.
84, Sec. 53, eff. September 1, 2009.
Sec. 153.257. EXEMPTION LAWS APPLICABLE TO PARTNERSHIP INTEREST
NOT AFFECTED. Section 153.256 does not deprive a partner of the
benefit of an exemption law applicable to that partner's
partnership interest.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
SUBCHAPTER G. REPORTS
Sec. 153.301. PERIODIC REPORT. The secretary of state may
require a domestic limited partnership or a foreign limited
partnership registered to transact business in this state to file
a report not more than once every four years as required by this
subchapter.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 153.302. FORM AND CONTENTS OF REPORT. (a) The report
must:
(1) include:
(A) the name of the limited partnership;
(B) the state or territory under the laws of which the limited
partnership is formed;
(C) the address of the registered office of the limited
partnership in this state and the name of the registered agent at
that address;
(D) the address of the principal office in the United States
where records are to be kept or made available under Sections
153.551 and 153.552; and
(E) the name, mailing address, and street address of the
business or residence of each general partner;
(2) be made on a form adopted by the secretary of state for that
purpose; and
(3) be signed on behalf of the limited partnership by at least
one general partner.
(b) The information contained in the report must be given as of
the date of the execution of the report.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 153.303. FILING FEE. The filing fee for the report is as
provided by Chapter 4.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 153.304. DELIVERY OF REPORT. The report must be delivered
to the secretary of state not later than the 30th day after the
date on which notice is mailed under Section 153.305.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 153.305. ACTION BY SECRETARY OF STATE. (a) The secretary
of state shall send a notice that the report required by Section
153.301 is due.
(b) The notice must be:
(1) addressed to the limited partnership; and
(2) mailed to:
(A) the registered office of the limited partnership;
(B) the last known address of the limited partnership as it
appears on record in the office of the secretary of state; or
(C) any other known place of business of the limited
partnership.
(c) The secretary of state shall include with the notice a copy
of a report form to be prepared and filed as provided by this
subchapter.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 153.306. EFFECT OF FILING REPORT. (a) If the secretary of
state finds that the report complies with this subchapter, the
secretary shall:
(1) accept the report for filing;
(2) acknowledge to the limited partnership the filing of the
report; and
(3) update the records of the secretary of state's office to
reflect:
(A) a reported change in the address of the registered office or
principal office, or in the business or residence address of a
general partner; and
(B) a reported change in the name of the registered agent.
(b) The filing of a report under Section 153.301 does not
relieve the limited partnership of the requirement to file an
amendment to the certificate of formation required under Section
153.051 or 153.052, except that the limited partnership is not
required to file an amendment to change the information specified
in Subsection (a)(3).
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 153.307. EFFECT OF FAILURE TO FILE REPORT. (a) A domestic
or foreign limited partnership that fails to file a report under
Section 153.301 when the report is due forfeits the limited
partnership's right to transact business in this state. A
forfeiture under this section takes effect without judicial
ascertainment.
(b) When the right to transact business has been forfeited under
this section, the secretary of state shall note that the right to
transact business has been forfeited and the date of forfeiture
on the record kept in the secretary's office relating to the
limited partnership.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 153.308. NOTICE OF FORFEITURE OF RIGHT TO TRANSACT
BUSINESS. Notice of the forfeiture under Section 153.307 shall
be mailed to the limited partnership at:
(1) the registered office of the limited partnership;
(2) the last known address of the limited partnership; or
(3) any other place of business of the limited partnership.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 153.309. EFFECT OF FORFEITURE OF RIGHT TO TRANSACT
BUSINESS. (a) Unless the right of the limited partnership to
transact business is revived in accordance with Section 153.310:
(1) the limited partnership may not maintain an action, suit, or
proceeding in a court of this state; and
(2) a successor or assignee of the limited partnership may not
maintain an action, suit, or proceeding in a court of this state
on a right, claim, or demand arising from the transaction of
business by the limited partnership in this state.
(b) The forfeiture of the right to transact business in this
state does not:
(1) impair the validity of a contract or act of the limited
partnership; or
(2) prevent the limited partnership from defending an action,
suit, or proceeding in a court of this state.
(c) This section and Sections 153.307 and 153.308 do not affect
the liability of a limited partner.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Amended by:
Acts 2009, 81st Leg., R.S., Ch.
84, Sec. 54, eff. September 1, 2009.
Sec. 153.310. REVIVAL OF RIGHT TO TRANSACT BUSINESS. (a) A
limited partnership that forfeits the right to transact business
in this state as provided by Section 153.309 may be relieved from
the forfeiture by filing the required report not later than the
120th day after the date of mailing of the notice of forfeiture
under Section 153.308, accompanied by the filing fees as provided
by Chapter 4.
(b) If a limited partnership complies with Subsection (a), the
secretary of state shall:
(1) revive the right of the limited partnership to transact
business in this state;
(2) cancel the note regarding the forfeiture; and
(3) note the revival and the date of revival on the record kept
in the secretary's office relating to the limited partnership.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 153.311. TERMINATION OF CERTIFICATE OR REVOCATION OF
REGISTRATION AFTER FORFEITURE. (a) The secretary of state may
terminate the certificate of formation of a domestic limited
partnership, or revoke the registration of a foreign limited
partnership, if the limited partnership:
(1) forfeits its right to transact business in this state under
Section 153.307; and
(2) fails to revive that right under Section 153.310.
(b) Termination of the certificate or revocation of registration
takes effect without judicial ascertainment.
