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Is Your Limited Partnership Agreement Out of Date?
Corporate & Business Law Group Update | 2/13/2009

In 2008, California enacted the Uniform Limited Partnership Act of 2008 (California Corporations Code Sec. 15900, et seq) (the “New Act”). Any limited partnership formed after 2007 is subject to the New Act. However, any limited partnership formed before 2008 is not subject to the New Act until January 1, 2010 (with some limited exceptions).

Some of the major changes in the New Act are:

• Greater protection to both general partners and limited partners.
• Changes in default rules regarding allocation of profits and losses.
• Changes in default rules regarding transfers of limited partnership interests.
• Expansion of purpose may now include non-profit enterprises.

The New Act is of particular concern if you have an existing limited partnership agreement that does NOT specifically address allocation of profits and losses or transfers of limited partnership interests. A limited partnership may voluntarily elect to be subject to the New Act now rather than wait until 2010. Because of the greater protections to limited partners and general partners, you may wish to opt to have the New Act apply to your limited partnership before January 1, 2010.

The decision whether to elect to be subject to the New Act and the need to update your limited partnership agreement is dependent on a variety of factors and should be considered carefully in consultation with your legal adviser.

If you have any questions regarding your limited partnership or whether or not you may need to make changes to your limited partnership agreement, please contact a member of our Corporate and Business Law Group.