15 Pa.C.S. Ch. 86

15 Pa.C.S. Ch. 86
in effect

15 Pa.C.S. § 8611 Short title and application of chapter.

(a) Short title.--This chapter may be cited as the Pennsylvania Uniform Limited Partnership Act of 2016. (b) Initial application.--Before April 1, 2017, this chapter governs only: (1) a limited partnership formed on or after February 21, 2017; and (2) except as provided under subsections (c) and (d), a limited partnership formed before February 21, 2017, which elects, in the manner provided in its partnership agreement or by law for amending the partnership agreement, to be subject to this chapter. (c) Full effective date.--Except as provided in subsections (d) and (e), on and after April 1, 2017, this chapter governs all limited partnerships. (d) Transitional provisions.--With respect to a limited partnership formed before February 21, 2017, the following rules apply except as the partners otherwise elect in the manner provided in the partnership agreement or by law for amending the partnership agreement: (1) Section 8620(c) (relating to characteristics of limited partnership) does not apply and the limited partnership has whatever duration it had under the law applicable immediately before February 21, 2017. (2) Sections 8661 (relating to dissociation as limited partner) and 8662 (relating to effects of dissociation as limited partner) do not apply and a limited partner has the same right and power to dissociate from the limited partnership, with the same consequences, as existed immediately before February 21, 2017. (3) Section 8663(a)(4) (relating to dissociation as general partner) shall not apply. (4) Section 8663(a)(5) shall not apply and the court has the same power to expel a general partner as the court had immediately before February 21, 2017. (5) Section 8681(a)(3) (relating to events causing dissolution) shall not apply and the connection between a person's dissociation as a general partner and the dissolution of the limited partnership is the same as existed immediately before February 21, 2017. (e) Liabilities to third parties.--With respect to a limited partnership that elects under subsection (b)(2) to be subject to this chapter, after the election takes effect, the provisions of this chapter relating to the liability of the limited partnership's general partners to third parties apply: (1) before April 1, 2017, to: (i) a third party that had not done business with the limited partnership in the year before the election took effect; and (ii) a third party that had done business with the limited partnership in the year before the election took effect only if the third party knows or has been notified of the election; and (2) on and after April 1, 2017, to all third parties, except that those provisions remain inapplicable to any obligation incurred while those provisions were inapplicable under paragraph (1)(ii). (f) References to withdrawal.--A reference in the organic rules of a limited partnership to the withdrawal of a general partner or limited partner shall be deemed to be a reference to the dissociation of the partner. (g) Cross reference.--See section 8615 (relating to contents of partnership agreement). (Nov. 3, 2022, P.L.1791, No.122, eff. 60 days) 2022 Amendment. Act 122 relettered former subsec. (f) to subsec. (g) and added present subsec. (f). Cross References. Section 8611 is referred to in sections 8612, 8615, 8620, 8661, 8662, 8663, 8681 of this title.

15 Pa.C.S. § 8612 Definitions.

(a) General definitions.--The following words and phrases when used in this chapter shall have the meanings given to them in this section unless the context clearly indicates otherwise: "Certificate of limited partnership." The certificate required by section 8621 (relating to formation of limited partnership and certificate of limited partnership). The term includes the certificate as amended or restated. "Contribution." Property or a benefit described in section 8651 (relating to form of contribution) which is provided by a person to a limited partnership to become a partner or in the person's capacity as a partner. "Distribution." A direct or indirect transfer of money or other property or incurrence of indebtedness by a limited partnership to a person on account of a transferable interest or in the person's capacity as a partner. The term: (1) Includes: (i) a redemption or other purchase by a limited partnership of a transferable interest; and (ii) a transfer to a partner in return for the partner's relinquishment of any right to participate as a partner in the management or conduct of the partnership's activities and affairs or to have access to records or other information concerning the partnership's activities and affairs. (2) Does not include: (i) amounts constituting reasonable compensation for present or past service or payments made in the ordinary course of business under a bona fide retirement plan or other bona fide benefits program; (ii) the making of, or payment or performance on, a guaranty or similar arrangement by a partnership for the benefit of any or all of its partners; (iii) a direct or indirect allocation or transfer effected under Chapter 3 (relating to entity transactions) with the approval of the members; or (iv) a direct or indirect transfer of: (A) a governance or transferable interest; or (B) options, rights or warrants to acquire a governance or transferable interest. "General partner." A person that: (1) has become a general partner under section 8641 (relating to becoming a general partner) or was a general partner in a partnership when the partnership became subject to this chapter under section 8611 (relating to short title and application of chapter); and (2) has not dissociated as a general partner under section 8663 (relating to dissociation as general partner). "Limited partner." A person that: (1) has become a limited partner under section 8631 (relating to becoming a limited partner) or was a limited partner in a limited partnership when the partnership became subject to this chapter under section 8611 (relating to short title and application of chapter); and (2) has not dissociated as a limited partner under section 8661 (relating to dissociation as limited partner). "Limited partnership." An association formed under this chapter or which becomes subject to this chapter under Chapter 3 (relating to entity transactions) or section 8611 (relating to short title and application of chapter). The term includes a limited liability limited partnership or an electing partnership that is also a limited partnership. "Partner." A limited partner or general partner. "Partnership agreement." The agreement, whether or not referred to as a partnership agreement and whether oral, implied, in record form or in any combination thereof, of all the partners of a limited partnership concerning the matters described under section 8615(a) (relating to contents of partnership agreement). The term includes the agreement as amended or restated. "Required information." The information that a limited partnership is required to maintain under section 8618 (relating to required information). "Transferable interest." The right, as initially owned by a person in the person's capacity as a partner, to receive distributions from a limited 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. "Transferee." A person to which all or part of a transferable interest has been transferred, whether or not the transferor is a partner. The term includes a person that owns a transferable interest under section 8662(a)(3) (relating to effects of dissociation as limited partner) or 8665(a)(4) (relating to effects of dissociation as general partner). (b) Index of definitions.--Following is a nonexclusive list of definitions in section 102 (relating to definitions) that apply to this chapter: "Act" or "action." "Court." "Debtor in bankruptcy." "Department." "Jurisdiction." "Jurisdiction of formation." "Obligation." "Professional services." "Property." "Record form." "Sign." "Transfer." Cross References. Section 8612 is referred to in sections 102, 8654 of this title.

15 Pa.C.S. § 8613 Knowledge and notice.

(a) Knowledge.--A person knows a fact if the person: (1) has actual knowledge of it; or (2) is deemed to know it under law other than this chapter. (b) Notice.--A person has notice of a fact if the person: (1) has reason to know the fact from all the facts known to the person at the time in question; or (2) is deemed to have notice of the fact under subsection (c) or (d). (c) Effect of certificate.--A certificate of limited partnership on file in the department is notice that the partnership is a limited partnership and the persons designated in the certificate as general partners are general partners. Except as provided under subsection (d) and section 8201(g) (relating to scope), the certificate is not notice of any other fact. (d) Constructive notice.--A person not a partner is deemed to have notice of: (1) another person's dissociation as a general partner 90 days after an amendment to the certificate of limited partnership which states that the other person has dissociated becomes effective or 90 days after a certificate of dissociation pertaining to the other person becomes effective, whichever occurs first; (2) a limited partnership's: (i) dissolution 90 days after an amendment to the certificate of limited partnership stating that the limited partnership is dissolved is effective; (ii) termination 90 days after a certificate of termination under section 8682(e) (relating to winding up and filing of certificates) is effective; and (iii) participation in a merger, interest exchange, conversion, division or domestication, 90 days after a statement of merger, interest exchange, conversion, division or domestication under Chapter 3 (relating to entity transactions) is effective. (e) Notification.--Except as provided in section 113(b) (relating to delivery of document), 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. (f) Effect of partner's knowledge or notice.--A general partner's knowledge or notice of a fact relating to the limited 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 the general partner. A limited partner's knowledge or notice of a fact relating to the partnership is not effective as knowledge of or notice to the partnership.

15 Pa.C.S. § 8614 Governing law.

(a) General rule.--The laws of this Commonwealth govern: (1) the internal affairs of a limited partnership; and (2) the liability of a partner as partner for the debts, obligations or other liabilities of a limited partnership. (b) Cross reference.--See section 8615(c)(6) (relating to contents of partnership agreement). Cross References. Section 8614 is referred to in section 8615 of this title.

15 Pa.C.S. § 8615 Contents of partnership agreement.

(a) Scope of partnership agreement.--Except as provided under subsections (c) and (d), the partnership agreement governs: (1) relations among the partners as partners and between the partners and the limited partnership; (2) the rights and duties under this title of a person in the capacity of a partner; (3) the activities and affairs of the partnership and the conduct of those activities and affairs; (4) the means and conditions for amending the partnership agreement; and (5) the means and conditions for approving a transaction under Chapter 3 (relating to entity transactions). (b) Title applies generally.--To the extent the partnership agreement does not provide for a matter described in subsection (a), this title governs the matter. (c) Limitations.--A partnership agreement may not do any of the following: (1) Vary a provision of Chapter 1 (relating to general provisions) or Subchapter A of Chapter 2 (relating to names). (2) Vary the right of a partner to approve a merger, interest exchange, conversion or division under section 333(a)(2) (relating to approval of merger), 343(a)(2) (relating to approval of interest exchange), 353(a)(3) (relating to approval of conversion) or 363(a)(2) (relating to approval of division). (3) Vary the required contents of a plan of merger under section 332(a) (relating to plan of merger), plan of interest exchange under section 342(a) (relating to plan of interest exchange), plan of conversion under section 352(a) (relating to plan of conversion), plan of division under section 362(a) (relating to plan of division) or plan of domestication under section 372(a) (relating to plan of domestication). (4) Vary a provision of Chapter 81 (relating to general provisions) or 82 (relating to limited liability partnerships and limited liability limited partnerships). (5) Vary the provisions of section 8611(b), (c), (d) and (e) (relating to short title and application of chapter). (6) Vary the law applicable under section 8614 (relating to governing law). (7) Vary any requirement, procedure or other provision of this title pertaining to: (i) registered offices; or (ii) the department, including provisions pertaining to documents authorized or required to be delivered to the department for filing under this title. (8) Vary a limited partnership's capacity under section 8620(d) (relating to characteristics of limited partnership) to sue and be sued in its own name. (9) Vary a provision of section 8620(e). (10) Eliminate the duty of loyalty provided for in section 8649(b)(1)(i) or (ii) or (2) (relating to standards of conduct for general partners) or the duty of care, except as provided in subsection (d). (11) Vary the contractual obligation of good faith and fair dealing under sections 8635(a) (relating to limited duties of limited partners) and 8649(d), except as provided in subsection (d). (12) Provide indemnification or exoneration in violation of the limitations in sections 8648(g) (relating to reimbursement, indemnification, advancement and insurance) and 8649(i). (13) Vary the information required under section 8618 (relating to required information) or unreasonably restrict the duties and rights under section 8634 (relating to limited partner rights to information) or 8647 (relating to general partner rights to information), except as provided under subsection (d). (14) Vary the power of a person to dissociate as a general partner under section 8664(a) (relating to power to dissociate as general partner and wrongful dissociation), except to require that the notice under section 8663(a)(1) (relating to dissociation as general partner) be in record form. (15) Vary the causes of dissolution specified in section 8681(a)(6) (relating to events causing dissolution). (16) Vary the requirements to wind up the partnership's activities and affairs specified in section 8682(a), (b)(1), (d) and (e) (relating to winding up and filing of certificates). (17) Unreasonably restrict the right of a partner to maintain an action under Subchapter I (relating to actions by partners). (18) Vary the provisions of section 8694 (relating to special litigation committee), except that the partnership agreement may provide that the partnership may not have a special litigation committee. (19) Except as provided in section 8617(b) (relating to amendment and effect of partnership agreement), restrict the rights under this title of a person other than a partner. (d) Rules.--Subject to subsection (c)(12), the following rules apply: (1) The partnership agreement may: (i) 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; (ii) alter the prohibition in section 8654(a)(2) (relating to limitations on distributions) so that the prohibition requires only that the partnership's total assets not be less than the sum of its total liabilities; and (iii) impose reasonable restrictions on the availability and use of information obtained under section 8618, 8634 or 8647 and may define appropriate remedies, including liquidated damages, for a breach of any reasonable restriction on use. (2) To the extent the partnership agreement expressly relieves a partner of a responsibility that the partner would otherwise have under this title 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. (3) If not manifestly unreasonable, the partnership agreement may: (i) alter the aspects of the duty of loyalty stated in section 8649(b)(1)(i) or (ii) or (2); (ii) identify specific types or categories of activities that do not violate the duty of loyalty; (iii) alter the duty of care; (iv) alter or eliminate any other fiduciary duty; and (v) prescribe the standards by which the performance of the contractual obligation of good faith and fair dealing is to be measured. (e) Determination of manifest unreasonableness.--A court shall decide as a matter of law whether a term of a partnership agreement is manifestly unreasonable under subsection (d)(3). The court: (1) 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; and (2) may invalidate the term only if, in light of the purposes, activities and affairs of the limited partnership, it is readily apparent that: (i) the objective of the term is unreasonable; or (ii) the term is an unreasonable means to achieve the term's objective. (July 15, 2024, P.L.728, No.59, eff. 60 days) 2024 Amendment. Act 59 amended subsec. (c)(2). Cross References. Section 8615 is referred to in sections 8611, 8612, 8614, 8617, 8618, 8620, 8621, 8625, 8634, 8635, 8647, 8649, 8654, 8664, 8681, 8682, 8691, 8692, 8694, 8695 of this title.

