Current through Register 2024 Notice Reg. No. 38, September 20, 2024
(a) General Requirement.
(1) Without the necessity for concurrence by
the general partner(s), a majority of the outstanding limited partnership
interests may vote to (A) amend the partnership agreement, (B) remove the
general partner(s), (C) elect a new general partner(s), (D) approve or
disapprove the sale of all or substantially all of the assets of the
partnership other than in the ordinary course of its business and (E) dissolve
the partnership.
(2) Without
concurrence of a majority of the outstanding limited partnership interests, the
general partner(s) may not (A) amend the partnership agreement except for those
amendments which do not adversely affect the rights of the limited partners,
(B) voluntarily withdraw as a general partner, (C) appoint a new general
partner(s), (D) sell all or substantially all of the assets of the program
other than in the ordinary course of the program's business, (E) cause the
merger or other reorganization of the program or (F) dissolve the partnership.
Notwithstanding clause (C) of paragraph (2), an additional general partner may
be appointed without obtaining the consent of the participants if the addition
of such person is necessary to preserve the tax status of the program, such
person has no authority to manage or control the program under the program
agreement, there is no change in the identity of persons who have authority to
manage or control the program, and the admission of such person as an
additional general partner does not materially adversely affect the
participants. Any amendment to the partnership agreement which modifies the
compensation or distributions to which a general partner is entitled or which
affects the duties of a general partner may be conditioned upon the consent of
the general partner. If the law of the state of formation provides that the
program will dissolve upon termination of a general partner(s) unless the
remaining general partner(s) continues the existence of the program, the
program agreement shall obligate the remaining general partner(s) to continue
the program's existence; and if there will be no remaining general partner(s),
the termination of the last general partner shall not be effective for a period
of at least 120 days during which time a majority of the outstanding program
interests shall have the right to elect a general partner who shall agree to
continue the existence of the program. The partnership agreement should provide
for a successor general partner where the only general partner of the program
is an individual.
(b)
Foreign Limited Partnerships. In those applications filed by limited
partnerships organized in states where the investor voting rights are not
provided as set forth in subsection (a), the limited partnership shall provide
all such investor voting rights set forth in subsection (a) which can be
afforded in the jurisdiction where the limited partnership is organized and
limit the sale of limited partnership interests in California to no more than
25 percent of the total interests to be sold.
In the discretion of the Commissioner, the sale of
foreign limited partnership interests in excess of the 25 percent limitation
may be authorized. The Commissioner may impose investor suitability standards
higher than those set forth in Section
260.140.112.2 in these
cases.
(c) Prospectus
Legend. To the extent that a foreign limited partnership does not provide all
of the investor voting rights as set forth in subsection (a), a legend in bold
face type shall appear prominently in the prospectus containing substantially
the following:
THE PARTNERSHIP UNITS OF __________ DO NOT PROVIDE TO
LIMITED PARTNERS THE UNCONDITIONAL RIGHT TO VOTE UPON MATTERS AFFECTING THE
BASIC STRUCTURE OF THE PARTNERSHIP, WHICH RIGHTS ARE REQUIRED BY THE CALIFORNIA
COMMISSIONER OF CORPORATIONS TO BE PROVIDED IN THE PARTNERSHIP AGREEMENT OF
PARTNERSHIPS FORMED UNDER CALIFORNIA LAW, INCLUDING THE FOLLOWING
MATTERS:
(1) ELECTION OR REMOVAL OF
GENERAL PARTNERS,
(2) TERMINATION
OF THE PARTNERSHIP,
(3) AMENDMENT
OF THE PARTNERSHIP AGREEMENT, AND
(4) SALE OF ALL OR SUBSTANTIALLY ALL OF THE
ASSETS OF THE PARTNERSHIP. THE ABSENCE OR CONDITIONING OF ANY OF THESE RIGHTS
MEANS THAT THE LIMITED PARTNERS' ABILITY TO PARTICIPATE IN BASIC INVESTOR
VOTING IS EITHER NONEXISTENT OR SUBSTANTIALLY LIMITED.
1.
Amendment filed 3-12-74; effective thirtieth day thereafter (Register 74, No.
11).
2. Amendment filed 1-27-84; effective thirtieth day thereafter
(Register 84, No. 4).
3. Amendment of subsection (a) filed 5-18-92;
operative 6-17-92 (Register 92, No. 22).
Note: Authority cited: Section
25610,
Corporations Code. Reference: Section
25140,
Corporations Code.
