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Legislative Assembly of New Brunswick
Status of Legislation - First Reading Bill
An Act to Amend the Partnership Act
 
Legislature :
54
Session :
5
Bill No. :
43
Member :
Hon. Betts
First Reading :
2003-3-20
Second Reading :
2003-3-21
Committee of the Whole :
2003-3-25
Amended :
Third Reading :
2003-3-26
Royal Assent :
2003-4-11
Download PDF :
  Bill 43         
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Text of Bill :
Her Majesty, by and with the advice and consent of the Legislative Assembly of New Brunswick, enacts as follows:

1 Section 5 of the French version of the Partnership Act, chapter P-4 of the Revised Statutes, 1973, is amended by striking out "une firme," and substituting "une firme, qui s'entend également d'un cabinet,".

2 The Act is amended by adding after section 45 the following:

PART III
LIMITED LIABILITY PARTNERSHIPS
46 In this Part

"distribution", in relation to partnership property, means a transfer of money or other partnership property by a partnership to a partner or an assignee of a partner's share in the partnership, whether as a share of profits, return of contributions to capital, repayment of advances or otherwise;

"extra-provincial limited liability partnership" means a partnership that is designated as an extra-provincial limited liability partnership under the Partnerships and Business Names Registration Act;

"governing jurisdiction", in relation to a partnership, means the jurisdiction whose law governs the interpretation of the partnership agreement by operation of law or through a provision in the partnership agreement or another document created by the partnership;

"New Brunswick limited liability partnership" means a partnership that is designated as a New Brunswick limited liability partner ship under the Partnerships and Business Names Registration Act;

"partnership obligation" means any debt, obligation or liability of a partnership, other than debts, obligations or liabilities of partners as between themselves or as between themselves and the partnership.

47 Parts I and II apply to New Brunswick limited liability partnerships and extra-provincial limited liability partnerships insofar as those Parts are not inconsistent with this Part.

48(1) Except as expressly provided in this Part, in another Act or in an agreement, a partner in a New Brunswick limited liability partnership

(a) is not personally liable for a partnership obligation solely by reason of being a partner,

(b) is not personally liable for an obligation under an agreement between the partnership and another person, and

(c) is not personally liable to the partnership or another partner by way of contribution, indemnity or otherwise, in respect of an obligation to which paragraph (a) or (b) applies.

48(2) Subsection (1) does not relieve a person who is a partner in a New Brunswick limited liability partnership from personal liability for the person's negligence, wrongful act or omission, malpractice or misconduct for which the person would be personally liable if the person were not a partner.

48(3) Subsection (1) does not protect the interest in the partnership property of a partner in a New Brunswick limited liability partnership from claims against the partnership respecting a partnership obligation.

49(1) Partners in a New Brunswick limited liability partnership are personally liable for any partnership obligation for which they would be liable if the partnership were a corporation of which they were the directors.

49(2) Where a corporation is a partner in a New Brunswick limited liability partnership, the directors of the corporation are jointly and severally liable for any liability imposed on the corporation under subsection (1).

50 Nothing in this Part limits the liability of partners in a New Brunswick limited liability partnership for any partnership obligation that

(a) arose before the partnership became a New Brunswick limited liability partnership, or

(b) arises out of a contract entered into before the partnership became a New Brunswick limited liability partnership.

51(1) A New Brunswick limited liability partnership shall not make a distribution of partnership property in connection with the winding up of its affairs unless all partnership obligations have been paid or satisfactory provision for their payment has been made.

51(2) In circumstances other than in connection with the winding up of its affairs, a New Brunswick limited liability partnership shall not make a distribution of partnership property if there are reasonable grounds to believe that after the distribution

(a) the partnership would be unable to pay its partnership obligations as they come due, or

(b) the value of the partnership property would be less than the partnership obligations.

51(3) Subsection (1) does not prohibit a payment on account of any partnership obligation where a partner in a New Brunswick limited liability partnership receives a prorated payment with all other creditors of the partnership of the same class.

51(4) Subsections (1) and (2) do not prohibit a payment made as reasonable compensation for current services provided by a partner to the New Brunswick limited liability partnership, to the extent that the payment would be reasonable if paid to an employee who was not a partner as compensation for similar services.

51(5) A New Brunswick limited liability partnership may base its determination of whether a distribution is prohibited by subsection (2):

(a) on financial statements prepared on the basis of accounting practices and principles that are reasonable in the circumstances;

(b) on a fair valuation; or

(c) on another method that is reasonable in the circumstances.

52(1) A partner in a New Brunswick limited liability partnership who receives a distribution contrary to section 51 is liable to the partnership for the lesser of

(a) the value of the property received by the partner, and

(b) the amount necessary to discharge the partnership obligations that existed at the time of the distribution.

52(2) A partner in a New Brunswick limited liability partnership who authorizes a distribution contrary to section 51 is jointly and severally liable to the partnership for any amount for which a recipient is liable under subsection (1), to the extent that the amount is not recovered from the recipient.

52(3) Proceedings to enforce a liability under this section may be brought by the New Brunswick limited liability partnership, any partner in the partnership or any person to whom the partnership was obligated at the time of the distribution to which the liability relates.

52(4) No proceedings to enforce a liability under this section shall be commenced later than two years after the date of the distribution to which the liability relates.

53 After the dissolution of a New Brunswick limited liability partnership, the partnership maintains its status as a New Brunswick limited liability partnership while its affairs are being wound up.

54(1) In this section

"eligible profession" means eligible profession as defined in the Partnerships and Business Names Registration Act.

54(2) Except as expressly provided in another Act, the law of the governing jurisdiction of an extra-provincial limited liability partnership applies

(a) to the organization and internal affairs of the extra-provincial limited liability partnership, and

(b) to the liability of the partners in the extra-provincial limited liability partnership for debts, obligations and liabilities of or chargeable to the partnership.

54(3) Notwithstanding subsection (2), a partner in an extra-provincial limited liability partnership does not have any greater protection against personal liability with respect to his or her practice of an eligible profession in New Brunswick than a partner in a New Brunswick limited liability partnership would have under this Part.

Commencement
3 This Act or any provision of it comes into force on a day or days to be fixed by proclamation.

EXPLANATORY NOTES

Section 1

The existing provision is as follows:

5 Les personnes qui se sont associées pour former une société en nom collectif sont, aux fins de la présente loi, appelées collectivement une firme, et le nom sous lequel elles exploitent leur entreprise est appelé la raison sociale.

Section 2

New provisions.

Section 3

Commencement provision.

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Legend
* Private Bill
** Bill referred to Standing Committee on Law Amendments
+ Private Member's Public Bill
++ Motion for second reading defeated
+++ Debate at second reading adjourned
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