0001| AN ACT | 0002| RELATING TO PARTNERSHIP; ENACTING THE UNIFORM PARTNERSHIP ACT (1994); | 0003| ESTABLISHING PROCEDURES AND STANDARDS FOR THE OPERATION OF PARTNERSHIPS; | 0004| REPEALING AND ENACTING SECTIONS OF THE NMSA 1978. | 0005| | 0006| BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO: | 0007| ARTICLE 1 | 0008| GENERAL PROVISIONS | 0009| Section 101. DEFINITIONS.--As used in the Uniform Partnership Act | 0010| (1994): | 0011| (1) "business" includes every trade, occupation and | 0012| profession; | 0013| (2) "debtor in bankruptcy" means a person who is the subject | 0014| of: | 0015| (i) an order for relief under Title 11 of the United | 0016| States Code or a comparable order under a successor statute of general | 0017| application; or | 0018| (ii) a comparable order under federal, state or | 0019| foreign law governing insolvency; | 0020| (3) "distribution" means a transfer of money or other | 0021| property from a partnership to a partner in the partner's capacity as a | 0022| partner or to the partner's transferee; | 0023| (4) "foreign registered limited liability partnership" means | 0024| a registered limited liability partnership formed pursuant to an | 0025| agreement governed by the laws of another jurisdiction and registered | 0001| under the laws of that jurisdiction; | 0002| (5) "partnership" means an association of two or more | 0003| persons to carry on as co-owners a business for profit formed under | 0004| Section 202, predecessor law, or comparable law of another jurisdiction, | 0005| and includes a registered limited liability partnership; | 0006| (6) "partnership agreement" means the agreement, whether | 0007| written, oral or implied, among the partners concerning the partnership, | 0008| including amendments to the partnership agreement; | 0009| (7) "partnership at will" means a partnership in which the | 0010| partners have not agreed to remain partners until the expiration of a | 0011| definite term or the completion of a particular undertaking; | 0012| (8) "partnership interest" or "partner's interest in the | 0013| partnership" means all of a partner's interests in the partnership, | 0014| including the partner's transferable interest and all management and | 0015| other rights; | 0016| (9) "person" means an individual, corporation, business | 0017| trust, estate, trust, partnership, limited liability company, | 0018| association, joint venture, government, governmental subdivision, agency | 0019| or instrumentality or any other legal or commercial entity; | 0020| (10) "property" means all property, real, personal or mixed, | 0021| tangible or intangible, or any interest therein; | 0022| (11) "registered limited liability partnership" includes a | 0023| partnership formed pursuant to an agreement governed by the laws of this | 0024| state, registered under Section 54-1-44 NMSA 1978 and complying with | 0025| Section 54-1-45 NMSA 1978; | 0001| (12) "state" means a state of the United States, the | 0002| district of Columbia, the commonwealth of Puerto Rico or any territory | 0003| or insular possession subject to the jurisdiction of the United States; | 0004| (13) "statement" means a statement of partnership authority | 0005| under Section 303, a statement of denial under Section 304, a statement | 0006| of dissociation under Section 704, a statement of dissolution under | 0007| Section 805, a statement of merger under Section 907 or an amendment or | 0008| cancellation of any of the foregoing; and | 0009| (14) "transfer" includes an assignment, conveyance, lease, | 0010| mortgage, deed and encumbrance. | 0011| Section 102. KNOWLEDGE AND NOTICE.-- | 0012| (a) A person knows a fact if the person has actual knowledge | 0013| of it. | 0014| (b) A person has notice of a fact if the person: | 0015| (1) knows of it; | 0016| (2) has received a notification of it; or | 0017| (3) has reason to know it exists from all of the facts | 0018| known to the person at the time in question. | 0019| (c) A person notifies or gives a notification to another by | 0020| taking steps reasonably required to inform the other person in ordinary | 0021| course, whether or not the other person learns of it. | 0022| (d) A person receives a notification when the notification: | 0023| (1) comes to the person's attention; or | 0024| (2) is duly delivered at the person's place of | 0025| business or at any other place held out by the person as a place for | 0001| receiving communications. | 0002| (e) Except as otherwise provided in Subsection (f), a person | 0003| other than an individual knows, has notice or receives a notification of | 0004| a fact for purposes of a particular transaction when the individual | 0005| conducting the transaction knows, has notice or receives a notification | 0006| of the fact, or in any event when the fact would have been brought to | 0007| the individual's attention, if the person had exercised reasonable | 0008| diligence. The person exercises reasonable diligence if it maintains | 0009| reasonable routines for communicating significant information to the | 0010| individual conducting the transaction and there is reasonable compliance | 0011| with the routines. Reasonable diligence does not require an individual | 0012| acting for the person to communicate information unless the | 0013| communication is part of the individual's regular duties or the | 0014| individual has reason to know of the transaction and that the | 0015| transaction would be materially affected by the information. | 0016| (f) A partner's knowledge, notice or receipt of a | 0017| notification of a fact relating to the partnership is effective | 0018| immediately as knowledge by, notice to or receipt of a notification by | 0019| the partnership, except in the case of a fraud on the partnership | 0020| committed by or with the consent of that partner. | 0021| Section 103. EFFECT OF PARTNERSHIP AGREEMENT--NONWAIVABLE | 0022| PROVISIONS.-- | 0023| (a) Except as otherwise provided in Subsection (b), | 0024| relations among the partners and between the partners and the | 0025| partnership are governed by the partnership agreement. To the extent | 0001| the partnership agreement does not otherwise provide, the Uniform | 0002| Partnership Act (1994) governs relations among the partners and between | 0003| the partners and the partnership. | 0004| (b) The partnership agreement may not: | 0005| (1) vary the rights and duties under Section 105, | 0006| except to eliminate the duty to provide copies of statements to all of | 0007| the partners; | 0008| (2) unreasonably restrict the right of access to books | 0009| and records under Section 403(b); | 0010| (3) eliminate the duty of loyalty under Section 404(b) | 0011| or 603(b)(3), but: | 0012| (i) the partnership agreement may identify | 0013| specific types or categories of activities that do not violate the duty | 0014| of loyalty, if not manifestly unreasonable; or | 0015| (ii) all of the partners or a number or percentage | 0016| specified in the partnership agreement may authorize or ratify, after | 0017| full disclosure of all material facts, a specific act or transaction | 0018| that would violate the duty of loyalty; | 0019| (4) unreasonably reduce the duty of care under Section | 0020| 404(c) or 603(b)(3); | 0021| (5) eliminate the obligation of good faith and fair | 0022| dealing under Section 404(d), but the partnership agreement may | 0023| prescribe the standards by which the performance of the obligation is to | 0024| be measured, if the standards are not manifestly unreasonable; | 0025| (6) vary the power to dissociate as a partner under | 0001| Section 602(a), except to require the notice under Section 601(1) to be | 0002| in writing; | 0003| (7) vary the right of a court to expel a partner in | 0004| the events specified in Section 601(5); | 0005| (8) vary the requirement to wind up the partnership | 0006| business in cases specified in Section 801(4), (5) or (6); or | 0007| (9) restrict rights of third parties under the Uniform | 0008| Partnership Act (1994). | 0009| Section 104. SUPPLEMENTAL PRINCIPLES OF LAW.-- | 0010| (a) Unless displaced by particular provisions of the Uniform | 0011| Partnership Act (1994), the principles of law and equity supplement that | 0012| act. | 0013| (b) If an obligation to pay interest arises under the | 0014| Uniform Partnership Act (1994) and the rate is not specified, the rate | 0015| is that specified in Section 56-8-4 NMSA 1978. | 0016| Section 105. EXECUTION, FILING AND RECORDING OF STATEMENTS.-- | 0017| (a) A statement may be filed in the office of the secretary | 0018| of state. A certified copy of a statement that is filed in an office in | 0019| another state may be filed in the office of the secretary of state. | 0020| Either filing has the effect provided in the Uniform Partnership Act | 0021| (1994) with respect to partnership property located in or transactions | 0022| that occur in this state. | 0023| (b) A certified copy of a statement that has been filed in | 0024| the office of the secretary of state and recorded in the office for | 0025| recording transfers of real property has the effect provided for | 0001| recorded statements in the Uniform Partnership Act (1994). A recorded | 0002| statement that is not a certified copy of a statement filed in the | 0003| office of the secretary of state does not have the effect provided for | 0004| recorded statements in that act. | 0005| (c) A statement filed by a partnership must be executed by | 0006| at least two partners. Other statements must be executed by a partner | 0007| or other person authorized by the Uniform Partnership Act (1994). An | 0008| individual who executes a statement as, or on behalf of, a partner or | 0009| other person named as a partner in a statement shall personally declare | 0010| under penalty of perjury that the contents of the statement are | 0011| accurate. | 0012| (d) A person authorized by the Uniform Partnership Act | 0013| (1994) to file a statement may amend or cancel the statement by filing | 0014| an amendment or cancellation that names the partnership, identifies the | 0015| statement and states the substance of the amendment or cancellation. | 0016| (e) A person who files a statement pursuant to this section | 0017| shall promptly send a copy of the statement to every nonfiling partner | 0018| and to any other person named as a partner in the statement. Failure to | 0019| send a copy of a statement to a partner or other person does not limit | 0020| the effectiveness of the statement as to a person not a partner. | 0021| (f) The secretary of state may collect a fee for filing or | 0022| providing a certified copy of a statement. The officer responsible for | 0023| recording transfers of real property may collect a fee for recording a | 0024| statement. | 0025| Section 106. LAW GOVERNING INTERNAL RELATIONS.