Bloomberg Law ©2019 The Bureau of National Affairs, Inc.
to be filed with the Secretary of State to form a registered series, and the name of a registered series must begin with the
name of the limited partnership and be distinguishable from the names of other Delaware business entities or business
entities qualified or registered to do business in Delaware (Article 9 of the Delaware Uniform Commercial Code was also
amended effective Aug. 1, 2019 to provide that a registered series constitutes a “registered organization”).
Second, one or more registered series of a limited partnership may merge or consolidate with or into one or more other
registered series of the same limited partnership. Third, certificates of good standing and certificates of existence with
respect to registered series will be issued by the Secretary of State. Fourth, a protected series of a limited partnership may
convert to a registered series of the same limited partnership and a registered series of a limited partnership may convert
to a protected series of the same limited partnership. Finally, an annual franchise tax in the amount of $75 per registered
series will be required to be paid.
Division of a Limited Partnership. Pursuant to new Section 17-220 of the DRULPA, a limited partnership may divide into
one or more newly formed limited partnerships, with the dividing limited partnership either continuing its existence or
terminating as part of the division. A division of a limited partnership is effected by the adoption of a plan of division setting
forth the terms and conditions of the division, including, among others, the allocation of assets, property, rights, series,
debts, liabilities and duties of the dividing limited partnership among the resulting limited partnerships and, if it survives,
the dividing limited partnership; and the filing with the Secretary of State of a certificate of division and a certificate of
limited partnership for each newly formed limited partnership.
A plan of division will be given effect to divide the assets and liabilities of a limited partnership among the resulting limited
partnerships and, if it survives, the dividing limited partnership, so long as the plan of division does not constitute a
fraudulent conveyance under applicable law. With respect to any limited partnership formed prior to Aug. 1, 2019 that is
party to any written contract, indenture or other agreement entered into prior to Aug. 1, 2019 that by its terms restricts,
conditions or prohibits such limited partnership from (x) consummating a merger or consolidation with or into another
party or (y) transferring assets, such restriction shall be deemed to apply to a division as if it were a merger or consolidation
or transfer of assets.
The amendments also adopted a new subsection 17-301(b)(4) of the DRULPA to provide that a person is admitted as a
partner of a division partnership pursuant to a division approved in accordance with Section 17-220 of the DRULPA as
provided in the partnership agreement of such division partnership or in the plan of division and, in the event of any
inconsistencies, the plan of division controls.
New subsection 17-301(b)(4) also provides that a person is admitted as a partner of a limited partnership pursuant to a
division in which such limited partnership is not a division partnership in such division (for example, when interests are
issued by such limited partnership) as provided in the partnership agreement of such limited partnership. The division
provisions should prove to be valuable tools in limited partnership transactions including secondary sale transactions.
Statutory Public Benefit Limited Partnerships. Under the amendments, new subchapter XII of the DRULPA authorizes
the creation of statutory public benefit limited partnerships, which are similar to public benefit corporations organized
under subchapter XV of the Delaware General Corporation Law and public benefit limited liability companies formed
under subchapter XII of the DLLCA. Subchapter XII of the DRULPA is intended to provide a simple and efficient “opt-in”
procedure for forming a public benefit limited partnership. As with a public benefit corporation and a public benefit limited
liability company, a statutory public benefit limited partnership is intended to produce a public benefit and to operate in a
responsible and sustainable manner. New subchapter XII of the DRULPA does not limit the formation or operation of a
limited partnership formed or operated for a public benefit (including a limited partnership designated as a public benefit
limited partnership) that is not a statutory public benefit limited partnership.
Judicial Cancellation of Certificate of Limited Partnership. The amendments include new Section 17-112, which is similar
to Section 18-112 of the DLLCA and grants the Court of Chancery jurisdiction to cancel a certificate of limited partnership
for abuse or misuse of such limited partnership's powers, privileges or existence upon a motion by the Attorney General.
Upon such cancellation, the Court of Chancery has the power, by appointment of trustees, receivers or otherwise, to
administer and wind up the affairs of such limited partnership.