HB721 - LIMITED LIABILITY PARTNERSHIPS - May, Brian H.
HB721 ALLOWS FOR FORMATION OF LIMITED LIABILITY PARTNERSHIP.
Sponsor: May, Brian H. (108) Effective Date:00/00/00
CoSponsor:Lakin, Scott (33) LR Number:1615-01
Last Action: COMMITTEE: JUDICIARY
04/03/95 - HCS Reported Do Pass (H)
HCS HB 721
Next Hearing:Hearing not scheduled
Calendar:Bill currently not on calendar
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Available Bill Summaries for HB721
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Available Bill Text for HB721
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BILL SUMMARIES

COMMITTEE

HCS HB 721 -- LIMITED LIABILITY PARTNERSHIPS

SPONSOR:  Witt

COMMITTEE ACTION:  Voted "do pass" by the Committee on Judiciary
and Ethics by a vote of 11 to 0.

This substitute creates the law of limited liability partnership
(LLP).  The substitute sets forth requirements for registering
an LLP with the Secretary of State.  Time restrictions,
procedure, and fees for filing are set forth.  Knowingly
falsifying information in the application for an LLP is a class
A misdemeanor.  The name of an LLP must be unique, and may be
reserved.  The procedure for this reservation and the fee are
provided.  An LLP must have a registered office in the state,
and a registered agent for service of process.  Procedure and
fees for the filing of an agent and for the changing of agents
are provided.  Fees are established for acquiring copies of
files of any registered LLP.  An LLP may do business and
exercise the powers granted by the substitute anywhere in the
world.  An LLP registered in another state may do business in
this state but is  required to register in this state.
Procedure and fees for filing are set forth.  An LLP or any
other partnership formed in another jurisdiction is bound by the
laws of that jurisdiction.  A regular partnership may be changed
to an LLP without going through a dissolution process.

In an LLP, a partner is not liable, including by way of
indemnification or contribution, for debts or obligations
chargeable to the LLP, whether by tort, contract, or otherwise,
arising from the negligence, misconduct, or malpractice of
another partner or an employee, agent, or representative of the
LLP.  A partner is liable for his or her own acts, and for those
of any person under his or her direct supervision and control.
Absent such personal culpability, a partner is not a proper
party to a proceeding by or against an LLP.  Partners will be
liable for all state and local LLP taxes or fees.

The substitute also changes the definition of bankrupt to
include a debtor subject to either an insolvency proceeding
under state law, or a petition filed under the Federal
Bankruptcy Code.

FISCAL NOTE:  Not available at time of this printing.

PROPONENTS:  Supporters say that this bill simply allows a
business entity to structure itself so that it limits the tort
liability for a partner for acts done by other partners outside
of the first partner's control.  The partnership is still liable
for the acts of any of the partners, but partner A is not
individually liable for the negligent acts of partner B when
partner A had nothing to do with those negligent acts.  The
result is that liability is placed upon the actual wrongdoer.
This is already the law in 19 states, and 29 states are
currently considering the law.  If such business entities are
not allowed in Missouri, new businesses can easily dismiss the
state as a future home.

Testifying for the bill were Representative May; Missouri Bar;
and Missouri Society of Certified Public Accountants.

OPPONENTS:  There was no opposition voiced to the committee.

Richard Smreker, Research Analyst


INTRODUCED

HB 721 -- Limited Liability Partnerships

Co-Sponsors:  May, Lakin

This bill creates the law of limited liability partnership
(LLP).  The bill sets forth requirements for registering an LLP
with the Secretary of State.  Time restrictions, procedure, and
fees for filing are set forth.  Knowingly falsifying information
in the application for an LLP is a class A misdemeanor.  The
name of an LLP must be unique, and may be reserved.  The
procedure for this reservation and the fee are provided.  An LLP
must have a registered office in the state, and a registered
agent for service of process.  Procedure and fees for the filing
of an agent and for the changing of agents are provided.  Fees
are established for acquiring copies of files of any registered
LLP.  An LLP may do business and exercise the powers granted by
the bill anywhere in the world.  An LLP registered in another
state may do business in this state but is  required to register
in this state.  Procedure and fees for filing are set forth.  An
LLP or any other partnership formed in another jurisdiction is
bound by the laws of that jurisdiction.  A regular partnership
may be changed to an LLP without going through a dissolution
process.

In an LLP, a partner is not liable, including by way of
indemnification or contribution, for debts or obligations
chargeable to the LLP, whether by tort, contract, or otherwise,
arising from the negligence, misconduct, or malpractice of
another partner or an employee, agent, or representative of the
LLP.  A partner is liable for his own acts, and for those of any
person under his direct supervision and control.  Absent such
personal culpability, a partner is not a proper party to a
proceeding by or against an LLP.  Partners will be liable for
all state and local LLP taxes or fees.

The bill also changes the definition of bankrupt to include a
debtor subject to either an insolvency proceeding under state
law, or a petition filed under the Federal Bankruptcy Code.


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