Republic of the Marshall Islands

ASSOCIATIONS LAW

This publication contains the text of Part I (Business Corporations Act), Part II (Revised Partnership Act), Part III (Limited Partnership Act), and Part IV (Limited Liability Company Act) of Title 52, Associations Law, of the Republic of the Marshall Islands Revised Code, as amended, through the 39th Constitutional Regular Session, 2018. This publication is published by the Republic of the Marshall Islands Registrar of Non-resident Domestic Corporations, Partnerships, Limited Partnerships, Limited Liability Companies, and Foreign Maritime Entities, The Trust Company of the Marshall Islands, Inc., Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960.

This publication is not the official government codification of the Republic of the Marshall Islands Associations Law and is provided as a convenience by the publisher for ease of reference only.

Published by:

The Trust Company of the Marshall Islands, Inc., Republic of the Marshall Islands Registrar of Non-resident Domestic Corporations, Partnerships, Limited Partnerships, Limited Liability Companies, and Foreign Maritime Entities.

November 2018

ASSOCIATIONS LAW TABLE OF CONTENTS

PART I: BUSINESS CORPORATIONS ACT

DIVISION 1: GENERAL PROVISIONS

§ 1. Short title. 1 § 2. Definitions. 1 § 3. Application of Business Corporations Act. 2 § 4. Registrars of Corporations; establishment and duties. 3 § 5. Form of instruments; filing. 3 § 6. Certificates or certified copies as evidence (non-resident entities ) 4 § 7. Approval of corporation charters (resident domestic and authorized foreign corporations) 4 § 8. Fees on filing articles of incorporation and other documents 4 § 9. Annual registration fee. 5 § 10. Waiver of notice. 5 § 10A. Immunity from liability and suit. 5 § 11. Notice to shareholders of bearer shares. 5 § 12. Exemptions for non-resident entities. 5 § 13. Construction; adoption of United States corporation law. 6

DIVISION 2: CORPORATE PURPOSES AND POWERS

§ 14. Purposes. 6 § 15. General Powers. 6 § 16. Guarantee authorized by shareholders. 7 § 17. Defense of ultra vires. 7 § 18. Effect of incorporation; corporation as proper party to action 7 § 19. Liability of directors, officers and shareholders 7

DIVISION 3: SERVICE OF PROCESS; REGISTERED AGEN

§ 20. Registered agent for service of process. 8 § 21. Attorney General as agent for service of process 9 § 22. Service of process on foreign corporations not authorized to do business. 9 § 23. Records and certificates of Attorney General. 10 § 24. Limitation on effect of division. 10

DIVISION 4: FORMATION OF CORPORATIONS; CORPORATE NAMES

§ 25. Incorporators. 10 § 26. Corporate name. 10 § 27. Index of names of corporations. 10 § 28. Contents of articles of incorporation. 11 § 29. Powers and rights of bondholders. 12 § 30. Execution and filing of articles of incorporation. 12 § 31. Effect of filing articles of incorporation. 12 § 32. Organization meeting. 12 § 33. Bylaws. 12 § 34. Emergency bylaws and other powers in emergency 13

DIVISION 5: CORPORATE FINANCE

§ 35. Classes and series of shares. 13 § 36. Restrictions on transfer of shares. 14 § 37. Subscriptions for shares. 14 § 38. Consideration for shares. 15 § 39. Payment for shares. 16 § 40. Compensation for formation, reorganization and financing 16 § 41. Determination of stated capital. 16 § 42. Form and content of certificates. 16 § 43. Dividends in cash, stock, or other property. 17 § 44. Share dividends. 18 § 45. Purchase or redemption by corporation of its own shares 18 § 46. Reacquired shares. 18 § 47. Reduction of stated capital by action of the board 19

DIVISION 6: DIRECTORS AND MANAGEMENT

§ 48. Management of business of corporation. 20 § 49. Qualifications of directors. 20 § 50. Number of directors. 20 § 51. Election and term of directors. 20 § 52. Classes of directors. 20 § 53. Newly created directorships and vacancies. 20 § 54. Removal of directors. 21 § 55. Quorum; action by the board. 21 § 56. Meetings of the board. 22 § 57. Executive and other committees. 22 § 58. Director conflicts of interest. 22 § 59. Loans to employees and officers; guaranty of obligations of employees and officers. 23 § 60. Indemnification of directors and officers. 23 § 61. Standard of care to be observed by directors and officers. 24 § 62. Officers. 24 § 63. Removal of officers. 24

DIVISION 7: SHAREHOLDERS

§ 64. Meetings of shareholders. 25 § 65. Notice of meetings of shareholders. 25 § 66. Waiver of notice. 26 § 67. Action by shareholders without a meeting. 26 § 68. Fixing record date. 26 § 69. Proxies. 26 § 70. Quorum of shareholders. 28 § 71. Vote of shareholders required. 28 § 72. Greater requirement as to quorum and vote of shareholders. 28 § 73. List of shareholders at meetings. 29 § 74. Qualification of voters. 29 § 75. Voting trusts. 29 § 76. Agreements among shareholders as to voting. 30 § 77. Conduct of shareholders’ meetings. 30 § 78. Preemptive rights. 30 § 79. Shareholders’ derivative actions. 31

DIVISION 8: CORPORATE RECORDS AND REPORTS

§ 80. Requirement for keeping accounting records, minutes, and records of shareholders and beneficial owners. 32 § 81. Shareholders’ right to inspect books and records. 34 § 82. Directors’ right of inspection. 34 § 83. List of directors and officers. 34 § 84. Enforcement of right of inspection. 35 § 85. Annual report. 35

DIVISION 9: AMENDMENTS OF ARTICLES OF INCORPORATION

§ 86. Right to amend articles of incorporation. 35 § 87. Reduction of stated capital by amendment. 36 § 88. Procedure for amendment. 36 § 89. Class voting on amendments. 36 § 90. Articles of amendment. 36 § 91. Effectiveness of amendment. 36 § 92. Right of dissenting shareholders to payment. 37 § 93. Restated articles of incorporation. 37

DIVISION 10: MERGER OR CONSOLIDATION

§ 94. Definitions. 38 § 95. Merger or consolidation of domestic 38 § 96. Merger of subsidiary corporations. 39 § 97. Effect of merger or consolidation. 39 § 98. Merger or consolidation of domestic and 40 § 99. Sale, lease, exchange or other disposition of assets. 41 § 100. Right of dissenting shareholder to receive payment for shares. 41 § 101. Procedure to enforce shareholder’s right to receive payment for shares 41

DIVISION 11: DISSOLUTION

§ 102. Manner of effecting dissolution. 43 § 103. Judicial dissolution. 44 § 104. Dissolution on failure to pay annual registration fee or appoint or maintain registered agent. 45 § 105. Winding up affairs of corporation after 45 § 106. Settlement of claims against corporation. 46

DIVISION 12: FOREIGN ENTITIES

§ 107. Authorization of foreign entities. 47 § 108. Application to existing authorized foreign entities. 47 § 109. Application for authority to do business. 47 § 110. Amendment of authority to do business. 48 § 111. Termination of authority of foreign entity. 48 § 112. Revocation of authority to do business. 49 § 113. Rights and liabilities of unauthorized foreign entity doing business. 49 § 114. Actions or special proceedings against foreign entities. 49 § 115. Record of shareholders. 50 § 116. Liability of foreign corporations for failure to disclose information. 50 § 117. Applicability to foreign corporations of other provisions. 50 § 118. Fees. 50

DIVISION 13: FOREIGN MARITIME ENTITIES

§ 119. Method of registration. 50 § 120. Powers granted on registration. 51

§ 121. Subsequent change of business address or address of lawful fiduciary or legal representative; amendment of document upon which existence is based. 51 § 122. Revocation of registration. 51 § 123. Fees. 51 § 124. Termination of authority of foreign maritime entity. 51 § 125. Actions or special proceedings against foreign maririme entities. 52

DIVISION 14: TRANSFER OF DOMICILE INTO AND OUT OF THE REPUBLIC

§ 126. Definitions. 53 § 127. Domestication of foreign corporations. 53 § 128. Transfer of domicile of domestic corporation to foreign jurisdiction. 54 § 129. Fees. 55

DIVISION 15: RULES AND REGULATIONS

§ 129.5 Power to prescribe new rules. 55

DIVISION 16: MISCELLANEOUS

§ 130. Merger or consolidation of domestic corporation and partnership. 55 § 131. Merger or consolidation of domestic corporation and limited liability company. 57 § 132. Conversion of other entities to a domestic corporation. 58 § 133. Conversion of domestic corporation to other entities. 59

PART II: REVISED PARTNERSHIP ACT

DIVISION 1: GENERAL PROVISIONS

§ 1. Definitions. 56 § 2. Knowledge and notice. 57 § 3. Effect of partnership agreement; nonwaivable provisions. 57 § 4. Supplemental principles of law. 58 § 5. Execution, filing and recording of statements and certificates. 58 § 6. Governing law. 59 § 7. Reserved power of the Marshall Islands to alter or repeal Act. 60 § 8. Name of partnership. 60 § 9. Indemnification. 60 § 10. Registered agent for the service of process. 60 § 11. Attorney General as agent for service of process. 61 § 12. Doing business. 61 § 13. Restated certificate of partnership existence. 61 § 14. Execution, amendment or cancellation by judicial order. 62 § 15. Certificate of correction; corrected certificate. 62 § 16. Business transactions of partner with the partnership. 62 § 17. Contractual appraisal rights. 62 § 18. Contested matters relating to partners; contested votes. 63 § 19. Interpretation and enforcement of partnership agreement. 63

DIVISION 2: NATURE OF PARTNERSHIP

§ 20. Partnership as entity. 63 § 21. Formation of partnership; powers. 63 § 22. Partnership property. 64 § 23. When property is partnership property. 64

§ 24. Admission without contribution or partnership interest. 64 § 25. Form of contribution. 64 § 26. Liability for contribution. 64

DIVISION 3: RELATIONS OF PARTNERS TO PERSONS DEALING WITH PARTNERSHIP

§ 27. Partner agent of partnership. 65 § 28. Transfer of partnership property. 65 § 29. Certificate of partnership existence. 65 § 30. Denial of status as partner. 66 § 31. Partnership liable for partner’s actionable conduct. 66 § 32. Partner’s liability. 66 § 33. Actions by and against partnership and partners. 66 § 34. Liability of purported partner. 67

DIVISION 4: RELATIONS OF PARTNERS TO EACH OTHER AND TO PARTNERSHIP

§ 35. Partner’s rights and duties. 68 § 36. Distributions in kind. 68 § 37. Requirement for keeping accounting records, minutes, and records of partners and beneficial owners; partner’s rights and duties with respect to information. 69 § 38. General standards of partner’s conduct. 72 § 39. Actions by partnership and partners; derivative actions. 72 § 40. Continuation of partnership beyond definite term or undertaking. 73 § 41. Classes and voting. 73 § 42. Remedies for breach of partnership agreement. 74

DIVISION 5: TRANSFEREES AND CREDITORS OF PARTNER

§ 43. Partner not co-owner of partnership property. 74 § 44. Partner’s economic interest in partnership; personal property. 74 § 45. Transfer of partner’s economic interest. 74

DIVISION 6: PARTNER'S DISSOCIATION

§ 46. Partner’s economic interest subject to charging order. 75 § 47. Events causing partner’s dissociation. 75 § 48. Partner’s power to dissociate; wrongful dissociation. 76 § 49. Effect of partner’s dissociation. 77

DIVISION 7: PARTNER'S DISSOCIATION WHEN BUSINESS OR AFFAIRS NOT WOULD UP

§ 50. Purchase of dissociated partner’s partnership interest. 77 § 51. Dissociated partner’s power to bind and liability to partnership. 78 § 52. Dissociated partner’s liability to other persons. 78 § 53. Certificate of dissociation. 79 § 54. Continued use of partnership name. 79

DIVISION 8: WINDING UP PARTNERSHIP BUSINESS OR AFFAIRS

§ 55. Events causing dissolution and winding up of partnership business or affairs. 79 § 56. Partnership continues after dissolution. 80 § 57. Right to wind up partnership business or affairs. 80 § 58. Partner’s power to bind partnership after dissolution. 80

§ 59. Certificate of dissolution. 80 § 60. Partner’s liability to other partners after dissolution. 81 § 61. Settlement of accounts and contributions among partners. 81

DIVISION 9: CONVERSION; MERGER; DOMESTICATION; AND TRANSFER

§ 62. Conversion of certain entities to a domestic partnership. 81 § 63. Merger or consolidation. 82 § 64. Approval of conversion of a domestic partnership. 85 § 65. Domestication of non-Marshall Islands entities. 85 § 66. Transfer of domestic partnerships. 87

DIVISION 10: MISCELLANEOUS

§ 67. Uniformity of application and construction. 88 § 68. Short title. 88 § 69. Severability clause. 88 § 70. Fees. 88 § 71. Cancellation of certificate of partnership existence for failure to pay annual fee. 88 § 72. Reinstatement of partnership. 88 § 73. Exemptions for non-resident entities. 89 § 74. Repeals. 89 § 75. Applicability. 89 § 76. Effective Date. 89

PART III: LIMITED PARTNERSHIP ACT

DIVISION 1: GENERAL PROVISIONS

§ 1. Definitions. 88 § 2. Name set forth in certificate. 89 § 3. Registered agent for service of process. 89 § 4. Attorney General as agent for service of process. 90 § 5. Nature of business permitted; powers. 90 § 6. Business transactions of partner with the partnership. 91 § 7. Indemnification. 91 § 8. Contested matters relating to general partners; contested votes. 91 § 9. Interpretation and enforcement of partnership agreement. 91

DIVISION 2: FORMATION; CERTIFICATE OF LIMITED PARTNERSHIP

§ 10. Certificate of limited partnership. 92 § 11. Amendment to certificate. 92 § 12. Cancellation of certificate. 93 § 13. Execution. 93 § 14. Execution, amendment or cancellation by judicial order. 94 § 15. Filing. 94 § 16. Liability for false statement. 95 § 17. Notice. 95 § 18. Delivery of certificates to limited partners. 95 § 19. Restated certificate. 96 § 20. Merger and consolidation. 96 § 21. Contractual appraisal rights. 98 § 22. Certificate of correction. 99

§ 23. Domestication of non-Marshall Islands entities. 99 § 24. Transfer of domestic limited partnerships. 100 § 25. Conversion of certain entities to a limited partnership. 102 § 26. Series of limited partners, general partners or partnership interests. 103 § 27. Approval of conversion of a limited partnership. 105

DIVISION 3: LIMITED PARTNERS

§ 28. Admission of limited partners. 106 § 29. Classes and voting. 107 § 30. Liability to third parties. 108 § 31. Person erroneously believing himself or herself limited partner. 109 § 32. Requirement for keeping accounting records, minutes, and records of partners and beneficial owners; access to and confidentiality of information. 109 § 33. Remedies for breach of partnership agreement by limited partner. 112

DIVISION 4: GENERAL PARTNERS

§ 34. Admission of general partners. 113 § 35. Events of withdrawal. 113 § 36. General powers and liabilities. 114 § 37. Contributions by a general partner. 114 § 38. Classes and voting. 114 § 39. Remedies for breach of partnership agreement by general partner. 115

DIVISION 5: FINANCE

§ 40. Form of contribution. 115 § 41. Liability for contribution. 115 § 42. Allocation of profits and losses. 116 § 43. Allocation of distributions. 116 § 44. Defense of usury not available. 116

DIVISION 6: DISTRIBUTIONS AND WITHDRAWAL

§ 45. Interim distributions. 116 § 46. Withdrawal of general partner and assignment of general partner’s partnership interest. 117 § 47. Withdrawal of limited partner. 117 § 48. Distribution upon withdrawal. 117 § 49. Distribution in kind. 117 § 50. Right to distribution. 117 § 51. Limitations on distribution. 117 § 52. Nature of partnership interest. 118

DIVISION 7: ASSIGNMENT OF LIMITED LIABILITY COMPANY INTERESTS

§ 53. Assignment of partnership interest. 118 § 54. Partner’s partnership interest subject to charging order. 118 § 55. Right of assignee to become limited partner. 119 § 56. Powers of estate of deceased or incompetent partner. 119

DIVISION 8: DISSOLUTION

§ 57. Nonjudicial dissolution. 119 § 58. Judicial dissolution. 120 § 59. Winding up. 120

§ 60. Distribution of assets. 121 § 61. Trustees or receivers for limited partnerships; appointment; powers; duties. 122

DIVISION 9: DERIVATIVE ACTIONS

§ 62. Right to bring action. 122 § 63. Proper plaintiff. 122 § 64. Complaint. 122 § 65. Expenses. 122

DIVISION 10: MISCELLANEOUS

§ 66. Construction and application of Act and partnership agreement. 122 § 67. Short title. 123 § 68. Severability. 123 § 69. Fees. 123 § 70. Reserved power of the Republic of the Marshall Islands to alter or repeal Act. 123 § 71. Cancellation of certificate of limited partnership for failure to pay annual fee. 123 § 72. Reinstatement of domestic limited partnership. 123 § 73. Exemptions for non-resident entities. 124

PART IV: LIMITED LIABILITY COMPANY ACT

DIVISION 1: PRELIMINARY; GENERAL

§ 1. Short title. 124 § 2. Definitions. 124 § 3. Name set forth in certificate. 125 § 4. Reservation of name. 125 § 5. Service of process; registered agent. 125 § 6. Nature of business permitted; powers. 128 § 7. Business transactions of member or manager with the limited liability company. 128 § 8. Indemnification. 128 § 9. Certificate of formation. 128

DIVISION 2: FORMATION; CERTIFICATE OF FORMATION

§ 10. Amendment to certificate of formation. 129 § 11. Cancellation of certificate. 129 § 12. Execution. 129 § 13. Execution, amendment or cancellation by judicial order. 129 § 14. Filing. 130 § 15. Notice. 131 § 16. Restated certificate. 131 § 17. Merger and consolidation. 132

DIVISION 3: MEMBERS

§ 18. Admission of members. 134 § 19. Classes and voting. 134 § 20. Liability to third parties. 135 § 21. Events of bankruptcy. 135 § 22. Requirement for keeping accounting records, minutes, and records of members, managers, and beneficial owners; access to and confidentiality of information. 136 § 23. Remedies for breach of limited liability company agreement by member. 138

DIVISION 4: MANAGERS

§ 24. Admission of managers. 138 § 25. Management of limited liability company. 138 § 26. Contributions by a manager. 139 § 27. Classes and voting. 139 § 28. Remedies for breach of limited liability company agreement by manager. 139 § 29. Reliance on reports and information by member or manager. 140

DIVISION 5: FINANCE

§ 30. Form of contribution. 140 § 31. Liability for contribution. 140 § 32. Allocation of profits and losses. 140 § 33. Allocation of distributions. 141

DIVISION 6: DISTRIBUTIONS AND RESIGNATIONS

§ 34. Interim distribution. 141 § 35. Resignation of manager. 141 § 36. Resignation of member. 141 § 37. Distribution upon resignation. 141 § 38. Distribution in kind. 141 § 39. Right to distribution. 142 § 40. Limitations on distribution. 142