--The law of the | 0001| jurisdiction in which a partnership has its chief executive office | 0002| governs the relations among the partners and the partnership. | 0003| Section 107. PARTNERSHIP SUBJECT TO AMENDMENT OR REPEAL OF THE | 0004| UNIFORM PARTNERSHIP ACT (1994).--A partnership governed by the Uniform | 0005| Partnership Act (1994) is subject to any amendment to or repeal of that | 0006| act. | 0007| ARTICLE 2 | 0008| NATURE OF PARTNERSHIP | 0009| Section 201. PARTNERSHIP AS ENTITY.--A partnership is an entity | 0010| distinct from its partners. | 0011| Section 202. FORMATION OF PARTNERSHIP.-- | 0012| (a) Except as otherwise provided in Subsection (b), the | 0013| association of two or more persons to carry on as co-owners a business | 0014| for profit forms a partnership, whether or not the persons intend to | 0015| form a partnership. | 0016| (b) An association formed under a statute other than the | 0017| Uniform Partnership Act (1994), a predecessor statute or a comparable | 0018| statute of another jurisdiction is not a partnership under that act. | 0019| (c) In determining whether a partnership is formed, the | 0020| following rules apply: | 0021| (1) joint tenancy, tenancy in common, tenancy by the | 0022| entireties, joint property, common property or part ownership does not | 0023| by itself establish a partnership, even if the co-owners share profits | 0024| made by the use of the property; | 0025| (2) the sharing of gross returns does not by itself | 0001| establish a partnership, even if the persons sharing them have a joint | 0002| or common right or interest in property from which the returns are | 0003| derived; and | 0004| (3) a person who receives a share of the profits of a | 0005| business is presumed to be a partner in the business, unless the profits | 0006| were received in payment: | 0007| (i) of a debt by installments or otherwise; | 0008| (ii) for services as an independent contractor or | 0009| of wages or other compensation to an employee; | 0010| (iii) of rent; | 0011| (iv) of an annuity or other retirement or health | 0012| benefit to a beneficiary, representative or designee of a deceased or | 0013| retired partner; | 0014| (v) of interest or other charge on a loan, even | 0015| if the amount of payment varies with the profits of the business, | 0016| including a direct or indirect present or future ownership of the | 0017| collateral, or rights to income, proceeds or increase in value derived | 0018| from the collateral; or | 0019| (vi) for the sale of the goodwill of a business | 0020| or other property by installments or otherwise. | 0021| Section 203. PARTNERSHIP PROPERTY.--Property acquired by a | 0022| partnership is property of the partnership and not of the partners | 0023| individually. | 0024| Section 204. WHEN PROPERTY IS PARTNERSHIP PROPERTY.-- | 0025| (a) Property is partnership property if acquired in the name | 0001| of: | 0002| (1) the partnership; or | 0003| (2) one or more partners with an indication in the | 0004| instrument transferring title to the property of the person's capacity | 0005| as a partner or of the existence of a partnership but without an | 0006| indication of the name of the partnership. | 0007| (b) Property is acquired in the name of the partnership by a | 0008| transfer to: | 0009| (1) the partnership in its name; or | 0010| (2) one or more partners in their capacity as partners | 0011| in the partnership, if the name of the partnership is indicated in the | 0012| instrument transferring title to the property. | 0013| (c) Property is presumed to be partnership property if | 0014| purchased with partnership assets, even if not acquired in the name of | 0015| the partnership or of one or more partners with an indication in the | 0016| instrument transferring title to the property of the person's capacity | 0017| as a partner or of the existence of a partnership. | 0018| (d) Property acquired in the name of one or more of the | 0019| partners, without an indication in the instrument transferring title to | 0020| the property of the person's capacity as a partner or of the existence | 0021| of a partnership and without use of partnership assets, is presumed to | 0022| be separate property, even if used for partnership purposes. | 0023| ARTICLE 3 | 0024| RELATIONS OF PARTNERS TO | 0025| PERSONS DEALING WITH PARTNERSHIP | 0001| Section 301. PARTNER AGENT OF PARTNERSHIP.--Subject to the effect | 0002| of a statement of partnership authority under Section 303: | 0003| (1) each partner is an agent of the partnership for the | 0004| purpose of its business. An act of a partner, including the execution | 0005| of an instrument in the partnership name, for apparently carrying on in | 0006| the ordinary course the partnership business or business of the kind | 0007| carried on by the partnership binds the partnership, unless the partner | 0008| had no authority to act for the partnership in the particular matter and | 0009| the person with whom the partner was dealing knew or had received a | 0010| notification that the partner lacked authority; and | 0011| (2) an act of a partner which is not apparently for carrying | 0012| on in the ordinary course the partnership business or business of the | 0013| kind carried on by the partnership binds the partnership only if the act | 0014| was authorized by the other partners. | 0015| Section 302. TRANSFER OF PARTNERSHIP PROPERTY.-- | 0016| (a) Partnership property may be transferred as follows: | 0017| (1) subject to the effect of a statement of | 0018| partnership authority under Section 303, partnership property held in | 0019| the name of the partnership may be transferred by an instrument of | 0020| transfer executed by a partner in the partnership name; | 0021| (2) partnership property held in the name of one or | 0022| more partners with an indication in the instrument transferring the | 0023| property to them of their capacity as partners or of the existence of a | 0024| partnership, but without an indication of the name of the partnership, | 0025| may be transferred by an instrument of transfer executed by the persons | 0001| in whose name the property is held; and | 0002| (3) partnership property held in the name of one or | 0003| more persons other than the partnership, without an indication in the | 0004| instrument transferring the property to them of their capacity as | 0005| partners or of the existence of a partnership, may be transferred by an | 0006| instrument of transfer executed by the persons in whose name the | 0007| property is held. | 0008| (b) A partnership may recover partnership property from a | 0009| transferee only if it proves that execution of the instrument of initial | 0010| transfer did not bind the partnership under Section 301 and: | 0011| (1) as to a subsequent transferee who gave value for | 0012| property transferred under Subsection (a)(1) and (2), proves that the | 0013| subsequent transferee knew or had received a notification that the | 0014| person who executed the instrument of initial transfer lacked authority | 0015| to bind the partnership; or | 0016| (2) as to a transferee who gave value for property | 0017| transferred under Subsection (a)(3), proves that the transferee knew or | 0018| had received a notification that the property was partnership property | 0019| and that the person who executed the instrument of initial transfer | 0020| lacked authority to bind the partnership. | 0021| (c) A partnership may not recover partnership property from | 0022| a subsequent transferee if the partnership would not have been entitled | 0023| to recover the property, under Subsection (b), from any earlier | 0024| transferee of the property. | 0025| (d) If a person holds all of the partners' interests in the | 0001| partnership, all of the partnership property vests in that person. The | 0002| person may execute a document in the name of the partnership to evidence | 0003| vesting of the property in that person and may file or record the | 0004| document. | 0005| Section 303. STATEMENT OF PARTNERSHIP AUTHORITY.-- | 0006| (a) A partnership may file a statement of partnership | 0007| authority which: | 0008| (1) must include: | 0009| (i) the name of the partnership; | 0010| (ii) the street address of its chief executive | 0011| office and of one office in this state, if there is one; | 0012| (iii) the names and mailing addresses of all of | 0013| the partners or of an agent appointed and maintained by the partnership | 0014| for the purpose of Subsection (b); and | 0015| (iv) the names of the partners authorized to | 0016| execute an instrument transferring real property held in the name of the | 0017| partnership; and | 0018| (2) may state the authority, or limitations on the | 0019| authority, of some or all of the partners to enter into other | 0020| transactions on behalf of the partnership and any other matter. | 0021| (b) If a statement of partnership authority names an agent, | 0022| the agent shall maintain a list of the names and mailing addresses of | 0023| all of the partners and make it available to any person on request for | 0024| good cause shown. | 0025| (c) If a filed statement of partnership authority is | 0001| executed pursuant to Section 105(c) and states the name of the | 0002| partnership but does not contain all of the other information required | 0003| by Subsection (a), the statement nevertheless operates with respect to a | 0004| person not a partner as provided in Subsections (d) and (e). | 0005| (d) Except as otherwise provided in Subsection (g), a filed | 0006| statement of partnership authority supplements the authority of a | 0007| partner to enter into transactions on behalf of the partnership as | 0008| follows: | 0009| (1) except for transfers of real property, a grant of | 0010| authority contained in a filed statement of partnership authority is | 0011| conclusive in favor of a person who gives value without knowledge to the | 0012| contrary, so long as and to the extent that a limitation on that | 0013| authority is not then contained in another filed statement. A filed | 0014| cancellation of a