Legislative Wrap-Up, 0716 ALBJ, 77 The Alabama Lawyer 304 (2016)
The 2016 Legislative Session was an interesting one. It has been a hard session to put a particular focus on, although it was very active. On the heels of two special sessions in 2015, it was a focus to deal with the General Fund budget early and the legislature passed it prior to its “spring break” hiatus. Likewise, the Education Trust Fund passed the second house on the 22nd legislative day, although a conference committee was needed to hammer out the differences between the two houses. With the budgets done early, the legislature was able to deal with a broad array of issues. In the final analysis, two of the major discussion points, prison construction and how to best make use of the BP settlement funds, went unfinished in the final hours.
Complete
copies of the legislation addressed herein or any other
legislation considered during the 2016 Regular Session can be
found by visiting www.legislature.state.al.us and
clicking on the “Session Information”
tab.
Alabama Law Institute Legislation
Alabama Limited Partnership Law (act 2016- 379)
Representative Bill Poole and senator Cam Ward
• This act was proposed by the ALI Committee on Business Entitles as the latest step toward modernizing our business formation and governance laws.
• This act will bring our LP statute into line with the significant improvements made last year for LLCs.
Noteworthy features of this act are: ■ Contractual Nature
features of a limited partnership can be modified by the partners to suit their needs in a partnership agreement. This act sets out the default rules, but provides maximum flexibility through freedom to contract.
■ Mandatory Safeguards
Despite the emphasis on allowing the partners to make their own contract, the new LP law maintains certain obligations, such as the implied contractual covenant of good faith and fair dealing, cannot be modified.
■ Notice Filing
In keeping with the contractual nature of the limited partnership, the filings required to form, dissolve, merge or convert a limited partnership are designed only to notify the state and third parties that the limited partnership exists and how to contact it.
■ Agency
Unlike a limited liability company, the agency of a limited partnership is set by statute, and is vested in the general partners. Thus, the certificate of formation requires that the general partners be listed.
■ Harmonization
This act harmonizes, to the extent possible, the various processes of formation, filings, notice, amendment and restatement of certificates of formation, admission of limited partners and general partners, contributions and distributions, dissociation of partners and the effects thereof, transfers of interests, charging orders, rights of personal representatives, dissolution and winding up, direct and derivative actions and conversions and mergers.
■ Conversions
The process for conversions was slightly modified to take into...
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