Chapter 67 — Partnerships;
Limited Liability Partnerships
2011 EDITION
PARTNERSHIPS; LIMITED LIABILITY
PARTNERSHIPS
CORPORATIONS AND PARTNERSHIPS
GENERAL PROVISIONS
67.005 Definitions
PARTNERSHIPS
67.010 Knowledge
and notice
67.015 Effect
of partnership agreement; non- waivable provisions
67.020 Supplemental
principles of law
67.025 Governing
law
(Nature of Partnership)
67.050 Partnership
as entity
67.055 Creation
of partnership
67.060 Partnership
property
67.065 When
property is partnership property
67.070 General
powers of a partnership
(Relations of Partners to Persons Dealing
With Partnership)
67.090 Partner
agent of partnership
67.095 Transfer
of partnership property
67.100 Partnership
liable for partner’s actionable conduct
67.105 Partner’s
liability
67.110 Actions
by and against partnership and partners
67.115 Liability
of purported partner
(Relations of Partners to Each Other and
to Partnership)
67.140 Partner’s
rights and duties
67.145 Distributions
in kind
67.150 Partner’s
rights and duties with respect to information
67.155 General
standards of partner’s conduct
67.160 Actions
by partnership and partners
67.165 Continuation
of partnership beyond definite term or particular undertaking
(Transferees and Creditors of Partner)
67.190 Partner
not co-owner of partnership property
67.195 Partner’s
transferable interest in partnership
67.200 Transfer
of whole or part of partner’s transferable interest
67.205 Partner’s
transferable interest subject to charging order
(Partner’s Dissociation)
67.220 Events
causing partner’s dissociation
67.225 Partner’s
power to dissociate; wrongful dissociation
67.230 Effect
of partner’s dissociation
(Partner’s Dissociation When Business
Not Wound Up)
67.250 Purchase
of dissociated partner’s interest
67.255 Dissociated
partner’s power to bind and liability to partnership
67.260 Dissociated
partner’s liability to other persons
67.265 Continued
use of partnership name
(Winding Up Partnership Business)
67.290 Events
causing dissolution and winding up of partnership business
67.295 Partnership
continues after dissolution
67.300 Right
to wind up partnership business
67.305 Partner’s
power to bind partnership after dissolution
67.310 Partner’s
liability to other partners after dissolution
67.315 Settlement
of accounts and contributions among partners
(Conversions and Mergers)
67.340 Definitions
for ORS 67.340 to 67.365
67.342 Conversion
67.344 Action
on plan of conversion
67.346 Articles
of conversion
67.348 Effect
of conversion; entity existence continues; assumed business name
67.360 Merger
67.362 Action
on plan of merger
67.364 Articles
of merger
67.365 Effect
of merger
LIMITED LIABILITY PARTNERSHIPS
(Generally)
67.500 Eligibility
for registration as a limited liability partnership; required vote
(Filing Documents)
67.520 Filing
requirements
67.525 Filing,
service, copying and certification fees
67.530 Effective
time and date of document
67.535 Filing
duty of Secretary of State
67.540 Appeal
from actions of Secretary of State
67.545 Evidentiary
effect of copy of filed document
67.550 Certificate
of existence or authorization
(Secretary of State)
67.570 Powers
(Registration)
67.590 Application
for registration; effective date; fee; duration of status as limited liability
partnership
67.595 Cancellation
of registration; effect
(Partnership Powers)
67.610 Effect
of changes in partnership on limited liability partnership status and liability
of partners; amendment of application for registration
67.615 Distributions
to partners
(Name)
67.625 Limited
liability partnership name
(Service of Process)
67.635 Service
of process on limited liability partnership
(Annual Report)
67.645 Annual
report; updates; rules
(Administrative Revocation)
67.655 Grounds
for administrative revocation
67.660 Procedure
for and effect of administrative revocation
67.665 Reinstatement
following administrative revocation
67.670 Appeal
from denial of reinstatement
(Interstate Application)
67.680 Interstate
application
FOREIGN LIMITED LIABILITY PARTNERSHIPS
(Authority to Transact Business)
67.700 Authority
to transact business
67.705 Consequences
of transacting business without authority
67.710 Application
for authority to transact business; effective date of authorization
67.715 Amendment
to application for authority
67.720 Limitations
applicable to foreign limited liability partnerships
(Name)
67.730 Name
of foreign limited liability partnership
(Withdrawal)
67.740 Withdrawal
of foreign limited liability partnership
(Revocation)
67.750 Grounds
for revocation
67.755 Procedure
for and effect of revocation
67.760 Appeal
from revocation
67.765 Reinstatement
of authority
67.770 Action
by Attorney General
MISCELLANEOUS
67.800 Uniformity
of application and construction
67.805 Severability
67.810 Partnership
subject to amendment or repeal of chapter
67.815 Short
title
GENERAL PROVISIONS
67.005 Definitions.
As used in this chapter:
(1)
“Business” includes every trade, occupation, profession and commercial
activity.
(2)
“Debtor in bankruptcy” means a person who is the subject of:
(a)
An order for relief under Title 11 of the United States Code or a comparable
order under a successor statute of general application; or
(b)
A comparable order under federal, state or foreign law governing insolvency.
(3)
“Dissociated partner” means a partner with respect to whom an event specified
in ORS 67.220 has occurred.
(4)
“Distribution” means a transfer of money or other property from a partnership
to a partner in the partner’s capacity as a partner or to the partner’s
transferee.
(5)
“Foreign limited liability partnership” means a partnership that:
(a)
Is formed under laws other than the law of this state; and
(b)
Has the status of a limited liability partnership under those laws.
(6)
“Limited liability partnership” means a partnership that has registered under
ORS 67.590, and has not registered or qualified in any other jurisdiction other
than as a foreign limited liability partnership.
(7)
“Partnership” means an association of two or more persons to carry on as
co-owners a business for profit created under ORS 67.055, predecessor law, or
comparable law of another jurisdiction. A partnership includes a limited
liability partnership.
(8)
“Partnership agreement” means the agreement, whether written, oral or implied,
among the partners concerning the partnership, including amendments to the
partnership agreement.
(9)
“Partnership at will” means a partnership in which the partners have not agreed
to remain partners until the expiration of a definite term or the completion of
a particular undertaking.
(10)
“Partnership interest” or “partner’s interest in the partnership” means all of
a partner’s interests in the partnership, including the partner’s transferable
interest and all management and other rights.
(11)
“Person” means an individual, corporation, business trust, partnership, limited
liability company, association, joint venture, government, governmental
subdivision, agency, instrumentality or any other legal or commercial entity.
(12)
“Professional” means:
(a)
Accountants licensed under ORS 673.010 to 673.457 or the laws of another state;
(b)
Architects licensed under ORS 671.010 to 671.220 or the laws of another state;
(c)
Attorneys licensed under ORS 9.005 to 9.755 or the laws of another state;
(d)
Chiropractors licensed under ORS chapter 684 or the laws of another state;
(e)
Dentists licensed under ORS chapter 679 or the laws of another state;
(f)
Landscape architects licensed under ORS 671.310 to 671.459 or the laws of
another state;
(g)
Naturopaths licensed under ORS chapter 685 or the laws of another state;
(h)
Nurse practitioners licensed under ORS 678.010 to 678.410 or the laws of
another state;
(i) Psychologists licensed under ORS 675.010 to 675.150 or
the laws of another state;
(j)
Physicians licensed under ORS chapter 677 or the laws of another state;
(k)
Podiatrists licensed under ORS chapter 677 or the laws of another state;
(L)
Medical imaging licensees under ORS 688.405 to 688.605 or the laws of another
state;
(m)
Real estate appraisers licensed under ORS chapter 674 or the laws of another
state; and
(n)
Other persons providing to the public types of personal service or services
substantially similar to those listed in paragraphs (a) to (m) of this
subsection that may be lawfully rendered only pursuant to a license.
(13)
“Professional service” means the service rendered by a professional.
(14)
“Property” means all property, real, personal or mixed, tangible or intangible,
or any interest therein.
(15)
“State” means a state of the United States, the District of Columbia, the
Commonwealth of Puerto Rico or any territory or insular possession subject to
the jurisdiction of the United States.
(16)
“Transfer” includes an assignment, conveyance, lease, mortgage, deed,
encumbrance, creation of a security interest and any other disposition.
(17)
“Transferable interest of a partner in the partnership” means the partner’s
share of the profits and losses of the partnership and the partner’s right to
receive distributions. [1997 c.775 §1; 2003 c.14 §25; 2009 c.294 §8; 2009 c.833
§28]
PARTNERSHIPS
67.010 Knowledge and notice.
(1) A person knows a fact if the person has actual knowledge of it.
(2)
A person has notice of a fact if the person:
(a)
Knows of it;
(b)
Has received a notification of it; or
(c)
Has reason to know it exists from all the facts known to the person at the time
in question.
(3)
A person notifies or gives notification to another by taking steps reasonably
required to inform the other person in the ordinary course, whether or not the
other person learns of it.
(4)
A person receives a notification when the notification:
(a)
Comes to the person’s attention; or
(b)
Is addressed to the person and is duly delivered at the person’s place of
business or at any other place held out by the person as a place for receiving
communications.
(5)
Except as provided in subsection (6) of this section, a person other than an
individual knows, has notice or receives a notification of a fact for purposes
of a particular transaction when the individual conducting the transaction
knows, has notice or receives a notification of the fact, or in any event when
the fact would have been brought to the individual’s attention if the person
had exercised reasonable diligence.
(6)
A partner’s knowledge, notice or receipt of a notification of a fact relating
to the partnership is effective immediately as knowledge by, notice to or
receipt of a notification by the partnership, except in the case of a fraud on
the partnership committed by or with the consent of that partner. [1997 c.775 §2]
67.015 Effect of partnership agreement; nonwaivable provisions. (1)
Except as otherwise provided in subsection (2) of this section, relations among
the partners and between the partners and the partnership are governed by the
partnership agreement. To the extent the partnership agreement does not
otherwise provide, this chapter governs relations among the partners and
between the partners and the partnership.
(2)
The partnership agreement may not:
(a)
Unreasonably restrict the right of access to books and records under ORS 67.150
(2);
(b)
Eliminate the duty of loyalty under ORS 67.155 (2) or 67.230 (2)(c), but:
(A)
The partnership agreement may identify specific types or categories of
activities that do not violate the duty of loyalty, if not unconscionable; or
(B)
All the partners or a number or percentage specified in the partnership
agreement may authorize or ratify, after full disclosure of all material facts,
a specific act or transaction that otherwise would violate the duty of loyalty;
(c)
Unreasonably reduce the duty of care under ORS 67.155 (3) or 67.230 (2)(c);
(d)
Eliminate the obligation of good faith and fair dealing under ORS 67.155 (4),
but the partnership agreement may prescribe the standards by which the
performance of the obligation is to be measured, if the standards are not
unconscionable;
(e)
Vary the power to dissociate as a partner under ORS 67.225 (1), except to
require the notice under ORS 67.220 (1) of this Act to be in writing;
(f)
Vary the right of a court to expel a partner in the events specified in ORS
67.220 (5);
(g)
Vary the requirement to wind up the partnership business in cases specified in
ORS 67.290 (4), (5), (6) or (7);
(h)
Choose a governing law not permitted under ORS 67.025 (1) or vary the
application of this state’s law with respect to a limited liability partnership
or a foreign limited liability partnership pursuant to ORS 67.025 (2) or (3);
or
(i) Restrict rights of third parties under this chapter. [1997
c.775 §3]
67.020 Supplemental principles of law.
(1) Unless displaced by particular provisions of this chapter, the principles
of law and equity supplement this chapter.
(2)
If an obligation to pay interest arises under this chapter and the rate is not
specified, the rate is that specified in ORS 82.010. [1997 c.775 §4]
67.025 Governing law.
(1) Except as otherwise provided in subsections (2) and (3) of this section,
the relations among the partners and between the partners and the partnership
and the liability of the partners for obligations of the partnership are
governed by:
(a)
The law of the state chosen by the partners to govern if that state bears a
reasonable relation to the partners or to the partnership business and affairs;
or
(b)
If the partners do not choose a governing law under paragraph (a) of this
subsection, the law of the state in which the partnership has its principal
office from which the partnership conducts its business.
