Winding Up and Terminating Limited Partnership
TEXAS BUSINESS ORGANIZATIONS
SUPPLEMENTAL WINDING UP AND TERMINATION PROVISIONS
§ 153.501. CANCELLATION OR REVOCATION OF EVENT REQUIRING WINDING UP; CONTINUATION OF BUSINESS.
(a) The limited partnership may cancel under § 11.152 an event requiring winding up arising from the expiration of its period of duration as specified in § 11.051(1) or from the occurrence of an event specified in its governing documents as specified in § 11.051(3) if, not later than the 90th day after the event, all remaining partners, or another group or percentage of partners as specified by the partnership agreement, agree in writing to continue the business of the limited partnership.
(b) The limited partnership may cancel under § 11.152 an event requiring winding up arising from an event of withdrawal of a general partner as specified in § 11.058(b) if:
(1) there remains at least one general partner and the partnership agreement permits the business of the limited partnership to be carried on by the remaining general partners and those remaining general partners carry on the business; or
(2) not later than one year after the event, all remaining partners, or another group or percentage of partners specified in the partnership agreement:
(A) agree in writing to continue the business of the limited partnership; and
(B) to the extent that they desire or if there are no remaining general partners, agree to the appointment of one or more new general partners.
(c) The appointment of one or more new general partners under Subsection (b)(2)(B) is effective from the date of withdrawal.
(d) To approve a revocation under § 11.151 by a limited partnership of a voluntary decision to wind up as specified in § 11.058(a), prior to filing the certificate of termination required by § 11.101, all remaining partners, or another group or percentage of partners as specified by the partnership agreement, must agree in writing to revoke the voluntary decision to wind up and continue the business of the limited partnership.
(e) The limited partnership may cancel under § 11.152 an event requiring winding up arising when there are no limited partners in the limited partnership, as specified in § 11.058(c), if, not later than the first anniversary of the date of the event requiring winding up:
(1) the legal representative or successor of the last remaining limited partner and all of the general partners agree to:
(A) continue the business of the limited partnership; and
(B) admit the legal representative or successor of the last remaining limited partner, or the person's nominee or designee, to the limited partnership as a limited partner, effective as of the date the event that caused the last remaining limited partner to cease to be a limited partner occurred; or
(2) a limited partner is admitted to the limited partnership in the manner provided by the partnership agreement, effective as of the date the event that caused the last remaining limited partner to cease to be a limited partner occurred.
§ 153.502. WINDING UP PROCEDURES.
(a) Except as provided by the partnership agreement, the winding up of the partnership's affairs shall be accomplished by:
(1) the general partners;
(2) if there are no general partners, the limited partners or a person chosen by the limited partners; or
(3) a person appointed by the court to carry out the winding up under Subsection (b).
(b) On application of a partner or a partner's legal representative or transferee, a court, on cause shown, may wind up the limited partnership's affairs and, in connection with the winding up, may appoint a person to carry out the liquidation and may make all other orders, directions, and inquiries that the circumstances require.
(c) § 11.052(a)(2) shall not be applicable to a limited partnership.
§ 153.503. POWERS OF PERSON CONDUCTING WIND UP.
(a) After the occurrence of an event requiring winding up of a limited partnership and until the filing of a certificate of termination as provided by § 11.101, unless a written partnership agreement provides otherwise, a person winding up the limited partnership's business in the name of and on behalf of the limited partnership may take the actions specified in §§ 11.052 and 11.053.
(b) The acts described by Subsection (a) do not create a liability for a limited partner that did not exist before an action to wind up the business of the partnership was taken.
§ 153.504. DISPOSITION OF ASSETS.
On the winding up of a limited partnership, its assets shall be paid or transferred as follows:
(1) to the extent otherwise permitted by law, to creditors, including partners who are creditors other than solely because of the application of § 153.207, for the payment or the making of reasonable provision for payment to satisfy the liabilities of the limited partnership;
(2) unless otherwise provided by the partnership agreement, to partners and former partners to satisfy the partnership's liability for distributions under § 153.111 or 153.209; and
(3) unless otherwise provided by the partnership agreement, to partners first for the return of their capital and second with respect to their partnership interests, in the proportions provided by §§ 153.208(a) and (b).
§ 153.505. APPROVAL OF REINSTATEMENT.
To approve a reinstatement of a limited partnership under § 11.202, all of the remaining partners, or another group or percentage of partners as specified by the partnership agreement, must agree in writing to reinstate and continue the business of the limited partnership.
§ 153.551. RECORDS.
(a) A domestic limited partnership shall maintain the following records in its principal office in the United States or make the records available in that office not later than the fifth day after the date on which a written request under § 153.552(a) is received:
(1) a current list that states:
(A) the name and mailing address of each partner, separately identifying in alphabetical order the general partners and the limited partners;
(B) the last known street address of the business or residence of each general partner;
(C) the percentage or other interest in the partnership owned by each partner; and
(D) if one or more classes or groups are established under the partnership agreement, the names of the partners who are members of each specified class or group;
(2) a copy of:
(A) the limited partnership's federal, state, and local information or income tax returns for each of the partnership's six most recent tax years;
(B) the partnership agreement and certificate of formation; and
(C) all amendments or restatements;
(3) copies of any document that creates, in the manner provided by the partnership agreement, classes or groups of partners;
(4) an executed copy of any powers of attorney under which the partnership agreement, certificate of formation, and all amendments or restatements to the agreement and certificate have been executed;
(5) unless contained in the written partnership agreement, a written statement of:
(A) the amount of the cash contribution and a description and statement of the agreed value of any other contribution made by each partner;
(B) the amount of the cash contribution and a description and statement of the agreed value of any other contribution that the partner has agreed to make in the future as an additional contribution;
(C) the events requiring additional contributions to be made or the date on which additional contributions are to be made;
(D) the events requiring the winding up of the limited partnership; and
(E) the date on which each partner in the limited partnership became a partner; and
(6) books and records of the accounts of the limited partnership.