DIVISION 7: ASSIGNMENT OF LIMITED LIABILITY COMPANY INTERESTS

§ 41. Nature of limited liability company interest. 142 § 42. Assignment of limited liability company interest. 142 § 43. Rights of judgment creditor. 143 § 44. Right of assignee to become member. 143 § 45. Powers of estate of deceased or incompetent member. 143

DIVISION 8: DISSOLUTION

§ 46. Dissolution. 143 § 47. Judicial dissolution. 144 § 48. Winding up. 144 § 49. Distribution of assets. 145

DIVISION 9: FOREIGN LIMITED LIABILITY COMPANIES

§ 50. Law governing. 145 § 51. Registration required; application. 146 § 52. Issuance of registration. 146 § 53. Name; registered agent. 146 § 54. Amendments to application. 146 § 55. Cancellation of registration. 147 § 56. Doing business without registration. 147 § 57. Foreign limited liability companies doing business without having qualified; injunctions. 147 § 58. Execution; liability. 147 § 59. Service of process on registered foreign limited liability companies. 147 § 60. Service of process on unregistered foreign limited liability companies. 147

DIVISION 10: DERIVATIVE ACTIONS

§ 61. Right to bring action. 148 § 62. Proper plaintiff. 148 § 63. Complaint. 148 § 64. Expenses. 148

DIVISION 11: MISCELLANEOUS

§ 65. Construction and application of Act and limited liability company agreement. 149 § 66. Severability. 149 § 67. Cases not provided for in this Act. 149 § 68. Filing fees. 149 § 69. Reserved power of the Republic of the Marshall Islands to alter or repeal Act. 149 § 70. Annual fees associated with limited liability companies. 149 § 71. Construction; adoption of Delaware limited liability company law. 149 § 72. Immunity from liability and suit. 149 § 73. Contested matters relating to managers; contested votes. 150 § 74. Interpretation and enforcement of limited liability company agreement. 150 § 75. Contractual appraisal rights. 150 § 76. Domestication of non-Marshall Islands entities. 150 § 77. Transfer of domestic limited liability companies. 152 § 78. Conversion of other entities to a limited liability company. 153 § 79. Series of members, managers of limited liability company interest. 154 § 80. Conversion of a domestic limited liability company to other entities. 156 § 81. Delegation of rights and powers to manage. 156 § 82. Defense of usury not available. 157 § 83. RESERVED. 157

PART I:

BUSINESS CORPORATIONS ACT

DIVISION 1: under any other general statute or by any special act of GENERAL PROVISIONS the Republic or which has transferred to the Republic pursuant to Division 14 of this Act; § 1. Short title. § 2. Definitions. (d) “electronic transmission” means any form of § 3. Application of Business Corporations Act. communication, not directly involving the physical § 4. Registrars of Corporations; establishment and transmission of paper, including the use of, or duties. participation in, one (1) or more electronic networks or § 5. Form of instruments; filing. databases (including one (1) or more distributed § 6. Certificates or certified copies as evidence electronic networks or databases), that creates a record (non-resident entities). that may be retained, retrieved and reviewed by a § 7. Approval of corporation charters (resident recipient thereof, and that may be directly reproduced domestic and authorized foreign in paper form by such a recipient through an automated corporations). process; § 8. Fees on filing articles of incorporation and other documents. (e) “foreign corporation” means a corporation for § 9. Annual registration fee. profit formed under laws of a foreign jurisdiction. § 10. Waiver of notice. “Authorized” when used with respect to a foreign cor- § 10A. Immunity from liability and suit. poration means having authority under Division 12 of § 11. Notice to shareholders of bearer shares. this Act to do business in the Republic; § 12. Exemptions for non-resident entities. § 13. Construction; adoption of United States (f) “foreign maritime entity” means a foreign entity corporation law. registered pursuant to the provisions of Division 13 of this Act;

§ 1. Short title. (g) “government” means the Government of the Republic; This Act shall be known and may be cited as the “Associations Law.” Part I of this title shall be known as (h) “insolvent” means being unable to pay debts as the “Business Corporations Act.” References in Part I to they become due in the usual course of the debtor’s “this Act” mean the Business Corporations Act. [P.L. business; 1990-91, § 1.1; amended by P.L. 1990-93, § 2(1), adding the first sentence.] (i) “legislature” means the Nitijela of the Republic;

§ 2. Definitions. (j) “non-resident corporation, partnership, trust, unincorporated association or other entity” means either a As used in this Act, unless the context otherwise domestic corporation or a foreign corporation, partner- requires, the term: ship, trust, unincorporated association or other entity not doing business in the Republic; (a) “articles of incorporation” includes: (k) “publicly-traded company” means a company (i) the original articles of incorporation or any with equity securities that are listed (i) on a securities other instrument filed or issued under any statute to exchange, (ii) on an automated quotation system or (iii) form a domestic or foreign corporation, amended, otherwise on a regulated securities or commodities supplemented, corrected or restated by articles of market that is subject to disclosure requirements amendment, merger, or consolidation or other consistent with international standards which ensure instruments filed or issued under any statute; or adequate transparency of ownership information, or that is formed in contemplation of becoming so (ii) a special act or charter creating a domestic publicly traded or listed and shall be so publicly traded or foreign corporation, as amended, supplemented or or listed within 364 days of the company’s formation, restated; and shall include all direct and indirect subsidiaries

(b) “board” means board of directors; thereof. An entity is a subsidiary of another entity if (i) the parent holds, directly or indirectly, a beneficial (c) “corporation” or “domestic corporation” means a interest in a majority or more of the shares, or a corporation for profit formed under this Act, or majority or more of the voting rights, in the subsidiary existing on its effective date and theretofore formed or (ii) such entity is consolidated in the financial

statements of the parent that are publicly available or (vii) holds a lease or rental of property in the will be made publicly available within 364 days; Republic, solely for the conduct of any activity specified in this subsection; (l) “resident domestic corporation” means a domestic corporation doing business in the Republic; (viii) maintains an office in the Republic, solely for the conduct of any activities allowed in this sub- (m) “Registrar of Corporations” or “Registrars of section; Corporations” means the person or persons appointed by or pursuant to this Act with respect to the type of (ix) holds or owns shares, debt obligations or filing designated herein or their deputy or deputies; other securities in a corporation, partnership, trust, unincorporated association or other entity incorpo- (n) “Republic” means the Republic of the Marshall rated or organized in the Republic; Islands; (x) maintains a registered business agent as (o) “treasury shares” means shares which have been required by any applicable provision of the laws of issued, have been subsequently acquired, and are the Republic; and retained uncanceled by the corporation; (xi) secures and maintains registry in the (p) “Trust Company” means The Trust Company of Republic of any vessel, or conducts other activities in the Marshall Islands, Inc.; the Republic, solely related to the operation, char- tering or disposition of any vessel outside of the (q) Solely for the purposes of this Act, “doing Republic. business in the Republic” means the corporation, partnership, trust, unincorporated association or other Notwithstanding the foregoing, nothing herein shall be entity is carrying on business or conducting trans- deemed to exempt any entity described in this Act from actions in the Republic. A non-resident corporation, the jurisdiction of the High Court of the Republic in partnership, trust, unincorporated association or other respect to activities or transactions within the Republic. entity shall not be deemed to be doing business in the A non-resident domestic or foreign corporation, partner- Republic merely because it engages in one (1) or more ship, trust, unincorporated association or other entity or all of the following activities: shall not engage in:

(i) maintains an administrative, management, (i) retailing, wholesaling, trading or importing executive, billing or statutory office in the Republic; goods or services for or with residents of the Republic; or (ii) has officers or directors who are residents or citizens of the Republic; provided, however, that any (ii) any extractive industry in the Republic; or income derived therefrom and received by such resident officers or directors shall be deemed domestic (iii) any regulated professional service activity income; in the Republic; or

(iii) maintains bank accounts or deposits, or (iv) the export of any commodity or goods borrows from licensed financial institutions carrying manufactured, processed, mined or made in the on business within the Republic; Republic; or

(iv) makes or maintains professional contact (v) the ownership of real property located in with or uses the services of attorneys, accountants, the Republic. [P.L. 1990-91, § 1.2; Paragraphs bookkeepers, trust companies, administration com- renumbered correctly; amended by P.L. 1990-93, § panies, investment advisors, or other similar persons 2(2), deleting the word “International” in carrying on business within the Republic; Paragraph (n); amended by P.L. 2017-52.]

(v) prepares or maintains books and records of § 3. Application of Business Corporations Act. accounts, minutes, and share registries within the Republic; (1) To domestic and foreign corporations in general. The Business Corporations Act applies to every resident (vi) holds meetings of its directors, shareholders, and non-resident domestic corporation and to every partnership or members within the Republic; foreign corporation authorized to do business or doing business in the Republic; but the provision of this Act

shall not alter or amend the articles of incorporation of maritime entities and other entities and the name index any domestic corporation in existence on the effective required by section 27 of this Act, which shall be appointed date of this Act, whether established by incorporation or by the Cabinet. created by special act. Any domestic corporation created prior to the effective date of this Act may at any time (2) The Registrars shall be responsible for the filing subject itself to the provisions of this Act by amending its and maintenance of all instruments required or permitted articles of incorporation in accordance with the manner to be filed under this Act, such additional instruments as prescribed by Division 9 of this Act. the Government may from time to time require, and the issuance of certificates and certified copies with respect (2) Banking and insurance corporations. A corpora- to such filings and records, for the entities for which they tion to which any banking law or insurance law of this are responsible. Republic may be applicable shall also be subject to the Business Corporations Act, but such banking law or (3) The Registrar of Corporations responsible for insurance law, as the case may be, shall prevail over any resident domestic and qualified foreign corporations shall conflicting provisions of the Business Corporations Act. be appointed by the Cabinet. The Registrar of Corpora- tions responsible for non-resident corporations, foreign (3) Causes of action, liability or penalty. This Act maritime entities and the name index shall be the Trust shall not affect any cause of action, liability, penalty, or Company. The Trust Company shall appoint such deputy action or special proceeding which on the effective date registrars outside of the Republic as it deems appropriate. of this Act is accrued, existing, incurred or pending, but [P.L. 1990-91, § 1.4; paragraphs were numbered as the same may be asserted, enforced, prosecuted, or subsections to conform to format of the Code; amended defended as if this Act had not been enacted. by P.L. 1997-52, § 4; amended by P.L. 2005-27, § 4.]

(4) Joint ventures. Any business venture carried on by § 5. Form of instruments; filing. two (2) or more corporations as partners shall be governed by the Revised Partnership Act. (1) General requirement. Whenever any provision of (5) Nature of business permitted; powers. A non- this Act requires any instrument to be filed, such instru- resident domestic corporation may carry on any lawful ment shall be filed with the appropriate Registrar of business, purpose or activity with the exception of the Corporations and shall comply with the provision of this business of granting policies of insurance or assuming section unless otherwise expressly provided by the statute. insurance risks, trust services or banking. (2) Language. Every instrument shall be in the English (6) Regulation by foreign authorities. Every non- language and may be accompanied by a translation, resident domestic corporation that carries out activities however, the governing language shall be English. without the Republic which would be regulated under the Banking Act 1987 (17 MIRC, Chapter 1) or the (3) Execution. All instruments shall be signed by an regulations promulgated thereunder if carried out within officer or director of the corporation or by a person auth- the Republic shall be regulated by the relevant authorities orized to sign on behalf of the corporation. Such signa- in the jurisdiction(s) in which the corporation carries out ture shall be over the printed name and title of the signa- these activities and shall comply with the laws, regula- tory. Any signature on any instrument authorized to be tions, and licensing requirements of such jurisdiction(s). filed with a Registrar of Corporations under this Act may [P.L. 1990-91, § 1.3; reference to “Act” in the be a facsimile or an electronically transmitted signature. parenthetical note was changed to “Part” for clarity; amended by P.L. 2005-27, § 3, adding new section; (4) Acknowledgements. Whenever any provision of amended by P.L. 2018-100, § 6.] this Act requires an instrument to be acknowledged such requirement is satisfied by either: § 4. Registrars of Corporations; establishment and duties. (a) The formal acknowledgement by the person or one (1) of the persons signing the instrument that it is (1) There are herewith established two (2) Registrars of his act and deed or the act and deed of the corporation, Corporations: a Registrar of Corporations responsible for and that the facts stated therein are true. Such acknow- resident domestic and authorized foreign corporations, and a ledgment shall be made before a person who is Registrar of Corporations responsible for non-resident authorized by the law of the Republic or the law of the corporations, partnerships, limited partnerships, limited place of execution to take acknowledgments. If such liability companies, unincorporated associations, foreign

person has a seal of office he shall affix it to the correct form. The corrected instrument when filed shall be instrument. effective as of the date the original instrument was filed.

(b) The signature over the typed or printed name (7) Facsimile signature. and title of the signatory, without more, of the person or persons signing the instrument, in which case such (a) Any signature of a Registrar or Deputy Registrar signature or signatures shall constitute the affirmation of Corporations on any instrument or certificate filed or acknowledgement of the signatory, under penalties or issued under this Act or the authority granted by this of perjury, that the instrument is his act and deed or the Act may be a facsimile. act and deed of the corporation, and that the facts stated therein are true. (b) Any signature on any instrument authorized to be filed with a Registrar or Deputy Registrar of Corpo- (5) Filing. Whenever any provision of this Act rations under this Act may be a facsimile. [P.L. 1990- requires any instrument to be filed with a Registrar of 91, § 1.5; amended by P.L. 1998-73, § 5; amended by Corporations, such requirement means that: P.L. 2000-18, § 5; amended by P.L. 2017-52, § 3.]

(a) The original instrument, and a duplicate copy, § 6. Certificates or certified copies as evidence which may be either a signed copy or a photographic (non-resident entities). copy if such copy clearly shows the signatures on the instruments, shall be delivered to a Registrar or Deputy All certificates issued by the Registrar or Deputy Registrar of Corporations accompanied by a receipt Registrar of Corporations responsible for non-resident showing payment to the appropriate Registrar of domestic and foreign corporations, foreign maritime Corporations of all fees required to be paid in entities, and other non-resident entities in accordance connection with the filing of the instrument. with the provisions of this Act and all copies of documents filed in his office in accordance with the (b) Upon delivery of the original signed instrument with provisions of this Act shall, when certified by him, be the required receipt and the duplicate copy, a Registrar or taken and received in all courts, public offices and Deputy Registrar of Corporations shall certify that the official bodies as prima facie evidence of the facts instrument has been filed in his office by endorsing the therein stated and of the execution of such instruments. word “Filed” and the date of filing on the original. [P.L. 1990-91, § 1.6.]

(c) A Registrar or Deputy Registrar of Corporations § 7. Approval of corporation charters (resident shall compare the duplicate copy with the original signed domestic and authorized foreign instrument, and if he finds that the text is identical, shall corporations). affix on the duplicate copy the same endorsement of

filing as he affixed on the original. The said duplicate Notwithstanding any other provision of this Act or any copy, as endorsed, shall be returned to the corporation. other law, the Registrar of Corporations responsible for The endorsement constitutes the certificate of the resident domestic and authorized foreign corporations Registrar that the document is a true copy of the shall submit to the Cabinet for approval the proposed instrument filed in his office and that it was filed as of articles of incorporation, bylaws and any other documen- the date stated in the endorsement. tation which the Registrar of Corporations or the Cabinet

(d) Any instrument filed in accordance with subsec- may require from time to time. The Cabinet shall have tion (b) of this section shall be effective as of the filing the authority to cause the issuance of a corporate charter date stated thereon. for any resident domestic corporation and such corporate charter shall be prima facie evidence of incorporation in (6) Correction of filed instruments. Any instrument the Republic as a resident domestic corporation. [P.L. relating to a domestic or foreign corporation and filed 1990-91, § 1.7.] with a Registrar or Deputy Registrar of Corporations under this Act may be corrected with respect to any error § 8. Fees on filing articles of incorporation and apparent on the face or defect in the execution thereof by other documents. filing with a Registrar or Deputy Registrar of Corporations a certificate of correction, executed and acknowledged in (1) Articles of incorporation. On filing articles of the manner required for the original instrument. The cer- incorporation a fee shall be paid to the appropriate tificate of correction shall specify the error or defect to be Registrar of Corporations in such an amount as shall be corrected and shall set forth the portion of the instrument in prescribed from time to time by such Registrar and a

receipt therefore shall accompany the documents presen- convened. Neither the business to be transacted at, nor ted for filing. the purpose of, any regular or special meeting of the shareholders, directors or members of a committee of (2) Increasing authorized number of shares; articles directors need be specified in any written waiver of of merger or consolidation. On filing with a Registrar or notice or any waiver by electronic transmission unless so Deputy Registrar of Corporations an amendment of required by the articles of incorporation or the bylaws. articles of incorporation increasing the authorized num- [P.L. 1990-91, § 1.10; amended by P.L. 2017-52.] ber of shares or articles of merger or consolidation of two (2) or more domestic corporations, a fee shall be paid § 10A. Immunity from liability and suit. computed in accordance with the schedule stated in subsection (1) of this section on the basis of the number In the performance of their duties, the Registrar, any of shares provided for in the articles of amendment or Deputy Registrar, and/or any trust corporation and/or agent articles of merger or consolidation, except that all fees appointed, authorized, recognized, and/or designated by the paid by the corporation with respect to the shares autho- Registrar or any Deputy Registrar, or trust corporation, or rized prior to such amendment or merger or consolidation by any person acting on their behalf for the administration shall be deducted from the amount to be paid, but in no of the provisions of this Act or any Regulation promulgated case shall the amount be less than ten dollars (U.S. $10). pursuant thereto or for the performance of any services, pursuant to this Act, together with any affiliate of any such (3) Articles of dissolution; articles of amendment; agent, their stockholders, members, directors, officers and articles of merger or consolidation into foreign corporation. employees, wherever located, shall have full immunity from On filing with a Registrar or Deputy Registrar of Corpo- liability and from suit with respect to any act or omission or rations an amendment of articles of incorporation other thing done by any of them in good faith in the exercise or than an amendment increasing the authorized number of performance, or in the purported exercise or performance, of shares, or articles of dissolution, or articles of merger or any power, authority or duty conferred or imposed upon any consolidation into a foreign corporation or any other of them under or in connection with this Act or any document for which a certificate is issued under this Act, Regulation, as amended, or any other law or rule applicable a fee shall be paid to the appropriate Registrar of to the performance of any of their said duties. Corporations in such amount as shall be prescribed from time to time by such Registrar. The immunity provided by this section shall only apply to those acts or omissions of agents and/or employees of (4) Other fees. Fees for certifying copies of documents the Registrar of Corporations done by them in the course and for filing, recording or indexing papers shall be fixed of and in connection with the administration of the by a Registrar of Corporations. [P.L. 1990-91, § 1.8.] Republic of the Marshall Islands Corporate Program. [P.L. 1997-34, § 10A, adding new section.]

§ 9. Annual registration fee. § 11. Notice to shareholders of bearer shares.

