2022 -- H 7753

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LC004940

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2022

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A N   A C T

RELATING TO CORPORATIONS, ASSOCIATIONS, AND PARTNERSHIPS -- UNIFORM

PARTNERSHIP ACT

     Introduced By: Representative Gregg Amore

     Date Introduced: March 02, 2022

     Referred To: House Corporations

     (Secretary of State)

It is enacted by the General Assembly as follows:

     SECTION 1. Sections 7-12-12, 7-12-13, 7-12-14, 7-12-15, 7-12-16, 7-12-17, 7-12-18, 7-

12-19, 7-12-20, 7-12-21, 7-12-22, 7-12-23, 7-12-24, 7-12-25, 7-12-26, 7-12-27, 7-12-28, 7-12-29,

7-12-30, 7-12-31, 7-12-32, 7-12-33, 7-12-34, 7-12-35, 7-12-36, 7-12-37, 7-12-38, 7-12-39, 7-12-

40, 7-12-41, 7-12-42, 7-12-43, 7-12-44, 7-12-45, 7-12-46, 7-12-47, 7-12-48, 7-12-49, 7-12-50, 7-

12-51, 7-12-52, 7-12-53, 7-12-54, 7-12-55, 7-12-56, 7-12-57, 7-12-58 and 7-12-59 of the General

Laws in Chapter 7-12 entitled "Partnerships" are hereby repealed:

     7-12-12. Short title.

     Sections 7-12-12 - - 7-12-55 may be cited as the "Uniform Partnership Act".

     7-12-13. Definitions.

     In §§ 7-12-12 - - 7-12-59:

     (1) "Bankrupt" includes bankrupt under title 11 of the United States Code (Bankruptcy) or

insolvent under any state insolvent act.

     (2) "Business" includes every trade, occupation, or profession.

     (3) "Conveyance" includes every assignment, lease, mortgage, or encumbrance.

     (4) "Court" includes every court and judge having jurisdiction in the case.

     (5) "Foreign registered limited-liability partnership" means a registered limited-liability

partnership or a limited-liability partnership formed pursuant to an agreement governed by the laws

of another jurisdiction and registered under the laws of that jurisdiction.

     (6) "Person" includes individuals, partnerships, corporations, and other associations.

     (7) "Real property" includes land and any interest or estate in land.

     (8) "Registered limited-liability partnership" means a partnership formed pursuant to an

agreement governed by the laws of this state, registered under § 7-12-56 and in compliance with §

7-12-58.

     7-12-14. Interpretation of knowledge and notice.

     (a) A person has "knowledge" of a fact within the meaning of §§ 7-12-12 - - 7-12-55 not

only when he or she has actual knowledge of it, but also when he or she has knowledge of any other

facts that in the circumstances show bad faith.

     (b) A person has "notice" of a fact within the meaning of §§ 7-12-12 - - 7-12-55 when the

person who claims the benefit of the notice:

     (1) States the fact to the person; or

     (2) Delivers through the mail, or by other means of communication, a written statement of

the fact to the person or to a proper person at his or her place of business or residence.

     7-12-15. Rules of construction.

     (a) The rule that statutes in derogation of the common law are to be strictly construed has

no application to §§ 7-12-12 - - 7-12-55.

     (b) The law of estoppel applies under §§ 7-12-12 - - 7-12-55.

     (c) The law of agency applies under §§ 7-12-12 - - 7-12-55.

     (d) Sections 7-12-12 - - 7-12-55 shall be so interpreted and construed as to effect their

general purpose to make uniform the law of those states which enact them.

     (e) Sections 7-12-12 - - 7-12-55 shall not be construed so as to impair the obligations of

any contract existing on October 1, 1957, nor to affect any action or proceedings or right accrued

before October 1, 1957.

     7-12-16. Rules for cases not provided for.

     In any case not provided for in §§ 7-12-12 - - 7-12-55, the rules of law and equity, including

the law merchant, govern.

     7-12-17. Partnership defined.

     (a) A partnership is an association of two (2) or more persons to carry on as co-owners a

business for profit, and includes a registered limited-liability partnership.

     (b) Any association formed under any other statute of this state, or any statute adopted by

authority, other than the authority of the state, is not a partnership under §§ 7-12-12 - - 7-12-59,

unless the association would have been a partnership in this state prior to May 6, 1957; but §§ 7-

12-12 - - 7-12-59 apply to limited partnerships except insofar as the statutes relating to partnerships

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are inconsistent with these provisions.

     7-12-18. Rules for determining the existence of a partnership.

     In determining whether a partnership exists, these rules apply:

     (1) Except as provided by § 7-12-27, persons who are not partners as to each other are not

partners as to third persons.

     (2) Joint tenancy, tenancy in common, tenancy by the entireties, joint property, common

property, or part ownership does not of itself establish a partnership, whether the co-owners do or

do not share any profits made by the use of the property.

     (3) The sharing of gross returns does not of itself establish a partnership, whether or not

the persons sharing them have a joint or common right or interest in any property from which the

returns are derived.

     (4) The receipt by a person of a share of the profits of a business is prima facie evidence

that he or she is a partner in the business, but no such inference is drawn if profits were received in

payment:

     (i) As a debt by installments or otherwise;

     (ii) As wages of an employee or rent to a landlord;

     (iii) As an annuity to a widow or representative of a deceased partner;

     (iv) As interest on a loan, though the amount of payment vary with the profits of the

business;

     (v) As the consideration for the sale of a good will of a business or other property by

installments or otherwise.

     7-12-19. Partnership property.

     (a) All property originally brought into the partnership stock or subsequently acquired by

purchase or otherwise, on account of the partnership, is partnership property.

     (b) Unless the contrary intention appears, property acquired with partnership funds is

partnership property.

     (c) Any estate in real property may be acquired in the partnership name. Title so acquired

can be conveyed only in the partnership name.

     (d) A conveyance to a partnership in the partnership name, though without words of

inheritance, passes the entire estate of the grantor unless a contrary intent appears.

     7-12-20. Partner agent of partnership as to partnership business.

     (a) Every partner is an agent of the partnership for the purpose of its business, and the act

of every partner, including the execution in the partnership name of any instrument, for apparently

carrying on in the usual way the business of the partnership of which he or she is a member, binds

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the partnership, unless the partner so acting has in fact no authority to act for the partnership in the

particular matter, and the person with whom he or she is dealing has knowledge of the fact that he

or she has no authority.

     (b) An act of a partner that is not apparently for the carrying on of the business of the

partnership in the usual way does not bind the partnership unless authorized by the other partners.

     (c) Unless authorized by the other partners or unless they have abandoned the business,

one or more but less than all the partners have no authority to:

     (1) Assign the partnership property in trust for creditors or on the assignee's promise to pay

the debts of the partnership;

     (2) Dispose of the good will of the business;

     (3) Do any other act that would make it impossible to carry on the ordinary business of a

partnership;

     (4) Confess a judgment;

     (5) Submit a partnership claim or liability to arbitration or reference.

     (d) No act of a partner in contravention of a restriction on authority shall bind the

partnership to persons having knowledge of the restriction.

     7-12-21. Conveyance of real property of the partnership.

     (a) Where title to real property is in the partnership name, any partner may convey title to

the property by a conveyance executed in the partnership name; but the partnership may recover

the property unless the partner's act binds the partnership under the provisions of § 7-12-20(a), or

unless the property has been conveyed by the grantee or a person claiming through the grantee to

a holder for value without knowledge that the partner, in making the conveyance, has exceeded his

or her authority.

     (b) Where title to real property is in the name of the partnership, a conveyance executed by

a partner, in his or her own name, passes the equitable interest of the partnership, provided the act

is one within the authority of the partner under the provisions of § 7-12-20(a).

     (c) Where title to real property is in the name of one or more but not all the partners, and

the record does not disclose the right of the partnership, the partners in whose name the title stands

may convey title to the property, but the partnership may recover the property if the partners' act

does not bind the partnership under the provisions of § 7-12-20(a) unless the purchaser or his or

her assignee, is a holder for value, without knowledge.

     (d) Where the title to real property is in the name of one or more or all of the partners, or

in a third person in trust for the partnership, a conveyance executed by a partner in the partnership

name, or in his or her own name, passes the equitable interest of the partnership, provided the act

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is one within the authority of the partner under the provision of § 7-12-20(a).

     (e) Where the title to real property is in the names of all the partners a conveyance executed

by all the partners passes all their rights in the property.

     7-12-22. Partnership bound by admission of partner.

     An admission or representation made by any partner concerning partnership affairs within

the scope of his or her authority as conferred by §§ 7-12-12 - - 7-12-55 is evidence against the

partnership.

     7-12-23. Partnership charged with knowledge of or notice to partner.

     Notice to any partner of any matter relating to partnership affairs, and the knowledge of

the partners acting in the particular matter, acquired while a partner or then present to his or her

mind, and the knowledge of any other partner who reasonably could and should have

communicated it to the acting partner, operate as notice to or knowledge of the partnership, except

in the case of a fraud on the partnership committed by or with the consent of that partner.

     7-12-24. Partnership bound by partner's wrongful act.

     Where, by any wrongful act or omission of any partner acting in the ordinary course of the

business of the partnership or with the authority of his or her copartners, loss or injury is caused to

any person, not being a partner in the partnership, or any penalty is incurred, the partnership is

liable for the loss, injury, or penalty to the same extent as the partner acting or omitting to act.

