Indiana Law Review


Indiana Revised Uniform Limited Partnership Act

Paul J. Galanti*

I. Introduction

The most significant development in the area of Indiana business

associations law during the past year was the enactment of the new

Indiana Revised Uniform Limited Partnership Act ^ (IRULPA or "new
Act") which is based largely on the Revised Uniform Limited Partnership

Act of 1976, with 1985 amendments ("Model Act"). It also incorporates

some features of the 1985 Delaware Limited Partnership Act,^ ("Delaware

Act") and reflects changes intended to parallel aspects of the Indiana

Business Corporation Law^ (IBCL) that became effective on August 1,
1987.

The IRULPA superseded the prior Indiana Uniform Limited Part-
nership Act (lULPA or "old Act")'^ which was enacted in 1949. The
lULPA was based on the Uniform Limited Partnership Act (ULPA)
promulgated in 1916. There were no reported cases arising under the

lULPA until recently, and even now there have been only a few cases
involving this statute. However, the use in Indiana of the limited part-

nership form of enterprise might increase under the modern, flexible,

state of the art IRULPA.
The purpose of this Survey Article is to compare the new Act with

the old Act and the Model Act. Before doing that, however, a brief
introduction to Umited partnerships is in order. The limited partnership

is a business organization with attributes somewhere between the cor-

poration and the general partnership.^ There are two classes of partners

in a limited partnership: any number of limited partners and at least

one general partner charged with conducting the partnership's business.

Limited partners are somewhat analogous to shareholders of a corporation

because their liability for partnership obligations is limited to the amount

* Professor of Law, Indiana University School of Law—Indianapolis. A.B.,
Bowdoin College, 1960; J.D., University of Chicago, 1963.

1. Ind. Code §§ 23-16-1-1 to -12-6 (1988). Indiana has recognized limited part-
nerships since 1859. See generally Brown, The Limited Partnership in Indiana, 5 Ind.

L.J. 421 (1930).

2. Del. Code Ann. tit. 6, §§ 17-101 to 1108 (Supp. 1986).
3. Ind. Code §§ 23-1-17-1 to -54-3 (1988).
4. Ind. Code §§ 23-4-2-1 to -2-31 (repealed effective 1993).
5. See generally J. Crane & A. Bromberg, Law of Partnership § 26 (1968)

[hereinafter Crane & Bromberg].

27



28 INDIANA LAW REVIEW [Vol. 22:27

they have invested in the business. They differ from corporate share-

holders, however, by being restricted in the degree they can take part

or participate in controlling the partnership's business without risk of

losing their limited Uability status.^ One major difference between the
new and old Acts is that the Umited partner's risk of being subjected

to personal liability is much reduced under the IRULPA.
The general partner, or partners, in a limited partnership manage

the business. They have the same rights, duties and liabilities as partners

in a general partnership including unlimited liability for the obligations

of the enterprise. Another distinction between general and limited part-

nerships is the formality necessary for organization. Here again the

Hmited partnership is akin to the corporation because both require

compliance with specific statutory provisions to be formed properly. In

contrast, organizing a general partnership can be very informal. The

formalities of organizing a limited partnership, however, have been

simplified in the new Act as compared to the old Act.

II. Background and Applicability of IRULPA

The origins of Umited partnerships can be traced back to the middle

ages.^ Two early common law decisions^ holding that "profit sharing"
alone was a ground for imposing liability for losses, created the need

for a business form permitting investors to share profits with limited

liability for losses and to invest capital without responsibility for man-

agement. The limited partnership is such a device, although a limited

partner's protection against unlimited liability^ is less secure than the

protection given to a shareholder of a corporation.

Statutory authority is needed to form Hmited partnerships. Early

statutes dating back 150 years often were strictly construed on the grant

of limited liability. '° Consequently, Hmited partnerships were not very

common. Even the promulgation of the ULPA did not cause a substantial
increase in the use of Hmited partnerships. They have been used, however,

6. The elimination of this distinction has been seriously urged. See Basile, Limited

Liability for Limited Partners: An Argument for the Abolition of the Control Rule, 38
Vand. L. Rev. 1199 (1985); Kempin, The Problem of Control in Limited Partnership

Law: An Analysis and Recommendation, 22 Am. Bus. L.J. 443 (1985).
7. Crane & Bromberg, supra note 5, § 26, at 143-44.
8. Waugh V. Carver, 2 H. Bl. 235, 126 Eng. Rep. 525 (1793); Grace v. Smith,

2 Wm. Bl. 998, 1000, 96 Eng. Rep. 587, 588 (1775). Eventually, these cases were overruled
in England. Cox v. Hickman, 8 H.L. Cas. 268, 11 Eng. Rep. 431 (1860). See generally

Crane & Bromberg, supra note 5, §§ 14(b), 26(a).
9. See Klein v. Weiss, 284 Md. 36, 395 A.2d 126 (1978); Oilman Paint & Varnish

Co. V. Legum, 197 Md. 665, 670, 80 A.2d 906, 908 (1951).
10. Crane & Bromberg, supra note 5, at 144 n.25.



1988] IRULPA 29

with some frequency in real estate and oil and gas ventures^' and in

high-risk ventures such as theatrical enterprises where the parties want

both limited liability and the conduit type of income tax treatment of

partnerships.^^

One reason for the hmited use of the limited partnership form of
business is that although the ULPA was an improvement over prior
Hmited partnership statutes, it contained some ambiguous provisions,

and other provisions created some serious practical problems for limited

partnerships.'^ These problems prompted the National Conference of

Commissioners on Uniform State Laws to promulgate the Model Act

in 1976 "to modernize the prior uniform law while retaining the special

character of limited partnerships as compared to corporations. "''* The

11. See generally Lowell, Organizing a Limited Partnership to Achieve Real Estate

Investment Objectives in Indiana, 48 Ind. L.J. 369 (1973).

12. These deals were often organized to shelter income of individuals who would
otherwise have to pay high income tax rates rather than as true profit making ventures

which would increase the investors' taxes even more. Although limits on tax shelters

imposed by the Tax Reform Act of 1976, and the reduction of the maximum tax bracket,
should have reduced the incentive to invest in a "business" that produces nothing but

tax losses, a Department of the Treasury study showed a dramatic increase from 1979 to

1982 in the number of tax shelter partnerships being used as a vehicle to reduce the tax

liabilities of high income individuals. Nelson, Taxes Paid by High-Income Taxpayers and

the Growth of Partnerships, Internal Revenue Service Statistics of Income Bulletin

(1985).

13. See Basile, The 1985 Delaware Revised Uniform Limited Partnership Act, 41

Bus. Law. 571, 572 (1986).
14. Lamb, Introduction—Symposium: Limited Partnership Act, 9 St. Mary's L.J.

441 (1978). See also Rev. Unif. Limited Partnership Act commissioners' prefatory note,
6 U.L.A. 211-13 (Supp. 1988). No state adopted the RULPA for several years until the
probable tax treatment of organizations formed under it could be ascertained. Once that

issue was resolved, states started to adopt the RULPA and now it is the law in most
jurisdictions.

Delaware did not adopt the original ULPA until 1973. It was the last state to adopt
the act. The Delaware ULPA contained some nonuniform provisions designed to make
Delaware an attractive jurisdiction in which to organize limited partnerships. The Delaware

act adopted in 1982 also included nonuniform provisions for the same purpose. Delaware

significantly amended its limited partnership act in 1985 shortly before the Commissioners

adopted the 1985 amendments to the RULPA. Those amendments were intended to further
refine the statute, in part in response to the changes the Delaware legislature made when
it adopted the RULPA in 1982. Delaware, in turn, acted to provide an even "clearer
and more flexible limited partnership act than the 1985 RULPA." Basile, supra note 13,
at 573. Delaware clearly intends to be a state as attractive to large limited partnerships

as it is to large corporations.

See generally Aslanides, Cardinali, Haynsworth, Lane & Niesar, Limited Partnerships—
What's Next and What's Lefti, 34 Bus. Law. 257 (1978); Hecker, The Revised Uniform
Limited Partnership Act: Provisions Affecting the Relationship of the Firm and its Members
to Third Parties, 27 Kansas L. Rev. 1 (1978); Kessler, The New Uniform Limited



30 INDIANA LAW REVIEW [Vol. 22:27

Commissioners' Prefatory Note points out that although a limited part-

nership can be more flexible than a corporation with respect to relations

among the partners, the consensual relationship among partners requires
more concurrence from passive investors than might be acceptable to
corporate management.'^ Finally, the Commissioners point out that the

limited partnership is an alternative to the corporation form of enterprise

but that neither the ULPA nor the Model Act was intended to make
the limited partnership appropriate in all cases where the corporate form

is undesirable for tax or other reasons.'^

A major difference between the old and the new Acts is that under
the lULPA limited partnerships organized under prior statutes continued
to be controlled by those statutes unless the partnership elected to come
under that Act.'^ The IRULPA applies to all Indiana limited partnerships
organized after its effective date of July 1, 1988.'^ Existing limited

partnerships can "opt in" to the IRULPA by fihng a new certificate
of limited partnership with the secretary of state after July 1, 1988.'^

Unless otherwise agreed by all partners, the applicable provisions of the

lULPA governing allocation of profits and losses, distributions to a
withdrawing partner, and distribution of assets upon the winding up of

a limited partnership govern limited partnerships formed before July 1,
1988.20 However, after July 1, 1993, the IRULPA will apply to limited
partnerships existing before July 1, 1988, regardless of whether the

partnership opts in.^' The IRULPA follows the approach of the drafters

Partnership Act: A Critique, 48 Fordham L, Rev, 159 (1979); Symposium: Limited
Partnership Act, 9 St. Mary's L.J. 441 (1978); Note, Investor Protection and the Revised

Uniform Limited Partnership Act, 56 Wash. L. Rev. 99 (1980).
15. Rev. Unif. Limited Parnership Act commissioner's prefatory note, 6 U.L.A.

