SB 112 — AN ACT TO AMEND TITLE 6 OF THE DELAWARE CODE RELATING TO THE CREATION, REGULATION, OPERATION, AND DISSOLUTION OF DOMESTIC LIMITED PARTNERSHIPS AND THE REGISTRATION AND REGULATION OF FOREIGN LIMITED PARTNERSHIPS.

Summary

This Act continues the practice of amending periodically the Delaware Revised Uniform Limited Partnership Act (the “LP Act”) to keep it current and to maintain its national preeminence. The following is a section-by-section review of the proposed amendments to the LP Act: Section 1 amends § 17-204(a) of the LP Act to clarify that certificates required by the LP Act to be filed in the office of the Secretary of State be executed in the manner set forth in § 17-204(a). Further, because Section 5 of this Act contains amendments that permit or require a certificate of amendment to a certificate of division to be filed in the office of the Secretary of State, this section also amends § 17-204(a) of the LP Act to provide the manner in which a certificate of amendment to a certificate of division must be signed. Section 2 amends § 17-211(g) of the LP Act. Currently, § 17-211(g) of the LP Act permits a duly approved agreement of merger or consolidation or plan of merger to effect any amendment to the partnership agreement or effect the adoption of a new partnership agreement. This amendment to § 17-211(g) confirms that an amendment to a partnership agreement or adoption of a new partnership agreement effected pursuant to § 17-211(g) of the LP Act may be effected only with respect to the partnership agreement of the surviving or resulting limited partnership and not with respect to the partnership agreement of a constituent limited partnership that is not the surviving or resulting limited partnership. Sections 3 and 6 amend § 17-218(b)(1) and § 17-221(c)(1) of the LP Act. Each protected or registered series of a Delaware limited partnership must have a general partner associated with it. If a partnership agreement fails to designate an initial general partner associated with such a series, the LP Act designates a general partner to be associated with such a series. If a partnership agreement fails to designate a general partner of the limited partnership generally, the LP Act designates a general partner of the limited partnership generally. These sections amend § 17-218(b)(1) of the LP Act and § 17-221(c)(1) of the LP Act to confirm that the rules for designating a general partner for a limited partnership that has protected or registered series apply only to the designation of an initial general partner and not to subsequent general partners. Section 4 amends §17-218 of the LP Act. Currently, § 17-806 of the LP Act permits revocation of dissolution of a limited partnership prior to the filing of a certificate of cancellation of the certificate of limited partnership in the office of the Secretary of State; however, the LP Act does not currently address revocation of termination of a protected series prior to the completion of the winding up of the protected series. This amendment adds a new § 17-218(d) to permit revocation of termination of a protected series prior to the completion of the winding up of the protected series. Section 5 amends § 17-220(h) of the LP Act. Currently, among other requirements, a certificate of division must state the name and business address of the division contact and the name and address of the division partnership where the plan of division is on file. Because this information may change over time, this amendment permits or requires the filing of a certificate of amendment of certificate of division to amend the name or business address of the division contact or the name and address of the division partnership where the plan of division is on file. The requirement to update such information in a certificate of division ends after the expiration of a period of 6 years following the effective date of the division. Section 5 also amends § 17-220(l)(1) of the LP Act to clarify that pursuant to a division, a dividing partnership is divided into distinct and independent division partnerships as such term is used in the LP Act. Finally, Section 5 also amends § 17-220(l)(9) of the LP Act. Currently, under § 17-220 of the LP Act, a dividing partnership does not need to survive a division. This amendment confirms that a dividing partnership need not be a surviving partnership. Section 7 amends §17-221 of the LP Act. Currently, § 17-806 of the LP Act permits revocation of dissolution of a limited partnership prior to the filing of a certificate of cancellation of the certificate of limited partnership in the office of the Secretary of State; however, the LP Act does not currently address revocation of dissolution of a registered series prior to the filing of a certificate of cancellation of the certificate of registered series in the office of the Secretary of State. This amendment adds a new § 17-221(f) to permit revocation of dissolution of a registered series prior to the filing of a certificate of cancellation of the certificate of registered series in the office of the Secretary of State. Section 8 adds a new § 17-506 to the LP Act to clarify that a subscription for a partnership interest may be irrevocable if the subscription states it is irrevocable to the extent provided by the terms of the subscription. Section 9 amends § 17-1107(a)(3) of the LP Act to specify the fee payable to the Secretary of State to file a certificate of amendment of certificate of division. Section 10 amends § 17-1109(j) of the LP Act to acknowledge that certificates of amendment of certificate of division should be accepted for filing by the Secretary of State if at least 1 division partnership is in good standing at the time of such filings. Section 11 provides that the proposed amendments to the LP Act take effect August 1, 2023. This Act requires a greater than majority vote for passage because § 11 of Article VIII of the Delaware Constitution requires the affirmative vote of three-fifths of the members elected to each house of the General Assembly to impose or levy a tax or license fee.

Bill Text

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The bill amends various sections of Title 6 of the Delaware Code to update the procedures and regulations regarding the execution of certificates related to limited partnerships and to clarify the nature and operation of protected series within those partnerships.

• § 17-204

  or certificate of registered series → certificate of cancellation of certificate of registered series

  This change specifies the full term for the cancellation certificate, improving clarity about the document being referenced.

• § 17-204

  and → series;

  This change removes redundancy in the text by correcting punctuation and improving readability.

• § 17-211

  agreement → agreement agreement

  This insertion duplicates the term 'agreement' to address a grammatical issue, ensuring consistency in legal terminology.

• § 17-218

  that a partnership agreement establishes → the following sentence is a protected series. Notwithstanding anything to the contrary set forth in this chapter or under other applicable law, in the event

  This amendment clarifies that the establishment of a protected series is dependent on specific conditions, enhancing legal precision.

• § 17-218

  A partnership agreement does not need to use the term protected when referencing series or refer to this section.

  This deletion removes unnecessary language regarding referencing terms, simplifying the statute.

• § 17-218

  Any amendment to a partnership agreement → An agreement of merger or consolidation or a plan of merger approved in accordance with subsection (b) of this section may (1) effect any amendment to the partnership agreement or (2) effect the adoption of a new partnership

  This change updates the criteria for partnership agreements to reflect recent legal frameworks on mergers and consolidations.

Action History

1. July 17, 2023

   Signed by Governor

2. June 27, 2023

   Passed By House. Votes: 39 YES 2 ABSENT

3. June 13, 2023

   Reported Out of Committee (Administration) in House with 5 On Its Merits

4. May 18, 2023

   Re-Assigned to Administration Committee in House

5. May 17, 2023

   Assigned to Judiciary Committee in House

6. May 16, 2023

   Passed By Senate. Votes: 21 YES

7. May 10, 2023

   Reported Out of Committee (Judiciary) in Senate with 4 Favorable, 1 On Its Merits

8. May 04, 2023

   Introduced and Assigned to Judiciary Committee in Senate

Sponsors

• Kyle Evans Gay · Primary
• Trey Paradee · Primary
• Timothy D. Dukes · Primary
• William Bush · Primary
• John "Jack" Walsh · Primary
• Brian Pettyjohn · Primary
• Spiros Mantzavinos · Primary
• Franklin D. Cooke · Primary
• Nicole Poore · Primary
• Darius J. Brown · Primary
• Bryan Townsend · Primary
• Sean Matthews · Primary
• Sarah McBride · Primary
• Valerie Longhurst · Primary
• Peter C. Schwartzkopf · Primary

Votes

Subjects