limitation on authority revives the previous grant of | 0015| authority; and | 0016| (2) a grant of authority to transfer real property | 0017| held in the name of the partnership contained in a certified copy of a | 0018| filed statement of partnership authority recorded in the office for | 0019| recording transfers of that real property is conclusive in favor of a | 0020| person who gives value without knowledge to the contrary, so long as and | 0021| to the extent that a certified copy of a filed statement containing a | 0022| limitation on that authority is not then of record in the office for | 0023| recording transfers of that real property. The recording in the office | 0024| for recording transfers of that real property of a certified copy of a | 0025| filed cancellation of a limitation on authority revives the previous | 0001| grant of authority. | 0002| (e) A person not a partner is deemed to know of a limitation | 0003| on the authority of a partner to transfer real property held in the name | 0004| of the partnership if a certified copy of the filed statement containing | 0005| the limitation on authority is of record in the office for recording | 0006| transfers of that real property. | 0007| (f) Except as otherwise provided in Subsections (d) and (e) | 0008| and Sections 704 and 805, a person not a partner is not deemed to know | 0009| of a limitation on the authority of a partner merely because the | 0010| limitation is contained in a filed statement. | 0011| (g) Unless earlier canceled, a filed statement of | 0012| partnership authority is canceled by operation of law five years after | 0013| the date on which the statement, or the most recent amendment, was filed | 0014| with the secretary of state. | 0015| Section 304. STATEMENT OF DENIAL.--A partner or other person | 0016| named as a partner in a filed statement of partnership authority or in a | 0017| list maintained by an agent pursuant to Section 303(b) may file a | 0018| statement of denial stating the name of the partnership and the fact | 0019| that is being denied, which may include denial of a person's authority | 0020| or status as a partner. A statement of denial is a limitation on | 0021| authority as provided in Section 303(d) and (e). | 0022| Section 305. PARTNERSHIP LIABLE FOR PARTNER'S ACTIONABLE | 0023| CONDUCT.-- | 0024| (a) A partnership is liable for loss or injury caused to a | 0025| person, or for a penalty incurred, as a result of a wrongful act or | 0001| omission, or other actionable conduct, of a partner acting in the | 0002| ordinary course of business of the partnership or with authority of the | 0003| partnership. | 0004| (b) If, in the course of the partnership's business or while | 0005| acting with the authority of the partnership, a partner receives or | 0006| causes the partnership to receive money or property of a person not a | 0007| partner, and the money or property is misapplied by a partner, the | 0008| partnership is liable for the loss. | 0009| Section 306. PARTNER'S LIABILITY.-- | 0010| (a) Except as otherwise provided in Subsections (b) and (c), | 0011| all partners are liable jointly and severally for all obligations of the | 0012| partnership unless otherwise agreed by the claimant or provided by law. | 0013| (b) A person admitted as a partner into an existing | 0014| partnership is not personally liable for any partnership obligation | 0015| incurred before the person's admission as a partner. | 0016| (c) Subject to Subsection (b), a partner in a registered | 0017| limited liability partnership is not liable directly or indirectly, by | 0018| way of indemnification, contribution or otherwise, for debts, | 0019| obligations and liabilities of or chargeable to the partnership or | 0020| another partner or partners, whether in tort, contract or otherwise, | 0021| arising from omissions, negligence, wrongful acts, misconduct or | 0022| malpractice committed while the partnership is a registered limited | 0023| liability partnership and in the course of the partnership business by | 0024| another partner or an employee, agent or representative of the | 0025| partnership. | 0001| (d) Subsection (c) shall not affect the liability of a | 0002| partner in a registered limited liability partnership for the partner's | 0003| own omission, negligence, wrongful act, misconduct or malpractice or | 0004| that of any person under the partner's direct supervision and control. | 0005| (e) A partner in a registered limited liability partnership | 0006| is not a proper party to a proceeding by or against a registered limited | 0007| liability partnership, the object of which is to recover damages or | 0008| enforce the obligations arising out of the omissions, negligence, | 0009| wrongful acts, misconduct or malpractice of the type described in | 0010| Subsection (c) unless such partner is personally liable under Subsection | 0011| (d). | 0012| Section 307. ACTIONS BY AND AGAINST PARTNERSHIP AND PARTNERS.-- | 0013| (a) A partnership may sue and be sued in the name of the | 0014| partnership. | 0015| (b) An action may be brought against the partnership and any | 0016| or all of the partners in the same action or in separate actions. | 0017| (c) A judgment against a partnership is not by itself a | 0018| judgment against a partner. A judgment against a partnership may not be | 0019| satisfied from a partner's assets unless there is also a judgment | 0020| against the partner. | 0021| (d) A judgment creditor of a partner may not levy execution | 0022| against the assets of the partner to satisfy a judgment based on a claim | 0023| against the partnership unless: | 0024| (1) a judgment based on the same claim has been | 0025| obtained against the partnership and a writ of execution on the judgment | 0001| has been returned unsatisfied in whole or in part; | 0002| (2) the partnership is a debtor in bankruptcy; | 0003| (3) the partner has agreed that the creditor need not | 0004| exhaust partnership assets; | 0005| (4) a court grants permission to the judgment creditor | 0006| to levy execution against the assets of a partner based on a finding | 0007| that partnership assets subject to execution are clearly insufficient to | 0008| satisfy the judgment, that exhaustion of partnership assets is | 0009| excessively burdensome, or that the grant of permission is an | 0010| appropriate exercise of the court's equitable powers; or | 0011| (5) liability is imposed on the partner by law or | 0012| contract independent of the existence of the partnership. | 0013| (e) This section applies to any partnership liability or | 0014| obligation resulting from a representation by a partner or purported | 0015| partner under Section 308. | 0016| Section 308. LIABILITY OF PURPORTED PARTNER.-- | 0017| (a) If a person, by words or conduct, purports to be a | 0018| partner, or consents to being represented by another as a partner, in a | 0019| partnership or with one or more persons not partners, the purported | 0020| partner is liable to a person to whom the representation is made, if | 0021| that person, relying on the representation, enters into a transaction | 0022| with the actual or purported partnership. If the representation, either | 0023| by the purported partner or by a person with the purported partner's | 0024| consent, is made in a public manner, the purported partner is liable to | 0025| a person who relies upon the purported partnership even if the purported | 0001| partner is not aware of being held out as a partner to the claimant. If | 0002| partnership liability results, the purported partner is liable with | 0003| respect to that liability as if the purported partner were a partner. | 0004| If no partnership liability results, the purported partner is liable | 0005| with respect to that liability jointly and severally with any other | 0006| person consenting to the representation. | 0007| (b) If a person is thus represented to be a partner in an | 0008| existing partnership, or with one or more persons not partners, the | 0009| purported partner is an agent of persons consenting to the | 0010| representation to bind them to the same extent and in the same manner as | 0011| if the purported partner were a partner, with respect to persons who | 0012| enter into transactions in reliance upon the representation. If all of | 0013| the partners of the existing partnership consent to the representation, | 0014| a partnership act or obligation results. If fewer than all of the | 0015| partners of the existing partnership consent to the representation, the | 0016| person acting and the partners consenting to the representation are | 0017| jointly and severally liable. | 0018| (c) A person is not liable as a partner merely because the | 0019| person is named by another in a statement of partnership authority. | 0020| (d) A person does not continue to be liable as a partner | 0021| merely because of a failure to file a statement of dissociation or to | 0022| amend a statement of partnership authority to indicate the partner's | 0023| dissociation from the partnership. | 0024| (e) Except as otherwise provided in Subsections (a) and (b), | 0025| persons who are not partners as to each other are not liable as partners | 0001| to other persons. | 0002| ARTICLE 4 | 0003| RELATIONS OF PARTNERS TO EACH OTHER AND TO PARTNERSHIP | 0004| Section 401. PARTNER'S RIGHTS AND DUTIES.