(2)
With respect to a limited liability partnership, the law of this state governs
the relations among the partners and between the partners and the partnership,
and the liability of the partners for obligations of the limited liability
partnership.
(3)
With respect to a foreign limited liability partnership:
(a)
The laws of the state or other jurisdiction under which a foreign limited
liability partnership is formed governs the internal affairs of the partnership
and the relations among the partners and between the partners and the partnership;
(b)
Except as provided in paragraph (c) of this subsection, the liability of a
partner of a foreign limited liability partnership for the obligations of the
foreign limited liability partnership arising in this state shall be the same
as the liability of a partner of a limited liability partnership under ORS
67.105 for the obligations of the limited liability partnership; and
(c)
The partners of a foreign limited liability partnership who are professionals
who hold licenses to render professional service in this state and who practice
more than incidentally in this state shall be personally liable in their
capacity as partners to the same extent and in the same manner as provided for
shareholders of a foreign professional corporation under ORS 58.185 and 58.187
and as otherwise provided in this chapter. [1997 c.775 §5]
(Nature of Partnership)
67.050 Partnership as entity.
(1) A partnership is an entity distinct from its partners.
(2)
A limited liability partnership continues to be the same entity that existed
before the filing of a registration under ORS 67.590 and remains the same
entity if its registration ceases. [1997 c.775 §6]
67.055 Creation of partnership.
(1) Except as otherwise provided in subsection (3) of this section, the association
of two or more persons to carry on as co-owners a business for profit creates a
partnership, whether or not the persons intend to create a partnership.
(2)
A partnership may be created under this chapter, a predecessor statute or a
comparable law of another jurisdiction.
(3)
An association or entity created under a law other than the laws described in
subsection (2) of this section is not a partnership.
(4)
In determining whether a partnership is created, the following rules apply:
(a)
Factors indicating that persons have created a partnership include:
(A)
Their receipt of or right to receive a share of profits of the business;
(B)
Their expression of an intent to be partners in the business;
(C)
Their participation or right to participate in control of the business;
(D)
Their sharing or agreeing to share losses of the business or liability for
claims by third parties against the business; and
(E)
Their contributing or agreeing to contribute money or property to the business.
(b)
Joint tenancy, tenancy in common, tenancy by the entireties, joint property,
common property or part ownership does not by itself create a partnership, even
if the co-owners share profits made by the use of the property.
(c)
The sharing of gross returns does not by itself create a partnership, even if
the persons sharing them have a joint or common right or interest in property
from which the returns are derived.
(d)
It is a rebuttable presumption that a person who receives a share of the
profits of a business is a partner in the business, unless the profits were
received in payment of:
(A)
A debt by installments or otherwise;
(B)
Wages or other compensation to an employee or independent contractor;
(C)
Rent;
(D)
Amounts owing to a former partner, a beneficiary, representative or designee of
a deceased partner or a partner with a disability, or a transferee of a
partnership interest;
(E)
Interest or other charge on a loan, whether or not the amount of payment varies
with the profits of the business, and whether or not the loan agreement or
instrument includes a direct or indirect present or future ownership interest
in collateral or rights to income, proceeds or increase in value derived from
collateral; or
(F)
Consideration for the sale of a business, including goodwill, or other property
by installments or otherwise.
(e)
An agreement to share losses by the owners of a business is not necessary to
create a partnership. [1997 c.775 §7; 2007 c.70 §16]
67.060 Partnership property.
Property acquired by a partnership is property of the partnership and not of
the partners individually. [1997 c.775 §8]
67.065 When property is partnership
property. (1) Property is partnership property if
acquired in the name of:
(a)
The partnership; or
(b)
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.
(2)
Property is acquired in the name of the partnership by a transfer to:
(a)
The partnership in its name; or
(b)
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.
(3)
It is a rebuttable presumption that property is 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.
(4)
It is a rebuttable presumption that 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 separate property,
even if used for partnership purposes. [1997 c.775 §9]
67.070 General powers of a partnership.
Unless restricted by applicable law, a partnership has the same powers as an
individual to do all things necessary or convenient to carry on its business
and affairs. [1997 c.775 §10]
(Relations of Partners to Persons Dealing
With Partnership)
67.090 Partner agent of partnership.
(1) Each partner is an agent of the partnership for the purpose of its
business. An act of a partner, including the execution of an instrument in the
name of the partnership, 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 had no authority to act for the
partnership in the particular matter and the person with whom the partner was
dealing knew or had received a notification that the partner lacked authority.
(2)
An act of a partner that is not for apparently carrying on in the ordinary
course the partnership business or business of the kind carried on by the
partnership, binds the partnership only if the act was authorized by the other
partners. [1997 c.775 §11]
67.095 Transfer of partnership property.
(1) Partnership property may be transferred as follows:
(a)
Partnership property held in the name of the partnership may be transferred by
an instrument of transfer executed by a partner in the name of the partnership.
(b)
Partnership property held in the name of one or more partners with an
indication in the instrument transferring the property to them of their
capacity as partners or of the existence of a partnership, but without an
indication of the name of the partnership, may be transferred by an instrument
of transfer executed by the persons in whose name the property is held.
(c)
Partnership property held in the name of one or more persons other than the
partnership, without an indication in the instrument transferring the property
to them of their capacity as partners or of the existence of a partnership, may
be transferred by an instrument of transfer executed by the persons in whose
name the property is held.
(2)
A partnership may recover partnership property from a transferee only if it
proves that execution of the instrument of initial transfer did not bind the
partnership under ORS 67.090 and:
(a)
As to a subsequent transferee who gave value for property transferred under
subsection (1)(a) and (b) of this section, proves that prior to the transfer to
the subsequent transferee, the subsequent transferee knew or had received a
notification that the person who executed the instrument of initial transfer
lacked authority to bind the partnership; or
(b)
As to a transferee who gave value for property transferred under subsection
(1)(c) of this section, proves that prior to the transfer to the transferee,
the transferee knew or had received a notification that the property was
partnership property and that the person who executed the instrument of initial
transfer lacked authority to bind the partnership.
(3)
A partnership may not recover partnership property from a subsequent transferee
if the partnership would not have been entitled to recover the property, under
subsection (2) of this section, from any earlier transferee of the property.
(4)
If a person holds all the partners’ interests in the partnership, all the
partnership property vests in that person. The person may execute a document in
the name of the partnership to evidence vesting of the property in that person
and may file or record the document. [1997 c.775 §12]
67.100 Partnership liable for partner’s
actionable conduct. (1) A partnership is liable for
loss or injury caused to a person, including a partner, or for a penalty
incurred as a result of a wrongful act or omission or other actionable conduct
of a partner acting in the ordinary course of business of the partnership or
with authority of the partnership.
(2)
If, in the course of the partnership’s business or while acting with authority
of the partnership, a partner receives or causes the partnership to receive
money or property of a person not a partner, and the money or property is
misapplied by a partner, the partnership is liable to such person for the loss.
[1997 c.775 §13]
67.105 Partner’s liability.
(1) Except as otherwise provided in this section, all partners are liable
jointly and severally for all obligations of the partnership unless otherwise
agreed by the claimant or provided by law.
(2)
A person admitted as a partner into an existing partnership is not personally
liable for any partnership obligation incurred before the person’s admission as
a partner.
(3)(a)
An obligation of a partnership incurred while the partnership is a limited
liability partnership, whether arising in contract, tort or otherwise, is
solely the obligation of the partnership. A partner is not personally liable,
directly or indirectly, by way of indemnification, contribution or otherwise,
for such an obligation solely by reason of being or so acting as a partner.
(b)
Notwithstanding paragraph (a) of this subsection, a partner of a limited
liability partnership shall continue to be liable for any obligation of the
partnership for which the partner was liable before the partnership became a
limited liability partnership.
(c)
Nothing in this subsection shall in any way affect or impair the ability of a
partner to be released from any such obligation. This subsection applies to a
partner’s liability notwithstanding anything inconsistent in the partnership
agreement that existed immediately before the vote required to become a limited
liability partnership under ORS 67.500 (3).
(4)
Notwithstanding subsection (3) of this section, the partners of a limited
liability partnership who are professionals shall be personally liable in their
capacity as partners to the same extent and in the same manner as provided for
shareholders of a domestic professional corporation under ORS 58.185 and 58.187
and as otherwise provided in this chapter. [1997 c.775 §14]
67.110 Actions by and against partnership
and partners. (1) A partnership may sue and be sued
in the name of the partnership.
(2)
An action may be brought against the partnership and, to the extent not inconsistent
with ORS 67.105, any or all of the partners in the same action or in separate
actions.
(3)
A judgment against a partnership is not by itself a judgment against a partner.
(4)
Except as provided by subsection (5) of this section, a creditor may proceed
against one or more partners or their property to satisfy a judgment based on a
claim that could have been successfully asserted against the partnership only
if:
(a)
The partner is personally liable for the claim under ORS 67.105;
(b)
A judgment is also obtained against the partner; and
(c)
A judgment based on the same claim is obtained against the partnership that:
(A)
Has not been reversed or vacated; and
(B)
Remains unsatisfied for 90 days after:
(i) The date of entry of the judgment; or
(ii)
The date of expiration or termination of the stay, if the judgment is contested
by appropriate proceedings and execution on the judgment has been stayed.
(5)
Subsection (4) of this section does not prohibit a creditor from proceeding
directly against one or more partners who are personally liable for the claim
under ORS 67.105 or against their property without first seeking satisfaction
from partnership property if:
(a)
The partnership is a debtor in bankruptcy;
(b)
The creditor and the partnership agreed that the creditor is not required to
comply with subsection (4) of this section;
(c)
A court orders otherwise, based on a finding that partnership property subject
to execution within the state is clearly insufficient to satisfy the judgment
or that compliance with subsection (4) of this section is excessively
burdensome; or
(d)
Liability is imposed on the partner by law or contract independently of the
person’s status as a partner. [1997 c.775 §15]
67.115 Liability of purported partner.
(1) If a person, by words or conduct, purports to be a partner or consents to
being represented by another as a partner in a partnership or with one or more
persons not partners, the purported partner is liable to a person to whom the
representation is made if that person relying on the false representation
enters into a transaction with the actual or purported partnership. If the
false representation is made in a public manner, the purported partner is
liable to a person who relies upon it even if the purported partner is not
aware of being held out as a partner to the claimant. If partnership liability
results, the purported partner is liable with respect to that liability as if
the purported partner were a partner. If no partnership liability results, the
purported partner is liable with respect to that liability jointly and
severally with any other person consenting to the representation.
(2)
A person falsely represented to be a partner is an agent of persons consenting
to the representation to bind them to the same extent and in the same manner as
if the purported partner were a partner, with respect to persons who enter into
transactions in reliance upon the representation. If all the partners of the
existing partnership consent to the representation, a partnership act or
obligation results. If fewer than all the partners of the existing partnership
consent to the representation, the person acting and the partners consenting to
the representation are jointly and severally liable.
(3)
Except as otherwise provided in subsections (1) and (2) of this section,
persons who are not partners to each other are not liable as partners to other
persons. [1997 c.775 §16]
(Relations of Partners to Each Other and
to Partnership)
67.140 Partner’s rights and duties.
(1) Each partner is deemed to have an account that is:
(a)
Credited with an amount equal to the money plus the value of any other
property, net of the amount of any liabilities, the partner contributes to the
partnership and the partner’s share of the partnership profits; and
(b)
Charged with an amount equal to the money plus the value of any other property,
net of the amount of any liabilities, distributed by the partnership to the
partner and the partner’s share of the partnership losses.
(2)
Each partner is entitled to an equal share of the partnership profits and is
chargeable with a share of the partnership losses in proportion to the partner’s
share of the profits.
(3)
A partnership shall reimburse a partner for payments made and indemnify a
partner for liabilities incurred by the partner in the ordinary course of the
business of the partnership or for the preservation of its business or
property.
(4)
A partnership shall reimburse a partner for an advance to the partnership
beyond the amount of capital the partner agreed to contribute.
(5)
A payment or advance made by a partner which gives rise to a partnership
obligation under subsection (3) or (4) of this section constitutes a loan to
the partnership that accrues interest from the date of the payment or advance.
(6)
Except as otherwise provided in subsection (5) of this section, a partner shall
not receive interest on the amount of capital contributed to the partnership.
(7)
Each partner has equal rights in the management and conduct of the partnership
business.
