Uniform Limited Partnership Act - Definition
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Table of ContentsUniform Limited Partnership Act (ULPA) DefinitionA Little More on the Uniform Limited Partnership ActA Brief Timeline of the ULPAThe Revised Uniform Partnership Act (RUPA)UPA Vs. RUPAAcademic Research
Uniform Limited Partnership Act (ULPA) Definition
The Uniform Limited Partnership Act (ULPA), together with a 1976 revision known as the Revised Uniform Limited Partnership Act (RULPA), is a uniform act that was formulated and promoted by the National Conference of Commissioners on Uniform State Laws (NCCUSL) in order to provide an adaptable and stable foundation for the organization of limited partnerships by U.S. states. The original ULPA traces its origin to 1916 and exhibits characteristics that are mostly typical of model statutes.
A Little More on the Uniform Limited Partnership Act
The Uniform Limited Partnership Act (ULPA) was originally promulgated by the National Conference of Commissioners on Uniform State Laws (NCCUSL) in 1916 as a means to organize limited partnerships within the United States. In fact, ULPA and its general partnership counterpart, the Uniform Partnership Act (UPA) are the two acts that have been governing all partnerships across the country.
A Brief Timeline of the ULPA
- The Uniform Limited Partnership Act (ULPA) was first promulgated in 1916. It is also referred to today as ULPA-1916.
- ULPA received its first revision in 1976, whereupon it came to be variously referred to as the Revised Uniform Limited Partnership Act (RULPA), the Uniform Limited Partnership Act (1976), ULPA (1976) or RULPA (1976).
- Then, in 1985, the Act underwent another revision and came to be known as Uniform Limited Partnership Act (1976) with 1985 Amendments. However, the terms ULPA (1985) or RULPA (1985) are used ,more often today to refer to the 1985 revision.
- ULPA received a subsequent revision in the year 2001, which was unofficially and briefly known as Re-RULPA. However, the official terminology is Uniform Limited Partnership Act (2001) or ULPA (2001), in short.
- ULPA (2001) has already undergone two revisions, one in 2011 and the other in 2013 (which also happens to be the final revision of the Act as of May, 2019). Both of these revisions were made as part of the Harmonization of Business Entity Acts initiative, which sought to synchronize the language used in the ULPA with corresponding provisions in other uniform acts.
The Revised Uniform Partnership Act (RUPA)
Although the NCCUSLs first revision of the Uniform Partnership Act (UPA) was promulgated in 1992, the Act received two subsequent amendments in 1993 and 1994. It is the amendment of 1994 that was then commonly known as the Revised Uniform Partnership Act (RUPA). However, the subsequent 1996 and 1997 revisions of UPA also came to be termed RUPA, causing much confusion. As such, the NCCUSL came up with a new system of designation, where each revised version of the act is referred to as simply the Uniform Partnership Act, followed immediately by the year of its approval by NCCUSL mentioned within braces. Despite this clarification, ambiguity still exists in the usage of the term RUPA, which, to this day, is used to refer to any version of UPA except the original 1914 version.
UPA Vs. RUPA
The roles played by both the Uniform Partnership Act (UPA) and the Revised Uniform Partnership Act (RUPA) in a partnership cannot be underestimated. Both versions have incorporated certain rules to govern a partnership relationship. These are:
- Rules pertaining to the formation of the partnership.
- Rules governing the ownership of partnership assets.
- Rules that assess the various fiduciary duties.
- Rules pertaining to the settlement of partnership disputes.
- Rules governing the termination of the partnership.
However, there are certain fundamental differences between the two. They are described below.
- Compared to UPA, RUPA provides a much more detailed understanding of the extent to which any partnership agreement is allowed to modify the rules and regulations set forth in the original statute.
- Unlike UPA, RUPA defines a partnership as an entity and not as a mere group of individuals. This, in turn, provides clarity on the nature of the partnership.
Enactment of the Uniform Limited Partnership Act by U.S. States Every state in the United States, with the exception of Louisiana, adopted the 1914 version of the Uniform Limited Partnership Act (ULPA). Furthermore, 37 out of the 50 states have adopted the latest ULPA revision. The following states have adopted ULPA or a similar uniform act as of 1997.
|Alabama||District of Columbia||Maine||New Mexico||U.S. Virgin Islands|
|Colorado||Iowa||Nebraska||South Dakota *||West Virginia|
|Delaware||Kentucky||New Jersey||Texas *|
* These states have promulgated uniform acts similar to ULPA. Source: NCCUSL website.