Every domestic corporation and every foreign corpora- Subject to the provisions of section 42 of this Act, any tion authorized to do business in the Republic shall pay notice or information required to be given to shareholders an annual fee to the appropriate Registrar of Corporations of bearer shares shall be provided in the manner in such amount as shall be prescribed from time to time designated in the corporation’s articles of incorporation by such Registrar. [P.L. 1990-91, § 1.9.] or, in the absence of such designation or if the notice can no longer be provided as stated therein, the notice shall § 10. Waiver of notice. be published in a publication of general circulation in the Republic or in a place where the corporation has a place Whenever notice is required to be given under any of business. Any notice requiring a shareholder to take provision of this Act or the articles of incorporation or action in order to secure a right or privilege shall be bylaws, a written waiver, signed by the person entitled to published in time to allow a reasonable opportunity for notice, or a waiver by electronic transmission by the such action to be taken. [P.L. 1990-91, § 1.11.] person entitled to notice, whether before or after the time stated therein, shall be deemed equivalent to notice. § 12. Exemptions for non-resident entities. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person Notwithstanding any provision of the Income Tax Act attends a meeting for the express purpose of objecting at of 1989 (II MIRC, Chapter 1A), or any other law or the beginning of the meeting, to the transaction of any regulation imposing taxes or fees now in effect or business because the meeting is not lawfully called or hereinafter enacted, a non-resident domestic or foreign

corporation, partnership, trust, unincorporated association or limited liability company; and (solely for purposes of Corporations may be organized under this Act for any this section) the Administrator and Trust Company duly lawful business purpose or purposes. [P.L. 1990-91, appointed by the Cabinet to act in the capacity of the § 2.1.] Registrar of Corporations for non-resident entities pursuant to this Act and as the Maritime Administrator § 15. General Powers. created pursuant to the Marshall Islands Maritime Act 1990 (34 MIRC, Chapter 3A), shall be exempt from any Every corporation, subject to any limitations provided corporate tax, net income tax on unincorporated busi- in this Act or any other statute of the Republic or its arti- nesses, corporate profit tax, income tax, withholding tax cles of incorporation, shall have power in furtherance of on revenues of the entity, asset tax, tax reporting its corporate purposes irrespective of corporate benefit to: requirement on revenues of the entity, stamp duty, exchange controls or other fees or taxes other than those (a) have perpetual duration; imposed by sections 8 and 9 of this division. (b) sue and be sued in all courts of competent Interest, dividends, royalties, rents, payments (including jurisdiction in the Republic and to participate in actions payments to creditors), compensation or other distribu- and proceedings, whether judicial, administrative, arbi- tions of income paid by a non-resident corporation, trative or otherwise, in like cases as natural persons; partnership, trust, unincorporated association or limited liability company to another non-resident corporation, (c) have a corporate seal, and to alter such a seal at partnership, trust, unincorporated association or limited pleasure, and to use it by causing it or a facsimile to be liability company or to individuals or enti-ties which are affixed or impressed or reproduced in any other not citizens or residents of the Republic are exempt from manner; any tax or withholding provisions of the laws of the

Marshall Islands. [P.L. 1990-91, § 1.12; amended by P.L. (d) purchase, receive, take by grant, gift, devise, 2000-18, § 12; amended by P.L. 2017-52.] bequest, or otherwise, lease or otherwise acquire, own, § 13. Construction; adoption of United States hold, improve, employ, use and otherwise deal in and corporation law. with real or personal property, or any interest therein, wherever situated; This Act shall be applied and construed to make the laws of the Republic, with respect to the subject matter (e) sell, convey, lease, exchange, transfer or other- hereof, uniform with the laws of the State of Delaware wise dispose of, or mortgage or pledge, or create a and other states of the United States of America with security interest in all, or any of its property, or any substantially similar legislative provisions. Insofar as it interest therein, wherever situated; does not conflict with any other provision of this Act, the non-statutory law of the State of Delaware and of those (f) purchase, take, receive, subscribe for, or other states of the United States of America with otherwise acquire, own, hold, vote, employ, sell, lend, substantially similar legislative provisions is hereby lease, exchange, transfer, or otherwise dispose of, declared to be and is hereby adopted as the law of the mortgage, and pledge, bonds and other obligations, Republic, provided however, that this section shall not shares, or other securities or interests issued by others, apply to resident domestic corporations. [P.L. 1990-91, whether engaged in similar or different business, § 1.13; amended by P.L. 2000-18, § 13.] governmental, or other activities;

DIVISION 2: (g) make contracts, give guarantees and incur liabi- CORPORATE PURPOSES AND POWERS lities, borrow money at such rates of interest as the corporation may determine, issue its notes, bonds, and § 14. Purposes. other obligations, and secure any of its obligations by § 15. General powers. mortgage or pledge of all or any of its property or any § 16. Guarantee authorized by shareholders. interest therein, wherever situated; § 17. Defense of ultra vires. (h) lend money, invest and reinvest its funds, and § 18. Effect of incorporation; corporation as proper have offices and exercise the powers granted by this party to action. division in any jurisdiction within or without the § 19. Liability of directors, officers and Republic; shareholders. § 14. Purposes.

(i) elect or appoint officers, employees and other vote thereon. If authorized by a like vote, such guaran- agents of the corporation, define their duties, fix their tee may be secured by a mortgage or pledge of, or the compensation, and the compensation of directors, and creation of a security interest in, all or any part of the to indemnify corporate personnel; corporate property, or any interest therein, wherever situated. [P.L. 1990-91, § 2.3.] (j) adopt, amend or repeal bylaws relating to the business of the corporation, the conduct of its affairs, § 17. Defense of ultra vires. its rights or powers or the rights or powers of its shareholders, directors or officers; No act of a corporation and no transfer of real or personal property to or by a corporation, otherwise law- (k) make donations for the public welfare or for ful, shall be invalid by reason of the fact that the charitable, educational, scientific, civic or similar corporation was without capacity or power to do such act purposes; or to make or receive such transfer, but such lack of capacity or power may be asserted in an action by: (l) pay pensions and establish pension plans, pension trusts, profit sharing plans, stock bonus plans, (a) a shareholder against the corporation to enjoin stock option plans and other incentive plans for any or the doing of any act or the transfer of real or personal all of its directors, officers, and employees; property by or to the corporation. If the unauthorized act or transfer sought to be enjoined is being, or is to be, performed or made under any contract to which the (m) purchase, receive, take or otherwise acquire, corporation is a party, the court may, if all of the own, hold, sell, lend, exchange, transfer or otherwise parties to the contract are parties to the action and if it dispose of, pledge, use and otherwise deal in and with deems the same to be equitable, set aside and enjoin its own shares; the performance of such contract, and in so doing may

allow to the corporation or to the other parties to the (n) be a promoter, incorporator, partner, member, contract, as the case may be, such compensation as associate, or manager of any partnership, corporation, may be equitable for the loss or damage sustained by joint venture, trust or other enterprise; any of them from the action of the court in setting

aside and enjoining the performance of such contract; (o) renounce, in its articles of incorporation or by provided, that anticipated profits to be derived from action of its board of directors, any interest or the performance of the contract shall not be awarded expectancy of the corporation in, or in being offered an by the court as a loss or damage sustained; opportunity to participate in, specified business opportunities or specified classes or categories of (b) the corporation, whether acting directly or business opportunities that are presented to the through a receiver, trustee, or other legal represen- corporation or one (1) or more of its officers, directors tative, or through shareholders in a derivative suit or shareholders; against the incumbent or former officers or directors of the corporation for loss or damage due to their (p) domicile, redomicile, domesticate, file or Regis- unauthorized business. [P.L. 1990-91, § 2.4.] ter itself, or move or transfer its place or situs of initial or subsequent registration, domicile, siege social or § 18. Effect of incorporation; corporation as proper sitz or any other equivalent thereto from or to any party to action. place and to continue as a corporation of any place; and A corporation is a legal entity, considered in law as a fictional person distinct from its shareholders or (q) have and exercise all powers necessary or members, and with separate rights and liabilities. The convenient to effect any or all of the purposes for corporation is a proper plaintiff in a suit to assert a legal which the corporation is formed. [P.L. 1990-91, § 2.2; right of the corporation and a proper defendant in a suit amended by P.L. 2017-52, § (o).] to assert a legal right against the corporation. [P.L. 1990- 91, § 2.5.] § 16. Guarantee authorized by shareholders. § 19. Liability of directors, officers and A guarantee may be given by a corporation, although shareholders. not in furtherance of its corporate purposes, when authorized at a meeting of shareholders by vote of the Unless otherwise provided by law, the directors, holders of a majority of all outstanding shares entitled to officers and shareholders of a foreign or domestic

corporation shall not be liable for corporate debts and notify the corporation not less than thirty (30) days prior obligations. [P.L. 1990-91, § 2.6.] to such filing and resignation. The registered agent shall mail or cause to be mailed to the corporation at the last DIVISION 3: known address of the corporation, within or without the SERVICE OF PROCESS; REGISTERED AGENT Republic or at the last known address of the person at whose request the corporation was formed, notice of the § 20. Registered agent for service of process. resignation of the agent. No designation of a new § 21. Attorney General as agent for service of registered agent shall be accepted for filing until all process. charges owing to the former registered agent shall have § 22. Service of process on foreign corporations been paid. not authorized to do business. § 23. Records and certificates of Attorney General. (6) Making, revoking or changing designation by § 24. Limitation on effect of division. corporation. A designation of a registered agent under this section may be made, revoked, or changed by filing an appropriate notification with a Registrar of Corpo- § 20. Registered agent for service of process. rations.

(1) Registered agent. Every domestic corporation or (7) Termination of designation. The designation of a foreign corporation, partnership, trust, unincorporated registered agent shall terminate upon filing a notice of association or other entity authorized to do business in resignation provided that the registered agent certifies the Republic, or foreign maritime entity registered under that the corporation was notified not less than thirty (30) the provisions of section 119 of this Act, shall designate days prior to such filing as provided by subsection (5) of a registered agent in the Republic upon whom process this section. against such entity or any notice or demand required or permitted by law to be served may be served. The agent (8) Notification by registered agent to corporation. A for a corporation having a place of business in the registered agent, when served with process, notice or Republic shall be a resident domestic corporation having demand for the corporation which he represents, shall a place of business in the Republic or a natural person, transmit the same to the corporation by personal resident of and having a business address in the notification or in the following manner: Upon receipt of Republic. the process, notice or demand, the registered agent shall cause a copy of such paper to be mailed to the (2) Registered agent for non-resident entities. The corporation named therein at its last known address. registered agent for a non-resident domestic or foreign Such mailing shall be by registered mail. As soon corporation, partnership, trust, unincorporated association thereafter as possible if process was issued in the or other entity, or for a foreign maritime entity, shall be Republic, the registered agent may file with the clerk of the Trust Company. the court of the Republic issuing the process or with the agency of the Government issuing the notice or demand (3) Failure to maintain a registered agent. A domestic either the receipt of such registered mailing or an corporation, authorized foreign corporation, partnership, affidavit stating that such mailing has been made, signed trust, unincorporated association, foreign maritime entity, by the registered agent, or if the agent is a corporation, or other entity, which fails to maintain a registered agent by an officer of the same, properly notarized. Com- as required by this Act shall be dissolved or its authority pliance with the provisions of this subsection shall to do business or registration shall be revoked, as the case relieve the registered agent from any further obligation may be, in accordance with sections 104, 112, or 122 of to the corporation for service of the process, notice or this Act. demand, but the agent’s failure to comply with the provisions of this subsection shall in no way affect the (4) Manner of service. Service of process on a Regis- validity of the service of the process, notice or demand. tered agent may be made in the manner provided by law for the service of summons as if the registered agent (9) Liability of registered agent; dismissal of action were a defendant. against. A registered agent for service of process acting pursuant to the provisions of this section shall not be (5) Resignation by registered agent. Any registered liable for the actions or obligations of the corporation for agent of a corporation may resign as such agent upon whom it acts. The registered agent shall not be a party to filing a written notice thereof with a Registrar of Corpo- any suit or action against the corporation or arising from rations; provided, however that the registered agent shall the acts or obligations of the corporation. If the Regis-

tered agent is named in any such action, the action shall § 22. Service of process on foreign corporations not be dismissed as to such agent. [P.L. 1990-91, § 3.1.] authorized to do business.

§ 21. Attorney General as agent for service of (1) Attorney General as agent to receive service. Every process. foreign corporation not authorized to do business or not registered under section 119 of this Act, which itself or (1) When Attorney General is agent for service. Whene- through an agent does any business in the Republic or ver a domestic corporation or foreign corporation, does any other act in the Republic which under partnership, trust, unincorporated association or other applicable law confers jurisdiction on Marshall Islands’ entity authorized to do business in the Republic or a courts as to claims arising out of such act, is deemed to foreign maritime entity registered pursuant to Division have designated the Attorney General as its agent upon 13 of this Act or a corporation which has transferred its whom process against it may be served, in any action or domicile out of the Republic into another jurisdiction special proceeding arising out of or in connection with fails to maintain a registered agent in the Republic, or the doing of such business or the doing of such other act. whenever its registered agent cannot with reasonable Such process may issue in any court in the Republic diligence be found at his business address, then the having jurisdiction of the subject manner. Attorney General shall be an agent of such corporation or other entity upon whom any process or notice or (2) Manner of service. Service of such process upon demand required or permitted by law to be served may the Attorney General shall be made by personally be served upon. delivering to and leaving with him or his deputy, or with any person authorized by the Attorney General to receive (2) Manner of service. Service on the Attorney General such service, at the office of the Attorney General in as agent of a domestic or foreign corporation or other Majuro Atoll, a copy of such process together with the entity authorized to do business or on a foreign maritime statutory fee. Such service shall be sufficient if a copy of entity registered under section 119 of this Act, shall be the process is: made by personally delivering to and leaving with him or his deputy or with any person authorized by the Attorney (a) delivered personally without the Republic to General to receive such service, at the office of the such foreign corporation or other entity by a person Attorney General in Majuro Atoll, duplicate copies of and in the manner authorized to serve process by law such process together with the statutory fee. The of the jurisdiction in which service is made; or Attorney General shall promptly send one (1) of such copies by registered mail return receipt requested, to (b) sent by or on behalf of the plaintiff to such such corporation at the business address of its registered foreign corporation by registered mail at the post office agent, or if there is no such office, the Attorney General address specified for the purpose of mailing process, shall mail such copy, in the case of a resident domestic on file in the office of the Attorney General in the corporation, in care of any director named in its articles jurisdiction of its creation or with any official or body of incorporation at his address stated therein, or in the performing the equivalent function thereof, or if no case of a non-resident domestic corporation or other such address is there specified, to its registered agent or entity, at the address of the corporation without the other office there specified, or if no such office is Republic, or if none, at the last known address of a specified, to the last address of such foreign person at whose request the corporation was formed; or corporation known to the plaintiff. in the case of a foreign corporation authorized to do business, to such corporation at its address as stated in its (3) Proof of service. Proof of service shall be by application for authority to do business, or, in the case of affidavit of compliance with this section filed, together a foreign maritime entity registered pursuant to Division with the process, within thirty (30) days after such 13 of this Act, to its principal place of business; or in the service with the clerk of the court in which the action or case of a corporation which has transferred its domicile special proceeding is pending. If a copy of the process is out of the Republic to such corporation’s registered mailed in accordance with this section, there shall be agent as shown in the certificate of transfer of domicile. filed with the affidavit of compliance either the return [P.L. 1990-91, § 3.2.] receipt signed by such foreign corporation or other official proof of delivery or, if acceptance was refused, the original envelope with a notation by the postal authorities that acceptance was refused. If acceptance was refused, a copy of the process together with notice of the mailing by registered mail and refusal to accept shall

be promptly sent to such foreign corporation at the same § 26. Corporate name. address by ordinary mail and the affidavit of compliance shall so state. Service of process shall be complete ten (1) General requirements. Except as otherwise provi- (10) days after such papers are filed with the clerk of the ded in subsection (2) of this section, the name of a court. The refusal to accept delivery of the registered domestic or authorized foreign corporation shall: mail or to sign the return receipt shall not affect the validity of the service and such foreign corporation (a) contain the word “corporation,” “incorporated,” refusing to accept such registered mail shall be charged “company,” or “limited” or an abbreviation of one (1) with knowledge of the contents thereof. [P.L. 1990-91, of such words; but a non-resident domestic corporation § 3.3.] or a foreign corporation may, in place of any of the above mentioned words or abbreviations, include as § 23. Records and certificates of Attorney General. part of its name such words, abbreviations, suffix, or prefix as will clearly indicate that it is a corporation as The Government or its designee shall keep a record of distinguished from a natural person or partnership; each process served upon the Attorney General under this division, including the date of service. It shall, upon (b) not be the same as the name of a corporation of request made within five (5) years of such service, issue a any type or kind, as such name appears on the indices certificate under its seal certifying as to the receipt of the of names of existing domestic and authorized foreign process by an authorized person, the date and place of corporations maintained by the Registrar of Corpora- such service, and the receipt of the statutory fee. [P.L. tions or a name so similar to any such name as to tend 1990-91, § 3.4.] to confuse or deceive;

§ 24. Limitation on effect of division. (c) notwithstanding subsection (1)(a) of this section, the Registrar of Corporations may waive the abbrevia- Nothing contained in this division shall affect the tion, suffix or prefix requirements for the name of a non- validity of service of process on a corporation or other resident domestic corporation where deemed appropriate. entity effected in any other manner permitted by law. [P.L. 1990-91, § 3.5.] (2) Limitations on scope of requirement. The provisions of subsection (1) of this section shall not: DIVISION 4: FORMATION OF CORPORATIONS; (a) require any corporation, existing or authorized CORPORATE NAMES to do business on the effective date of this Act, to add

to, modify or otherwise change its corporate name; § 25. Incorporators.