-- | 0005| (a) Each partner is deemed to have an account that is: | 0006| (1) credited with an amount equal to the money plus | 0007| the value of any other property, net of the amount of any liabilities, | 0008| the partner contributes to the partnership and the partner's share of | 0009| the partnership profits; and | 0010| (2) charged with an amount equal to the money plus the | 0011| value of any other property, net of the amount of any liabilities, | 0012| distributed by the partnership to the partner and the partner's share of | 0013| the partnership losses. | 0014| (b) Each partner is entitled to an equal share of the | 0015| partnership profits and, except as otherwise provided in Section 306 and | 0016| Section 54-1-48 NMSA 1978, is chargeable with a share of the partnership | 0017| losses in proportion to the partner's share of the profits. | 0018| (c) A partnership shall reimburse a partner for payments | 0019| made and indemnify a partner for liabilities incurred by the partner in | 0020| the ordinary course of the business of the partnership or for the | 0021| preservation of its business or property. | 0022| (d) A partnership shall reimburse a partner for an advance | 0023| to the partnership beyond the amount of capital the partner agreed to | 0024| contribute. | 0025| (e) A payment or advance made by a partner which gives rise | 0001| to a partnership obligation under Subsection (c) or (d) constitutes a | 0002| loan to the partnership which accrues interest from the date of the | 0003| payment or advance. | 0004| (f) Each partner has equal rights in the management and | 0005| conduct of the partnership business. | 0006| (g) A partner may use or possess partnership property only | 0007| on behalf of the partnership. | 0008| (h) A partner is not entitled to remuneration for services | 0009| performed for the partnership, except for reasonable compensation for | 0010| services rendered in winding up the business of the partnership. | 0011| (i) A person may become a partner only with the consent of | 0012| all of the partners. | 0013| (j) A difference arising as to a matter in the ordinary | 0014| course of business of a partnership may be decided by a majority of the | 0015| partners. An act outside the ordinary course of business of a | 0016| partnership and an amendment to the partnership agreement may be | 0017| undertaken only with the consent of all of the partners. | 0018| (k) This section does not affect the obligations of a | 0019| partnership to other persons under Section 301. | 0020| Section 402. DISTRIBUTIONS IN KIND.--A partner has no right to | 0021| receive, and may not be required to accept, a distribution in kind. | 0022| Section 403. PARTNER'S RIGHTS AND DUTIES WITH RESPECT TO | 0023| INFORMATION.-- | 0024| (a) A partnership shall keep its books and records, if any, | 0025| at its chief executive office. | 0001| (b) A partnership shall provide partners and their agents | 0002| and attorneys access to its books and records. It shall provide former | 0003| partners and their agents and attorneys access to books and records | 0004| pertaining to the period during which they were partners. The right of | 0005| access provides the opportunity to inspect and copy books and records | 0006| during ordinary business hours. A partnership may impose a reasonable | 0007| charge, covering the costs of labor and material, for copies of | 0008| documents furnished. | 0009| (c) Each partner and the partnership shall furnish to a | 0010| partner, and to the legal representative of a deceased partner or | 0011| partner under legal disability: | 0012| (1) without demand, any information concerning the | 0013| partnership's business and affairs reasonably required for the proper | 0014| exercise of the partner's rights and duties under the partnership | 0015| agreement or the Uniform Partnership Act (1994); and | 0016| (2) on demand, any other information concerning the | 0017| partnership's business and affairs, except to the extent the demand or | 0018| the information demanded is unreasonable or otherwise improper under the | 0019| circumstances. | 0020| Section 404. GENERAL STANDARDS OF PARTNER'S CONDUCT.-- | 0021| (a) The only fiduciary duties a partner owes to the | 0022| partnership and the other partners are the duty of loyalty and the duty | 0023| of care set forth in Subsections (b) and (c). | 0024| (b) A partner's duty of loyalty to the partnership and the | 0025| other partners is limited to the following: | 0001| (1) to account to the partnership and hold as trustee | 0002| for it any property, profit or benefit derived by the partner in the | 0003| conduct and winding up of the partnership business or derived from a use | 0004| by the partner of partnership property, including the appropriation of a | 0005| partnership opportunity; | 0006| (2) to refrain from dealing with the partnership in | 0007| the conduct or winding up of the partnership business as or on behalf of | 0008| a party having an interest adverse to the partnership; and | 0009| (3) to refrain from competing with the partnership in | 0010| the conduct of the partnership business before the dissolution of the | 0011| partnership. | 0012| (c) A partner's duty of care to the partnership and the | 0013| other partners in the conduct and winding up of the partnership business | 0014| is limited to refraining from engaging in grossly negligent or reckless | 0015| conduct, intentional misconduct or a knowing violation of law. | 0016| (d) A partner shall discharge the duties to the partnership | 0017| and the other partners under the Uniform Partnership Act (1994) or under | 0018| the partnership agreement and exercise any rights consistently with the | 0019| obligation of good faith and fair dealing. | 0020| (e) A partner does not violate a duty or obligation under | 0021| the Uniform Partnership Act (1994) or under the partnership agreement | 0022| merely because the partner's conduct furthers the partner's own | 0023| interest. | 0024| (f) A partner may lend money to and transact other business | 0025| with the partnership, and as to each loan or transaction, the rights and | 0001| obligations of the partner are the same as those of a person who is not | 0002| a partner, subject to other applicable law. | 0003| (g) This section applies to a person winding up the | 0004| partnership business as the personal or legal representative of the last | 0005| surviving partner as if the person were a partner. | 0006| Section 405. ACTIONS BY PARTNERSHIP AND PARTNERS.-- | 0007| (a) A partnership may maintain an action against a partner | 0008| for a breach of the partnership agreement, or for the violation of a | 0009| duty to the partnership, causing harm to the partnership. | 0010| (b) A partner may maintain an action against the partnership | 0011| or another partner for legal or equitable relief, with or without an | 0012| accounting as to partnership business, to: | 0013| (1) enforce the partner's rights under the partnership | 0014| agreement; | 0015| (2) enforce the partner's rights under the Uniform | 0016| Partnership Act (1994), including: | 0017| (i) the partner's rights under Section 401, 403 | 0018| or 404; | 0019| (ii) the partner's right on dissociation to have | 0020| the partner's interest in the partnership purchased pursuant to Section | 0021| 701 or enforce any other right under Article 6 or 7; or | 0022| (iii) the partner's right to compel a dissolution | 0023| and winding up of the partnership business under Section 801 or enforce | 0024| any other right under Article 8; or | 0025| (3) enforce the rights and otherwise protect the | 0001| interests of the partner, including rights and interests arising | 0002| independently of the partnership relationship. | 0003| (c) The accrual of, and any time limitation on, a right of | 0004| action for a remedy under this section is governed by other law. A | 0005| right to an accounting upon a dissolution and winding up does not revive | 0006| a claim barred by law. | 0007| Section 406. CONTINUATION OF PARTNERSHIP BEYOND DEFINITE TERM OR | 0008| PARTICULAR UNDERTAKING.-- | 0009| (a) If a partnership for a definite term or particular | 0010| undertaking is continued, without an express agreement, after the | 0011| expiration of the term or completion of the undertaking, the rights and | 0012| duties of the partners remain the same as they were at the expiration or | 0013| completion, so far as is consistent with a partnership at will. | 0014| (b) If the partners, or those of them who habitually acted | 0015| in the business during the term or undertaking, continue the business | 0016| without any settlement or liquidation of the partnership, they are | 0017| presumed to have agreed that the partnership will continue. | 0018| ARTICLE 5 | 0019| TRANSFEREES AND CREDITORS OF PARTNER | 0020| Section 501. PARTNER NOT CO-OWNER OF PARTNERSHIP PROPERTY.--A | 0021| partner is not a co-owner of partnership property and has no interest in | 0022| partnership property which can be transferred, either voluntarily or | 0023| involuntarily. | 0024| Section 502. PARTNER'S TRANSFERABLE INTEREST IN | 0025| PARTNERSHIP.--The only transferable interest of a partner in the | 0001| partnership is the partner's share of the profits and losses of the | 0002| partnership and the partner's right to receive distributions. The | 0003| interest is personal property. | 0004| Section 503. TRANSFER OF PARTNER'S TRANSFERABLE | 0005| INTEREST.-- | 0006| (a) A transfer, in whole or in part, of a partner's | 0007| transferable interest in the partnership: | 0008| (1) is permissible; | 0009| (2) does not by itself cause the partner's | 0010| dissociation or a dissolution and winding up of the partnership | 0011| business; and | 0012| (3) does not, as against the other partners or the | 0013| partnership, entitle the transferee, during the continuance of the | 0014| partnership, to participate in the management or conduct of the | 0015| partnership business, to require access to information concerning | 0016| partnership transactions or to inspect or copy the partnership books or | 0017| records. | 0018| (b) A transferee of a partner's transferable interest in the | 0019| partnership has a right: | 0020| (1) to receive, in accordance with the transfer, | 0021| distributions to which the transferor would otherwise be entitled; | 0022| (2) to receive upon the dissolution and winding up of | 0023| the partnership business, in accordance with the transfer, the net | 0024| amount otherwise distributable to the transferor; and | 0025| (3) to seek under Section 801(6) a judicial | 0001| determination that it is equitable to wind up the partnership business. | 0002| (c) In a dissolution and winding up, a transferee is | 0003| entitled to an account of partnership transactions only from the date of | 0004| the latest account agreed to by all of the partners. | 0005| (d) Upon transfer, the transferor retains the rights and | 0006| duties of a partner other than the interest in distributions | 0007| transferred. | 0008| (e) A partnership need not give effect to a transferee's | 0009| rights under this section until it has notice of the transfer. | 0010| (f) A transfer of a partner's transferable interest in the | 0011| partnership in violation of a restriction on transfer contained in the | 0012| partnership agreement is ineffective as to a person having notice of the | 0013| restriction at the time of transfer. | 0014| Section 504. PARTNER'S TRANSFERABLE INTEREST SUBJECT TO CHARGING | 0015| ORDER.