     7-12-25. Partnership bound by partner's breach of trust.

     The partnership is bound to make good the loss:

     (1) Where one partner acting within the scope of his or her apparent authority receives

money or property of a third person and misapplies it; and

     (2) Where the partnership in the course of its business receives money or property of a third

person and the money or property so received is misapplied by any partner while it is in the custody

of the partnership.

     7-12-26. Nature of partner's liability.

     (a) All partners are liable, except as provided in subsection (b):

     (1) Jointly and severally for everything chargeable to the partnership under §§ 7-12-24 and

7-12-25.

     (2) Jointly for all other debts and obligations of the partnership; but any partner may enter

into a separate obligation to perform a partnership contract.

     (b) Subject to subsection (c), a partner in a registered limited-liability partnership is not

liable, directly or indirectly (including by way of indemnification, contribution, assessment or

otherwise), for debts, obligations, and liabilities of, or chargeable to, the partnership whether in

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tort, contract, or otherwise, arising while the partnership is a registered limited-liability partnership.

     (c) Subsection (b) does not affect the individual liability of a partner in a registered limited-

liability partnership for his or her own negligence, wrongful acts or misconduct, or that of any

person under that partner's direct supervision and control other than in an administrative capacity.

     (d) A partner in a registered limited-liability partnership is not a proper party in his or her

individual capacity to a proceeding by or against a registered limited-liability partnership, the object

of which is to recover damages or enforce the obligations of the registered limited-liability

partnership, unless the partner is personally liable under subsection (c).

     (e) Notwithstanding any other provisions of this section, the personal liability of a partner

in a limited-liability partnership engaged in the rendering of professional services is not less than

or greater than the personal liability of a shareholder of a professional corporation organized under

chapter 5.1 of this title engaged in the rendering of the same professional services.

     7-12-27. Partner by estoppel.

     (a) When a person, by words spoken or written or by conduct, represents himself or herself,

or consents to another representing him or her to any one, as a partner in an existing partnership or

with one or more persons not actual partners, he or she is liable to any person to whom the

representation has been made, who has, on the faith of the representation, given credit to the actual

or apparent partnership, and if he or she has made a representation or consented to its being made

in a public manner, he or she is liable to the person, whether the representation has or has not been

made or communicated to the person giving credit by or with the knowledge of the apparent partner

making the representation or consenting to its being made.

     (1) When a partnership liability results, he or she is liable as though he or she were an

actual member of the partnership.

     (2) When no partnership liability results, he or she is liable jointly with the other persons,

if any, so consenting to the contract or representation as to incur liability, otherwise separately.

     (b) When a person is represented to be a partner in an existing partnership, or with one or

more persons not actual partners, he or she is an agent of the persons consenting to the

representation to bind them to the same extent and in the same manner as though he or she were a

partner in fact, with respect to persons who rely on the representation. Where all the members of

the existing partnership consent to the representation, a partnership act or obligation results; but in

all other cases it is the joint act or obligation of the person acting and the persons consenting to the

representation.

     7-12-28. Liability of incoming partner.

     A person admitted as a partner into an existing partnership is liable for all the obligations

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of the partnership arising before his or her admission as though he or she had been a partner when

the obligations were incurred, except that this liability is satisfied only out of partnership property.

     7-12-29. Rules determining rights and duties of partners.

     The rights and duties of the partners in relation to the partnership are determined, subject

to any agreement between them, by the following rules:

     (1) Each partner is repaid his or her contributions, whether by way of capital or advances

to the partnership property, and shares equally in the profits and surplus remaining after all

liabilities, including those to partners, are satisfied; and except as provided in § 7-12-26(b), each

partner must contribute toward the losses, whether of capital or otherwise, sustained by the

partnership according to his or her share in the profits.

     (2) The partnership must indemnify every partner in respect of payments made and

personal liabilities reasonably incurred by him or her in the ordinary and proper conduct of its

business, or for the preservation of its business or property.

     (3) A partner, who in aid of the partnership makes any payment or advance beyond the

amount of capital that he or she agreed to contribute, is paid interest from the date of the payment

or advance.

     (4) A partner receives interest on the capital contributed by him or her only from the date

when repayment should be made.

     (5) All partners have equal rights in the management and conduct of the partnership

business.

     (6) No partner is entitled to remuneration for acting in the partnership business, except that

a surviving partner is entitled to reasonable compensation for his or her services in winding up the

partnership affairs.

     (7) No person can become a member of a partnership without the consent of all the partners.

     (8) Any difference arising as to ordinary matters connected with the partnership business

may be decided by a majority of the partners; but no act in contravention of any agreement between

the partners may be done rightfully without the consent of all the partners.

     7-12-30. Partnership books.

     The partnership books are kept, subject to any agreement between the partners, at the

principal place of business of the partnership, and every partner shall at all times have access to

and may inspect and copy any of them.

     7-12-31. Duty of partners to render information.

     Partners shall render on demand true and full information of all things affecting the

partnership to any partner or the legal representative of any deceased partner or partner under legal

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disability.

     7-12-32. Partner accountable as a fiduciary.

     (a) Every partner must account to the partnership for any benefit, and hold as trustee for it

any profits derived by him or her without the consent of the other partners from any transaction

connected with the formation, conduct, or liquidation of the partnership or from any use by him or

her of its property.

     (b) This section applies also to the representatives of a deceased partner engaged in the

liquidation of the affairs of the partnership as the personal representatives of the last surviving

partner.

     7-12-33. Right to an account.

     Any partner has the right to a formal account as to partnership affairs:

     (1) If he or she is wrongfully excluded from the partnership business or possession of its

property by his or her copartners.

     (2) If the right exists under the terms of any agreement.

     (3) As provided by § 7-12-32.

     (4) Whenever other circumstances render it just and reasonable.

     7-12-34. Continuation of partnership beyond fixed term.

     (a) When a partnership for a fixed term or particular undertaking is continued after the

termination of the term or particular undertaking without any express agreement, the rights and

duties of the partners remain the same as they were at the termination, insofar as is consistent with

a partnership at will.

     (b) A continuation of the business by the partners or those of them who habitually acted in

the partnership during the term, without any settlement or liquidation of the partnership affairs, is

prima facie evidence of a continuation of the partnership.

     7-12-35. Extent of property rights of a partner.

     The property rights of a partner are:

     (1) His or her rights in specific partnership property;

     (2) His or her interest in the partnership; and

     (3) His or her rights to participate in the management.

     7-12-36. Nature of a partner's right in specific partnership property.

     (a) A partner is co-owner with his or her partners of specific partnership property holding

as a tenant in partnership.

     (b) The incidents of this tenancy are such that:

     (1) A partner, subject to the provisions of §§ 7-12-12 - - 7-12-55 and to any agreement

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between the partners, has an equal right with his or her partners to possess specific partnership

property for partnership purposes; but he or she has no right to possess the property for any other

purpose without the consent of his or her partners.

     (2) A partner's right in specific partnership property is not assignable, except in connection

with the assignment of rights of all the partners in the same property.

     (3) A partner's right in specific partnership property is not subject to attachment or

execution, except on a claim against the partnership. When partnership property is attached for a

partnership debt, the partners, or any of them, or the representatives of a deceased partner, cannot

claim any right under the exemption laws.

     (4) On the death of a partner, his or her right in specific partnership property vests in the

surviving partner or partners, except where the deceased was the last surviving partner, when his

or her right in the property vests in his or her legal representative. The surviving partner, or partners,

or the legal representative of the last surviving partner, has no right to possess the partnership

property for any but a partnership purpose.

     (5) A partner's right in specific partnership property is not subject to dower, curtesy, or

allowances to widows, heirs, or next of kin.

     7-12-37. Nature of partner's interest in the partnership.

     A partner's interest in the partnership is his or her share of the profits and surplus, and his

or her share of the profits and surplus is personal property.

     7-12-38. Assignment of partner's interest.

     (a) A conveyance by a partner of his or her interest in the partnership does not of itself

dissolve the partnership, nor, as against the other partners in the absence of agreement, entitle the

assignee, during the continuance of the partnership, to interfere in the management or

administration of the partnership business or affairs, to require any information or account of

partnership transactions, or to inspect the partnership book. It merely entitles the assignee to

receive, in accordance with his or her contract, the profits to which the assigning partner would

otherwise be entitled.

     (b) In case of a dissolution of the partnership, the assignee is entitled to receive his or her

assignor's interest and may require an account from the date only of the last account agreed to by

all the partners.

     7-12-39. Partner's interest subject to charging order.

     (a) On due application to the superior court by any judgment creditor of a partner, the court

may charge the interest of the debtor partner with payment of the unsatisfied amount of the

judgment debt with interest on it; and may then or later appoint a receiver of his or her share of the

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profits, and of any other money due, or to fall due, to him or her in respect of the partnership, and

make all other orders, directions, accounts, and inquiries that the debtor partner might have made,

or that the circumstances of the case require.

     (b) The interest charged may be redeemed at any time before foreclosure, or in case of a

sale being directed by the court, may be purchased without causing a dissolution:

     (1) With separate property, by any one or more of the partners; or

     (2) With partnership property, by any one or more of the partners with the consent of all

the partners whose interests are not so charged or sold.