(b) A limited partnership shall maintain its records in written form or in another form capable of being converted to written form in a reasonable time.
(c) A limited partnership shall keep in its registered office in this state and make available to a partner on reasonable request the street address of its principal office in the United States in which the records required by this § are maintained.
§ 153.552. EXAMINATION OF RECORDS AND INFORMATION.
(a) On written request stating a proper purpose, a partner or an assignee of a partnership interest may examine and copy, in person or through a representative, records required to be kept under § 153.551 and other information regarding the business, affairs, and financial condition of the limited partnership as is just and reasonable for the person to examine and copy.
(b) The records requested under Subsection (a) may be examined and copied at a reasonable time and at the partner's sole expense.
(c) On written request by a partner or an assignee of a partnership interest, the partnership shall provide to the requesting partner or assignee without charge copies of:
(1) the partnership agreement and certificate of formation and all amendments or restatements; and
(2) any tax return described by § 153.551(a)(2).
(d) A request made under Subsection (c) must be made to:
(1) the person who is designated to receive the request in the partnership agreement at the address designated in the partnership agreement; or
(2) if there is no designation, a general partner at the partnership's principal office in the United States.
§ 153.5521. PENALTY FOR REFUSAL TO PERMIT EXAMINATION OF CERTAIN RECORDS.
(a) A limited partnership that refuses to allow a partner or assignee of a partnership interest to examine and copy, on written request that complies with § 153.552(a), records or other information described by that § is liable to the partner or assignee for any cost or expense, including attorney's fees, incurred in enforcing the partner's or assignee's rights under § 153.552. The liability imposed on a limited partnership under this subsection is in addition to any other damages or remedy afforded to the partner or assignee by law.
(b) It is a defense to an action brought under this § that the person suing:
(1) has improperly used information obtained through a prior examination of the records or other information of the limited partnership or any other limited partnership under § 153.552; or
(2) was not acting in good faith or for a proper purpose in making the person's request for examination.
§ 153.553. EXECUTION OF FILINGS.
(a) Except as provided by Subsection (a-1), a filing instrument required by this code to be filed by a limited partnership with the secretary of state must be signed by at least one general partner.
(a-1) The following certificates shall be executed as follows:
(1) an initial certificate of formation must be signed as provided in § 3.004(b)(1);
(2) a certificate of amendment or restated certificate of formation must be signed by at least one general partner and by each other general partner designated in the certificate of amendment as a new general partner, unless signed and filed by a person under § 153.052(b) or (c), but the certificate of amendment need not be signed by a withdrawing general partner;
(3) a certificate of termination must be signed by all general partners participating in the winding up of the limited partnership's business or, if no general partners are winding up the limited partnership's business, by all nonpartner liquidators or, if the limited partners are winding up the limited partnership's business, by a majority-in-interest of the limited partners;
(4) a certificate of merger, conversion, or exchange filed on behalf of a domestic limited partnership must be signed as provided by Chapter 10; and
(5) a certificate filed under Subchapter G, Chapter 10, must be signed by the person designated by the court.
(b) Any person may sign a certificate or partnership agreement or amendment or restated certificate by an attorney in fact. A power of attorney relating to the signing of a certificate or partnership agreement or amendment or restated certificate by an attorney in fact:
(1) is not required to be sworn to, verified, or acknowledged;
(2) is not required to be filed with the secretary of state; and
(3) shall be retained with the partnership records under §§ 153.551 and 153.552.
(c) The execution of a certificate by a general partner or the execution of a written statement by a person under § 153.106(2) is an oath or affirmation, under a penalty of perjury, that, to the best of the executing party's knowledge and belief, the facts stated in the certificate or statement are true.
§ 153.554. EXECUTION, AMENDMENT, OR CANCELLATION BY JUDICIAL ORDER.
(a) If a person fails or refuses to execute or file a certificate as required by this chapter or Title 1 or to execute a partnership agreement, another person adversely affected by the failure or refusal may petition a court to direct the execution or filing of the certificate or the execution of the partnership agreement, as appropriate.
(b) If the court finds that the execution or filing of the certificate is proper and that a person required to execute or file the certificate has failed or refused to execute or file the certificate, the court shall order the secretary of state to record an appropriate certificate.
(c) The judicial remedy described by Subsection (b) is not a limit on the rights of a person to file a written statement under § 153.106(2).
(d) If the court finds that the partnership agreement should be executed and that a person required to execute the partnership agreement has failed or refused to execute the agreement, the court shall enter an order granting appropriate relief.
(e) If a court enters an order in favor of the adversely affected person requesting relief under this section, the court shall award to that person reasonable expenses, including reasonable attorney's fees.
§ 153.555. PERMITTED TRANSFER IN CONNECTION WITH RACETRACK LICENSE.
The following transfer relating to a limited partnership is not a prohibited transfer that violates § 2025.107(a), Occupations Code:
(1) a transfer by a general partnership of its assets to a limited partnership, the corporate general partner of which is controlled by the partners of the general partnership; or
(2) a transfer by a limited partnership of the beneficial use of or interest in any of its rights, privileges, or assets to a local development corporation incorporated before January 31, 1993, under Subchapter D, Chapter 431, Transportation Code.