(8)
A partner may use or possess partnership property only on behalf of the
partnership.
(9)
A partner is not entitled to remuneration for services performed for the
partnership except for reasonable compensation for services rendered in winding
up the business of the partnership.
(10)
A person may become a partner only with the consent of all the partners.
(11)
A difference arising as to a matter in the ordinary course of business of a
partnership may be decided by a majority of the partners. An act outside the
ordinary course of business of a partnership and an amendment to the
partnership agreement may be undertaken only with the consent of all the
partners.
(12)
A written partnership agreement may establish classes or groups of one or more
partners having certain relative rights, powers and duties, including voting
rights, and may provide for the future creation of additional classes or groups
of one or more partners having certain relative rights, powers and duties,
including voting rights. The rights, powers or duties of a class or group of
partners may be senior to those of one or more existing classes or groups of
partners.
(13)
This section does not affect the obligations of a partnership to other persons
under ORS 67.090. [1997 c.775 §17]
67.145 Distributions in kind.
A partner has no right to receive, and may not be required to accept, a
distribution in kind. [1997 c.775 §18]
67.150 Partner’s rights and duties with
respect to information. (1) A partnership shall keep its
books and records, if any, at its principal office from which the partnership
conducts its business.
(2)
A partnership shall provide partners and their agents and attorneys access to
its books and records. It shall provide former partners and their agents and
attorneys access to books and records pertaining to the period during which
they were partners. The right of access provides the opportunity to inspect and
copy books and records during ordinary business hours. A partnership may impose
a reasonable charge covering the costs of labor and material for copies of
documents furnished.
(3)
Each partner, to the extent of the partner’s knowledge or possession of
information, and the partnership shall furnish to a partner and to the legal
representative of a deceased partner or partner under legal disability:
(a)
Without demand, any information concerning the partnership’s business and
affairs reasonably required for the proper exercise of the partner’s rights and
duties under the partnership agreement or under this chapter; and
(b)
On demand, any other information concerning the partnership’s business and
affairs, except to the extent the demand or the information demanded is
unreasonable or otherwise improper under the circumstances. [1997 c.775 §19]
67.155 General standards of partner’s
conduct. (1) The only fiduciary duties a partner
owes to the partnership and the other partners are the duty of loyalty and the
duty of care set forth in subsections (2) and (3) of this section.
(2)
A partner’s duty of loyalty to the partnership and the other partners includes
the following:
(a)
To account to the partnership and hold for it any property, profit or benefit
derived by the partner in the conduct and winding up of the partnership
business or derived from a use by the partner of partnership property,
including the appropriation of a partnership opportunity;
(b)
Except as provided in subsections (5) and (6) of this section, to refrain from
dealing with the partnership in a manner adverse to the partnership and to
refrain from representing a person with an interest adverse to the partnership,
in the conduct or winding up of the partnership business; and
(c)
To refrain from competing with the partnership in the conduct of the
partnership business before the dissolution of the partnership.
(3)
A partner’s duty of care to the partnership and the other partners in the
conduct and winding up of the partnership business is limited to refraining
from engaging in grossly negligent or reckless conduct, intentional misconduct
or a knowing violation of law.
(4)
A partner shall discharge the duties to the partnership and the other partners
under this chapter or under the partnership agreement and exercise any rights
consistent with the obligation of good faith and fair dealing.
(5)
A partner does not violate a duty or obligation under this chapter or under the
partnership agreement merely because the partner’s conduct furthers the partner’s
own interest.
(6)
A partner may lend money to or transact other business with the partnership, provided
that any loan or transaction between a partner and the partnership must be:
(a)
Fair to the partnership;
(b)
Authorized by the partnership agreement; or
(c)
Authorized or ratified by a majority of the disinterested partners or by a
number or percentage of partners specified in the partnership agreement, after
full disclosure of all material facts.
(7)
Loans and other transactions between the partnership and a partner are binding
on the parties in the same manner as transactions between the partnership and
persons who are not partners, subject to other applicable law.
(8)
This section also applies to a person winding up the partnership business as
the personal or legal representative of the last surviving partner as if the
person were a partner. [1997 c.775 §20]
67.160 Actions by partnership and
partners. (1) A partner is liable to a
partnership and the other partners for a breach of the partnership agreement or
for a violation of a duty to the partnership or the other partners under this
chapter.
(2)
A partnership may maintain an action against a partner for a breach of the
partnership agreement or for the violation of a duty to the partnership.
(3)
A partner may maintain an action against the partnership or another partner for
legal or equitable relief, with or without an accounting as to partnership
business, to:
(a)
Enforce the partner’s rights under the partnership agreement;
(b)
Enforce the partner’s rights under this chapter, including:
(A)
The partner’s rights under ORS 67.140, 67.150 or 67.155;
(B)
The partner’s right on dissociation to have the partner’s interest in the
partnership purchased pursuant to ORS 67.250 or enforce any other right under
ORS 67.220 to 67.265; or
(C)
The partner’s right to compel a dissolution and winding up of the partnership
business under ORS 67.290 or enforce any other right under ORS 67.290 to
67.315; or
(c)
Enforce the rights and otherwise protect the interests of the partner,
including rights and interests arising independently of the partnership relationship.
(4)
The accrual of and any time limitation on a right of action for a remedy under
this section is governed by other law. A right to an accounting upon a
dissolution and winding up does not revive a claim barred by law. [1997 c.775 §21]
67.165 Continuation of partnership beyond
definite term or particular undertaking. (1) If a
partnership for a definite term or particular undertaking is continued without
an express agreement after the expiration of the term or completion of the
undertaking, the rights and duties of the partners remain the same as they were
at the expiration or completion so far as is consistent with a partnership at
will.
(2)
If the partners, or those of them who habitually acted in the business during
the term or undertaking, continue the business without any settlement or
liquidation of the partnership and all partners have notice of such
continuation, there is a rebuttable presumption that the partners have agreed
that the partnership will continue. [1997 c.775 §22]
(Transferees and Creditors of Partner)
67.190 Partner not co-owner of partnership
property. A partner is not a co-owner of
partnership property and has no interest in partnership property that can be
transferred either voluntarily or involuntarily. [1997 c.775 §23]
67.195 Partner’s transferable interest in
partnership. The only transferable interest of a
partner in the partnership is the partner’s share of the profits and losses of
the partnership and the partner’s right to receive distributions. The interest
is personal property. [1997 c.775 §24]
67.200 Transfer of whole or part of
partner’s transferable interest. (1) A
transfer, in whole or in part, of a partner’s transferable interest in the
partnership:
(a)
Is permissible;
(b)
Does not by itself cause the partner’s dissociation or a dissolution and
winding up of the partnership business; and
(c)
Does not, as against the other partners or the partnership, entitle the
transferee, during the continuance of the partnership, to participate in the
management or conduct of the partnership business, to require access to
information concerning partnership transactions or to inspect or copy the
partnership books or records.
(2)
A transferee of a partner’s transferable interest in the partnership has a
right:
(a)
To receive, in accordance with the transfer, distributions to which the
transferor would otherwise be entitled;
(b)
To receive upon the dissolution and winding up of the partnership business, in
accordance with the transfer, the net amount otherwise distributable to the
transferor; and
(c)
To seek under ORS 67.290 (6) a judicial determination that it is equitable to
wind up the partnership business.
(3)
In a dissolution and winding up, a transferee is entitled to an account of
partnership transactions only from the date of the latest account agreed to by
all the partners.
(4)
Upon transfer, the transferor retains the rights and duties of a partner other
than the transferred interest in profits and losses of the partnership and the
right to receive distributions.
(5)
A partnership need not give effect to a transferee’s rights under this section
until it has notice of the transfer. Upon request, a transferee must furnish to
the partnership reasonable proof of the transfer.
(6)
A transfer of a partner’s transferable interest in the partnership in violation
of a restriction on transfer contained in the partnership agreement is
ineffective as to a person having notice of the restriction at the time of
transfer. [1997 c.775 §25]
67.205 Partner’s transferable interest subject
to charging order. (1) On application by a judgment
creditor of a partner or of a partner’s transferee, a court having jurisdiction
may charge the transferable interest of the judgment debtor to satisfy the
judgment. The court may appoint a receiver of the share of the distributions
due or to become due to the judgment debtor in respect of the partnership and
make all other orders, directions, accounts and inquiries the judgment debtor
might have made or that the circumstances of the case may require.
(2)
A charging order constitutes a lien on the judgment debtor’s transferable
interest in the partnership. The court may order a foreclosure of the interest
subject to the charging order at any time. The purchaser at the foreclosure
sale has the rights of a transferee.
(3)
At any time before foreclosure, an interest charged may be redeemed:
(a)
By the judgment debtor;
(b)
With property other than partnership property, by one or more of the other
partners; or
(c)
With partnership property, by one or more of the other partners with the
consent of all the partners whose interests are not so charged.
(4)
This chapter does not deprive a partner of a right under exemption laws with
respect to the partner’s interest in the partnership.
(5)
This section provides the exclusive remedy by which a judgment creditor of a
partner or partner’s transferee may satisfy a judgment out of the judgment
debtor’s transferable interest in the partnership. [1997 c.775 §26]
(Partner’s Dissociation)
67.220 Events causing partner’s
dissociation. A partner is dissociated from a
partnership upon the occurrence of any of the following events:
(1)
The partnership’s having notice of the partner’s express will to withdraw as a
partner or on a later date specified by the partner;
(2)
An event agreed to in the partnership agreement as causing the partner’s
dissociation;
(3)
The partner’s expulsion pursuant to the partnership agreement;
(4)
The partner’s expulsion by the unanimous vote of the other partners if:
(a)
It is unlawful to carry on the partnership business with that partner;
(b)
There has been a transfer of all or substantially all of that partner’s
transferable interest in the partnership, other than a transfer for security
purposes that has not been foreclosed or a court order charging the partner’s
interest that has not been foreclosed;
(c)
Within 90 days after the partnership notifies a corporation that is a partner
that it will be expelled because it has filed articles of dissolution or the
equivalent, has been administratively dissolved or has had its right to conduct
business suspended by the jurisdiction of its incorporation, there is no
revocation of the articles of dissolution or the administrative dissolution or
no reinstatement of its right to conduct business;
(d)
Within 90 days after the partnership notifies a limited liability company that
is a partner that it will be expelled because it has filed articles of
dissolution or the equivalent, has been administratively dissolved or has had
its right to conduct business suspended by the jurisdiction of its
organization, there is no revocation of the articles of dissolution or the
administrative dissolution or no reinstatement of its right to conduct
business;
(e)
Within 90 days after the partnership notifies a limited partnership that is a
partner that it will be expelled because it has filed a certificate of
cancellation or the equivalent, has been administratively inactivated or has
had its right to conduct business suspended by the jurisdiction of its
organization, there is no revocation of the certificate of cancellation or the
administrative inactivation or no reinstatement of its right to conduct
business; or
(f)
A partnership that is a partner has been dissolved and its business is being
wound up;
(5)
On application by the partnership or another partner, the partner’s expulsion
by judicial determination because:
(a)
The partner engaged in wrongful conduct that adversely and materially affected
the partnership business;
(b)
The partner willfully or persistently committed a material breach of the
partnership agreement or of a duty owed to the partnership or the other
partners under ORS 67.155; or
(c)
The partner engaged in conduct relating to the partnership business which makes
it not reasonably practicable to carry on the business in partnership with the
partner;
(6)
The partner is:
(a)
Becoming a debtor in bankruptcy;
(b)
Executing an assignment for the benefit of creditors;
(c)
Seeking, consenting to or acquiescing in the appointment of a trustee, receiver
or liquidator of that partner or of all or substantially all of that partner’s
property; or
(d)
Failing, within 90 days after the appointment, to have vacated or stayed the
appointment of a trustee, receiver or liquidator of the partner or of all or
substantially all of the partner’s property obtained without the partner’s
consent or acquiescence, or failing within 90 days after the expiration of a
stay to have the appointment vacated;
(7)
In the case of a partner who is an individual:
(a)
The partner’s death;
(b)
The appointment of a guardian or general conservator for the partner; or
(c)
A judicial determination that the partner has otherwise become incapable of
performing the partner’s duties under the partnership agreement;
(8)
In the case of a partner that is a trust or is acting as a partner by virtue of
being a trustee of a trust, distribution of the trust’s entire transferable
interest in the partnership, but not merely by reason of the substitution of a
successor trustee;
(9)
In the case of a partner that is an estate or is acting as a partner by virtue
of being a personal representative of an estate, distribution of the estate’s
entire transferable interest in the partnership, but not merely by reason of
the substitution of a successor personal representative; or
(10)
Termination of the existence of a partner who is not an individual,
partnership, limited partnership, limited liability company, corporation, trust
or estate. [1997 c.775 §27]
67.225 Partner’s power to dissociate;
wrongful dissociation. (1) A partner has the power to
dissociate at any time, rightfully or wrongfully, by express will pursuant to
ORS 67.220 (1).