     (c) Nothing in §§ 7-12-12 - - 7-12-55 deprives a partner of his or her right, if any, under

the exemption laws, regarding his interest in the partnership.

     7-12-40. Dissolution defined.

     The dissolution of a partnership is the change in the relation of the partners caused by any

partner ceasing to be associated in the carrying on as distinguished from the winding up of the

business.

     7-12-41. Partnership not terminated by dissolution.

     On dissolution the partnership is not terminated, but continues until the winding up of

partnership affairs is completed.

     7-12-42. Causes of dissolution.

     Dissolution is caused:

     (1) Without violation of the agreement between the partners:

     (i) By the termination of the definite term or particular undertaking specified in the

agreement;

     (ii) By the express will of any partner when no definite term or particular undertaking is

specified;

     (iii) By the express will of all the partners who have not assigned their interests or suffered

them to be charged for their separate debts, either before or after the termination of any specified

term or particular undertaking;

     (iv) By the expulsion of any partner from the business bona fide in accordance with the

power conferred by the agreement between the partners;

     (2) In contravention of the agreement between the partners, where the circumstances do

not permit a dissolution under any other provision of this section, by the express will of any partner

at any time;

     (3) By any event that makes it unlawful for the business of the partnership to be carried on

or for the members to carry it on in partnership;

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     (4) By the death of any partner;

     (5) By the bankruptcy of any partner or the partnership;

     (6) By decree of court under § 7-12-43.

     7-12-43. Dissolution by decree of court.

     (a) On application by or for a partner, the court shall decree a dissolution whenever:

     (1) A partner has been declared mentally incompetent in any judicial proceeding or is

shown to be of unsound mind;

     (2) A partner becomes in any other way incapable of performing his or her part of the

partnership contract;

     (3) A partner has been guilty of any conduct that tends to affect prejudicially the carrying

on of the business;

     (4) A partner willfully or persistently commits a breach of the partnership agreement, or

otherwise so conducts him or herself in matters relating to the partnership business that it is not

reasonably practicable to carry on the business in partnership with him or her;

     (5) The business of the partnership can only be carried on at a loss;

     (6) Other circumstances render a dissolution equitable.

     (b) On the application of the purchaser of a partner's interest under §§ 7-12-38 and 7-12-

39, the court shall decree a dissolution:

     (1) After the termination of the specified term or particular undertaking;

     (2) At any time if the partnership was a partnership at will when the interest was assigned

or when the charging order was issued.

     7-12-44. General effect of dissolution on authority of partner.

     Except insofar as is necessary to wind up partnership affairs or to complete transactions

begun but not then finished, dissolution terminates all authority of any partner to act for the

partnership:

     (1) Regarding the partners:

     (i) When the dissolution is not by the act, bankruptcy, or death of a partner; or

     (ii) When the dissolution is by the act, bankruptcy, or death of a partner, in cases where §

7-12-45 so requires.

     (2) With respect to persons not partners, as declared in § 7-12-46.

     7-12-45. Right of partner to contribution from copartners after dissolution.

     Where the dissolution is caused by the act, death, or bankruptcy of a partner, each partner

is liable to his or her copartners for his or her share of any liability created by any partner acting

for the partnership as if the partnership had not been dissolved, unless:

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     (1) The dissolution being by act of any partner, the partner acting for the partnership had

knowledge of the dissolution;

     (2) The dissolution being by the death or bankruptcy of a partner, the partner acting for the

partnership had knowledge or notice of the death or bankruptcy; or

     (3) The liability is for a debt or obligation for which the partner is not liable as provided in

§ 7-12-26(b).

     7-12-46. Power of partner to bind partnership to third persons after dissolution.

     (a) After dissolution, a partner can bind the partnership except as provided in subsection

(c) by:

     (1) Any act appropriate for winding up partnership affairs or completing transactions

unfinished at dissolution;

     (2) Any transaction that would bind the partnership if dissolution had not taken place,

provided the other party to the transaction:

     (i) Had extended credit to the partnership prior to dissolution and had no knowledge or

notice of the dissolution; or

     (ii) Though he or she had not so extended credit, had nevertheless known of the partnership

prior to dissolution, and, having no knowledge or notice of dissolution, the fact of dissolution had

not been advertised in a newspaper of general circulation in the place (or in each place if more than

one) at which the partnership business was regularly carried on.

     (b) The liability of a partner under subsection (a)(2) shall be satisfied out of partnership

assets alone, when the partner had been, prior to dissolution:

     (1) Unknown as a partner to the person with whom the contract is made; and

     (2) So far unknown and inactive in partnership affairs that the business reputation of the

partnership could not be said to have been in any degree due to his or her connection with it.

     (c) The partnership is in no case bound by any act of a partner after dissolution where:

     (1) The partnership is dissolved because it is unlawful to carry on the business, unless the

act is appropriate for winding up partnership affairs;

     (2) The partner has become bankrupt; or

     (3) The partner has no authority to wind up partnership affairs, except by a transaction with

one who:

     (i) Had extended credit to the partnership prior to dissolution and had no knowledge or

notice of his or her want of authority; or

     (ii) Had not extended credit to the partnership prior to dissolution, and, having no

knowledge or notice of his or her want of authority, the fact of his or her want of authority has not

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been advertised in the manner provided for advertising the fact of dissolution in subsection

(a)(2)(ii).

     (d) Nothing in this section affects the liability under § 7-12-27 of any person who after

dissolution represents him or herself or consents to another representing him or her as a partner in

a partnership engaged in carrying on business.

     7-12-47. Effect of dissolution on partner's existing liability.

     (a) The dissolution of the partnership does not of itself discharge the existing liability of

any partner.

     (b) A partner is discharged from any existing liability upon dissolution of the partnership

by an agreement to that effect between himself or herself, the partnership creditor, and the person

or partnership continuing the business. An agreement may be inferred from the course of dealing

between the creditor having knowledge of the dissolution and the person or partnership continuing

the business.

     (c) Where a person agrees to assume the existing obligations of a dissolved partnership,

the partners whose obligations have been assumed are discharged from any liability to any creditor

of the partnership who, knowing of the agreement, consents to a material alteration in the nature or

time of payment of the obligations.

     (d) The individual property of a deceased partner is liable for those obligations of the

partnership incurred while he or she was a partner and for which he or she is liable under § 7-12-

26, but subject to the prior payment of his or her separate debts.

     7-12-48. Right to wind up.

     Unless otherwise agreed, the partners who have not wrongfully dissolved the partnership

or the legal representative of the last surviving partner, not bankrupt, has the right to wind up the

partnership affairs; provided, that any partner, his or her legal representative, or his or her assignee

may obtain winding up by the court upon cause shown.

     7-12-49. Rights of partners to application of partnership property.

     (a) When dissolution is caused in any way, except in contravention of the partnership

agreement, each partner, as against his or her copartners and all persons claiming through them in

respect of their interests in the partnership, unless otherwise agreed, may have the partnership

property applied to discharge its liabilities, and the surplus applied to pay in cash the net amount

owing to the respective partners. But if dissolution is caused by the expulsion of a bona fide partner

under the partnership agreement, and if the expelled partner is discharged from all partnership

liabilities, either by payment or agreement under § 7-12-47(b), he or she receives in cash only the

net amount due him or her from the partnership.

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     (b) When dissolution is caused in contravention of the partnership agreement, the rights of

the partners are as follows:

     (1) Each partner who has not wrongfully caused dissolution has:

     (i) All the rights specified in subsection (a); and

     (ii) The right, as against each partner who has wrongfully caused the dissolution, to

damages for breach of the agreement.

     (2) The partners who have not wrongfully caused the dissolution, if they all desire to

continue the business in the same name, either by themselves or jointly with others, may do so

during the agreed term for the partnership and for that purpose may possess the partnership

property, provided they secure the payment by bond approved by the court, or pay to any partner

who has wrongfully caused the dissolution, the value of his or her interest in the partnership at the

dissolution, less any damages recoverable under subsection (b)(1)(ii), and in like manner indemnify

him or her against all present or future partnership liabilities.

     (3) A partner who has wrongfully caused the dissolution has:

     (i) If the business is not continued under the provisions of subsection (b)(2), all the rights

of a partner under subsection (a), subject to subsection (b)(1)(ii);

     (ii) If the business is continued under subsection (b)(2), the right as against his or her

copartners, and all claiming through them as to their interests in the partnership, to have the value

of his or her interest in the partnership, less any damages caused to his or her copartners by the

dissolution, ascertained and paid to him or her in cash, or the payment secured by bond approved

by the court, and to be released from all existing liabilities of the partnership; but in ascertaining

the value of the partner's interest, the value of the good will of the business is not considered.

     7-12-50. Rights where partnership is dissolved for fraud or misrepresentation.

     Where a partnership contract is rescinded on the ground of the fraud or misrepresentation

of one of the parties to the contract, the party entitled to rescind is, without prejudice to any other

right, entitled to:

     (1) A lien on, or right of retention of, the surplus of the partnership property, after satisfying

the partnership liabilities to third persons, for any sum of money paid by him or her for the purchase

of an interest in the partnership and for any capital or advances contributed by him; and

     (2) Stand, after all liabilities to third persons have been satisfied, in the place of the creditors

of the partnership for any payments made by him or her as to the partnership liabilities; and

     (3) Indemnification by the person guilty of the fraud or making the representation against

all debts and liabilities of the partnership.

