GENERAL PARTNERS

Iowa Code tit. XII, ch. 488, art. 4

in effect

Iowa Code § 488.401 Becoming general partner.

488.401. Becoming general partner. A person becomes a general partner according to any of the following: 1. As provided in the partnership agreement. 2. Under section 488.801, subsection 3, paragraph “b”, following the dissociation of a limited partnership’s last general partner. 3. As the result of a conversion or merger under article 11. 4. With the consent of all the partners. 2004 Acts, ch 1021, §35, 118

Iowa Code § 488.402 General partner agent of limited partnership.

488.402. General partner agent of limited partnership. 1. Each general partner is an agent of the limited partnership for the purposes of its activities. An act of a general partner, including the signing of a record in the partnership’s name, for apparently carrying on in the ordinary course the limited partnership’s activities or activities of the kind carried on by the limited partnership binds the limited partnership, unless the general partner did not have authority to act for the limited partnership in the particular matter and the person with which the general partner was dealing knew, had received a notification, or had notice under section 488.103, subsection 4, that the general partner lacked authority. 2. An act of a general partner which is not apparently for carrying on in the ordinary course the limited partnership’s activities or activities of the kind carried on by the limited partnership binds the limited partnership only if the act was authorized in the partnership agreement or by all the other partners. 2004 Acts, ch 1021, §36, 118

Iowa Code § 488.403 Limited partnership liable for general partner’s actionable conduct.

488.403. Limited partnership liable for general partner’s actionable conduct. 1. A limited partnership is liable for loss or injury caused to a person, or for a penalty incurred, as a result of a wrongful act or omission, or other actionable conduct, of a general partner acting in the ordinary course of activities of the limited partnership or with authority of the limited partnership. 2. If, in the course of the limited partnership’s activities or while acting with authority of the limited partnership, a general partner receives or causes the limited partnership to receive money or property of a person not a partner, and the money or property is misapplied by a general partner, the limited partnership is liable for the loss. 2004 Acts, ch 1021, §37, 118

Iowa Code § 488.404 General partner’s liability.

488.404. General partner’s liability. 1. Except as otherwise provided in subsections 2 and 3, all general partners are liable jointly and severally for all obligations of the limited partnership unless otherwise agreed by the claimant or provided by law. 2. A person that becomes a general partner of an existing limited partnership is not personally liable for an obligation of a limited partnership incurred before the person became a general partner. 3. An obligation of a limited partnership incurred while the limited partnership is a limited liability limited partnership, whether arising in contract, tort, or otherwise, is solely the obligation of the limited partnership. A general partner is not personally liable, directly or indirectly, by way of contribution or otherwise, for such an obligation solely by reason of being or acting as a general partner. This subsection applies despite anything inconsistent in the partnership agreement that existed immediately before the consent required to become a limited liability limited partnership under section 488.406, subsection 2, paragraph “b”. 2004 Acts, ch 1021, §38, 118

Iowa Code § 488.405 Actions by and against partnership and partners.

488.405. Actions by and against partnership and partners. 1. To the extent not inconsistent with section 488.404, a general partner may be joined in an action against the limited partnership or named in a separate action. 2. A judgment against a limited partnership is not by itself a judgment against a general partner. A judgment against a limited partnership shall not be satisfied from a general partner’s assets unless there is also a judgment against the general partner. 3. A judgment creditor of a general partner shall not levy execution against the assets of the general partner to satisfy a judgment based on a claim against the limited partnership, unless the partner is personally liable for the claim under section 488.404 and at least one of the following applies: a. A judgment based on the same claim has been obtained against the limited partnership and a writ of execution on the judgment has been returned unsatisfied in whole or in part. b. The limited partnership is a debtor in bankruptcy. c. The general partner has agreed that the creditor need not exhaust limited partnership assets. d. A court grants permission to the judgment creditor to levy execution against the assets of a general partner based on a finding that limited partnership assets subject to execution are clearly insufficient to satisfy the judgment, that exhaustion of limited partnership assets is excessively burdensome, or that the grant of permission is an appropriate exercise of the court’s equitable powers. e. Liability is imposed on the general partner by law or contract independent of the existence of the limited partnership. 2004 Acts, ch 1021, §39, 118

Iowa Code § 488.406 Management rights of general partner.