211 (Supp. 1988).

16. Id. at 211-13.

17. IND. Code §§ 23-4-2-28(3), -30(2) (repealed effective 1993).
18. Id. § 23-16-12-2(a). The effective date for the IRULPA as it applies to foreign

limited partnerships seeking to transact business in Indiana is January 1, 1989. Id. § 23-

16-12-2(d).

19. Id. ^ 23-16-12-2(f)(l). The lULPA continues to apply to existing limited part-
nerships that do not opt in to the IRULPA. Id. § 23-16-12-2(g).

20. Id. § 23-16-12-2(e).

21. Id. § 23-16-12-2(0(2). The statute provides that

if a hmited partnership existing under [the lULPA] before July 1, 1988, does
not file a certificate of limited partnership or a certificate of amendment with

the secretary of state by July 1, 1993, and no event has occurred that, under

[the IRULPA], requires the filing of a certificate of amendment, then:

(1) the limited partnership continues to exist as a limited partnership under [the

IRULPA], and the failure to file a certificate with the secretary of state
does not impair the validity of any contract or act of the limited partnership

nor prevent the limited partnership from defending any action in any court



1988] IRULPA 31

of the Delaware Act which also provides for an extended effective date.^^

The IRULPA approach differs from the current version of the Model
Act which provides that the repeal of any earlier limited partnership

statute does not impair, or otherwise affect, the organization or the

continued existence of an existing limited partnership, nor impair any

contract or affect any right accrued before its effective date.^^ The purpose

of this savings clause is to ensure that the apphcation of the Model Act

to existing limited partnerships "would not violate constitutional pro-

hibitions against the impairment of contracts. "^"^

Interestingly, the IRULPA provides that an existing limited part-
nership which does not file a new or amended limited partnership
certificate by July 1, 1993, continues as a limited partnership under the

IRULPA, and that failing to file does not impair the validity of any
contract or act of the limited partnership or prevent it from defending

any action in an Indiana court. ^^ It is not clear whether this provision

would affect rights accrued against the partnership or against the general

or limited partners under the lULPA before July 1, 1993, which raises
some possible constitutional problems. However, there probably will be

few if any limited partnerships that might face such problems.

A limited partnership organized under the IRULPA may carry on
any business which a general partnership may conduct except the making
of insurance within the meaning of the Indiana Insurance Law.^^ A
general partnership is defined in the Indiana Uniform Partnership Act

(lUPA) as "an association of two (2) or more persons to carry on as
co-owners a business for profit. "^^ The term business is defined in the

in Indiana;

(2) a limited partner of the limited partnership is not liable as a general partner

solely by reason of the failure to file a certificate with the secretary of state;

and

(3) the limited partnership may not maintain an action in any court of Indiana
until it has filed a certificate with the secretary of state in compliance with

[the IRULPA].
Id. § 23-16-12-2(h).

22. Del. Code Ann. tit. 6, § 17-114 (Supp. 1986).
23. Rev. Unif. Limited Partnership Act § 116, 6 U.L.A. 365 (Supp. 1988).
24. Id.

25. IND. Code § 23-16-12-2(h) (1988). The lULPA was similar. Id. § 23-4-2-3
(repealed effective 1993).

26. Id. § I'i-X^-l-l . A proposed business contemplating the purchase of liquor by
individuals and the entering into of storage and service agreements with various private

clubs has been held to be neither a "business" nor "operated for profit" within the

meaning of the ULPA. Roby v. Day, 635 P.2d 611 (Okla. 1981).
27. Ind. Code § 23-4-1-6 (repealed effective 1993). The existence of statutes au-

thorizing the organization of particular types of partnerships with special attributes does

not preclude the use of a limited partnership unless the special statute and the limited



32 INDIANA LAW REVIEW [Vol. 22:27

lUPA to include "every trade, occupation, or profession. "^^

Limited partnership statutes are not the only sources of law con-

trolling Umited partnerships. Other statutes might restrict the otherwise

lawful business of a limited partnership. For example, it has been held

that the failure to comply with statutory requirements regulating entry

into the liquor business made a limited partnership agreement void and
unenforceable.^^ It also has been held that a statute Umiting the amount

of land that can be owned by a corporation or association controlled

by nonresident ahens applied to a limited partnership. ^^ A general part-
nership must be dissolved if its business becomes illegal after its inception^'

and presumably this is the case with limited partnerships as well.

III. Substantive Provisions of IRULPA

A. Definitions and General Provisions

One of the most obvious differences between the old Act and the
new Act is that the IRULPA groups related provisions in twelve separate
chapters. ^^ The lULPA substantive provisions are contained in one chap-
ter." This change makes it easier for an attorney to review the statutory

rules that apply to limited partnerships.

The definition sections of the IRULPA are in chapter 1.^"* The
general provisions are in chapter 2J^ These include the provisions relating

to names of hmited partnerships.^^ Under IRULPA a limited partnership

partnership act are irreconcilable. See Stowe v. Merrilees, 6 Cal. App. 2d 217, 44 P. 2d

368 (1935) (limited partnership for mining purposes proper even though special statute

provided for mining partnerships).

28. iND. Code § 23-4-1-2 (repealed effective 1993).
29. See Sponholz v. Meyer, 27 Wis. 288, 70 N.W.2d 619 (1955) (limited partner's

accounting action dismissed because of his failure to disclose his name in the liquor license
application, even though the purpose of the licensing act was to disclose those persons

controlling licensee.) Cf. Searles v. Haynes, 126 Ind. App, 626, 129 N.E.2d 362, reh'g

denied, 130 N.E.2d 2182 (1955).

30. Lehndorff Geneva, Inc. v. Warren, 74 Wis. 2d 369, 246 N.W.2d 815 (1976).
31. See Searles, 126 Ind. App. 626, 129 N.E.2d 362.

32. Ind. Code §§ 23-16-1 to -12 (1988). The model act has eleven articles.
33. Id. § 23-4-2 (repealed effective 1993).

34. Id. §§ 23-16-1-1 to -14. The definitions in the model act are contained in

Article 3.

35. Id. §§ 23-16-2-1 to -9.

36. Id. § 23-16-2-1. The name of a Hmited partnership as set forth in its certificate
of limited partnership must contain the words "limited partnership" or the abbreviation

"L.P." Id. § 23-1 6-2- l.(a)(l). It "may not contain the name of a limited partner unless:
(A) it is also the name of a general partner or the corporate name of a corporate general
partner; (B) or the business of the Umited partnership had been carried on under the

name before the admission of that limited partner." Id. § 23-16-2- 1(a)(2). The name "may



1988] IRULPA 33

may reserve the exclusive right to a name.^'' The lULPA did not provide
for reservation of names of limited partnerships. Even though the records

of limited partnerships will now be in the office of the Secretary of
State, as with corporations, the IRULPA unlike the Model Act^^ and
the Delaware Act^^ inexplicably does not integrate the registration of

limited partnership names with corporation names. Thus, an Indiana

limited partnership can have a name that is not distinguishable from
the name of an Indiana corporation or a registered foreign corporation. "^^

Chapter 2 of the IRULPA requires a limited partnership to maintain
in the state an office and an agent for service of process. "^^ The IRULPA
goes beyond the Model Act by providing for the resignation of registered

agents'*^ and for service of process on limited partnerships.^^ The IRULPA
prescribes certain partnership records that must be kept in the registered

office,"^ and gives partners the right to inspect these records. "^^ There

were no counterparts to these provisions in the lULPA. The effect of
these provisions is to create a statutory scheme similar to that existing

for corporations under the IBCL.

The IRULPA eliminates what was in effect a fraudulent conveyance
provision applicable to secured loans by limited partners, as well as the

prohibition against a general partner sharing pro rata with other part-

nership creditors in the case of unsecured loans ."^^ Section 23-16-2-8'*'^

which effects this change is similar to, but goes beyond, the Model

Act,"^^ and gives the partners very extensive rights to deal with the

not contain any word or phrase indicating or implying that it is organized other than for

a purpose stated in its partnership agreement." Id. § 23-16-2-l(a)(3). Generally the name

of a limited partnership "must be such as to distinguish it upon the records in the office

of the secretary of state from the name of any limited partnership reserved, registered,
or organized under the laws of Indiana or qualified to do business or registered as a

foreign limited partnership in Indiana," id. § 23- 16-2- 1(a)(4), but a non-distinguishable

name may be used with the consent of the other limited partnership or by a court judgment.
Id. § 23- 16-2- 1(b).

37. Id. § 23-16-2-2.

38. Rev. Unif. Limited Partnership Act § 102(3), 6 U.L.A. 241 (Supp. 1988).
39. Del. Code Ann. tit. 6, § 17-102(4) (Supp. 1986).
40. This can be a significant problem in Indiana because a corporation can indicate

its corporateness in its name by using the word "Limited" or the abbreviation "Ltd."
It can be argued that "XYZ, Ltd.," a corporation, is distinguishable from "XYZ, L.P.,"
a limited partnership, but it can be questioned if that is a distinction with a difference

in the real world.

41. IND. Code § 23-16-2-3(a) (1988).
42. Id. § 23-16-2-4.

43. Id. § 23-16-2-5.

44. Id. § 23-16-2-6(a).

45. Id. § 23-16-2-6(b).

46. Id. § 23-4-2-13 (repealed effective 1993).

47. iND. Code § 23-16-2-8 (1988).
48. Rev. Unif. Limited Partnership Act § 107, 6 U.L.A. 256 (Supp. 1988). This



34 INDIANA LAW REVIEW [Vol. 22:27

partnership, including the right to borrow from the partnership, except

as provided in the partnership agreement.