     7-12-51. Rules for distribution.

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     In settling accounts between the partners after dissolution, the following rules are observed,

subject to any agreement to the contrary:

     (1) The assets of the partnership are:

     (i) The partnership property;

     (ii) The contributions of the partners specified in subdivision (4).

     (2) The liabilities of the partnership rank in order of payment, as follows:

     (i) Those owing to creditors other than partners;

     (ii) Those owing to partners other than for capital and profits;

     (iii) Those owing to partners in respect of capital;

     (iv) Those owing to partners in respect of profits.

     (3) The assets are applied in the order of their declaration in subdivision (1) to the

satisfaction of the liabilities.

     (4) Except as provided in § 7-12-26(b), the partners shall contribute, as provided by § 7-

12-29(1), the amount necessary to satisfy the liabilities; but if any, but not all, of the partners are

insolvent, or not being subject to process, refuse to contribute, the other partners shall contribute

their share of the liabilities, and, in the relative proportions in which they share the profits, the

additional amount necessary to pay the liabilities.

     (5) An assignee for the benefit of creditors of any person appointed by the court has the

right to enforce the contributions specified in subdivision (4).

     (6) Any partner, or his or her legal representative, has the right to enforce the contributions

specified in subdivision (4), to the extent of the amount that he or she has paid in excess of his or

her share.

     (7) The individual property of a deceased partner is liable for the contributions specified in

subdivision (4).

     (8) When partnership property and the individual properties of the partners are in

possession of a court for distribution, partnership creditors have priority on partnership property

and separate creditors on individual property, saving the rights of lien or secured creditors as

previously.

     (9) Where a partner has become bankrupt, or his or her estate is insolvent, the claims against

his or her separate property rank in the following order:

     (i) Those owing to separate creditors;

     (ii) Those owing to partnership creditors;

     (iii) Those owing to partners by way of contribution.

     7-12-52. Liability of persons continuing the business in certain cases.

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     (a) When any new partner is admitted into an existing partnership, or when any partner

retires and assigns (or the representative of the deceased partner assigns) his or her rights in

partnership property to two (2) or more of the partners, or to one or more of the partners, and one

or more third persons, if the business is continued without liquidation of the partnership affairs,

creditors of the first or dissolved partnership are also creditors of the partnership continuing the

business.

     (b) When all but one partner retire and assign (or the representative of the deceased partner

assigns) their rights in partnership property to the remaining partner, who continues the business

without liquidation of partnership affairs, either alone or with others, creditors of the dissolved

partnership are also creditors of the person or partnership continuing the business.

     (c) When any partner retires or dies and the business of the dissolved partnership is

continued as described in subsections (a) and (b), with the consent of the retired partners or the

representative of the deceased partner, but without any assignment of his or her right in partnership

property, rights of creditors of the dissolved partnership and of the creditors of the person or

partnership continuing the business are as if the assignment had been made.

     (d) When all the partners or their representatives assign their rights in partnership property

to one or more third persons who promise to pay the debts and who continue the business of the

dissolved partnerships, creditors of the dissolved partnerships are also creditors of the person or

partnership continuing the business.

     (e) When any partner wrongfully causes a dissolution and the remaining partners continue

the business under the provision of § 7-12-49(b)(2), either alone or with others, and without

liquidation of the partnership affairs, creditors of the dissolved partnership are also creditors of the

person or partnership continuing the business.

     (f) When a partner is expelled and the remaining partners continue the business either alone

or with others, without liquidation of the partnership affairs, creditors of the dissolved partnership

are also creditors of the person or partnership continuing the business.

     (g) The liability of a third person becoming a partner in the partnership continuing the

business, under this section, to the creditors of the dissolved partnership is satisfied out of

partnership property only.

     (h) When the business of a partnership after dissolution is continued under any conditions

described in this section, the creditors of the dissolved partnership, as against the separate creditors

of the retiring or deceased partner or the representative of the deceased partner, have a prior right

to any claim of the retired partner or the representative of the deceased partner against the person

or partnership continuing the business, on account of the retired or deceased partner's interest in the

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dissolved partnership or on account of any consideration promised for the interest or for his or her

right in partnership property.

     (i) Nothing in this section can be held to modify any right of creditors to set aside any

assignment on the ground of fraud.

     (j) The use by the person or partnership continuing the business of the partnership name,

or the name of a deceased partner as part of it, does not of itself make the individual property of

the deceased partner liable for any debts contracted by the person or partnership.

     7-12-53. Rights of retiring or estate of deceased partner when the business is

continued.

     When any partner retires or dies, and the business is continued under any of the conditions

described in subsection (a), (b), (c), (e) or (f) of § 7-12-52, or § 7-12-49(b)(2), without any

settlement of accounts as between him or her or his or her estate and the person or partnership

continuing the business, unless otherwise agreed, he or she or his or her legal representative as

against the persons or partnership may have the value of his or her interest at the date of dissolution

ascertained, and shall receive as an ordinary creditor an amount equal to the value of his or her

interest in the dissolved partnership with interest, or, at his or her option or at the option of his or

her legal representative, in lieu of interest, the profits attributable to the use of his or her right in

the property of the dissolved partnership; provided, that the creditors of the dissolved partnership

as against the separate creditors, or the representative of the retired or deceased partner, have

priority on any claim arising under this section as provided by § 7-12-52(h).

     7-12-54. Accrual of actions.

     The right to an account of his or her interest accrues to any partner, or his or her legal

representative, as against the winding up partners or the surviving partners or the person or

partnership continuing the business, at the date of dissolution, in the absence of any agreement to

the contrary.

     7-12-55. Other laws preserved.

     Nothing contained in §§ 7-12-12 - - 7-12-55 affects the provisions of §§ 7-12-1 - - 7-12-11

or of chapter 13 of this title.

     7-12-56. Registered limited-liability partnerships.

     (a) To become, and to continue as, a registered limited-liability partnership, a partnership

shall file with the secretary of state an application, or a renewal application, stating the name of the

partnership, the address of its principal office, if the partnership's principal office is not located in

this state, the address of a registered office and the name and address of a registered agent for

service of process in this state that a partnership is required to maintain. In addition, partnerships

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under this section shall provide the names and addresses of all resident partners, the place where

the business records of the partnership are maintained, or if more than one location for business

records is maintained, then the principal place of business of the partnership, number, a brief

statement of the business in which the partnership engaged, and that the partnership applies for

status, or renewal of its status, as a registered limited-liability partnership.

     (b) The application or renewal application shall be executed by a majority in interest of the

partners or by one or more partners authorized to execute an application or renewal application.

     (c) The application shall be accompanied by a fee of one hundred fifty dollars ($150) for

each partnership's initial filing.

     Renewal applications are to be filed yearly and are to be accompanied by a fee of fifty

dollars ($50.00).

     (d) The secretary of state shall register as a registered limited-liability partnership, and shall

renew the registration of any limited-liability partnership, any partnership that submits a completed

application or renewal application with the required fee.

     (e) Registration is effective for one year after the date an application is filed, unless

voluntarily withdrawn by filing with the secretary of state a written withdrawal notice executed by

a majority in interest of the partners or by one or more partners authorized to execute a withdrawal.

Registration, whether pursuant to an original application or a renewal application, as a registered

limited-liability partnership is renewed if, during the sixty-day (60) period preceding the date the

application or renewal application otherwise would have expired, the partnership filed with the

secretary of state a renewal application. A renewal application expires one year after the date an

original application would have expired if the last renewal of the application had not occurred.

     (f) The status of a partnership as a registered limited-liability partnership is not affected by

changes after the filing of an application or a renewal application in the information stated in the

application or renewal application.

     (g) The secretary of state may provide forms for application for, or renewal of, registration.

Any renewals shall maintain resident partners as set out in this section.

     (h) A partnership that registers as a registered limited-liability partnership is not deemed to

have dissolved as a result of that registration and is for all purposes the same partnership that existed

before the registration and continues to be a partnership under the laws of this state. If a registered

limited-liability partnership dissolves, a partnership that is a successor to the registered limited-

liability partnership and that intends to be a registered limited-liability partnership is not required

to file a new application and is deemed to have filed any documents required or permitted under

this chapter that were filed by the predecessor partnership.

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     (i) The fact that an application or renewal application is on file in the office of the secretary

of state is notice that the partnership is a registered limited-liability partnership and is notice of all

other facts stated in the application or renewal application.

     7-12-57. Name of registered limited-liability partnerships.

     (a) The name of a registered limited-liability partnership contains the words "registered

limited-liability partnership" or the abbreviation "L.L.P" or "LLP" as the last words or letters of its

name.

     (b) The name shall be distinguishable upon the records of the secretary of state from the

name of any domestic for-profit or nonprofit corporation, or any domestic limited partnership, or

any domestic limited-liability company or any registered limited-liability partnership existing

under the laws of the state, or the name of any foreign for-profit or nonprofit corporation, or foreign

limited partnership, or foreign limited-liability company, or foreign registered limited-liability

partnership authorized to transact business in this state, or a name the exclusive right to which is,

at the time filed, reserved or registered in the manner provided under this title, subject to the

following:

     (1) This provision does not apply if the applicant files with the secretary of state a certified

copy of a final decree of a court of competent jurisdiction establishing the prior right of the

applicant to the use of the name in this state; and

     (2) The name may be the same as the name of a corporation, or limited-liability company,

or registered limited-liability partnership, the certificate of incorporation, authority, organization,

or registration of which has been revoked by the secretary of state as permitted by law and the

revocation has not been withdrawn within one year from the date of the revocation.