(2)
A partner’s dissociation is wrongful only if:
(a)
The dissociation is in breach of an express provision of the partnership
agreement; or
(b)
In the case of a partnership for a definite term or particular undertaking,
before the expiration of the term or the completion of the undertaking:
(A)
The partner withdraws by express will, unless the withdrawal follows within 90
days after another partner’s dissociation under ORS 67.220 (3) to (10) or
wrongful dissociation under this subsection;
(B)
The partner is expelled by judicial determination under ORS 67.220 (5);
(C)
The partner is dissociated by becoming a debtor in bankruptcy; or
(D)
In the case of a partner who is not an individual, trust other than a business
trust, or estate, the partner is expelled or otherwise dissociated because it
willfully dissolved or terminated.
(3)
A partner who wrongfully dissociates is liable to the partnership and to the
other partners for damages caused by the dissociation. The liability is in
addition to any other obligation of the partner to the partnership or to the
other partners. [1997 c.775 §28]
67.230 Effect of partner’s dissociation.
(1) If a partner’s dissociation results in a dissolution and winding up of the
partnership business, ORS 67.290 to 67.315 apply. If a partner’s dissociation
does not result in dissolution and winding up of the partnership business, ORS
67.250 to 67.265 apply.
(2)
Upon a partner’s dissociation:
(a)
The partner’s right to participate in the management and conduct of the
partnership business terminates, except as otherwise provided in ORS 67.300;
(b)
The partner’s duty of loyalty under ORS 67.155 (2)(c) terminates; and
(c)
The partner’s duty of loyalty under ORS 67.155 (2)(a) and (b) and duty of care
under ORS 67.155 (3) continue only with regard to matters arising and events
occurring before the partner’s dissociation, unless the partner participates in
winding up the partnership’s business pursuant to ORS 67.300. [1997 c.775 §29]
(Partner’s Dissociation When Business
Not Wound Up)
67.250 Purchase of dissociated partner’s
interest. (1) If a partner is dissociated from a
partnership without resulting in a dissolution and winding up of the
partnership business under ORS 67.290, the partnership shall cause the
dissociated partner’s interest in the partnership to be purchased for a buyout
price determined pursuant to subsection (2) of this section.
(2)
The buyout price of a dissociated partner’s interest is an amount equal to the
fair value of the dissociated partner’s interest in the partnership on the date
of the dissociation. If the dissociated partner has a minority interest in the
partnership, the buyout price of the dissociated partner’s interest shall not
be discounted as a result of such minority interest. Interest must be paid from
the date of dissociation to the date of payment.
(3)
Damages for wrongful dissociation under ORS 67.225 (2) and all other amounts
owing, whether or not presently due, from the dissociated partner to the
partnership, must be offset against the buyout price. Interest must be paid
from the date the amount owed becomes due to the date of payment.
(4)
A partnership shall indemnify a dissociated partner whose interest is being
purchased against all partnership liabilities, whether incurred before or after
the dissociation, except liabilities incurred by an act of the dissociated
partner under ORS 67.255. On application by the partnership or a partner made
within 120 days after the date of dissociation, a court may determine that
indemnification of the dissociated partner against all partnership liabilities
incurred before the dissociation is not equitable based on either:
(a)
The financial condition of the partnership on the date of dissociation; or
(b)
The dissolution of the partnership within 60 days after the date of
dissociation.
(5)
If no agreement for the purchase of a dissociated partner’s interest is reached
within 120 days after a written demand for payment, the partnership shall pay,
or cause to be paid, in cash to the dissociated partner the amount the
partnership estimates to be the buyout price and accrued interest, reduced by
any offsets and accrued interest under subsection (3) of this section.
(6)
If a deferred payment is authorized under subsection (8) of this section, the
partnership shall tender a written offer to pay the amount it estimates to be
the buyout price and accrued interest, reduced by any offsets under subsection
(3) of this section, stating the time of payment and the other terms and
conditions of the obligation.
(7)
The payment or tender required by subsection (5) or (6) of this section must be
accompanied by the following:
(a)
A statement of partnership assets and liabilities as of the date of
dissociation;
(b)
The latest available partnership balance sheet and income statement, if any;
(c)
An explanation of how the estimated amount of the payment was calculated; and
(d)
Written notice that the payment is in full satisfaction of the obligation to
purchase unless, within 120 days after the written notice, the dissociated
partner commences an action to determine the buyout price, any offsets under
subsection (3) of this section or other terms of the obligation to purchase.
(8)
A partner who wrongfully dissociates before the expiration of a definite term
or the completion of a particular undertaking is not entitled to payment of any
portion of the buyout price until the expiration of the term or completion of
the undertaking, unless the partner establishes to the satisfaction of the
court that earlier payment will not cause undue hardship to the business of the
partnership. A deferred payment bears interest but need not be secured unless
the dissociated partner demonstrates to the satisfaction of the court that
security for the deferred payment is appropriate.
(9)
A dissociated partner may maintain an action against the partnership, pursuant
to ORS 67.160 (3)(b)(B), to determine the buyout price of that partner’s
interest, any offsets under subsection (3) of this section or other terms of
the obligation to purchase. The action must be commenced within 120 days after
the partnership has tendered payment or an offer to pay, or within one year
after written demand for payment if no payment or offer to pay is tendered. The
court shall determine the buyout price of the dissociated partner’s interest
and any offset due under subsection (3) of this section and accrued interest,
and enter judgment for any additional payment or refund. If deferred payment is
authorized under subsection (8) of this section, the court shall also determine
whether security for deferred payment is appropriate and the other terms of the
obligation to purchase. The court may assess reasonable attorney fees and the
fees and expenses of appraisers or other experts for a party to the action, in
amounts the court finds equitable, against a party that the court finds acted
arbitrarily, vexatiously or not in good faith. The
finding may be based on the partnership’s failure to tender payment or an offer
to pay or to comply with subsection (7) of this section. [1997 c.775 §30]
67.255 Dissociated partner’s power to bind
and liability to partnership. (1) If a partner
dissociates without resulting in a dissolution and winding up of the
partnership business, the partnership, including a converted or surviving
business entity under ORS 67.340 to 67.365, is bound by an act of the
dissociated partner only if:
(a)
The act occurs within six months after the date of dissociation;
(b)
The act would have bound the partnership under ORS 67.090 before dissociation;
(c)
At the time of entering into the transaction, the other party reasonably
believed that the dissociated partner was then a partner and did not have
notice of the partner’s dissociation; and
(d)
At the time of entering into the transaction, the dissociation 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 is regularly carried on.
(2)
A dissociated partner is liable to the partnership for any damage caused to the
partnership arising from an obligation incurred by the dissociated partner
after dissociation for which the partnership is liable under subsection (1) of
this section. [1997 c.775 §31; 1999 c.362 §51]
67.260 Dissociated partner’s liability to
other persons. (1) A partner’s dissociation does not
of itself discharge the partner’s liability for a partnership obligation
incurred before dissociation. A dissociated partner is not liable for a
partnership obligation incurred after dissociation, except as otherwise
provided in subsection (2) of this section.
(2)
A partner who dissociates without resulting in a dissolution and winding up of
the partnership business is liable as a partner to the other party in a
transaction entered into by the partnership, or a converted or surviving
business entity under ORS 67.340 to 67.365, within six months after the partner’s
dissociation only if the partner is personally liable for the obligation under
ORS 67.105 and, at the time of entering into the transaction:
(a)
The other party reasonably believed that the dissociated partner was then a
partner;
(b)
The other party did not have notice of the partner’s dissociation; and
(c)
The dissociation 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 is regularly carried on.
(3)
By agreement with the partnership creditor and the partners continuing the
business, a dissociated partner may be released from liability for a
partnership obligation.
(4)
A dissociated partner is released from liability for a partnership obligation
if a partnership creditor, with notice of the partner’s dissociation but
without the partner’s consent, agrees to a material alteration in the nature or
time of payment of a partnership obligation. [1997 c.775 §32; 1999 c.362 §52]
67.265 Continued use of partnership name.
Continued use of a partnership name, or a dissociated partner’s name as part
thereof, by partners continuing the business does not of itself make the
dissociated partner liable for an obligation of the partners or the partnership
continuing the business. [1997 c.775 §33]
(Winding Up Partnership Business)
67.290 Events causing dissolution and
winding up of partnership business. A partnership
is dissolved, and its business must be wound up, only upon the occurrence of
any of the following events:
(1)
In a partnership at will, the express will of a majority of the partners,
excluding any dissociated partner;
(2)
In a partnership for a definite term or particular undertaking:
(a)
The express will of all the partners, excluding any dissociated partner, to
wind up the partnership business; or
(b)
The expiration of the term or the completion of the undertaking;
(3)
An event agreed to in the partnership agreement resulting in the winding up of
the partnership business;
(4)
An event that makes it unlawful for all or substantially all of the business of
the partnership to be continued, but a cure of illegality within 90 days after
notice to the partnership of the event is effective retroactively to the date
of the event for purposes of this section;
(5)
On application by a partner, a judicial determination that:
(a)
The economic purpose of the partnership is likely to be unreasonably
frustrated;
(b)
Another partner has engaged in conduct relating to the partnership business
that makes it not reasonably practicable to carry on the business in
partnership with that partner;
(c)
It is not otherwise reasonably practicable to carry on the partnership business
in conformity with the partnership agreement; or
(d)
Other circumstances render a dissolution of the partnership and a winding up of
its business equitable;
(6)
On application by a transferee of a partner’s transferable interest, a judicial
determination that it is equitable to wind up the partnership business:
(a)
After the expiration of the term or completion of the undertaking, if the
partnership was for a definite term or particular undertaking at the time of
the transfer or entry of the charging order that gave rise to the transfer; or
(b)
At any time, if the partnership was a partnership at will at the time of the
transfer or entry of the charging order that gave rise to the transfer; or
(7)
There are no longer two or more partners carrying on as co-owners the business
of the partnership for profit. [1997 c.775 §34]
67.295 Partnership continues after dissolution.
(1) Subject to subsection (2) of this section, a partnership continues after
dissolution only for the purpose of winding up its business. The partnership is
terminated when the winding up of its business is completed.
(2)
At any time after the dissolution of a partnership and before the winding up of
its business is completed, all the partners, excluding any dissociated partner,
may waive the right to have the partnership’s business wound up and the
partnership terminated. In that event:
(a)
The partnership resumes carrying on its business as if dissolution had never
occurred, and any liability incurred by the partnership or a partner after the
dissolution and before the waiver is determined as if dissolution had never
occurred; and
(b)
The rights of a third party accruing under ORS 67.305 (1) or arising out of
conduct in reliance on the dissolution before the third party knew or received
a notification of the waiver may not be adversely affected. [1997 c.775 §35]
67.300 Right to wind up partnership
business. (1) After dissolution, a partner who
has not wrongfully dissociated may participate in winding up the partnership’s
business, but on application of any partner, partner’s legal representative or
transferee, the circuit court, for good cause shown, may order judicial
supervision of the winding up.
(2)
The legal representative of the last surviving partner may wind up a
partnership’s business.
(3)
A person winding up a partnership’s business may preserve the partnership
business or property as a going concern for a reasonable time, prosecute and
defend actions and proceedings, whether civil, criminal, or administrative,
settle and close the partnership’s business, dispose of and transfer the
partnership’s property, discharge the partnership’s liabilities, distribute the
assets of the partnership pursuant to ORS 67.315, settle disputes by mediation,
arbitration or otherwise, and perform other necessary acts. [1997 c.775 §36]
67.305 Partner’s power to bind partnership
after dissolution. A partnership is bound by a
partner’s act after dissolution that:
(1)
Is appropriate for winding up the partnership business; or
(2)
Would have bound the partnership under ORS 67.090 before dissolution, if:
(a)
The other party to the transaction did not have notice of the dissolution; and
(b)
The 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 is regularly carried on. [1997 c.775 §37]
67.310 Partner’s liability to other partners
after dissolution. (1) Except as otherwise provided
in subsection (2) of this section and ORS 67.105, after dissolution a partner
is liable to the other partners for the partner’s share of any partnership
liability incurred under ORS 67.305.