The IRULPA also goes beyond the Model Act and the lULPA by
authorizing the indemnification of partners, employees, officers or agents

of the limited partnership/^ It is not clear to what extent this indem-

nification right will affect the otherwise unhmited personal liability of

a general partner in a limited partnership.

Unlike a general partnership which can be a private, informal and

voluntary arrangement among the partners, creating a limited partnership
still requires compliance with the statutory provisions of the IRULPA.^°

However, the "formalities" of the IRULPA are less extensive than those
of the lULPA. The lULPA statutory scheme emphasized a certificate
of limited partnership which did not comport with commercial reality.

In fact, the lULPA did not even expressly recognize the existence of a
partnership agreement.

B. Formation and Certificate of Limited Partnership

The IRULPA recognizes in chapter 3 that the basic document in a
limited partnership is the partnership agreement, just as in a general

partnership. Except with respect to assignments of partnership interests,

"a person has the rights, and is subject to the liabilities, of a general

partner only if the person has signed a limited partnership agreement

in person or by an attorney-in-fact."^^ The IRULPA provides that an
agreement may be amended from time to time. However,

unless the partnership agreement provides otherwise, an amend-

ment of the partnership agreement may be made only with the
written consent of each limited partner who may be adversely
affected by an amendment that would accomplish any of the
following:

(1) Increase the obligations of any limited partner to make

section makes substantial changes to section 13 of the lULPA. The drafters did not intend
to give carte blanche to partners, but rather concluded that such matters should be

controlled by general fraudulent conveyance statutes or by doctrines developed under

bankruptcy or insolvency laws which may require subordination of loans by partners.
Rev. Unif. Limited Partnership Act, 6 U.L.A. 256 (Supp. 1988). Presumably this will

be the case in Indiana.

49. Ind. Code § 23-16-2-9 (1988). Delaware does, too. See Del. Code Ann. tit.

6, § 17-18 (Supp. 1986).

50. A limited partnership cannot be formed by "implication." See MIF Securities
V. R.C. Stamm & Co., 94 A.D.2d 211, 463 N.Y.S.2d 771 (1983). See generally Crane
& Bromberg, supra note 5, § 26(b).

51. iND. Code § 23-16-3-l(a) (1988).



1988] IRULPA 35

contributions.

(2) Alter the allocation for tax purposes of any items of income,

gain, loss, deduction, or credit.

(3) Alter the manner of computing the distributions of any

partner.

(4) Alter, except as provided in [the agreement], the voting or

other rights of any limited partner.

(5) Allow the obligation of a partner to make a contribution
to be compromised by written consent of fewer than all partners,

[or]

(6) Alter the procedures for amendment of the partnership agree-
ment.^^

The authority for the partnership agreement "to provide otherwise,"

which authority is not in the Model or Delaware Acts, can jeopardize

the rights of limited partners of Indiana limited partnerships.

A limited partnership is still required to file a certificate of limited
partnership containing specified information^^ which is filed in the office

of the Secretary of State. ^"^ Centralized filing of certificates of limited

partnerships is a major change from the scheme of the lULPA. It should
simplify greatly the task of an attorney organizing a limited partnership.

The Secretary of State's office has prepared many documents for filing
by corporations under the IBCL. However, the incumbent Secretary of

State has elected not to provide forms for limited partnership transactions

or filings. ^^

A limited partnership certificate must include the following:

(1) The name of the Hmited partnership.

(2) The address of the office and the name and address of the
agent for service of process.

(3) The name and the business address of each general partner.

(4) The latest date upon which the limited partnership is to
dissolve, [and]

(5) Any other matters the general partners agree to include. ^^

A limited partnership is formed at the time the initial certificate of
Hmited partnership is filed in the office of the Secretary of State "or

52. Id. § 23-16-3-l(b).

53. Id. § 23-16-3-2(a).

54. The limited partnership certificate required by the lULPA was filed with the
county recorder of the county in which the principal place of business of the partnership

is located. Id. § 23-4-2-2(b).

55. See Indiana Limited Partnership Guide § 1(A)(4).

56. IND. Code § 23-16-3-2(a) (1988).



36 INDIANA LAW REVIEW [Vol. 22:27

at any later time specified in the certificate of limited partnership if,

in either case, there has been substantial compliance with the requirements

of the IRULPA."^^ ''Unless the certificate specifies an effective date
that is different from the filing date, the time and date of the filing

of the certificate is conclusive evidence as to when a limited partnership
is formed. "^^

A limited partnership was formed under the lULPA "if there had
been substantial compliance in good faith with the requirements of [the

act]."^^ Controversies could arise whether there had been such compliance

if the limited partnership did business in several counties and its certificate

was not filed in each county recorder's office where the limited part-

nership did substantial business.^° This problem was ehminated by the

central filing approach of the IRULPA.
The IRULPA requires the filing of a certificate of amendment to

a limited partnership certificate within sixty days after certain events,^^ and

at any time for any other proper purpose the general partners may
determine.^^ Filing a certificate of amendment within the sixty-day period
"absolves a person from any habihty that might arise because the limited

partnership certificate did not reflect the occurrence of the event before

the fihng of the amendment."" The IRULPA goes beyond the Model
Act and the Delaware Act in this respect. The Model Act only absolves

persons from liability where the amended certificate is required because

a new general partner has been admitted, a general partner has withdrawn,

or the partnership continues after a nonjudicial dissolution.^ The IRULPA
extends the protection to situations where a general partner becomes

aware that a statement in the certificate was false when made or has
become inaccurate. This difference can be beneficial to the interests of

57. Id. § 23-16-3-2(b).

58. Id.

59. Id. § 23-4-2-2(2) (repealed effective 1993).

60. See Crane & Bromberg, supra note 5, § 26(b) at 145-46.
61. IND. Code § 23-16-3-3(b) (1988). These include:

(1) The admission of a new general partner.

(2) The withdrawal of a general partner.

(3) The continuation of the business under [Ind. Code] § 23-16-9-1 after an

event of withdrawal of a general partner.

(4) The discovery by a general partner that any statement in the certificate of

limited partnership was false when made.

(5) The discovery by a general partner that any facts or arrangements described

in the certificate of limited partnership have changed, making the certificate

inaccurate in any respect.

62. Id. § 23-16-3-3(d).

63. Id. § 23-16-3-3(c).

64. Rev. Unif. Limited Partnership Act § 202(e), 6 U.L.A. 265 (Supp. 1988).



1988] IRULPA 37

the partners, and, conversely, detrimental to the interests of creditors

or claimants of a limited partnership.^^

The IRULPA also requires that a certificate of limited partnership
be cancelled by "filing a certificate of cancellation upon the dissolution

and the commencement of winding up of the partnership or at any

other time there are no Hmited partners. "^^ A certificate of cancellation
is filed in the office of the Secretary of State. ^^

The old Act required all partners, including the limited partners, to

sign the limited partnership certificate. The Model Act as originally

drafted in 1976 continued this requirement.^^ The current version of the

Model Act, on which the IRULPA is based, eliminated the requirement
that limited partners sign the certificate. All general partners must sign

the original limited partnership certificate,^^ and all new general partners,
and at least one existing general partner if there is one, must sign a

certificate of amendment or restatement of a limited partnership certif-

icate. ^° All general partners must sign a cancellation certificate, but if

there are no general partners, the cancellation certificate "must be signed

by a majority in interest of the limited partners. "^^ The execution of

65. For example, it is not impossible that a limited partner could escape liability

by having the certificate amended to change the name of the partnership where the limited
partner knowingly permitted his or her name to be used in the name of the limited
partnership, and who as a consequence would be liable to creditors who extended credit
to the limited partnership thinking the limited partner was a general partner because of

the "erroneous certificate," if the creditors had no actual knowledge that the person was

not a general partner. Of course, a court may prevent this result by characterizing it as
fraud, and it might constitute perjury if the general partners who signed the certificate
knew of the deception. Ind. Code § 23-16-3-5(a)(3) (1988).

66. Id. § 23-16-3-4.

67. The certificate of cancellation must contain:

(1) The name of the limited partnership.

(2) Yhe date of filing of its certificate of limited partnership.

(3) The reason for filing the certificate of cancellation.

(4) The effective date or time (which must be a date or time certain) of

cancellation if it is not to be effective upon the filing of the certificate.

(5) Any other information the person filing the certificate of cancellation de-
termines.

Id.

68. Rev. Unif. Limited Partnership Act § 204 comment, 6 U.L.A. 272-73 (Supp.
1988).

69. Ind. Code § 23-16-3-5(a)(l) (1988). A person may sign a limited partnership
certificate, a limited partnership agreement or an amendment to a certificate or agreement
by an attorney-in-fact. Id. § 23-16-3-5(b). The Delaware Act also permits this, Del. Code
Ann. tit. 6, § 17-204(b), but the Model Act limits this right to the execution of certificates.
Rev. Unif. Limited Partnership Act § 204(b), 6 U.L.A. 272 (Supp. 1988).