     (3) Words and/or abbreviations that are required by statute to identify the particular type

of business entity shall be disregarded when determining if a name is distinguishable upon the

records of the secretary of state.

     (4) The secretary of state shall promulgate rules and regulations defining the term

"distinguishable upon the record" for the administration of this chapter.

     7-12-58. Insurance or financial responsibility of registered limited-liability

partnerships.

     (a) A registered limited-liability partnership that is to perform professional services as

defined in § 7-5.1-2 shall carry, if reasonably available, liability insurance of a kind that is designed

to cover the kinds of negligence, wrongful acts, or misconduct for which liability is limited by § 7-

12-26(b). The insurance shall be in the aggregate amount of fifty thousand dollars ($50,000)

multiplied by the number of professional employees of the registered limited-liability partnership

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as of the policy anniversary date; provided, that in no case shall the coverage be less than one

hundred thousand dollars ($100,000) but in no event shall the necessary coverage exceed a

maximum of five hundred thousand dollars ($500,000); provided, further, that any policy for

insurance coverage may include a deductible provision in any amount not to exceed twenty-five

thousand dollars ($25,000) for each claim multiplied by the number of professional employees of

the limited-liability partnership as of the date of the issuance of the policy. The policy or policies

of insurance may be subject to any terms, conditions, exclusions and endorsements that are

typically contained in policies of this type.

     (b) If, in any proceeding, compliance by a partnership with the requirements of subsection

(a) is disputed:

     (1) That issue is determined by the court, and

     (2) The burden of proof of compliance is on the person who claims the limitation of liability

in § 7-12-26(b).

     (c) If a registered limited-liability partnership is in compliance with the requirements of

subsection (a), the requirements of this section shall not be admissible or in any way be made

known to a jury in determining an issue of liability for or extent of the debt or obligation or damages

in question.

     (d) Insurance is reasonably available for the purpose of subsection (a) if, at the time that

the coverage would apply to the negligence, wrongful acts, or misconduct in question, it was

reasonably available to similar types of partnerships through the admitted or eligible surplus lines

market.

     (e) A registered limited-liability partnership is considered to be in compliance with

subsection (a) if the partnership provides five hundred thousand dollars ($500,000) of funds

specifically designated and segregated for the satisfaction of judgments against the partnership

based on the forms of negligence, wrongful acts, and misconduct for which liability is limited by §

7-12-26(b) by:

     (1) Deposit in trust or in bank escrow of cash, bank certificates of deposit, or United States

Treasury obligations; or

     (2) A bank letter of credit or insurance company bonds.

     (f) To the extent that a partnership maintains liability insurance or segregated funds

pursuant to the laws or regulations of another jurisdiction, the liability insurance or segregated

funds are deemed to satisfy this section if the amount hereof is equal to or greater than the amount

specified in subsection (a) or (e).

     7-12-59. Applicability to foreign and interstate commerce.

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     (a) A partnership, including a registered limited-liability partnership, formed and existing

pursuant to an agreement governed by this chapter, may conduct its business, carry on its operations

and have and exercise the powers granted by this chapter in any state, territory, district or possession

of the United States, or in any foreign country.

     (b) It is the intent of the general assembly that the legal existence of partnerships, including

registered limited-liability partnerships, formed in this state are recognized outside the boundaries

of this state and that, subject to any reasonable requirement of registration, a partnership, including

a registered limited-liability partnership, formed pursuant to an agreement governed by this chapter

and transacting business outside this state is granted the protection of full faith and credit under the

Constitution of the United States.

     (c) The liability of partners in a partnership, including registered limited-liability

partnerships, formed and existing pursuant to an agreement governed by this chapter for the debts

and obligations of the partnership, is at all times determined exclusively by the laws of this state.

     (d) Before transacting business in this state, a foreign registered limited-liability

partnership shall comply with any statutory or administrative registration or filing requirements

governing the specific type of business in which the partnership is engaged, and file a notice with

the secretary of state, on any forms that the Secretary provides, stating:

     (1) The name of the partnership;

     (2) The jurisdiction, the laws of which govern its partnership agreement and under which

it is registered as a limited-liability partnership;

     (3) The address of its principal office;

     (4) If the partnership's principal office is not located in this state;

     (5) The address of a registered office and the name and address of a registered agent for

service of process in this state that the partnership shall be required to maintain;

     (6) The names and addresses of all resident partners in this state;

     (7) A brief statement of the business in which the partnership engages;

     (8) Any other information that the partnership determines to include;

     (9) A statement that the partnership is a registered limited-liability partnership. The notice

shall be accompanied by a fee of one thousand dollars ($1,000). The notice is effective for two (2)

years from the date of filing, after which time the partnership shall file a new notice. The filing of

the notice with the secretary of state makes it unnecessary to file any other documents under §§ 6-

1-1 - - 6-1-4.

     (e) The name of a foreign registered limited-liability partnership doing business in this state

shall contain the words "Registered Limited-Liability Partnership" or "L.L.P." or "LLP", or any

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other similar words or abbreviation as are required or authorized by the laws of the state where the

partnership is registered, as the last words or letters of its name.

     (f) The internal affairs of foreign registered limited-liability partnerships, including the

liability of partners for debts, obligations, and liabilities of, or chargeable to, the partnership or

another partner or partners, are subject to and governed by the laws of the jurisdiction in which the

foreign registered limited-liability partnership is registered.

     SECTION 2. Title 7 of the General Laws entitled "CORPORATIONS, ASSOCIATIONS,

AND PARTNERSHIPS" is hereby amended by adding thereto the following chapter:

CHAPTER 12.1

UNIFORM PARTNERSHIP ACT

ARTICLE 1

GENERAL PROVISIONS

     7-12.1-101. Short title.

     This chapter shall be known and may be cited as "The Uniform Partnership Act".

     7-12.1-102. Definitions.

     As used in this chapter:

     (1) "Business" includes every trade, occupation, and profession.

     (2) "Contribution", except in the phrase "right of contribution", means property or a benefit

described in § 7-12.1-403 which is provided by a person to a partnership to become a partner or in

the person's capacity as a partner.

     (3) "Debtor in bankruptcy" means a person that is the subject of:

     (i) An order for relief under Title 11 of the United States Code or a comparable order under

a successor statute of general application; or

     (ii) A comparable order under federal, state, or foreign law governing insolvency.

     (4) "Delivering/delivered" means either physically transferring a paper document to the

secretary of state or transferring a document to the secretary of state by electronic transmission

through a medium provided and authorized by the secretary of state.

     (5) "Distribution" means a transfer of money or other property from a partnership to a

person on account of a transferable interest or in a person's capacity as a partner. The term:

     (i) Includes:

     (A) A redemption or other purchase by a partnership of a transferable interest; and

     (B) 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 business or have access

to records or other information concerning the partnership's business; and

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     (ii) Does not include 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.

     (6) "Electronic transmission" means any form of communication, not directly involving

the physical transmission of paper, that creates a record that may be retained, retrieved, and

reviewed by a recipient thereof, and that may be directly reproduced in paper form by such a

recipient through an automated process.

     (7) "Foreign limited-liability partnership" means a foreign partnership whose partners have

limited-liability for the debts, obligations, or other liabilities of the foreign partnership under a

provision similar to § 7-12.1-306(c).

     (8) "Foreign partnership" means an unincorporated entity formed under the law of a

jurisdiction other than this state which would be a partnership if formed under the law of this state.

The term includes a foreign limited-liability partnership.

     (9) "Jurisdiction", used to refer to a political entity, means the United States, a state, a

foreign country, or a political subdivision of a foreign country.

     (10) "Jurisdiction of formation" means the jurisdiction whose law governs the internal

affairs of an entity.

     (11) "Limited-liability partnership", except in the phrase "foreign limited-liability

partnership" and in Article 11 of this chapter, means a partnership that has filed a statement of

qualification under § 7-12.1-901 and does not have a similar statement in effect in any other

jurisdiction.

     (12) "Partner" means a person that:

     (i) Has become a partner in a partnership under § 7-12.1-402 or was a partner in a

partnership when the partnership became subject to this chapter under § 7-12.1-110; and

     (ii) Has not dissociated as a partner under § 7-12.1-601.

     (13) "Partnership", except in Article 11 of this chapter, means an association of two (2) or

more persons to carry on as co-owners of a business for profit formed under this chapter or that

becomes subject to this chapter under Article 11 of this chapter or § 7-12.1-110. The term includes

a limited-liability partnership.

     (14) "Partnership agreement" means the agreement, whether or not referred to as a

partnership agreement and whether oral, implied, in a record, or in any combination thereof, of all

the partners of a partnership concerning the matters described in § 7-12.1-105. The term includes

the agreement as amended or restated.

     (15) "Partnership at will" means a partnership in which the partners have not agreed to

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remain partners until the expiration of a definite term or the completion of a particular undertaking.

     (16) "Person" means an individual, business corporation, nonprofit corporation,

partnership, limited partnership, limited-liability company, general cooperative association, limited

cooperative association, unincorporated nonprofit association, statutory trust, business trust,

common-law business trust, estate, trust, association, joint venture, public corporation, government

or governmental subdivision, agency, or instrumentality, or any other legal or commercial entity.