488.406. Management rights of general partner. 1. Each general partner has equal rights in the management and conduct of the limited partnership’s activities. Except as expressly provided in this chapter, any matter relating to the activities of the limited partnership may be exclusively decided by the general partner or, if there is more than one general partner, by a majority of the general partners. 2. The consent of each partner is necessary to do any or all of the following: a. Amend the partnership agreement. b. Amend the certificate of limited partnership to add or, subject to section 488.1110, delete a statement that the limited partnership is a limited liability limited partnership. c. Sell, lease, exchange, or otherwise dispose of all, or substantially all, of the limited partnership’s property, with or without the goodwill, other than in the usual and regular course of the limited partnership’s activities. 3. A limited partnership shall reimburse a general partner for payments made and indemnify a general partner for liabilities incurred by the general partner in the ordinary course of the activities of the partnership or for the preservation of its activities or property. 4. A limited partnership shall reimburse a general partner for an advance to the limited partnership beyond the amount of capital the general partner agreed to contribute. 5. A payment or advance made by a general partner which gives rise to an obligation of the limited partnership under subsection 3 or 4 constitutes a loan to the limited partnership which accrues interest from the date of the payment or advance. 6. A general partner is not entitled to remuneration for services performed for the partnership. 2004 Acts, ch 1021, §40, 118

Iowa Code § 488.407 Right of general partner and former general partner to information.

488.407. Right of general partner and former general partner to information. 1. A general partner, without having any particular purpose for seeking the information, may inspect and copy during regular business hours any or all of the following: a. In the limited partnership’s registered office, required information. b. At a reasonable location specified by the limited partnership, any other records maintained by the limited partnership regarding the limited partnership’s activities and financial condition. 2. Each general partner and the limited partnership shall furnish to a general partner all of the following: a. Without demand, any information concerning the limited partnership’s activities and financial condition reasonably required for the proper exercise of the general partner’s rights and duties under the partnership agreement or this chapter. b. On demand, any other information concerning the limited partnership’s activities, except to the extent the demand or the information demanded is unreasonable or otherwise improper under the circumstances. 3. Subject to subsection 5, on ten days’ demand made in a record received by the limited partnership, a person dissociated as a general partner may have access to the information and records described in subsection 1 at the location specified in subsection 1 if all of the following apply: a. The information or record pertains to the period during which the person was a general partner. b. The person seeks the information or record in good faith. c. The person satisfies the requirements imposed on a limited partner by section 488.304, subsection 2. 4. The limited partnership shall respond to a demand made pursuant to subsection 3 in the same manner as provided in section 488.304, subsection 3. 5. If a general partner dies, section 488.704 applies. 6. The limited partnership may impose reasonable restrictions on the use of information under this section. In any dispute concerning the reasonableness of a restriction under this subsection, the limited partnership has the burden of proving reasonableness. 7. A limited partnership may charge a person dissociated as a general partner that makes a demand under this section reasonable costs of copying, limited to the costs of labor and material. 8. A general partner or person dissociated as a general partner may exercise the rights under this section through an attorney or other agent. Any restriction imposed under subsection 6 or by the partnership agreement applies both to the attorney or other agent and to the general partner or person dissociated as a general partner. 9. The rights under this section do not extend to a person as transferee, but the rights under subsection 3 of a person dissociated as a general partner may be exercised by the legal representative of an individual who dissociated as a general partner under section 488.603, subsection 7, paragraph “b” or “c”. 2004 Acts, ch 1021, §41, 118; 2016 Acts, ch 1097, §13

Iowa Code § 488.408 General standards of general partner’s conduct.

488.408. General standards of general partner’s conduct. 1. The only fiduciary duties that a general partner has to the limited partnership and the other partners are the duties of loyalty and care under subsections 2 and 3. 2. A general partner’s duty of loyalty to the limited partnership and the other partners is limited to all of the following: a. To account to the limited partnership and hold as trustee for it any property, profit, or benefit derived by the general partner in the conduct and winding up of the limited partnership’s activities or derived from a use by the general partner of limited partnership property, including the appropriation of a limited partnership opportunity. b. To refrain from dealing with the limited partnership in the conduct or winding up of the limited partnership’s activities as or on behalf of a party having an interest adverse to the limited partnership. c. To refrain from competing with the limited partnership in the conduct or winding up of the limited partnership’s activities. 3. A general partner’s duty of care to the limited partnership and the other partners in the conduct and winding up of the limited partnership’s activities is limited to refraining from engaging in grossly negligent or reckless conduct, intentional misconduct, or a knowing violation of law. 4. A general partner shall discharge the duties to the partnership and the other partners under this chapter or under the partnership agreement and exercise any rights consistently with the obligation of good faith and fair dealing. 5. A general partner does not violate a duty or obligation under this chapter or under the partnership agreement merely because the general partner’s conduct furthers the general partner’s own interest. 2004 Acts, ch 1021, §42, 118