Uniform Limited Partnership Act - Explained
What is the Uniform Limited Partnership Act?
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What is the Uniform Limited Partnership Act (ULPA)?
The Uniform Limited Partnership Act (ULPA), together with a 1976 revision known as the Revised Uniform Limited Partnership Act (RULPA), is a uniform act that was formulated and promoted by the National Conference of Commissioners on Uniform State Laws (NCCUSL) in order to provide an adaptable and stable foundation for the organization of limited partnerships by U.S. states. The original ULPA traces its origin to 1916 and exhibits characteristics that are mostly typical of model statutes.
How Does the Uniform Limited Partnership Act Work?
The Uniform Limited Partnership Act (ULPA) was originally promulgated by the National Conference of Commissioners on Uniform State Laws (NCCUSL) in 1916 as a means to organize limited partnerships within the United States. In fact, ULPA and its general partnership counterpart, the Uniform Partnership Act (UPA) are the two acts that have been governing all partnerships across the country.
A Brief Timeline of the ULPA
- The Uniform Limited Partnership Act (ULPA) was first promulgated in 1916. It is also referred to today as ULPA-1916.
- ULPA received its first revision in 1976, whereupon it came to be variously referred to as the Revised Uniform Limited Partnership Act (RULPA), the Uniform Limited Partnership Act (1976), ULPA (1976) or RULPA (1976).
- Then, in 1985, the Act underwent another revision and came to be known as Uniform Limited Partnership Act (1976) with 1985 Amendments. However, the terms ULPA (1985) or RULPA (1985) are used ,more often today to refer to the 1985 revision.
- ULPA received a subsequent revision in the year 2001, which was unofficially and briefly known as Re-RULPA. However, the official terminology is Uniform Limited Partnership Act (2001) or ULPA (2001), in short.
- ULPA (2001) has already undergone two revisions, one in 2011 and the other in 2013 (which also happens to be the final revision of the Act as of May, 2019). Both of these revisions were made as part of the Harmonization of Business Entity Acts initiative, which sought to synchronize the language used in the ULPA with corresponding provisions in other uniform acts.
The Revised Uniform Partnership Act (RUPA)
Although the NCCUSLs first revision of the Uniform Partnership Act (UPA) was promulgated in 1992, the Act received two subsequent amendments in 1993 and 1994. It is the amendment of 1994 that was then commonly known as the Revised Uniform Partnership Act (RUPA). However, the subsequent 1996 and 1997 revisions of UPA also came to be termed RUPA, causing much confusion. As such, the NCCUSL came up with a new system of designation, where each revised version of the act is referred to as simply the Uniform Partnership Act, followed immediately by the year of its approval by NCCUSL mentioned within braces. Despite this clarification, ambiguity still exists in the usage of the term RUPA, which, to this day, is used to refer to any version of UPA except the original 1914 version.
UPA vs. RUPA
The roles played by both the Uniform Partnership Act (UPA) and the Revised Uniform Partnership Act (RUPA) in a partnership cannot be underestimated. Both versions have incorporated certain rules to govern a partnership relationship. These are:
- Rules pertaining to the formation of the partnership.
- Rules governing the ownership of partnership assets.
- Rules that assess the various fiduciary duties.
- Rules pertaining to the settlement of partnership disputes.
- Rules governing the termination of the partnership.
However, there are certain fundamental differences between the two. They are described below.
- Compared to UPA, RUPA provides a much more detailed understanding of the extent to which any partnership agreement is allowed to modify the rules and regulations set forth in the original statute.
- Unlike UPA, RUPA defines a partnership as an entity and not as a mere group of individuals. This, in turn, provides clarity on the nature of the partnership.
Enactment of the Uniform Limited Partnership Act by U.S. States
Every state in the United States, with the exception of Louisiana, adopted the 1914 version of the Uniform Limited Partnership Act (ULPA). Furthermore, 37 out of the 50 states have adopted the latest ULPA revision. The following states have adopted ULPA or a similar uniform act as of 1997.
|Alabama||District of Columbia||Maine||New Mexico||U.S. Virgin Islands|
|Colorado||Iowa||Nebraska||South Dakota *||West Virginia|
|Delaware||Kentucky||New Jersey||Texas *|
* These states have promulgated uniform acts similar to ULPA. Source: NCCUSL website.
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