     (17) "Principal office" means the principal executive office of a partnership or a foreign

limited-liability partnership, whether or not the office is located in this state.

     (18) "Property" means all property, whether real, personal, or mixed or tangible or

intangible, or any right or interest therein.

     (19) "Record", used as a noun, means information that is inscribed on a tangible medium

or that is stored in an electronic or other medium and is retrievable in perceivable form.

     (20) "Registered agent" means an agent of a limited-liability partnership or foreign limited-

liability partnership which is authorized to receive service of any process, notice, or demand

required or permitted by law to be served on the partnership.

     (21) "Registered foreign limited-liability partnership" means a foreign limited-liability

partnership that is registered to do business in this state pursuant to a statement of registration filed

with the secretary of state.

     (22) "Sign" means, with present intent to authenticate or adopt a record:

     (i) To execute or adopt a tangible symbol; or

     (ii) To attach to or logically associate with the record an electronic symbol, sound, or

process.

     (23) "Signature" or "signed" or "executed" means an original signature, facsimile, or an

electronically transmitted signature submitted through a medium provided and authorized by the

secretary of state.

     (24) "State" means a state of the United States, the District of Columbia, Puerto Rico, the

United States Virgin Islands, or any territory or insular possession subject to the jurisdiction of the

United States.

     (25) "Transfer" includes:

     (i) An assignment;

     (ii) A conveyance;

     (iii) A sale;

     (iv) A lease;

     (v) An encumbrance, including a mortgage or security interest;

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     (vi) A gift; and

     (vii) A transfer by operation of law.

     (26) "Transferable interest" means the right, as initially owned by a person in the person's

capacity as a partner, to receive distributions from a partnership, whether or not the person remains

a partner or continues to own any part of the right. The term applies to any fraction of the interest,

by whomever owned.

     (27) "Transferee" means a person to which all or part of a transferable interest has been

transferred, whether or not the transferor is a partner.

     7-12.1-103. Knowledge; Notice.

     (a) A person knows a fact if the person:

     (1) Has actual knowledge of it; or

     (2) Is deemed to know it under subsection (d)(1) of this section or law other than this

chapter.

     (b) 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 (d)(2) of this section.

     (c) Subject to § 7-12.1-117(f), 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.

     (d) A person not a partner is deemed:

     (1) To know of a limitation on authority to transfer real property as provided in § 7-12.1-

303(g); and

     (2) To have notice of:

     (i) A person's dissociation as a partner ninety (90) days after a statement of dissociation

under § 7-12.1-704 becomes effective; and

     (ii) A partnership's:

     (A) Dissolution ninety (90) days after a statement of dissolution under § 7-12.1-802

becomes effective;

     (B) Termination ninety (90) days after a statement of termination under § 7-12.1-802

becomes effective; and

     (C) Participation in a merger, interest exchange, conversion, or domestication, ninety (90)

days after articles of merger, interest exchange, conversion, or domestication under Article 11 of

this chapter become effective.

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     (e) A partner's knowledge or notice of a fact relating to the partnership is effective

immediately as knowledge of or notice to the partnership, except in the case of a fraud on the

partnership committed by or with the consent of that partner.

     7-12.1-104. Governing law.

     The internal affairs of a partnership and the liability of a partner as a partner for a debt,

obligation, or other liability of the partnership are governed by:

     (1) In the case of a limited-liability partnership, the law of this state; and

     (2) In the case of a partnership that is not a limited-liability partnership, the law of the

jurisdiction in which the partnership has its principal office.

     7-12.1-105. Partnership agreement; Scope, Function, and Limitations.

     (a) Except as otherwise provided in subsections (c) and (d) of this section, the partnership

agreement governs:

     (1) Relations among the partners as partners and between the partners and the partnership;

     (2) The business of the partnership and the conduct of that business; and

     (3) The means and conditions for amending the partnership agreement.

     (b) To the extent the partnership agreement does not provide for a matter described in

subsection (a) of this section, this chapter governs the matter.

     (c) A partnership agreement may not:

     (1) Vary the law applicable under § 7-12.1-104(1);

     (2) Vary the provisions of § 7-12.1-110;

     (3) Vary the provisions of § 7-12.1-307;

     (4) Unreasonably restrict the duties and rights under § 7-12.1-408, but the partnership

agreement may impose reasonable restrictions on the availability and use of information obtained

under that section and may define appropriate remedies, including liquidated damages, for a breach

of any reasonable restriction on use;

     (5) Alter or eliminate the duty of loyalty or the duty of care, except as otherwise provided

in subsection (d) of this section;

     (6) Eliminate the contractual obligation of good faith and fair dealing under § 7-12.1-

409(d), but the partnership agreement may prescribe the standards, if not manifestly unreasonable,

by which the performance of the obligation is to be measured;

     (7) Unreasonably restrict the right of a person to maintain an action under § 7-12.1-410(b);

     (8) Relieve or exonerate a person from liability for conduct involving bad faith, willful or

intentional misconduct, or knowing violation of law;

     (9) Vary the power of a person to dissociate as a partner under § 7-12.1-602(a), except to

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require that the notice under § 7-12.1-601(1) to be in a record;

     (10) Vary the grounds for expulsion specified in § 7-12.1-601(5);

     (11) Vary the causes of dissolution specified in § 7-12.1-801(4) or (5);

     (12) Vary the requirement to wind up the partnership's business as specified in § 7-12.1-

802(a), (b)(1), and (d);

     (13) Vary the right of a partner under § 7-12.1-901(f) to vote on or consent to a cancellation

of a statement of qualification;

     (14) Vary the right of a partner to approve a merger, interest exchange, conversion, or

domestication under §§ 7-12.1-11.23(a)(2), 7-12.1-11.33(a)(2), 7-12.1-11.43(a)(2), or 7-12.1-

11.53(a)(2);

     (15) Vary the required contents of a plan of merger under § 7-12.1-11.22(a), plan of interest

exchange under § 7-12.1-11.32(a), plan of conversion under § 7-12.1-11.42(a), or plan of

domestication under § 7-12.1-11.52(a);

     (16) Vary any requirement, procedure, or other provision of this chapter pertaining to:

     (i) Registered agents; or

     (ii) The secretary of state, including provisions pertaining to records authorized or required

to be filed with the secretary of state under this chapter; or

     (17) Except as otherwise provided in §§ 7-12.1-106 and 7-12.1-107(b), restrict the rights

under this chapter of a person other than a partner.

     (d) Subject to subsection (c)(8) of this section, without limiting other terms that may be

included in a partnership agreement, 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; and

     (ii) Alter the prohibition in § 7-12.1-406(a)(2) to the extent the prohibition requires only

that the partnership's total assets not be less than the sum of its total liabilities.

     (2) To the extent the partnership agreement expressly relieves a partner of a responsibility

that the partner would otherwise have under this chapter and imposes the responsibility on one or

more other partners, the agreement also may eliminate or limit any fiduciary duty of the partner

relieved of the responsibility which would have pertained to the responsibility.

     (3) If not manifestly unreasonable, the partnership agreement may:

     (i) Alter or eliminate the aspects of the duty of loyalty stated in § 7-12.1-409(b);

     (ii) Identify specific types or categories of activities that do not violate the duty of loyalty;

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     (iii) Alter the duty of care, but may not authorize conduct involving bad faith, willful or

intentional misconduct, or knowing violation of law; and

     (iv) Alter or eliminate any other fiduciary duty.

     (e) The court shall decide as a matter of law whether a term of a partnership agreement is

manifestly unreasonable under subsection (c)(6) or (d)(3) of this section. The Providence County

superior 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 and business of the 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.

     7-12.1-106. Partnership agreement -- Effect on partnership and person becoming

partner -- Preformation agreement.

     (a) A partnership is bound by and may enforce the partnership agreement, whether or not

the partnership has itself manifested assent to the agreement.

     (b) A person that becomes a partner is deemed to assent to the partnership agreement.

     (c) Two (2) or more persons intending to become the initial partners of a partnership may

make an agreement providing that upon the formation of the partnership the agreement will become

the partnership agreement.

     7-12.1-107. Partnership agreement -- Effect on third parties and relationship to

records effective on behalf of partnership.

     (a) 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) The obligations of a partnership and its partners to a person in the person's capacity as

a transferee or person dissociated as a partner are governed by the partnership agreement. Subject

only to a court order issued under § 7-12.1-504(b)(2) 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:

     (i) Imposes a new debt, obligation, or other liability on the transferee or person dissociated

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as a partner; or

     (ii) Prejudices the rights under § 7-12.1-701 of a person that dissociated as a partner before

the amendment was made.

     (c) If a record delivered by a partnership to the secretary of state for filing becomes

effective and contains a provision that would be ineffective under §§ 7-12.1-105(c) or 7-12.1-

105(d)(3) if contained in the partnership agreement, the provision is ineffective in the record.

     (d) Subject to subsection (c) of this section, if a record delivered by a partnership to the

secretary of state for filing becomes effective and conflicts with a provision of the partnership

agreement:

     (1) The agreement prevails as to partners, persons dissociated as partners, and transferees;

and

     (2) The record prevails as to other persons to the extent they reasonably rely on the record.

     7-12.1-108. Signing of records to be delivered for filing to secretary of state.