70. Ind. Code § 23-16-3-5(a)(2) (1988).
71. Id. § 23-16-3-5(a)(3).



38 INDIANA LAW REVIEW [Vol. 22:27

a certificate constitutes an "oath or affirmation under the penalties of

perjury that to the best of the [signer's] knowledge and behef the

statements made in the certificate are true."^^ Any person adversely
affected by the failure of a person required to execute a certificate to

do so may petition the appropriate circuit or superior court for an order
directing the Secretary of State to file a certificate.^^

It is no longer necessary for a person executing a certificate as an

agent or fiduciary to exhibit evidence of authority as a prerequisite to

filing the certificate with the Secretary of State. "^"^ A certificate is filed
unless the Secretary of State finds that it does not conform to law.^^

The fact that a certificate of limited partnership is on file in the office

of the Secretary of State is notice that the partnership is a limited

partnership and is notice of all other facts that are required to be set

forth in a limited partnership certificate under the IRULPA and that
are thus set forth in the certificate.^^

The Model Act contains explicit statutory recognition of the practice

of restating an amended limited partnership certificate.^^ However, the

Model Act provision is not nearly as detailed as the IRULPA,^^ which
is patterned on the Delaware Act.^^

Unhke the old Act, the IRULPA does not require disclosure of the
limited partners' capital contributions and their participation in the profits

of the enterprise. This increases the desirability of the limited partnership

as a business form where the participants wish to keep confidential the

amount of their investments.

The IRULPA also does not require publication or notification other
than the required filing to form a limited partnership. ^° Unlike the old

Act, the new Act does require the name of a limited partnership to
include words indicating its nature,^^ which is the most effective manner

72. Id. § 23-16-3-5(c). The Model Act provides that the execution of a certificate

constitutes an affirmation under the penalties of perjury that the facts are true and not

merely true to the best of the person's knowledge and belief. Rev. Unif. Limited Part-

NERSfflP Act § 204(c), 6 U.L.A. 272 (Supp. 1988).
73. IND. Code § 23-16-3-6 (1988).
74. Id. § 23-16-3-7(a).

75. Id. General partners are obUgated to deliver a copy of the filed limited

partnership certificate to the limited partners unless the limited partnership agreement

provides otherwise. Id. § 23-16-3-1.

76. Id. § 23-16-3-9.

77. Rev. Unif. Limited Partnership Act § 2027(0, 6 U.L.A. 265 (Supp. 1988).
78. iND. Code § 23-16-3-11 (1988).
79. Del. Code Ann. tit. 6, § 17-210 (Supp. 1986).
80. The organizers of a limited partnership, however, must comply with the Indiana

Assumed Business Names Act, Ind. Code §§ 23-15-1-1 to -4 (1988), which requires the
filing of certificates in the office of the county recorder of each county where the partnership

has an office or a place of business.

81. iND. Code § 23- 16-2- 1(a)(1) (1988).



1988] IRULPA 39

of communicating the status of the firm to third persons. As previously

noted, the IRULPA prohibits the name of a limited partner from appearing
in the partnership name unless it is also the name of a general partner,

or the corporate name of a corporate general partner, ^^ or the business

had been carried on under a name containing the name before the limited

partner was admitted.^^ The lULPA expressly provided that a Hmited
partner whose name appeared in the partnership name was liable as a
general partner to creditors who extended credit to the partnership without
actual knowledge ihat the person was not a general partner.^'*

At one time, there was some question whether a corporation could

be a partner, either general or limited.^^ However, a corporation can

be a partner under the IBCL,^^ and could be under the predecessor

Indiana General Corporation Act.^^ The fact that a corporation can be

the general partner in a limited partnership can defeat the assumption

that a limited partnership will have a solvent general partner with un-

limited liability. A corporate general partner is liable only to the extent
of its assets, unless circumstances exist where a court may be willing
to disregard the corporate fiction or "pierce the corporate veil" and

hold the shareholders personally liable. ^^ Of course, there is no assurance
that an individual who is a general partner is and always will be solvent.

The various limited partnership statutes do not restrict the number

of general or limited partners and there are many large publicly-held
Hmited partnerships. Limited partnership interests can be considered

securities and the public sale of such interests may require compliance
with both federaP^ and state securities laws.^°

82. Id. § 23-16-2-l(a)(2)(A).

83. Id. § 23-16-2-l(a)(2)(B).

84. IND. Code § 23-4-2-5(2) (repealed effective 1993).
85. See, e.g., Mallory v. Hanover Oil Works, 86 Tenn. 598, 8 S.W. 396 (1888);

Whittenton Mills v. Upton, 76 Mass. (10 Gray) 582 (1858). See generally Note, The

Corporation as Managing Partner in a Limited Partnership, 55 N.D.L. Rev. 271 (1979).
86. Ind. Code § 23-1-22-2(9) (1984). The partnership business must be within the

scope of the corporation's articles. Lurie v. Arizona Fertilizer & Chem. Co., 11 Ariz.
482, 421 P.2d 330 (1966).

87. Ind. Code § 23-l-2-2(a)(14) {repealed 1987). Before the IGCA was amended,
a corporation could be a partner if the power was granted in the articles of incorporation.

88. Compare Delaney v. Fidelity Lease Ltd, 526 S.W.2d 543 (Tex. 1975), with
Frigidaire Sales Corp. v. Union Properties, Inc., 14 Wash. App. 634, 544 P.2d 781 (1975),

aff'd, 88 Wash. 2d 400, 562 P.2d 244 (1977).

89. See, e.g., SEC v. Murphy, 626 F.2d 633, 640-41 (9th Cir. 198); Beaty v. Basic
Resources Int'l, SA, 1985-86 Fed. Sec. L. Rptr (CCH) 1 92,452 (S.D.N.Y. 1986). See
also Rode v. Gillman, 1985-86 Fed. Sec. L. Rptr. (CCH) 1 92,547 (7th Cir. 1986) (limited
partnership interest a security despite option to buy-out general partners).

90. See, e.g., Garbo v. Hilleary Franchise Sys., Inc., 479 S.W.2d 491 (Mo. Ct.
App. 1972).



40 INDIANA LAW REVIEW [Vol. 22:27

Section 207^' of the Model Act both expands and narrows liability

for false statements in the certificate of limited partnership over the

comparable provision in the predecessor Uniform Limited Partnership

Act.^^ The IRULPA is less expansive than the Model Act. It does provide
explicitly that a person who signs a certificate as an agent under a power
of attorney, as well as those for whom the agent signs who knew a
statement was false at the time the certificate was executed, is liable to

persons who are damaged by reasonable rehance on a false statement. ^^

The new Act does extend potential liability for false statements to general
partners who should have known of the false statement as well as those
who knew the statement was false,^ and to any general partner who:

after the execution of [a limited partnership certificate], but at

least sixty (60) days before the statement was reasonably relied

upon, knew or should have known that any arrangement or
other fact described in a statement in the certificate had changed,

. . . and failed to cancel or amend the certificate or to file a
petition for the cancellation or amendment of the certificate
under section [23-16-3-6 of the IRULPA] before the statement
was reasonably relied upon.^^

Again, however, the Hability is limited to those who suffered loss by
reasonable reliance on the false statement.^^

As stated earlier, the IRULPA gives general partners an escape clause
from liability for false statements in certificates.

A general partner is not liable for failing to cancel or amend
a certificate or for failing to file a petition for the amendment
or cancellation of a certificate under [section 23-16-3-8(a)(2)] if

a certificate of amendment, certificate of cancellation, or petition

for amendment or cancellation is filed within sixty (60) days
after the general partner knew or should have known to the

91. See Rev. Unif. Limited Partnership Act § 207, 6 U.L.A. 281 (Supp. 1988).
92. See id. § 207 comment, 6 U.L.A. 281.

93. Ind. Code § 23-16-3-8(a)(l) (1988). The Model Act does not contain a re-
quirement that the reliance be "reasonable." The Delaware Act does. Del. Code Ann.
tit. 6, § 17-27(a) (Supp. 1988). This approach reduces, at least in theory, the universe of

potential plaintiffs by eliminating those who "rely" but whose rehance is not "reasonable,"
presumably using some objective standards.

94. Ind. Code § 23-16-3-8(a)(2) (1988).
95. Id. § 23-16-3-8(a)(3).

96. Section 23-16-3-8 narrows potential hability for false statements by confining

to general partners the obligation to amend a certificate of limited partnership where
future events have made a statement in a certificate inaccurate. All partners were subject
to hability under the lULPA. Id. § 23-4-2-6.



1988] IRULPA 41

extent provided in section [23-16-3-8(a)] that the statement in

the certificate was false in any material respect.
^"^

Another major difference between the old and new Acts is that the

IRULPA permits the merger of Indiana limited partnerships with other
Indiana limited partnerships or partnerships organized under the laws

of another state, with one partnership being the surviving partnership

as provided by the merger agreement.^^ A domestic limited partnership
that is not the surviving partnership must file a certificate of cancellation

with an effective date not later than the effective date of the merger. ^^

If the surviving limited partnership in a merger is a foreign limited

partnership, it must attach a certificate to the Indiana limited partner-

ship's certificate of cancellation stating that the foreign limited partnership

agrees to be served with process in Indiana in any action to enforce an

obligation of the nonsurviving Indiana limited partnership, that it consents

to the Secretary of State as agent for service of process, and that it is

providing an address to which the process may be mailed. *°° The IRULPA
merger provision also spells out the consequences of a merger of limited

partnerships with respect to such matters as continued liability for ob-

ligations, title to property, and similar rights and duties. ^^'

C. Rights and Duties of Limited Partners

The provisions relating to the rights, duties and liabilities of limited

partners are contained in chapter 4 of the IRULPA. The most significant
concern of a limited partner is the possibility of losing limited liability

status. There are two situations where the availability of limited liability

is an issue: (1) where there has been a failure to comply fully with the

statutory requirements; and (2) where the limited partner has taken part

in "the control of the business."