15 Pa.C.S. § 8616 Application of partnership agreement.

(a) Partnership bound.--A limited partnership is bound by and may enforce the partnership agreement, whether or not the partnership has itself manifested assent to the agreement. (b) Deemed assent.--A person that becomes a partner is deemed to assent to the partnership agreement. (c) Preformation agreement.--Two or more persons intending to become the initial partners of a limited partnership may make an agreement providing that upon the formation of the partnership the agreement will become the partnership agreement. (d) Cross reference.--See section 8621 (relating to formation of limited partnership and certificate of limited partnership).

15 Pa.C.S. § 8617 Amendment and effect of partnership agreement.

(a) Approval of amendments.--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. (b) Obligations to nonpartners.--The obligations of a limited 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. Except as provided in section 8653(d) (relating to sharing of and right to distributions before dissolution) or in a court order issued under section 8673(b)(2) (relating to charging order) to effectuate a charging order, an amendment to the partnership agreement made after a person becomes a transferee or is dissociated as a partner: (1) 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; and (2) is not effective to the extent the amendment imposes a new debt, obligation or other liability on the transferee or person dissociated as a partner. (c) Provisions in filed documents.--If a document delivered by a limited partnership to the department for filing becomes effective and contains a provision that would be ineffective under section 8615(c) or (d)(3) (relating to contents of partnership agreement) if contained in the partnership agreement, the provision is ineffective in the document. (d) Conflicts with partnership agreement.--Subject to subsection (c): (1) If a provision of the certificate of limited partnership conflicts with a provision of the partnership agreement, the provision of the certificate prevails. (2) If a document other than its certificate of limited partnership that has been delivered by a limited partnership to the department for filing becomes effective and conflicts with a provision of the partnership agreement: (i) the agreement prevails as to partners, persons dissociated as partners and transferees; and (ii) the document prevails as to other persons to the extent they reasonably rely on the document. (e) Prohibition of oral amendments.--If a provision of a partnership agreement in record form provides that the partnership agreement cannot be amended, modified or rescinded except in record form, an oral agreement, amendment, modification or rescission shall not be enforceable. (f) Voting requirements.--A partnership agreement may provide in record form that, whenever a provision of this title requires the vote or consent of a specified number or percentage of partners or of a class of partners for the taking of any action, a higher number or percentage of votes or consents shall be required for the action. Except as otherwise provided in the partnership agreement, whenever the partnership agreement requires for the taking of any action by the partners or a class of partners a specific number or percentage of votes or consents, the provision of the partnership agreement setting forth that requirement shall not be amended or repealed by any lesser number or percentage of votes or consents of the partners or the class of partners. Cross References. Section 8617 is referred to in section 8615 of this title.

15 Pa.C.S. § 8618 Required information.

(a) General rule.--A limited partnership shall maintain at its principal office the following information: (1) A current list showing the full name and last known street and mailing address of each partner, separately identifying the general partners, in alphabetical order, and the limited partners, in alphabetical order. (2) A copy of the initial certificate of limited partnership and all amendments to and restatements of the certificate, together with signed copies of any powers of attorney under which any certificate, amendment or restatement has been signed. (3) A copy of any filed certificate or statement of merger, interest exchange, conversion, division or domestication. (4) A copy of the partnership's Federal, State and local income tax returns and reports, if any, for the three most recent years. (5) A copy of any provisions of the partnership agreement in record form and any amendment made in record form to any partnership agreement. (6) A copy of any financial statement of the partnership for the three most recent years. (7) A copy of any record made by the partnership during the past three years of any consent given by or vote taken of any partner under this title or the partnership agreement. (8) Unless contained in a provision of the partnership agreement in record form, a record stating: (i) a description and statement of the agreed value of contributions other than money made and agreed to be made by each partner; (ii) the times at which, or events on the happening of which, any additional contributions agreed to be made by each partner are to be made; (iii) for any person that is both a general partner and a limited partner, a specification of what transferable interest the person owns in each capacity; and (iv) any events upon the happening of which the partnership is to be dissolved and its activities and affairs wound up. (b) Cross reference.--See section 8615 (relating to contents of partnership agreement). Cross References. Section 8618 is referred to in sections 8612, 8615 of this title.

15 Pa.C.S. § 8619 Dual capacity.

A person may be both a general partner and a limited partner. A person that is both a general and limited partner has the rights, powers, duties and obligations provided by this title and the partnership agreement in each of those capacities. When the person acts as a general partner, the person is subject to the obligations, duties and restrictions under this title and the partnership agreement for general partners. When the person acts as a limited partner, the person is subject to the obligations, duties and restrictions under this title and the partnership agreement for limited partners.

15 Pa.C.S. § 8620 Characteristics of limited partnership.

(a) Separate entity.--A limited partnership is an entity distinct from its partners. A limited partnership is the same entity regardless of whether: (1) its certificate of limited partnership states that the limited partnership is a limited liability limited partnership; or (2) it has a statement of registration in effect under section 8201 (relating to scope). (b) Purpose.--A limited partnership may have any lawful purpose, other than acting as a banking institution, credit union or insurer, regardless of whether the purpose is for profit. See section 8102 (relating to interchangeability of partnership, limited liability company and corporate forms of organization). (c) Duration.--A limited partnership has perpetual duration. (d) Powers.--A limited partnership has the capacity to sue and be sued in its own name and the power to do all things necessary or convenient to carry on its activities and affairs. (e) Restrictions on nonprofit limited partnerships.--If a limited partnership has a purpose that is not for profit: (1) Its purpose must be stated in the certificate of limited partnership. (2) The partnership shall not distribute any part of its income or profits to its partners, but it may pay compensation in a reasonable amount to those persons for services rendered. (3) The partnership may confer benefits on partners or nonpartners in conformity with its purposes, may repay capital contributions and may redeem evidences of indebtedness, except when the partnership is currently insolvent or would thereby be made insolvent or rendered unable to carry on its purposes, or when the fair value of the assets of the partnership remaining after the conferring of benefits, payment or redemption would be insufficient to meet its liabilities. The partnership may make distributions of money or property to partners upon dissolution or final liquidation as permitted by this chapter. (4) If the partnership is organized for a charitable purpose, it may take, receive and hold real and personal property as may be given, devised to, or otherwise vested in the partnership, in trust, for the purpose or purposes set forth in its certificate of limited partnership. The general partners shall, as trustees of the property, be held to the same degree of responsibility and accountability as other trustees, unless: (i) a lesser degree or a particular degree of responsibility and accountability is prescribed in the trust instrument; or (ii) the general partners are under the control of the limited partners or third persons who retain the right to direct, and do direct, the actions of the general partners as to the use of the trust property from time to time. (5) Property of the partnership committed to charitable purposes shall not, by any proceeding under Chapter 3 (relating to entity transactions) or otherwise, be diverted from the objects to which it was donated, granted or devised, unless and until the partnership obtains from the court an order under 20 Pa.C.S. Ch. 77 (relating to trusts) specifying the disposition of the property. (f) Cross references.--See sections 8611(d) (relating to short title and application of chapter) and 8615 (relating to contents of partnership agreement). Cross References. Section 8620 is referred to in sections 8102, 8611, 8615, 8621 of this title.

15 Pa.C.S. § 8621 Formation of limited partnership and certificate of limited partnership.

(a) Formation.--To form a limited partnership, a person must deliver a certificate of limited partnership to the department for filing. (b) Required contents of certificate.--A certificate of limited partnership must state: (1) the name of the limited partnership, which must comply with Subchapter A of Chapter 2 (relating to names); (2) subject to section 109 (relating to name of commercial registered office provider in lieu of registered address), the address, including street and number, if any, of the partnership's registered office; and (3) the name and address of each general partner. (c) Optional contents of certificate.--A certificate of limited partnership may contain statements as to matters other than those required under subsection (b), but may not vary or otherwise affect the provisions specified in section 8615(c) and (d) (relating to contents of partnership agreement) in a manner inconsistent with that section. (d) Time of formation.--A limited partnership is formed when: (1) the certificate of limited partnership becomes effective; (2) at least two persons have become partners; (3) at least one person has become a general partner; and (4) at least one person has become a limited partner. (e) Cross references.--See: Section 134 (relating to docketing statement). Section 135 (relating to requirements to be met by filed documents). Section 136(c) (relating to processing of documents by Department of State). Section 8620 (relating to characteristics of limited partnership). Section 8623 (relating to signing of filed documents). Cross References. Section 8621 is referred to in sections 8612, 8616 of this title.

15 Pa.C.S. § 8622 Amendment or restatement of certificate of limited partnership.

(a) General rule.--A certificate of limited partnership may be amended or restated at any time. (b) Required contents of certificate of amendment.--To amend its certificate of limited partnership, a limited partnership must deliver to the department for filing a certificate of amendment that states: (1) the name of the partnership; (2) the date of filing of its initial certificate; (3) subject to section 109 (relating to name of commercial registered office provider in lieu of registered address), the address, including street and number, if any, of its registered office; and (4) the amendment. (c) Restatement.--To restate its certificate of limited partnership, a limited partnership must deliver to the department for filing a certificate of amendment that: (1) is designated as a restatement; and (2) includes a statement that the restated certificate supersedes the original certificate and all amendments. (d) Required amendments.--A limited partnership shall promptly deliver to the department for filing an amendment to its certificate of limited partnership to reflect: (1) the admission of a new general partner; (2) the dissociation of a person as a general partner; or (3) the appointment of a person to wind up the partnership's activities and affairs under section 8682(c) or (d) (relating to winding up and filing of certificates). (e) Obligation to correct.--If a general partner knows that any information in a filed certificate of limited partnership is inaccurate, the general partner shall promptly: (1) cause the certificate to be amended; or (2) if appropriate, deliver to the department for filing: (i) a certificate of change of registered office under section 8625 (relating to registered office); (ii) a statement of correction under section 138 (relating to statement of correction); or (iii) a statement of abandonment under section 141 (relating to abandonment of filing before effectiveness). (f) Amendment of voting provisions.--Except as provided in the certificate of limited partnership, whenever the certificate requires for the taking of any action by the partners or a class of partners a specific number or percentage of votes or consents, the provision of the certificate setting forth that requirement shall not be amended or repealed by any lesser number or percentage of votes or consents of the partners or of the class of partners. (g) Cross references.--See: Section 134 (relating to docketing statement). Section 135 (relating to requirements to be met by filed documents). Section 136(c) (relating to processing of documents by Department of State). Section 8623 (relating to signing of filed documents). Cross References. Section 8622 is referred to in section 8624 of this title.

15 Pa.C.S. § 8623 Signing of filed documents.

(a) Required signatures.--Except as provided in this title, a document delivered to the department for filing under this title relating to a limited partnership must be signed as follows: (1) An initial certificate of limited partnership must be signed by all general partners listed in the certificate. (2) An amendment to the certificate of limited partnership deleting a statement that the limited partnership is a limited liability limited partnership must be signed by all general partners listed in the certificate. (3) An amendment to the certificate of limited partnership designating as general partner a person admitted under section 8681(a)(3)(ii) (relating to events causing dissolution) following the dissociation of a limited partnership's last general partner must be signed by the person admitted as a general partner. (4) An amendment to the certificate of limited partnership required by section 8682(c) (relating to winding up and filing of certificates) following the appointment of a person to wind up the dissolved limited partnership's activities and affairs must be signed by that person. (5) Any other amendment to the certificate of limited partnership must be signed by: (i) at least one general partner listed in the certificate; (ii) each person designated in the amendment as a new general partner; and (iii) each person that the amendment indicates has dissociated as a general partner, unless: (A) the person is deceased or a guardian has been appointed for the person and the amendment so states; or (B) the person has previously delivered to the department for filing a certificate of dissociation. (6) A restated certificate of limited partnership must be signed by at least one general partner listed in the certificate, and, to the extent the restated certificate effects a change under any other paragraph of this subsection, the certificate must be signed in a manner that satisfies that paragraph. (7) A certificate of termination must be signed by all general partners listed in the certificate of limited partnership or, if the certificate of a dissolved limited partnership lists no general partners, by the person appointed under section 8682(c) or (d) to wind up the dissolved limited partnership's activities and affairs. (8) Any other document delivered by a limited partnership to the department for filing must be signed by at least one general partner listed in the certificate of limited partnership. (9) A statement by a person under section 8665(a)(3) (relating to effects of dissociation as general partner) stating that the person has dissociated as a general partner must be signed by that person. (10) A certificate of negation by a person under section 8636 (relating to person erroneously believing self to be limited partner) must be signed by that person. (11) Any other document delivered on behalf of a person to the department for filing must be signed by that person. (b) Cross reference.--See section 142 (relating to effect of signing filings). (Nov. 3, 2022, P.L.1791, No.122, eff. 60 days) 2022 Amendment. Act 122 amended subsec. (a)(3). Cross References. Section 8623 is referred to in sections 8621, 8622, 8625, 8636, 8665, 8681.1, 8682 of this title.