-- | 0016| (a) On application by a judgment creditor of a partner or of | 0017| a partner's transferee, a court having jurisdiction may charge the | 0018| transferable interest of the judgment debtor to satisfy the judgment. | 0019| The court may appoint a receiver of the share of the distributions due | 0020| or to become due to the judgment debtor in respect of the partnership | 0021| and make all other orders, directions, accounts and inquiries the | 0022| judgment debtor might have made or which the circumstances of the case | 0023| may require. | 0024| (b) A charging order constitutes a lien on the judgment | 0025| debtor's transferable interest in the partnership. The court may order | 0001| a foreclosure of the interest subject to the charging order at any time. | 0002| The purchaser at the foreclosure sale has the rights of a transferee. | 0003| (c) At any time before foreclosure, an interest charged may | 0004| be redeemed: | 0005| (1) by the judgment debtor; | 0006| (2) with property other than partnership property, by | 0007| one or more of the other partners; or | 0008| (3) with partnership property, by one or more of the | 0009| other partners with the consent of all of the partners whose interests | 0010| are not so charged. | 0011| (d) The Uniform Partnership Act (1994) does not deprive a | 0012| partner of a right under exemption laws with respect to the partner's | 0013| interest in the partnership. | 0014| (e) This section provides the exclusive remedy by which a | 0015| judgment creditor of a partner or partner's transferee may satisfy a | 0016| judgment out of the judgment debtor's transferable interest in the | 0017| partnership. | 0018| ARTICLE 6 | 0019| PARTNER'S DISSOCIATION | 0020| Section 601. EVENTS CAUSING PARTNER'S DISSOCIATION.-- | 0021| A partner is dissociated from a partnership upon the occurrence of any | 0022| of the following events: | 0023| (1) the partnership's having notice of the partner's express | 0024| will to withdraw as a partner or on a later date specified by the | 0025| partner; | 0001| (2) an event agreed to in the partnership agreement as | 0002| causing the partner's dissociation; | 0003| (3) the partner's expulsion pursuant to the partnership | 0004| agreement; | 0005| (4) the partner's expulsion by the unanimous vote of the | 0006| other partners if: | 0007| (i) it is unlawful to carry on the partnership | 0008| business with that partner; | 0009| (ii) there has been a transfer of all or substantially | 0010| all of that partner's transferable interest in the partnership, other | 0011| than a transfer for security purposes, or a court order charging the | 0012| partner's interest, which has not been foreclosed; | 0013| (iii) within ninety days after the partnership | 0014| notifies a corporate partner that it will be expelled because it has | 0015| filed a certificate of dissolution or the equivalent, its charter has | 0016| been revoked or its right to conduct business has been suspended by the | 0017| jurisdiction of its incorporation, there is no revocation of the | 0018| certificate of dissolution or no reinstatement of its charter or its | 0019| right to conduct business; or | 0020| (iv) a partnership that is a partner has been | 0021| dissolved and its business is being wound up; | 0022| (5) on application by the partnership or another partner, | 0023| the partner's expulsion by judicial determination because: | 0024| (i) the partner engaged in wrongful conduct that | 0025| adversely and materially affected the partnership business; | 0001| (ii) the partner willfully or persistently committed a | 0002| material breach of the partnership agreement or of a duty owed to the | 0003| partnership or the other partners under Section 404; or | 0004| (iii) the partner engaged in conduct relating to the | 0005| partnership business which makes it not reasonably practicable to carry | 0006| on the business in partnership with the partner; | 0007| (6) the partner's: | 0008| (i) becoming a debtor in bankruptcy; | 0009| (ii) executing an assignment for the benefit of | 0010| creditors; | 0011| (iii) seeking, consenting to or acquiescing in the | 0012| appointment of a trustee, receiver or liquidator of that partner or of | 0013| all or substantially all of that partner's property; or | 0014| (iv) failing, within ninety days after the | 0015| appointment, to have vacated or stayed the appointment of a trustee, | 0016| receiver or liquidator of the partner or of all or substantially all of | 0017| the partner's property obtained without the partner's consent or | 0018| acquiescence or failing within ninety days after the expiration of a | 0019| stay to have the appointment vacated; | 0020| (7) in the case of a partner who is an individual: | 0021| (i) the partner's death; | 0022| (ii) the appointment of a guardian or general | 0023| conservator for the partner; or | 0024| (iii) a judicial determination that the partner has | 0025| otherwise become incapable of performing the partner's duties under the | 0001| partnership agreement; | 0002| (8) in the case of a partner that is a trust or is acting as | 0003| a partner by virtue of being a trustee of a trust, distribution of the | 0004| trust's entire transferable interest in the partnership, but not merely | 0005| by reason of the substitution of a successor trustee; | 0006| (9) in the case of a partner that is an estate or is acting | 0007| as a partner by virtue of being a personal representative of an estate, | 0008| distribution of the estate's entire transferable interest in the | 0009| partnership, but not merely by reason of the substitution of a successor | 0010| personal representative; or | 0011| (10) termination of a partner who is not an individual, | 0012| partnership, corporation, trust or estate. | 0013| Section 602. PARTNER'S POWER TO DISSOCIATE--WRONGFUL | 0014| DISSOCIATION.-- | 0015| (a) A partner has the power to dissociate at any time, | 0016| rightfully or wrongfully, by express will pursuant to Section 601(1). | 0017| (b) A partner's dissociation is wrongful only if: | 0018| (1) it is in breach of an express provision of the | 0019| partnership agreement; or | 0020| (2) in the case of a partnership for a definite term | 0021| or particular undertaking, before the expiration of the term or the | 0022| completion of the undertaking: | 0023| (i) the partner withdraws by express will, unless | 0024| the withdrawal follows within ninety days after another partner's | 0025| dissociation by death or otherwise under Section 601(6) through (10) or | 0001| wrongful dissociation under Section 602(b); | 0002| (ii) the partner is expelled by judicial | 0003| determination under Section 601(5); | 0004| (iii) the partner is dissociated by becoming a | 0005| debtor in bankruptcy; or | 0006| (iv) in the case of a partner who is not an | 0007| individual, trust other than a business trust or estate, the partner is | 0008| expelled or otherwise dissociated because it willfully dissolved or | 0009| terminated. | 0010| (c) A partner who wrongfully dissociates is liable to the | 0011| partnership and to the other partners for damages caused by the | 0012| dissociation. The liability is in addition to any other obligation of | 0013| the partner to the partnership or to the other partners. | 0014| Section 603. EFFECT OF PARTNER'S DISSOCIATION.-- | 0015| (a) If a partner's dissociation results in a dissolution and | 0016| winding up of the partnership business, Article 8 applies; otherwise, | 0017| Article 7 applies. | 0018| (b) Upon a partner's dissociation: | 0019| (1) the partner's right to participate in the | 0020| management and conduct of the partnership business terminates, except as | 0021| otherwise provided in Section 803; | 0022| (2) the partner's duty of loyalty under Section | 0023| 404(b)(3) terminates; and | 0024| (3) the partner's duty of loyalty under Section | 0025| 404(b)(1) and (2) and duty of care under Section 404(c) continue only | 0001| with regard to matters arising and events occurring before the partner's | 0002| dissociation, unless the partner participates in winding up the | 0003| partnership's business pursuant to Section 803. | 0004| ARTICLE 7 | 0005| PARTNER'S DISSOCIATION WHEN BUSINESS NOT WOUND UP | 0006| Section 701. PURCHASE OF DISSOCIATED PARTNER'S INTEREST.-- | 0007| (a) If a partner is dissociated from a partnership without | 0008| resulting in a dissolution and winding up of the partnership business | 0009| under Section 801, the partnership shall cause the dissociated partner's | 0010| interest in the partnership to be purchased for a buyout price | 0011| determined pursuant to Subsection (b). | 0012| (b) The buyout price of a dissociated partner's interest is | 0013| the amount that would have been distributable to the dissociating | 0014| partner under Section 807(b) if, on the date of dissociation, the assets | 0015| of the partnership were sold at a price equal to the greater of the | 0016| liquidation value or the value based on a sale of the entire business as | 0017| a going concern without the dissociated partner and the partnership were | 0018| wound up as of that date. Interest must be paid from the date of | 0019| dissociation to the date of payment. | 0020| (c) Damages for wrongful dissociation under Section 602(b), | 0021| and all other amounts owing, whether or not presently due, from the | 0022| dissociated partner to the partnership, must be offset against the | 0023| buyout price. Interest must be paid from the date the amount owed | 0024| becomes due to the date of payment. | 0025| (d) A partnership shall indemnify a dissociated partner | 0001| whose interest is being purchased against all partnership liabilities, | 0002| whether incurred before or after the dissociation, except liabilities | 0003| incurred by an act of the dissociated partner under Section 702. | 0004| (e) If no agreement for the purchase of a dissociated | 0005| partner's interest is reached within one hundred twenty days after a | 0006| written demand for payment, the partnership shall pay, or cause to be | 0007| paid, in cash to the dissociated partner the amount the partnership | 0008| estimates to be the buyout price and accrued interest, reduced by any | 0009| offsets and accrued interest under Subsection (c). | 0010| (f) If a deferred payment is authorized under Subsection | 0011| (h), the partnership may tender a written offer to pay the amount it | 0012| estimates to be the buyout price and accrued interest, reduced by any | 0013| offsets under Subsection (c), stating