(1) Failure to comply fully with the statutory requirements.—One
purpose of the drafters of the original Uniform Limited Partnership Act

was to prevent limited partners from losing limited liability for trivial

failures to comply with the statute. The Model Act continues this ap-
proach. '^^ The IRULPA, not surprisingly, goes further. As noted, the
process of forming a limited partnership has been simplified, '^^ and a

97. Id. § 23-16-3-8(b).

98. Id. § 23-16-3 -12(a). The statute does not permit mergers with Hmited partnerships
organized under the laws of a foreign country.

99. Id. § 23-16-3-12(b).

100. Id. § 23-16-3-12(c).

101. Id. § 23-16-3-12(d).

102. See Rev. Unif. Limited Partnership Act §§ 201, 304, 6 U.L.A. 257, 297
(Supp. 1988).

103. See Ind. Code § 23-16-3-2 (1988).



42 INDIANA LAW REVIEW [Vol. 22:27

limited partnership is formed when there has been "substantial com-
pliance" with the section of the statute pertaining to the limited part-

nership certificate, '^^ even if the partnership does not comply with other

provisions of the statute.

More importantly, the IRULPA provides a broader escape clause
for limited partners facing potential unlimited UabiHty as a result of an

improperly organized limited partnership than did the lULPA.^^^ Section

23-16-4-4 provides that

except as provided in [section 23-16-4-4(b)], a person who makes
a contribution to a partnership and erroneously but in good

faith believes that the person has become a hmited partner in

the partnership is not a general partner in the partnership, and

is not bound by its obligations by reason of making the con-
tribution, receiving distributions from the partnership, or exer-

cising any rights of a limited partner, if, within sixty (60) days

after ascertaining the mistake, that person:

(1) . . . causes an appropriate certificate of limited partnership

or a certificate of amendment to be executed and filed, [if the
person wishes to be a limited partner] ;*°^ or

(2) takes such action as may be necessary to withdraw[, if a
person wishes to withdraw from the partnership] . '°^

Section 23-16-4-4(b) further reduces the likehhood of actual liability to

a third party by providing that a person who contributes to a partnership
erroneously believing himself or herself to be a limited partner, is hable

as a general partner to any third party who transacts business with the
partnership before an appropriate limited partnership certificate is filed

or the person withdraws from the partnership only if the third party

actually believed in good faith that the person was a general partner at

the time of the transaction; acted in reasonable reliance on that belief;

and extended credit to the partnership in reasonable reUance on the

credit of that person. ^^^

The prospect of liability under these circumstances is somewhat

greater under the Model Act than under the IRULPA. ^^^ However,
because limited partners do not have to be named in the limited part-
nership certificate, the only time liability under section 23-16-4-4(a) is

104. Id. § 23-16-3-2(b).

105. See id. § 23-16-4-4.

106. Id. § 23-16-4-4(a)(l).

107. Id. § 23-16-4-4(a)(2).

108. Id. § 23-16-4-4(b).

109. Rev. Unif. Limited Partnership Act § 304 comment, 6 U.L.A. 297 (Supp.
1988).



1988] IRULPA 43

likely to occur is in the rare situation where a person intending to be

a Hmited partner is erroneously identified as a general partner in the

certificate.

(2) Participating in the control of the business.—The quid pro quo
for limited liability under the IRULPA is the limited partner's sacrificing
the right to control the management of the firm that is inherent to

partners in a general partnership. Section 23-16-4-3(a) of the Act spe-

cifically provides that a limited partner is not liable for the obligations

of a limited partnership unless "(1) the limited partner is also a general

partner; or, (2) the limited partner, in addition to exercising the rights

and powers of a limited partner, participates in the control of the

business."''^ The lULPA had a similar provision.^*' One of the problems
with the Uniform Limited Partnership Act was that it was unclear exactly

how much review, advisory, management selection, or veto powers a
limited partner could exercise without crossing the vague line of par-

ticipating in the control of the business. This uncertainty was perhaps

the greatest drawback of the Hmited partnership form of business under

the IULPA.'»2

Many if not most of these problems have been remedied by the
'*safe harbor" provisions of the IRULPA. These provisions enumerate
certain activities in which a limited partner may engage without being
deemed to be participating in the control of the business. '^^ These safe

harbors are not exclusive, and the possession or exercise of any other

powers by a limited partner does not automatically constitute participation

by that limited partner in the control of the business of the limited

partnership. ^^"^ Of course, a limited partner cannot knowingly permit

110. Ind. Code § 23-16-4-3(a) (1988), However, a limited partner who participates
in the control of the business is liable only to persons who transact business with the
hmited partnership reasonably believing, based upon the hmited partner's conduct, that
the limited partner is a general partner. See generally Abrams, Imposing Liability for
"Control" Under Section 7 of the Uniform Limited Partnership Act, 28 Case W. Res.
L. Rev. 785 (1978).

111. Ind. Code § 23-4-2-7 (repealed effective 1993).
112. See generally Crane & Bromberg, supra note 5, § 26 at 147.
113. Ind. Code § 23-16-4-3(b) (1988). One of the most important safe harbors is

section 23- 16-4-3 (b)(1) which permits a hmited partner to be an officer, director or

shareholder of a corporate general partner. This provision prevents the result reached in

Delaney v. Fidelity Lease Ltd., 526 S.W.2d 543 (Tex. 1975), where the Texas Supreme

Court held that if three limited partners had taken part in the control of the business

within the meaning of section 7 of the ULPA by acting as officers of the corporate
general partner, then they would be liable as general partners. Not all courts reached this

result. See Frigidaire Sales Corp. v. Union Properties, Inc., 14 Wash. App. 634, 544 P. 2d
781 (1975), aff'd, 88 Wash. 2d 400, 562 P.2d 244 (1977). See generally Note, supra note

85, at 271.

114. Ind. Code § 23-16-4-3(c) (1988).



44 INDIANA LAW REVIEW [Vol. 22:27

"the partner's name to be used in the name of the Umited partnership,
except under circumstances permitted" by the IRULPA, without incurring
HabiUty "to creditors who extend credit to the Umited partnership without
actual knowledge that the limited partner is not a general partner,"

although this liability might be avoided by changing the name of the
partnership. ^'^ In essence, the IRULPA imposes Hability on a Umited
partner who permits a situation to exist where third parties can be misled
as to the limited partner's true status, but confines that liability to those

who actually have been misled.
The IRULPA contains other provisions that affect the rights, duties

and liabilities of limited partners. Most of these provisions are based

on the Model Act but differ to some degree in form or substance. For

example, like the Model Act, the IRULPA clarifies prior law by explicitly
recognizing that unanimous consent of all partners is required for ad-

mission of new limited partners unless the partnership agreement provides
otherwise. '^^ However, unlike the Model Act,^'^ the IRULPA does not
require a limited partnership to maintain a record of the date a person

becomes a limited partner.

The Model Act explicitly recognizes the not uncommon practice of
a limited partnership agreement granting voting rights to either all or

a specified group of limited partners.''^ The provision permits voting

on matters that go beyond those for which a specific safe harbor is

provided. The comparable provision in the IRULPA goes much further
in authorizing the partnership agreement to provide for classes or groups

of limited partners, and in specifying the rights, powers and duties of

limited partners.''^ In this respect, the Delaware Act was the model. '^°

One of the most significant aspects of section 23-16-4-2 is that it permits
the drafters of limited partnership agreements to provide "for the future

creation, in the manner provided in the partnership agreement, of ad-

ditional classes or groups of limited partners having such relative rights,

powers, and duties as may from time to time be established (including
rights, powers, and duties senior to existing classes and groups of Umited

partners), "'2' and, subject to section 23-16-4-3, permits the drafters to

grant to all the limited partners, to certain identified limited

partners, or to a specified class or group of the limited partners

115. Id. ^ 23-16-4-4(d).

116. Id. § 23-16-4-1.

117. Rev. Unif. Limited Partnership Act § 301 comment, 6 U.L.A. 255 (Supp.
1988).

118. Id. § 302 commem, 6 U.L.A. 255 (Supp. 1988).
119. I>JD. Code § 23-16-4-2 (1988).
120. See Del. Code Ann. tit. 6, § 17-405 (Supp. 1988).
121. IND. Code § 23-16^-2(a) (1988).



1988] IRULPA 45

the right to vote (on a per capita or other basis), separately or

with all or any class or group of the limited partners or the

general partners, on any matter. ^^^

These provisions doubtlessly will reassure general partners that they can

establish defenses against a possible "takeover" of an Indiana limited

partnership. However, such provisions should cause concern among inves-
tors who might find themselves relegated to third class status by the
creation of "senior" limited partners. Finally, section 23-16-4-5 of the

IRULPA is similar in substance but differs in form from section 305
of the Model Act.'^^ Section 23-16-4-5 changes as compared to the old

Act, and restates the rights of limited partners to information about the

partnership.

D. Financing, Derivative Actions and the Rights and Duties of
General Partners

Section 23-16-6-1^^"* of the IRULPA in conjunction with the definition
of "contribution" in section 23-16-1-3,'^^ makes it clear that contributions

of services are permissible forms of contribution to a limited partnership

even by limited partners. The IRULPA continues the obligation of a
partner to fulfill any promised contribution, if the obligation is set out

in a writing signed by the limited partner. ^^^ A partner who is unable
to perform promised services because of death or disability, as well as

by default, is required to pay the cash value of the services except as

otherwise provided in the partnership agreement. ^^^

Like the Model Act,'^^ the IRULPA permits a creditor to enforce
an original obUgation of a partner, both limited and general, to contribute

to the partnership where credit is extended in reliance on the obligation

before it is compromised by the partners. '^^ This right is Umited to

creditors only to the extent that in extending the credit, the creditor

reasonably relied on the obligation of a partner to make the contri-
bution. ^^° This is a departure from the Model Act and demonstrates

122. Id. § 23-16-4-2(b).

123. Compare id. § 23-16-3-5 with Rev. Unif. Limited Partnership Act § 305,
6 U.L.A. 300 (Supp. 1988).

124. IND. Code § 23-16-6-1 (1988).
125. Id. § 23-16-1-3.

126. Id. § 23-16-6-2(a).

127. Id. § 23-16-6-2(b). This option is in addition to, and is not in lieu of, any

other rights, including the right to specific performance, that the limited partnership may
have against such a partner under the partnership agreement or applicable law.

