SB657: Bill Text

SB657,16,20 (b) To attach to or logically associate with the record an electronic symbol, sound, or process.

SB657,16,23 (21) "State" means a state of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands, or any territory or insular possession subject to the jurisdiction of the United States.

SB657,16,24 (22) "Transfer" includes all of the following:

SB657,16,25 (a) An assignment.

SB657,17,1 (b) A conveyance.

SB657,17,2 (c) A sale.

SB657,17,3 (d) A lease.

SB657,17,4 (e) An encumbrance, including a mortgage or security interest.

SB657,17,5 (f) A gift.

SB657,17,6 (g) A transfer by operation of law.

SB657,17,10 (23) "Transferable interest" means the right, as initially owned by a person in the person's capacity as a partner, to receive distributions from a partnership, whether or not the person remains a partner or continues to own any part of the right. The term applies to any fraction of the interest, by whomever owned.

SB657,17,12 (24) "Transferee" means a person to which all or part of a transferable interest has been transferred, whether or not the transferor is a partner.

SB657,17,14 178.0103 Knowledge; notice. (1) A person knows a fact if any of the following applies:

SB657,17,15 (a) The person has actual knowledge of the fact.

SB657,17,17 (b) The person is deemed to know the fact under sub. (4) (a) or law other than this chapter.

SB657,17,18 (2) A person has notice of a fact if any of the following applies:

SB657,17,20 (a) The person has reason to know the fact from all the facts known to the person at the time in question.

SB657,17,21 (b) The person is deemed to have notice of the fact under sub. (4) (b).

SB657,17,24 (3) Subject to s. 178.0117 (6), a person notifies another person of a fact by taking steps reasonably required to inform the other person in ordinary course, whether or not those steps cause the other person to know the fact.

SB657,18,2 (4) (a) A person not a partner is deemed to know of a limitation on authority to transfer real property as provided in s. 178.0303 (7).

SB657,18,4 (b) A person not a partner is deemed to have notice of all of the following as follows:

SB657,18,6 1. A person's dissociation as a partner 90 days after a statement of dissociation under s. 178.0704 becomes effective.

SB657,18,8 2. A partnership's dissolution 90 days after a statement of dissolution under s. 178.0802 becomes effective.

SB657,18,10 3. A partnership's termination 90 days after a statement of termination under s. 178.0802 becomes effective.

SB657,18,13 4. A partnership's participation in a merger, interest exchange, conversion, or domestication, 90 days after the articles of merger, interest exchange, conversion, or domestication under subch. XI become effective.

SB657,18,19 (5) Except for a transferor partner's notice or knowledge of the transfer under s. 178.0503 (4) or a withdrawing partner's notice or knowledge of the withdrawal under s. 178.0601 (1), a partner's knowledge or notice of a fact relating to the partnership is effective immediately as knowledge of or notice to the partnership, except in the case of a fraud on the partnership committed by or with the consent of that partner.

SB657,18,22 (6) This subsection applies to notice that is required under this chapter and that is made subject to this subsection by express reference to this subsection. Written notice is effective at the earliest of the following:

SB657,18,23 (a) When received.

SB657,18,25 (b) Five days after its deposit in the U.S. mail, if mailed postpaid and correctly addressed.

SB657,19,3 (c) On the date shown on the return receipt, if sent by registered or certified mail, return receipt requested, and the receipt is signed by or on behalf of the addressee.

SB657,19,7 178.0104 Governing law. The internal affairs of an association that would be a partnership if its governing law were the law of this state and the liability of the persons so associated for a debt, obligation, or other liability of the association are governed by the law of this state if any of the following applies:

SB657,19,8 (1) The association is a domestic limited liability partnership.

SB657,19,12 (2) In the case of any association other than a domestic or foreign limited liability partnership, the partnership agreement designates the law of this state as its governing law or, in the absence of such designation, the association has its principal office in this state.

SB657,19,15 178.0105 Partnership agreement; scope, function, and limitations. (1) Except as otherwise provided in subs. (3) and (4), the partnership agreement governs all of the following:

SB657,19,17 (a) Relations among the partners as partners and between the partners and the partnership.