(c) The secretary of state shall note the termination or
revocation and the date on the record kept in the secretary's
office relating to the limited partnership.
(d) On termination or revocation, the status of the limited
partnership is changed to inactive according to the records of
the secretary of state. The change to inactive status does not
affect the liability of a limited partner.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Amended by:
Acts 2009, 81st Leg., R.S., Ch.
84, Sec. 55, eff. September 1, 2009.
Sec. 153.312. REINSTATEMENT OF CERTIFICATE OF FORMATION OR
REGISTRATION. (a) A limited partnership the certificate of
formation or registration of which has been terminated or revoked
as provided by Section 153.311 may be relieved of the termination
or revocation by filing the report required by Section 153.301,
accompanied by the filing fees provided by Chapter 4.
(b) If the limited partnership pays the fees required by
Subsection (a) and all taxes, penalties, and interest due and
accruing before termination or revocation, the secretary of state
shall:
(1) reinstate the certificate or registration of the limited
partnership without judicial ascertainment;
(2) change the status of the limited partnership to active; and
(3) note the reinstatement on the record kept in the secretary's
office relating to the limited partnership.
(c) If the name of the limited partnership is not available at
the time of reinstatement, the secretary of state shall require
the limited partnership as a precondition to reinstatement to:
(1) file an amendment to the partnership's certificate of
formation; or
(2) in the case of a foreign limited partnership, amend its
application for registration to adopt an assumed name for use in
this state.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Amended by:
Acts 2009, 81st Leg., R.S., Ch.
84, Sec. 56, eff. September 1, 2009.
SUBCHAPTER H. LIMITED PARTNERSHIP AS LIMITED LIABILITY
PARTNERSHIP
Sec. 153.351. REQUIREMENTS. A limited partnership is a limited
liability partnership and a limited partnership if the
partnership:
(1) registers as a limited liability partnership:
(A) as permitted by its partnership agreement; or
(B) if its partnership agreement does not include a provision
for becoming a limited liability partnership, with the consent of
partners required to amend its partnership agreement;
(2) complies with Subchapter J, Chapter 152; and
(3) complies with Chapter 5.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 153.352. APPLICABILITY OF OTHER REQUIREMENTS. For purposes
of applying Section 152.802 to a limited partnership:
(1) an application to become a limited liability partnership or
to withdraw a registration must be signed by at least one general
partner; and
(2) other references to a partner mean a general partner only.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 153.353. LAW APPLICABLE TO PARTNERS. If a limited
partnership is a limited liability partnership, Section 152.801
applies to a general partner and to a limited partner who is
liable under other provisions of this chapter for the debts or
obligations of the limited partnership.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
SUBCHAPTER I. DERIVATIVE ACTIONS
Sec. 153.401. RIGHT TO BRING ACTION. A limited partner may
bring an action in a court on behalf of the limited partnership
to recover a judgment in the limited partnership's favor if:
(1) all general partners with authority to bring the action have
refused to bring the action; or
(2) an effort to cause those general partners to bring the
action is not likely to succeed.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 153.402. PROPER PLAINTIFF. In a derivative action, the
plaintiff must be a limited partner when the action is brought
and:
(1) the person must have been a limited partner at the time of
the transaction that is the subject of the action; or
(2) the person's status as a limited partner must have arisen by
operation of law or under the terms of the partnership agreement
from a person who was a limited partner at the time of the
transaction.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 153.403. PLEADING. In a derivative action, the complaint
must contain with particularity:
(1) the effort, if any, of the plaintiff to secure initiation of
the action by a general partner; or
(2) the reasons for not making the effort.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 153.404. SECURITY FOR EXPENSES OF DEFENDANTS. (a) In a
derivative action, the court may require the plaintiff to give
security for the reasonable expenses incurred or expected to be
incurred by a defendant in the action, including reasonable
attorney's fees.
(b) The court may increase or decrease at any time the amount of
the security on a showing that the security provided is
inadequate or excessive.
(c) If a plaintiff is unable to give security, the plaintiff may
file an affidavit in accordance with the Texas Rules of Civil
Procedure.
(d) Except as provided by Subsection (c), if a plaintiff fails
to give the security within a reasonable time set by the court,
the court shall dismiss the suit without prejudice.
(e) The court, on final judgment for a defendant and on a
finding that suit was brought without reasonable cause against
the defendant, may require the plaintiff to pay reasonable
expenses, including reasonable attorney's fees, to the defendant,
regardless of whether security has been required.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 153.405. EXPENSES OF PLAINTIFF. If a derivative action is
successful, wholly or partly, or if anything is received by the
plaintiff because of a judgment, compromise, or settlement of the
action or claim constituting a part of the action, the court may
award the plaintiff reasonable expenses, including reasonable
attorney's fees, and shall direct the plaintiff to remit to a
party identified by the court the remainder of the proceeds
received by the plaintiff.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
SUBCHAPTER K. SUPPLEMENTAL WINDING UP AND TERMINATION PROVISIONS
Sec. 153.501. CANCELLATION OR REVOCATION OF EVENT REQUIRING
WINDING UP; CONTINUATION OF BUSINESS. (a) The limited
partnership may cancel under Section 11.152 an event requiring
winding up arising from the expiration of its period of duration
as specified in Section 11.051(1) or from the occurrence of an
event specified in its governing documents as specified in
Section 11.051(3) if, not later than the 90th day after the
event, all remaining partners, or anothe