HB 0558 Regulaion of Partnerships and Securities; Certain Sales
Sponsor:HOSMER Handling House Bill:WIGGINS
Committee:CORR LR Number:S1253.11T
Last Action:07/05/95 - Signed by Governor
Title:SCS/HCS/HB 558
Effective Date:August 28, 1995
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Current Bill Summary

SCS/HCS/HB 558 - This act amends the Limited Liability Partnership (LLP) laws by adding this designation to certain statutes, further defining partnership liabilities, clarifying application and registration requirements, and clarifying out-of- state legal issues.

A "registered limited liability partnership" means a partnership formed under an agreement that abides by the laws of Missouri and which has been registered with the Secretary of State. The definition of "partnership" now includes a registered LLP and a foreign registered LLP. A partnership formed under an agreement governed by the laws of another state is not automatically deemed a partnership in Missouri.

Partners in a registered LLP are not liable for negligence, wrongful acts, omissions, misconduct, or malpractice committed by another partner or employee of the registered LLP. A partner is liable for his own negligence, etc. and for the negligence of those under the partner's direct supervision and control. A partner is liable for his own taxes or fees.

A partner is not a proper party to a proceeding involving a registered LLP concerning acts of negligence, etc., unless the partner is personally liable. A registered LLP may sue and be sued in its own name. For venue purposes, a registered LLP shall be deemed a citizen and resident of the county of its principal office. Service of process may be made upon the partnership's registered agent, a partner, managing or general agent, or at any business office of the registered LLP.

A partner is not liable to the other partners in dissolution if the dissolution is the result of an act of negligence, etc. of another partner. The individual property of a deceased partner shall be liable for all obligations incurred by the partnership while the partner was alive for which the partner would have been liable, subject to prior payment of the partner's separate debts.

A written application shall be filed in duplicate with the secretary of state. The initial LLP application is effective for one year, unless withdrawn or revoked earlier, or renewed.

A registration may be withdrawn by filing a written withdrawal notice with the Secretary of State, accompanied by a specified fee. The registration is terminated on the date the withdrawal notice is filed with the Secretary of State.

A registration may be amended or corrected by filing articles of amendment with the Secretary of State.

An amendment to an application or a renewal is required within 90 days if there is a change in the name of the registered LLP or a change in the address of the registered office or a change in the name or address of the registered agent.

A foreign registered LLP shall: 1) comply with any statutory requirements governing its type of business; and 2) file a notice with the Secretary of State stating: a) its name; b) the law governing its partnership agreement; c) its address; d) and a brief statement of its type of business.

In Missouri each registered LLP shall have a registered office and a registered agent for service of process. Any change in name or address of the registered agent may be made by filing a notice with the Secretary of State accompanied by a required fee.

Certified copies of any paper on file may be obtained from the Secretary of State by paying a fee.

A partnership formed under the laws of the state of Missouri may conduct business anywhere. The legal existence of a registered LLP formed under the laws of Missouri shall be recognized outside the state of Missouri, and the Missouri laws that govern the LLP shall be granted full faith and credit. The internal affairs of a partnership formed under Missouri law shall be governed by Missouri laws (SB 106).

It is unlawful to sell any security to a client or buy any security from a client without proper disclosure and consent by the client. It is unlawful for a person to serve as an investment advisor in Missouri if that person has no place of business in this state. Finally, an advisor's business is restricted to certain business entities or a certain number of contacts in a twelve month period. It is unlawful to transact business as an investment adviser representative unless: 1) he is registered as a securities agent under Chapter 409; 2) he is registered as an investment advisor or as a broker-dealer. No registered investment advisor may employ an investment advisor unless that advisor is also registered.

The Commissioner of the Securities Division may censure a registrant or another individual performing similar functions as a registrant who has been adjudicated within the past ten years by an securities and commodities agency for violating a federal securities act or has been denied the right to do business in the industry. In settling an investigation, the Commissioner may receive a payment into the Secretary of State's Investor Education Fund or create a fund for Missouri investors. The Commissioner may cooperate with other securities agencies in administering the sections of this chapter. The rulemaking language applies to rules promulgated under this chapter.

Any person who advises others for compensation as to the value of securities in a fraudulent manner is liable for damages suffered by those advised. The statute of limitations on such actions is three years. Damages shall be computed as the cost of the security plus eight percent interest per year, attorneys' fees, less the amount received by the purchaser upon the sale of such security.

A registered agent transferring to another broker in Missouri shall be issued a temporary permit which is valid for one-hundred and twenty days.

Under the provisions of this act, any person, except a licensed auctioneer as defined in section 343.010, RSMo, who advertises and conducts a going-out-of-business sale must notify the Attorney General in writing concerning the duration of the sale. The sale shall not exceed a period of sixty days unless an extension has been filed with the Attorney General's office. If the Attorney General fails to take action against violators of laws governing business closure sales, the act permits a prosecuting attorney or a circuit attorney to take action against violators.

Finally, the act expands the redemptions of stock from preferred stock to any class of or series of stock.

However, at least one class or series of stock with full voting power shall not be subject to redemption.

Any stock of a regulated investment company registered under the Investment Company Act of 1940, as amended, may be made subject to redemption by the corporation at its option or at the option of holders of the stock.

Finally, any stock of a corporation which holds a contract from a governmental agency to conduct its business or which is a member of a national securities exchange may be made subject to redemption by the corporation to the extent necessary to prevent the loss of such license, franchise or membership or to reinstate it.