SB657: Bill Text

SB657,38,7 (b) Partnership property held in the name of one or more partners with an indication in the instrument transferring the property to them of their capacity as partners or of the existence of a partnership, but without an indication of the name of the partnership, may be transferred by an instrument of transfer signed by the persons in whose name the property is held.

SB657,38,12 (c) Partnership property held in the name of one or more persons other than the partnership, without an indication in the instrument transferring the property to them of their capacity as partners or of the existence of a partnership, may be transferred by an instrument of transfer signed by the persons in whose name the property is held.

SB657,38,16 (2) A partnership may recover partnership property from a transferee, as a result of the lack of authority under this subchapter to make the transfer, only if the partnership proves that signing of the instrument of initial transfer did not bind the partnership under s. 178.0301 and if any of the following is true:

SB657,38,20 (a) As to a subsequent transferee who gave value for property transferred under sub. (1) (a) or (b), the partnership proves that the subsequent transferee knew or had been notified that the person who signed the instrument of initial transfer lacked authority to bind the partnership.

SB657,38,23 (b) As to a transferee who gave value for property transferred under sub. (1) (c), the partnership proves that the transferee knew or had been notified of all of the following:

SB657,38,24 1. The property was partnership property.

SB657,39,2 2. The person who signed the instrument of initial transfer lacked authority to bind the partnership.

SB657,39,6 (3) A partnership may not recover partnership property from a subsequent transferee, for lack of authority under this subchapter to make the transfer, if the partnership would not have been entitled to recover the property under sub. (2) from any earlier transferee of the property.

SB657,39,10 (4) If a person holds all of the partners' interests in a partnership that is dissolved under subch. VIII, all the partnership property vests in that person. The person may sign a record in the name of the partnership to evidence vesting of the property in that person and may file or record the record.

SB657,39,12 178.0303 Statement of partnership authority. (1) (a) A partnership may deliver to the department for filing a statement of partnership authority.

SB657,39,13 (b) The statement of authority must include all of the following:

SB657,39,14 1. The name of the partnership.

SB657,39,16 2. If the partnership is not a limited liability partnership, the street and mailing addresses of its principal office.

SB657,39,18 3. If the partnership is a limited liability partnership, the street address of its registered office in this state and the name of its registered agent at that office.

SB657,39,21 (c) With respect to any position that exists in or with respect to the partnership, the statement of authority may state the authority, or limitations on the authority, of all persons holding the position to do any of the following:

SB657,39,23 1. Sign an instrument transferring real property held in the name of the partnership.

SB657,39,25 2. Enter into other transactions on behalf of, or otherwise act for or bind, the partnership.

SB657,40,2 (d) The statement of authority may state the authority, or limitations on the authority, of a specific person to do any of the following:

SB657,40,4 1. Sign an instrument transferring real property held in the name of the partnership.

SB657,40,6 2. Enter into other transactions on behalf of, or otherwise act for or bind, the partnership.

SB657,40,9 (2) To amend or cancel a statement of authority filed by the department, a partnership must deliver to the department for filing an amendment or cancellation stating all of the following:

SB657,40,10 (a) The name of the partnership.

SB657,40,12 (b) If the partnership is not a limited liability partnership, the street and mailing addresses of the partnership's principal office.

SB657,40,14 (c) If the partnership is a limited liability partnership, the street address of its registered office in this state and the name of its registered agent at that office.

SB657,40,15 (d) The date the statement being affected became effective.

SB657,40,17 (e) The contents of the amendment or a declaration that the statement is canceled.

SB657,40,21 (2m) (a) A statement of authority is renewable for successive 5-year periods. To renew a statement of authority filed by the department, a partnership must deliver to the department for filing, during the 3 months before the cancellation would occur under sub. (10), a statement of renewal that includes all of the following:

SB657,40,22 1. The name of the partnership.

SB657,40,24 2. If the partnership is not a limited liability partnership, the street and mailing addresses of the partnership's principal office.

SB657,41,2 3. If the partnership is a limited liability partnership, the street address of its registered office in this state and the name of its registered agent at that office.

SB657,41,3 4. The statement of authority being affected.

SB657,41,4 5. A declaration that the statement of authority is being renewed.

SB657,41,7 (b) When filed, a statement of renewal that complies with par. (a) renews the statement of authority for a 5-year period commencing with the date of filing of the statement of renewal.

SB657,41,9 (3) A statement of authority affects only the power of a person to bind a partnership to persons that are not partners.

SB657,41,13 (4) Subject to sub. (3) and s. 178.0103 (4) (a), and except as otherwise provided in subs. (6) to (8), a limitation on the authority of a person or a position contained in an effective statement of authority is not by itself evidence of any person's knowledge or notice of the limitation.

SB657,41,17 (5) Subject to sub. (3), a grant of authority not pertaining to transfers of real property and contained in an effective statement of authority is conclusive in favor of a person that gives value in reliance on the grant, except to the extent that when the person gives value any of the following applies:

SB657,41,18 (a) The person has knowledge to the contrary.

SB657,41,19 (b) The statement has been canceled or restrictively amended under sub. (2).