     (a) A record filed with the secretary of state pursuant to this chapter must be signed as

follows:

     (1) Except as otherwise provided in subsections (a)(2) and (a)(3) of this section, a record

signed by a partnership must be signed by a person authorized by the partnership.

     (2) A record filed on behalf of a dissolved partnership that has no partner must be signed

by the person winding up the partnership's business under § 7-12.1-802(c) or a person appointed

under § 7-12.1-802(d) to wind up the business.

     (3) A statement of denial by a person under § 7-12.1-304 must be signed by that person.

     (4) Any other record delivered on behalf of a person to the secretary of state for filing must

be signed by that person.

     (b) A record filed under this chapter may be signed by an agent. Whenever this chapter

requires a particular individual to sign a record and the individual is deceased or incompetent, the

record may be signed by a legal representative of the individual.

     (c) A person that signs a record as an agent or legal representative affirms as a fact that the

person is authorized to sign the record.

     7-12.1-109. Liability for inaccurate information in filed record.

     (a) If a record filed with the secretary of state under this chapter and filed by the secretary

of state contains inaccurate information, a person that suffers loss by reliance on the information

may recover damages for the loss from:

     (1) A person that signed the record, or caused another to sign it on the person's behalf, and

knew the information to be inaccurate at the time the record was signed; and

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     (2) Subject to subsection (b) of this section, a partner if:

     (i) The record was delivered for filing on behalf of the partnership; and

     (ii) The partner knew or had notice of the inaccuracy for a reasonably sufficient time before

the information was relied upon so that, before the reliance, the partner reasonably could have:

     (A) Effected an amendment under § 7-12.1-901(f);

     (B) Filed a petition under § 7-12.1-112; or

     (C) Filed with the secretary of state a statement of change under § 7-12.1-909 or a statement

of correction under § 7-12.1-116.

     (b) To the extent the partnership agreement expressly relieves a partner of responsibility

for maintaining the accuracy of information contained in records delivered on behalf of the

partnership to the secretary of state for filing under this chapter and imposes that responsibility on

one or more other partners, the liability stated in subsection (a)(2) of this section applies to those

other partners and not to the partner that the partnership agreement relieves of the responsibility.

     (c) An individual who signs a record authorized or required to be filed under this chapter

affirms under penalty of perjury that the information stated in the record is accurate.

     7-12.1-110. Application to existing relationships.

     (a) This chapter governs only:

     (1) A partnership formed on or after January 1, 2023; and

     (2) Except as otherwise provided in subsection (c) of this section, a partnership formed

before January 1, 2023, which elects, in the manner provided in its partnership agreement or by law

for amending the partnership agreement, to be subject to this chapter.

     (b) Except as otherwise provided in subsection (c) of this section, on and after January 1,

2023, this chapter governs all partnerships.

     (c) With respect to a partnership that elects pursuant to subsection (a)(2) of this section to

be subject to this chapter, after the election takes effect the provisions of this chapter relating to the

liability of the partnership's partners to third parties apply to:

     (1) A third party that had not done business with the partnership in the year before the

election took effect; and

     (2) A third party that had done business with the partnership in the year before the election

took effect only if the third party knows or has been notified of the election.

     7-12.1-110.1. Election of existing limited-liability partnerships.

     (a) With respect to a limited-liability partnership that elects pursuant to §7-12.1-110 (a)(2)

to be subject to this chapter, the partnership must deliver to the secretary of state a statement

approved in the manner required by § 7-12.1-901(b). The statement must contain:

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     (1) The name of the limited-liability partnership;

     (2) A statement that the partnership is a limited-liability partnership and elects to comply

with the provisions of chapter 12.1 of title 7;

     (3) A statement that the partnership’s status as a limited-liability partnership is perpetual

and remains effective, regardless of changes to the partnership, until it is canceled or

administratively revoked pursuant to the provision of chapter 12.1 of title 7;

     (4) The name and street address in this state of the partnership’s registered agent.

     (b) Prior to the effective date of this chapter outlined in § 7-12.1-110(b), a limited-liability

partnership may renew its registration pursuant to § 7-12-56(e). Upon the effective date of this

chapter, to maintain its status as a limited-liability partnership, the following actions must be taken:

     (1) A designation of a registered agent must be recorded with the secretary of state; and

     (2) At the time prescribed, the limited-liability partnership must file an annual report in

accordance with the provisions of § 7-12.1-913.

     7-12.1-111. Delivery of record.

     (a) Except as otherwise provided in this chapter, permissible means of delivery of a record

include delivery by hand, mail, conventional commercial practice, and electronic transmission.

     (b) Delivery to the secretary of state is effective only when a record is received by the

secretary of state.

     7-12.1-112. Signing and filing pursuant to judicial order.

     (a) If a person required by this chapter to sign a record or deliver a record to the secretary

of state for filing under this chapter does not do so, any other person that is aggrieved may petition

the superior court to order:

     (1) The person to sign the record;

     (2) The person to deliver the record to the secretary of state for filing; or

     (3) The secretary of state to file the record unsigned.

     (b) If a petitioner under subsection (a) of this section is not the partnership or foreign

limited-liability partnership to which the record pertains, the petitioner shall make the partnership

or foreign partnership a party to the action.

     (c) A record filed under subsection (a)(3) of this section is effective without being signed.

     7-12.1-113. Filing requirements.

     (a) To be filed by the secretary of state pursuant to this chapter, a record must be received

by the secretary of state, comply with this chapter, and satisfy the following:

     (1) The filing of the record must be required or permitted by this chapter;

     (2) The record must be physically delivered in written form unless and to the extent the

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secretary of state permits electronic delivery of records;

     (3) The words in the record must be in English, and numbers must be in Arabic or Roman

numerals, but the name of an entity need not be in English if written in English letters or Arabic or

Roman numerals;

     (4) The record must be signed by a person authorized or required under this chapter to sign

the record; and

     (5) The record must state the name and capacity, if any, of each individual who signed it,

either on behalf of the individual or the person authorized or required to sign the record, but need

not contain a seal, attestation, acknowledgment, or verification.

     (b) If any law other than this chapter prohibits the disclosure by the secretary of state of

information contained in a record filed with the secretary of state, the secretary of state shall file

the record if the record otherwise complies with this chapter but may redact the information.

     (c) When a record is filed with the secretary of state, any fee required under this chapter

and any fee, tax, interest, or penalty required to be paid under this chapter or law other than this

chapter must be paid in a manner permitted by the secretary of state or by that law.

     (d) The secretary of state may require that a record delivered in written form be

accompanied by an identical or conformed copy.

     (e) The secretary of state may provide forms for filings required or permitted to be made

by this chapter, but, except as otherwise provided in this section, their use is not required.

     (f) The secretary of state may require that a cover sheet for a filing be on a form prescribed

by the secretary of state.

     7-12.1-114. Effective date and time.

     Except as otherwise provided in § 7-12.1-115 and subject to § 7-12.1-116(c), a record filed

under this chapter is effective:

     (1) On the date and at the time of its filing by the secretary of state, as provided in § 7-

12.1-117(b);

     (2) On the date of filing and at the time specified in the record as its effective time, if later

than the time under subsection (1) of this section;

     (3) At a specified delayed effective date and time, which may not be more than ninety (90)

days after the date of filing; or

     (4) If a delayed effective date is specified, but no time is specified, at one minute past

twelve am (12:01 a.m.) on the date specified, which may not be more than ninety (90) days after

the date of filing.

     7-12.1-115. Withdrawal of filed record before effectiveness.

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     (a) Except as otherwise provided in §§ 7-12.1-11.24, 7-12.1-11.34, 7-12.1-11.44, and 7-

12.1-11.54, a record filed with the secretary of state may be withdrawn before it takes effect by

delivering to the secretary of state for filing a statement of withdrawal.

     (b) A statement of withdrawal must:

     (1) Be signed by each person that signed the record being withdrawn, except as otherwise

agreed by those persons;

     (2) Identify the record to be withdrawn; and

     (3) If signed by fewer than all the persons that signed the record being withdrawn, state

that the record is withdrawn in accordance with the agreement of all the persons that signed the

record.

     (c) On filing by the secretary of state of a statement of withdrawal, the action or transaction

evidenced by the original record does not take effect.

     7-12.1-116. Correcting filed record.

     (a) A person on whose behalf a filed record was filed with the secretary of state may correct

the record if:

     (1) The record at the time of filing was inaccurate;

     (2) The record was defectively signed; or

     (3) The electronic transmission of the record to the secretary of state was defective.

     (b) To correct a filed record, a person on whose behalf the record was delivered to the

secretary of state must deliver to the secretary of state for filing a statement of correction.

     (c) A statement of correction:

     (1) May not state a delayed effective date;

     (2) Must be signed by the person correcting the filed record;

     (3) Must identify the filed record to be corrected;

     (4) Must specify the inaccuracy or defect to be corrected; and

     (5) Must correct the inaccuracy or defect.

     (d) A statement of correction is effective as of the effective date of the filed record that it

corrects except for purposes of § 7-12.1-103(d) and as to persons relying on the uncorrected filed

record and adversely affected by the correction. For those purposes and as to those persons, the

statement of correction is effective when filed.

     7-12.1-117. Duty of secretary of state to file -- Review of refusal to file -- Delivery of

record by secretary of state.

