Limited Partnerships Act

Link to law: http://nslegislature.ca/legc/statutes/limitedp.htm
Published: 2016-01-05

Limited Partnerships Act

CHAPTER 259 OF THE REVISED STATUTES, 1989

An Act Respecting Limited Partnerships

Short title
1 This Act may be cited as the Limited Partnerships Act. R.S., c. 259,s. 1.

Interpretation
2 In this Act,

(a) "business" includes every trade, occupation and profession;

(b) "certificate" means a certificate made pursuant to Section 5and includes a certificate which has been amended;

(c) "Court" means the Trial Division of the Supreme Court ofNova Scotia;

(d) "partnership property" means property and rights andinterests in property originally brought into the partnership stock,or acquired, whether by purchase or otherwise, on account of thefirm, or for the purposes of and in the course of partnershipbusiness;

(e) "person" includes an individual, sole proprietorship,partnership, unincorporated association, unincorporated syndicate,unincorporated organization, trust, body corporate, and a naturalperson in his capacity as trustee, executor, administrator or otherlegal representative. R.S., c. 259, s. 2.

Partnership Act and equity and common law
3 The Partnership Act and the rules of equity and common lawapplicable to partnerships, except as such rules are inconsistent with thePartnership Act and this Act, apply to limited partnerships. R.S., c. 259,s. 3.

Business that may be carried on
4 (1) A limited partnership may be formed to carry on anybusiness that a partnership without limited partners may carry on.

General and limited partners required
(2) A limited partnership shall consist of one or more persons who aregeneral partners and one or more persons who are limited partners. R.S.,c. 259, s. 4.

Formation upon filing of certificate
5 (1) A limited partnership is formed when a certificatesubstantially complying with subsection (2) is filed and recorded in theoffice of the Registrar of Joint Stock Companies.

Signing and content of certificate
(2) A certificate shall be signed by all the persons desiring to form alimited partnership and shall state

(a) the firm name under which the limited partnership is to beconducted;

(b) the character of the business;

(c) the name and place of residence of each partner, general andlimited partners being respectively designated;

(d) the term for which the limited partnership is to exist;

(e) the amount of cash and the nature and fair value of otherproperty, if any, contributed by each limited partner;

(f) the amount of additional contributions, if any, agreed to bemade by each limited partner and the times at which or events onthe happening of which an additional contribution is to be made;

(g) the time, if agreed upon, when the contribution of eachlimited partner is to be returned;

(h) the share of the profits or other compensation by way ofincome which each limited partner is entitled to by reason of hiscontribution;

(i) the right, if given, of a limited partner to substitute anassignee as contributor in his place, and the terms and conditionsof the substitution;

(j) the right, if given, of the partners to admit additional limitedpartners;

(k) the right, if given, of one or more of the limited partners topriority over other limited partners, to a return of contributions orto compensation by way of income, and the nature of the priority;

(l) the right, if given, of the remaining general partner orpartners to continue the business on the death, retirement or mentalincompetence of a general partner; and

(m) the right, if given, of a limited partner to demand andreceive property other than cash in return for his contribution.

Declaration not required
(3) Where a certificate is filed pursuant to this Act, a declaration is notrequired to be filed under the Partnerships and Business NamesRegistration Act.

Appointment of agent
(4) Where a certificate is filed pursuant to this Act, it shall beaccompanied by an appointment of agent in the same form and to thesame effect as an appointment of agent filed pursuant to the Partnershipsand Business Names Registration Act. R.S., c. 259, s. 5.

Person may be both general and limited partner
6 (1) A person may be a general partner and a limited partner atthe same time in the same limited partnership.

Rights and powers of dual partner
(2) A person who is at the same time a general partner and a limitedpartner has the same rights and powers and is subject to the samerestrictions as a general partner except that in respect of his contributionas a limited partner he has the rights against the other partners that hewould have if he were not also a general partner. R.S., c. 259, s. 6.