15 Pa.C.S. § 8624 Liability of general partner for false or missing information in filed document.

(a) General rule.--If a document delivered to the department for filing under this title and filed by the department contains a materially false statement or fails to state a material fact required to be stated, a person that suffers loss by reasonable reliance on the statement or failure to state a material fact may recover damages for the loss from a general partner if: (1) the document was delivered for filing on behalf of the limited partnership; and (2) the general partner knew or had notice there was false or missing information in the document for a reasonably sufficient time before the document was relied upon so that, before the reliance, the general partner reasonably could have: (i) effected an amendment under section 8622 (relating to amendment or restatement of certificate of limited partnership); (ii) filed a petition under section 144 (relating to signing and filing pursuant to judicial order); or (iii) delivered to the department for filing: (A) a certificate of change of registered office under section 8625 (relating to registered office); (B) a statement of correction under section 138 (relating to statement of correction); or (C) a statement of abandonment under section 141 (relating to abandonment of filing before effectiveness). (b) Cross references.--See sections 142 (relating to effect of signing filings) and 143 (relating to liability for inaccurate information in filing).

15 Pa.C.S. § 8625 Registered office.

(a) General rule.--Every limited partnership shall have and continuously maintain in this Commonwealth a registered office which may, but need not, be the same as its place of business. (b) Change of registered office.--After formation, a change in the location of the registered office may be effected at any time by the limited partnership. Before the change becomes effective, the limited partnership shall amend its certificate of limited partnership under the provisions of this chapter to reflect the change, include the change in an annual report under section 146 (relating to annual report) or deliver to the department for filing a certificate of change of registered office setting forth: (1) The name of the limited partnership. (2) The address, including street and number, if any, of its then registered office. (3) The address, including street and number, if any, to which the registered office is to be changed. (c) Alternative procedure.--A limited partnership may satisfy the requirements of this chapter concerning the maintenance of a registered office in this Commonwealth by setting forth in any document filed by the department under any provision of this title that permits or requires the statement of the address of its then registered office, in lieu of that address, the statement authorized by section 109(a) (relating to name of commercial registered office provider in lieu of registered address). (d) Effect of statement.--A statement regarding the registered office of a limited partnership set forth in a document filed in the department pursuant to this section shall operate as an amendment of the certificate of limited partnership. (e) Cross references.--See: Section 108 (relating to change in location or status of registered office provided by agent). Section 134 (relating to docketing statement). Section 135 (relating to requirements to be met by filed documents). Section 136(c) (relating to processing of documents by Department of State). Section 8615(c)(6) (relating to contents of partnership agreement). Section 8623 (relating to signing of filed documents). (Nov. 3, 2022, P.L.1791, No.122, eff. 60 days) 2022 Amendment. Act 122 amended subsec. (b) and relettered former subsec. (d) to subsec. (e) and added present subsec. (d). Cross References. Section 8625 is referred to in sections 8622, 8624 of this title.

15 Pa.C.S. § 8631 Becoming a limited partner.

(a) Upon formation.--Upon formation of a limited partnership, a person becomes a limited partner as agreed among the persons that are to be the initial partners. (b) After formation.--After formation, a person becomes a limited partner: (1) as provided in the partnership agreement; (2) as the result of a transaction effective under Chapter 3 (relating to entity transactions); (3) with the affirmative vote or consent of all the partners; or (4) as provided in section 8681(a)(4) or (5) (relating to events causing dissolution). (c) Noneconomic limited partners.--A person may become a limited partner without: (1) acquiring a transferable interest; or (2) making or being obligated to make a contribution to the limited partnership. (d) Nature of interest.--The interest of a limited partner in a limited partnership is personal property. Cross References. Section 8631 is referred to in section 8612 of this title.

15 Pa.C.S. § 8632 No agency power of limited partner as limited partner.

(a) General rule.--A limited partner is not an agent of a limited partnership solely by reason of being a limited partner. (b) Creation of partnership liability.--A person's status as a limited partner does not prevent or restrict law other than this chapter from imposing liability on a limited partnership because of the person's conduct.

15 Pa.C.S. § 8633 No liability as limited partner for limited partnership obligations.

A debt, obligation or other liability of a limited partnership is not the debt, obligation or other liability of a limited partner. A limited partner is not personally liable, directly or indirectly, by way of contribution or otherwise, for a debt, obligation or other liability of the partnership solely by reason of being or acting as a limited partner, even if the limited partner participates in the management and control of the partnership. This subsection applies regardless of the dissolution, winding up or termination of the partnership.

15 Pa.C.S. § 8634 Limited partner rights to information.

(a) Right to required information.--Within 10 days after receipt by a limited partnership of a demand made in record form, a limited partner may inspect and copy required information during regular business hours in the partnership's principal office. The limited partner need not have any particular purpose for seeking the information. (b) Right to other information.--During regular business hours and at a reasonable location specified by the limited partnership, a limited partner may inspect and copy information, other than the required information, regarding the activities, affairs, financial condition and other circumstances of the partnership if: (1) the limited partner seeks the information for a purpose reasonably related to the partner's interest as a limited partner; (2) the limited partner makes a demand in record form received by the partnership, describing with reasonable particularity the information sought and the purpose for seeking the information; and (3) the information sought is directly connected to the limited partner's purpose. (c) Rights of person dissociated as limited partner.--Subject to subsection (h), on demand made in record form received by a limited partnership, a person dissociated as a limited partner may have access to information to which the person was entitled while a limited partner if: (1) the information pertains to the period during which the person was a limited partner; (2) in seeking the information the person complies with section 8635(a) (relating to limited duties of limited partners) as if still a limited partner; and (3) the person satisfies the requirements imposed on a limited partner by subsection (b). (d) Required response to demand.--Within 10 days after receiving a demand under subsection (b) or (c), the limited partnership shall inform in record form the person that made the demand of: (1) what information the partnership will provide in response to the demand and when and where the partnership will provide the information; and (2) the partnership's reasons for declining, if the partnership declines to provide any demanded information. (e) Copying costs.--A limited partnership may charge a person that makes a demand under this section the reasonable costs of copying. (f) Rights of agent or guardian.--A limited partner or person dissociated as a limited partner may exercise the rights under this section through an agent or, in the case of an individual under legal disability, a guardian. Any restriction or condition imposed by the partnership agreement or under subsection (h) applies both to the agent or guardian and to the limited partner or person dissociated as a limited partner. (g) No rights of transferee.--Subject to section 8674 (relating to power of personal representative of deceased partner), the rights under this section do not extend to a person as transferee. (h) Limitations on access.--In addition to any restriction or condition stated in its partnership agreement, a limited partnership, as a matter within the ordinary course of its activities and affairs, may impose reasonable restrictions and conditions on access to and use of information to be furnished under this section, including designating information confidential and imposing nondisclosure and safeguarding obligations on the recipient. In a dispute concerning the reasonableness of a restriction under this subsection, the partnership has the burden of proving reasonableness. (i) Enforcement of right to information.--If the limited partnership, or a general partner or agent thereof, refuses to permit an inspection sought by a limited partner or person dissociated as a limited partner or attorney or other agent acting for the limited partner or person dissociated as a limited partner pursuant to subsection (a), (b) or (c), or does not reply to the demand made under any of those subsections within 10 days after the demand has been received, the limited partner may file an action in the court for an order to compel the inspection. The court is vested with exclusive jurisdiction to determine whether or not the person seeking inspection is entitled to the inspection sought. The court may summarily order the limited partnership to permit the limited partner to inspect the information and to make copies or extracts therefrom. (j) Cross reference.--See section 8615 (relating to contents of partnership agreement). (Nov. 3, 2022, P.L.1791, No.122, eff. 60 days) 2022 Amendment. Act 122 relettered former subsec. (i) to subsec. (j) and added present subsec. (i). Cross References. Section 8634 is referred to in sections 8615, 8662, 8674 of this title.

15 Pa.C.S. § 8635 Limited duties of limited partners.

(a) Good faith and fair dealing.--A limited partner shall discharge any duties to the limited partnership and the other partners under the partnership agreement and exercise any rights under this title or the partnership agreement consistently with the contractual obligation of good faith and fair dealing. (b) No other duties.--Except as provided under subsection (a), a limited partner does not have any duty to the limited partnership or to any other partner solely by reason of acting as a limited partner. (c) Transactions with limited partnership.--If a limited partner enters into a transaction with a limited partnership, the limited partner's rights and obligations arising from the transaction are the same as those of a person that is not a partner. (d) Cross reference.--See section 8615(c)(11) (relating to contents of partnership agreement). Cross References. Section 8635 is referred to in sections 8615, 8634, 8661, 8662 of this title.

15 Pa.C.S. § 8636 Person erroneously believing self to be limited partner.

(a) Right to correct.--Except as provided in subsection (b), a person that makes an investment in a business enterprise and erroneously but in good faith believes that the person has become a limited partner in the enterprise is not liable for the enterprise's obligations by reason of making the investment, receiving distributions from the enterprise or exercising any rights of or appropriate to a limited partner, if, on ascertaining the mistake, the person: (1) causes an appropriate certificate of limited partnership, amendment or statement of correction to be signed and delivered to the department for filing; (2) if a certificate of limited partnership is on file in the department, withdraws from future participation as an owner in the enterprise by delivering to the department for filing a certificate of negation under this section stating: (i) the name of the limited partnership; (ii) subject to section 109 (relating to name of commercial registered office provider in lieu of registered address), the address, including street and number, if any, of the partnership's registered office; (iii) the name of the person delivering the certificate to the department for filing; and (iv) that the person is not a general partner; or (3) files a certificate of denial under section 8434 (relating to certificate of denial) as if the enterprise were a general partnership. (b) Liability before correction.--A person that makes an investment described in subsection (a) is liable to the same extent as a general partner to any third party that enters into a transaction with the enterprise, believing in good faith that the person is a general partner, before the department files a certificate of negation, certificate of limited partnership, amendment or statement of correction to show that the person is not a general partner. (c) Right to withdraw.--If a person makes a diligent effort in good faith to comply with subsection (a)(1) and is unable to cause the appropriate certificate of limited partnership, amendment or statement of correction to be signed and delivered to the department for filing, the person has the right to withdraw from the enterprise under subsection (a)(2) even if the withdrawal would otherwise breach an agreement with others that are or have agreed to become co-owners of the enterprise. (d) Cross references.--See: Section 134 (relating to docketing statement). Section 135 (relating to requirements to be met by filed documents). Section 136(c) (relating to processing of documents by Department of State). Section 8623 (relating to signing of filed documents). Cross References. Section 8636 is referred to in section 8623 of this title.

15 Pa.C.S. § 8641 Becoming a general partner.

(a) Admission on formation.--On formation of a limited partnership, a person becomes a general partner as agreed among the persons that are to be the initial partners. (b) Admission after formation.--After formation of a limited partnership, a person becomes a general partner: (1) as provided in the partnership agreement; (2) as the result of a transaction effective under Chapter 3 (relating to entity transactions); (3) with the affirmative vote or consent of all the partners; or (4) under section 8681(a)(3)(ii) or (5) (relating to events causing dissolution) following the dissociation of a limited partnership's last general partner. (c) Noneconomic general partners.--A person may become a general partner without: (1) acquiring a transferable interest; or (2) making or being obligated to make a contribution to the partnership. (d) Nature of interest.--The interest of a general partner in a limited partnership is personal property. Cross References. Section 8641 is referred to in section 8612 of this title.

15 Pa.C.S. § 8642 General partner agent of limited partnership.

(a) General rule.--Each general partner is an agent of the limited partnership for the purposes of its activities and affairs. An act of a general partner, including the signing of a document in record form in the partnership's name, for apparently carrying on in the ordinary course the partnership's activities and affairs, or activities and affairs of the kind carried on by the partnership, binds the partnership, unless the general partner did not have authority to act for the partnership in the particular matter and the person with which the general partner was dealing knew or had notice that the general partner lacked authority. (b) Act outside of ordinary course.--An act of a general partner which is not apparently for carrying on in the ordinary course the limited partnership's activities and affairs, or activities and affairs of the kind carried on by the partnership, binds the partnership only if the partner had actual authority to take the action. Cross References. Section 8642 is referred to in sections 8666, 8684 of this title.

15 Pa.C.S. § 8643 Limited partnership liable for general partner's actionable conduct.

(a) General rule.--A limited partnership is liable for loss or injury caused to a person or for a penalty incurred as a result of a wrongful act, or other actionable conduct, of a general partner acting in the ordinary course of activities and affairs of the partnership or with the actual or apparent authority of the partnership. (b) Misapplication of property.--If, in the course of a limited partnership's activities and affairs or while acting with actual or apparent authority of the partnership, a general 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 general partner, the partnership is liable for the loss.

