New Partnership Legislation

The 2006 Kentucky General Assembly passed legislation that substantially modernized and enhanced Kentucky partnership law for the first time in over fifty years.  House Bill 234, sponsored by Rep. Scott Brinkman (Louisville), was a top priority for the Office of the Secretary of State in the 2006 legislative session.  The new bill aligned Kentucky law with the most recent version of the Uniform Partnership Act, as approved by the National Conference of Commissioners on Uniform State Laws. Thirty-seven other states have adopted the legislation since the latest update of the Act in 1997.

The bill levels the business playing field by bringing Kentucky into conformity with the rest of the country’s practices.  Some of its provisions and additions include language that shifts Kentucky from an aggregate approach to partnership law to an entity model. This change will clarify that a partnership is an entity unto itself, distinct and separate from its partners; thus, it can take legal action and acquire property the way other entities are able to do so.  The partners will also have separate rights and liabilities from the partnership. 

Most significantly for the Office of the Secretary of State, there is now a provision for the public filing of statements of partnership authority, including statements of dissociation and dissolution.

Adopting the updated Uniform Partnership Act will make Kentucky a more enticing business environment and will enhance the Commonwealth’s efforts to attract and retain new and growing businesses.  This bill will bring partnership law up to speed with modern business practices and trends, a requisite improvement that allows Kentucky to remain competitive in the global business arena.

In conforming with other states, this bill will ease the burden on businesses seeking to relocate or expand into Kentucky.  Additionally, the changes will allow businesses greater flexibility in determining their form of corporate structure.