(2)
A partner who, with knowledge of the dissolution, incurs a partnership
liability under ORS 67.305 (2) by an act that is not appropriate for winding up
the partnership business is liable to the partnership for any damage caused to
the partnership arising from the liability. [1997 c.775 §38]
67.315 Settlement of accounts and contributions
among partners. (1) In winding up a partnership’s
business, the assets of the partnership, including the contributions of the
partners required by this section, must be applied to discharge its obligations
to creditors, including, to the extent permitted by law, partners who are
creditors. Any surplus must be applied to pay in cash the net amount
distributable to partners in accordance with their right to distributions under
subsection (2) of this section.
(2)
Each partner is entitled to a settlement of all partnership accounts upon
winding up the partnership business. In settling accounts among the partners,
the profits and losses that result from the liquidation of the partnership
assets must be credited and charged to the partners’ accounts. The partnership
shall make a distribution to a partner in an amount equal to any excess of the
credits over the charges in the partner’s account. A partner shall contribute
to the partnership an amount equal to any excess of the charges over the
credits in the partner’s account, but excluding from the calculation of such
excess, charges attributable to an obligation for which the partner is not
personally liable under ORS 67.105.
(3)
If a partner fails to contribute the full amount the partner is personally
obligated to contribute under subsection (2) of this section, all the other
partners shall contribute, in the proportions in which those partners share partnership
losses, the additional amount necessary to satisfy the partnership obligations
for which they are personally liable under ORS 67.105. A partner or partner’s
legal representative may recover from the other partners any contributions the
partner makes to the extent the amount contributed exceeds that partner’s share
of the partnership obligations for which the partner is personally liable under
ORS 67.105.
(4)
After the settlement of accounts, each partner shall contribute, in the
proportion in which the partner shares partnership losses, the amount necessary
to satisfy partnership obligations that were not known at the time of the
settlement for which the partner is personally liable under ORS 67.105.
(5)
The estate of a deceased partner is liable for the partner’s obligation to
contribute to the partnership.
(6)
An assignee for the benefit of creditors of a partnership or a partner, or a
person appointed by a court to represent creditors of a partnership or a
partner, may enforce a partner’s obligation to contribute to the partnership. [1997
c.775 §39]
(Conversions and Mergers)
67.340 Definitions for ORS 67.340 to
67.365. As used in ORS 67.340 to 67.365:
(1)
“Business entity” means:
(a)
Any of the following for-profit entities:
(A)
A professional corporation organized under ORS chapter 58, predecessor law or
comparable law of another jurisdiction;
(B)
A corporation organized under ORS chapter 60, predecessor law or comparable law
of another jurisdiction;
(C)
A limited liability company organized under ORS chapter 63 or comparable law of
another jurisdiction;
(D)
A partnership organized in Oregon after January 1, 1998, or that is registered
as a limited liability partnership, or that has elected to be governed by this
chapter, and a partnership governed by law of another jurisdiction that
expressly provides for conversions and mergers; and
(E)
A limited partnership organized under ORS chapter 70, predecessor law or
comparable law of another jurisdiction; and
(b)
A cooperative organized under ORS chapter 62, predecessor law or comparable law
of another jurisdiction.
(2)
“General partner” means a partner in a partnership and a general partner in a
limited partnership.
(3)
“Limited partner” means a limited partner in a limited partnership.
(4)
“Limited partnership” means a limited partnership created under ORS chapter 70,
predecessor law or comparable law of another jurisdiction.
(5)
“Organizational document” means the following for an Oregon business entity or,
for a foreign business entity, a document equivalent to the following:
(a)
In the case of a corporation, professional corporation or cooperative, articles
of incorporation;
(b)
In the case of a limited liability company, articles of organization;
(c)
In the case of a partnership, a partnership agreement and, for a limited
liability partnership, its registration; and
(d)
In the case of a limited partnership, a certificate of limited partnership.
(6)
“Owner” means a:
(a)
Shareholder of a corporation or of a professional corporation;
(b)
Member or shareholder of a cooperative;
(c)
Member of a limited liability company;
(d)
Partner of a partnership; and
(e)
Partner of a limited partnership.
(7)
“Partner” includes both a general partner and a limited partner. [1997 c.775 §40;
1999 c.362 §40; 2003 c.80 §28]
67.342 Conversion.
(1)(a) A business entity may be converted to a partnership organized under this
chapter.
(b)
A partnership organized under this chapter may be converted to another business
entity organized under the laws of this state if the statutes that govern the
other business entity permit the conversion.
(c)
A business entity may perform a conversion described in paragraph (a) or (b) of
this subsection by approving a plan of conversion and filing articles of
conversion.
(2)
A partnership organized under this chapter may be converted to a business
entity organized under the laws of another jurisdiction if:
(a)
The laws of the other jurisdiction permit the conversion;
(b)
The converting partnership approves a plan of conversion;
(c)
Articles of conversion are filed in this state;
(d)(A)
The converted business entity submits an application for filing to the
Secretary of State to transact business as a foreign business entity of the
type into which the business entity converted unless the converted business
entity does not intend to continue to transact business in this state; and
(B)
The converted business entity meets all other requirements the laws of this
state prescribe for authorization to transact business as a foreign business
entity of the type into which the business entity converted; and
(e)
The partnership complies with any requirements that the laws of the other
jurisdiction impose with respect to the conversion.
(3)
The plan of conversion must set forth:
(a)
The name and type of the business entity prior to conversion;
(b)
The name and type of the business entity after conversion;
(c)
A summary of the material terms and conditions of the conversion;
(d)
The manner and basis of converting the ownership interests of each owner into
ownership interests or obligations of the converted business entity or any
other business entity, or into cash or other property in whole or in part; and
(e)
If the business entity after conversion is not a partnership, any additional
information that the statutes that govern converted business entities of the
type into which the business entity converted require in the organizational
document of the converted business entity.
(4)
The plan of conversion may set forth other provisions relating to the
conversion. [1999 c.362 §42; 2001 c.315 §18; 2003 c.80 §22; 2011 c.147 §17]
67.344 Action on plan of conversion.
(1) A plan of conversion shall be approved by each business entity that is a
party to the conversion, as follows:
(a)
In the case of a partnership, by all of the partners, unless a lesser vote is
provided in the partnership agreement; and
(b)
In the case of a business entity other than a partnership, as provided by the
statutes governing that business entity.
(2)
After a conversion is approved, and at any time before articles of conversion
are filed, the planned conversion may be abandoned, subject to any contractual
rights:
(a)
By a partnership that planned to convert to another business entity, in
accordance with the procedure set forth in the plan of conversion or, if none
is set forth, by a vote of the partners; and
(b)
By a business entity other than a partnership that planned to convert to a
partnership, in accordance with the procedure set forth in the plan of
conversion or, if none is set forth, in the manner permitted by the statutes
governing that business entity. [1999 c.362 §43]
67.345 [1997
c.775 §41; repealed by 1999 c.362 §67]
67.346 Articles of conversion.
(1) After conversion is approved by the owners, the converting business entity
shall file articles of conversion, which shall state the name and type of
business entity prior to conversion, the name and type of business entity after
conversion and the names and addresses of at least two partners, and shall
include the plan of conversion.
(2)
The conversion takes effect at the later of the date and time determined
pursuant to ORS 67.530 or the date and time determined pursuant to the statutes
governing the business entity that is not a partnership. [1999 c.362 §44; 2001
c.315 §10]
67.348 Effect of conversion; entity
existence continues; assumed business name. (1)
When a conversion to or from a partnership pursuant to ORS 67.342 takes effect:
(a)
The business entity continues its existence despite the conversion;
(b)
Title to all real estate and other property owned by the converting business
entity is vested in the converted business entity without reversion or
impairment;
(c)
All obligations of the converting business entity, including, without
limitation, contractual, tort, statutory and administrative obligations, are
obligations of the converted business entity;
(d)
An action or proceeding pending against the converting business entity or its
owners may be continued as if the conversion had not occurred, or the converted
business entity may be substituted as a party to the action or proceeding;
(e)
The ownership interests of each owner that are to be converted into ownership
interests or obligations of the converted business entity or any other business
entity, or into cash or other property, are converted as provided in the plan
of conversion;
(f)
Liability of an owner for obligations of the business entity, including,
without limitation, contractual, tort, statutory and administrative obligations,
shall be determined:
(A)
As to obligations incurred prior to conversion, according to the laws
applicable prior to conversion, except as provided in paragraph (g) of this
subsection; and
(B)
As to obligations incurred after conversion, according to the laws applicable
after conversion, except as provided in paragraph (h) of this subsection;
(g)
If the converting business entity is a partnership other than a limited
liability partnership and its obligations incurred before the conversion are
not satisfied by the converted business entity, the persons who were partners
of the converting business entity immediately before the effective date of the
conversion shall contribute the amount necessary to satisfy the converting
business entity’s obligations in the manner provided in ORS 67.315 as if the
converting business entity were dissolved;
(h)
If prior to conversion an owner of a business entity was a partner of a
partnership or general partner of a limited partnership or a foreign limited
partnership, and was personally liable for the business entity’s obligations,
and after conversion is an owner normally protected from personal liability,
then such owner shall continue to be personally liable for the business entity’s
obligations incurred during the 12 months following conversion, if the other
party or parties to the transaction reasonably believed that the owner would be
personally liable and had not received notice of the conversion; and
(i) The registrants of an assumed business name that is used
as the name of a partnership that is a converting business entity shall file an
application to cancel the registration under ORS chapter 648, and the converted
business entity, if it intends to continue using the name, shall file an
assumed business name registration for the name under ORS chapter 648.
(2)
Owners of the business entity that converted are entitled to the rights
provided in the plan of conversion and:
(a)
Any partner who did not vote in favor of the conversion is deemed to have
dissociated from the partnership effective immediately before the conversion
unless, within 60 days after the later of the effective date of the conversion
or the date the partner receives notice of the conversion, the partner notifies
the partnership of the partner’s desire not to dissociate. A dissociation under
this paragraph is not a wrongful withdrawal; and
(b)
In the case of owners of business entities other than partnerships, the rights
provided in the statutes applicable to the business entity prior to conversion,
including, without limitation, any rights to dissent, to dissociate, to
withdraw, to recover for breach of any duty or obligation owed by the other
owners, and to obtain an appraisal or payment for the value of an owner’s
interest. [1999 c.362 §45; 2001 c.315 §5]
67.350 [1997
c.775 §42; repealed by 1999 c.362 §67]
67.355 [1997
c.775 §43; repealed by 1999 c.362 §67]
67.360 Merger.
(1) One or more business entities may merge into a partnership organized under
this chapter if the merger is permitted by the statutes governing each other
business entity that is a party to the merger, a plan of merger is approved by
each business entity that is a party to the merger and articles of merger are
filed. A partnership organized under this chapter may be merged into a business
entity organized under the laws of this state or under the laws of another
jurisdiction if:
(a)
The merger is permitted by the laws of this state or by the laws of the other
jurisdiction that govern the other business entity;
(b)
A plan of merger is approved by each business entity that is a party to the
merger;
(c)
Articles of merger are filed in this state; and
(d)
The partnership complies with all requirements imposed under the laws of this
state and, if applicable, the laws of the other jurisdiction with respect to
the merger.
(2)
The plan of merger shall set forth:
(a)
The name and type of each business entity planning to merge;
(b)
The name and type of the business entity that will survive;
(c)
A summary of the material terms and conditions of the merger;
(d)
The manner and basis of converting the ownership interests of each owner into
ownership interests or obligations of the surviving business entity or any
other business entity, or into cash or other property in whole or in part; and
(e)
If any party is a business entity other than a partnership, any additional
information required for a merger by the statutes governing that business
entity.