Restriction on firm name
7 (1) The surname of a limited partner shall not appear in the firmname of the limited partnership unless it is also the surname of one of thegeneral partners.

Liability where misuse of surname
(2) A limited partner whose surname appears in the firm name contraryto subsection (1) is liable as a general partner to any creditor of thelimited partnership who has extended the credit without actual knowledgethat the limited partner is not a general partner. R.S., c. 259, s. 7.

Restriction on contribution of limited partner
8 (1) A limited partner may contribute cash and other property tothe limited partnership, but not services.

Interest of limited partner is personal property
(2) A limited partners interest in the limited partnership is personalproperty.

General partner is registered owner of real property
(3) Only the general partners shall be shown at the registry of deedsas owners of any interest of the limited partnership in real property. R.S.,c. 259, s. 8.

Rights and powers and liabilities of general partner
9 A general partner in a limited partnership has all the rights andpowers and is subject to all the restrictions and liabilities of a partner ina partnership without limited partners except that, without the writtenconsent to or ratification of the specific act by all the limited partners, ageneral partner has no authority to

(a) do any act in contravention of the certificate;

(b) do any act which makes it impossible to carry on theordinary business of the limited partnership;

(c) consent to a judgment against the limited partnership;

(d) possess limited partnership property, or assign any rights inspecific partnership property, for other than a partnership purpose;

(e) admit a person as a general partner;

(f) admit a person as a limited partner, unless the right to do sois given in the certificate; or

(g) continue the business of the limited partnership on the death,retirement or mental incompetence of a general partner, unless theright to do so is given in the certificate. R.S., c. 259, s. 9.

Liability of limited partner
10 A limited partner is not liable for the obligations of the limitedpartnership except in respect of the amount of property he contributes oragrees to contribute to the capital of the limited partnership. R.S., c. 259,s. 10.

Right of limited partner to information and dissolution
11 A limited partner has the same right as has a general partner

(a) to inspect and make copies of or take extracts from thelimited partnership books at all times;

(b) to be given, on demand, true and full information of allthings affecting the limited partnership, and to be given a formalaccount of partnership affairs whenever circumstances render it justand reasonable;

(c) to obtain dissolution and winding up of the limitedpartnership by court order. R.S., c. 259, s. 11.

Right to profit and return of contribution
12 (1) A limited partner has the right

(a) to a share of the profits or other compensation by way ofincome;

(b) to have his contribution to the limited partnership returned.

Condition for share of profit to limited partner
(2) A limited partner may receive from the limited partnership theshare of the profits or the compensation by way of income stipulated forin the certificate if, after payment thereof is made, whether from theproperty of the limited partnership or that of a general partner, thelimited partnership assets exceed all the limited partnership liabilities,excepting liabilities to limited partners on account of their contributionsand to general partners. R.S., c. 259, s. 12.

Business dealings of limited partner with partnership
13 A limited partner may loan money to and transact other businesswith the limited partnership and, unless he is also a general partner, mayreceive on account of resulting claims against the limited partnership,with general creditors, a pro rata share of the assets, but no limitedpartner shall in respect of any such claim

(a) receive or hold as collateral security any of the limitedpartnership property; or

(b) receive from a general partner or the limited partnership anypayment, conveyance or release from liability if, at the time, theassets of the partnership are not sufficient to discharge partnershipliabilities to persons not claiming as general or limited partners. R.S., c. 259, s. 13.

Sharing among limited partners of assets
14 (1) Subject to subsection (2), limited partners, in relation to oneanother, share in the limited partnership assets in respect of their claims

(a) for capital; and

(b) for profit or compensation by way of income on theircontributions,

in proportion to the respective amounts of their claims.

Agreement for priority among limited partners
(2) Where there are several limited partners, the partners may agreethat one or more of the limited partners is to have a priority over otherlimited partners

(a) as to the return of contribution;

(b) as to compensation by way of income; or

(c) as to any other matter,

but the existence of and nature of the agreement shall be stated in thecertificate and, in the absence of a statement, all limited partners, subjectto subsection (1), stand upon equal footing. R.S., c. 259, s. 14.

