It is enacted by the General Assembly as follows:

SECTION 1. Sections 7-12-13, 7-12-17, 7-12-26, 7-12-29, 7-12-45, 7-12-47 and 7-12-51 of the General Laws in Chapter 7-12 entitled "Partnerships" are hereby amended to read as follows:

7-12-13. Definitions. -- In sections 7-12-12-- 7-12-55 {ADD 7-12-59 ADD} , inclusive,

(a) "Bankrupt" includes bankrupt under title 11 of the United States Code (Bankruptcy) or insolvent under any state insolvent act.

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

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

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

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

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

{ADD (g) "Registered limited liability partnership" means a partnership formed pursuant to an agreement governed by the laws of this state, registered under section 7-12-56 and in compliance with section 7-12-58.

(h) "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 such jurisdiction. ADD}

7-12-17. Partnership defined. -- (1) A partnership is an association of two (2) or more persons to carry on as co-owners a business for profit . {ADD , and shall include a registered limited liability company. ADD}

(2) But 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 sections 7-12-12-- 7-12-55 {ADD 7-12-59 ADD} , inclusive, unless the association would have been a partnership in this state prior to May 6, 1957; but sections 7-12-12-- 7-12-55 {ADD 7-12-59 ADD} , inclusive, shall apply to limited partnerships except insofar as the statutes relating to partnerships are inconsistent herewith.

7-12-26. Nature of partner's liability. -- All partners are liable, {ADD (1) except as provided in subsection (2) of this section, ADD}

(a) Jointly and severally for everything chargeable to the partnership under sections 7-12-24 and 7-12-25.

(b) Jointly for all other debts and obligations of the partnership; but any partner may enter into a separate obligation to perform a partnership contract.

{ADD (2) Subject to subsection (3) of this section, a partner in a registered limited liability partnership shall not be personally liable for debts and obligations of or chargeable to the partnership whether in tort, contract or otherwise arising from omissions, negligence, wrongful acts or misconduct or malpractice committed in the course of the partnership business by another partner or an employee, agent or representative of the partnership.

(3) Subsection (2) of this section 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 his or her direct supervision and control.

(4) 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 arising out of the omissions, negligence, wrongful acts, misconduct or malpractice of the type described in subsection (2) of this section, unless such partner is personally liable under subsection (3) of this section. ADD}

7-12-29. Rules determining rights and duties of partners. -- The rights and duties of the partners in relation to the partnership shall be determined, subject to any agreement between them, by the following rules:

(a) Each partner shall be repaid his or her contributions, whether by way of capital or advances to the partnership property and share equally in the profits and surplus remaining after all liabilities, including those to partners, are satisfied; and {ADD except as provided in section 7-12-26(2), each partner ADD} must contribute toward the losses, whether of capital or otherwise, sustained by the partnership according to his or her share in the profits.

(b) 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.

(c) A partner, who in aid of the partnership makes any payment or advance beyond the amount of capital which he or she agreed to contribute, shall be paid interest from the date of the payment or advance.

(d) A partner shall receive interest on the capital contributed by him or her only from the date when repayment should be made.

(e) All partners have equal rights in the management and conduct of the partnership business.

(f) 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.

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

(h) 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.

7-12-45. Right of partner to contribution from co-partners 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:

(a) The dissolution being by act of any partner, the partner acting for the partnership had knowledge of the dissolution; or

(b) 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 . {ADD , or

(c) The liability is for a debt or obligation for which the partner is not liable as provided in section 7-12-26(2). ADD}

7-12-47. Effect of dissolution on partner's existing liability. -- (1) The dissolution of the partnership does not of itself discharge the existing liability of any partner.

(2) 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; and 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.

(3) Where a person agrees to assume the existing obligations of a dissolved partnership, the partners whose obligations have been assumed shall be 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.

(4) The individual property of a deceased partner shall be liable for all {ADD those ADD} obligations of the partnership incurred while he or she was a partner , {ADD and for which he or she shall be liable under section 7-12-26, ADD} but subject to the prior payment of his or her separate debts.

7-12-51. Rules for distribution. -- In settling accounts between the partners after dissolution, the following rules shall be observed, subject to any agreement to the contrary:

(a) The assets of the partnership are:

(1) The partnership property;

(2) The contributions of the partners necessary for the payment of all the liabilities specified in clause (b). {ADD (d). ADD}

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

(1) Those owing to creditors other than partners;

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

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

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

(c) The assets shall be applied in the order of their declaration in subdivision (a) to the satisfaction of the liabilities.

(d) The {ADD Except as provided in section 7-12-26(2), (1) the ADD} partners shall contribute, as provided by section 7-12-29(a) 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.

(e) An assignee for the benefit of creditors of any person appointed by the court shall have the right to enforce the contributions specified in subdivision (d).

(f) Any partner or his or her legal representative shall have the right to enforce the contributions specified in subdivision (d), to the extent of the amount which he or she has paid in excess of his or her share.

(g) The individual property of a deceased partner shall be liable for the contributions specified in subdivision (d).

(h) When partnership property and the individual properties of the partners are in possession of a court for distribution, partnership creditors shall have priority on partnership property and separate creditors on individual property, saving the rights of lien or secured creditors as heretofore.

(i) Where a partner has become bankrupt or his or her estate is insolvent the claims against his or her separate property shall rank in the following order:

(1) Those owing to separate creditors;

(2) Those owing to partnership creditors;

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

SECTION 2. Chapter 7-12 of the General Laws entitled "Partnership" is hereby amended by adding thereto the following sections:

{ADD 7-12-31.1. Nature of business. -- (1) Except as provided in subsection (2) of this section, a registered limited liability partnership or a foreign registered limited liability partnership may conduct any lawful business in this state.