§ 26. Corporate name. (b) prevent a corporation with which another § 27. Index of names of corporations. corporation, domestic or foreign, is merged, or which § 28. Contents of articles of incorporation. is formed by the reorganization or consolidation of one § 29. Powers and rights of bondholders. (1) or more domestic or foreign corporations, or upon a § 30. Execution and filing of articles of sale, lease or other disposition to or exchange with, a incorporation. domestic corporation of all or substantially all the § 31. Effect of filing articles of incorporation. assets of another domestic corporation, including its § 32. Organization meeting. name, from having the same name as any of such § 33. Bylaws. corporations if at the time such other corporation was § 34. Emergency bylaws and other powers in existing under the laws of the Republic or was emergency. authorized to do business in the Republic. [P.L. 1990-

91, § 4.2; amended by P.L. 2000-18, § 26.] § 25. Incorporators. § 27. Index of names of corporations. Any person, partnership, association or corporation, singly or jointly with others, and without regard to his or The Registrar of Corporations shall keep alphabetical their residence, domicile, or jurisdiction of incorporation, indices of all names of all existing resident and non- may incorporate or organize a corporation under this resident domestic corporations, foreign maritime entities Act. [P.L. 1990-91, § 4.1.] registered pursuant to Division 13 of this Act, and foreign corporations authorized to do business in the Republic in accordance with their respective duties

provided in separately. Such indices shall be in addition of each series and a statement of the variations in the to the files of articles of incorporation and other docu- relative rights and preferences as between series ments required to be kept by the Registrar of insofar as the same are to be fixed in the articles of Corporations under this Act. [P.L. 1990-91, § 4.3.] incorporation, and a statement of any authority to be vested in the board of directors to establish series and § 28. Contents of articles of incorporation. fix and determine the variations in the relative rights and preferences as between series; The articles of incorporation shall set forth: (j) if the initial directors are to be named in the (a) the name of the corporation; articles of incorporation, the names and addresses of the persons who are to serve as directors until the first (b) the duration of the corporation if other than annual meeting of the shareholders or until their perpetual; successors shall be elected and qualified;

(c) the purpose or purposes for which the corpo- (k) the name and address of each incorporator; ration is organized. It shall be sufficient to state, either alone or with other businesses or purposes, that the (l) a statement affirming that “the corporation will purpose of the corporation is to engage in any lawful comply with all applicable provisions of the Republic act or activity for which corporations may be organized of the Marshall Islands Business Corporations Act, under this Act, and by such statement all lawful acts including retention, maintenance, and production of and activities shall be within the purposes of the accounting, shareholder, beneficial owner, and director corporation, except for express limitations, if any; and officer records in accordance with Division 8 of the Republic of the Marshall Islands Business (d) the registered address of the corporation in the Corporations Act”; this statement shall, by force of Republic and the name and address of its registered law, be deemed to be included in the articles of agent; incorporation of all corporations, including those incorporated prior to the effective date of this law; (e) the aggregate number of shares which the corporation shall have authority to issue; if such shares (m) any provision, not inconsistent with law, which are to consist of one (1) class only, the par value of the incorporators elect to set forth in the articles of each of such shares, or a statement that all of such incorporation for the regulation of the affairs of the shares are without par value; or if such shares are to be corporation, including the designation of initial divided into classes, the number of shares of each directors, subscription of stock by the incorporators, class, and a statement of the par value of the shares of and any provision restricting the transfer of shares or each class or that such shares are to be without par providing for greater quorum or voting requirements value; with respect to shareholders or directors that are otherwise prescribed in this Act, and any provision (f) if the shares are to be divided into classes, the which under this Act is required or permitted to be set designation of each class and a statement of the pre- forth in the bylaws. It is not necessary to enumerate in ferences, limitations and relative rights in respect of the articles of incorporation the general corporate the shares of each class; powers stated in section 15 of this Act;

(g) subject to the provisions of section 42 of this (n) in addition to the matters required to be set forth Act, the number of shares to be issued as registered in the articles of incorporation by this section, the shares and as bearer shares and whether registered articles of incorporation may also contain a provision shares may be exchanged for bearer shares and bearer for elimination or limitation of personal liability of a shares for registered shares; director to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a (h) if bearer shares are authorized to be issued as director, provided that such provision shall not provided in section 42 of this Act, the manner in which eliminate or limit the liability of a director: any required notice shall be given to shareholders of bearer shares; (i) for any breach of the director’s duty of loyalty to the corporation or its stockholders; (i) if the corporation is to issue the shares of any preferred or special class in series, then the designation

(ii) for acts or omissions not undertaken in good § 32. Organization meeting. faith or which involve intentional misconduct or a knowing violation of law; or (1) Meeting. After the filing of the articles of incorporation an organization meeting or meetings of the (iii) for any transaction from which the director corporation shall be held either within or without the derived an improper personal benefit. No such Republic for the purposes of doing such acts to perfect provision shall eliminate or limit the liability of a the organization of the corporation as are deemed director for any act or omission occurring prior to appropriate and transacting such other business as may the date when such provision becomes effective. come before the meeting(s). [P.L. 1990-91, § 4.4.] (2) Who may hold. The organization meeting(s) may be § 29. Powers and rights of bondholders. held by either:

The articles of incorporation may confer upon the (a) the original directors (if named in the articles of holders of any bonds, debentures, or other obligations incorporation); or issued or to be issued by the corporation, whether secured by mortgage or otherwise or unsecured, any one (b) the incorporator or incorporators, in person or (1) or more of the following powers and rights: by proxy, whether or not they are subscribers; or

(a) the power to vote on the election of directors, or (c) if the articles of incorporation state that incor- other matters specified in the articles; porators or others have subscribed to stock, by such subscribers; or (b) the right of inspection of books of account, minutes, and other corporate records; (d) if the subscriptions have been transferred, by the transferees of subscription rights. (c) any other rights to information concerning the (3) Written consent. Any action permitted to be taken financial condition of the corporation which its at the organization meeting(s) may be taken without a shareholders have or may have. [P.L. 1990-91, § 4.5.] meeting if all the directors, incorporators, subscribers or transferees, as the case may be, having the right to attend § 30. Execution and filing of articles of incorporation. the meeting consent to and sign (an) instrument(s) setting forth the actions taken. [P.L. 1990-91, § 4.8.] Articles of incorporation shall be signed and acknowledged by each incorporator and filed with a Registrar or § 33. Bylaws. Deputy Registrar of Corporations in conformity with the provisions of section 5 of this Act. On filing the original (1) Power to make bylaws. The initial bylaws of a copy of the articles of incorporation, the Registrar or corporation may be adopted by any person or persons Deputy Registrar of Corporations shall indicate thereon authorized by section 32(2) of this division to hold (an) whether the corporation is a resident domestic corpora- organizational meeting(s). Except as otherwise provided tion or a non-resident domestic corporation. [P.L. 1990- in the articles of incorporation, bylaws may be amended, 91, § 4.6.] repealed or adopted by vote of the shareholders. If so provided in the articles of incorporation or a bylaw § 31. Effect of filing articles of incorporation. adopted by the shareholders, bylaws may also be amended, repealed or adopted by the board of directors, The corporate existence begins upon filing the articles but any bylaw adopted by the directors may be amended of incorporation effective as of the filing date stated or repealed by shareholders entitled to vote thereon. thereon. The endorsement by a Registrar or Deputy Registrar of Corporations, as required by section 5 of (2) Scope. The bylaws may contain any provision this Act, shall be conclusive evidence that all conditions relating to the business of the corporation, the conduct of precedent required to be performed by the incorporators its affairs, its rights or powers or the rights or powers of have been complied with and that the corporation has its shareholders, directors or officers, not inconsistent been incorporated under this Act. [P.L. 1990-91, § 4.7.] with this Act or any other statute of the Republic or the articles of incorporation. [P.L. 1990-91, § 4.9.]

§ 34. Emergency bylaws and other powers in emergency. (5) Effect on non-emergency bylaws. To the extent not inconsistent with any emergency bylaws so adopted, the (1) Adoption of emergency bylaws. The board of any bylaws of the corporation shall remain in effect during corporation may adopt emergency bylaws, subject to any emergency and upon its termination the emergency repeal or change by action of the shareholders, which bylaws shall cease to be operative. shall notwithstanding any different provisions elsewhere in this Act or in the certificate of incorporation or (6) Notice in an emergency. Unless otherwise provided bylaws, be operative during any emergency resulting in emergency bylaws, notice of any meeting of the board from an attack on the Republic or on a locality in which during such an emergency may be given only to such of the corporation conducts its business or customarily the directors as it may be feasible to reach at the time holds meetings of its board or its shareholders, or during and by such means as may be feasible at the time, any nuclear or atomic disaster, or during the existence of including publication or radio. any catastrophe, or other similar emergency condition, as a result of which a quorum of the board or a standing (7) Quorum in an emergency. To the extent required committee thereof cannot readily be convened for action. to constitute a quorum at any meeting of the board The emergency bylaws may make any provision that during such an emergency, the officers of the corporation may be practical and necessary for the circumstances of who are present shall, unless otherwise provided in the emergency, including provision that: emergency bylaws, be deemed, in order of rank and within the same rank in order of seniority, directors for (a) a meeting of the board or a committee thereof such meeting. may be called by any officer or director in such manner and under such conditions as shall be pres- (8) Non-exclusive effect of emergency bylaws. Nothing cribed in the emergency bylaws; contained in this section shall be deemed exclusive of any other provisions for emergency powers consistent (b) the director or directors in attendance at the with other sections of this Act which have been or may meeting, or any greater number fixed by the emer- be adopted by corporations created under this Act. [P.L. gency bylaws, shall constitute a quorum; and 1990-91, § 4.10; Subsections renumbered.]

(c) the officers or other persons designated on a list DIVISION 5: approved by the board before the emergency, all in CORPORATE FINANCE such order of priority and subject to such conditions and for such period of time (not longer than reasonably § 35. Classes and series of shares. necessary) after the termination of the emergency as § 36. Restrictions on transfer of shares. may be provided in the emergency bylaws or in the § 37. Subscriptions for shares. resolution approving the list, shall, to the extent § 38. Consideration for shares. required to provide a quorum at any meeting of the § 39. Payment for shares. board, be deemed directors for such meeting. § 40. Compensation for formation, reorganization and financing. (2) Change in directors during emergency. The board § 41. Determination of stated capital. either before or during any such emergency, may § 42. Form and content of certificates. provide, and from time to time modify, lines of succes- § 43. Dividends in cash, stock, or other property. sion in the event that during such emergency any or all § 44. Share dividends. officers or agents of the corporation shall for any reason § 45. Purchase or redemption by corporation of its be rendered incapable of discharging their duties. own shares. § 46. Reacquired shares. (3) Change in location of office in an emergency. The § 47. Reduction of stated capital by action of the board, either before or during any such emergency, may, board. effective in the emergency, change the head office or designate several alternative head offices or regional offices, or authorize the officers to do so. § 35. Classes and series of shares.

(4) Immunization from liability. No officer, director or (1) Power to issue. Every corporation shall have employee acting in accordance with any emergency power to issue the number of shares stated in its articles bylaws shall be liable except for willful misconduct. of incorporation. Such shares may be of one (1) or more

classes or one (1) or more series within any class thereof, amendment of the articles of incorporation. [P.L. 1990- any or all of which classes may be of shares with par 91, § 5.1.] value or shares without par value, and may be registered or bearer shares, with such voting powers, full or limited, § 36. Restrictions on transfer of shares. or without voting powers and in such series and with such designations, preferences and relative, participating, (1) In general. A restriction on the transfer of shares optional or special rights and qualifications, limitations of a corporation may be imposed either by the articles of or restrictions thereon as shall be stated in the articles of incorporation or by the bylaws or by an agreement incorporation or in the resolution providing for the issue among any number of shareholders or among such of such shares adopted by the board of directors pursuant holders and the corporation. No restriction so imposed to authority expressly vested in it by the provisions of shall be binding with respect to shares issued prior to the the articles of incorporation. adoption of the restriction unless the holders of the shares are parties to an agreement or voted in favor of (2) Convertible shares. The articles of incorporation the restriction. Any restriction which absolutely prohibits or the resolution providing for the issue of shares the transfer of shares shall be null. adopted by the board of directors may provide that shares of any class of shares or of any series of shares (2) Restrictions. Restrictions on the transfer of shares within any class thereof shall be convertible into the include those which: shares of one (1) or more other classes of shares or series (a) obligate the holder of the restricted shares to except into shares of a class or series having rights or offer to the corporation or to any other holders of preferences as to dividends or distribution of assets upon securities of the corporation or to any person or to any liquidation which are prior or superior in rank to those of combination of the foregoing, a prior opportunity, to the shares being converted. be exercised within a reasonable time, to acquire the

restricted shares; (3) Redeemable shares. A corporation may provide in (b) obligate the corporation or any holder of shares its articles of incorporation for one (1) or more classes or of the corporation or any other person or any combi- series of shares which are redeemable, in whole or in nation of the foregoing, to purchase at a specified price part, at the option of the corporation at such price or the shares which are the subject of an agreement prices, within such period and under such conditions as respecting the purchase and sale of the restricted are stated in the articles of incorporation or in the securities; resolution providing for the issue of such shares adopted by the board of directors pursuant to authority expressly (c) require the corporation or the holders of any vested in it by the provisions of the articles of shares of the corporation to consent to any proposed incorporation. transfer of the restricted shares or to approve the

proposed transferee of the restricted shares; (4) Fractional shares. A corporation may issue fractional shares. (d) prohibit the transfer of the restricted shares to (5) Shares provided for by resolution of board. Before designated persons or classes of persons, and such any corporation shall issue any shares of any class or of designation is not manifestly unreasonable; or any series of any class of which the voting powers, designations, preferences and relative, participating, (e) any other restriction on the transfer of shares for optional or other rights, if any, of the qualifications, the purpose of maintaining any tax advantage of the limitations or restrictions thereof, if any, have not been corporation or of accomplishing the business purposes set forth in the articles of incorporation, but are provided of the corporation. for in a resolution adopted by the board of directors pursuant to authority expressly vested in it by the (3) Annotation. Any transfer restriction adopted under provisions of the articles of incorporation, a statement this section shall be noted on the face or the back of the setting forth a copy of such resolution and the number of stock certificate. [P.L. 1990-91, § 5.2.] shares of the class or series to be issued shall be executed, acknowledged, and filed in accordance with § 37. Subscriptions for shares. section 5 of this Act. Upon the filing of such statement, the resolution establishing and designating the class or (1) Irrevocability of subscription for six months. A series and fixing the relative rights and preferences subscription for shares of a corporation to be organized thereof shall become effective and shall constitute an shall be irrevocable for a period of six (6) months from its date unless otherwise provided by the terms of the

subscription agreement or unless all of the subscribers consideration consisting of cash, any tangible or consent to the revocation of such subscription. intangible property or any benefit to the corporation, or any combination thereof. The resolution authorizing the (2) Writing required. A subscription, whether made issuance of shares may provide that any shares to be before or after the formation of a corporation, shall not issued pursuant to such resolution may be issued in one be enforceable unless in writing and signed by the (1) or more transactions in such numbers and at such subscriber. times as are set forth in or determined by or in the manner set forth in the resolution, which may include a (3) Time of payment calls. Unless otherwise provided determination or action by any person or body, including in the subscription agreement, subscriptions for shares, the corporation, provided the resolution fixes a whether made before or after the organization of a maximum number of shares that may be issued pursuant corporation, shall be paid in full at such time, or in such to such resolution, a time period during which such installments and at such times, as shall be determined by shares may be issued and a minimum amount of the board of directors. Any call made by the board of consideration for which such shares may be issued. The directors for payment on subscriptions shall be uniform board of directors may determine the amount of as to all shares of the class or as to all shares of the same consideration for which shares may be issued by setting series, as the case may be. a minimum amount of consideration or approving a formula by which the amount or minimum amount of (4) Default in payment; penalties. In case of default in consideration is determined. The formula may include or the payment of any installment or call when such be made dependent upon facts ascertainable outside the payment is due, the corporation may proceed to collect formula, provided the manner in which such facts shall the amount due in the same manner as any debt due the operate upon the formula is clearly and expressly set corporation. The bylaws may prescribe a penalty for forth in the formula or in the resolution approving the failure to pay installments or calls that may become due, formula. In the absence of actual fraud in the transaction, but no penalty working a forfeiture of a subscription, or the judgment of the directors as to the value of such of the amounts paid thereon, shall be declared as against consideration shall be conclusive. The shares so issued any subscriber unless the amount due thereon shall shall be deemed to be fully paid and nonassessable remain unpaid for a period of thirty (30) days after shares upon receipt by the corporation of such written demand has been made therefore. If mailed, such consideration; provided, however, nothing contained written demand shall be deemed to be made when sent herein shall prevent the board of directors from issuing by registered mail addressed to the subscriber at his last partly paid shares under section 39 of this Act. post office address known to the corporation. In the event of the sale of any shares by reason of any for- (2) Amount of consideration for shares with par value. feiture, the excess of proceeds realized over the amount Shares with par value may be issued for such considera- due and unpaid on such shares shall be paid to the tion, having a value not less than the par value thereof, as delinquent subscriber or to his legal representative. If no determined from time to time by the board of directors, prospective purchaser offers a cash price sufficient to or by the shareholders if the articles of incorporation so pay the full balance owed by the delinquent subscriber provide. plus the expenses incidental to such sale, the shares subscribed for shall be canceled and restored to the status (3) Amount of consideration for shares without par of authorized but unissued shares and all previous value. Shares without par value may be issued for such payments thereon shall be forfeited to the corporation consideration as is determined from time to time by the and transferred to surplus. board of directors, or by the shareholders if the articles of incorporation so provide. (5) Transfer of subscriptions. Subscriptions for shares of stock are transferable unless otherwise provided in a (4) Determination by shareholders. If the articles of subscription agreement. [P.L. 1990-91, § 5.3.] incorporation reserves to the shareholders the right to determine the consideration for the issue of any shares, § 38. Consideration for shares. the shareholders shall, unless the articles of incorporation require a greater vote, do so by a vote of a majority of the (1) Quality of consideration. Consideration for outstanding shares entitled to vote thereon. subscriptions to, or the purchase of, shares to be issued (5) Disposition of treasury shares. Treasury shares by a corporation shall be paid in such form and in such may be disposed of by a corporation on such terms and manner as the board of directors shall determine. The conditions as are fixed from time to time by the board. board of directors may authorize shares to be issued for

(6) Consideration for share dividends. That part of the within a period of sixty (60) days after issue allocates to surplus of a corporation which is transferred to stated surplus a portion, but not all, of the consideration capital upon the issuance of shares as a share dividend received for such shares. No such allocation shall be shall be deemed to be the consideration for the issuance made of any portion of the consideration received for of such shares. [P.L. 1990-91, § 5.4; amended by P.L. shares without par value having a preference in the assets 2017-52, §§ 1-4.] of the corporation upon involuntary liquidation except all or part of the amount, if any, of such consideration in § 39. Payment for shares. excess of such preference, nor shall such allocation be made of any portion of the consideration for the issue of (1) Partly paid shares. Any corporation may issue the shares without par value which is fixed by the whole or any part of its shares as partly paid and subject shareholders pursuant to a right reserved in the articles of to call for the remainder of the consideration to be paid incorporation, unless such allocation is authorized by therefor. Upon the face or back of each stock certificate vote of the shareholders. issued to represent any such partly paid shares, or upon the books and records of the corporation in the case of (3) Increase by transfer for surplus. The stated capital uncertificated partly paid shares, the total amount of of a corporation may be increased from time to time by consideration to be paid therefor and the amount paid resolution of the board transferring all or part of surplus thereon shall be stated. of the corporation to stated capital. [P.L. 1990-91, § 5.7.]