15 Pa.C.S. § 8644 General partner's liability.

(a) General rule.--Except as provided under subsection (b) or section 8204 (relating to limitation on liability of partners), all general partners are liable jointly and severally for all debts, obligations and other liabilities of the limited partnership unless otherwise agreed by the claimant or provided by law. (b) Preexisting obligations.--A person that becomes a general partner is not personally liable for a debt, obligation or other liability of the limited partnership incurred before the person became a general partner. Cross References. Section 8644 is referred to in sections 8645, 8667, 8686, 8687, 8689 of this title.

15 Pa.C.S. § 8645 Actions by and against partnership and partners.

(a) General partner as party.--To the extent not inconsistent with section 8644 (relating to general partner's liability), a general partner may be joined in an action against the limited partnership or named in a separate action. (b) Judgment against partnership only.--A judgment against a partnership: (1) is not by itself a judgment against a partner; and (2) except as set forth in subsection (c), may not be satisfied from a partner's assets. (c) Judgment against partnership and partner.--If there is a judgment against a partnership and a partner on the same claim, the judgment creditor may levy execution against the assets of the partner if both of the following paragraphs apply: (1) The partner is personally liable for the claim under section 8644. (2) One of the following subparagraphs applies: (i) A writ of execution on the judgment against the partnership has been returned unsatisfied in whole or in part. (ii) The partnership is a debtor in bankruptcy. (iii) The partner has agreed that the creditor need not exhaust partnership assets. (iv) A court grants permission to levy execution based on a finding that: (A) partnership assets subject to execution are clearly insufficient to satisfy the judgment; (B) exhaustion of partnership assets is excessively burdensome; or (C) the grant of permission is an appropriate exercise of the court's equitable powers. (v) Liability is imposed on the partner by law or contract independent of the existence of the partnership.

15 Pa.C.S. § 8646 Management rights.

(a) General rule.--Each general partner has equal rights in the management and conduct of the limited partnership's activities and affairs. Except as provided in this title, any matter relating to the activities and affairs of the partnership is decided exclusively by the general partner or, if there is more than one general partner, by a majority of the general partners. (b) Actions requiring unanimous approval.--The affirmative vote or consent of all the partners is required to: (1) amend the partnership agreement; and (2) amend the certificate of limited partnership to delete a statement that the limited partnership is a limited liability limited partnership. (c) Reimbursement of advance.--A limited partnership shall reimburse a general partner for an advance to the partnership beyond the amount of capital the general partner agreed to contribute. (d) Status of advance.--A payment or advance made by a general partner which gives rise to an obligation of the limited partnership under subsection (c) or section 8648(a) (relating to reimbursement, indemnification, advancement and insurance) constitutes a loan to the partnership which accrues interest from the date of the payment or advance. (e) No right to remuneration.--A general partner is not entitled to remuneration for services performed for the limited partnership. (f) Sale of assets.--A sale, lease, exchange or other disposition of all, or substantially all, the property and assets of a limited partnership that is not made in the usual and regular course of the activities and affairs of the partnership must be approved by: (1) all the general partners; and (2) limited partners owning the rights to receive a majority of the distributions as limited partners. (g) Cross reference.--See section 324 (relating to approval by limited partnership). Cross References. Section 8646 is referred to in section 8648 of this title.

15 Pa.C.S. § 8647 General partner rights to information.

(a) Right to required information.--A general partner may inspect and copy required information during regular business hours in the limited partnership's principal office. (b) Right to other information.--On reasonable notice, a general partner may inspect and copy during regular business hours, at a reasonable location specified by the limited partnership, any other records maintained by the partnership in addition to the required information regarding the partnership's activities, affairs, financial condition and other circumstances. (c) Obligation of limited partnership.--A limited partnership shall furnish to each general partner, without demand, any information concerning the partnership's activities, affairs, financial condition and other circumstances which the partnership knows and is material to the proper exercise of the general partner's rights and duties under the partnership agreement or this title, except to the extent the partnership can establish that it reasonably believes the general partner already knows the information. (d) Obligation of general partner.--The duty to furnish information under subsection (c) also applies to each general partner to the extent the general partner knows any of the information described in subsection (b). (e) Rights of person dissociated as general partner.--Subject to subsection (j), within 10 days after receipt by a limited partnership of a demand made in record form, a person dissociated as a general partner may have access to the information and records described under subsections (a) and (b) at the locations specified under subsections (a) and (b) if: (1) the information or record pertains to the period during which the person was a general partner; (2) in seeking the information or record, the person complies with section 8649(d) (relating to standards of conduct for general partners) as if still a general partner; and (3) all of the following apply: (i) the person seeks the information for a purpose reasonably related to the partner's interest as a former general partner; (ii) the person makes a demand in record form received by the partnership, describing with reasonable particularity the information sought and the purpose for seeking the information; and (iii) the information sought is directly connected to the person's purpose. (f) Required response to demand.--Within 10 days after receiving a demand under subsection (e), the limited partnership shall, in record form, inform the person that made the demand of: (1) what information the partnership will provide in response to the demand and when and where the partnership will provide the information; and (2) the partnership's reasons for declining, if the partnership declines to provide any demanded information. (g) Copying costs.--A limited partnership may charge a person that makes a demand under this section the reasonable costs of copying. (h) Rights of agent or guardian.--A general partner or person dissociated as a general partner may exercise the rights under this section through an agent or, in the case of an individual under legal disability, a guardian. Any restriction or condition imposed by the partnership agreement or under subsection (j) applies both to the agent or guardian and to the general partner or person dissociated as a general partner. (i) No rights of transferee.--The rights under this section do not extend to a person as transferee, except that if: (1) a general partner dies, section 8674 (relating to power of personal representative of deceased partner) applies; and (2) an individual dissociates as a general partner under section 8663(a)(7)(ii) or (iii) (relating to dissociation as general partner), the personal representative of the individual may exercise the rights under subsection (d) of a person dissociated as a general partner. (j) Limitations on access.--In addition to any restriction or condition stated in its partnership agreement, a limited partnership, as a matter within the ordinary course of its activities and affairs, may impose reasonable restrictions and conditions on access to and use of information to be furnished under this section, including designating information confidential and imposing nondisclosure and safeguarding obligations on the recipient. In a dispute concerning the reasonableness of a restriction under this subsection, the partnership has the burden of proving reasonableness. (k) Enforcement of right to information.--If the limited partnership, or a general partner or agent thereof, refuses to permit an inspection sought by a general partner or person dissociated as a general partner or attorney or other agent acting for the general partner or person dissociated as a general partner pursuant to subsection (a), (b) or (e), or does not reply to the demand made under any of those subsections within 10 days after the demand has been received, the general partner may file an action in the court for an order to compel the inspection. The court is vested with exclusive jurisdiction to determine whether or not the person seeking inspection is entitled to the inspection sought. The court may summarily order the limited partnership to permit the general partner to inspect the information and to make copies or extracts therefrom. (l) Cross reference.--See section 8615 (relating to contents of partnership agreement). (Nov. 3, 2022, P.L.1791, No.122, eff. 60 days) 2022 Amendment. Act 122 relettered former subsec. (k) to subsec. (l) and added present subsec. (k). Cross References. Section 8647 is referred to in sections 8615, 8665 of this title.

15 Pa.C.S. § 8648 Reimbursement, indemnification, advancement and insurance.

(a) Reimbursement.--A limited partnership shall reimburse a general partner for any payment made by the general partner in the course of the general partner's activities on behalf of the partnership, if the general partner complied with sections 8646 (relating to management rights), 8649 (relating to standards of conduct for general partners) and 8654 (relating to limitations on distributions) in making the payment. (b) Indemnification.--A limited 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 general partner, if the claim, demand, debt, obligation or other liability does not arise from the person's breach of section 8646, 8649 or 8654. (c) Advancement.--In the ordinary course of its activities and affairs, a limited partnership may advance 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 general partner, if the person promises to repay the partnership if the person ultimately is determined not to be entitled to be indemnified. (d) Insurance.--A limited partnership may purchase and maintain insurance on behalf of a general partner against liability asserted against or incurred by the general partner in that capacity or arising from that status even if, under subsection (g), the partnership agreement could not eliminate or limit the person's liability to the partnership for the conduct giving rise to the liability. (e) Nonexclusivity.--The rights provided under subsections (a), (b), (c) and (d) shall not be deemed exclusive of any other rights to which a person seeking reimbursement, indemnification, advancement of expenses or insurance may be entitled under the partnership agreement, vote of partners, contract or otherwise, both as to action in his official capacity and as to action in another capacity while holding that position. Section 8649(f) shall be applicable to a vote, contract or other action under this subsection. A limited partnership may create a fund of any nature, which may, but need not be, under the control of a trustee, or otherwise secure or insure in any manner its indemnification obligations, whether arising under this section or otherwise. (f) Grounds.--Indemnification under subsection (e) may be granted for any action taken and may be made whether or not the limited partnership would have the power to indemnify the person under any other provision of law except as provided in this section and whether or not the indemnified liability arises or arose from any threatened, pending or completed action by or in the right of the partnership. Indemnification under subsection (e) is declared to be consistent with the public policy of the Commonwealth. (g) Limitation.--Indemnification under this section shall not be made in any case where the act giving rise to the claim for indemnification is determined by a court to constitute recklessness, willful misconduct or a knowing violation of law. Cross References. Section 8648 is referred to in sections 8615, 8646, 8693, 8694 of this title.

15 Pa.C.S. § 8649 Standards of conduct for general partners.

(a) General rule.--A general partner owes to the limited partnership and, subject to section 8691 (relating to direct action by partner), the other partners the duties of loyalty and care stated in subsections (b) and (c). (b) Duty of loyalty.--The fiduciary duty of loyalty of a general partner includes the duties: (1) to account to the limited partnership and hold as trustee for it any property, profit or benefit derived by the general partner: (i) in the conduct or winding up of the partnership's activities and affairs; (ii) from a use by the general partner of the partnership's property; or (iii) from the appropriation of a partnership opportunity; (2) to refrain from dealing with the partnership in the conduct or winding up of the partnership's activities and affairs as or on behalf of a person having an interest adverse to the partnership; and (3) to refrain from competing with the partnership in the conduct or winding up of the partnership's activities and affairs. (c) Duty of care.--The duty of care of a general partner in the conduct or winding up of the limited partnership's activities and affairs is to refrain from engaging in grossly negligent or reckless conduct, willful or intentional misconduct or knowing violation of law. (d) Good faith and fair dealing.--A general partner shall discharge the duties and obligations under this title or under the partnership agreement and exercise any rights consistent with the contractual obligation of good faith and fair dealing. (e) Self-serving conduct.--A general partner does not violate a duty or obligation under this title or under the partnership agreement solely because the general partner's conduct furthers the general partner's own interest. (f) Authorization or ratification.--All the partners of a limited partnership may authorize or ratify, after full disclosure of all material facts, a specific act or transaction that otherwise would violate the duty of loyalty of a general partner. (g) Fairness as a defense.--It is a defense to a claim under subsection (b)(2) and any comparable claim in equity or at common law that the transaction was fair to the limited partnership at the time it is authorized or ratified under subsection (f). (h) Rights and obligations in approved transactions.--If a general partner enters into a transaction with the limited partnership which otherwise would be prohibited by subsection (b)(2) and the transaction is authorized or ratified as provided in subsection (f) or the partnership agreement, the general partner's rights and obligations arising from the transaction are the same as those of a person that is not a general partner. (i) Exoneration.--The partnership agreement may provide that a general partner shall not be personally liable for monetary damages to the partnership or the other partner for a breach of subsection (c), except that a general partner may not be exonerated for an act that constitutes recklessness, willful misconduct or a knowing violation of law. (j) Cross reference.--See section 8615 (relating to contents of partnership agreement). Cross References. Section 8649 is referred to in sections 8615, 8647, 8648, 8654, 8655, 8663, 8665, 8694 of this title.

15 Pa.C.S. § 8651 Form of contribution.

A contribution may consist of: (1) property transferred to, services performed for or another benefit provided to the limited partnership; (2) an agreement to transfer property to, perform services for or provide another benefit to the partnership; or (3) any combination of items listed in paragraphs (1) and (2). Cross References. Section 8651 is referred to in section 8612 of this title.

15 Pa.C.S. § 8652 Liability for contribution.

(a) Obligation not excused.--A person's obligation to make a contribution to a limited partnership is not excused by the person's death, disability, termination or other inability to perform personally. (b) Substitute payment.--If a person does not fulfill an obligation to make a contribution other than money, the person is obligated at the option of the limited partnership to contribute money equal to the value, as stated in the required information, of the part of the contribution which has not been made. (c) Compromise of obligation.--The obligation of a person to make a contribution may be compromised only by the affirmative vote or consent of all the partners. If a creditor of a limited partnership extends credit or otherwise acts in reliance on an obligation described in subsection (a) without knowledge or notice of a compromise under this subsection, the creditor may enforce the obligation.