SB657,41,21 (c) A limitation on the grant is contained in another statement of authority that became effective after the statement containing the grant became effective.

SB657,42,2 (6) Subject to sub. (3), an effective statement of authority that grants authority to transfer real property held in the name of the partnership, a certified copy of which statement is recorded in the office of the register of deeds for the county in which the property is located, is conclusive in favor of a person that gives value in reliance on the grant without knowledge to the contrary, except to the extent that when the person gives value any of the following applies:

SB657,42,5 (a) The statement has been canceled or restrictively amended under sub. (2), and a certified copy of the cancellation or restrictive amendment has been recorded in the office of the register of deeds for the county in which the property is located.

SB657,42,9 (b) A limitation on the grant is contained in another statement of authority that became effective after the statement containing the grant became effective, and a certified copy of the later-effective statement is recorded in the office of the register of deeds for the county in which the property is located.

SB657,42,13 (7) Subject to sub. (3), if a certified copy of an effective statement containing a limitation on the authority to transfer real property held in the name of a partnership is recorded in the office of the register of deeds for the county in which the property is located, all persons are deemed to know of the limitation.

SB657,42,16 (8) Subject to sub. (9), an effective statement of dissolution is a cancellation of any filed statement of authority for the purposes of sub. (6) and is a limitation on authority for purposes of sub. (7).

SB657,42,20 (9) After a statement of dissolution becomes effective, a partnership may deliver to the department for filing and, if appropriate, may record a statement of authority that is designated as a postdissolution statement of authority. The statement operates as provided in subs. (6) and (7).

SB657,42,24 (10) Unless canceled earlier, an effective statement of authority is canceled by operation of law 5 years after the date on which the statement, or its most recent amendment or renewal, was filed. The cancellation is effective without recording under sub. (6) or (7).

SB657,43,2 (11) An effective statement of denial operates as a restrictive amendment under this section and may be recorded by certified copy for purposes of sub. (6) (a).

SB657,43,6 (11m) Certified copies to be recorded in the office of the register of deeds are to be sent by the person desiring the copies to be recorded and the department is not obligated to send the copies to the office of the register of deeds unless it chooses to undertake this responsibility.

SB657,43,9 178.0304 Statement of denial. A person named in a filed statement of authority granting that person authority may deliver to the department for filing a statement of denial that does all of the following:

SB657,43,11 (1) Provides the name of the partnership and the caption of the statement of authority to which the statement of denial pertains.

SB657,43,12 (2) Denies the grant of authority.

SB657,43,17 178.0305 Partnership liable for partner's actionable conduct. (1) A partnership is liable for loss or injury caused to a person, or for a penalty incurred, as a result of a wrongful act or omission, or other actionable conduct, of a partner acting in the ordinary course of business of the partnership or with the actual or apparent authority of the partnership.

SB657,43,21 (2) If, in the course of the partnership's business or while acting with actual or apparent authority of the partnership, a partner receives or causes the partnership to receive money or property of a person not a partner, and the money or property is misapplied by a partner, the partnership is liable for the loss.

SB657,43,25 178.0306 Partner's liability. (1) Except as otherwise provided in subs. (2) to (3m), all partners are liable jointly and severally for all debts, obligations, and other liabilities of the partnership unless otherwise agreed by the claimant or provided by law.

SB657,44,3 (2) A person that becomes a partner is not personally liable for a debt, obligation, or other liability of the partnership incurred before the person became a partner.

SB657,44,9 (3) (a) Except as provided in sub. (3m), a debt, obligation, or other liability of a partnership incurred while the partnership is a limited liability partnership is solely the debt, obligation, or other liability of the limited liability partnership. A partner is not personally liable, directly or indirectly, by way of contribution or otherwise, for such a debt, obligation, or other liability of the limited liability partnership solely by reason of being or acting as a partner.

SB657,44,12 (b) This subsection applies despite anything inconsistent in the partnership agreement that existed immediately before the vote or consent required to become a limited liability partnership under s. 178.0901 (2).

SB657,44,14 (c) This subsection applies regardless of the dissolution of the limited liability partnership.

SB657,44,18 (3m) (a) To the extent a partnership has or is deemed to have elected under par. (b) to have this par. (a) apply, sub. (3) does not affect the liability of a partner in a limited liability partnership for any of the following that occurs while the partnership is subject to this subsection:

SB657,44,20 1. The partner's own omissions, negligence, wrongful acts, misconduct, or malpractice.

SB657,44,24 2. The omissions, negligence, wrongful acts, misconduct, or malpractice of any person acting under the partner's actual supervision and control in the specific activity in which the omissions, negligence, wrongful acts, misconduct, or malpractice occurred.

SB657,45,3 (b) 1. Except as provided in subd. 3., a limited liability partnership that became a limited liability partnership before January 1, 2018, is deemed to have elected to have par. (a) apply.

SB657,45,6 2. Except as provided in subd. 3, a limited liability partnership that became a limited liability partnership on or after January 1, 2018, is deemed to not have elected to have par. (a) apply.

SB657,45,9 3. A limited liability partnership may change its election under this paragraph by filing an amended statement of qualification to that effect. This amendment may be made at any time, but shall be effective prospectively only.