(2) Rights of subscriber on full payment. When the § 42. Form and content of certificates. consideration for shares has been paid in full and, in the case of bearer shares, the subscriber and each beneficial (1) Signature and seal. The shares of a corporation owner have provided to the corporation their names, shall be represented by certificates or shall be addresses, nationalities, and, in the case of natural uncertificated shares. Certificates shall be signed by an persons, dates of birth, and these have been recorded in officer(s) and/or a director, however designated, of the accordance with section 80 of this Act, the subscriber corporation, and may be sealed with the seal of the shall be entitled to all rights and privileges of a holder of corporation, if any, or a facsimile thereof. The signatures such shares and to a certificate representing his shares, upon a certificate may be facsimiles if the certificate is and such shares shall be deemed fully paid and non- countersigned by a transfer agent other than the assessable. [P.L. 1990-91, § 5.5; amended by P.L. 2017- corporation itself or its employees. In case any person 52, §§ 1-3.] who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such § 40. Compensation for formation, reorganization officer or director before such certificate is issued, it may and financing. be issued by the corporation with the same effect as if he/she were such officer or director at the date of issue. The reasonable charges and expenses of formation or For the purposes of this section, “uncertificated shares” reorganization of a corporation, and the reasonable are shares of a corporation which: expenses of and compensation for the sale of under- writing of its shares may be paid or allowed by the (a) are not represented by an instrument; corporation out of the consideration received by it in payment for its shares without thereby rendering such (b) the transfer of which is registered upon books shares not fully paid or assessable. [P.L. 1990-91, § 5.6.] maintained for that purpose by or on behalf of the corporation issuing the shares; and § 41. Determination of stated capital. (c) are of a type commonly dealt in upon securities (1) On shares with par value. Upon issue by a exchanges or markets. corporation of shares with a par value not in excess of the authorized shares, the consideration received therefore (2) Registered or bearer shares. Shares may be issued shall constitute stated capital to the extent of the par either in registered form or in bearer form provided that value of such shares, and the excess, if any, of such all records of shareholders and beneficial owners are consideration shall constitute surplus. provided to the corporation by the shareholder and/or beneficial owner and maintained in accordance with (2) On shares without par value. Upon issue by a section 80 of this Act and the articles of incorporation corporation of shares without par value not in excess of prescribe the manner in which any required notice is to the authorized shares, the entire consideration received be given to shareholders of bearer shares in conformity therefore shall constitute stated capital unless the board with section 11 of this Act; provided, however, that

resident domestic corporations shall not be allowed to (5) Unless otherwise provided by the articles of issue shares in bearer form. The transfer of bearer shares incorporation or bylaws, the board of directors of a shall be by delivery of the certificates and valid upon corporation may provide by resolution that some or all of recordation of such transfer in accordance with section any or all classes and series shall be uncertificated shares, 80 of this Act. The validity of bearer shares, including provided that such resolution shall not apply to shares any and all rights and privileges of a holder of such represented by a certificate until such certificate is shares and the exercise thereof, is conditional upon all surrendered to the corporation or transfer agent. Within a records of shareholders and beneficial owners being reasonable time after the issuance or transfer of provided to the corporation by the shareholder and/or uncertificated shares, the corporation or transfer agent beneficial owner and recorded and maintained in shall send to the registered owner thereof a written notice accordance with section 80 of this Act upon issuance or containing the information required to be set forth or any subsequent transfer. The articles of incorporation stated on the certificates pursuant to subsections (3) and may provide that on request of a shareholder his bearer (4) of this section. Except as otherwise expressly shares shall be exchanged for registered shares or his provided by law, the rights and obligations of the holders registered shares exchanged for bearer shares. of uncertificated shares and the rights and obligations of the holders of certificates representing shares of the same (3) Statement regarding class and series. Each class and series shall be identical; provided however, that certificate representing shares issued by a corporation bearer shares may not be uncertificated. which is authorized to issue shares of more than one (1) class shall set forth upon the face or back of the (6) The board of directors may, by resolution, provide certificate, or shall state that the corporation will furnish that some or all classes and series of uncertificated shares to any shareholder upon request and without charge, a shall be represented by certificates, provided that such full statement of the designation, relative rights, resolution shall not become effective until the share preferences and limitations of the shares of each class certificates are issued. authorized to be issued and, if the corporation is authorized to issue any class of preferred shares in series, (7) Lost, stolen or destroyed stock certificates; the designation, relative rights, preferences and limi- issuance of new certificate or uncertificated shares. A tations of each such series so far as the same have been corporation may issue a new certificate of stock or fixed and the authority of the board to designate and fix uncertificated shares in place of any certificate thereto- the relative rights, preferences and limitations of other fore issued by it, alleged to have been lost, stolen or series. destroyed, and the corporation may require the owner of the lost, stolen or destroyed certificate, or such owner’s (4) Other statements on certificate. Each certificate legal representative to give the corporation a bond representing shares shall when issued state upon the face sufficient to indemnify it against any claim that may be thereof: made against it on account of the alleged loss, theft or destruction of any such certificate or the issuance of such (a) that the corporation is formed under the laws of new certificate or uncertificated shares. [P.L. 1990-91, the Republic; § 5.8; amended by P.L. 1998-73, § 42; amended by P.L. 2000-18, § 42; amended by P.L. 2017-52, § 2.] (b) the name of the person or persons to whom issued if a registered share; § 43. Dividends in cash, stock, or other property.

(c) the number and class of shares, and the desig- (1) General limitation. A corporation may declare and nation of the series, if any, which such certificate pay dividends in cash, stock or other property on its represents; outstanding shares, except when currently the corporation is insolvent or would thereby be made insolvent or (d) the par value of each share represented by such when the declaration or payment would be contrary to certificate, or a statement that the shares are without any restrictions contained in the articles of incorporation. par value; and Dividends may be declared and paid out of surplus only; but in case there is no surplus, dividends may be (e) if the share does not entitle the holder to vote, declared or paid out of the net profits for the fiscal year that it is non-voting, or if the right to vote exists only in which the dividend is declared and for the preceding under certain circumstances, that the right to vote is fiscal year. limited.

(2) Corporations engaged in exploitation of wasting (5) Split-ups. A split-up or division of the issued shares assets. A corporation engaged in the exploitation of of any class into a greater number of shares of the same natural resources or other wasting assets, including class without increasing the stated capital of the corpora- patents, or formed primarily for the liquidation of tion shall not be construed to be a share dividend within specific assets, may declare and pay dividends regardless the meaning of this section. [P.L. 1990-91, § 5.10.] of any surplus from the net profits derived from the liquidation or exploitation of such assets without making § 45. Purchase or redemption by corporation of its any deduction for the depletion of such assets resulting own shares. from lapse of time, consumption, liquidation or exploitation of such assets if the net assets remaining (1) Purchase or redemption out of surplus. A corpo- after such dividends are sufficient to cover the liquida- ration, subject to any restrictions contained in its articles tion preferences of shares having such preferences in of incorporation, may purchase its own shares or redeem involuntary liquidation. [P.L. 1990-91, § 5.9.] its redeemable shares out of surplus except when currently the corporation is insolvent or would thereby § 44. Share dividends. be made insolvent.

(1) Restrictions on distribution. A corporation may (2) Purchase out of stated capital. A corporation may make pro rata distribution of its authorized but unissued purchase its own shares out of stated capital except when shares to holders of any class or series of its outstanding currently the corporation is insolvent or would thereby shares subject to the following conditions: be made insolvent, if the purchase is made for the purpose of: (a) if a distribution of shares having a par value is made, such shares shall be issued at not less than the (a) eliminating fractions of shares; par value thereof and there shall be transferred to (b) collecting or compromising indebtedness to the stated capital at the time of such distribution an corporation; or amount of surplus equal to the aggregate par value of such shares; (c) paying dissenting shareholders entitled to receive payment for their shares under sections 92 or 100 of this (b) if a distribution of shares without par value is Act. made, the amount of stated capital to be represented by each such share shall be fixed by the board, unless the (3) Redemption out of stated capital. A corporation articles of incorporation reserved to the shareholders subject to any restrictions contained in its articles of the right to fix the consideration for the issue of such incorporation, may redeem or purchase its redeemable shares; and there shall be transferred to stated capital shares out of stated capital except when currently the at the time of such distribution an amount of surplus corporation is insolvent or would thereby be made equal to the aggregate stated capital represented by insolvent and except when such redemption or purchase such shares. would reduce net assets below the stated capital remaining after giving effect to the cancellation of such (2) Payment out of unrealized appreciation prohibited. redeemable shares. Unrealized appreciation of assets, if any, shall not be included in the computation of surplus available for a (4) Purchase price of redeemable shares. When its share dividend. redeemable shares are purchased by a corporation within the period of redeemability, the purchase price thereof (3) Notice to shareholders. Upon the payment of a shall not exceed the applicable redemption price stated in dividend payable in shares, notice shall be given to the the articles of incorporation. Upon a call for redemption, shareholders of the amount per share transferred from the amount payable by the corporation for shares having surplus. a cumulative preference on dividends may include the stated redemption price plus accrued dividends to the (4) Authorized by shareholders. No dividend payable next dividend date following the date of redemption of in shares of any class shall be paid unless the share such shares. [P.L. 1990-91, § 5.11.] dividend is specifically authorized by the vote of two- thirds of the shares of each class that might be adversely § 46. Reacquired shares. affected by such a share dividend. (1) When shares required to be canceled. Shares that have been issued and have been purchased, redeemed or

otherwise reacquired by a corporation shall be canceled if or by eliminating any amount of stated capital represen- they are reacquired out of stated capital, or if they are ted by issued shares having a par value to the extent that converted shares, or if the articles of incorporation the stated capital exceeds the aggregate par value of such require that such shares be canceled upon reacquisition. shares, or by reducing the amount of stated capital represented by issued shares without par value. (2) Shares not required to be canceled. Any shares reacquired by the corporation and not required to be If, however, the consideration for the issue of shares canceled may be either retained as treasury shares or without par value was fixed by the shareholders under canceled by the board at the time of reacquisition or at section 38(3) of this Act, the board shall not reduce the sta- any time thereafter. ted capital represented by such shares except to the extent, if any, that the board was authorized by the shareholders to (3) Disposition of treasury shares. Neither the reten- allocate any portion of such consideration to surplus. tion of reacquired shares as treasury shares, nor their subsequent distribution to shareholders or disposition for (2) Limitation on amount of reduction. No reduction a consideration shall change the stated capital. Treasury of stated capital shall be made under this section unless shares may be disposed of for such consideration as the after such reduction the stated capital exceeds the aggre- directors may fix. When treasury shares are disposed of gate preferential amounts payable upon involuntary for a consideration, the surplus shall be increased by the liquidation upon all issued shares having preferential full amount of the consideration received. rights in the assets plus the par value of all other issued shares with par value. (4) Reduction of stated capital on reacquisition of shares. When reacquired shares other than converted (3) Notice to shareholders. When a reduction of stated shares are canceled, the stated capital of the corporation capital has been effected under this section, the amount shall be reduced by the amount of stated capital then of such reduction shall be disclosed in the next financial represented by the shares so canceled. The amount by statement covering the period in which such reduction is which stated capital has been reduced by cancellation of made that is furnished by the corporation to all its reacquired shares during a stated period of time shall be shareholders, or, if practicable, in the first notice of disclosed in the next financial statement covering such dividend or share distribution that is furnished to the period that is furnished by the corporation to all its holders of each class or series of its shares between the shareholders, or if practicable, in the first notice of date of such reduction and the next such financial dividend or share distribution that is furnished to the statement, and in any event to all its shareholders within holders of each class or series of its shares between the six (6) months of the date of such reduction. [P.L. 1990- end of the period and the next such financial statement, 91, § 5.13.] and in any event to all its shareholders within six (6) months of the date of the reduction of capital. DIVISION 6: DIRECTORS AND MANAGEMENT (5) Canceled shares; eliminated shares. Shares canceled under this section shall be restored to the status of § 48. Management of business of corporation. authorized but unissued shares, except that if the articles § 49. Qualifications of directors. of incorporation prohibit the reissue of any shares § 50. Number of directors. required or permitted to be canceled under this section, § 51. Election and term of directors. the board shall approve and deliver to a Registrar of § 52. Classes of directors. Corporations articles of amendment under section 90 of § 53. Newly created directorships and vacancies. this Act eliminating such shares from the number of § 54. Removal of directors. authorized shares. [P.L. 1990-91, § 5.12.] § 55. Quorum; action by the board. § 56. Meetings of the board. § 47. Reduction of stated capital by action of the § 57. Executive and other committees. board. § 58. Director conflicts of interest. § 59. Loans to employees and officers; guaranty of (1) When board may reduce capital. Except as other- obligations of employees and officers. wise provided in the articles of incorporation, the board § 60. Indemnification of directors and officers. may at any time reduce the stated capital of a corporation § 61. Standard of care to be observed by directors by eliminating from stated capital amounts previously and officers. transferred by the board from surplus to stated capital and § 62. Officers. not allocated to any designated class or series of shares, § 63. Removal of officers.

his successor has been elected and qualified. [P.L. 1990- § 48. Management of business of corporation. 91, § 6.4.]

Subject to limitations of the articles of incorporation § 52. Classes of directors. and of this Act as to action which shall be authorized or approved by the shareholders, all corporate powers shall (a) The articles of incorporation may provide that the be exercised by or under authority of, and the business directors be divided into two (2) or more classes and that and affairs of every corporation shall be managed by, a each class of directors serve for such term as specified in board of directors. [P.L. 1990-91, § 6.1.] the articles of incorporation.

§ 49. Qualifications of directors. (b) The articles of incorporation may confer upon the holders of any class or series of shares the right to elect The articles of incorporation may prescribe special one (1) or more directors who shall serve for such term, qualifications for directors. Unless otherwise provided in and have such voting powers as shall be stated in the the articles of incorporation, directors may be of any articles of incorporation. The terms of office and voting nationality and need not be residents of the Republic or powers of the directors elected in the manner so provided shareholders of the corporation. Directors of a resident in the articles of incorporation may be greater than or corporation shall be natural persons. Non-resident less than those of any other director or class of directors. corporations may appoint or elect directors which are corporations. [P.L. 1990-91, § 6.2.] (c) In addition, the articles of incorporation may confer upon one (1) or more directors, whether or not § 50. Number of directors. elected separately by the holders of any class or series of stock, voting powers greater than or less than those of (1) Number required. The number of directors consti- other directors. tuting the board of directors shall be one (1) or more. The number of directors of the corporation may be fixed (d) If the articles of incorporation provide that one (1) by the bylaws, by the shareholders, or by action of the or more directors shall have more or less than one (1) board under the specific provisions of a bylaw. vote per director on any matter, every reference in this Act to a majority or other proportion of the directors (2) Increase or decrease. The number of directors shall refer to a majority or other proportion of the votes may be increased or decreased by amendment of the of the directors. [P.L. 1990-91, § 6.5; amended by P.L. bylaws, by the shareholders, or by action of the board 1998-73, § 52; amended by P.L. 2010-35, adding § under the specific provisions of a bylaw, subject to the 52(c); amended by P.L. 2017-52; amended by P.L. 2018- following limitations: 100, § 52(d).]

(a) if the board is authorized by the bylaws to § 53. Newly created directorships and vacancies. change the number of directors, whether by amending the bylaws or by taking action under the specific (1) How vacancies filled in general. Newly created provisions of a bylaw, such amendment or action shall directorships resulting from an increase in the number of require the vote of a majority of the entire board; directors and vacancies occurring in the board for any reason except removal of directors without cause may be (b) no decrease shall shorten the term of any filled by vote of a majority of the directors then in office, incumbent director. [P.L. 1990-91, § 6.3.] although less than a quorum exists, unless the articles of incorporation or the bylaws provide that such newly § 51. Election and term of directors. created directorships or vacancies shall be filled by vote of the shareholders. (1) Manner and term. At each annual meeting of shareholders, directors shall be elected to hold office (2) Vacancies on removal without cause. Unless the until the next annual meeting except as authorized by articles of incorporation or the specific provisions of a section 52 of this Act. The articles of incorporation may bylaw adopted by the shareholders provide that the board provide for the election of one (1) or more directors by shall fill vacancies occurring in the board by reason of the holders of the shares of any class or series. the removal of directors without cause, such vacancies may be filled only by vote of the shareholders.

(2) Tenure. Each director shall hold office until the expiration of the term for which he is elected, and until

(3) Term. A director elected to fill a vacancy shall be (3) Proxy. Unless otherwise provided in the articles of elected to hold office for the unexpired term of his prede- incorporation or the bylaws, any director may be cessor. [P.L. 1990-91, § 6.6; amended by P.L. 2005-27, represented and vote at a meeting or unanimously con- § 53.] sent to action without a meeting by a proxy or proxies given to another director appointed by instrument in § 54. Removal of directors. writing, or by electronic transmission. The articles of incorporation or the bylaws may contain restrictions, (1) Removal for cause. Any or all of the directors may prohibitions or limitations upon the grant or use of be removed for cause by vote of the shareholders. The proxies by directors. articles of incorporation or the specific provisions of a bylaw may provide for such removal by action of the (4) Action without meeting. Unless restricted by the board, except in the case of any director elected by articles of incorporation or bylaws, any action required cumulative voting, or by the holders of the shares of any or permitted to be taken at any meeting of the board of class or series when so entitled by the provisions of the directors or of any committee thereof may be taken articles of incorporation. without a meeting if all members of the board or committee, as the case may be, consent thereto in writing (2) Without cause. If the articles of incorporation or or by electronic transmission and the consent or consents the bylaws so provide, any or all of the directors may be are filed with the minutes of the proceedings of the board removed without cause by vote of the shareholders. or committee.

(3) Limitations on removal. The removal of directors, (5) Participation by communication equipment. Unless with or without cause, as provided in subsections (1) and restricted by the articles of incorporation or bylaws, (2) of this section is subject to the following: members of the board or any committee thereof may participate in a meeting of such board or committee by (a) in the case of a corporation having cumulative means of communications equipment which permits the voting, no director may be removed when the votes persons participating in the meeting to communicate with cast against his removal would be sufficient to elect each other, and participation in a meeting pursuant to this him if voted cumulatively at an election at which the paragraph shall constitute presence in person at such same total number of votes were cast and the entire meeting. board, or the entire class of directors or which he is a member, were then being elected; and (6) Greater requirement as to quorum and vote of directors. The articles of incorporation may contain (b) when by the provisions of the articles of provisions specifying either or both of the following: incorporation the holders of the shares of any class or series, or holders of bonds, voting as a class are entitled to (a) that the portion of directors that shall constitute a elect one (1) or more directors, any director so elected may quorum for the transaction of business or of any be removed only by the applicable vote of the holders of specified item of business shall be greater than the the shares of that class or series, or the holders of such proportion prescribed by subsection (1) of this section bonds, voting as a class. [P.L. 1990-91, § 6.7.] in the absence of such provision;

§ 55. Quorum; action by the board. (b) that the proportion of votes of directors that shall be necessary for the transaction of business or of any (1) Quorum defined. Unless a greater proportion is specified item of business shall be greater than the required by the articles of incorporation, a majority of proportion prescribed by subsection (2) of this section the entire board, present in person or by proxy at a in the absence of such provision. meeting duly assembled, shall constitute a quorum for the transaction of business or of any specified item of (7) Amendment of articles with regard to quorum or business, except that the articles of incorporation or the votes of directors. An amendment of the articles of bylaws may fix the quorum at less than a majority of the incorporation which adds a provision permitted by entire board but not less than one-third thereof. subsection (6) of this section or which changes or strikes out such a provision, shall be authorized at a meeting of (2) Vote at meeting as action by board. The vote of shareholders by a vote of the holders of two-thirds of all the majority of the directors present in person or by outstanding shares entitled to vote thereon, or of such proxy at a meeting at which a quorum is present shall be greater proportion of shares, or class or series of shares, the act of the board unless the articles of incorporation as may be provided specifically in the articles of require the vote of a greater number. incorporation for adding, changing, or striking out a

provision permitted by subsection (6) of this section. (e) the amendment or repeal of any resolution of the [P.L. 1990-91, § 6.8; amended by P.L. 1998-73, § 55; board which by its terms shall not be so amendable or amended by P.L. 2017-52, § 3 and 4.] repealable.

