REVISED LIMITED PARTNERSHIP ACT REVISITED

An article in the July, 1991, issue of the Newsletter discussing the recently enacted Revised Limited Partnership Act (the "RLPA"), Partnership Law, Article 8-A, noted that the State Legislature was expected to reconsider the provision which considered the formation of a domestic limited partnership on "subsequent compliance with the notice provisions." The effective date of the RLPA was July 1, 1991.

Section 121-201(b) of the RLPA, as amended by Chapter 33 of the Laws of 1991, had provided that a newly organized limited partnership would be deemed formed on the date on which the initial certificate of limited partnership was filed with the Department of State (or on a date specified in the certificate within sixty days from the date of filing), provided that there was subsequent compliance with the publication of notice requirements of Section 121-201(c).

The RLPA requires that either a copy of the filed certificate or a notice containing the substance thereof be published once in each week for six successive weeks in two newspapers of the county in which the office of the limited partnership is located. Publication was required to be commenced "immediately after the filing of the certificate."

Chapter 264 of the Laws of 1991, signed into law on August 13, amended the RLPA as of July 1, 1991. Among the changes made by this enactment was elimination of the requirement that publication of a copy of the certificate or a notice thereof be completed as a precondition to the formation of a domestic limited partnership. The act of the filing of the certificate is, absent actual fraud, deemed conclusive evidence of formation as of the date the certificate is filed or as of such later date as is provided in the certificate.

As a consequence of the Chapter amendment, neither a newly organized domestic limited partnership nor a foreign limited partnership filing an Application for Authority with the Department of State (also required to publish either a copy of its certificate of authority or a notice containing the substance thereof) is required to commence publication immediately after filing. Publication must be commenced and proof of publication must be filed within one hundred and twenty (120) days of the date on which the initial certificate or the Application for Authority, as the case may be, has been filed.

Although Section 121-201(c), as to domestic limited partnerships, and Section 121-902(d), as to foreign limited Partnerships, state that the failure to file proof of publication with the Department of State shall not impair the validity of any contract or action of the partnership in question, the failure to timely file such proof does prohibit the partnership from maintaining any action or special proceeding until filing is actually made.

While these Sections do not explicitly state that the failure to publish, in addition to the failure to file proof of publication, will not impair contracts entered into by or acts of a partnership, such appears to have been the intention of the drafters of the Chapter amendment, as confirmed to this author by counsel to Chapter 264's Senate sponsor. An amendment clarifying the drafter's intention would seem to be in order.

As a result of Chapter 264, Section 121-801(d) of the RLPA now provides that a domestic limited partnership will be deemed dissolved on the withdrawal of a general partner unless either the partnership agreement permits the continuation of the business of the partnership by the remaining general partner or within ninety (90) days after withdrawal all general and limited partners agree, in writing, to continue the business of the partnership and appoint, as necessary or desirable, one or more general partners. This section had authorized less than all the remaining general and limited partners, as might be specified in the applicable partnership agreement, to elect to continue the business.

Further, a domestic limited partnership formed prior to the effective date of the RLPA may no longer choose to be governed by the substantive provisions of the Partnership Law, Article 8 and to be subject only to the filing requirements of the RLPA. Subsection (b) and (c) of Section 121-1202 now provides that no amendment to the certificate of such an entity can be accepted for filing by the Department of State unless a Certificate of Adoption of the RLPA is first filed.

The Department of State requires that the filing date of the Certificate of Adoption be entered in at least the first Amendment being made to the Certificate of Limited Partnership of a pre--RLPA domestic limited partnership. The statutory fees for filing a Certificate of Adoption and a Certificate of Amendment are $200.00 and $60.00, respectively.

Other amendments to the RLPA set forth further terms which may not be included in the name of a limited partnership, concern procedures for reserving partnership names, preclude the term of a domestic limited partnership from being stated in its certificate as being "perpetual," and provided for additional filing fees.

By: Michael J. Berey

Published in the Real Property Law Section Newsletter, New York State Bar Association, Volume 20, No. 1, January 1992.