(3)
The plan of merger may set forth:
(a)
Amendments to the partnership agreement of a partnership and, if applicable,
its registration as a limited liability partnership if the partnership is the
surviving business entity; and
(b)
Other provisions relating to the merger. [1997 c.775 §44; 1999 c.362 §46; 2001
c.315 §19; 2003 c.80 §23]
67.362 Action on plan of merger.
(1) A plan of merger shall be approved by each business entity that is a party
to the merger, as follows:
(a)
In the case of a partnership, by unanimous vote of the partners, or by the
number or percentage specified for merger in its partnership agreement; and
(b)
In the case of a business entity other than a partnership, as provided by the
statutes governing that business entity.
(2)
After a merger is authorized, and at any time before articles of merger are
filed, the planned merger may be abandoned, subject to any contractual rights:
(a)
By the partnership, without further action by the partners, in accordance with
the procedure set forth in the plan of merger or the partnership agreement; and
(b)
By a party to the merger that is not a partnership, in accordance with the
procedure set forth in the plan of merger or, if none is set forth, in the
manner permitted by the statutes governing that business entity. [1999 c.362 §47]
67.364 Articles of merger.
(1) After a plan of merger is approved by each business entity that is a party
to the merger, the surviving business entity shall deliver to the office of the
Secretary of State, for filing, articles of merger, except that no filing is
required if all of the parties to the merger are partnerships that have not
registered as limited liability partnerships. The articles of merger shall set
forth:
(a)
The plan of merger; and
(b)
A statement that the plan of merger was duly authorized and approved by each
business entity that is a party to the merger in accordance with ORS 67.360.
(2)
The merger takes effect on the later of the date and time determined pursuant
to ORS 67.530 or the date and time determined pursuant to the statutes
governing any party to the merger that is a business entity other than a
partnership. [1999 c.362 §48]
67.365 Effect of merger.
(1) When a merger involving a partnership takes effect:
(a)
Every other business entity that is a party to the merger merges into the
surviving business entity, and the separate existence of every other party
ceases;
(b)
The title to all real estate and other property owned by each of the business
entities that were parties to the merger is vested in the surviving business
entity without reversion or impairment;
(c)
All obligations of each of the business entities that were parties to the
merger, including, without limitation, contractual, tort, statutory and
administrative obligations, are obligations of the surviving business entity;
(d)
An action or proceeding pending against each of the business entities or its
owners that were parties to the merger may be continued as if the merger had
not occurred, or the surviving business entity may be substituted as a party to
the action or proceeding;
(e)
If a partnership is the surviving business entity, its partnership agreement is
amended to the extent provided in the plan of merger;
(f)
The shares or other ownership interests of each partner or other owner that are
to be converted into shares or other ownership interests or obligations of the
surviving business entity or any other business entity, or into cash or other
property, are converted as provided in the plan of merger;
(g)
Liability of an owner for obligations of a business entity, including, without
limitation, contractual, tort, statutory and administrative obligations, shall
be determined:
(A)
As to obligations incurred prior to merger, according to the laws applicable
prior to merger, except as provided in paragraph (h) of this subsection; and
(B)
As to obligations incurred after merger, according to the laws applicable after
merger, except as provided in paragraph (i) of this
subsection;
(h)
If a party to the merger is a partnership other than a limited liability
partnership and its obligations incurred before the merger are not satisfied by
the surviving business entity, the persons who were partners of the merging
partnership immediately before the effective date of the merger shall
contribute the amount necessary to satisfy the merging business entity’s
obligation to the surviving business entity in the manner provided in ORS
67.315 as if the merged party were dissolved; and
(i) If prior to merger an owner of a business entity was a
partner of a partnership or general partner of a limited partnership or a
foreign limited partnership, and was personally liable for the business entity’s
obligations, and after merger is an owner normally protected from personal
liability, then such owner shall continue to be personally liable for the
business entity’s obligations incurred during the 12 months following merger,
if the other party or parties to the transaction reasonably believed that the
owner would be personally liable and had not received notice of the merger.
(2)
Owners of the business entity that merged are entitled to the rights provided
in the plan of merger and:
(a)
Any partner who did not vote in favor of the merger is deemed to have
dissociated from the partnership effective immediately before the merger
unless, within 60 days after the later of the effective date of the merger or
the date the partner receives notice of the merger, the partner notifies the
partnership of the partner’s desire not to dissociate. A dissociation under
this paragraph is not a wrongful withdrawal; and
(b)
In the case of owners of business entities other than partnerships, the rights
provided in the statutes applicable to the business entity prior to merger,
including, without limitation, any rights to dissent, to dissociate, to
withdraw, to recover for breach of any duty or obligation owed by the other
owners, and to obtain an appraisal or payment for the value of an owner’s
interest.
(3)
The registration of an assumed business name of a business entity under ORS
chapter 648 shall not be affected by the merger. [1997 c.775 §45; 1999 c.362 §49]
67.370 [1997
c.775 §46; repealed by 1999 c.362 §67]
LIMITED LIABILITY PARTNERSHIPS
(Generally)
67.500 Eligibility for registration as a
limited liability partnership; required vote. (1)
Notwithstanding any other provision of this chapter, a partnership, not
including a limited partnership, may register as a limited liability
partnership or apply for authority as a foreign limited liability partnership
only if it:
(a)
Renders professional service; or
(b)
Is affiliated with a limited liability partnership or a foreign limited
liability partnership that renders professional service and renders services
related to or complementary to the professional service rendered by, or
provides services or facilities to, the limited liability partnership or
foreign limited liability partnership that renders professional service.
(2)
For purposes of subsection (1) of this section, a partnership is affiliated
with a limited liability partnership or foreign limited liability partnership
that renders professional services if:
(a)
At least a majority of partners in one partnership are partners in the other
partnership;
(b)
At least a majority of the partners in each partnership also are partners or
hold interest in another person and each partnership renders services pursuant
to an agreement with such other person; or
(c)
One partnership directly or indirectly through one or more intermediaries
controls, is controlled by or is under common control with the other
partnership.
(3)
The terms and conditions by which a partnership becomes a limited liability
partnership and a decision to cancel registration as a limited liability
partnership must be approved by either:
(a)
The vote of the partners necessary to amend the partnership agreement; or
(b)
In the case of a partnership agreement that includes provisions that expressly
address the obligations of partners to make contributions to cover partnership
losses, the vote of the partners necessary to amend such provisions. [1997
c.775 §47]
(Filing Documents)
67.520 Filing requirements.
(1) A document must satisfy the requirements of this section, as modified by
any other provision of this chapter, to be entitled to filing by the Secretary
of State.
(2)
This chapter must require or permit filing of the document with the office of
the Secretary of State.
(3)
The document shall contain the information required by this chapter. It may
contain other information as well.
(4)
The document must be legible.
(5)
The document must be in the English language.
(6)
Each document or report required by this chapter to be filed with the office of
the Secretary of State shall be executed by one or more partners. If the
limited liability partnership is in the hands of a receiver, trustee or other
court-appointed fiduciary, a document or report shall be signed by that
receiver, trustee or fiduciary.
(7)
The person executing the document shall state beneath or opposite the signature
the name of the person and the capacity in which the person signs. The document
may, but is not required to, contain acknowledgment, verification or proof.
(8)
If the Secretary of State has prescribed a mandatory form for the document, the
document must be in or on the prescribed form.
(9)
The document must be delivered to the office of the Secretary of State
accompanied by the required fees.
(10)
Delivery of a document to the office of the Secretary of State is accomplished
only when the document is actually received by the office of the Secretary of
State. [1997 c.775 §48]
67.525 Filing, service, copying and
certification fees. The Secretary of State shall
collect the fees described in ORS 56.140 for each document delivered for filing
under this chapter and for process served on the secretary under this chapter.
The secretary may collect the fees described in ORS 56.140 for copying any
public record under this chapter, certifying the copy or certifying to other
facts of record under this chapter. [1997 c.775 §49; 1999 c.362 §§50,50a]
67.530 Effective time and date of
document. (1) Except as provided in subsection
(2) of this section, a document accepted for filing is effective on the date it
is filed by the Secretary of State and at the time, if any, specified in the
document as its effective time or at 12:01 a.m. on that date if no effective
time is specified.
(2)
If a document specifies a delayed effective time and date, the document becomes
effective at the time and date specified. If a document specifies a delayed
effective date but no time, the document becomes effective at 12:01 a.m. on
that date. A delayed effective date for a document may not be later than the
90th day after the date it is filed. [1997 c.775 §50]
67.535 Filing duty of Secretary of State.
(1) If a document delivered to the office of the Secretary of State for filing
satisfies the requirements of ORS 67.520, the Secretary of State shall file it.
(2)
The Secretary of State files a document by indicating thereon that it has been
filed by the Secretary of State and the date of filing. After filing a
document, the Secretary of State shall return an acknowledgment of filing to
the limited liability partnership or foreign limited liability partnership or
its representative.
(3)
If the Secretary of State refuses to file a document, the Secretary of State
shall return it to the limited liability partnership or foreign limited
liability partnership or its representative within 10 business days after the
document was delivered together with a brief written explanation of the reason
for the refusal.
(4)
The duty of the Secretary of State to file documents under this section is
ministerial. The Secretary of State is not required to verify or inquire into
the legality or truth of any matter included in any document delivered to the
office of the Secretary of State for filing. The filing of or refusal to file a
document by the Secretary of State does not:
(a)
Affect the validity or invalidity of the document in
whole or part; or
(b)
Relate to the correctness or incorrectness of information contained in the
document.
(5)
The refusal by the Secretary of State to file a document does not create a
presumption that the document is invalid or that information contained in the
document is incorrect. [1997 c.775 §51; 1999 c.486 §12]
67.540 Appeal from actions of Secretary of
State. (1) If the Secretary of State refuses
to file a document delivered to the office of the Secretary of State for
filing, the limited liability partnership or foreign limited liability
partnership, in addition to any other legal remedy that may be available, shall
have the right to appeal from the order pursuant to ORS chapter 183.
(2)
If the Secretary of State revokes the registration of a limited liability
partnership or revokes the authorization of a foreign limited liability
partnership, the limited liability partnership or foreign limited liability
partnership, in addition to any other legal remedy that may be available, shall
have the right to appeal from the order pursuant to ORS chapter 183. [1997
c.775 §52]
67.545 Evidentiary effect of copy of filed
document. (1) A certificate attached to a copy of
a document filed by the Secretary of State, bearing the Secretary of State’s
signature, which may be in facsimile, is conclusive evidence that the document
or a facsimile thereof is on file with the office of the Secretary of State.
(2)
The provisions of ORS 56.110 shall apply to all documents filed pursuant to
this chapter. [1997 c.775 §53]
67.550 Certificate of existence or
authorization. (1) Anyone may apply to the Secretary
of State to furnish a certificate of existence for a limited liability
partnership or a certificate of authorization for a foreign limited liability
partnership.
(2)
A certificate of existence or authorization when issued means that:
(a)
The name of the limited liability partnership or the foreign limited liability
partnership is registered in this state;
(b)
The limited liability partnership is duly registered under the laws of this
state or the foreign limited liability partnership is authorized to transact
business in this state;
(c)
All fees payable to the Secretary of State under this chapter have been paid,
if nonpayment affects the existence or authorization of the limited liability
partnership or foreign limited liability partnership;
(d)
An annual report required by ORS 67.645 has been filed by the Secretary of
State within the preceding 14 months; and
(e)
A cancellation notice under ORS 67.595 or a withdrawal notice under ORS 67.740
has not been filed by the Secretary of State.
(3)
Subject to any qualification stated in the certificate, a certificate of
existence or authorization issued by the Secretary of State may be relied upon
as conclusive evidence that the limited liability partnership or foreign
limited liability partnership is registered or is authorized to transact
business in this state. [1997 c.775 §54]
(Secretary of State)
67.570 Powers.
The Secretary of State has the power reasonably necessary to perform the duties
required of the Secretary of State by this chapter. [1997 c.775 §55]
(Registration)
67.590 Application for registration;
effective date; fee; duration of status as limited liability partnership.
(1) After the approval required by ORS 67.500 (3), a partnership may become a
limited liability partnership by delivering an application for registration to
the office of the Secretary of State for filing.