§ 56. Meetings of the board. (2) Tenure; effect of committee on duty of directors. Each such committee shall serve at the pleasure of the (1) Time and place. Meetings of the board, regular or board. The designation of any such committee and the special, may be held at any place within or without the delegation thereto of authority shall not alone relieve any Republic, unless otherwise provided by the articles of director of his duty to the corporation under section 61 of incorporation or the bylaws. The time and place for this Act. [P.L. 1990-91, § 6.10.] holding meetings of the board may be fixed by or under the bylaws, or if not so fixed, by the board. § 58. Director conflicts of interest.

(2) Notice of meetings. Unless otherwise provided by (1) Effect of personal financial interest or common the bylaws, regular meetings of the board may be held directorship. No contract or other transaction between a without notice if the time and place of such meetings are corporation and one (1) or more of its directors, or between fixed by the bylaws or the board. Special meetings of the a corporation and any other corporation, firm, association or board may be called in the manner provided in the other entity in which one (1) or more of its directors are bylaws and shall be held upon notice to the directors. The directors or officers, or have a substantial financial interest, bylaws may prescribe what shall constitute notice of shall be either void or voidable for this reason alone or by meeting of the board. A notice or waiver of notice need reason alone that such director or directors are present at the not specify the purpose of any regular or special meeting meeting of the board, or of a committee thereof, which of the board, unless required by the bylaws. approves such contract or transaction, or that his or their votes are counted for such purpose: (3) Waiver of notice. Notice of a meeting need not be given to any director who has waived notice in (a) if the material facts as to such director’s interest accordance with section 10 of this Act. [P.L. 1990-91, § in such contract or transaction and as to any such 6.9; amended by P.L. 2017-52, § 3.] common directorship, officership or financial interest are disclosed in good faith or known to the board or § 57. Executive and other committees. committee, and the board or committee approves such contract or transaction by a vote sufficient for such (1) Appointment and powers of committees. If the purpose without counting the vote of such interested articles of incorporation or the bylaws so provide, the director, or, if the votes of the disinterested directors board, by resolution adopted by a majority vote of the are insufficient to constitute an act of the board as entire board, may designate from among its members an defined in section 55 of this Act, by unanimous vote of executive committee and other committees, each of the disinterested directors; or which to the extent provided in the resolution or in the articles of incorporation or bylaws of the corporation, (b) if the material facts as to such director’s interest shall have and may exercise all the authority of the board in such contract or transaction and as to any such of directors, but no such committee shall have the common directorship, officership or financial interest authority as to the following matters: are disclosed in good faith or known to the shareholders entitled to vote thereon, and such contract or (a) the submission to shareholders of any action that transaction is approved by vote of such shareholders. requires shareholders’ authorization under this Act; (2) Determining quorum. Common or interested (b) the filling of vacancies in the board of directors directors may be counted in determining the presence of or in a committee; a quorum at a meeting of the board or of a committee which approves such contract or transaction. (c) the fixing of compensation of the directors for serving on the board or on any committee; (3) Additional restrictions on transactions with directors. The articles of incorporation may contain additional (d) the amendment or repeal of the bylaws, or the restrictions on contracts or transactions between a adoption of new bylaws; corporation and its directors and may provide that contracts or transactions in violation of such restrictions shall be void or voidable by the corporation.

(4) Compensation of board. Unless otherwise provided respect to any criminal action or proceeding, had reason- in the articles of incorporation or the bylaws, the board able cause to believe that his conduct was unlawful. shall have authority to fix the compensation of directors for services in any capacity. [P.L. 1990-91, § 6.11.] (2) Actions by or in right of the corporation. A corporation shall have power to indemnify any person who was § 59. Loans to employees and officers; guaranty of or is a party or is threatened to be made a party to any obligations of employees and officers. threatened, pending, or completed action or suit by or in the right of the corporation to procure judgment in its Unless restricted by the articles of incorporation or favor by reason of the fact that he is or was a director or bylaws, any corporation may lend money to, or guarantee officer of the corporation, or is or was serving at the any obligations of, or otherwise assist any officer, request of the corporation as a director or officer of director or employee of the corporation or of its subsi- another corporation, partnership, joint venture, trust or diary, whenever, in the judgment of the directors, such other enterprise against expenses (including attorneys’ loan, guaranty or assistance may reasonably be expected fees) actually and reasonably incurred by him or in to benefit the corporation. However, a loan shall not be connection with the defense or settlement of such action made by a corporation to any director unless it is or suit if he acted in good faith and in a manner he authorized by a vote of the shareholders. For this reasonably believed to be in or not opposed to the best purpose, the shares of the director who would be the interests of the corporation and except that no borrower will not be entitled to vote. The loan, guaranty indemnification shall be made in respect of any claim, or other assistance may be with or without interest, and issue or matter as to which such person shall have been may be unsecured or secured in such manner as the adjudged to be liable for negligence or misconduct in the Board of Directors shall approve, including, without performance of his duty to the corporation unless and limitation, a pledge of shares of stock of the corporation. only to the extent that the court in which such action or Nothing in this section contained shall be deemed to suit was brought shall determine upon application that, deny, limit or restrict the powers of guaranty or warranty despite the adjudication of liability but in view of all the of any corporation at common law or under any statute. circumstances of the case, such person is fairly and [P.L. 1990-91, § 6.12; amended by P.L. 1998-73, § 59.] reasonably entitled to indemnity for such expenses which the court shall deem proper. § 60. Indemnification of directors and officers. (3) When director or officer successful. To the extent that (1) Actions not by or in right of the corporation. A a director or officer of a corporation has been successful on corporation shall have the power to indemnify any person the merits or otherwise in defense of any action, suit or who was or is a party or is threatened to be made a party proceeding referred to in subsections (1) or (2) of this to any threatened, pending or completed action, suit or section, or in the defense of a claim, issue or matter therein, proceeding whether civil, criminal, administrative or he shall be indemnified against expenses (including attor- investigative (other than an action by or in the right of the neys’ fees) actually and reasonably incurred by him in corporation) by reason of the fact that he is or was a connection therewith. director or officer of the corporation, or is or was serving at the request of the corporation as a director or officer of (4) Payment of expenses in advance. Expenses incurred another corporation, partnership, joint venture, trust or in defending a civil or criminal action, suit or proceeding other enterprise, against expenses (including attorneys’ may be paid in advance of the final disposition of such fees), judgments, fines and amounts paid in settlement action, suit or proceeding as authorized by the board of actually and reasonably incurred by him in connection directors in the specific case upon receipt of an with such action, suit or proceeding if he acted in good undertaking by or on behalf of the director or officer to faith and in a manner he reasonably believed to be in or repay such amount if it shall ultimately be determined not opposed to the best interests of the corporation, and, that he is not entitled to be indemnified by the with respect to any criminal action or proceeding, had no corporation as authorized in this section. reasonable cause to believe that his conduct was unlawful. The termination of any action, suit or proceeding by (5) Indemnification pursuant to other rights. The indem- judgment, order, settlement, conviction, or upon a plea of nification and advancement of expenses provided by, or no contest, or its equivalent, shall not, of itself, create a granted pursuant to, the other subsections of this section presumption that the person did not act in good faith and shall not be deemed exclusive of any other rights to in a manner which he reasonably believed to be in or not which those seeking indemnification or advancement of opposed to the best interests of the corporation, and, with expenses may be entitled under any bylaw, agreement, vote of stockholders or disinterested directors or other-

wise, both as to action in his official capacity and as to specified officers shall be elected by the shareholders action in another capacity while holding such office. instead of by the board.

(6) Continuation of indemnification. The indemnifica- (4) Terms. Unless otherwise provided in the articles of tion and advancement of expenses provided by, or incorporation or bylaws, all officers shall be elected or granted pursuant to, this section shall, unless otherwise appointed to hold office until the meeting of the board provided when authorized or ratified, continue as to a following the next annual meeting of shareholders, or in person who has ceased to be a director, officer, employee the case of officers elected by the shareholders, until the or agent and shall inure to the benefit of the heirs, next annual meeting of the shareholders. executors and administrators of such a person. (5) Tenure. Each officer shall hold office for the term (7) Insurance. A corporation shall have the power to for which he is elected or appointed, and until his purchase and maintain insurance on behalf of any person successor has been elected or appointed and qualified. who is or was a director or officer of the corporation or is (6) Same person for more than one office. Any two (2) or was serving at the request of the corporation as a or more offices may be held by the same person unless the director or officer against any liability asserted against articles of incorporation or bylaws otherwise provide. him and incurred by him in such capacity whether or not the corporation would have the power to indemnify him (7) Security for performance. The board may require against such liability under the provisions of this section. any officer to give security for the faithful performance [P.L. 1990-91, § 6.13; amended by P.L. 1998-73, § 60.] of his duties.

§ 61. Standard of care to be observed by directors (8) Duties. All officers as between themselves and the and officers. corporation shall have such authority and perform such

Directors and officers shall discharge the duties of their duties with respect to the management of the corporation respective positions in good faith and with that degree of as may be provided in the bylaws, or to the extent not so diligence, care and skill which ordinarily prudent men provided, by the board. would exercise under similar circumstances in like positions. In discharging their duties, directors and officers, (9) Nationality and residence. Officers may be of any when acting in good faith, may rely upon financial nationality and need not be residents of the Republic. statements of the corporation represented to them to be [P.L. 1990-91, § 6.15; amended by P.L. 1998-73, § 62; correct by the president or the officer of the corporation amended by P.L. 2000-18, § 62.] having charge of its books or accounts, or stated in a written report by an independent public or certified § 63. Removal of officers. public accountant or firm of such accountants fairly to reflect the financial condition of such corporation. [P.L. (1) Method of removal. Any officer elected or appointed 1990-91, § 6.14.] by the board may be removed by the board with or without cause except as otherwise provided in the articles of § 62. Officers. incorporation or the bylaws. An officer elected by the shareholders may be removed, with or without cause, only (1) Appointment. Every corporation shall have a secre- by vote of the shareholders, but his authority to act as an tary and may have such officers, however designated, as officer may be suspended by the board for cause. shall be provided for in the articles of incorporation or bylaws. Such officers shall be appointed by the board or (2) Effect of removal without cause. The removal of in the manner directed by the articles of incorporation or an officer without cause shall be without prejudice to his the bylaws. Additional officers from time to time may be contract rights, if any. The election or appointment of an appointed in the manner outlined by the articles or the officer shall not of itself create contract rights. [P.L. bylaws or as the board may determine are desirable or 1990-91, § 6.16.] necessary to carry on the business of the corporation.

(2) Qualifications. Officers of the corporation may be natural persons, a corporation or other business entity.

(3) Election by shareholders. The articles of incorporation or the bylaws may provide that all officers or that

DIVISION 7: demand may give such notice. The shares of stock SHAREHOLDERS represented at such meeting, either in person or by proxy, and entitled to vote thereat, shall constitute a quorum, § 64. Meetings of shareholders. notwithstanding any provision of the articles of § 65. Notice of meetings of shareholders. incorporation or bylaws to the contrary. § 66. Waiver of notice. § 67. Action by shareholders without a meeting. An electronic transmission demanding the call of a § 68. Fixing record date. special meeting transmitted by a shareholder pursuant to § 69. Proxies. this subsection shall be deemed to be written for the § 70. Quorum of shareholders. purposes of this subsection, provided that any such § 71. Vote of shareholders required. electronic transmission sets forth or is delivered with § 72. Greater requirement as to quorum and vote information from which the corporation can determine of shareholders. (a) that the electronic transmission was transmitted by the § 73. List of shareholders at meetings. shareholder and (b) the date on which such shareholder § 74. Qualification of voters. transmitted such electronic transmission. § 75. Voting trusts. § 76. Agreements among shareholders as to voting. (4) Special meetings. Special meetings of the share- § 77. Conduct of shareholders’ meetings. holders may be called by the board of directors or by § 78. Preemptive rights. such person or persons as may be authorized by the § 79. Shareholders’ derivative actions. articles of incorporation or the bylaws. At any such special meeting, only such business may be transacted which is related to the purpose or purposes set forth in § 64. Meetings of shareholders. the notice required by section 65.

(1) Place of meeting. Meetings of shareholders may (5) Ballots. The articles of incorporation or the bylaws be held at such place, either within or without the may provide that elections of directors shall be by written Republic, as may be designated in the bylaws. ballot; if authorized by the board of directors, such requirement of a written ballot shall be satisfied by a (2) Time of meeting; business. An annual meeting of ballot submitted by electronic transmission, provided that shareholders shall be held for the election of directors on any such electronic transmission must either set forth or a date and at a time designated by or in the manner be submitted with information from which it can be provided in the bylaws. Any other proper business may determined that the electronic transmission was be transacted at the annual meeting. authorized by the shareholder or proxy holder. [P.L. 1990-91, § 7.1; amended by P.L. 1998-73, § 64; (3) Failure to hold meeting. A failure to hold the annual amended by P.L. 2017-52, §§ 3 and 5.] meeting at the designated time or to elect a sufficient number of directors to conduct the business of the corporation § 65. Notice of meetings of shareholders. shall not affect otherwise valid corporate acts or cause a dissolution of the corporation except as may be otherwise (1) Requirement. Whenever under the provisions of specifically provided in this Act. If the annual meeting for this Act shareholders are required or permitted to take election of directors is not held on the date designated any action at a meeting, written notice shall state the therefor, the directors shall cause the meeting to be held as place, date and hour of the meeting and, unless it is the soon thereafter as convenient. If there is a failure to hold the annual meeting, indicate that it is being issued by or at annual meeting for a period of ninety (90) days after the the direction of the person or persons calling the meeting. date designated therefor, or if no date has been designated Notice of a special meeting shall also state the purpose for a period of thirteen (13) months after the organization of for which the meeting is called. the corporation or after its last annual meeting, holders of not less than ten percent (10%) of the shares entitled to vote (2) Manner of giving notice to registered shareholders. in an election of directors may, in writing, demand the call A copy of the notice of any meeting shall be given of a special meeting specifying the time thereof, which shall personally or sent by mail or by electronic transmission, not be less than two (2) nor more than three (3) months not less than fifteen (15) nor more than sixty (60) days from the date of such call. The secretary of the corporation before the date of the meeting, to each registered upon receiving the written demand shall promptly give shareholder entitled to vote at such meeting. If mailed, notice of such meeting, or if he fails to do so within five (5) such notice is given when deposited in the mail, directed business days thereafter, any shareholder signing such to the shareholder at his address as it appears on the

record of shareholders, or, if he shall have filed with the authorize or take such action at a meeting at which all secretary of the corporation a written request that notices shares entitled to vote thereon were present and voted. to him be mailed to some other address, then directed to him at such other address. If sent by electronic (2) Electronic transmission. An electronic transmission transmission, notice given pursuant to this section shall consenting to an action to be taken and transmitted by a be deemed given when directed to a number or electronic shareholder or proxyholder, or by a person or persons mail address at which the shareholder has consented to authorized to act for a shareholder or proxyholder, shall receive notice. be deemed to be written and signed for the purposes of this section, provided that any such electronic (3) Manner of giving notice to bearer shareholders. transmission sets forth or is delivered with information Notice of any meeting shall be given to shareholders of from which the corporation can determine (a) that the bearer shares, subject to the provisions of section 42 of electronic transmission was transmitted by the this Act, in accordance with the provisions of section 11 shareholder or proxyholder or by a person or persons of this Act. The notice shall include a statement of the authorized to act for the shareholder or proxyholder and conditions under which shareholders may attend the (b) the date on which such shareholder or proxyholder or meeting and exercise the right to vote. authorized person or persons transmitted such electronic transmission. [P.L. 1990-91, § 7.4; amended by P.L. (4) Adjournments. When a meeting is adjourned to 2017-52, §§ 1 and 2; amended by P.L. 2018-67, § 1.] another time or place, it shall not be necessary, unless the meeting was adjourned for lack of a quorum or unless the § 68. Fixing record date. bylaws require otherwise, to give any notice of the adjourned meeting if the time and place to which the For the purpose of determining the shareholders entitled meeting is adjourned are announced at the meeting at to notice of or to vote at any meeting of shareholders or any which the adjournment is taken, and at the adjourned adjournment thereof, or to express consent to or dissent meeting any business may be transacted that might have from any proposal without a meeting, or for the purpose of been transacted on the original date of the meeting. determining shareholders entitled to receive payment of any However, if after the adjournment the board fixes a new dividend or the allotment of any rights, or for the purpose of record date for the adjourned meeting, a notice of the any other action, the bylaws may provide for fixing or, in adjourned meeting shall be given to each shareholder of the absence of such provision, the board may fix, in advance record on the new record date entitled to notice under a date as the record date for any such determination of subsection (1) of this section. [P.L. 1990-91, § 7.2; shareholders. Such date shall not be more than sixty (60) nor amended by P.L. 2017-52, § 2.] less than fifteen (15) days before the date of such meeting, nor more than sixty (60) days prior to any other action. § 66. Waiver of notice. Notice shall be given in the manner prescribed by section 11 of this Act, to holders of bearer shares concerning the record Notice of a meeting need not be given to any date by which such holders are to present their shares to the shareholder who has waived notice in accordance with corporation in order to be considered “holders of record” section 10 of this Act. [P.L. 1990-91, § 7.3; amended by entitled to vote or claim any other right or privilege of a P.L. 2017-52.] shareholder. [P.L. 1990-91, § 7.5.]

§ 67. Action by shareholders without a meeting. § 69. Proxies.