15 Pa.C.S. § 8653 Sharing of and right to distributions before dissolution.

(a) General rule.--Any distribution made by a limited partnership before its dissolution and winding up must be shared among the partners and persons dissociated as partners on the basis of the value, as stated in the required information when the limited partnership decides to make the distribution, of the contributions the limited partnership has received from each partner, except as provided in section 8672(b) (relating to transfer of transferable interest) or to the extent necessary to comply with a charging order in effect under section 8673 (relating to charging order). (b) No entitlement to distribution.--A person has a right to a distribution before the dissolution and winding up of a limited partnership only if the partnership decides to make an interim distribution. A person's dissociation does not entitle the person to a distribution. (c) Distribution in kind.--A person does not have a right to demand or receive a distribution from a limited partnership in any form other than money. Except as provided under section 8690(f) (relating to disposition of assets in winding up and required contributions), a partnership may distribute an asset in kind only if each part of the asset is fungible with each other part and each person receives a percentage of the asset equal in value to the person's share of distributions. (d) Status as creditor.--If a partner or transferee becomes entitled to receive a distribution, the partner or transferee has the status of, and is entitled to all remedies available to, a creditor of the limited partnership with respect to the distribution, except that the partnership's obligation to make a distribution is subject to offset for any amount owed to the partnership by the partner or a person dissociated as a partner on whose account the distribution is made. Cross References. Section 8653 is referred to in section 8617 of this title.

15 Pa.C.S. § 8654 Limitations on distributions.

(a) General rule.--A limited partnership may not make a distribution, including a distribution under section 8690 (relating to disposition of assets in winding up and required contributions), if after the distribution: (1) the partnership would not be able to pay its debts as they become due in the ordinary course of the partnership's activities and affairs; or (2) the partnership's total assets would be less than the sum of its total liabilities plus the amount that would be needed, if the partnership were to be dissolved and wound up at the time of the distribution, to satisfy the preferential rights upon dissolution and winding up of partners and transferees whose preferential rights are superior to the rights of persons receiving the distribution. (b) Valuation.--A limited partnership may base a determination that a distribution is not prohibited under subsection (a)(2) on: (1) the book values of the assets and liabilities of the partnership, as reflected on its books and records; (2) a valuation that takes into consideration unrealized appreciation and depreciation or other changes in value of the assets and liabilities of the partnership; (3) the current value of the assets and liabilities of the partnership, either valued separately or valued in segments or as an entirety as a going concern; or (4) any other method that is reasonable in the circumstances. (c) Excluded liabilities.--In determining whether a distribution is prohibited by subsection (a)(2), the limited partnership need not consider obligations and liabilities unless they are required to be reflected on a balance sheet, not including the notes to the balance sheet, prepared on the basis of generally accepted accounting principles or other such accounting practices and principles as are used generally by the partnership in the maintenance of its books and records and as are reasonable in the circumstances. (d) Measuring date of distribution.--Except as provided in subsection (e), the effect of a distribution under subsection (a) is measured: (1) as of the date specified by the limited partnership when it authorizes the distribution if the distribution occurs within 125 days of the earlier of the date so specified or the date of authorization; or (2) as of the date of distribution in all other cases. (e) Date of redemption.--In the case of a distribution described in paragraph (1) of the definition of "distribution" in section 8612 (relating to definitions), the distribution is deemed to occur as of the earlier of the date money or other property is transferred or debt is incurred by the limited partnership or the date the person entitled to the distribution ceases to own the interest or right being acquired by the partnership in return for the distribution. (f) Status of distribution debt.--The indebtedness of a limited partnership to a partner or transferee incurred by reason of a distribution made in accordance with this section shall be at least on a parity with the partnership's indebtedness to its general, unsecured creditors, except to the extent subordinated by agreement. (g) Certain subordinated debt.--The indebtedness of a limited partnership, including indebtedness issued as a distribution, is not a liability for purposes of subsection (a) if the terms of the indebtedness provide that payment of principal and interest is made only if and to the extent that payment of a distribution could then be made under this section. If the indebtedness is issued as a distribution, each payment of principal or interest is treated as a distribution, the effect of which is measured on the date the payment is made. (h) Distributions in winding up.--In measuring the effect of a distribution under section 8690, the liabilities of a dissolved limited partnership do not include any claim that has been barred under section 8686 (relating to known claims against dissolved limited partnership) or 8687 (relating to other claims against dissolved limited partnership), or for which security has been provided under section 8688 (relating to court proceedings). (i) Cross references.--See sections 8615(d)(1)(ii) (relating to contents of partnership agreement) and 8649 (relating to standards of conduct for general partners). Cross References. Section 8654 is referred to in sections 8615, 8648, 8655 of this title.

15 Pa.C.S. § 8655 Liability for improper distributions.

(a) General rule.--If a general partner consents to a distribution made in violation of section 8654 (relating to limitations on distributions) and in consenting to the distribution fails to comply with section 8649 (relating to standards of conduct for general partners), the general partner is personally liable to the limited partnership for the amount of the distribution which exceeds the amount that could have been distributed without the violation of section 8654. (b) Recipients.--A person that receives a distribution knowing that the distribution violated section 8654 is personally liable to the limited partnership but only to the extent that the distribution received by the person exceeded the amount that could have been properly paid under section 8654. (c) Contribution.--A general partner against which an action is commenced because the general partner is liable under subsection (a) may: (1) join any other person that is liable under subsection (a) or otherwise seek to enforce a right of contribution from the person; and (2) join any person that received a distribution in violation of subsection (b) or otherwise seek to enforce a right of contribution from the person in the amount the person received in violation of subsection (b). (d) Statute of repose.--An action under this section is barred unless commenced within two years after the distribution.

15 Pa.C.S. § 8661 Dissociation as limited partner.

(a) No right to dissociate.--A person does not have a right to dissociate as a limited partner before the completion of the winding up of the limited partnership. (b) Events causing dissociation.--A person is dissociated as a limited partner when any of the following apply: (1) The limited partnership knows or has notice of the person's express will to withdraw as a limited partner rightfully or wrongfully, except that, if the person has specified a withdrawal date later than the date the partnership knew or had notice, on that later date. (2) An event stated in the partnership agreement as causing the person's dissociation as a limited partner occurs. (3) The person is expelled as a limited partner pursuant to the partnership agreement. (4) The person is expelled as a limited partner by the affirmative vote or consent of all the other partners if: (i) it is unlawful to carry on the partnership's activities and affairs with the person as a limited partner; (ii) there has been a transfer of all the person's transferable interest in the partnership, other than: (A) a transfer for security purposes; or (B) a charging order in effect under section 8673 (relating to charging order) which has not been foreclosed; (iii) the person is an entity and: (A) the partnership notifies the person that it will be expelled as a limited partner because: (I) the person has filed a certificate of dissolution or the equivalent; (II) the person has been administratively dissolved; (III) the person's charter or the equivalent has been revoked; or (IV) the person's right to conduct business has been suspended by the person's jurisdiction of formation; and (B) within 90 days after the notification: (I) the certificate of dissolution or the equivalent has not been withdrawn, rescinded or revoked; (II) the person has not been reinstated; (III) the person's charter or the equivalent has not been reinstated; or (IV) the person's right to conduct business has not been reinstated; or (iv) the person is an unincorporated entity that has been dissolved and whose activities and affairs are being wound up. (5) On application by the partnership or a partner in a direct action under section 8691 (relating to direct action by partner), the person is expelled as a limited partner by judicial order because the person: (i) has engaged or is engaging in wrongful conduct that has affected adversely and materially, or will affect adversely and materially, the partnership's activities and affairs; (ii) has committed willfully or persistently, or is committing willfully or persistently, a material breach of the partnership agreement or the contractual obligation of good faith and fair dealing under section 8635(a) (relating to limited duties of limited partners); or (iii) has engaged or is engaging in conduct relating to the partnership's activities and affairs which makes it not reasonably practicable to carry on the activities and affairs with the person as a limited partner. (6) In the case of an individual, the individual dies. (7) In the case of a person that is a testamentary or inter vivos trust or is acting as a limited partner by virtue of being a trustee of such a trust, the trust's entire transferable interest in the limited partnership is distributed. (8) In the case of a person that is an estate or is acting as a limited partner by virtue of being a personal representative of an estate, the estate's entire transferable interest in the limited partnership is distributed. (9) In the case of a person that is not an individual, the existence of the person terminates. (10) The partnership participates in a merger under Chapter 3 (relating to entity transactions) and: (i) the partnership is not the surviving entity; or (ii) otherwise as a result of the merger, the person ceases to be a limited partner. (11) The partnership participates in an interest exchange under Chapter 3 and, as a result of the interest exchange, the person ceases to be a limited partner. (12) The partnership participates in a conversion under Chapter 3. (13) The partnership participates in a division under Chapter 3 and: (i) the partnership is not a resulting association; or (ii) as a result of the division, the person ceases to be a partner. (14) The partnership participates in a domestication under Chapter 3 and, as a result of the domestication, the person ceases to be a limited partner. (15) The partnership dissolves and completes winding up. (c) Cross reference.--See section 8611(d) (relating to short title and application of chapter). Cross References. Section 8661 is referred to in sections 8611, 8612, 8672 of this title.

15 Pa.C.S. § 8662 Effects of dissociation as limited partner.

(a) General rule.--If a person is dissociated as a limited partner: (1) subject to section 8674 (relating to power of personal representative of deceased partner), the person does not have further rights as a limited partner; (2) the person's contractual obligation of good faith and fair dealing as a limited partner under section 8635(a) (relating to limited duties of limited partners) ends with regard to matters arising and events occurring after the person's dissociation except as provided in section 8634(c) (relating to limited partner rights to information); and (3) subject to section 8674 and Chapter 3 (relating to entity transactions), any transferable interest owned by the person in the person's capacity as a limited partner immediately before dissociation is owned by the person solely as a transferee. (b) Existing obligations not discharged.--A person's dissociation as a limited partner does not of itself discharge the person from any debt, obligation or other liability to the limited partnership or the other partners which the person incurred while a limited partner. (c) Cross reference.--See section 8611(d) (relating to short title and application of chapter). Cross References. Section 8662 is referred to in sections 8611, 8612 of this title.

15 Pa.C.S. § 8663 Dissociation as general partner.

(a) General rule.--A person is dissociated as a general partner when any of the following occurs: (1) The limited partnership knows or has notice of the person's express will to withdraw as a general partner rightfully or wrongfully, except that, if the person has specified a withdrawal date later than the date the partnership knew or had notice, on that later date. (2) An event stated in the partnership agreement as causing the person's dissociation as a general partner occurs. (3) The person is expelled as a general partner pursuant to the partnership agreement. (4) The person is expelled as a general partner by the affirmative vote or consent of all the other partners if: (i) it is unlawful to carry on the partnership's activities and affairs with the person as a general partner; (ii) there has been a transfer of all the person's transferable interest in the partnership, other than: (A) a transfer for security purposes; or (B) a charging order in effect under section 8673 (relating to charging order) which has not been foreclosed; (iii) the person is an entity and: (A) the partnership notifies the person that it will be expelled as a general partner because: (I) the person has filed a certificate of dissolution or the equivalent; (II) the person has been administratively dissolved; (III) the person's charter or the equivalent has been revoked; or (IV) the person's right to conduct business has been suspended by the person's jurisdiction of formation; and (B) within 90 days after the notification: (I) the certificate of dissolution or the equivalent has not been withdrawn, rescinded or revoked; (II) the person has not been reinstated; (III) the person's charter or the equivalent has not been reinstated; or (IV) the person's right to conduct business has not been reinstated; or (iv) the person is an unincorporated entity that has been dissolved and whose activities and affairs are being wound up. (5) On application by the partnership or a partner in a direct action under section 8691 (relating to direct action by partner), the person is expelled as a general partner by judicial order because the person: (i) has engaged or is engaging in wrongful conduct that has affected adversely and materially, or will affect adversely and materially, the partnership's activities and affairs; (ii) has committed willfully or persistently, or is committing willfully or persistently, a material breach of the partnership agreement or a duty or obligation under section 8649 (relating to standards of conduct for general partners); or (iii) has engaged or is engaging in conduct relating to the partnership's activities and affairs which makes it not reasonably practicable to carry on the activities and affairs of the partnership with the person as a general partner. (6) The person: (i) becomes a debtor in bankruptcy; (ii) executes an assignment for the benefit of creditors; or (iii) seeks, consents to or acquiesces in the appointment of a trustee, receiver or liquidator of the person or of all or substantially all the person's property. (7) In the case of an individual: (i) the individual dies; (ii) a guardian for the individual is appointed; or (iii) a court orders that the individual has otherwise become incapable of performing the individual's duties as a general partner under this title or the partnership agreement. (8) In the case of a person that is a testamentary or inter vivos trust or is acting as a general partner by virtue of being a trustee of the trust, the trust's entire transferable interest in the limited partnership is distributed. (9) In the case of a person that is an estate or is acting as a general partner by virtue of being a personal representative of an estate, the estate's entire transferable interest in the limited partnership is distributed. (10) In the case of a person that is not an individual, the existence of the person terminates. (11) The partnership participates in a merger under Chapter 3 (relating to entity transactions) and: (i) the partnership is not the surviving entity; or (ii) otherwise as a result of the merger, the person ceases to be a general partner. (12) The partnership participates in an interest exchange under Chapter 3 and, as a result of the interest exchange, the person ceases to be a general partner. (13) The partnership participates in a conversion under Chapter 3. (14) The partnership participates in a division under Chapter 3 and: (i) the partnership is not a resulting association; or (ii) as a result of the division, the person ceases to be a partner. (15) The partnership participates in a domestication under Chapter 3 and, as a result of the domestication, the person ceases to be a general partner. (16) The partnership dissolves and completes winding up. (b) Cross reference.--See section 8611(d) (relating to short title and application of chapter). Cross References. Section 8663 is referred to in sections 8611, 8612, 8615, 8647, 8664, 8672 of this title.