(2)
The application for registration shall set forth the following information:
(a)
The name of the partnership;
(b)
The address, including street and number, and mailing address, if different, of
the principal office from which the partnership conducts its business;
(c)
A mailing address to which notices as required by this chapter may be mailed
until an address has been designated by the limited liability partnership in
its annual report;
(d)
A brief statement describing the primary business activity of the partnership
and, for a partnership rendering a professional service or services, the
professional service or services to be rendered through the partnership;
(e)
A representation by the partner or partners executing the application for
registration that the application for registration has been approved by a vote
of the partners as required by ORS 67.500 (3); and
(f)
The names and addresses of at least two partners of the partnership.
(3)
The application for registration may set forth any other provisions, not
inconsistent with law, that the partnership may decide to include in the
application.
(4)
The filing of an application for registration establishes that the partnership
has satisfied all conditions precedent to the qualification of the partnership
as a limited liability partnership.
(5)
The status of the partnership as a limited liability partnership is effective
upon filing of the application for registration or, if applicable, upon the
delayed effective time and date set forth in the application for registration
in accordance with ORS 67.530, and the payment of the required fee. The status
remains effective, regardless of changes in the partnership, until the
registration is voluntarily canceled pursuant to ORS 67.595 or the registration
is revoked pursuant to ORS 67.660. The cancellation or revocation of the
registration shall not affect the personal liability of any partner with
respect to any obligations of the limited liability partnership that are
incurred by the limited liability partnership prior to the effective date of
the cancellation or revocation of the registration.
(6)
A partnership that is a limited liability partnership on January 1, 1998, shall
not be required to file a new registration by reason of this chapter to
continue its status as a limited liability partnership. [1997 c.775 §56; 1997
c.774 §15a; 2007 c.186 §9]
67.595 Cancellation of registration;
effect. (1) A registration of a limited
liability partnership may be canceled by delivering to the office of the
Secretary of State for filing a written cancellation notice.
(2)
The cancellation notice shall contain:
(a)
The name of the limited liability partnership;
(b)
The date of filing of the initial application for registration;
(c)
A statement that the registration of the partnership as a limited liability
partnership is being canceled; and
(d)
A representation by the partner or partners executing the cancellation notice
that the cancellation has been approved by a vote of the partners as required
by ORS 67.500 (3).
(3)
A cancellation notice terminates the status of the partnership as a limited
liability partnership as of the date of filing the cancellation notice or a
later effective date specified in the cancellation notice. [1997 c.775 §57]
(Partnership Powers)
67.610 Effect of changes in partnership on
limited liability partnership status and liability of partners; amendment of
application for registration. (1) The
status of a partnership as a limited liability partnership is not affected by
changes, occurring after the filing of an application for registration, in the
information stated in the application. The partnership is not required to amend
or correct the application for registration with respect to the changes, but is
required to provide accurate information in any annual report that is
subsequently filed.
(2)
The dissolution or winding up of a limited liability partnership does not
affect the liability of a partner under ORS 67.105 for any obligation incurred
while the partnership was a limited liability partnership.
(3)
The status of a partnership as a limited liability partnership is not affected
by errors in the information stated in an application for registration. The
partnership shall correct any errors in the application by amending its
registration in accordance with subsection (4) of this section.
(4)
Consistent with the provisions of this chapter, a limited liability partnership
may amend its application for registration at any time. A limited liability
partnership amending its application shall deliver the amendment to the office
of the Secretary of State for filing. The amendment shall contain:
(a)
The name of the limited liability partnership;
(b)
The date of filing of the initial application for registration;
(c)
The text of each amendment adopted; and
(d)
The date of adoption of each amendment.
(5)
An amendment of an application for registration is effective when filed or at a
later effective date specified in the amendment. [1997 c.775 §58]
67.615 Distributions to partners.
(1) A distribution may be made by a limited liability partnership to any
partner only if, after giving effect to the distribution, in the judgment of
the partners approving the distribution:
(a)
The partnership would be able to pay its debts as they become due in the
ordinary course of business; and
(b)
The fair value of the total assets of the partnership would equal or exceed its
total liabilities.
(2)
The partners of a limited liability partnership may base a determination that a
distribution is not prohibited under subsection (1) of this section either on:
(a)
Financial statements prepared on the basis of accounting practices and
principles that are reasonable in the circumstances; or
(b)
A fair valuation or other method that is reasonable in the circumstances.
(3)
For purposes of this section, the amount, if any, by which a liability as to
which the recourse of creditors is limited to specific property of the limited
liability partnership exceeds the fair value of such specific property shall be
disregarded as a liability of the partnership.
(4)
This section shall not apply to distributions to the partners that are
regularly and customarily paid and constitute reasonable compensation for services
performed by the partners in the business of the partnership.
(5)
If a partner receives a distribution in violation of the partnership agreement
or this section, the partner is liable to the limited liability partnership for
a period of two years after the receipt of such distribution for that portion
of the distribution that violates the partnership agreement or this section. [1997
c.775 §60]
(Name)
67.625 Limited liability partnership name.
(1) The name of the limited liability partnership shall contain the word “limited
liability partnership” or the abbreviation “L.L.P.” or “LLP” as the last words
or letters of its name.
(2)
A limited liability partnership name shall not contain the word “cooperative,” “corporation,”
“corp.,” “incorporated,” “Inc.,” “limited partnership,” “L.P.,” “LP,” “Ltd.,” “limited
liability company,” “L.L.C.” or “LLC” or any abbreviation or derivation of any
of the terms used in this subsection.
(3)
A limited liability partnership name shall be written in the alphabet used to
write the English language and may include Arabic and Roman numerals and
incidental punctuation.
(4)
A limited liability partnership name shall be distinguishable upon the records
of the office of the Secretary of State from any other limited liability
partnership name, limited liability company name, corporate name, professional
corporate name, nonprofit corporate name, cooperative name, limited partnership
name, business trust name, reserved name, registered corporate name or assumed
business name of active record with the office.
(5)
Notwithstanding subsection (4) of this section, a limited liability partnership
that renders professional service may use as its name all or some of the names
of individual present or former partners of the partnership or a predecessor
partnership, as permitted by the applicable rules of ethics and by the
applicable statutory or regulatory provisions governing the rendering of such
professional service. The limited liability partnership name need not satisfy
the requirement of subsection (4) of this section if the partnership delivers
to the office a certified copy of a final judgment of a court of competent
jurisdiction that finds that the partnership has a prior or concurrent right to
use the partnership name in this state.
(6)
A limited liability partnership shall not transact business under an assumed
business name unless the assumed business name contains the words or the
abbreviation required by subsection (1) of this section and the assumed
business name is registered in accordance with ORS chapter 648.
(7)
A limited liability partnership is not required to register the name of the
limited liability partnership as an assumed business name under ORS chapter 648
as long as its status as a limited liability partnership is effective.
(8)
The name of a partnership that is not a limited liability partnership or a
foreign limited liability partnership and the name of any corporation, limited
liability company or other form of entity shall not contain the word “limited
liability partnership” or the abbreviation “L.L.P.” or “LLP” or any
abbreviation or derivation of any of the terms used in this subsection.
(9)
The provisions of this section do not:
(a)
Abrogate or limit the law governing unfair competition or unfair trade practices;
or
(b)
Derogate from the common law, the principles of equity or the statutes of this
state or of the United States with respect to the right to acquire and protect
trade names. [1997 c.775 §59]
(Service of Process)
67.635 Service of process on limited
liability partnership. Service of process shall be made
upon a limited liability partnership or a foreign limited liability partnership
in the same manner as service is made upon a general partnership under the
Oregon Rules of Civil Procedure. [1997 c.775 §61]
(Annual Report)
67.645 Annual report; updates; rules.
(1) A limited liability partnership registered to transact business in this
state, and a foreign limited liability partnership authorized to transact
business in this state, shall by the limited liability partnership’s
anniversary deliver an annual report to the office of the Secretary of State
for filing. The annual report must set forth:
(a)
The name of the limited liability partnership and the state or country under
whose law the limited liability partnership is registered or qualified as a
limited liability partnership;
(b)
The address, including street and number, and mailing address, if different, of
the principal office from which the limited liability partnership conducts the
limited liability partnership’s business;
(c)
The names and addresses of at least two partners of the limited liability
partnership;
(d)
A brief statement describing the primary business activity of the limited
liability partnership; and
(e)
Additional identifying information that the Secretary of State may require by
rule.
(2)
The information contained in the annual report must be current within 30 days
before the report is due.
(3)
The Secretary of State shall mail the annual report form to any address shown
for the limited liability partnership or foreign limited liability partnership
in the current records of the office of the Secretary of State. The failure of
the limited liability partnership or foreign limited liability partnership to
receive the annual report form from the Secretary of State does not relieve the
limited liability partnership or foreign limited liability partnership of the
limited liability partnership’s or foreign limited liability partnership’s duty
under this section to deliver an annual report to the office.
(4)
If an annual report does not contain the information this section requires, the
Secretary of State shall notify the reporting limited liability partnership or
foreign limited liability partnership in writing and return the report to the
limited liability partnership or foreign limited liability partnership for
correction. The limited liability partnership or foreign limited liability
partnership must correct the error within 45 days after the Secretary of State
gives the notice.
(5)(a)
A limited liability partnership or foreign limited liability partnership may
update information that is required or permitted in an annual report filing at
any time by delivering to the office of the Secretary of State for filing:
(A)
An amendment to the annual report if a change in the information set forth in
the annual report occurs after the report is delivered to the office for filing
and before the next anniversary; or
(B)
A statement with the change if the update occurs before the limited liability
partnership or foreign limited liability partnership files the first annual
report.
(b)
The amendment to the annual report filed under paragraph (a) of this subsection
must set forth:
(A)
The name of the limited liability partnership or foreign limited liability
partnership as shown on the records of the office; and
(B)
The information as changed. [1997 c.775 §62; 1999 c.86 §21; 2007 c.186 §10;
2011 c.147 §18]
(Administrative Revocation)
67.655 Grounds for administrative
revocation. The Secretary of State may commence a
proceeding under ORS 67.660 to administratively revoke the registration of a
limited liability partnership if:
(1)
The limited liability partnership does not pay when due any fees imposed by
this chapter; or
(2)
The limited liability partnership does not deliver its annual report to the
Secretary of State when due. [1997 c.775 §63]
67.660 Procedure for and effect of administrative
revocation. (1) If the Secretary of State
determines that one or more grounds exist under ORS 67.655 for revoking the
registration of a limited liability partnership, the Secretary of State shall
give the limited liability partnership written notice of the determination.
(2)
If the limited liability partnership does not correct each ground for
revocation or demonstrate to the reasonable satisfaction of the Secretary of
State within 45 days after notice is given that each ground determined by the
Secretary of State does not exist, the Secretary of State shall revoke the
registration of the partnership as a limited liability partnership. [1997 c.775
§64]
67.665 Reinstatement following administrative
revocation. (1) A limited liability partnership for
which the Secretary of State has administratively revoked the limited liability
partnership’s registration as a limited liability partnership may apply to the
Secretary of State for reinstatement within five years from the date of
revocation. The application must:
(a)
State the name of the limited liability partnership and the effective date of
the administrative revocation of the limited liability partnership’s
registration as a limited liability partnership; and
(b)
State that the ground or grounds for revocation either did not exist or have
been eliminated.
(2)
If the Secretary of State determines that the application contains the
information required by subsection (1) of this section, that the information is
correct and that the limited liability partnership’s name satisfies the
requirements of ORS 67.625, the Secretary of State shall reinstate the
registration of the limited liability partnership.
(3)
When effective, the reinstatement relates back to and takes effect as of the
effective date of the administrative revocation and the partnership’s status as
a limited liability partnership continues as if the administrative revocation
had never occurred.
(4)
The Secretary of State may waive the requirement under subsection (1) of this
section that the limited liability partnership apply for reinstatement within
five years after the date of administrative revocation if the limited liability
partnership requests the waiver and provides evidence of the limited liability
partnership’s continued existence as an active concern during the period of
administrative revocation. [1997 c.775 §65; 2011 c.147 §19]
67.670 Appeal from denial of reinstatement.
(1) If the Secretary of State denies a limited liability partnership’s
application for reinstatement following administrative revocation of its
registration as a limited liability partnership, the Secretary of State shall
give written notice to the limited liability partnership that explains the
reason or reasons for denial.