Fixing Up the Old Jalopy-The Modern Limited Partnership Under the ULPA, Kratovil, R., & Werner, R. J. (1975). John's L. Rev., 50, 51. Although numerous attempts have been made to eulogize the virtues of limited partnerships as a means for syndication of real estate ventures, there exist other aspects of such partnerships that have been mostly ignored. The modern limited partnership mostly involves one large investor or a large group of investors in order to facilitate the inflow of a substantial amount of investment capital. This transformation has necessitated a complete overhaul of the structure as well as operations of the limited partnership. This paper seeks to highlight these neglected facets of limited partnerships. Charging Orders and the New Uniform Limited Partnership Act-Dispelling Rumors of Disaster, Kleinberger, D. S., Bishop, C. G., & Geu, T. E. (2004). Prob. & Prop., 18, 30. This paper scrutinizes a previous assertion that the 2001 ULPA Act offers considerably lesser protection to a partners partnership interest than the 1976 version. The authors disprove the rumors of disaster perpetrated by the previous assertion and contend that there should be absolutely no apprehensions regarding the 2001 ULPAs provisions on charging orders. The authors seek to elucidate the following topics to support their claims: The historical background as well as the objective of the charging order remedy. The ramifications of a foreclosure of the charging order. The existing legislation pertaining to limited partnerships, charging orders and foreclosures. The New Uniform Limited Partnership Act: A Critique, Kessler, R. A. (1979). Fordham L. Rev., 48, 159. This paper scrutinizes the differences between the older (1916) and the newer (1976) Uniform Limited Partnership Acts and provides a detailed analysis and assessment of the 1976 revision. The author acknowledges the logical structure of the new ULPA. However, he contends that there exists a typical interrelationship between certain elements of the revised Act that renders a section-by-section evaluation difficult, if not impossible. The author, thus performs a topical evaluation instead. A User's Guide to the New Uniform Limited Partnership Act, Kleinberger, D. S. (2004). Suffolk UL Rev., 37, 583. The 1976 revision of the original Uniform Limited Partnership Act of 1916 is widely referred to as the Revised Uniform Limited Partnership Act (RULPA (1976)). This revision was followed by another re-evaluation just nine years later, which is known as RULPA (1985). Subsequently, in 2001, NCCUSL propagated ULPA (2001) as a comprehensive replacement of RULPA. This paper elaborates the workings of ULPA (2001), which, the author contends, is far more extensive and much more complicated than RULPA (1985). The paper starts with a description of the evolution of ULPA (2001) and proceeds to explain the rationale behind adopting this new Act in lieu of RULPA. Finally, the paper provides an in-depth analysis of the structure of ULPA (2001) and details the various sources for the Acts provisions. An Analysis of the Revised Uniform Limited Partnership Act, Donnell, J. D. (1980). American Business Law Journal, 18(3), 399-411. A higher rate of taxation has renewed interest in limited partnership as a lucrative type of business organization. This is mainly because a limited partnership is usually taxed as an aggregate of individuals and not as a single business entity. Moreover, the members of a limited partnership have access to the same level of protection from firm debts as corporate shareholders. Furthermore, in a limited partnership it is possible for the manager to retain complete control over the business even after forfeiting their majority stake in the business. Lastly, the bases for distribution of profits and losses are not interrelated and do not correspond with capital contributions. Limited Partner Control and Liability Under the Revised Uniform Limited Partnership Act, Pierce, M. K. (1978). Sw. LJ, 32, 1301. One of the defining attributes of a limited partnership is that partnership obligations of each partner are limited to his individual capital contribution. However, this limitation in liability does not apply to individuals that have taken control over the business. Therefore, it is absolutely essential, especially from a legal perspective, to establish a threshold for control of the business. The author highlights the limitations of the Uniform Limited Partnership Act (ULPA) with respect to defining these thresholds for control. As such, there exists an uncertainty regarding the acceptable amount of participation in the affairs of the partnership. Federal Income Tax Classification of Limited Partnerships Formed Under the Revised Uniform Limited Partnership Act, Haims, B. D., & Strock, M. H. (1977). . Mary's LJ, 9, 489. This paper seeks to elucidate the disputable and often incorrectly interpreted role of federal tax law in the classification of limited partnerships that have been constituted under the Revised Uniform Limited Partnership Act (RULPA). The authors also touch upon the foreseeable tax consequences to limited partnerships operating under the Act. The outcome is, debatably, a tax neutral statute. Linkage and Delinkage: A Funny Thing Happened to Limited Partnerships When the Revised Uniform Partnership Act Came Along, Miller, E. S. (2004). Suffolk UL Rev., 37, 891. The concept of linkage has been receiving a lot of attention of late, especially in the context of limited partnerships. Linkage, a constituent of general partnership law, is increasingly being applied to limited partnership law as a gap-filler under the purview of the Uniform Partnership Act (UPA) of 1914, the Uniform Limited Partnership Act (ULPA) of 1916 and the Revised Uniform Limited Partnership Act (RULPA) of 1976. However, with the promulgation of the Revised Uniform Partnership Act (RUPA) in 1994, several significant alterations were made in the general partnership laws, which basically disregarded the concept of linkage. A Comprehensive Uniform Limited Partnership Act-The Time Has Come, Vestal, A. W. (1994). UC Davis L. Rev., 28, 1195. With the promulgation of the Revised Uniform Partnership Act (RUPA) in 1994, the domain of general partnership was expected to witness drastic changes. The author contends that the Act would have similar implications for limited partnerships as well. This paper seeks to offer an analysis of the functioning of the new statute. The 1985 Delaware Revised Uniform Limited Partnership Act, Basile Jr, J. J. (1986). The Business Lawyer, 571-593. The 1985 amendment of the Delaware Revised Uniform Limited Partnership Act sought to address numerous legal and empirical issues typically faced by limited partnerships. These issues were, until now, ignored by the extant limited partnership acts. This paper scrutinizes the amended Act and compares it to both erstwhile versions of partnership regulations in force in Delaware as well as the current version of the Revised Limited Partnership Act. The Financial Provisions of the Revised Uniform Limited Partnership Act: Articles 5 and 6, Gregory, W. A. (1977). Mary's LJ, 9, 479. Articles 5 and 6 contain the financial provisions of the Uniform Limited Partnership Act (ULPA). Article 5 introduces certain important changes such as the permission to explicitly include as contributions the offering of services and promises to offer cash, property or services. Similarly, Article 6 introduces changes to the procedures of distributions and withdrawals of partners from limited partnerships. Imposing Liability for Control Under Section 7 of the Uniform Limited Partnership Act, Abrams, N. (1977). Case W. Res. L. Rev., 28, 785. This paper scrutinizes four discrete tests for control that were formulated by both courts as well as observers. The author concludes that none of the four tests offer satisfactory outcomes, and as such, he offers his own proposal of an effects test. This novel test employs the causation approach to determine numerous types of activities that limited partners typically undertake.