15 Pa.C.S. § 8664 Power to dissociate as general partner and wrongful dissociation.

(a) Power to dissociate.--A person has the power to dissociate as a general partner at any time, rightfully or wrongfully, by withdrawing as a general partner by express will under section 8663(a)(1) (relating to dissociation as general partner). (b) Wrongful dissociation.--A person's dissociation as a general partner is wrongful only if the dissociation: (1) is in breach of an express provision of the partnership agreement; or (2) occurs before the completion of the winding up of the limited partnership, and: (i) the person withdraws as a general partner by express will; (ii) the person is expelled as a general partner by judicial order under section 8663(a)(5); (iii) the person is dissociated as a general partner under section 8663(a)(6); or (iv) the person is expelled or otherwise dissociated as a general partner because its existence terminated, except that this subparagraph does not apply to a person that is: (A) a trust that is not a business or statutory trust; (B) an estate; or (C) an individual. (c) Damages for wrongful dissociation.--A person that wrongfully dissociates as a general partner is liable to the limited partnership and, subject to section 8691 (relating to direct action by partner), to the other partners for damages caused by the dissociation. The liability is in addition to any debt, obligation or other liability of the general partner to the partnership or the other partners. (d) Cross reference.--See section 8615 (relating to contents of partnership agreement). Cross References. Section 8664 is referred to in section 8615 of this title.

15 Pa.C.S. § 8665 Effects of dissociation as general partner.

(a) General rule.--If a person is dissociated as a general partner: (1) The person's right to participate as a general partner in the management and conduct of the limited partnership's activities and affairs terminates. (2) The person's duties and obligations as a general partner under section 8649 (relating to standards of conduct for general partners) end with regard to matters arising and events occurring after the person's dissociation except as provided in section 8647(e)(2) (relating to general partner rights to information). (3) The person may deliver to the department for filing a certificate of dissociation stating: (i) the name of the partnership; (ii) subject to section 109 (relating to name of commercial registered office provider in lieu of registered address), the address, including street and number, if any, of the registered office of the partnership; and (iii) the name of the person and that the person has dissociated as a general partner. (4) At the request of the limited partnership, the person shall sign an amendment to the certificate of limited partnership which states that the person has dissociated as a general partner. (5) Subject to section 8674 (relating to power of personal representative of deceased partner) and Chapter 3 (relating to entity transactions), any transferable interest owned by the person in the person's capacity as a general partner immediately before dissociation is owned by the person solely as a transferee. (b) Existing obligations not discharged.--A person's dissociation as a general partner does not of itself discharge the person from any debt, obligation or other liability to the limited partnership or the other partners which the person incurred while a general partner. (c) Cross references.--See: Section 134 (relating to docketing statement). Section 135 (relating to requirements to be met by filed documents). Section 136(c) (relating to processing of documents by Department of State). Section 8623 (relating to signing of filed documents). Cross References. Section 8665 is referred to in sections 8612, 8623 of this title.

15 Pa.C.S. § 8666 Power to bind and liability of person dissociated as general partner.

(a) Power to bind.--After a person is dissociated as a general partner and before the limited partnership is merged or divided out of existence, converted or domesticated under Chapter 3 (relating to entity transactions) or dissolved, the partnership is bound by an act of the person only if: (1) the act would have bound the partnership under section 8642 (relating to general partner agent of limited partnership) before the dissociation; and (2) at the time the other party enters into the transaction: (i) less than two years have passed since the dissociation; and (ii) the other party does not know or have notice of the dissociation and reasonably believes that the person is a general partner. (b) Liability.--If a limited partnership is bound under subsection (a), the person dissociated as a general partner which caused the partnership to be bound is liable: (1) to the partnership for any damage caused to the partnership arising from the obligation incurred under subsection (a); and (2) if a general partner or another person dissociated as a general partner is liable for the obligation, to the general partner or other person for any damage caused to the general partner or other person arising from the liability.

15 Pa.C.S. § 8667 Liability of person dissociated as general partner to other persons.

(a) General rule.--A person's dissociation as a general partner does not of itself discharge the person's liability as a general partner for a debt, obligation or other liability of the limited partnership incurred before dissociation. Except as provided in subsections (b) and (c), the person is not liable for a partnership obligation incurred after dissociation. (b) Obligations incurred after dissolution.--A person whose dissociation as a general partner results in a dissolution and winding up of the limited partnership's activities and affairs is liable on an obligation incurred by the partnership under section 8685 (relating to general partner liability after dissolution) to the same extent as a general partner under section 8644 (relating to general partner's liability). (c) When partnership not dissolved.--A person that is dissociated as a general partner without the dissociation resulting in a dissolution and winding up of the limited partnership's activities and affairs is liable on a transaction entered into by the partnership after the dissociation only if a general partner would be liable on the transaction, but at the time the other party enters into the transaction: (1) less than two years have passed since the dissociation; and (2) the other party does not have knowledge or notice of the dissociation and reasonably believes that the person is a general partner. (d) Constructive release by creditor.--A person dissociated as a general partner is released from liability for a debt, obligation or other liability of the limited partnership if the partnership's creditor, with knowledge or notice of the person's dissociation as a general partner and without the person's consent, agrees to a material alteration in the nature or time of payment of the debt, obligation or other liability. The release from liability under this subsection applies whether the liability arises directly or indirectly, by way of contribution or otherwise, but only if the liability arises solely by reason of having been a general partner. Cross References. Section 8667 is referred to in sections 8687, 8689, 8690 of this title.

15 Pa.C.S. § 8671 Nature of transferable interest.

(a) Personal property.--A transferable interest is personal property. (b) Only right that may be transferred.--A person may not transfer to a person not a partner any rights in a limited partnership other than a transferable interest.

15 Pa.C.S. § 8672 Transfer of transferable interest.

(a) General rule.--A transfer, in whole or in part, of a transferable interest: (1) is permissible; (2) does not by itself cause the dissociation of the transferor as a partner or a dissolution and winding up of the limited partnership's activities and affairs; and (3) subject to section 8674 (relating to power of personal representative of deceased partner), does not entitle the transferee to: (i) participate in the management or conduct of the partnership's activities and affairs; or (ii) except as provided under subsection (c), have access to required information, records or other information concerning the partnership's activities and affairs. (b) Right to distributions.--A transferee has the right to receive, in accordance with the transfer, distributions to which the transferor would otherwise be entitled. (c) Right to account on dissolution.--In a dissolution and winding up of a limited partnership, a transferee is entitled to an account of the partnership's transactions only from the date of dissolution. (d) Certificate of interest.--A transferable interest may be evidenced by a certificate of the interest issued by a limited partnership in record form, and, subject to this section, the interest represented by the certificate may be transferred by a transfer of the certificate. (e) Recognition of transferee's rights.--A limited partnership need not give effect to a transferee's rights under this section until the partnership knows or has notice of the transfer. (f) Transfer restrictions.--A transfer of a transferable interest in violation of a restriction on transfer contained in the partnership agreement is ineffective if the intended transferee has knowledge or notice of the restriction at the time of transfer. (g) Rights retained by transferor.--Except as provided under sections 8661(b)(4)(ii) (relating to dissociation as limited partner) and 8663(a)(4)(ii) (relating to dissociation as general partner), if a general or limited partner transfers a transferable interest, the transferor retains the rights of a general or limited partner other than the transferable interest transferred and retains all the duties and obligations of a general or limited partner. Cross References. Section 8672 is referred to in sections 8653, 8673, 8674 of this title.

15 Pa.C.S. § 8673 Charging order.

(a) General rule.--On application by a judgment creditor of a partner or transferee, a court may enter a charging order against the transferable interest of the judgment debtor for the unsatisfied amount of the judgment. A charging order constitutes a lien on a judgment debtor's transferable interest and requires the limited partnership to pay over to the person to which the charging order was issued any distribution that otherwise would be paid to the judgment debtor. (b) Available relief.--To the extent necessary to effectuate the collection of distributions pursuant to a charging order in effect under subsection (a), the court may: (1) appoint a receiver of the distributions subject to the charging order, with the power to make all inquiries the judgment debtor might have made; and (2) make all other orders necessary to give effect to the charging order. (c) Foreclosure.--Upon a showing that distributions under a charging order will not pay the judgment debt within a reasonable time, the court may foreclose the lien and order the sale of the transferable interest. The purchaser at the foreclosure sale obtains only the transferable interest, does not thereby become a partner and is subject to section 8672 (relating to transfer of transferable interest). (d) Satisfaction of judgment.--At any time before foreclosure under subsection (c), the partner or transferee whose transferable interest is subject to a charging order under subsection (a) may extinguish the charging order by satisfying the judgment and filing a certified copy of the satisfaction with the court that issued the charging order. (e) Purchase of rights.--At any time before foreclosure under subsection (c), a limited partnership or one or more partners whose transferable interests are not subject to the charging order may pay to the judgment creditor the full amount due under the judgment and thereby succeed to the rights of the judgment creditor, including the charging order. (f) Exemption laws preserved.--This chapter shall not deprive any partner or transferee of the benefit of any exemption law applicable to the transferable interest of the partner or transferee. (g) Exclusive remedy.--This section provides the exclusive remedy by which a person seeking, in the capacity of a judgment creditor, to enforce a judgment against a partner or transferee may satisfy the judgment from the judgment debtor's transferable interest. Cross References. Section 8673 is referred to in sections 8617, 8653, 8661, 8663, 8690 of this title.

15 Pa.C.S. § 8674 Power of personal representative of deceased partner.

If a partner dies, the personal representative of the deceased partner may exercise: (1) the rights of a transferee provided in section 8672(c) (relating to transfer of transferable interest); and (2) for the purposes of settling the estate, the rights of a current limited partner under section 8634 (relating to limited partner rights to information). Cross References. Section 8674 is referred to in sections 8634, 8647, 8662, 8665, 8672 of this title.

15 Pa.C.S. § 8681 Events causing dissolution.

(a) General rule.--A limited partnership is dissolved, and its activities and affairs must be wound up, upon the occurrence of any of the following: (1) an event or circumstance that the partnership agreement states causes dissolution; (2) the affirmative vote or consent of: (i) all general partners; and (ii) limited partners owning the rights to receive a majority of the distributions as limited partners at the time the vote or consent is to be effective; (3) after the dissociation of a person as a general partner: (i) if the partnership has at least one remaining general partner, the affirmative vote or consent to dissolve the partnership within 90 days after the dissociation by partners owning a majority of the rights to receive distributions as partners at the time the vote or consent is to be effective; or (ii) if the partnership does not have a remaining general partner, the passage of 180 days after the dissociation, unless before the end of the period: (A) consent to continue the activities and affairs of the partnership and admit at least one general partner is given by limited partners owning a majority of the rights to receive distributions as limited partners at the time the consent is to be effective; and (B) at least one person is admitted as a general partner in accordance with the consent; (4) the passage of 180 consecutive days after the dissociation of the partnership's last limited partner, unless before the end of the period the partnership admits at least one limited partner; (5) the passage of 180 consecutive days during which the partnership has only one partner, unless before the end of the period: (i) the partnership admits at least one person as a partner; (ii) if the previously sole remaining partner is only a general partner, the partnership admits a person as a limited partner; and (iii) if the previously sole remaining partner is only a limited partner, the partnership admits a person as a general partner; or (6) on application by a partner, the entry by the court of an order dissolving the partnership on the grounds that: (i) the conduct of all or substantially all the partnership's activities and affairs is unlawful; (ii) it is not reasonably practicable to carry on the partnership's activities and affairs in conformity with the certificate of limited partnership and partnership agreement; or (iii) the general partners have acted, are acting or will act in a manner that is illegal or fraudulent. (b) Multiple deadlines.--If an event occurs that imposes a deadline on a limited partnership under subsection (a) and before the partnership has met the requirements of the deadline, another event occurs that imposes a different deadline on the partnership under subsection (a): (1) the occurrence of the second event does not affect the deadline caused by the first event; and (2) the partnership's meeting of the requirements of the first deadline does not extend the second deadline. (c) Cross references.--See sections 8611(d) (relating to short title and application of chapter) and 8615(c)(15) (relating to contents of partnership agreement). Cross References. Section 8681 is referred to in sections 8611, 8615, 8623, 8631, 8641 of this title.