the time of payment, the amount | 0014| and type of security for payment and the other terms and conditions of | 0015| the obligation. | 0016| (g) The payment or tender required by Subsection (e) or (f) | 0017| must be accompanied by the following: | 0018| (1) a statement of partnership assets and liabilities | 0019| as of the date of dissociation; | 0020| (2) the latest available partnership balance sheet and | 0021| income statement, if any; | 0022| (3) an explanation of how the estimated amount of the | 0023| payment was calculated; and | 0024| (4) written notice that the payment is in full | 0025| satisfaction of the obligation to purchase unless, within one hundred | 0001| twenty days after the written notice, the dissociated partner commences | 0002| an action to determine the buyout price, any offsets under Subsection | 0003| (c) or other terms of the obligation to purchase. | 0004| (h) A partner who wrongfully dissociates before the | 0005| expiration of a definite term or the completion of a particular | 0006| undertaking is not entitled to payment of any portion of the buyout | 0007| price until the expiration of the term or completion of the undertaking, | 0008| unless the partner establishes to the satisfaction of the court that | 0009| earlier payment will not cause undue hardship to the business of the | 0010| partnership. A deferred payment must be adequately secured and bear | 0011| interest. | 0012| (i) A dissociated partner may maintain an action against the | 0013| partnership, pursuant to Section 405(b)(2)(ii), to determine the buyout | 0014| price of that partner's interest, any offsets under Subsection (c), or | 0015| other terms of the obligation to purchase. The action must be commenced | 0016| within one hundred twenty days after the partnership has tendered | 0017| payment or an offer to pay or within one year after written demand for | 0018| payment if no payment or offer to pay is tendered. The court shall | 0019| determine the buyout price of the dissociated partner's interest, any | 0020| offset due under Subsection (c), and accrued interest and enter judgment | 0021| for any additional payment or refund. If deferred payment is authorized | 0022| under Subsection (h), the court shall also determine the security for | 0023| payment and other terms of the obligation to purchase. The court may | 0024| assess reasonable attorneys' fees and the fees and expenses of | 0025| appraisers or other experts for a party to the action, in amounts the | 0001| court finds equitable, against a party that the court finds acted | 0002| arbitrarily, vexatiously or not in good faith. The finding may be based | 0003| on the partnership's failure to tender payment or an offer to pay or to | 0004| comply with Subsection (g). | 0005| Section 702. DISSOCIATED PARTNER'S POWER TO BIND AND LIABILITY TO | 0006| PARTNERSHIP.-- | 0007| (a) For two years after a partner dissociates without | 0008| resulting in a dissolution and winding up of the partnership business, | 0009| the partnership, including a surviving partnership under Article 9, is | 0010| bound by an act of the dissociated partner which would have bound the | 0011| partnership under Section 301 before dissociation only if at the time of | 0012| entering into the transaction the other party: | 0013| (1) reasonably believed that the dissociated partner | 0014| was then a partner; | 0015| (2) did not have notice of the partner's dissociation; | 0016| and | 0017| (3) is not deemed to have had knowledge under Section | 0018| 303(e) or notice under Section 704(c). | 0019| (b) A dissociated partner is liable to the partnership for | 0020| any damage caused to the partnership arising from an obligation incurred | 0021| by the dissociated partner after dissociation for which the partnership | 0022| is liable under Subsection (a). | 0023| Section 703. DISSOCIATED PARTNER'S LIABILITY TO OTHER PERSONS.-- | 0024| (a) A partner's dissociation does not of itself discharge | 0025| the partner's liability for a partnership obligation incurred before | 0001| dissociation. A dissociated partner is not liable for a partnership | 0002| obligation incurred after dissociation, except as otherwise provided in | 0003| Subsection (b). | 0004| (b) A partner who dissociates without resulting in a | 0005| dissolution and winding up of the partnership business is liable as a | 0006| partner to the other party in a transaction entered into by the | 0007| partnership, or a surviving partnership under Article 9, within two | 0008| years after the partner's dissociation, only if the liability is owed | 0009| for which the partner is liable under Section 306 and Section 54-1-48 | 0010| NMSA 1978 and at the time of entering into the transaction the other | 0011| party: | 0012| (1) reasonably believed that the dissociated partner | 0013| was then a partner; | 0014| (2) did not have notice of the partner's dissociation; | 0015| and | 0016| (3) is not deemed to have had knowledge under Section | 0017| 303(e) or notice under Section 704(c). | 0018| (c) By agreement with the partnership creditor and the | 0019| partners continuing the business, a dissociated partner may be released | 0020| from liability for a partnership obligation. | 0021| (d) A dissociated partner is released from liability for a | 0022| partnership obligation if a partnership creditor, with notice of the | 0023| partner's dissociation but without the partner's consent, agrees to a | 0024| material alteration in the nature or time of payment of a partnership | 0025| obligation. | 0001| Section 704. STATEMENT OF DISSOCIATION.-- | 0002| (a) A dissociated partner or the partnership may file a | 0003| statement of dissociation stating the name of the partnership and that | 0004| the partner is dissociated from the partnership. | 0005| (b) A statement of dissociation is a limitation on the | 0006| authority of a dissociated partner for the purposes of Section 303(d) | 0007| and (e). | 0008| (c) For the purposes of Sections 702(a)(3) and 703(b)(3), a | 0009| person not a partner is deemed to have notice of the dissociation ninety | 0010| days after the statement of dissociation is filed. | 0011| Section 705. CONTINUED USE OF PARTNERSHIP NAME.--Continued use of | 0012| a partnership name, or a dissociated partner's name as part thereof, by | 0013| partners continuing the business does not of itself make the dissociated | 0014| partner liable for an obligation of the partners or the partnership | 0015| continuing the business. | 0016| ARTICLE 8 | 0017| WINDING UP PARTNERSHIP BUSINESS | 0018| Section 801. EVENTS CAUSING DISSOLUTION AND WINDING UP OF | 0019| PARTNERSHIP BUSINESS.--A partnership is dissolved, and its business must | 0020| be wound up, only upon the occurrence of any of the following events: | 0021| (1) in a partnership at will, the partnership's having | 0022| notice from a partner, other than a partner who is dissociated under | 0023| Section 601(2) through (10), of that partner's express will to withdraw | 0024| as a partner or on a later date specified by the partner; | 0025| (2) in a partnership for a definite term or particular | 0001| undertaking: | 0002| (i) the expiration of ninety days after a partner's | 0003| dissociation by death or otherwise under Section 601(6) through (10) or | 0004| wrongful dissociation under Section 602(b), unless before that time a | 0005| majority in interest of the remaining partners, including partners who | 0006| have rightfully dissociated pursuant to Section 601(b)(i), agree to | 0007| continue the partnership; | 0008| (ii) the express will of all of the partners to wind | 0009| up the partnership business; or | 0010| (iii) the expiration of the term or the completion of | 0011| the undertaking; | 0012| (3) an event agreed to in the partnership agreement | 0013| resulting in the winding up of the partnership business; | 0014| (4) an event that makes it unlawful for all or substantially | 0015| all of the business of the partnership to be continued, but a cure of | 0016| illegality within ninety days after notice to the partnership of the | 0017| event is effective retroactively to the date of the event for purposes | 0018| of this section; | 0019| (5) on application by a partner, a judicial determination | 0020| that: | 0021| (i) the economic purpose of the partnership is likely | 0022| to be unreasonably frustrated; | 0023| (ii) another partner has engaged in conduct relating | 0024| to the partnership business which makes it not reasonably practicable to | 0025| carry on the business in partnership with that partner; or | 0001| (iii) it is not otherwise reasonably practicable to | 0002| carry on the partnership business in conformity with the partnership | 0003| agreement; or | 0004| (6) on application by a transferee of a partner's | 0005| transferable interest, a judicial determination that it is equitable to | 0006| wind up the partnership business: | 0007| (i) after the expiration of the term or completion of | 0008| the undertaking, if the partnership was for a definite term or | 0009| particular undertaking at the time of the transfer or entry of the | 0010| charging order that gave rise to the transfer; or | 0011| (ii) at any time, if the partnership was a partnership | 0012| at will at the time of the transfer or entry of the charging order that | 0013| gave rise to the transfer. | 0014| Section 802. PARTNERSHIP CONTINUES AFTER DISSOLUTION.-- | 0015| (a) Subject to Subsection (b), a partnership continues after | 0016| dissolution only for the purpose of winding up its business. The | 0017| partnership is terminated when the winding up of its business is | 0018| completed. | 0019| (b) At any time after the dissolution of a partnership and | 0020| before the winding up of its business is completed, all of the partners, | 0021| including any dissociating partner other than a wrongfully dissociating | 0022| partner, may waive the right to have the partnership's business wound up | 0023| and the partnership terminated. In that event: | 0024| (1) the partnership resumes carrying on its business | 0025| as if dissolution had never occurred, and any liability incurred by the | 0001| partnership or a partner after the dissolution and before the waiver is | 0002| determined as if dissolution had never occurred; and | 0003| (2) the rights of a third party accruing under Section | 0004| 804(1) or arising out of conduct in reliance on the dissolution before | 0005| the third party knew or received a notification of the waiver may not be | 0006| adversely affected. | 0007| Section 803. RIGHT TO WIND UP PARTNERSHIP BUSINESS.