     (a) The secretary of state shall file a record filed with the secretary of state which satisfies

this chapter. The duty of the secretary of state under this section is ministerial.

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     (b) When the secretary of state files a record, the secretary of state shall record it as filed

on the date and at the time of its delivery. After filing a record, the secretary of state shall deliver

to the person that submitted the record a copy of the record with an acknowledgment of the date

and time of filing and, in the case of a statement of denial, also to the partnership to which the

statement pertains.

     (c) If the secretary of state refuses to file a record, the secretary of state shall, not later than

ten (10) business days after the record is delivered:

     (1) Return the record or notify the person that submitted the record of the refusal; and

     (2) Provide a brief explanation in a record of the reason for the refusal.

     (d) If the secretary of state refuses to file a record, the person that submitted the record may

petition the superior court to compel filing of the record. The record and the explanation of the

secretary of state of the refusal to file must be attached to the petition. The Providence County

superior court may decide the matter in a summary proceeding.

     (e) The filing of or refusal to file a record does not:

     (1) Affect the validity or invalidity of the record in whole or in part; or

     (2) Create a presumption that the information contained in the record is correct or incorrect.

     (f) Except as otherwise provided by § 7-12.1-909 or by law other than this chapter, the

secretary of state may deliver any record to a person by delivering it:

     (1) In person to the person that submitted it;

     (2) To the address of the person's registered agent;

     (3) To the principal office of the person;

     (4) To an electronic address the person provides to the secretary of state for delivery; or

     (5) By providing, at no cost to the filer, access to a downloadable copy of the record from

the secretary of state’s online corporate database.

     (g) Notwithstanding that any instrument authorized to be filed with the secretary of state

under this chapter is when filed inaccurately, defectively or erroneously executed, sealed or

acknowledged, or otherwise defective in any respect, the secretary of state has no liability to any

individual for the preclearance for filing, the acceptance for filing or the filing and indexing of such

instrument by the secretary of state.

     7-12.1-117.1. Fees for filing documents and issuing certificates.

     The secretary of state shall charge and collect for:

     (1) Filing a statement of partnership authority, one hundred dollars ($100);

     (2) Filing a statement of amendment or cancellation of partnership authority, fifty dollars

($50.00);

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     (3) Filing a statement of denial of partnership authority, fifty dollars ($50.00);

     (4) Filing a statement of dissociation, ten dollars ($10.00);

     (5) Filing an application to reserve a partnership name, fifty dollars ($50.00);

     (6) Filing a notice of transfer of a reserved partnership name, fifty dollars ($50.00);

     (7) Filing a statement of change of registered agent, twenty dollars ($20.00);

     (8) Filing a statement of change of name or address only for a registered agent, without

fee;

     (9) Filing a statement of qualification for a limited-liability partnership, one hundred fifty

dollars ($150)

     (10) Filing a statement of amendment or cancellation of a limited-liability partnership, fifty

dollars ($50.00);

     (11) Filing a fictitious business name statement for a limited-liability partnership, fifty

dollars ($50.00)

     (12) Filing an application of registration for a foreign limited-liability partnership, one

hundred fifty dollars ($150);

     (13) Filing an amendment to an application of registration for a foreign limited-liability

partnership, fifty dollars ($50.00)

     (14) Filing a certificate of withdrawal of registration as a foreign limited-liability

partnership, fifty dollars ($50.00);

     (15) Filing any other document, statement or report of a domestic or foreign limited-

liability partnership, except an annual report, ten dollars ($10.00);

     (16) An annual report of a domestic or foreign limited-liability partnership, fifty dollars

($50.00);

     (17) To withdraw the certificate of revocation of a limited-liability partnership, whether

domestic or foreign, a penalty in the amount of fifty dollars ($50.00) for each year or part of the

year that has elapsed since the issuance of the certificate of revocation;

     (18) For issuing a certificate of good standing/letter of status, twenty dollars ($20.00);

     (19) For issuing a certificate of fact, thirty dollars ($30.00);

     (20) For furnishing a certified copy of any document, instrument or paper relating to a

partnership or limited-liability partnership, a fee of fifteen cents ($.15) per page and ten dollars

($10.00) for the certificate and affirming the seal to it;

     (21) Service of process on the secretary of state as registered agent of a partnership or a

limited-liability partnership, fifteen dollars ($15.00) which amount may be recovered as a taxable

cost by the party to the suit or action making the service if the party prevails in the suit or action;

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     (22) Filing articles of merger for a partnership or limited-liability partnership, one hundred

dollars ($100); and

     (23) Filing a statement of domestication for a limited-liability partnership, fifty dollars

($50.00).

     7-12.1-118. Reservation of power to amend or repeal.

     The general assembly has power to amend or repeal all or part of this chapter at any time,

and all limited-liability partnerships and foreign limited-liability partnerships subject to this chapter

shall be governed by the amendment or repeal.

     7-12.1-119. Supplemental principles of law.

     Unless displaced by particular provisions of this chapter, the principles of law and equity

supplement this chapter.

ARTICLE 2

NATURE OF PARTNERSHIP

     7-12.1-201. Partnership as entity.

     (a) A partnership is an entity distinct from its partners.

     (b) A partnership is the same entity regardless of whether the partnership has a statement

of qualification in effect under § 7-12.1-901.

     7-12.1-202. Formation of partnership.

     (a) Except as otherwise provided in subsection (b) of this section, the association of two

(2) or more persons to carry on as co-owners a business for profit forms a partnership, whether or

not the persons intend to form a partnership.

     (b) An association formed under a statute other than this chapter, a predecessor statute, or

a comparable statute of another jurisdiction is not a partnership under this chapter.

     (c) In determining whether a partnership is formed, the following rules apply:

     (1) Joint tenancy, tenancy in common, tenancy by the entireties, joint property, common

property, or part ownership does not by itself establish a partnership, even if the co-owners share

profits made by the use of the property;

     (2) The sharing of gross returns does not by itself establish a partnership, even if the persons

sharing them have a joint or common right or interest in property from which the returns are

derived; and

     (3) A person who receives a share of the profits of a business is presumed to be a partner

in the business, unless the profits were received in payment:

     (i) Of a debt by installments or otherwise;

     (ii) For services as an independent contractor or of wages or other compensation to an

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employee;

     (iii) Of rent;

     (iv) Of an annuity or other retirement or health benefit to a deceased or retired partner or a

beneficiary, representative, or designee of a deceased or retired partner;

     (v) Of interest or other charge on a loan, even if the amount of payment varies with the

profits of the business, including a direct or indirect present or future ownership of the collateral,

or rights to income, proceeds, or increase in value derived from the collateral; or

     (vi) For the sale of the goodwill of a business or other property by installments or otherwise.

     7-12.1-203. Partnership property.

     Property acquired by a partnership is property of the partnership and not of the partners

individually.

     7-12.1-204. When property is partnership property.

     (a) Property is partnership property if acquired in the name of:

     (1) The partnership; or

     (2) One or more partners with an indication in the instrument transferring title to the

property of the person's capacity as a partner or of the existence of a partnership but without an

indication of the name of the partnership.

     (b) Property is acquired in the name of the partnership by a transfer to:

     (1) The partnership in its name; or

     (2) One or more partners in their capacity as partners in the partnership, if the name of the

partnership is indicated in the instrument transferring title to the property.

     (c) Property is presumed to be partnership property if purchased with partnership assets,

even if not acquired in the name of the partnership or of one or more partners with an indication in

the instrument transferring title to the property of the person's capacity as a partner or of the

existence of a partnership.

     (d) Property acquired in the name of one or more of the partners, without an indication in

the instrument transferring title to the property of the person's capacity as a partner or of the

existence of a partnership and without use of partnership assets, is presumed to be separate property,

even if used for partnership purposes.

ARTICLE 3

RELATIONS OF PARTNERS TO PERSONS DEALING WITH PARTNERSHIP

     7-12.1-301. Partner agent of partnership.

     Subject to the effect of a statement of partnership authority under § 7-12.1-303, the

following rules apply:

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     (1) Each partner is an agent of the partnership for the purpose of its business. An act of a

partner, including the signing of an instrument in the partnership name, for apparently carrying on

in the ordinary course the partnership business or business of the kind carried on by the partnership

binds the partnership, unless the partner did not have authority to act for the partnership in the

particular matter and the person with which the partner was dealing knew or had notice that the

partner lacked authority.

     (2) An act of a partner which is not apparently for carrying on in the ordinary course the

partnership's business or business of the kind carried on by the partnership binds the partnership

only if the act was actually authorized by all the other partners.

     7-12.1-302. Transfer of partnership property.

     (a) Partnership property may be transferred as follows:

     (1) Subject to the effect of a statement of partnership authority under § 7-12.1-303,

partnership property held in the name of the partnership may be transferred by an instrument of

transfer signed by a partner in the partnership name;

     (2) Partnership property held in the name of one or more partners with an indication in the

instrument transferring the property to them of their capacity as partners or of the existence of a

partnership, but without an indication of the name of the partnership, may be transferred by an

instrument of transfer signed by the persons in whose name the property is held; or

     (3) Partnership property held in the name of one or more persons other than the partnership,

without an indication in the instrument transferring the property to them of their capacity as partners

or of the existence of a partnership, may be transferred by an instrument of transfer signed by the

persons in whose name the property is held.

     (b) A partnership may recover partnership property from a transferee only if it proves that