15 Pa.C.S. § 8681.1 Voluntary termination by partners.

(a) General rule.--The general partners of a limited partnership that has never transacted business or held assets other than money received as capital contributions may effect the termination of the partnership by delivering to the department for filing a certificate of termination stating: (1) the name of the partnership; (2) subject to section 109 (relating to name of commercial registered office provider in lieu of registered address), the address, including street and number, if any, of the registered office of the partnership; (3) that the partnership has never transacted business or held assets other than money received as capital contributions; (4) that the amounts, if any, actually paid in as contributions, less any part disbursed for necessary expenses, have been returned to those entitled to the return of the amounts; (5) that all liabilities of the partnership have been discharged or that adequate provision has been made for those liabilities; and (6) that a majority of the general partners elect that the partnership be terminated. (b) Effect.--Upon the filing of the certificate of termination, the existence of the limited partnership shall cease. (c) Cross references.--See: Section 134 (relating to docketing statement). Section 135 (relating to requirements to be met by filed documents). Section 136(c) (relating to processing of documents by Department of State). Section 8623 (relating to signing of filed documents). Cross References. Section 8681.1 is referred to in section 139 of this title.

15 Pa.C.S. § 8682 Winding up and filing of certificates.

(a) General rule.--A dissolved limited partnership shall wind up its activities and affairs and the partnership continues after dissolution only for the purpose of winding up. (b) Conduct of winding up.--In winding up its activities and affairs, the limited partnership: (1) shall discharge the partnership's debts, obligations and other liabilities, settle and close the partnership's activities and affairs and marshal and distribute the assets of the partnership; and (2) may: (i) amend its certificate of limited partnership to state that the partnership is dissolved; (ii) preserve the partnership activities, affairs and property as a going concern for a reasonable time; (iii) prosecute, defend and settle actions and proceedings, whether civil, criminal or administrative; (iv) transfer the partnership's property; (v) participate in, agree to participate in and settle disputes by mediation, arbitration or alternative dispute resolution proceedings; and (vi) perform other acts necessary or appropriate to the winding up. (c) Conduct of winding up when no general partner.--If a dissolved limited partnership does not have a general partner, a person to wind up the dissolved partnership's activities and affairs may be appointed by the affirmative vote or consent of limited partners owning the rights to receive a majority of the distributions as limited partners at the time the vote or consent is to be effective. A person appointed under this subsection: (1) has the powers of a general partner under section 8684 (relating to power to bind partnership after dissolution) but is not liable for the debts, obligations and other liabilities of the partnership solely by reason of having or exercising those powers or otherwise acting to wind up the dissolved partnership's activities and affairs; and (2) shall deliver promptly to the department for filing an amendment to the partnership's certificate of limited partnership stating: (i) that the partnership does not have a general partner; (ii) the name and address of the person; and (iii) that the person has been appointed under this subsection to wind up the partnership. (d) Judicial supervision.--On the application of a partner or person entitled under subsection (c) to participate in winding up, the court may order judicial supervision of the winding up of a dissolved limited partnership, including the appointment of a person to wind up the partnership's activities and affairs, if: (1) the partnership does not have a general partner and within a reasonable time following the dissolution no person has been appointed under subsection (c); or (2) the applicant establishes other good cause. (e) Certificate of termination.--When all debts, obligations and other liabilities of the limited partnership have been paid and discharged or adequate provision has been made therefor and all of the remaining property and assets of the partnership have been distributed to the partners, a certificate of termination shall be delivered to the department for filing along with the certificates required by section 139 (relating to tax clearance of certain fundamental transactions). The certificate of termination shall set forth: (1) The name of the limited partnership. (2) Subject to section 109 (relating to name of commercial registered office provider in lieu of registered address), the address, including street and number, if any, of the registered office of the partnership. (3) That all debts, obligations and other liabilities of the partnership have been paid and discharged or that adequate provision has been made therefor. (4) That all the remaining property and assets of the partnership have been distributed among its partners in accordance with their respective rights and interests. (5) That there are no actions pending against the partnership in any court or that adequate provision has been made for the satisfaction of any judgment that may be entered against it in any pending action. (6) That the partnership is terminated. (f) Cross references.--See: Section 134 (relating to docketing statement). Section 135 (relating to requirements to be met by filed documents). Section 136(c) (relating to processing of documents by Department of State). Section 8615(c)(16) (relating to contents of partnership agreement). Section 8623 (relating to signing of filed documents). Cross References. Section 8682 is referred to in sections 8613, 8615, 8622, 8623 of this title.

15 Pa.C.S. § 8684 Power to bind partnership after dissolution.

(a) Power of general partner.--A limited partnership is bound by a general partner's act after dissolution which: (1) is appropriate for winding up the partnership's activities and affairs; or (2) would have bound the partnership under section 8642 (relating to general partner agent of limited partnership) before dissolution if, at the time the other party enters into the transaction, the other party does not know or have notice of the dissolution. (b) Power of person dissociated as general partner.--A person dissociated as a general partner binds a limited partnership through an act occurring after dissolution if: (1) at the time the other party enters into the transaction: (i) less than two years have passed since the dissociation; and (ii) the other party does not know or have notice of the dissociation and reasonably believes that the person is a general partner; and (2) the act: (i) is appropriate for winding up the partnership's activities and affairs; or (ii) would have bound the partnership under section 8642 before dissolution and at the time the other party enters into the transaction, the other party does not know or have notice of the dissolution. Cross References. Section 8684 is referred to in sections 8682, 8685 of this title.

15 Pa.C.S. § 8685 General partner liability after dissolution.

(a) Liability of general partner.--If a general partner having knowledge of the dissolution causes a limited partnership to incur an obligation under section 8684(a) (relating to power to bind partnership after dissolution) by an act that is not appropriate for winding up the partnership's activities and affairs, the general partner is liable: (1) to the partnership for any damage caused to the partnership arising from the obligation; and (2) if another general partner or a person dissociated as a general partner is liable for the obligation, to that other general partner or person for any damage caused to that other general partner or person arising from the liability. (b) Liability of person dissociated as general partner.--If a person dissociated as a general partner causes a limited partnership to incur an obligation under section 8684(b), the person is liable: (1) to the partnership for any damage caused to the partnership arising from the obligation; and (2) if a general partner or another person dissociated as a general partner is liable for the obligation, to the general partner or other person for any damage caused to the general partner or other person arising from the obligation. Cross References. Section 8685 is referred to in section 8667 of this title.

15 Pa.C.S. § 8686 Known claims against dissolved limited partnership.

(a) General rule.--Except as provided under subsection (d), a dissolved limited partnership may give notice of a known claim under subsection (b) which has the effect provided in subsection (c). (b) Required notice.--A dissolved limited partnership may notify in record form its known claimants of the dissolution. The notice must: (1) specify the information required to be included in a claim; (2) state that a claim must be in writing and provide a mailing address to which the claim is to be sent; (3) state the deadline for receipt of a claim, which may not be less than 120 days after the date the notice is received by the claimant; (4) state that the claim will be barred if not received by the deadline; and (5) unless the partnership has been throughout its existence a limited liability limited partnership, state that the barring of a claim against the partnership will also bar any corresponding claim against any general partner or person dissociated as a general partner which is based on section 8644 (relating to general partner's liability). (c) Claims barred.--A claim against a dissolved limited partnership is barred if the requirements of subsection (b) are met and: (1) the claim is not received by the specified deadline; or (2) if the claim is timely received but rejected by the partnership: (i) the partnership causes the claimant to receive a notice in record form stating that the claim is rejected and will be barred unless the claimant commences an action against the partnership to enforce the claim within 90 days after the claimant receives the notice; and (ii) the claimant fails to commence the required action no later than 90 days after the claimant receives the notice. (d) Later arising claims.--This section shall not apply to a claim based on an event occurring after the date of dissolution or a liability that on that date is contingent. Cross References. Section 8686 is referred to in sections 8654, 8687, 8689 of this title.

15 Pa.C.S. § 8687 Other claims against dissolved limited partnership.

(a) Permissive notice.--A dissolved limited partnership may publish notice of its dissolution and request persons having claims against the partnership to present them in accordance with the notice. (b) Notice procedure.--A notice under subsection (a) must: (1) be officially published one time; (2) describe the information required to be contained in a claim, state that the claim must be in writing and provide a mailing address to which the claim is to be sent; (3) state that a claim against the partnership is barred unless an action to enforce the claim is commenced within two years after publication of the notice; and (4) unless the partnership has been throughout its existence a limited liability limited partnership, state that the barring of a claim against the partnership will also bar any corresponding claim against any general partner or person dissociated as a general partner which is based on section 8644 (relating to general partner's liability). (c) Claims barred.--If a dissolved limited partnership publishes a notice in accordance with subsection (b), the claim of each of the following claimants is barred unless the claimant commences an action to enforce the claim against the partnership within two years after the publication date of the notice: (1) a claimant that did not receive notice in record form under section 8686 (relating to known claims against dissolved limited partnership); (2) a claimant whose claim was timely sent to the partnership but not acted on; and (3) a claimant whose claim is contingent at, or based on an event occurring after, the date of dissolution. (d) Claims not barred.--A claim not barred under this section or section 8686 may be enforced: (1) against the dissolved limited partnership, to the extent of its undistributed assets; (2) except as provided under section 8688 (relating to court proceedings), if assets of the partnership have been distributed after dissolution, against a partner or transferee to the extent of that person's proportionate share of the claim or of the partnership's assets distributed to the partner or transferee after dissolution, whichever is less, except that a person's total liability for all claims under this paragraph may not exceed the total amount of assets distributed to the person after dissolution; and (3) against any person liable on the claim under sections 8644 and 8667 (relating to liability of person dissociated as general partner to other persons). Cross References. Section 8687 is referred to in sections 8654, 8688, 8689 of this title.

15 Pa.C.S. § 8688 Court proceedings.

(a) Determination of security.--A dissolved limited partnership that has officially published a notice under section 8687 (relating to other claims against dissolved limited partnership) may file an application with the court of common pleas embracing the county where the partnership's principal office is located or, if the principal office is not located in this Commonwealth, where its registered office is or was last located, for a determination of the amount and form of security to be provided for payment of claims that are reasonably expected to arise after the date of dissolution based on facts known to the partnership and: (1) at the time of the application: (i) are contingent; or (ii) have not been made known to the partnership; or (2) are based on an event occurring after the date of dissolution. (b) When security not required.--Security is not required for any claim that is or is reasonably anticipated to be barred under section 8687. (c) Notice.--Within 10 days after the filing of an application under subsection (a), the dissolved limited partnership shall give notice of the proceeding to each claimant holding a contingent claim known to the partnership. (d) Guardian ad litem.--In a proceeding brought under this section, the court may appoint a guardian ad litem to represent all claimants whose identities are unknown. The reasonable fees and expenses of the guardian, including all reasonable expert witness fees, must be paid by the dissolved limited partnership. (e) Effect on contingent claims.--A dissolved limited partnership that provides security in the amount and form ordered by the court under subsection (a) satisfies the partnership's obligations with respect to claims that are contingent, have not been made known to the partnership or are based on an event occurring after the date of dissolution. The claims may not be enforced against a partner or transferee on account of assets received in liquidation. Cross References. Section 8688 is referred to in sections 8654, 8687, 8689 of this title.

15 Pa.C.S. § 8689 General partner liability when claim against limited partnership barred.

If a claim against a dissolved limited partnership is barred under section 8686 (relating to known claims against dissolved limited partnership), 8687 (relating to other claims against dissolved limited partnership) or 8688 (relating to court proceedings), any corresponding claim under section 8644 (relating to general partner's liability) or 8667 (relating to liability of person dissociated as general partner to other persons) is also barred.

15 Pa.C.S. § 8690 Disposition of assets in winding up and required contributions.

(a) Creditors.--In winding up its activities and affairs, a limited partnership shall apply its assets, including the contributions required by this section, to discharge the partnership's obligations to creditors, including partners that are creditors. (b) Surplus.--After a limited partnership complies with subsection (a), any surplus shall be distributed in the following order, subject to any charging order in effect under section 8673 (relating to charging order): (1) to each owner of a transferable interest that reflects contributions made and not previously returned, an amount equal to the value of the unreturned contributions; and (2) among owners of transferable interests in proportion to their respective rights to share in distributions immediately before the dissolution of the partnership. (c) Insufficient assets.--If a limited partnership's assets are insufficient to satisfy all of its obligations under subsection (a), with respect to each unsatisfied obligation incurred when the partnership was not a limited liability limited partnership, the following rules apply: (1) Each person that was a general partner when the obligation was incurred and that has not been released from the obligation under section 8667 (relating to liability of person dissociated as general partner to other persons) shall contribute to the partnership for the purpose of enabling the partnership to satisfy the obligation. The contribution due from each of those persons is in proportion to the right to receive distributions in the capacity of a general partner in effect for each of those persons when the obligation was incurred. (2) If a person does not contribute the full amount required under paragraph (1) with respect to an unsatisfied obligation of the partnership, the other persons required to contribute by paragraph (1) on account of the obligation shall contribute the additional amount necessary to discharge the obligation. The additional contribution due from each of those other persons is in proportion to the right to receive distributions in the capacity of a general partner in effect for each of those other persons when the obligation was incurred. (3) If a person does not make the additional contribution required by paragraph (2), further additional contributions are determined and due in the same manner as provided in that paragraph. (d) Recovery of additional contributions.--A person that makes an additional contribution under subsection (c)(2) or (3) may recover from any person whose failure to contribute under subsection (c)(1) or (2) necessitated the additional contribution. A person may not recover under this subsection more than the amount additionally contributed. A person's liability under this subsection may not exceed the amount the person failed to contribute. (e) Distribution when surplus insufficient.--If a limited partnership does not have sufficient surplus to comply with subsection (b)(1), any surplus must be distributed among the owners of transferable interests in proportion to the value of the respective unreturned contributions. (f) Form of payment.--All distributions made under subsections (b) and (c) must be paid in money. Cross References. Section 8690 is referred to in sections 8653, 8654 of this title.