-- | 0008| (a) After dissolution, a partner who has not wrongfully | 0009| dissociated may participate in winding up the partnership's business, | 0010| but on application of any partner, partner's legal representative or | 0011| transferee, the district court, for good cause shown, may order judicial | 0012| supervision of the winding up. | 0013| (b) The legal representative of the last surviving partner | 0014| may wind up a partnership's business. | 0015| (c) A person winding up a partnership's business may | 0016| preserve the partnership business or property as a going concern for a | 0017| reasonable time, prosecute and defend actions and proceedings, whether | 0018| civil, criminal or administrative, settle and close the partnership's | 0019| business, dispose of and transfer the partnership's property, discharge | 0020| the partnership's liabilities, distribute the assets of the partnership | 0021| pursuant to Section 807, settle disputes by mediation or arbitration and | 0022| perform other necessary acts. | 0023| Section 804. PARTNER'S POWER TO BIND PARTNERSHIP AFTER | 0024| DISSOLUTION.--Subject to Section 805, a partnership is bound by a | 0025| partner's act after dissolution that: | 0001| (1) is appropriate for winding up the partnership business; | 0002| or | 0003| (2) would have bound the partnership under Section 301 | 0004| before dissolution, if the other party to the transaction did not have | 0005| notice of the dissolution. | 0006| Section 805. STATEMENT OF DISSOLUTION.-- | 0007| (a) After dissolution, a partner who has not wrongfully | 0008| dissociated may file a statement of dissolution stating the name of the | 0009| partnership and that the partnership has dissolved and is winding up its | 0010| business. | 0011| (b) A statement of dissolution cancels a filed statement of | 0012| partnership authority for the purposes of Section 303(d) and is a | 0013| limitation on authority for the purposes of Section 303(e). | 0014| (c) For the purposes of Sections 301 and 804, a person not a | 0015| partner is deemed to have notice of the dissolution and the limitation | 0016| on the partners' authority as a result of the statement of dissolution | 0017| ninety days after it is filed. | 0018| (d) After filing and, if appropriate, recording a statement | 0019| of dissolution, a dissolved partnership may file and, if appropriate, | 0020| record a statement of partnership authority which will operate with | 0021| respect to a person not a partner as provided in Section 303(d) and (e) | 0022| in any transaction, whether or not the transaction is appropriate for | 0023| winding up the partnership business. | 0024| Section 806. PARTNER'S LIABILITY TO OTHER PARTNERS AFTER | 0025| DISSOLUTION.-- | 0001| (a) Except as otherwise provided in Subsection (b), after | 0002| dissolution a partner is liable to the other partners for the partner's | 0003| share of any partnership liability incurred under Section 804, unless | 0004| the liability is not one for which the partner is liable under Section | 0005| 306 and Section 54-1-48 NMSA 1978. | 0006| (b) A partner who, with knowledge of the dissolution, incurs | 0007| a partnership liability under Section 804(2) by an act that is not | 0008| appropriate for winding up the partnership business is liable to the | 0009| partnership for any damage caused to the partnership arising from the | 0010| liability. | 0011| Section 807. SETTLEMENT OF ACCOUNTS AND CONTRIBUTIONS AMONG | 0012| PARTNERS.-- | 0013| (a) In winding up a partnership's business, the assets of | 0014| the partnership, including the contributions of the partners required by | 0015| this section, must be applied to discharge its obligations to creditors, | 0016| including, to the extent permitted by law, partners who are creditors. | 0017| Any surplus must be applied to pay in cash the net amount distributable | 0018| to partners in accordance with their right to distributions under | 0019| Subsection (b). | 0020| (b) Each partner is entitled to a settlement of all | 0021| partnership accounts upon winding up the partnership business. In | 0022| settling accounts among the partners, the profits and losses that result | 0023| from the liquidation of the partnership assets must be credited and | 0024| charged to the partner's accounts. The partnership shall make a | 0025| distribution to a partner in an amount equal to any excess of the | 0001| credits over the charges in the partner's account. Except as otherwise | 0002| provided in Section 306 and Section 51-1-48 NMSA 1978, a partner shall | 0003| contribute to the partnership an amount equal to any excess of the | 0004| charges over the credits in the partner's account. | 0005| (c) If a partner fails to contribute, all of the other | 0006| partners shall contribute, in the proportions in which those partners | 0007| share partnership losses, the additional amount necessary to satisfy the | 0008| partnership obligations. A partner or partner's legal representative | 0009| may recover from the other partners any contributions the partner makes | 0010| to the extent the amount contributed exceeds that partner's share of the | 0011| partnership obligations. | 0012| (d) Except as otherwise provided in Section 306 and Section | 0013| 54-1-48 NMSA 1978, after the settlement of accounts, each partner shall | 0014| contribute, in the proportion in which the partner shares partnership | 0015| losses, the amount necessary to satisfy partnership obligations that | 0016| were not known at the time of the settlement. | 0017| (e) The estate of a deceased partner is liable for the | 0018| partner's obligation to contribute to the partnership. | 0019| (f) An assignee for the benefit of creditors of a | 0020| partnership or a partner, or a person appointed by a court to represent | 0021| creditors of a partnership or a partner, may enforce a partner's | 0022| obligation to contribute to the partnership. | 0023| ARTICLE 9 | 0024| CONVERSIONS AND MERGERS | 0025| Section 901. DEFINITIONS.--As used in this article: | 0001| (1) "general partner" means a partner in a partnership and a | 0002| general partner in a limited partnership; | 0003| (2) "limited partner" means a limited partner in a limited | 0004| partnership; | 0005| (3) "limited partnership" means a limited partnership | 0006| created under the Uniform Limited Partnership Act, predecessor law or | 0007| comparable law of another jurisdiction; and | 0008| (4) "partner" includes both a general partner and a limited | 0009| partner. | 0010| Section 902. CONVERSION OF PARTNERSHIP TO LIMITED PARTNERSHIP.-- | 0011| (a) A partnership may be converted to a limited partnership | 0012| pursuant to this section. | 0013| (b) The terms and conditions of a conversion of a | 0014| partnership to a limited partnership must be approved by all of the | 0015| partners or by a number or percentage specified for conversion in the | 0016| partnership agreement. | 0017| (c) After the conversion is approved by the partners, the | 0018| partnership shall file a certificate of limited partnership in the | 0019| jurisdiction in which the limited partnership is to be formed. The | 0020| certificate must include: | 0021| (1) a statement that the partnership was converted to | 0022| a limited partnership from a partnership; | 0023| (2) its former name; and | 0024| (3) a statement of the number of votes cast by the | 0025| partners for and against the conversion and, if the vote is less than | 0001| unanimous, the number or percentage required to approve the conversion | 0002| under the partnership agreement. | 0003| (d) The conversion takes effect when the certificate of | 0004| limited partnership is filed or at any later date specified in the | 0005| certificate. | 0006| (e) A general partner who becomes a limited partner as a | 0007| result of the conversion remains liable as a general partner for an | 0008| obligation incurred by the partnership before the conversion takes | 0009| effect. If the other party to a transaction with the limited | 0010| partnership reasonably believes when entering the transaction that the | 0011| limited partner is a general partner, the limited partner is liable for | 0012| an obligation incurred by the limited partnership within ninety days | 0013| after the conversion takes effect. The limited partner's liability for | 0014| all other obligations of the limited partnership incurred after the | 0015| conversion takes effect is that of a limited partner as provided in the | 0016| Uniform Limited Partnership Act. | 0017| Section 903. CONVERSION OF LIMITED PARTNERSHIP TO PARTNERSHIP.-- | 0018| (a) A limited partnership may be converted to a partnership | 0019| pursuant to this section. | 0020| (b) Notwithstanding a provision to the contrary in a limited | 0021| partnership agreement, the terms and conditions of a conversion of a | 0022| limited partnership to a partnership must be approved by all of the | 0023| partners. | 0024| (c) After the conversion is approved by the partners, the | 0025| limited partnership shall cancel its certificate of limited partnership. | 0001| (d) The conversion takes effect when the certificate of | 0002| limited partnership is canceled. | 0003| (e) A limited partner who becomes a general partner as a | 0004| result of the conversion remains liable only as a limited partner for an | 0005| obligation incurred by the limited partnership before the conversion | 0006| takes effect. The partner is liable as a general partner for an | 0007| obligation of the partnership incurred after the conversion takes | 0008| effect. | 0009| Section 904. EFFECT OF CONVERSION--ENTITY UNCHANGED.-- | 0010| (a) A partnership or limited partnership that has been | 0011| converted pursuant to this article is for all purposes the same entity | 0012| that existed before the conversion. | 0013| (b) When a conversion takes effect: | 0014| (1) all property owned by the converting partnership | 0015| or limited partnership remains vested in the converted entity; | 0016| (2) all obligations of the converting partnership or | 0017| limited partnership continue as obligations of the converted entity; and | 0018| (3) an action or proceeding pending against the | 0019| converting partnership or limited partnership may be continued as if the | 0020| conversion had not occurred. | 0021| Section 905. MERGER OF PARTNERSHIPS.