(2)
The limited liability partnership may appeal the denial of reinstatement
pursuant to the provisions of ORS chapter 183. [1997 c.775 §66]
(Interstate Application)
67.680 Interstate application.
(1) A partnership, including a limited liability partnership, created pursuant
to an agreement governed by the laws of this state, 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 Legislative Assembly that the legal existence of
limited liability partnerships governed by the laws of this state that are
registered under ORS 67.590 be recognized outside the boundaries of this state
and that the laws of this state governing such limited liability partnerships
transacting business outside this state be granted the protection of full faith
and credit under the Constitution of the United States. [1997 c.775 §67]
FOREIGN LIMITED LIABILITY PARTNERSHIPS
(Authority to Transact Business)
67.700 Authority to transact business.
(1) A foreign limited liability partnership may not transact business in this
state until it has been authorized to do so by the Secretary of State.
(2)
The following activities, among others, do not constitute transacting business
within the meaning of subsection (1) of this section:
(a)
Maintaining, defending or settling any proceeding;
(b)
Holding meetings of the partners or carrying on other activities concerning the
internal affairs of the partnership;
(c)
Maintaining bank accounts;
(d)
Selling through independent contractors;
(e)
Soliciting or obtaining orders, whether by mail or through employees or agents
or otherwise, if the orders require acceptance outside this state before they
become contracts;
(f)
Creating or acquiring indebtedness, mortgages and security interests in real or
personal property;
(g)
Securing or collecting debts or enforcing mortgages and security interests in
property securing the debts;
(h)
Owning, without more, real or personal property;
(i) Conducting an isolated transaction that is completed
within 30 days and is not one in the course of repeated transactions of a like
nature; or
(j)
Transacting business in interstate commerce.
(3)
The list of activities in subsection (2) of this section is not exhaustive. [1997
c.775 §68]
67.705 Consequences of transacting business
without authority. (1) A foreign limited liability
partnership transacting business in this state without authorization from the
Secretary of State may not maintain a proceeding in any court in this state
until it obtains authorization from the Secretary of State to transact business
in this state.
(2)
The successor to a foreign limited liability partnership that transacted
business in this state without authority to transact business in this state and
the assignee of a cause of action arising out of that business may not maintain
a proceeding based on that cause of action in any court in this state until the
foreign limited liability partnership or its successor obtains authorization
from the Secretary of State to transact business in this state.
(3)
A court may stay a proceeding commenced by a foreign limited liability
partnership or its successor or assignee until it determines whether the
foreign limited liability partnership or its successor requires authorization
from the Secretary of State to transact business in this state. If it so
determines, the court may further stay the proceeding until the foreign limited
liability partnership or its successor obtains the authorization.
(4)
A foreign limited liability partnership that transacts business in this state
without authority shall be liable to this state for the years or parts thereof
during which it transacted business in this state without authority in an
amount equal to all fees that would have been imposed by this chapter upon the foreign
limited liability partnership had it duly applied for and received authority to
transact business in this state as required by this chapter and thereafter
filed all reports required by this chapter.
(5)
Notwithstanding subsections (1) and (2) of this section, the failure of a
foreign limited liability partnership to obtain authority to transact business
in this state does not:
(a)
Impair the validity of its acts or prevent it from defending any proceeding in
this state; or
(b)
Result in a waiver of limitations on personal liability of the partners of the
foreign limited liability partnership. [1997 c.775 §69]
67.710 Application for authority to
transact business; effective date of authorization.
(1) A foreign limited liability partnership may apply for authority to transact
business in this state by delivering an application for authorization to the
office of the Secretary of State for filing. The application must set forth:
(a)
The name of the foreign limited liability partnership or, if the name the
foreign limited liability partnership uses is unavailable for filing in this
state, another name that satisfies the requirements of ORS 67.730;
(b)
The name of the state or country under whose law the foreign limited liability
partnership is registered and the date of registration;
(c)
The foreign limited liability partnership’s registry number in the state or
country under the laws of which the foreign limited liability partnership is
registered;
(d)
The address, including street and number, and mailing address, if different, of
the foreign limited liability partnership’s principal office;
(e)
A mailing address to which notices required by this chapter may be mailed;
(f)
A brief statement describing the primary business activity of the foreign limited
liability partnership; and
(g)
The names and addresses of at least two partners of the foreign limited
liability partnership.
(2)(a)
Except as provided in paragraph (b) of this subsection, the foreign limited
liability partnership shall deliver with the completed application a
certificate of existence, or a document of similar import, current within 60
days of delivery and authenticated by the official having custody of limited
liability partnership records in the state or country under whose law the
foreign limited liability partnership is registered.
(b)
A foreign limited liability partnership need not submit a certificate of
existence or document in accordance with paragraph (a) of this subsection if
the official who has custody of limited liability partnership records in the
state or country under whose law the foreign limited liability partnership is
registered provides free access via the Internet to a searchable database that
contains evidence of limited liability partnership registrations.
(3)
The foreign limited liability partnership is authorized by the Secretary of
State to transact business in this state upon the filing of the application for
authorization, or if applicable, upon the delayed effective time and date set
forth in the application for authorization in accordance with ORS 67.530, and
the payment of the required fee. The authorization shall remain effective until
the authorization is voluntarily withdrawn pursuant to ORS 67.740 or the
authorization is revoked pursuant to ORS 67.755. [1997 c.775 §70; 2007 c.186 §11;
2011 c.147 §20]
67.715 Amendment to application for
authority. (1) A foreign limited liability
partnership authorized to transact business in this state shall deliver an
amendment to its application for authorization to the office of the Secretary
of State for filing if it changes:
(a)
Its name as shown on the records of the office of the Secretary of State; or
(b)
The address of its principal office.
(2)
The amendment to the application for authorization shall set forth its name
shown on the records of the office of the Secretary of State and the text of
each amendment. The name as changed must satisfy the requirements of ORS
67.730. [1997 c.775 §71]
67.720 Limitations applicable to foreign
limited liability partnerships. (1) Except as
provided in subsection (2) of this section, a foreign limited liability
partnership may not be denied authorization to transact business in this state
by the Secretary of State by reason of any difference between the laws of this
state and the laws of the state or other jurisdiction under which the foreign
limited liability partnership is registered.
(2)
Notwithstanding subsection (1) of this section, a foreign limited liability
partnership shall not be authorized or permitted to exercise any powers or
purposes or conduct any business or affairs in this state that a limited
liability partnership is proscribed from exercising, pursuing or undertaking in
this state. [1997 c.775 §72]
(Name)
67.730 Name of foreign limited liability
partnership. (1) Except as provided in subsections
(2) and (3) of this section, the Secretary of State shall not authorize a
foreign limited liability partnership to transact business in this state if the
name of the foreign limited liability partnership does not conform to ORS
67.625.
(2)
The name of the foreign limited liability partnership must contain the words or
the abbreviation required by ORS 67.625 unless the name contains some other
word, phrase or abbreviation that the laws of the state or country under whose
laws the foreign limited liability partnership is registered require to denote
a limited liability partnership. A foreign limited liability partnership shall
not transact business in this state under an assumed business name unless the
assumed business name contains the words or the abbreviation required by ORS
67.625 and the assumed business name is registered in accordance with ORS
chapter 648.
(3)
If a limited liability partnership name, limited liability company name,
corporate name, professional corporate name, nonprofit corporate name,
cooperative name, limited partnership name, business trust name, reserved name,
registered corporate name or assumed business name of active record with the
office of the Secretary of State is not distinguishable on the records of the
office of the Secretary of State from the name of the foreign limited liability
partnership, the Secretary of State shall not authorize the foreign limited
liability partnership to transact business in this state unless the foreign
limited liability partnership states its name on the application for authority
to transact business in this state as (name under which created), a limited
liability partnership of (state or country under whose laws the foreign limited
liability partnership is registered), the entirety of which shall be the real
and true name of the foreign limited liability partnership in this state under
ORS chapter 648.
(4)
Notwithstanding subsection (3) of this section, a foreign limited liability
partnership that renders professional service may use as its name all or some
of the names of individual present or former partners of the partnership or a
predecessor partnership, as permitted by the applicable rules of ethics and by
the applicable statutory or regulatory provisions governing the rendering of
such professional service.
(5)
If a foreign limited liability partnership authorized to transact business in
this state changes its name to one that does not satisfy the requirements of
this section, it may not transact business in this state under the changed name
until it adopts a name satisfying the requirements of this section and amends
its application for authorization in accordance with ORS 67.715. [1997 c.775 §73]
(Withdrawal)
67.740 Withdrawal of foreign limited
liability partnership. (1) A foreign limited liability
partnership authorized to transact business in this state may withdraw from
transacting business in this state by applying to the office of the Secretary
of State for withdrawal. The application shall set forth:
(a)
The name of the foreign limited liability partnership and the name of the state
or country under whose law it is registered; and
(b)
A commitment to notify the Secretary of State for a period of five years from
the date of withdrawal of any change in its mailing address.
(2)
A withdrawal notice terminates the active status of the partnership as a
foreign limited liability partnership as of the date of filing the notice or a
later date specified in the notice. [1997 c.775 §74]
(Revocation)
67.750 Grounds for revocation.
The Secretary of State may commence a proceeding under ORS 67.755 to revoke the
authority of a foreign limited liability partnership to transact business in
this state if:
(1)
The foreign limited liability partnership does not deliver its annual report to
the office of the Secretary of State within the time prescribed by this
chapter; or
(2)
The foreign limited liability partnership does not pay within the time
prescribed by this chapter any fees imposed by this chapter. [1997 c.775 §75]
67.755 Procedure for and effect of
revocation. (1) If the Secretary of State
determines that one or more grounds exist under ORS 67.750 for revocation of
authority of a foreign limited liability partnership to transact business in this
state, the Secretary of State shall give the foreign limited liability
partnership written notice of the determination.
(2)
If the foreign limited liability partnership does not correct each ground for
revocation or demonstrate to the reasonable satisfaction of the Secretary of
State that each ground determined by the Secretary of State does not exist
within 45 days after notice is given, the Secretary of State shall revoke the
authority of the foreign limited liability partnership.
(3)
The authority of a foreign limited liability partnership to transact business
in this state ceases as of the date of revocation of its authority to transact
business in this state.
(4)
The Secretary of State’s revocation of a foreign limited liability partnership’s
authority to transact business in this state appoints the Secretary of State as
the foreign limited liability partnership’s agent for service of process in any
proceeding based on a cause of action which arose during the time the foreign
limited liability partnership was authorized to transact business in this
state. [1997 c.775 §76]
67.760 Appeal from revocation.
In addition to any other legal remedy which may be available, a foreign limited
liability partnership shall have the right to appeal the Secretary of State’s
revocation of its authority to transact business in this state pursuant to the
provisions of ORS chapter 183. [1997 c.775 §77]
67.765 Reinstatement of authority.
(1) A foreign limited liability partnership which has had its authority revoked
under ORS 67.755 may apply to the Secretary of State for reinstatement within
five years from the date of revocation. The application shall:
(a)
State the name of the foreign limited liability partnership and the effective
date its authority was revoked; and
(b)
State that the ground or grounds for revocation of authority either did not
exist or have been eliminated.
(2)
If the Secretary of State determines that the application contains the
information required by subsection (1) of this section, that the information is
correct and that the foreign limited liability partnership’s name satisfies the
requirements of ORS 67.730, the Secretary of State shall reinstate the
authority.
(3)
When the reinstatement is effective, it relates back to and takes effect as of
the effective date of the revocation of authority and the foreign limited
liability partnership resumes carrying on its business as if the revocation of
authority had never occurred. [1997 c.775 §78]
67.770 Action by Attorney General.
The Attorney General may maintain an action to restrain a foreign limited
liability partnership from transacting business in this state in violation of
this chapter. [1997 c.775 §79]
MISCELLANEOUS
67.800 Uniformity of application and
construction. This chapter shall be applied and
construed to effectuate its general purpose to make uniform the law with
respect to the subject of this chapter among states enacting it. [1997 c.775 §80]
67.805 Severability.
If any provision of this chapter or its application to any person or
circumstance is held invalid, the invalidity does not affect other provisions
or applications of this chapter that can be given effect without the invalid
provision or application, and to this end the provisions of this chapter are
severable. [1997 c.775 §82]
67.810 Partnership subject to amendment or
repeal of chapter. All or part of this chapter may
be amended or repealed at any time and all partnerships subject to this chapter
are governed by any amendment or repeal. [1997 c.775 §83]
67.815 Short title.
This chapter may be cited as the Oregon Revised Partnership Act. [1997 c.775 §81]
_______________