SB657,45,13 (4) The failure of a limited liability partnership to observe formalities relating to the exercise of its powers or management of its business is not a ground for imposing liability on a partner for a debt, obligation, or other liability of the partnership.

SB657,45,17 (5) The cancellation or administrative revocation of a limited liability partnership's statement of qualification does not affect the limitation in this section on the liability of a partner for a debt, obligation, or other liability of the partnership incurred while the statement was in effect.

SB657,45,19 178.0307 Actions by and against partnership and partners. (1) A partnership may sue and be sued in the name of the partnership.

SB657,45,21 (2) To the extent not inconsistent with s. 178.0306, a partner may be joined in an action against the partnership or named in a separate action.

SB657,45,24 (3) A judgment against a partnership is not by itself a judgment against a partner. A judgment against a partnership may not be satisfied from a partner's assets unless there is also a judgment against the partner.

SB657,46,4 (4) A judgment creditor of a partner may not levy execution against the assets of the partner to satisfy a judgment based on a claim against the partnership unless the partner is personally liable for the claim under s. 178.0306 and any of the following is true:

SB657,46,7 (a) A judgment based on the same claim has been obtained against the partnership and a writ of execution on the judgment has been returned unsatisfied in whole or in part.

SB657,46,8 (b) The partnership is a debtor in bankruptcy.

SB657,46,10 (c) The partner has agreed that the creditor need not exhaust partnership assets.

SB657,46,15 (d) A court grants permission to the judgment creditor to levy execution against the assets of a partner based on a finding that partnership assets subject to execution are clearly insufficient to satisfy the judgment, that exhaustion of partnership assets is excessively burdensome, or that the grant of permission is an appropriate exercise of the court's equitable powers.

SB657,46,17 (e) Liability is imposed on the partner by law or contract independent of the existence of the partnership.

SB657,46,20 (5) This section applies to any debt, liability, or other obligation of a partnership which results from a representation by a partner or purported partner under s. 178.0308.

SB657,47,8 178.0308 Liability of purported partner. (1) If a person, by words or conduct, purports to be a partner, or consents to being represented by another as a partner, in a partnership or with one or more persons not partners, the purported partner is liable to a person to whom the representation is made, if that person, relying on the representation, enters into a transaction with the actual or purported partnership. If the representation, either by the purported partner or by a person with the purported partner's consent, is made in a public manner, the purported partner is liable to a person who relies upon the purported partnership even if the purported partner is not aware of being held out as a partner to the claimant. If partnership liability results, the purported partner is liable with respect to that liability as if the purported partner were a partner. If no partnership liability results, the purported partner is liable with respect to that liability jointly and severally with any other person consenting to the representation.

SB657,47,17 (2) If a person is thus represented to be a partner in an existing partnership, or with one or more persons not partners, the purported partner is an agent of persons consenting to the representation to bind them to the same extent and in the same manner as if the purported partner were a partner with respect to persons who enter into transactions in reliance upon the representation. If all the partners of the existing partnership consent to the representation, a partnership act or obligation results. If fewer than all the partners of the existing partnership consent to the representation, the person acting and the partners consenting to the representation are jointly and severally liable.

SB657,47,19 (3) A person is not liable as a partner merely because the person is named by another as a partner in a statement of partnership authority.

SB657,47,22 (4) A person does not continue to be liable as a partner merely because of a failure to file a statement of dissociation or to amend a statement of partnership authority to indicate the person's dissociation as a partner.

SB657,47,24 (5) Except as otherwise provided in subs. (1) and (2) and subch. VII, persons who are not partners as to each other are not liable as partners to other persons.

SB657,47,25 subchapter iv

SB657,48,1 relations of partners to each

SB657,48,2 other and to partnership

SB657,48,6 178.0401 Partner's rights and duties. (1) Each partner is entitled to an equal share of the partnership distributions and, except in the case of a limited liability partnership, is chargeable with a share of the partnership losses in proportion to the partner's share of the distributions.

SB657,48,9 (2) A partnership shall reimburse a partner for any payment made by the partner in the course of the partner's activities on behalf of the partnership, if the partner complied with this section and s. 178.0409 in making the payment.

SB657,48,14 (3) A partnership shall indemnify and hold harmless a person with respect to any claim or demand against the person and any debt, obligation, or other liability incurred by the person by reason of the person's former or present capacity as a partner, if the claim, demand, debt, obligation, or other liability does not arise from the person's breach of this section or s. 178.0407 or 178.0409.

SB657,48,20 (4) In the ordinary course of its business, a partnership may advance reasonable expenses, including attorney fees and costs, incurred by a person in connection with a claim or demand against the person by reason of the person's former or present capacity as a partner, if the person promises to repay the partnership if the person ultimately is determined not to be entitled to be indemnified under sub. (3).

SB657,48,25 (5) A partnership may purchase and maintain insurance on behalf of a partner against liability asserted against or incurred by the partner in that capacity or arising from that status even if, under s. 178.0105 (3) (g), the partnership agreement could not eliminate or limit the person's liability to the partnership for the conduct giving rise to the liability.