-- | 0022| (a) Pursuant to a plan of merger approved as provided in | 0023| Subsection (c), a partnership may be merged with one or more | 0024| partnerships or limited partnerships. | 0025| (b) The plan of merger must set forth: | 0001| (1) the name of each partnership or limited | 0002| partnership that is a party to the merger; | 0003| (2) the name of the surviving entity into which the | 0004| other partnerships or limited partnerships will merge; | 0005| (3) whether the surviving entity is a partnership or a | 0006| limited partnership and the status of each partner; | 0007| (4) the terms and conditions of the merger; | 0008| (5) the manner and basis of converting the interests | 0009| of each party to the merger into interests or obligations of the | 0010| surviving entity or into money or other property in whole or part; and | 0011| (6) the street address of the surviving entity's chief | 0012| executive office. | 0013| (c) The plan of merger must be approved: | 0014| (1) in the case of a partnership that is a party to | 0015| the merger, by all of the partners, or a number or percentage specified | 0016| for merger in the partnership agreement; and | 0017| (2) in the case of a limited partnership that is a | 0018| party to the merger, by the vote required for approval of a merger by | 0019| the law of the state or foreign jurisdiction in which the limited | 0020| partnership is organized and, in the absence of such a specifically | 0021| applicable law, by all of the partners, notwithstanding a provision to | 0022| the contrary in the partnership agreement. | 0023| (d) After a plan of merger is approved and before the merger | 0024| takes effect, the plan may be amended or abandoned as provided in the | 0025| plan. | 0001| (e) The merger takes effect on the later of: | 0002| (1) the approval of the plan of merger by all parties | 0003| to the merger, as provided in Subsection (c); | 0004| (2) the filing of all documents required by law to be | 0005| filed as a condition to the effectiveness of the merger; or | 0006| (3) any effective date specified in the plan of | 0007| merger. | 0008| Section 906. EFFECT OF MERGER.-- | 0009| (a) When a merger takes effect: | 0010| (1) the separate existence of every partnership or | 0011| limited partnership that is a party to the merger, other than the | 0012| surviving entity, ceases; | 0013| (2) all property owned by each of the merged | 0014| partnerships or limited partnerships vests in the surviving entity; | 0015| (3) all obligations of every partnership or limited | 0016| partnership that is a party to the merger become the obligations of the | 0017| surviving entity; and | 0018| (4) an action or proceeding pending against a | 0019| partnership or limited partnership that is a party to the merger may be | 0020| continued as if the merger had not occurred or the surviving entity may | 0021| be substituted as a party to the action or proceeding. | 0022| (b) The secretary of state of this state is the agent for | 0023| service of process in an action or proceeding against a surviving | 0024| foreign partnership or limited partnership to enforce an obligation of a | 0025| domestic partnership or limited partnership that is a party to a merger. | 0001| The surviving entity shall promptly notify the secretary of state of the | 0002| mailing address of its chief executive office and of any change of | 0003| address. Upon receipt of process, the secretary of state shall mail a | 0004| copy of the process to the surviving foreign partnership or limited | 0005| partnership. | 0006| (c) A partner of the surviving partnership or limited | 0007| partnership is liable for: | 0008| (1) all obligations of a party to the merger for which | 0009| the partner was personally liable before the merger; | 0010| (2) all other obligations of the surviving entity | 0011| incurred before the merger by a party to the merger, but those | 0012| obligations may be satisfied only out of property of the entity; and | 0013| (3) all obligations of the surviving entity incurred | 0014| after the merger takes effect, but those obligations may be satisfied | 0015| only out of property of the entity if the partner is a limited partner. | 0016| (d) If the obligations incurred before the merger by a party | 0017| to the merger are not satisfied out of the property of the surviving | 0018| partnership or limited partnership, the general partners of that party | 0019| immediately before the effective date of the merger shall contribute the | 0020| amount necessary to satisfy that party's obligations to the surviving | 0021| entity, in the manner provided in Section 807 or in the limited | 0022| partnership act of the jurisdiction in which the party was formed, as | 0023| the case may be, as if the merged party were dissolved. | 0024| (e) A partner of a party to a merger who does not become a | 0025| partner of the surviving partnership or limited partnership is | 0001| dissociated from the entity, of which that partner was a partner, as of | 0002| the date the merger takes effect. The surviving entity shall cause the | 0003| partner's interest in the entity to be purchased under Section 701 or | 0004| another statute specifically applicable to that party's interest with | 0005| respect to a merger. The surviving entity is bound under Section 702 by | 0006| an act of a general partner dissociated under this subsection, and the | 0007| partner is liable under Section 703 for transactions entered into by the | 0008| surviving entity after the merger takes effect. | 0009| Section 907. STATEMENT OF MERGER.-- | 0010| (a) After a merger, the surviving partnership or limited | 0011| partnership may file a statement that one or more partnerships or | 0012| limited partnerships have merged into the surviving entity. | 0013| (b) A statement of merger must contain: | 0014| (1) the name of each partnership or limited | 0015| partnership that is a party to the merger; | 0016| (2) the name of the surviving entity into which the | 0017| other partnerships or limited partnerships were merged; | 0018| (3) the street address of the surviving entity's chief | 0019| executive office and of an office in this state, if any; and | 0020| (4) whether the surviving entity is a partnership or a | 0021| limited partnership. | 0022| (c) Except as otherwise provided in Subsection (d), for the | 0023| purposes of Section 302, property of the surviving partnership or | 0024| limited partnership which before the merger was held in the name of | 0025| another party to the merger is property held in the name of the | 0001| surviving entity upon filing a statement of merger. | 0002| (d) For the purposes of Section 302, real property of the | 0003| surviving partnership or limited partnership which before the merger was | 0004| held in the name of another party to the merger is property held in the | 0005| name of the surviving entity upon recording a certified copy of the | 0006| statement of merger in the office for recording transfers of that real | 0007| property. | 0008| (e) A filed and, if appropriate, recorded statement of | 0009| merger, executed and declared to be accurate pursuant to Section 105(c), | 0010| stating the name of a partnership or limited partnership that is a party | 0011| to the merger in whose name property was held before the merger and the | 0012| name of the surviving entity, but not containing all of the other | 0013| information required by Subsection (b), operates with respect to the | 0014| partnerships or limited partnerships named to the extent provided in | 0015| Subsections (c) and (d). | 0016| Section 908. NONEXCLUSIVE.--This article is not exclusive. | 0017| Partnerships or limited partnerships may be converted or merged in any | 0018| other manner provided by law. | 0019| ARTICLE 10 | 0020| MISCELLANEOUS PROVISIONS | 0021| Section 1001.--UNIFORMITY OF APPLICATION AND | 0022| CONSTRUCTION.--The Uniform Partnership Act (1994) shall be applied and | 0023| construed to effectuate its general purpose to make uniform the law with | 0024| respect to the subject of that act among states enacting it. | 0025| Section 1002. SHORT TITLE.--This act may be cited as the "Uniform | 0001| Partnership Act (1994)". | 0002| Section 1003. SAVINGS CLAUSE.--The Uniform Partnership Act (1994) | 0003| does not affect an action or proceeding commenced or right accrued | 0004| before that act takes effect. | 0005| Section 1004. REPEAL.--Sections 54-1-1 through 54-1-43 NMSA 1978 | 0006| (being Laws 1947, Chapter 37, Sections 1 through 43, as amended) are | 0007| repealed. | 0008| Section 1005. SEVERABILITY.--If any provision of the Uniform | 0009| Partnership Act (1994) or its application to any person or circumstance | 0010| is held invalid, the invalidity does not affect other provisions or | 0011| applications of that act which can be given effect without the invalid | 0012| provision or application, and to this end the provisions of that act are | 0013| severable. | 0014| Section 1006. APPLICABILITY.-- | 0015| (a) Before January 1, 2000, the Uniform Partnership Act | 0016| (1994) governs only a partnership formed: | 0017| (1) after the effective date of that act, unless that | 0018| partnership is continuing the business of a dissolved partnership under | 0019| Section 54-1-41 NMSA 1978, a part of the prior Uniform Partnership Act; | 0020| and | 0021| (2) before the effective date of that act, that | 0022| elects, as provided by Subsection (c), to be governed by that act. | 0023| (b) After January 1, 2000, the Uniform Partnership Act | 0024| (1994) governs all partnerships. | 0025| (c) Before January 1, 2000, a partnership voluntarily may | 0001| elect, in the manner provided in its partnership agreement or by law for | 0002| amending the partnership agreement, to be governed by the Uniform | 0003| Partnership Act (1994). Except as otherwise provided in Section 306, | 0004| the provisions of that act relating to the liability of the | 0005| partnership's partners to third parties apply to limit those partners' | 0006| liability to a third party who had done business with the partnership | 0007| within one year preceding the partnership's election to be governed by | 0008| that act, only if the third party knows or has received a notification | 0009| of the partnership's election to be governed by that act. | 0010| Section 1007. EFFECTIVE DATE.--The effective date of the | 0011| provisions of this act is July 1, 1997. | 0012| | 0013| HB | 0014| 255 | 0015| Page  |