(1) Action without a meeting. Unless otherwise (1) Voting by proxy authorized. Every shareholder provided in the articles of incorporation, any action entitled to vote at a meeting of shareholders or to express required by this Act to be taken at a meeting of consent or dissent without a meeting may authorize shareholders of a corporation, or any action which may another person to act for him by proxy. be taken at a meeting of the shareholders, may be taken without a meeting, without prior notice and without a (a) Without limiting the manner in which a vote, if a consent or consents in writing, setting forth the shareholder may authorize another person or persons to action so taken, shall be signed by all the shareholders act for such shareholder as proxy pursuant to subsec- entitled to vote with respect to the subject matter thereof, tion (1) of this section, the following shall constitute a or if the articles of incorporation so provide, by the valid means by which a shareholder may grant such holders of outstanding shares having not less than the authority: minimum number of votes that would be necessary to

(i) A shareholder may execute a writing autho- (3) Revocation by death or incompetence of shareholder. rizing another person or persons to act for such The authority of the holder of a proxy to act shall not be shareholder as proxy. Execution may be accomp- revoked by the incompetence or death of the shareholder lished by the shareholder or such shareholder’s who executed the proxy unless, before the authority is authorized officer, director, employee or agent exercised, written notice of an adjudication of such incom- signing such writing or causing such person’s signa- petence or of such death is received by the corporate officer ture to be affixed to such writing by any reasonable responsible for maintaining the list of shareholders. means including, but not limited to, by facsimile signature. (4) Issue of proxy by record holder. Except when other provisions shall have been made by written agreement (ii) A shareholder may authorize another person between the parties, the record holder of shares which are or persons to act for such shareholder as proxy by held by a pledgee as security or which belong to another, transmitting or authorizing the transmission of a upon demand therefor and payment of necessary expen- telegram, cablegram, or other means of electronic ses thereof, shall issue to the pledgee or to such owner of transmission to the person who will be the holder of such shares a proxy to vote or take other action thereon. the proxy or to a proxy solicitation firm, proxy support service organization or like agent duly (5) Sale of vote forbidden. A shareholder shall not sell authorized by the person who will be the holder of his vote, or issue a proxy to vote to any person for any the proxy to receive such transmission, provided that sum of money or anything of value, except as authorized any such telegram, cablegram or other means of in this section, section 75 and section 76 of this division. electronic transmission must either set forth or be submitted with information from which it can be (6) When proxy is irrevocable. A proxy which is determined that the telegram, cablegram or other entitled “irrevocable proxy” and which states that it is electronic transmission was authorized by the irrevocable, is irrevocable if and as long as it is coupled shareholder. If it is determined that such telegrams, with an interest sufficient to support an irrevocable cablegrams or other electronic transmissions are power, including when it is held by any of the following valid, the inspectors or, if there are no inspectors, or a nominee of any of the following: such other persons making that determination shall specify the information upon which they relied. (a) a pledgee;

(b) Any copy, facsimile telecommunication or other (b) a person who has purchased or agreed to reliable reproduction of the writing or transmission purchase the shares; created pursuant to subsection (1)(a) of this section may be substituted or used in lieu of the original wri- (c) a creditor of the corporation who extends or ting or transmission for any and all purposes for which continues credit to the corporation in consideration of the original writing or transmission could be used, the proxy if the proxy states that it was given in provided that such copy, facsimile telecommunication consideration of such extension or continuation of or other reproduction shall be a complete reproduction credit, the amount thereof, and the name of the person of the entire original writing or transmission. extending or continuing credit;

(c) A duly executed proxy shall be irrevocable if it (d) a person who has contracted to perform services states that it is irrevocable and if, and only as long as, it as an officer of the corporation, if a proxy is required is coupled with an interest sufficient in law to support by the contract of employment, if the proxy states that an irrevocable power. A proxy may be made irrevo- it was given in consideration of such contract of cable regardless of whether the interest with which it is employment, the name of the employee and the period coupled is an interest in the stock itself or an interest in of employment contracted for; or the corporation generally. (e) a person designated by or under an agreement (2) Period of validity; revocability. No proxy shall be under section 76 of this division. valid after the expiration of eleven (11) months from the date thereof unless otherwise provided in the proxy. (7) When proxy stated to be irrevocable becomes Every proxy shall be revocable at the pleasure of the revocable. Notwithstanding a provision in a proxy stating shareholder executing it, except as otherwise provided in that it is irrevocable, the proxy becomes revocable after this section. the pledge is redeemed, or the debt of the corporation is paid, or the period of employment provided for in the

contract of employment has terminated or the agreement voting, he would be entitled to cast for the election of under section 76 has been terminated, and become directors with respect to his shares multiplied by the revocable, in a case provided for in subsection (6)(c) and number of directors to be elected, and that he may cast all (d) of this section, at the end of the period, if any, of such votes for a single director or may distribute them specified therein as the period during which it is among the number to be voted for, or any two (2) or irrevocable, or three (3) years after the date of the proxy, more of them as he may see fit. This right, when whichever period is less, unless the period of exercised, shall be termed cumulative voting. irrevocability is renewed from time to time by the execution of a new irrevocable proxy as provided in this (3) Action other than election of directors. Whenever section. This paragraph does not affect the duration of a any corporate action, other than the election of directors, proxy under subsection (2) of this section. is to be taken under this Act by vote of the shareholders, it shall, except as otherwise required or permitted by this (8) Purchaser without knowledge of irrevocable proxy. Act or by the articles of incorporation as permitted by A proxy may be revoked notwithstanding a provision this Act, be authorized by a majority of the votes cast at a making it irrevocable, by a purchaser of shares without meeting of shareholders by the holders of shares entitled knowledge of the existence of the provision unless the to vote thereon. [P.L. 1990-91, § 7.8; amended by P.L. existence of the proxy and its irrevocability is noted 1998-73, § 71.] conspicuously on the face or back of the certificate representing such shares. [P.L. 1990-91, § 7.6; amended § 72. Greater requirement as to quorum and vote by P.L. 1998-73, § 69; amended by P.L. 2005-27, § 69; of shareholders. amended by P.L. 2017-52 § 3 and 4.] (1) Greater requirement permitted. The articles of § 70. Quorum of shareholders. incorporation may contain provisions specifying either or both of the following: (1) Number constituting quorum. Unless otherwise provided in the articles of incorporation or bylaws, a (a) that the proportion of shares, or the proportion of majority of shares entitled to vote, represented in person shares of any class or series thereof, the holders of or by proxy, shall constitute a quorum at a meeting of which shall be present in person or by proxy at any shareholders, but in no event shall a quorum consist of meeting of shareholders in order to constitute a quorum fewer than one-third of the shares entitled to vote at a for the transaction of any business or of any specified meeting. item of business, including amendments to the articles of incorporation, shall be greater than the proportion (2) Withdrawal of shareholders after quorum present. prescribed by this Act in the absence of such provision; When a quorum is once present to organize a meeting, it is not broken by the subsequent withdrawal of any (b) that the proportion of votes of the holders of shareholders. shares, or of the holders of shares of any class or series thereof, that shall be necessary at any meeting of share- (3) Adjournment by less than quorum. The shareholders for the transaction of any business or of any holders present may adjourn the meeting despite the specified item of business, including amendments to absence of a quorum. [P.L. 1990-91, § 7.7; amended by the articles of incorporation, shall be greater than the P.L. 2015-40, §70(1).] proportion prescribed by this Act in the absence of such provision. § 71. Vote of shareholders required. (2) Amendment of articles. An amendment of the (1) Election of directors. Directors shall, except as articles of incorporation which adds a provision permit- otherwise required by this Act or by the articles of ted by this section or which changes or strikes out such a incorporation as permitted by this Act, be elected by a provision, shall be authorized at a meeting of share- plurality of the votes cast at a meeting of shareholders by holders by vote of the holders of two-thirds of all the holders of shares entitled to vote in the election. outstanding shares entitled to vote thereon, or of such greater proportion of shares, or class or series of shares, (2) Cumulative voting. The articles of incorporation of as may be provided specifically in the articles of any corporation may provide that in all elections of incorporation for adding, changing, or striking out a directors of such corporation each shareholder shall be provision permitted by this section. [P.L. 1990-91, § 7.9; entitled to as many votes as shall equal the number of amended by P.L. 1998-73, § 72.] votes which, except for such provisions as to cumulative

§ 73. List of shareholders at meetings. invalidate any irrevocable proxy which is not otherwise illegal. A list of registered shareholders as of the record date, and of holders of bearer shares who as of the record date (7) Shares in name of another corporation. Shares have qualified for voting, certified by the corporate standing in the name of another domestic or foreign officer responsible for its preparation or by a transfer corporation or any type or kind may be voted by such agent, shall be produced at any meeting of shareholders officer, agent or proxy as the bylaws of such corporation upon request of any shareholder at the meeting or prior may provide, or, in the absence of such provision, as the thereto. If the right to vote at any meeting is challenged, board of such corporation may determine. the inspector of election, or person presiding thereat, shall require such list of shareholders to be produced as (8) Limitations on right to vote. The articles of incor- evidence of the right of the persons challenged to vote at poration may provide, except as limited by section 35 of such meeting, and all persons who appear from such list this Act, either absolutely or conditionally, that the to be shareholders entitled to vote thereat may vote at holder of any designated class or series of shares shall such meeting. [P.L. 1990-91, § 7.10.] not be entitled to vote, or it may otherwise limit or define the respective voting powers of the several classes or § 74. Qualification of voters. series of shares, and, except as otherwise provided in this Act, such provisions of such articles shall prevail, (1) Right of shareholder. Every registered shareholder according to their tenor, in all elections and in all as of the record date and every holder of bearer shares proceedings, over the provisions of this Act which who, as of the record date, has qualified for voting, shall authorize any action by the shareholders. If the articles be entitled at every meeting of shareholders to one (1) of incorporation provide for more or less than one (1) vote for every share standing in his name, unless vote for any share, on any matter, every reference in this otherwise provided in the articles of incorporation. Act to a majority or other proportion of stock or shares shall refer to such majority or other proportion of the (2) Treasury shares. Treasury shares are not shares votes of such stock or shares.1 [P.L. 1990-91, § 7.11; entitled to vote or to be counted in determining the total amended by P.L. 1998-73, § 74; amended by P.L. 2017- number of outstanding shares. 52, § 8; amended by P.L. 2018-100, § 8.]

(3) Shares held by subsidiary corporation. Shares of a § 75. Voting trusts. parent corporation held by a subsidiary corporation are not shares entitled to vote or to be counted in determi- (1) Voting trusts authorized. Any shareholder, under ning the total number of outstanding shares. an agreement in writing, may transfer his shares to a voting trustee for the purpose of conferring the right to (4) Shares held by fiduciary. Shares held by an admini- vote thereon for a period not exceeding ten (10) years strator, executor, guardian, conservator, committee, or upon the terms and conditions stated therein. The cert- other fiduciary, except a trustee, may be voted by him, ificates for shares so transferred shall be surrendered and either in person or by proxy, without transfer of such canceled and new certificates therefore issued to such shares into his name. Shares held by a trustee may be voted by him, either in person or by proxy, only after the shares have been transferred into his name as trustee or 1 P.L 2018-100 contains the following underlined typographical into the name of his nominee. errors which are in the process of being rectified administratively by the Clerk of the Nitijela: (5) Shares held by receiver. Shares held by or under (8) Limitations on right to vote. The articles of the control of a receiver may be voted by him without incorporation may provide, except as limited by section 35 of the transfer thereof into his name if authority to do so is this Act, either absolutely or conditionally, that the holder of contained in an order of the court by which such receiver any designated class or series of shares shall not be entitled to vote, or it may otherwise limit or define the respective voting was appointed. powers of the several classes or series of shares, and, except as otherwise provided in this Act, such provisions of such articles (6) Pledged shares. Persons whose stock is pledged shall prevail, according to their tenor, in all elections and in all shall be entitled to vote, unless in the transfer by the proceedings, over the provisions of this Act which authorize pledgor on the books of the corporation he has expressly any action by the shareholders. If the articles of incorporation empowered the pledgee to vote thereon, in which case provide for more or less than one (1) vote for any share, on any only the pledgee, or his proxy, may represent such stock matter, every reference in this Act to a majority or other and vote thereon. This section shall not be deemed to proportion of such stock or shares shall refer to such majority or other proportion of the votes of such stock or shares.

trustee stating that they are issued under such agreement, § 77. Conduct of shareholders’ meetings. and in the entry of such ownership in the record of the corporation that fact shall also be noted, and such trustee (1) Selection of inspectors. Unless otherwise provided may vote the shares so transferred during the term of in the bylaws, the board, in advance of any shareholders’ such agreement. At the termination of the agreement, the meeting, may appoint one (1) or more inspectors to act at shares surrendered shall be reissued to the owner in the meeting or any adjournment thereof. If inspectors are accordance with the terms of the trust agreement. not so appointed, the person presiding at a shareholders’ meeting may, and on the request of any shareholder (2) Right of inspection by certificate holders. The entitled to vote thereat shall, appoint one (1) or more trustee shall keep available for inspection by holders of inspectors. In case any person appointed fails to appear voting trust certificates at his office or at a place or act, the vacancy may be filled by appointment made designated in such agreement or of which the holders of by the board in advance of the meeting or at the meeting voting trust certificates have been notified in writing, by the person presiding thereat. Each inspector, before correct and complete books and records of account entering upon the discharge of his duties, shall take an relating to the trust, and a record containing the names oath faithfully to execute the duties of inspector at such and addresses of all persons who are holders of voting meeting. trust certificates and the number and class of shares represented by the certificates held by them and the dates (2) Duties of inspectors. Unless otherwise provided in when they became the owners thereof. The record may the bylaws, the inspectors shall determine the number of be in written form or any other form capable of being shares outstanding and the voting power of each, the shares converted into written form within a reasonable time. represented at the meeting, the existence of a quorum, the validity and effect of proxies, and shall receive votes, (3) Records in office of corporation. A duplicate of ballots, or consents, hear and determine all challenges and every such agreement shall be filed in the office of the questions arising in connection with the right to vote, count corporation and it and the record of voting trust and tabulate all votes, ballots or consents, determine the certificate holders shall be subject to the same right of results, and do such acts as are proper to conduct the inspection by a shareholder of record or a holder of a election or vote with fairness to all shareholders entitled to voting trust certificate, in person or by agent or attorney, vote thereat. Unless waived by vote of the shareholders, the as are the records for the corporation under section 81 of inspectors shall make a report in writing of any challenge, this Act. The shareholder or holder of a voting trust question or matter determined by them and execute a sworn certificate shall be entitled to the remedies provided in certificate of any fact found by them. Any report or section 84 of this Act. certificate made by them shall be prima facie evidence of (4) Extension agreements. At any time within six (6) the facts stated and of the vote as certified by them. [P.L. months before the expiration of such voting trust 1990-91, § 7.14.] agreement as originally fixed or as extended one (1) or more times under this subsection, one (1) or more § 78. Preemptive rights. holders of voting trust certificates may, by agreement in writing, extend the duration of such voting trust (1) When shares are subject to preemptive rights. agreement, nominating the same or a substitute trustee, Except as otherwise provided in the articles of incor- for an additional period not exceeding ten (10) years. poration or in this section, in the event of: Such extension agreement shall not affect the rights or obligations of persons not parties thereto and shall in (a) the proposed issuance by the corporation of every respect comply with and be subject to all the shares, whether or not of the same class as those provisions of this section applicable to the original previously held, which would adversely affect the voting trust agreement. [P.L. 1990-91, § 7.12.] voting rights or rights to current and liquidating dividends of such holders; or § 76. Agreements among shareholders as to voting. (b) the proposed issuance by the corporation of An agreement between two (2) or more shareholders, securities convertible into or carrying an option to if in writing and signed by the parties thereto, may purchase shares referred to in subsection 1(a) of this provide that in exercising any voting rights, the shares section; or held by them shall be voted as therein provided, or as they may agree, or as determined in accordance with a (c) the granting by the corporation of any options or procedure agreed upon by them. [P.L. 1990-91, § 7.13.] rights to purchase shares or securities referred to in subsections 1(a) or (b) of this section, the holders of

shares of any class shall have the right, during a dealer quotation system. [P.L. 1990-91, § 7.15; amended reasonable time and on reasonable terms, to be by P.L. 2006-52, § 78, adding new section.] determined by the board, to purchase such shares or other securities, as nearly as practicable, in such § 79. Shareholders’ derivative actions. proportion as would, if such preemptive right were exercised, preserve the relative rights to current and (1) Right to bring action. An action may be brought in liquidating dividends and voting rights of such holders the right of a corporation to procure a judgment in its and at a price or prices no less favorable than the price favor, by a holder of shares or of voting trust certificates at which such shares, securities, options or rights are to of the corporation or of a beneficial interest in such be offered to other holders. The holders of shares shares or certificates. entitled to preemptive right, and the number of shares for which they have a preemptive right, shall be (2) Ownership requirement. In any such action, it shall determined by fixing a record date in accordance with be made to appear that the plaintiff is such a holder at the section 68 of this Act. time of bringing the action and that he was such a holder at the time of the transaction of which he complains, or (2) When shares are not subject to preemptive rights. that his shares or his interest therein devolved upon him Except as otherwise provided in the articles of incorpora- by operation of law. tion, shareholders shall have no preemptive right to purchase: (3) Effort by plaintiff to secure action by board. In any such action in the Republic, the complaint shall set forth (a) shares or other securities issued to effect a with particularity the efforts of the plaintiff to secure the merger or consolidation; or initiation of such action by the board or the reasons for not making such effort. (b) shares or other securities issued or optioned to directors, officers, or employees of the corporation as (4) Settlement of action. Such action in the Republic an incentive to service or continued service with the shall not be discontinued, compromised or settled, with- corporation pursuant to an authorization given by the out the approval of the High Court of the Republic. If the shareholders, and by the vote of the holders of the High Court of the Republic shall determine that the shares entitled to exercise preemptive rights with interests of the shareholders or any class thereof will be respect to such shares; or substantially affected by such discontinuance, compromise, or settlement, the High Court, in its discretion, may (c) shares issued to satisfy conversion or option direct that notice, by publication or otherwise, shall be rights previously granted by the corporation; or given to the shareholders or class thereof whose interests it determines will be so affected; if notice is so directed (d) treasury shares; or to be given, the High Court may determine which one (1) or more of the parties to the action shall bear the expense (e) shares or securities which are part of the shares of giving such notice, in such amount as the High Court or securities of the corporation authorized in the shall determine and find to be reasonable in the circum- original articles of incorporation and are issued, sold or stances, and the amount of such expense shall be optioned within two (2) years from the date of filing awarded as special costs of the action and recoverable in such articles. the same manner as statutory taxable costs.