128. Rev. Unif. Limited Partnership Act § 502(c), 6 U.L.A. 311-12 (Supp. 1988).
129. iND. Code § 23-16-6-2(c) (1988).
130. Id.



46 INDIANA LAW REVIEW [Vol. 22:27

how persons dealing with Indiana limited partnerships who do not insist
on examining the partnership agreement do so at their peril. The promised

contribution of a limited partner does not have to be stated in the

limited partnership certificate. Moreover, the IRULPA explicitly au-
thorizes the partnership agreement to provide for the consequences and

penalties if a partner fails to make a contribution. ^^^

The lULPA did not specifically authorize a limited partner to bring
a derivative suit on behalf of the partnership. However, it was generally

recognized that a limited partner could bring a derivative action on

behalf of a limited partnership, ^^^ by analogizing the position of a limited

partner to that of a corporate shareholder.^" The IRULPA expressly
authorizes a limited partner to bring a derivative action ^^"^ and specifies

the appropriate procedures. '^^ A Umited partner whose suit is successful
can recover expenses and fees from the award, the balance of which is

remitted to the Umited partnership. ^^^

The IRULPA does not provide for a * 'litigation committee" that
can consider the propriety, or lack thereof, of pursuing a derivative

action filed on behalf of a Umited partnership as does the IBCL with
respect to Indiana corporations. ^^^ Interestingly, the drafters of the

IRULPA did provide that if the damages awarded a plaintiff in such
a suit are insufficient to reimburse the plaintiff's reasonable expenses,

the court can direct that part or all of the reasonable expenses be paid

by the partnership. '^^

A limited partner is entitled to a return of the partner's contribution
before any claims of general partners are paid under the lULPA.^^^

Under the IRULPA general and limited partners rank on the same level
except as otherwise provided in the partnership agreement. '"^^

Section 23-16-6-3 of the IRULPA specifies the basis on which partners
share profits and losses in the absence of a written agreement. ^"^^ The

13L Id. § 23-16-6-2(d).

132. See, e.g., Moore v. 1600 Downing Street, Ltd., 668 P.2d 16 (Colo. Ct. App.

1983); Partnership Equities, Inc. v. Marten, 15 Mass. App. Ct. 42, 443 N.E.2d 134 (1982).

133. See generally Hecker, Limited Partners' Derivative Suits Under the Revised

Uniform Limited Partnership Act, 33 Vand. L. Rev. 343 (1980); Reuschlein, Limited

Partnership Derivative Suits, 9 St. Mary's L.J. 443 (1978).
134. IND. Code § 23-16-11-1 (1988).
135. There is a contemporaneous ownership requirement, id. § 23-16-11-2, and a

limited partner must attempt to have the action initiated by a general partner or plead

reasons for not making the effort. Id. § 23-16-11-3.

136. See Rev. Unif. Limited Partnership Act § 1004, 6 U.L.A. 356 (Supp. 1988).
137. iND. Code § 23-1-32-4 (1988).
138. Id. § 23-16-11 -4(b).

139. Id. § 23-4-2-23 (repealed effective 1993).

140. Id. § 23-16-9-4(3).

141. Id. § 23-16-6-3.



1988] IRULPA 47

IRULPA differs from the Model Act which requires that the allocation
be in writing to be effective. '^^ Section 23-16-6-4 permits partners to

choose to share distributions on a different basis than they share profits

and losses by so providing in the partnership agreement.'"*^ The "default"

provisions, if the agreement does not so provide, are '*the agreed value

... of the contributions made by each partner to the extent they have
been received by the partnership and have not been returned. "'"^ Again

the IRULPA differs from the Model Act which requires that the allocation
of distributions be in writing. ^"^^

Chapter 5 of the IRULPA pertaining to general partners contains
many provisions derived from the old Act. First, a general partner of
an Indiana Umited partnership has substantially the same rights and

powers and is subject to all the restrictions of a partner in an ordinary

general partnership.''*^ Second, general partners manage the business of

the limited partnership and are personally Hable for all of the debts of

the partnership to persons other than the partnership and other partners. '"^^

Third, they have the same liabilities to the partnership and other partners

as partners in a general partnership, except as provided in the IRULPA
or the partnership agreement.'"*^ Finally, because a corporation can be

a general partner in a limited partnership, it is possible to limit the

overall liability of a limited partnership enterprise. '"^^

The Model Act expanded greatly the authority of general partners
vis a vis the partnership and the limited partners. As initially promulgated,
it continued the unwaivable requirement that all limited partners must

consent in writing to the admission of an additional general partner and

that the consent must specifically identify the general partner involved.

However, in 1985 the relevant provision was amended to require written

142. Rev. Unif. Limited Partnership Act § 503, 6 U.L.A. 314 (Supp. 1988). The
IRULPA tracks the Delaware Act in this respect. Del. Code Ann. tit. 6, § 17-503 (Supp.
1986). The Model Act requirement that matters of substantial importance be in writing

is to avoid fraud.

143. Id. § 23-16-6-4.

144. IND. Code § 23-16-6-4 (1988).
145. Rev. Unif. Limited Partnership Act § 504, 6 U.L.A. 316 (Supp. 1988).

Again the IRULPA follows the Delaware Act in this respect. Del. Code Ann. tit. 6 §
17-504 (Supp. 1986).

146. iND. Code § 23-16-5-3(a) (1988).
147. Id. § 23-16-5-3(b). A general partner's Uability to a third party does not change

even if the general partner subsequently becomes a limited partner. Hartford Fin. Serv.

V. Florida Software Serv., Inc., 550 F. Supp. 1079 (D. Me. 1982), appeal dismissed, 712
F.2d 724 (1st Cir. 1983).

148. iND. Code § 23-16-5-3(c) (1988).
149. It is also possible for a limited partnership to be the general partner of another

limited partnership. See, e.g.. Radio Picture Show Partnership v. Exclusive Int'l Pictures,
482 N.E.2d 1159 (Ind. Ct. App. 1985).



48 INDIANA LAW REVIEW [Vol. 22:27

consent only if the partnership agreement does not provide in writing

for the admission of additional general partners. '^^ This language was

adopted by the drafters of the IRULPA.^^i

Section 23-16-5-2 of the IRULPA expands the provisions of the old
Act as to when a person ceases to be a general partner.'" The old Act

provided for dissolution of the partnership on the retirement, death or

insanity of a general partner, unless the business was continued by

remaining general partners under a right so stated in the limited part-

nership certificate or with the consent of all partners.'" The IRULPA
recognizes as does the Model Act, that other events can cause the

dissolution of a limited partnership, albeit possibly giving rise to a breach

of contract action against a general partner who dissolves it in contra-
vention of the partnership agreement. '^'^ Section 23-16-5-2 further rec-

ognizes that limited partners should be able to replace a general partner

who is in financial dire straights and that a general partner which is
not a natural person, such as a corporation, can "die" just as a natural

person. '^^

The IRULPA continues the basic approach of the lULPA that,
except as provided in the Act, a general partner in a limited partnership

has the same rights and powers and is subject to the same restrictions

as a partner in a general partnership. '^^ As initially adopted in 1976,

the Model Act could have been read as authorizing a provision in a
limited partnership agreement limiting general partners' liability to cred-

itors of the partnership. However, the language of IRULPA sections
23-16-5-3(b) and (c), hke the current version of section 403 of the Model

Act, makes it clear that the partnership agreement can modify the

relationship of the general partner to the partnership and other partners,

but that the agreement cannot limit the liability of general partners to

third persons.'"

150. Rev. Unif. Limited Partnership Act § 401, 6 U.L.A. 302 (Supp. 1988).
151. IND. Code § 23-16-5-1 (1988).
152. Id. § 23-16-5-2.

153. Id. § 23-4-2-20 (repealed effective 1993).

154. Rev. Unif. Limited Partnership Act § 402 comment, 6 U.L.A. 304 (Supp.
1988).

155. Ind. Code § 23-16-5-2(6)-(10) (1988). For example, a corporation "dies" when
it is dissolved or its articles of incorporation are revoked. Interestingly, the IRULPA is
phrased in terms of a certificate of dissolution although a corporation is dissolved under

the IBCL on the effective date of its articles of dissolution which generally is when they
are filed with the Secretary of State. Id. § 23-l-45-3(b).

156. Id. § 23-16-5-3.

157. Id. § 23-16-5-3(b), (c); Rev, Unif. Limited Partnership Act § 403(b), 6
U.L.A. 306 (Supp. 1988). The ability to limit the liability of general partners would

probably result in a determination that the enterprise possessed the corporate characteristic

of limited liability for income tax purposes.



1988] IRULPA 49

It is possible for a person to be both a general partner and a limited

partner in a limited partnership under the IRULPA. ^^^ A general partner
who is also a limited partner, in the partner's capacity as a limited
partner, has the powers of and is subject to the restrictions of a limited

partner except as provided in the partnership agreement. '^^ Section 405

was added to the Model Act to clarify that the partnership agreement

can specify the voting rights of both general and limited partners. '^^ The

IRULPA goes much further than the Model Act in authorizing classes
and groups of general partners and their respective rights, powers and

duties. The agreement can even permit the creation of additional classes

and groups of general partners with rights, powers and duties senior to

existing classes and groups of general partners.'^' It is not clear who
exactly would create these classes, however.