Conditions for return of contribution
15 (1) A limited partner is not entitled to receive from a generalpartner or out of the limited partnership property any part of hiscontribution until

(a) all liabilities of the limited partnership, excepting liabilitiesto general partners and to limited partners on account of theircontributions, have been paid or there remains sufficient limitedpartnership property to pay them;

(b) the consent of all partners is obtained, unless the return ofthe contribution may be rightfully demanded under subsection (2);and

(c) the certificate is cancelled or so amended as to set forth thewithdrawal or reduction.

Right to demand return of contribution
(2) Subject to subsection (1), a limited partner may rightfully demandthe return of his contribution

(a) upon the dissolution of the limited partnership;

(b) when the time specified in the certificate for its return hasarrived; or

(c) after he has given six months notice in writing to all otherpartners, if no time is specified in the certificate either for thereturn of the contribution or for the dissolution of the limitedpartnership.

Cash return unless otherwise agreed
(3) A limited partner has, irrespective of the nature of his contribution,only the right to demand and receive cash in return therefor, unless

(a) there is a statement to the contrary in the certificate; or

(b) all the partners consent to some other manner of returningthe contribution.

Right of limited partner to dissolution
(4) A limited partner is entitled to have the limited partnershipdissolved and its affairs wound up where

(a) he rightfully but unsuccessfully demands the return of hiscontribution; or

(b) the other liabilities of the limited partnership have not beenpaid, or the limited partnership property is insufficient for theirpayment as required by clause (a) of subsection (1) and the limitedpartner seeking dissolution would otherwise be entitled to thereturn of his contribution. R.S., c. 259, s. 15.

Liability of limited partner to firm
16 (1) A limited partner is liable to the limited partnership for

(a) the difference, if any, between the amount of his contributionas actually made and the amount stated in the certificate as havingbeen made; and

(b) any unpaid contribution which he agreed in the certificate tomake in the future at the time and on the conditions, if any, statedin the certificate.

Limited partner holds certain property as trustee
(2) A limited partner holds as trustee for the limited partnership

(a) specific property stated in the certificate as contributed byhim, but which has not in fact been contributed or which has beenwrongfully returned; and

(b) money or other property wrongfully paid or conveyed to himon account of his contribution.

Waiver of liability of limited partner
(3) The liabilities of a limited partner as set forth in this Section may,subject to subsection (4), be waived or compromised, but only with theconsent of all partners.

Effect of waiver upon creditor
(4) A waiver or compromise agreed to pursuant to subsection (3) doesnot affect the right of a creditor of the limited partnership to enforce aliability arising from credit which was extended or a claim whichotherwise arose

(a) subsequent to the filing of the certificate whereby the limitedpartnership was formed; but

(b) prior to the cancellation or amendment thereof whereby thewaiver or compromise was effected.

Liability continues after return of contribution
(5) Where a limited partner has rightfully received the return, in wholeor in part, of the capital of his contribution, he is nevertheless liable tothe limited partnership for any sum, not in excess of that return withinterest, necessary to discharge its liabilities to all creditors who extendedcredit or whose claims otherwise arose before the return. R.S., c. 259,s. 16.

Limited partner may be liable as general partner
17 A limited partner does not become liable as a general partnerunless, in addition to exercising his rights and powers as a limitedpartner, he takes part in the control of the business. R.S., c. 259, s. 17.

Admission of additional limited partners
18 After the formation of a limited partnership, additional limitedpartners may be admitted by amendment of the certificate in accordancewith this Act. R.S., c. 259, s. 18.

Interest of limited partner is assignable
19 (1) The interest of a limited partner is assignable.

Substituted limited partner
(2) A substituted limited partner is a person admitted to all the rightsof a limited partner who has died or has assigned his interest in thelimited partnership.

