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Chapter 1783 | Limited Partnership Associations

Section 1783.01 | Limited partnership associations.

When any number of persons, not less than three nor more than twenty-five, desire to form a limited partnership association for the purpose of conducting any business or occupation within the United States or elsewhere, except for dealing in real estate or for banking, whose principal office or place of business will be established and maintained in this state, by subscribing and contributing capital to such association, which capital shall alone be liable for its debts, such persons may sign and acknowledge a statement, in writing, before some officer competent to take the acknowledgment of deeds, in which must be set forth the full names of such persons; the amount of capital subscribed for by each; the total amount of capital, one third of which shall be paid within thirty days of the filing of their statement with the county recorder as provided in this section and two thirds of which shall be paid within twelve months thereafter; the character of the business to be conducted, and its location; the name of the association, with "limited" as part of it; the contemplated duration of the association, which in no case shall exceed twenty years; and the names of the officers of the association, selected in conformity with sections 1783.01 to 1783.12, inclusive, of the Revised Code. Any amendment of such statement shall be made only in like manner. Such statement and amendments must be recorded in the office of the county recorder of the proper county.

Such association shall not loan its credit, its name, or its capital to any person or corporation.

Section 1783.02 | Name of firm.

"Limited" shall be the last word of the name of every limited partnership association formed under sections 1783.01 to 1783.12, inclusive, of the Revised Code. Every such association must paint or affix, and keep painted or affixed, its name on the outside of every office or place in which its business is carried on, in a conspicuous position and in letters easily legible, and must have its full name mentioned in legible characters in all notices, advertisements, and other of its official publications, and in all bills of exchange, promissory notes, checks, orders for money, bills of lading, invoices, receipts, letters, and other writings used in the transaction of its business.

The omission of "limited," in the use of the name of the association, shall render every person participating in such omission, or knowingly acquiescing therein, liable for any indebtedness or liabilities arising therefrom.

Section 1783.03 | Control and management.

There shall be at least one meeting of the members of a limited partnership association in each year at which not less than three nor more than five managers must be elected, one of whom shall be the chairman, one the treasurer, and one the secretary, except that one may be both treasurer and secretary. Such managers shall hold their respective offices for one year, and until their successors are duly installed.

No debt shall be contracted, or liability incurred, for the association, except by one or more of such managers, and no liability for an amount exceeding five hundred dollars, except against the person incurring it, shall bind the association unless reduced to writing and signed by at least two such managers.

Section 1783.04 | Members may contribute capital in property rather than in cash.

Persons forming a limited partnership association may make contribution to the capital thereof in real or personal estate, mines, or other property, at a valuation to be approved by all the members subscribing to its capital, but in any case one half of the capital must be paid in cash. In the statement required by section 1783.01 of the Revised Code to be recorded, it must be certified whether subscriptions to the capital indicated in such statement are in cash or in property; and when property has been contributed as a part of the capital, a schedule containing the names of parties so contributing, with a description and valuation of the property contributed, shall be inserted in such statement.

All such contributions to the capital of such association in property, at a valuation agreed upon by all the members subscribing to such capital, shall be as complete and effectual as if made in cash, if a certificate thereof is recorded as required by this section.

Section 1783.05 | Transferability of interest.

Interest in a limited partnership association is personal estate, and may be transferred under rules prescribed by the association. Such transfer shall take effect when the instrument transferring the interest is delivered for record, including the names of the parties thereto and the amount of the interest so transferred, in the office of the county recorder, who shall enter it. For such entry he shall receive the same fees as in other cases.

No transferee of an interest, or the representatives of a decedent, or an insolvent, shall be entitled thereafter to any participation in the subsequent business of the association, unless he is elected thereto by a vote of a majority of the members in number and value of their interests. Any change of ownership, whether by sale, death, bankruptcy, or otherwise, which is not followed by election of the new owner to the association shall entitle the owner only to his interest therein, at a price and upon terms to be mutually agreed upon. In default of such agreement, the price and terms shall be fixed by an appraiser appointed by the court of common pleas of the proper county, subject to the approval of such court.

Section 1783.06 | Title to realty, conveyancing, and judicial proceedings to be in firm name.

All real estate owned or purchased by a limited partnership association shall be held and owned, and conveyance thereof made, in the association name. When such an association executes a deed of conveyance, bonds with or without coupons, or mortgages to secure purchase or borrowed moneys, it may acknowledge such instruments by its chairman and its secretary. The association shall sue and be sued in the association name. When suit is brought against it, service shall be made upon its chairman, secretary, or treasurer, and such service shall be deemed as complete and effective as if made upon each member of the association.

Section 1783.07 | Record of debts and liabilities.

A limited partnership association shall keep a register of debts and liabilities, in which must be entered the nature and amount of all debts and liabilities contracted by it, with the date thereof, together with any payments or credits thereon. Such entry shall be made not more than ten days after such debt or liability was contracted. Such register shall be open to the inspection of all persons interested in any manner in the business or financial standing of the association, during all its business hours.

In case such association fails to enter on such register any debt or liability within ten days after it has been contracted, or makes or suffers to be made any false entry thereon, the members thereof shall be individually responsible, for the debts and liabilities contracted during such failure, to those thereby damaged.

Section 1783.08 | Liability of members.

The members of a limited partnership association shall not be liable under any judgment, decree, or order obtained against the association, or for any debt or engagement of the association, further or otherwise than is provided in sections 1783.01 to 1783.06, inclusive, and 1783.09 to 1783.12, inclusive, of the Revised Code.

Section 1783.09 | Levy on individual property of members.

If an execution or other process in the nature of execution has been issued against the property of a limited partnership association, and if there cannot be found sufficient property on which to levy or enforce such process, then such execution or process may be issued against any of the members, to the extent of the portions of their respective subscriptions in the capital of the association that are not then paid up; but no such execution shall issue against any member except upon an order of the court, or of a judge of the court, in which the action, suit, or other proceeding was brought. Such court or judge may compel the production of the books of the association, showing the names of the members thereof and the amount of capital remaining to be paid upon their respective subscriptions, and from such books, or from other sources of information, may ascertain the truth in regard thereto and order execution to issue accordingly. The association shall keep a subscription-list book for this purpose, and such book shall be open to inspection by the creditors and members of the association at all reasonable times.

Section 1783.10 | Dividends.

A limited partnership association from time to time may divide the profits of its business as a majority of its managers determine. Such division of profits shall not, at the time it is made diminish or impair the capital of the association. Anyone consenting to a dividend which diminishes or impairs the capital shall be liable to any person injured thereby, to the amount of such diminution or impairment.

Section 1783.11 | Dissolution.

A limited partnership association may be dissolved upon either of the following events:

(A) When the period fixed for its duration expires;

(B) When by a vote of a majority of its members, in value of interest and in number, a dissolution is determined upon.

Notice of such dissolution shall be given by publication in two newspapers, published in the proper city or county, at least six consecutive times. Immediately upon the commencement of such advertising, the association shall cease to carry on its business, except so far as may be required for its beneficial winding up.

Section 1783.12 | Distribution of property on dissolution.

When a limited partnership association is dissolved by the voluntary action of its members, its property shall be applied as follows:

(A) First, to the payment of all its debts for work and labor; and to secure such debts, in case its property is insufficient, the separate estate of each partner shall be liable without limitation or exemption, except as provided by law;

(B) Second, to the satisfaction of its other liabilities and indebtedness;

(C) Third, to distributions among the members, in proportion to their respective interests, by three liquidating trustees who shall be elected by the members of the association and who may wind up the concern and distribute the net assets thereof among the members under the direction of the court of common pleas of the proper county.