As under the lULPA, the acts of a general partner bind the limited
partnership under agency law principles if the acts are within the scope

of the partnership's business. '^^ The scope of the general partner's au-

thority and the business of the partnership will be determined by the

partnership agreement and, to a lesser degree, the limited partnership

certificate. ^^^

Also under existing law, a general partner owes a fiduciary duty to

other general partners as well as to the limited partners.'^"* It also has

been held that a limited partnership has enough attributes of an entity

apart from its members that a general partner can be convicted of

embezzUng partnership funds. '^^ An attorney who is a general partner
in a limited partnership is not automatically precluded from representing

the partnership in legal proceedings.'^^ The IRULPA should not change
any of these rules.

158. Ind. Code § 23-16-5-4 (1988). This was also possible under the lULPA. Id.

§ 23-4-2-12 (1982).

159. Id. § 23-16-5-4(b).

160. Rev. Unif. Limited PARXNERsmp Act § 405 comment, 6 U.L.A. 301 (Supp.
1988). However, if limited partners are entitled to vote on partnership matters, they do

not have a right to vote as a separate class unless provided in the agreement. Id.

161. Ind. Code § 23-16-5-5(a) (1988). The IRULPA tracks the Delaware Act in
this respect. Del. Code Ann. tit. 6, § 17-405 (Supp. 1986).

162. Ind. Code § 23-4-1-9 (repealed effective 1993). See Mishawaka Fed. Sav. &
Loan V. Brademas, 162 Ind. App. 423, 319 N.E.2d 674 (1974).

163. The interpretation of provisions in a limited partnership agreement pertaining
to the scope of a general partner's authority is subject to the general rules for interpreting

powers of attorney. See Klein v. Weiss, 284 Md. 36, 395 A.2d 126 (1978).
164. See JRY Corp. v. LeRoux, 18 Mass. App. Ct. 153, 464 N.E.2d 82 (1984);

Alpert V. Haimes, 64 Misc. 2d 608, 315 N.Y.S.2d 532 (1970).

165. State v. Siers, 197 Neb. 51, 248 N.W.2d 1 (1976).
166. See Gorovitz v. Planning Bd. of Nantucket, 394 Mass. 246, 475 N.E.2d 377

(1985).



50 INDIANA LAW REVIEW [Vol. 22:27

E. Distributions and Withdrawals

Chapter 7 of the IRULPA, which is based on article 6 of the Model
Act, made some significant changes from the prior law with respect to
distributions and withdrawals from limited partnerships. The IRULPA
permits interim distributions to partners before they withdraw from the

partnership and before the partnership is dissolved and wound up.^^^ A
general partner can now withdraw from a limited partnership at any
time by giving written notice, but is subject to suit for breach of contract

if the withdrawal violates the partnership agreement. ^^^ The IRULPA
permits a limited partner to withdraw at the time or upon the happening

of events specified in the agreement, or on six months written notice,

if the agreement does not specify in writing such time or events or

specify a definite time for the dissolution and winding up of the limited

partnership.'^^ The distributive share of a withdrawing partner is fixed

by the IRULPA in the absence of an agreement. '^^ The IRULPA provides
that except as provided in the partnership agreement, which does not

have to be in writing as under the Model Act,'^' a partner has no right

to demand a distribution in any form other than cash.'^^ At the same
time, it limits the amount a partner can be compelled to accept as a
distribution of assets in kind, to the same proportion as the partner's

share in the distributions of the partnership unless otherwise provided

in the agreement. '^^

It is now clear that any partner of a limited partnership who is
entitled to receive a distribution becomes a creditor of the limited part-

nership with respect to the distribution.'^'* The extraordinary remedy

contained in the lULPA, whereby a limited partner who was unsuccessful
in demanding a return of his contribution could seek dissolution of the

partnership,'"^^ was eliminated in the IRULPA. A partner entitled to a
distribution will have to sue as an ordinary creditor. '^^

167. IND. Code § 23-16-7-1 (1988).
168. Id. § 23-16-7-2.

169. Id. § 23-16-7-3.

170. Id. § 23-16-7-4.

171. Rev. Unif. Limited Partnership Act § 605, 6 U.L.A. 322 (Supp. 1988).
172. iND. Code § 23-16-7-5(a) (1988).
173. Id. § 23-16-7-5(b).

174. Id. § 23-16-7-6. A partner may not receive a distribution from a partnership
where, after the distribution, all liabilities of the limited partnership, other than liabilities

to partners on account of their partnership interests, exceed the fair value of the partnership

assets. Id. § 23-16-7-7.

175. Id. § 23-4-2-16(4) (repealed effective 1993).

176. See Rev. Unif. Limited Partnership Act § 606 comments, 6 U.L.A. 323
(Supp. 1988).



1988] IRULPA 51

The IRULPA creates a statute of limitations on the right of a limited
partnership to recover all or part of a contribution that has been returned

to a limited partner under certain circumstances. ^^^ The lULPA did not
have any comparable provisions. The new Act defines the return of a

partner's contribution as that portion of a distribution which ''reduces

the partner's share of the fair value of the net assets of the limited

partnership below the agreed value (as stated in the records of the limited

partnership) of the partner's contribution that has not been distributed

to the partner. "'^^ The lULPA treated a partner holding money or
property wrongfully returned to him as a trustee. ^^^ This provision was

eliminated in the Model Act.

F. Assignments

Chapter 8 of the IRULPA, which is based on Article 7 of the Model
Act/^^ relates to the assignment of partnership interests. A partnership
interest is personal property,'^' and is assignable in whole or in part

unless otherwise provided in the partnership agreement. ^^^ This eliminates

the ambiguity in prior law whether any limitations on the right of

assignment were permitted. ^^^ The IRULPA continues the rule that the
assignment of a partnership interest neither dissolves the limited part-

nership nor makes the assignee a partner. '^"^ Rather, "the assignee [is

entitled] to share in the profits and losses, to receive the distribution

or distributions, and to receive the allocation of income, gain, loss,

deduction, or credit or similar item to which the assignor was entitled,

to the extent assigned. "^^^ A partner ceases to be a partner when all
of the partner's partnership interest is assigned. ^^^

Section 23-16-8-3 of the IRULPA authorizes a judgment creditor to
seek a charging order against the interest of a debtor partner. '^"^ A
judgment creditor has only the rights of an assignee. '^^ The rights of

177. IND. Code § 23-16-7-8(a), (b) (1988).
178. Id. § 23-16-7-8(c). There was some question under the lULPA whether a

distribution to a limited partner was his share of income or a return of his contributions.

179. iND. Code § 23-4-2-17(2) (repealed effective 1993).
180. Rev. Unif. Limited Partnership Act §§ 701-705, 6 U.L.A. 325 (Supp. 1988).
181. Ind. Code § 23-16-8-1 (1988). A partner has no interest in specific limited

partnership property. Id.

182. Id. § 23-16-8-2(1).

183. Id. § 23-4-2-19(1) (1982). See Rev. Unif. Limited Partnership Act § 702
comments, 6 U.L.A. 326 (Supp. 1988).

184. Ind. Code § 23-16-8-2(2) (1988).
185. Id. § 23-16-8-2(3).

186. Id. § 23-16-8-2(4).

187. Id. § 23-16-8-3.

188. Id.



52 INDIANA LAW REVIEW [Vol. 22:27

judgment creditors under the IRULPA are similar to the rights available
under the lULPA except that the new Act has eliminated provisions
considered to be superfluous. ^^^

An assignee may become a limited partner if the partnership agree-
ment allows the assignee to become a limited partner or with the written

consent of all partners. '^^ The obligations of the assignor automatically

assumed by an assignee who becomes a limited partner have been nar-
rowed as compared to the prior uniform law.'^^ An assignor is not
released from liabihty to the limited partnership if the assignee becomes

a limited partner, unless such liabilities are specifically assumed by the

assignee. '^^

The IRULPA statutory rules dealing with the estate of a deceased
or incompetent partner are substantially the same as they are under the

lULPA.'^^ The personal representative of a deceased limited partner

becomes a limited partner for the purpose of settling the estate, and

has any power the deceased limited partner had to make an assignee a
substituted hmited partner. ^^"^ The estate of a deceased Hmited partner

also is hable for all the limited partner's habilities, although the specific

provision of the lULPA to that effect has been ehminated.'^^

G. Dissolution

The statutory provisions relating to the dissolution and winding up

of limited partnerships and the distribution of assets are contained in

chapter 9 of the IRULPA, which is based on article 8 of the Model
Act.'^^ One major difference between the old and new Acts is that under
the IRULPA a hmited partnership that would otherwise be dissolved
upon the withdrawal of a general partner, or even all general partners.

189. See Rev. Unif. Limited Partnership Act § 703 comment, 6 U.L.A. 327
(Supp. 1988).

190. Ind. Code § 23-16-8-4(a) (1988). The Model Act does not require that the
partners' consent be in writing. Rev. Unif. Limited Partnership Act § 704(a), 6 U.L.A.
328 (Supp. 1988).

191. Ind. Code § 23-16-8-4(b) (1988).
192. Id. § 23-16-8-4(c). The assignor is not relieved of such obligations if the assignee

becomes bound under either the Model Act, Rev. Unif. Limited Partnership Act §
704(c), 6 U.L.A. (Supp. 1988), or the Delaware Act, Del. Code Ann. tit. 6, § 17-704(c)
(Supp. 1986).