If assignee not a substituted limited partner
(3) An assignee who does not become a substituted limited partner hasno right to

(a) require any information or account of the partnershiptransactions; or

(b) inspect the partnership books,

but is entitled only to receive the share of the profits or othercompensation by way of income, or the return of his contribution, towhich his assignor would otherwise be entitled.

Assignee may become substituted limited partner
(4) An assignee may become a substituted limited partner if

(a) all the members, except the assignor, consent thereto; or

(b) the assignor, being so authorized by the terms in thecertificate, gives the assignee that right.

Substitution upon amendment of certificate
(5) An assignee becomes a substituted limited partner when thecertificate is appropriately amended in accordance with the requirementsof this Act.

Rights and liabilities of substituted limited partner
(6) A substituted limited partner has all the rights and powers and issubject to all the restrictions and liabilities of his assignor, except thoseliabilities of which he was ignorant at the time he became a limitedpartner and which could not be ascertained from the certificate.

Assignor not released from liability
(7) The substitution of an assignee as a limited partner does not releasethe assignor from the liability imposed by Sections 16 and 27. R.S.,c. 259, s. 19.

Dissolution of limited partnership
20 The retirement, death or mental incompetence of a general partner,or the dissolution of a general partner when the partner is a corporation,dissolves a limited partnership unless the business is continued by theremaining general partners

(a) pursuant to a right to do so stated in the certificate; or

(b) with the consent of all the remaining partners. R.S., c. 259,s. 20.

Powers of executor of limited partner
21 (1) The executor or administrator of the estate of a deceasedlimited partner has

(a) all the rights and powers of a limited partner for the purposeof settling the estate of the deceased limited partner; and

(b) whatever power the deceased had to constitute his assigneea substituted limited partner.

Liability of estate
(2) The estate of a deceased limited partner is liable for all hisliabilities as a limited partner. R.S., c. 259, s. 21.

Cancellation of certificate
22 (1) A certificate shall be cancelled when

(a) the limited partnership is dissolved; or

(b) all limited partners cease to be limited partners.

Signing of notice of cancellation
(2) The notice to cancel a certificate shall be signed by all the partners. R.S., c. 259, s. 22.

Amendment of certificate required
23 (1) A certificate shall be amended when

(a) there is a change in the name of the limited partnership or inthe amount or character of the contribution of any limited partnernot provided for in the certificate;

(b) a person is substituted as a limited partner;

(c) a person is added as a limited partner;

(d) a person is added as a general partner;

(e) a general partner retires, dies or becomes mentallyincompetent, and the business is continued pursuant to Section 20;

(f) there is a change in the character of the business of thelimited partnership;

(g) a false or erroneous statement is discovered in the certificate;

(h) there is a change in the time as stated in the certificate forthe dissolution of the limited partnership or for the return of acontribution;

(i) a time is fixed for the dissolution of the limited partnershipor for the return of a contribution, no time having been specifiedin the certificate;

(j) the partners desire to make a change in any other statementin the certificate in order to make the certificate accuratelyrepresent the agreement between them.

Requirements respecting notice of amendment
(2) The notice to amend a certificate shall

(a) set forth clearly the change in or addition to the certificatewhich is desired; and

(b) be signed by all the partners.

Additional signatures on notice
(3) A notice to amend a certificate by substituting a limited partner oradding a limited or general partner shall also be signed by the person tobe substituted or added and, where a limited partner is substituted, theamendment shall also be signed by the assigning limited partner. R.S.,c. 259, s. 23.

Refusal of required signatory to sign
24 (1) Where anyone designated pursuant to Section 22 or 23 asbeing a person who must sign a notice to cancel or amend a certificaterefuses to do so, a person desiring the cancellation or amendment mayapply to the Court for an order directing the cancellation or amendment.

Hearing and order of Court
(2) Upon hearing an application brought under subsection (1), theCourt, if it finds that the applicant is entitled to have the notice inquestion signed, shall by order direct the Registrar of Joint StockCompanies to record the cancellation or amendment of the certificate asset forth in the order. R.S., c. 259, s. 24.