SB657,19,18 (b) The business of the partnership and the conduct of that business.

SB657,19,19 (c) The means and conditions for amending the partnership agreement.

SB657,19,21 (d) Mergers, interest exchanges, conversions, and domestications under subch. XI.

SB657,19,23 (2) To the extent the partnership agreement does not provide for a matter described in sub. (1), this chapter governs the matter.

SB657,19,24 (3) A partnership agreement may not do any of the following:

SB657,19,25 (a) Vary the law applicable under ss. 178.0104 (1) and 178.0110.

SB657,20,1 (b) Vary the provisions of this section.

SB657,20,2 (c) Vary the provisions of s. 178.0307.

SB657,20,6 (d) Unreasonably restrict the duties and rights under s. 178.0408, but the partnership agreement may impose reasonable restrictions on the availability and use of information obtained under that section and may define appropriate remedies, including liquidated damages, for a breach of any reasonable restriction on use.

SB657,20,8 (e) Alter or eliminate, or restrict remedies for the breach of, the duty of loyalty or the duty of care, except as otherwise provided in sub. (4).

SB657,20,12 (f) Eliminate, or restrict remedies for the breach of, the contractual obligation of good faith and fair dealing under s. 178.0409 (4), but the partnership agreement may prescribe the standards, if not manifestly unreasonable, by which the performance of the obligation is to be measured.

SB657,20,14 (g) Unreasonably restrict the right of a person to maintain an action under s. 178.0410 (2).

SB657,20,16 (h) Relieve or exonerate a person from liability for conduct that constitutes any of the following:

SB657,20,18 1. A willful failure to deal fairly with the partnership or its partners in connection with a matter in which the partner has a material conflict of interest.

SB657,20,21 2. A violation of the criminal law, unless the partner had reasonable cause to believe that the partner's conduct was lawful or no reasonable cause to believe that the partner's conduct was unlawful.

SB657,20,22 3. A transaction from which the partner derived an improper personal profit.

SB657,20,23 4. Willful misconduct.

SB657,21,2 (i) Unless the partnership is a limited liability partnership, vary the power of a person to dissociate as a partner under s. 178.0602 (1), except to require that the notice under s. 178.0601 (1) be in a record and to not unreasonably specify how the notice must be given.

SB657,21,3 (j) Vary the grounds for expulsion specified in s. 178.0601 (5).

SB657,21,4 (k) Vary the causes of dissolution specified in s. 178.0801 (4) or (5).

SB657,21,6 (L) Vary the requirement to wind up the partnership's business as specified in s. 178.0802 (1), (2) (a), and (4).

SB657,21,8 (m) Vary the right of a partner under s. 178.0901 (6) to vote on or consent to a cancellation of a statement of qualification.

SB657,21,12 (n) Vary the right of a partner to approve a merger, interest exchange, conversion, or domestication under s. 178.1123 (1), 178.1133 (1), 178.1143 (1), or 178.1153 (1), except by written provision in the partnership agreement that does not impair the rights of a partner under s. 178.1161.

SB657,21,15 (o) Vary the required contents of a plan of merger under s. 178.1122, plan of interest exchange under s. 178.1132, plan of conversion under s. 178.1142, or plan of domestication under s. 178.1152.

SB657,21,17 (p) Vary any requirement, procedure, or other provision of this chapter pertaining to any of the following:

SB657,21,19 1. Registered agents, except to require some form of vote or consent of the partners notwithstanding s. 178.0909 (2).

SB657,21,21 2. The department, including provisions pertaining to records authorized or required to be delivered to the department for filing under this chapter.

SB657,21,23 (q) Except as otherwise provided in ss. 178.0106 and 178.0107 (2), restrict the rights under this chapter of a person other than a partner.

SB657,21,25 (4) Subject to sub. (3) (h), without limiting other terms that may be included in a partnership agreement, the following rules apply:

SB657,22,1 (a) The partnership agreement may do any of the following:

SB657,22,4 1. Specify the method by which a specific act or transaction that would otherwise violate the duty of loyalty may be authorized or ratified by one or more disinterested and independent persons after full disclosure of all material facts.