(2)(a) A registered limited liability partnership or a foreign registered limited liability partnership may not render professional services as defined in section 7-5.1-2 of the general laws, except that a registered limited liability partnership may engage in the practice of public accountancy pursuant to title 5, chapter 3 of the general laws.

(b) A registered limited liability partnership or foreign registered limited liability partnership that is engaged in the practice of public accountancy in this state is subject to the laws and regulations of this state governing the practice of public accountancy by partnerships. Nothing in this act shall affect the authority of the Rhode Island board of accountancy or regulate the practice of public accountancy. ADD}

{ADD 7-12-56. Registered limited liability partnerships. -- (1) 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 which a partnership shall be required to maintain: In addition, partnerships under this section shall provide the names and addresses of all residents 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 thereby applies for status or renewal of its status, as a registered limited liability partnership.

(2) The application or renewal application shall be executed by a majority in interest of the partners or by one (1) or more partners authorized to execute an application or renewal application.

(3) The application or renewal application shall be accompanied by a fee of one hundred dollars ($100) for each partner, not to exceed two thousand five hundred dollars ($2,500) for each partnership's initial filing or subsequent renewal application.

(4) 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.

(5) Registration shall be effective for one (1) 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 (1) 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 (60) day period preceding the date of 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 (1) year after the date an original application would have expired if the last renewal of the application had not occurred.

(6) The status of a partnership as a registered limited liability partnership shall not be affected by changes after the filing of an application or a renewal application in the information stated in the application or renewal application.

(7) The secretary of state may provide forms for application for or renewal of registration and all renewals shall be filed with the secretary of state by September 1 of each year. Any renewals shall maintain resident partners as set out in this section.

(8) A partnership that registers as a registered limited liability partnership shall not be deemed to have dissolved as a result thereof 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 which is a successor to such registered limited liability partnership and which intends to be a registered limited liability partnership shall not be required to file a new application and shall be deemed to have filed any documents required or permitted under this chapter which were filed by the predecessor partnership.

(9) 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 set forth in the application or renewal application. ADD}

{ADD 7-12-57. Name of registered limited liability partnerships. -- The name of a registered limited liability partnership shall contain the words 'registered limited liability partnership' or the abbreviation 'L.L.P' or as the last words or letters of its name. ADD}

{ADD 7-12-58. Insurance or financial responsibility of registered limited liability partnerships. -- (1) A registered limited liability partnership 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 section 7-12-26(2). 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 as of the policy anniversary date; provided, however, 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, however, 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. Such policy or policies of insurance may be subject to such terms, conditions, exclusions and endorsements as are typically contained in policies of this type.

(2) If, in any proceeding, compliance by a partnership with the requirements of subsection (1) of this section is disputed;

(a) that issue shall be determined by the court, and

(b) the burden of proof of compliance shall be on the person who claims the limitation of liability in section 7-12-26(2).

(3) If a registered limited liability partnership is in compliance with the requirements of subsection (1) of this section, 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.

(4) Insurance is reasonably available for the purpose of subsection (1) of this section if, at such time as 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.

(5) A registered limited liability partnership is considered to be in compliance with subsection (1) of this section 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 section 7-12-26(2) by:

(a) deposit in trust or in bank escrow of cash, bank certificates of deposit or United States Treasury obligations; or

(b) a bank letter or credit or insurance company bonds.

(6) To the extent that a partnership maintains liability insurance or segregated funds pursuant to the laws or regulations of another jurisdiction, such liability insurance or segregated funds shall be deemed to satisfy this section if the amount hereof is equal to or greater than the amount specified in subsection (1) or subsection (5). ADD}

7-12-59. Applicability to foreign and interstate commerce. -- (1) 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.

(2) It is the intent of the general assembly that the legal existence of partnerships, including registered limited liability partnerships, formed in this state be 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 be granted the protection of full faith and credit under the Constitution of the United States.

(3) The liability of partners in a partnership, including registered limited liability partnerships, formed and existing pursuant of an agreement governed by this chapter for the debts and obligations of the partnership shall at all times be determined solely and exclusively by the laws of this state.

(4) 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 such forms as the secretary shall provide, stating:

(a) the name of the partnership,

(b) the jurisdiction,

(c) the laws of which govern its partnership agreement and under which it is registered as a limited liability partnership,

(d) the address of its principal office,

(e) if the partnership's principal office is not located in this state,

(f) the address of a registered office and the name and address of a registered agent for service of process in this state which the partnership shall be required to maintain,

(g) the names and addresses of all resident partners in this state,

(h) a brief statement of the business in which the partnership engages,

(i) any other information that the partnership determines to include,

(j) a statement that the partnership is registered limited liability partnership. Such notice shall be accompanied by a fee of one thousand dollars ($1,000). Such notice shall be effective for two (2) years from the date of filing, provided they are in compliance with section 7-12-56, after which time the partnership shall file a new notice. The filing of such notice with the secretary of state shall make it unnecessary to file any other documents under sections 6-1-1 to 6-1-4 of the general laws of Rhode Island.

(5) 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 such other similar words or abbreviation as may be required or authorized by the laws of the state where the partnership is registered, as the last words or letters of its name.

(6) 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, shall be subject to and governed by the laws of the jurisdiction in which the foreign registered limited liability partnership is registered. ADD}

SECTION 3. This act shall take effect upon passage.