Secretary of State
Business Enhancement Legislation Passes, Grayson’s Top Legislative Priority on Way to Governor’s Desk
(Frankfort, KY) The Kentucky Senate unanimously endorsed legislation today that will substantially modernize and enhance Kentucky partnership law for the first time in over fifty years. House Bill 234, sponsored by Rep. Scott Brinkman (R-Louisville), will align 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 legislation was the top priority for Secretary of State Trey Grayson in the 2006 legislative session and now heads to Governor Fletcher for his consideration.
“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,” stated Secretary of State Trey Grayson whose office has been working with the sponsor and the Business Law Section of the Kentucky Bar Association to draft the legislation. “This bill will bring partnership law in line with modern business practices and trends and is essential if Kentucky’s business climate wants to remain competitive with the rest of the country.”
The bill levels the playing field by bringing Kentucky into conformity with the rest of the country’s business practices. Some of its provisions include language that moves Kentucky from an aggregate approach to partnership law to an entity model. This change will clarify that a partnership is an entity distinct from its partners; thus, it can take legal action and can acquire property the way other entities are able to do so. The partners will also have separate rights and liabilities from the partnership.
Rep. Brinkman, reacting to the passage of the legislation stated, “I want to thank the members of the General Assembly for supporting the modernization of our partnership laws. Through the passage of HB 234, we have created more certainty and flexibility for businesses that are either currently located in Kentucky or that may want to conduct business in Kentucky in the future.”
The conformity this bill provides with other states 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.
Testifying on behalf of the bill earlier in the 2006 session were Tom Rutledge, an authority on business law from the firm of Stoll, Keenon and Ogden and Allan Vestal, Dean of the University of Kentucky School of Law.
Rutledge noted that, “Kentucky joins the over thirty states that have modernized their general partnership acts and is on the leading edge of the states modernizing their limited partnership laws. With these new laws in place, Kentucky's business community has modern laws that address modern problems and provide modern solutions.”
One of the legislation’s top proponents, partnership law expert Dean Vestal, remarked that, “With this modernization of the Commonwealth's partnership laws, Kentucky is in the mainstream in this important area. Kentucky businesses and lawyers will be well-served by these thoughtful reforms.”
“The partnership that has been developed to pass this important legislation has been an incredible benefit to the business community of Kentucky,” Grayson stated, referring to the team of individuals who have worked for the bill’s passage. “I commend Rep. Brinkman, Chairman Robert Stivers (R-Manchester), and Chairman Gross Lindsey (D-Henderson) for working to bring this issue before their committees. Their efforts will certainly be remembered as vital to the modernization of Kentucky Business Law.”
In addition to House Bill 234, Secretary of State Trey Grayson is advocating for other enhancements to Kentucky business law including the modernization of Kentucky corporation limited liability statutes (House Bill 349 and House Bill 350). Rep. Brinkman, in addition to other legislators, will serve as a sponsor to the Kentucky Business Enhancement Legislation, which will be featured in Secretary Grayson’s future legislative packages.
“These reforms are just the first step in our efforts to enhance Kentucky’s business environment,” said Grayson. “More important enhancements are soon to come!”
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