SB657,22,6 2. Alter the prohibition in s. 178.0406 (1) (b) so that the prohibition requires only that the partnership's total assets not be less than the sum of its total liabilities.

SB657,22,11 (b) To the extent the partnership agreement expressly relieves a partner of a responsibility that the partner would otherwise have under this chapter and imposes the responsibility on one or more other partners, the agreement also may eliminate or limit any fiduciary duty of the partner relieved of the responsibility which would have pertained to the responsibility.

SB657,22,13 (c) Except as provided in sub. (3) (h), if not manifestly unreasonable, the partnership agreement may do any of the following:

SB657,22,15 1. Alter or eliminate the aspects of, or restrict remedies with respect to, the duty of loyalty stated in s. 178.0409 (2).

SB657,22,17 2. Identify specific types or categories of activities that do not violate the duty of loyalty or the contractual obligation of good faith and fair dealing.

SB657,22,18 3. Alter the duty of care.

SB657,22,19 4. Alter or eliminate any other fiduciary duty.

SB657,23,2 (5) The court shall decide as a matter of law whether a term of a partnership agreement is manifestly unreasonable under sub. (3) (f) or (4) (c). The court shall make its determination as of the time the challenged term became part of the partnership agreement and by considering only circumstances existing at that time. The court may invalidate the term only if, in light of the purposes and business of the partnership, it is readily apparent that the objective of the term is unreasonable or that the term is an unreasonable means to achieve the term's objective.

SB657,23,6 178.0106 Partnership agreement; effect on partnership and person becoming partner; preformation agreement. (1) A partnership is bound by and may enforce the partnership agreement, whether or not the partnership has itself manifested assent to the agreement.

SB657,23,8 (2) A person that becomes a partner is deemed to assent to the partnership agreement.

SB657,23,11 (3) Two or more persons intending to become the initial partners of a partnership may make an agreement providing that upon the formation of the partnership the agreement will become the partnership agreement.

SB657,23,17 178.0107 Partnership agreement; effect on third parties and relationship to records effective on behalf of partnership. (1) A partnership agreement may specify that its amendment requires the approval of a person that is not a party to the agreement or the satisfaction of a condition. An amendment is ineffective if its adoption does not include the required approval or satisfy the specified condition.

SB657,23,23 (2) The obligations of a partnership and its partners to a person in the person's capacity as a transferee or person dissociated as a partner are governed by the partnership agreement. Subject only to a court order issued under s. 178.0504 (2) (b) to effectuate a charging order, all of the following apply to an amendment to the partnership agreement made after a person becomes a transferee or is dissociated as a partner:

SB657,24,3 (a) Except as provided in par. (b), the amendment is effective with regard to any debt, obligation, or other liability of the partnership or its partners to the person in the person's capacity as a transferee or person dissociated as a partner.

SB657,24,5 (b) The amendment is not effective to the extent the amendment does any of the following:

SB657,24,7 1. Imposes a new debt, obligation, or other liability on the transferee or person dissociated as a partner.

SB657,24,9 2. Prejudices the rights under s. 178.0701 of a person that dissociated as a partner before the amendment was made.

SB657,24,13 (3) If a record delivered by a partnership to the department for filing becomes effective and contains a provision that would be ineffective under s. 178.0105 (3) or (4) (c) if contained in the partnership agreement, the provision is ineffective in the record.

SB657,24,16 (4) Subject to sub. (3), if a record delivered by a partnership to the department for filing becomes effective and conflicts with a provision of the partnership agreement, all of the following apply:

SB657,24,18 (a) The agreement prevails as to partners, persons dissociated as partners, and transferees.

SB657,24,20 (b) The record prevails as to other persons to the extent they reasonably rely on the record.

SB657,24,23 178.0108 Signing of records to be delivered for filing to the department. (1) A record delivered to the department for filing pursuant to this chapter must be signed as follows:

SB657,24,25 (a) Except as otherwise provided in pars. (b) and (c), a record signed by a partnership must be signed by a person authorized by the partnership.