15 Pa.C.S. § 8691 Direct action by partner.

(a) General rule.--Subject to subsection (b), a partner may maintain a direct action against another partner or the limited partnership, with or without an accounting as to the partnership's activities and affairs, to enforce the partner's rights and protect the partner's interests, including rights and interests under the partnership agreement or this title or arising independently of the partnership relationship. (b) Required injury.--A partner maintaining a direct action under this section must plead and prove an actual or threatened injury that is not solely the result of an injury suffered or threatened to be suffered by the limited partnership. (c) Claims not revived.--A right to an accounting on a dissolution and winding up does not revive a claim barred by law. (d) Cross reference.--See section 8615(c)(17) (relating to contents of partnership agreement). Cross References. Section 8691 is referred to in sections 8649, 8661, 8663, 8664 of this title.

15 Pa.C.S. § 8692 Derivative action.

(a) General rule.--Subject to section 8693 (relating to eligible partner plaintiffs and security for costs) and subsection (b), a plaintiff may maintain a derivative action to enforce a right of a limited partnership only if: (1) the plaintiff first makes a demand on the limited partnership or the general partners requesting that the partnership bring an action to enforce the right, and: (i) (Deleted by amendment). (i.1) if a special litigation committee is not appointed under section 8694 (relating to special litigation committee): (A) the general partners determine that: (I) an action based on some or all of the claims asserted in the demand not be brought by the limited partnership but that the partnership not object to an action being brought by the party that made the demand; or (II) an action already commenced continue under the control of the plaintiff; or (B) the general partners do not notify the party that made the demand within 60 days after the demand was made that the general partners have appointed a special litigation committee or have made a determination described under either clause (A)(I) or (II); or (ii) if a special litigation committee is appointed under section 8694, a determination is made: (A) under section 8694(e)(1) that the partnership not object to the action; or (B) under section 8694(e)(5)(i) that the plaintiff continue the action; (2) demand is excused under subsection (b); (3) the action is maintained for the limited purpose of seeking court review under section 8694(f); or (4) the court has allowed the action to continue under the control of the plaintiff under section 8694(f)(3)(ii). (b) Prior demand excused.-- (1) A demand under subsection (a)(1) is excused only if the plaintiff makes a specific showing that immediate and irreparable harm to the limited partnership would otherwise result. (2) If demand is excused under paragraph (1), demand shall be made promptly after commencement of the action. (c) Contents of demand.--A demand under this section must be in record form and give notice with reasonable specificity of: (1) the material facts relied upon to support each of the claims made in the demand against each proposed defendant; and (2) in the case of a derivative action commenced by a partner, the basis on which the person making the demand has standing under section 8693. (d) Additional claims.--If a derivative action is commenced after a demand has been made under this section and includes a claim that was not fairly subsumed under the demand, a new demand must be made with respect to that claim. The new demand shall not relate back to the date of the original demand for purposes of subsection (e). (e) Statute of limitations.--The making of a demand tolls any applicable statute of limitations with respect to a claim asserted in the demand until the earlier of the date: (1) the partner making the demand is notified either: (i) that the general partners have decided not to bring an action and not to appoint a special litigation committee; or (ii) of a determination under section 8694(e) after the appointment of a special litigation committee under section 8694; or (2) the plaintiff commences an action asserting the claim. (f) Cross reference.--See section 8615(c)(17) (relating to contents of partnership agreement). (Nov. 3, 2022, P.L.1791, No.122, eff. 60 days; July 15, 2024, P.L.728, No.59, eff. 60 days) 2024 Amendment. Act 59 amended subsec. (a)(1). Amendment. Act 122 amended subsecs. (a) intro. par., (1) intro. par. and (i), (b)(1) and (c).

15 Pa.C.S. § 8693 Eligible partner plaintiffs and security for costs.

(a) General rule.--Except as provided in subsection (b), in any action or proceeding brought by one or more partners of a limited partnership to enforce rights that the plaintiff claims could be, but have not been, asserted by the partnership, each plaintiff has standing to commence and maintain a derivative action only if the plaintiff: (1) was a partner at the time of the transaction or conduct of which the plaintiff complains, or that the plaintiff's interest as a partner devolved upon the plaintiff by operation of law from a person who was a partner at that time; and (2) continues to be a partner until the time of judgment, unless the failure to do so is the result of partnership action that: (i) was done merely to eliminate derivative claims; or (ii) has the effect of a reorganization that does not affect the plaintiff's ownership of the business enterprise. (b) Exception.--Any partner that, except for the provisions of subsection (a), would be entitled to maintain the action or proceeding and that does not meet such requirements may, nevertheless in the discretion of the court, be allowed to maintain the action or proceeding on preliminary showing to the court, by application and upon such verified statements and depositions as may be required by the court, that there is a strong prima facie case in favor of the claim asserted on behalf of the limited partnership and that without the action serious injustice will result. (c) Security for costs.--In any action or proceeding instituted or maintained by partners holding transferable interests entitled to receive less than 5% of any distribution by a limited partnership, unless the transferable interests held by the partners have an aggregate fair market value in excess of $200,000, the partnership in whose right the action or proceeding is brought shall be entitled at any stage of the proceedings to require the plaintiffs to give security for the reasonable expenses, including attorneys' fees, that may be incurred by the partnership in connection therewith or for which it may become liable pursuant to section 8648(b) (relating to reimbursement, indemnification, advancement and insurance) to which security the partnership shall have recourse in such amount as the court determines upon the termination of the action or proceeding. The amount of security may, from time to time, be increased or decreased in the discretion of the court upon showing that the security provided has or is likely to become inadequate or excessive. The security may be denied or limited by the court if the court finds after an evidentiary hearing that undue hardship on plaintiffs and serious injustice would result. (d) Failure to maintain ownership.--If a plaintiff loses the right to maintain a derivative action under subsection (a)(2), the court may entertain a motion by the limited partnership to substitute the partnership as the named plaintiff. (Nov. 3, 2022, P.L.1791, No.122, eff. 60 days) Cross References. Section 8693 is referred to in section 8692 of this title.

15 Pa.C.S. § 8694 Special litigation committee.

(a) General rule.--If a limited partnership or the general partners receive a demand to bring an action to enforce a right of the partnership, or if a derivative action is commenced before demand has been made on the partnership or the general partners, the general partners may appoint a special litigation committee to investigate the claims asserted in the demand or action and to determine on behalf of the limited partnership or recommend to the general partners whether pursuing any of the claims asserted is in the best interests of the partnership. The partnership must deliver a notice in record form to the person making the demand, or to the plaintiff if a derivative action has been commenced, promptly after the appointment of the committee under this section notifying the person making the demand or the plaintiff that a committee has been appointed and identifying by name the members of the committee. (b) Discovery stay.--If the general partners appoint a special litigation committee and an action is commenced before a determination has been made under subsection (e): (1) On motion by the limited partnership, or the committee made in the name of the partnership, the court shall stay discovery for the time reasonably necessary to permit the committee to make its investigation, except for good cause shown. (2) The time for the defendants to plead shall be tolled until the process provided for under subsection (f) has been completed. (c) Composition of committee.--A special litigation committee shall be composed of two or more individuals who: (1) are not interested in the claims asserted in the demand or action; (2) are capable as a group of objective judgment in the circumstances; and (3) may, but need not, be general or limited partners. (c.1) Committee members who are not general partners.--A member of a special litigation committee who is not a general partner, when acting as a member of the committee, is subject to the liabilities imposed, and entitled to the rights and immunities conferred, by sections 8648 (relating to reimbursement, indemnification, advancement and insurance) and 8649 (relating to standards of conduct for general partners). (d) Appointment of committee.--A special litigation committee may be appointed: (1) by a majority of the general partners not named as actual or potential parties in the demand or action; or (2) if all general partners are named as actual or potential parties in the demand or action, by a majority of the general partners so named. (e) Determination.--After appropriate investigation by a special litigation committee, the committee may determine, or the committee may recommend to the general partners that the general partners determine, that it is in the best interests of the limited partnership that: (1) an action based on some or all of the claims asserted in the demand not be brought by the partnership but that the partnership not object to an action being brought by the party that made the demand; (2) an action based on some or all of the claims asserted in the demand be brought by the partnership; (3) some or all of the claims asserted in the demand be settled on terms determined or recommended by the committee; (4) an action not be brought based on any of the claims asserted in the demand; (5) an action already commenced continue under the control of: (i) the plaintiff; (ii) the limited partnership; or (iii) the committee; (6) some or all of the claims asserted in an action already commenced be settled on terms determined or recommended by the committee; or (7) an action already commenced be dismissed. (f) Court review and action.--If a special litigation committee is appointed and a derivative action is commenced before or after either the committee makes a determination under subsection (e) or the general partners determine under that subsection to accept the recommendation of the committee: (1) The limited partnership or the committee shall file with the court after a determination is made under subsection (e) a statement of the determination and a report of the committee supporting the determination. The partnership or the committee shall serve each party with a copy of the determination and report. If the partnership or the committee moves to file the report under seal, the report shall be served on the parties subject to an appropriate stipulation agreed to by the parties or a protective order issued by the court. (2) The partnership or the committee shall file with the court a motion, pleading or notice consistent with the determination under subsection (e). (3) If the determination is one described in subsection (e)(2), (3), (4), (5)(ii), (6) or (7), the court shall determine whether the members of the committee met the qualifications required under subsection (c)(1) and (2) and whether the committee conducted its investigation and made its determination or recommendation in good faith, independently and with reasonable care. The plaintiff has the burden of proving that the committee did not meet those qualifications or act in the required manner. If the court finds that the members of the committee met the qualifications required under subsection (c)(1) and (2) and that the committee acted in good faith, independently and with reasonable care, the court shall enforce the determination of the committee or the general partners. Otherwise, the court shall: (i) dissolve any stay of discovery entered under subsection (b); (ii) allow the action to continue under the control of the plaintiff; and (iii) permit the defendants to file preliminary objections and other appropriate motions and pleadings. (g) Attorney General.--Nothing in this section shall limit the rights, powers and duties of the Attorney General under other applicable law with respect to a limited partnership organized for a charitable purpose. (h) Interest of a defendant.--The fact that a person is named as a defendant does not make the person interested in the claims asserted in a demand or action for purposes of subsection (c)(1) if the claims against the person: (1) are based only on an allegation that the person approved of or acquiesced in the transaction or conduct that is the subject of the claims; and (2) do not otherwise allege with particularity facts that, if true, raise a significant prospect that the person would be adjudged liable. (i) Cross reference.--See section 8615(c)(18) (relating to contents of partnership agreement). (Nov. 3, 2022, P.L.1791, No.122, eff. 60 days) 2022 Amendment. Act 122 amended subsecs. (a), (b)(1), (e) intro. par., (3) and (6) and (f), added subsec. (c.1) and relettered former subsec. (h) to subsec. (i) and added present subsec. (h). Cross References. Section 8694 is referred to in sections 8615, 8692 of this title.

15 Pa.C.S. § 8695 Proceeds and expenses.

(a) Proceeds.--Except as provided in subsection (b): (1) any proceeds or other benefits of a derivative action, whether by judgment, compromise or settlement, belong to the limited partnership and not to the plaintiff; and (2) if the plaintiff or its counsel receives any proceeds, the proceeds shall be remitted immediately to the partnership. (b) Expenses.--If a derivative action is successful in whole or in part, the court may award the plaintiff reasonable expenses, including reasonable attorney fees and costs, from the recovery of the limited partnership, but in no event shall the attorney fees awarded exceed a reasonable proportion of the value of the relief, including nonpecuniary relief, obtained by the plaintiff for the limited partnership. (c) Cross reference.--See section 8615(c)(7) (relating to contents of partnership agreement).
Source: Open US Law by Vaquill AI (CC BY 4.0)URL: https://www.palegis.us/statutes/consolidated/view-statute?txtType=HTM&ttl=15Fetched: 10/16/2026

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