Cancellation or amendment effective on filing
25 A certificate is cancelled or amended, as the case indicates, whenthere is filed with and recorded in the office of the Registrar of JointStock Companies

(a) a notice signed as required by this Act; or

(b) a certified copy of a Court order made pursuant to Section24. R.S., c. 259, s. 25.

Priority of payment of liabilities upon dissolution
26 In settling accounts after the dissolution of a limited partnership theliabilities of the partnership to creditors, excepting

(a) to limited partners on account of their contributions; and

(b) to general partners,

shall be paid first and then, subject to any statement in the certificate orto subsequent agreement, in the following order:

(c) to limited partners in respect of their share of the profits andother compensation by way of income on their contributions;

(d) to limited partners in respect of the capital of theircontributions;

(e) to general partners other than for capital and profits;

(f) to general partners in respect of profits;

(g) to general partners in respect of capital. R.S., c. 259, s. 26.

Liability for false statement in certificate
27 Where a certificate contains a false statement, any person sufferingloss as a result of relying upon that statement may hold liable as a generalpartner every party to the certificate who

(a) knew, when he signed the certificate, that the statementrelied upon was false; or

(b) became aware, subsequent to the time when he signed thecertificate, but within a sufficient time before the false statementwas relied upon to enable him to cancel or amend the certificate orto commence proceedings in accordance with this Act for the cancellation or amendment of the certificate, that the statement reliedupon was false. R.S., c. 259, s. 27.

Person mistakenly believing he is limited partner
28 A person who contributes to the capital of a business conducted bya person or partnership erroneously believing that he has become alimited partner in a limited partnership

(a) is not, by reason only of his exercising the rights of a limitedpartner, a general partner with the person or in the partnershipcarrying on the business; and

(b) is not bound by the obligations of the person or partnershipcarrying on the business,

if, upon ascertaining the fact that he is not a limited partner, he promptlyrenounces his interest in the profits or other compensation by way ofincome from the business. R.S., c. 259, s. 28.

Indebted limited partner
29 (1) The Court may, upon application by a judgment creditor ofa limited partner, charge the interest of the indebted limited partner withpayment of the unsatisfied amount of the judgment debt, and may appointa receiver and make all other orders, directions and inquiries which thecircumstances of the case require.

Redemption of charged interest
(2) A charged interest referred to in subsection (1) may be redeemedwith the separate property of a general partner, but may not be redeemedwith limited partnership property.

Remedies not exclusive
(3) The remedies conferred by subsection (1) are not exclusive ofothers which may exist. R.S., c. 259, s. 29.

Limited partner as party in proceeding against firm
30 A limited partner, unless he is also a general partner, is not aproper party to proceedings against a limited partnership, except wherethe object of the proceedings is to enforce a right of the limited partneragainst or liability to the limited partnership. R.S., c. 259, s. 30.

Special signing authority
31 (1) An actual or proposed general or limited partner may givespecial authority to any other person to execute on his behalf anydocument under this Act.

Filing of special authority
(2) A special authority referred to in subsection (1) shall be filed in theoffice of the Registrar of Joint Stock Companies and recorded with thedocument or one of the documents executed in the exercise of the specialauthority. R.S., c. 259, s. 31.

Death or bankruptcy
32 (1) A limited partnership is not dissolved by the death orbankruptcy of a limited partner.

Mental incompetence
(2) The mental incompetence of a limited partner is not a ground fordissolution of the limited partnership by a court unless the share of thatlimited partner cannot be otherwise ascertained and realized. R.S., c. 259,s. 32.

Regulations
33 The Governor in Council may make regulations

(a) prescribing fees for the purposes of this Act;

(b) respecting additional information to be included in acertificate filed under this Act;

(c) prescribing forms and providing for their use;

(d) defining any word or expression used in this Act and notdefined herein;

(e) respecting any matter necessary or advisable to carry out theintent and purpose of this Act. R.S., c. 259, s. 33.
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