Rhode Island has enacted the revised Uniform Limited Partnership Act and the revised Uniform Partnership Act, both of which took effect on January 1, 2023. The bills are intended to establish consistency with regard to entity formation requirements and business practices. Ultimately, the goal is to foster a more business-friendly climate within the state.
Under the revised Uniform Limited Partnership Act, limited partnerships (LPs) are impacted in the following ways:
- LPs formed in Rhode Island will have a self-contained statutory authority to rely upon, making it easier to identify the laws that govern them.
- Existing LPs will be allowed to opt to become Limited Liability Limited Partnerships (LLLPs).
- LPs will be provided a full, status-based shield against liability for entity obligations, even if the LP does not register as a LLLP.
- LPs and LLLPs will be permitted to have a perpetual status and will be required to file an annual report and maintain a registered agent for service of process. Existing partnerships will be required to file their first annual report by May 1, 2024.
The revised Uniform Partnership Act impacts partnerships in the following ways:
- Partnerships will now be defined as an entity and treated as a distinct body placed between the partners and the partnership assets.
- A partnership will be able to own property and sue and be sued in its own name.
- The act clearly outlines conditions for amending a partnership agreement, merging with another entity, having interest exchanges, converting to and from a partnership, and re-domesticating partnerships to Rhode Island.
- Clear instructions on the formation of a partnership are provided together with guidance on how to properly create agreements and tailor management structures.
- The act establishes basic standards of conduct for partners.
- The act also establishes perpetual status for registered Limited Liability Partnerships and, as such, LLPs will be required to file an annual report and maintain a registered agent for service of process. Existing Limited Liability Partnerships that conform to this act will be required to file their first annual report by May 1, 2024.