193. Ind. Code § 23-4-2-21 (repealed effective 1993).
194. Id. § 23-16-8-5(a) (1988).

195. Id. § 23-4-2-21(2). See Rev. Unif. Limited Partnership Act § 705 comment,
6 U.L.A. 330 (Supp. 1988). The relevant IRULPA provision states: The powers of a
partner that is a corporation, trust or other entity which is dissolved may be exercised
by the partner's legal representation or successor. Ind. Code § 23-16-8-5(b) (Supp. 1988).

196. Ind. Code §§ 23-16-9-1 to -4 (1988). Rev. Unif. Limited Partnership Act

§§ 801-804, 6 U.L.A. 331 (Supp. 1988).



1988] IRULPA 53

may be continued, if all of the remaining partners, or a lesser percentage
as provided in the partnership agreement, agree in writing within 90

days of the withdrawal and the appointment of one or more additional

general partners if necessary or desired. '^"^ There are other causes of

dissolution specified in the IRULPA. These include reaching the time
for dissolution specified in the certificate of Hmited partnership;'^^ the

occurring of events specified in the partnership agreement; '^^ "the written

consent of all general partners and the affirmative vote of two-thirds

in interest of each class of limited partners," subject to any "requirement

in the partnership agreement requiring the approval by a greater or lesser

percentage of Hmited partners and general partners; "^°° and the entry

of a decree of judicial dissolution. ^°' A partner is also authorized to
seek judicial dissolution of a Hmited partnership by order of an appro-

priate court whenever it is not reasonably practical to carry on the

business in conformity with the partnership agreement.^°^

The IRULPA contains a detailed provision regulating the winding
up of partnership affairs, ^°^ and the distribution of its assets.^^'* One of
the major distinctions between the old Act and the new Act is that the
IRULPA ranks general and limited partners on the same level except
as otherwise provided in the partnership agreement.^^^ A certificate of
limited partnership must be cancelled when a limited partnership is
dissolved. ^^^

H. Foreign Limited Partnerships and Miscellaneous Provisions

The lULPA did not recognize expressly the existence of limited
partnerships formed in other states. ^^ The failure of the lULPA to deal
with limited partnerships with multistate operations is a great weakness

197. Id. § 23- 16-9- 1(a)(4), (b).

198. Id. § 23- 16-9-1 (a)(1).

199. Id. § 23- 16-9- 1(a)(2).

200. Id. § 23- 16-9- 1(a)(3). The Model Act requires the written consent of all partners,
Rev. Unif. Limited Partnership Act § 801(3), 6 U.L.A. 331 (Supp. 1988), as does the
Delaware Act, Del. Code Ann. tit. 6, § 17-801(2) (Supp. 1986).

201. IND. Code § 23-16-9- 1(a)(5) (1988).
202. Id. § 23-16-9-2.

203. Id. § 23-16-9-3.

204. Id. § 23-16-9-4. Partners who are creditors are treated equally with other
creditors, except as to their partnership interests. Accrued obligations to make a distribution
are given priority over other equity distributions. Id. § 23-16-9-4(2).

205. Id. § 23-16-9-4(3). Some courts have held that under the prior uniform act,
the order of distribution cannot be changed by agreement. See Pine Grove Dev. Corp.

V. Dade Sav. & Loan Ass'n, 478 So. 2d 80 (Fla. Dist. Ct. App. 1985); Consolidated
Amalgamated Dev. Ltd. v. Gup, 428 So. 2d 750 (Fla. Dist. Ct. App. 1983).

206. iND. Code § 23-16-3-4 (1988).
207. See Radio Picture Show Partnership v. Exclusive Int'l Pictures, 482 N.E.2d

1159 (Ind. Ct. App. 1985).



54 INDIANA LAW REVIEW [Vol. 22:27

of that statute. One of the important advances of the IRULPA is that
it clarifies the status of foreign limited partnerships. ^'^^ A few states
enacted procedures for recognizing foreign limited partnerships before

the Model Act was promulgated, ^^^ and some courts recognized such
enterprises by applying choice of law rules. ^'^

The IRULPA expressly authorizes foreign limited partnerships to
transact business in Indiana. ^^^ Foreign limited partnerships are those

organized under the laws of another state or another country.^^^ Before

transacting business in Indiana, a foreign limited partnership must file

an application for registration as a foreign limited partnership.^^^ The

Model Act does not define what constitutes transacting business. The
IRULPA adopts the now common approach to determining when a
foreign business organization can be subjected to state regulation without

violating the commerce clause, by specifying activities, among others,
that do not constitute transacting business. ^^"^ The use of the phrase

"among others" in section 23-16-10-2(b) indicates that the Hsting is not
exclusive and the fact that a foreign limited partnership has engaged in

an activity not set forth in the statute does not necessarily mean that
it has to register as a foreign limited partnership.

The IRULPA provides that a foreign limited partnership may register
with the Secretary of State under any name that includes the words
"limited partnership" or the abbreviation "L.P." and which could be

208. Ind. Code §§ 23-16-1-1 to -9. See generally Sell, An Examination of Articles
3, 4 and 9 of the Revised Uniform Limited Partnership Act, 9 St. Mary's L.J. 459,
471-77 (1978).

209. See, e.g., Cal. Corp. Code § 15,700 (Deering Supp. 1974); Tex. Rev. Civ.
Stat. Ann. art. 6132a (Vernon 1970 & Supp. 1988).

210. See, e.g., Cheyenne Oil Corp. v. Oil & Gas Ventures, Inc., 42 Del. Ch. 106,
, 204 A.2d 743, 746 (1964); Oilman Paint & Varnish Co. v. Legum, 197 Md. 66,580
, A.2d 906, 907-08, (1951); King v. Sarria, 69 N.Y. 24, 30-31 (1877). See also Plaza

Realty Investors v. Bailey, 484 F. Supp. 335 (S.D.N.Y. 1979) (the United States District

Court for the Southern District of New York applied Indiana law to an Indiana limited
partnership in a diversity action); Partnership Equities v. Marten, 15 Mass. App. Ct. 42,

443 N.E.2d 134 (1982). See generally Crane & Bromberg, supra note 5, § 26 n.30.
211. Ind. Code § 23-16-1-1 (1988). This chapter of the IRULPA became effective

on July 1, 1988.

212. Id. § 23-16-10-l(a)(l). A foreign Hmited partnership may not be denied reg-
istration because of any differences between the law under which it was organized and

the law of Indiana. Id. § 23-16-10-l(a)(2). Indiana hmited partnerships may merge with
limited partnerships organized under the laws of other states but not other countries. Id.

§ 23-16-3-12.

213. Id. §§ 23-16-10-2(a), -3. The IRULPA specifies the information that must be
included in the appHcation. Id. §§ 23-16-10-2(a)(l) to (8). An original and a duplicate
copy of the application signed and sworn to by a general partner of the foreign limited

partnership under penalties of perjury is filed with the Secretary of State. Id.

214. Id. § 23-16-10-2(b)(l) to (11).



1988] IRULPA 55

registered by an Indiana limited partnership.^^^ A foreign limited part-
nership must maintain an office in Indiana, which is the equivalent of

the registered office of a corporation under the IBCL, and a registered

agent. 2^^ The registered agent is the foreign limited partnership's agent

for service of process, although service on a registered agent is not the

only means or necessarily the required means for serving a foreign limited

partnership. 2'^

A foreign limited partnership is required to correct statements in its
appHcation for registration that were false when made or where ar-
rangements or other facts described in the application are false in any

respect. ^'^ A foreign limited partnership that ceases to transact business
in Indiana may cancel its registration by filing a certificate of cancellation
with the Secretary of State.^'^

The IRULPA authorizes the Attorney General to sue to restrain a
foreign limited partnership from transacting business in Indiana in vi-

olation of the statute, and to enjoin the limited partnership or any of

its agents from doing business in Indiana if it has failed to register or

its registration was procured on the basis of false or misleading repre-

sentations.^^° A more effective sanction against an unregistered foreign
limited partnership transacting business in Indiana is the provision denying

it access to Indiana courts to maintain any action until it has registered

and paid all fees and penalties for the years during which it was

transacting business without having registered.^^' A third party, however,
can maintain an action against the unregistered limited partnership and

the partnership can defend actions brought against it in Indiana courts. ^^^

The failure to register in Indiana does not impair the validity of any

contract or act of the foreign limited partnership,^^^ and a limited partner

of a foreign limited partnership is not liable as a general partner solely

because the partnership has transacted business without registration. ^^^

A limited partner of a foreign limited partnership can be held liable for
the obligations of the partnership by participating in the control of the

215. Id. § 23-16-10-4(a), (b).

216. Id. § 23-16-10-4(c) to (0-

217. Id. § 23-16-10-5. The Secretary of State is the agent for the service of process

for a foreign limited partnership transacting business in Indiana without registration. Id.

§ 23-16-10-2(c).

218. Id. § 23-16-10-6.

219. Id. § 23-16-10-7.

220. Id. § 23-16-10-9.

221. Id. § 23-16-10-8.

222. Id. § 23-16-10-8(b)(2), (3).

223. Id. § 23-16-10-8(b)(l).

224. Id. § 23-16-10-8(c).



56 INDIANA LAW REVIEW [Vol. 22:27

business. The Secretary of State is the agent of such a limited partnership

for purposes of serving process.^^^

Chapter 12 of the IRULPA contains miscellaneous provisions dealing
with construction and application of the statute, such as severabihty and

the effective dates. ^^^ These provisions are self-explanatory and should

be consulted by persons contemplating a limited partnership.

225. Id. §§ 23-16-10-2(c), -8(d).

226. Id. §§ 23-16-12-1 to -6.