(3) Notice to shareholders of rights. The holders of (5) Disposition of proceeds. If the action in the shares entitled to the preemptive right shall be given Republic on behalf of the corporation was successful, in prompt notice setting forth the period within which and whole or in part or if anything was received by the the terms and conditions upon which such shareholders plaintiff or a claimant as the result of a judgment, may exercise their preemptive right. Such notice shall be compromise or settlement of an action of claim, the court given personally or by mail at least fifteen (15) days prior may award the plaintiff or claimant reasonable expenses, to the expiration of the period during which the right may including reasonable attorney’s fees, and shall direct him be exercised. to account to the corporation for the remainder of the proceeds so received by him. (4) Exception. Except as otherwise provided in the articles of incorporation, this section does not apply to (6) Security for expenses. In any action in the any corporation whose common shares are listed on a Republic authorized by this section, if the plaintiff holds securities exchange or admitted for trading on an inter- less than five percent (5%) of any class of the outstanding shares or holds voting trust certificates or a

beneficial interest in shares representing less than five domestic entities in connection with the performance of percent (5%) of any class of such shares, then unless the its audit functions or pursuant to a valid governmental shares, voting trust certificates or beneficial interest of request made to the registered agent for non-resident such plaintiff has a fair value in excess of fifty thousand domestic entities, every non-resident domestic corpora- dollars (U.S. $50,000), the corporation in whose right tion shall produce all accounting records and underlying such action is brought shall be entitled at any stage of the documentation required to be maintained pursuant to this proceedings before final judgment to require the plaintiff subsection to the registered agent for non-resident to give security for the reasonable expenses, including domestic entities in the Republic. The Minister of attorney’s fees, which may be incurred by it in Finance or any person designated by him or her under or connection with such action, in such amount as the court pursuant to the Tax Information Exchange Agreement having jurisdiction of such action shall determine upon (Implementation) Act of 1989 (41 MIRC, Chapter 4) or the termination of such action. The amount of such the Tax Information Exchange Agreement (Execution security may thereafter from time to time be increased or and Implementation) Act, 2010 (48 MIRC, Chapter 4) decreased in the discretion of the court having juris- may require the registered agent for non-resident diction of such action upon showing that the security domestic entities to demand production of all accounting provided has or may become inadequate or excessive. records and underlying documentation required to be [P.L. 1990-91, § 7.16.] maintained pursuant to this subsection. Additionally, upon formation, or in the case of a corporation existing DIVISION 8: prior to the effective date of this law, within 360 days of CORPORATE RECORDS AND REPORTS such date, and annually thereafter, an attestation, in a form prescribed by the Registrar for non-resident § 80. Requirement for keeping accounting records, domestic corporations, will be made by every non- minutes, and records of shareholders and resident domestic corporation, excluding publicly-traded beneficial owners. companies, to the Registrar for non-resident domestic § 81. Shareholders’ right to inspect books and corporations that accounting records and underlying records. documentation required to be maintained pursuant to this § 82. Directors’ right of inspection. subsection are being maintained in accordance with this § 83. List of directors and officers. section or, if applicable, that such records are not being § 84. Enforcement of right of inspection. maintained (wholly or partially). § 85. Annual report. (2) Minutes. Every domestic corporation shall keep minutes of all meetings of shareholders, of actions taken § 80. Requirement for keeping accounting records, on consent by shareholders, of all meetings of the board minutes, and records of shareholders and of directors, of actions taken on consent by directors and beneficial owners. of meetings of the executive committee, if any. A resident domestic corporation shall keep such minutes in (1) Accounting records. Every domestic corporation the Republic. shall keep reliable and complete accounting records, to include correct and complete books and records of (3) Records of shareholders and beneficial owners. account. Accounting records must be sufficient to correctly explain all transactions, enable the financial (a) Every domestic corporation shall keep an up-to- position of the corporation to be determined with date record containing the names and addresses of all reasonable accuracy at any time, and allow financial registered shareholders, the number and class of shares statements to be prepared. Additionally, every domestic held by each and the dates when they respectively corporation shall keep underlying documentation for became the owners of record thereof. In addition, every accounting records maintained pursuant to this sub- domestic corporation which issues bearer shares section, such as, but not limited to, invoices and subject to the provisions of section 42 of this Act shall contracts, which shall reflect all sums of money received maintain a record of all certificates issued in bearer and expended and the matters in respect of which the form, including the number, class, and dates of receipt and expenditure takes place; all sales, purchases, issuance of such certificates. A resident domestic and other transactions; and the assets and liabilities of corporation shall keep the records required to be the corporation. A resident domestic corporation shall maintained by this subsection in the Republic. keep all accounting records and underlying documentation as described in this subsection in the Republic. (b) Every domestic corporation, excluding publicly- Upon demand of the registered agent for non-resident traded companies, incorporated after the effective date

of this law shall, in addition to the shareholder records corporation has reason to believe that the response is required under paragraph (a) of this subsection, use all misleading or false. reasonable efforts to obtain and maintain an up-to-date record of the names and addresses of all beneficial (e) For the purpose of this Division, a shareholder owners of the corporation. Every domestic corporation, or beneficial owner of a domestic corporation has an excluding publicly-traded companies, incorporated on obligation to provide the information requested by or before such date shall comply with the requirements such corporation in accordance with this subsection. of this paragraph (b) within 360 days of such date. (f) For the purpose of this Division, “beneficial (c) Every domestic corporation which issues bearer owner” means the natural person(s) who ultimately shares after the effective date of this law shall, in owns or controls, or has ultimate effective control of, a addition to the shareholder records required under legal entity or arrangement, whether directly or paragraph (a) of this subsection, use all reasonable indirectly, or on whose behalf such interest in such efforts to obtain and maintain an up-to-date record of legal entity or arrangement is held. For a domestic the names, addresses, nationalities, and, in the case of corporation other than a publicly-traded company, the natural persons, dates of birth of all holders and natural person(s) who exercises control over such beneficial owners of such bearer shares and a record of corporation through direct or indirect ownership of any subsequent transfer, including the date of transfer more than 25% of the shares or voting rights in such and the names, addresses, nationalities, and, in the case corporation shall be regarded as the beneficial of natural persons, dates of birth of all new holders and owner(s); if no natural person exerts control through beneficial owners of the transferred bearer shares. In such an ownership interest, the natural person(s) who order to maintain the validity of any such bearer exercises control over such corporation through shares, including any and all rights and privileges of a management of the corporation or other means shall be holder of such shares, the records required under regarded as the beneficial owner(s). paragraph (a) and this paragraph (c) for the issuance and any subsequent transfer of such bearer shares must (g) Upon demand of the registered agent for non- be recorded with the registered agent for non-resident resident domestic entities in connection with the domestic entities. For all bearer shares issued on or performance of its audit functions or pursuant to a before the effective date of this law, every domestic valid governmental request made to the registered corporation shall comply with the requirements of this agent for non-resident domestic entities, every non- paragraph (c) within 360 days of such date. resident domestic corporation shall produce all records of shareholders and beneficial owners required to be (d) For the purposes of complying with paragraphs maintained pursuant to this subsection to the registered (b) and (c) of this subsection, every domestic agent for non-resident domestic entities in the corporation shall use all reasonable efforts to notify its Republic. The Minister of Finance or any person shareholders and beneficial owners of their obligation designated by him or her under or pursuant to the Tax to provide the information required to be kept by the Information Exchange Agreement (Implementation) corporation under the aforementioned paragraphs, and Act of 1989 (41 MIRC, Chapter 4) or the Tax shall use all reasonable efforts to obtain such Information Exchange Agreement (Execution and information. The requirement to use all reasonable Implementation) Act, 2010 (48 MIRC, Chapter 4) may efforts shall be satisfied by at least annually requesting require the registered agent for non-resident domestic by written notice the information required to be entities to demand production of all records of maintained by the corporation under the afore- shareholders and beneficial owners required to be mentioned paragraphs. Any written notice provided maintained pursuant to this subsection. Additionally, pursuant to this paragraph shall be given in accordance upon formation, or in the case of a corporation existing with section 65 of this Act. In respect of shareholders prior to the effective date of this law, within 360 days of bearer shares, any written notice shall be in of such date, and annually thereafter, an attestation, in accordance with section 11 of this Act and shall a form prescribed by the Registrar for non-resident include a statement of the conditions under which domestic corporations, will be made by every non- shareholders may exercise any and all rights and resident domestic corporation, excluding publicly- privileges. For the purpose of identifying beneficial traded companies, to the Registrar for non-resident owners, a corporation is entitled to rely, without domestic corporations that records of shareholders and further inquiry, on the response of a person to a written beneficial owners required to be maintained pursuant notice sent in good faith by the corporation, unless the to this subsection are being maintained in accordance

with this section or, if applicable, that such records are this section have been made to obtain and maintain such not being maintained (wholly or partially). information. [P.L. 1990-91, § 8.1; amended by P.L. 2000- 18, § 80; amended by P.L.2014-31, adding §80(4) and (5); (h) To the extent that records of shareholders and amended by P.L. 2015-40, §80; amended by P.L 2017-39; beneficial owners are not being maintained in amended by P.L. 2017-52, §§ 1, 3, and 6.] accordance with this subsection by a non-resident domestic corporation in respect of bearer shares, the § 81. Shareholders’ right to inspect books and corporation shall cancel the share certificates relating records. to those shareholders and beneficial owners for which such records are not being maintained: (1) Right stated. Any shareholder or holder of a voting trust certificate in person or by an attorney or other agent, (i) in the case of bearer shares issued on or may during the usual hours of business inspect, for a before the effective date of this law, within 180 days purpose reasonably related to his interests as a share- of the date on which such records are required to be holder, or as the holder of a voting trust certificate, and maintained in accordance with paragraph (c) of this make copies or extracts from the share register, books of subsection; and account, and minutes of all proceedings.

(ii) in any other case, within 180 days of the at- (2) Ground for refusal of right. Any inspection autho- testation that such records are not being maintained. rized by subsection (1) of this section may be denied to a shareholder or other person who within five (5) years (4) Forms of records. Any records maintained by a sold or offered for sale a list of shareholders of a corporation in the regular course of its business, including corporation or aided or abetted any person in procuring its stock ledger, books of account, and minute books, may for sale any such list of shareholders or who seeks such be kept on, or be in the form of, punch cards, magnetic inspection for a purpose which is not in the interest of a tape, photographs, microphotographs or any other informa- business other than the business of the corporation or tion storage device, provided that the records so kept can who refuses to furnish an affidavit attesting to this right be converted into clearly legible written form within a to inspect under this section. reasonable time. Any corporation shall so convert any records so kept upon the request of any person entitled to (3) Limitation of right forbidden. The right of inspec- inspect the same. When records are kept in such manner, a tion stated by this section may not be limited in the clearly legible written form produced from the cards, tapes, articles or bylaws. [P.L. 1990-91, § 8.2.] photographs, microphotographs or other information storage device shall be admissible in evidence, and accepted for all § 82. Directors’ right of inspection. other purposes, to the same extent as an original written record of the same information would have been, provided Every director shall have the absolute right at any the written form accurately portrays the record. reasonable time to inspect all books, records, documents of every kind, and the physical properties of the corpora- (5) Retention Period. All records required to be kept, tion, domestic or foreign, of which he is a director, and retained, or maintained under this section shall be kept, also of its subsidiary corporations, domestic or foreign. retained, or maintained for a minimum of five (5) years. Such inspection by a director may be made in person or by agent or attorney, and the right of inspection includes (6) Failure to maintain or produce records or to make the right to make extracts. In the case of authorized attestations. Any person who knowingly or recklessly fails foreign corporations this right extends only to such to keep, retain, or maintain records as required under this books, records, documents and properties of such section, or who fails to produce records within sixty (60) corporations as are kept or located in the Republic. [P.L. days upon demand or to make attestations as required 1990-91, § 8.3.] under this section, or who willfully keeps, retains, maintains, or produces false or misleading records or makes § 83. List of directors and officers. false or misleading attestations, shall be liable to a fine not exceeding $50,000, revocation of the corporation’s articles List of directors and officers. If a shareholder or of incorporation and dissolution, or both. Persons shall not creditor of a resident domestic corporation, in person or be liable under this section for any failure to keep, retain or by his attorney or agent, or a representative of either of maintain the beneficial ownership information required to the Registrars of Corporations or other government be maintained and produced under this section if all official makes a written demand on such corporation to reasonable efforts in compliance with the requirements of inspect a current list of its directors and officers and their

residence addresses, the corporation shall, within two (2) affidavit or otherwise, and if it appears that the applicant business days after receipt of the demand and for a is qualified and entitled to such inspection, the court shall period of one (1) week thereafter, make the list available grant an order compelling such inspection and awarding for such inspection at its office during usual business such further relief as the court may seem just and proper. hours. Upon demand of the registered agent for non- On order of the court issued under this section, all resident domestic entities in connection with the officers and agents of the corporation shall produce to the performance of its audit functions or pursuant to a valid inspectors or accountant so appointed all books and governmental request made to the registered agent for documents in their custody or power, under penalty of non-resident domestic entities, every non-resident punishment for contempt of court. All expenses of the domestic corporation shall produce a current list of its inspection shall be defrayed by the applicant unless the directors and executive officers and their business or court orders them to be paid or shared by the corporation. residence addresses to the registered agent for non- [P.L. 1990-91, § 8.5.] resident domestic entities in the Republic. The Minister of Finance or any person designated by him or her under § 85. Annual report. or pursuant to the Tax Information Exchange Agreement (Implementation) Act of 1989 (41 MIRC, Chapter 4) or Upon the written request of any person who shall have the Tax Information Exchange Agreement (Execution been a shareholder of record for at least six (6) months and Implementation) Act, 2010 (48 MIRC, Chapter 4) immediately preceding his request, or of any person may require the registered agent for non-resident holding, or thereunto authorized in writing by the holders domestic entities to demand production of such a list. of, at least five percent (5%) of any class of the Additionally, upon formation, or in the case of a outstanding shares, the corporation shall give or mail to corporation existing prior to the effective date of this such shareholder an annual balance sheet and profit and law, within 360 days of such date, and annually loss statement for the preceding fiscal year, and, if any thereafter, an attestation, in a form prescribed by the interim balance sheet or profit and loss statement has Registrar for non-resident domestic corporations, will be been distributed to its shareholders or otherwise made made by every non-resident domestic corporation, available to the public, the most recent such interim excluding publicly-traded companies, to the Registrar for balance sheet or profit and loss statement. The corpora- non-resident domestic corporations that a list of current tion shall be allowed a reasonable time to prepare such directors and executive officers is being maintained in annual balance sheet and profit and loss statement. [P.L. accordance with this section or, if applicable, that such 1990-91, § 8.6.] records are not being maintained (wholly or partially). DIVISION 9: (2) Failure to maintain or produce records or to make AMENDMENTS OF ARTICLES attestations. Any person who knowingly or recklessly OF INCORPORATION fails to keep, retain, or maintain records as required under this section, or who fails to produce records within § 86. Right to amend articles of incorporation. sixty (60) days upon demand or to make attestations as § 87. Reduction of stated capital by amendment. required under this section, or who willfully keeps, § 88. Procedure for amendment. retains, maintains, or produces false or misleading § 89. Class voting on amendments. records or makes false or misleading attestations, shall § 90. Articles of amendment. be liable to a fine not exceeding $50,000, revocation of § 91. Effectiveness of amendment. § 92. Right of dissenting shareholders to payment. the corporation’s articles of incorporation and dissolution, or both. [P.L. 1990-91, § 8.4; amended by § 93. Restated articles of incorporation.

P.L. 2017-52, §§ 1 and 2.] § 86. Right to amend articles of incorporation. § 84. Enforcement of right of inspection. A corporation may amend its articles of incorporation Upon refusal of a lawful demand for inspection of from time to time in any and as many respects as may be records required to be maintained in the Republic, the desired, provided such amendment contains only such person making the demand may apply to the High Court, provisions as might lawfully be contained in original upon such notice as the court may direct, for an order articles of incorporation filed at the time of making such directing the corporation to show cause why an order amendment. [P.L. 1990-91, § 9.1.] should not be granted permitting such inspection by the applicant. Upon the return day of the order to show cause, the court shall hear the parties summarily, by

§ 87. Reduction of stated capital by amendment. ment shall be authorized by vote of the holders of a majority of all outstanding shares of the class if the Reduction of stated capital which is not authorized by amendment would increase or decrease the aggregate action of the board may be effected by an amendment of number of authorized shares of such class, increase or the articles of incorporation, but no reduction of stated decrease the par value of the shares of such class, or alter capital shall be made by amendment unless after such or change the powers, preferences or special rights of the reduction the stated capital exceeds the aggregate prefe- shares of such class so as to affect them adversely. If any rential amount payable upon involuntary liquidation upon proposed amendment would alter or change the powers, all issued shares having preferential rights in assets plus preferences, or special rights of one (1) or more series of the par value of all other issued shares with par value. any class so as to affect them adversely, but shall not so [P.L. 1990-91, § 9.2.] affect the entire class, then only the shares of the series so affected by the amendment shall be considered a separate class for the purposes of this section. [P.L. § 88. Procedure for amendment. 1990-91, § 9.4.]

(1) General method of amending. Amendment of the § 90. Articles of amendment. articles of incorporation may be authorized by vote of the holders of a majority of all outstanding shares entitled to The articles of amendment shall be executed and vote thereon. acknowledged in accordance with provisions of section 5 of this Act and shall set forth: (2) Certain amendments may be approved by board. Alternatively, any one (1) or more of the following (a) the name of the corporation; amendments may be approved by the board: (b) the date its articles of incorporation were filed (a) to specify or change the location of the office or with a Registrar or Deputy Registrar of Corporations; registered address of the corporation; (c) each section affected thereby; (b) to make, revoke or change the designation of a registered agent, or to specify or change the address of (d) if any such amendment provides for a change or its registered agent. elimination of issued shares and, if the manner in which the same shall be effected is not set forth in the (3) Amendment by incorporators. The articles of articles of amendment, then a statement of the manner incorporation may be amended by consent in writing of in which the same shall be effected shall be included in all the incorporators provided the incorporators verify or annexed to the articles of amendment or furnished that no shares have been issued. without cost to any shareholder who requests a copy of such statement; (4) Amendment by subscribers. The articles of incorporation may be amended by consent in writing of the (e) if any amendment reduces stated capital, then a holders of all outstanding subscription rights to shares of statement of the manner in which the same is effected the corporation provided such holders verify that no and the amounts from which and to which stated shares have been issued. capital is reduced; and

(5) Other provisions for amendment unaffected. This (f) the manner in which the amendment of the section shall not alter the vote required under any other articles of incorporation was authorized. section for the adoption of an amendment referred to therein, nor alter the authority of the board to authorize The articles of amendment shall be filed with a amendments under any other section. [P.L. 1990-91, Registrar or Deputy Registrar of Corporations in accor- § 9.3; amended by P.L. 2018-100, § 1.] dance with the provisions of section 5 of this Act. [P.L. 1990-91, § 9.5.] § 89. Class voting on amendments. § 91. Effectiveness of amendment. Notwithstanding any provisions in the articles of incorporation, the holders of the outstanding shares of a (1) Time when effective. Upon filing of the articles of class shall be entitled to vote as a class upon a proposed amendment with a Registrar or Deputy Registrar of amendment, and in addition to the authorization of an Corporations, the amendment shall become effective as of amendment by vote of the holders of a majority of all outstanding shares entitled to vote thereon, the amend-

the filing date stated thereon and the articles of procedure and vote required by section 88(1) of this incorporation shall be deemed to be amended accordingly. division for amendment of the articles of incorporation shall be applicable. If the restated articles of incor- (2) Limitations on effect of amendment. No amendment poration restate and integrate and also further amend in shall affect any existing cause of action in favor of or any respect the articles of incorporation, as theretofore against the corporation, or any pending suit to which it amended or supplemented, it shall be proposed by the shall be party, or the existing rights of persons other than directors and adopted by the shareholders in the manner shareholders; and in the event the corporation name shall and by the vote prescribed by section 88(1) of this be changed, no suit brought by or against the corporation division. under its former name shall abate for that reason. [P.L. 1990-91, § 9.6.] (3) Form of restated articles. Restated articles of incorporation shall be specifically designated as such in their § 92. Right of dissenting shareholders to payment. heading. They shall state, either in their heading or in an introductory paragraph, the corporation’s present name, A holder of any adversely affected shares who does not and, if it has been changed, the name under which it was vote in favor of or consent in writing to an amendment in originally incorporated, and the date of filing of its the articles of incorporation shall, subject to and by original articles of incorporation with a Registrar of complying with the provisions of section 101 of this Act, Corporations. Restated articles of incorporation shall also have the right to dissent and to receive payment for such state that they were duly adopted in accordance with this shares, if the articles of amendment: section. If they were adopted by the board of directors without a vote of the shareholders, they shall state that (a) alter or abolish any preferential right of any they only restate and integrate and do not further amend outstanding shares having preferences; or the provisions of the corporation’s articles of incorporation, as theretofore amended or supplemented, and that (b) create, alter, or abolish any provision or right in there is no discrepancy between those provisions and the respect of the redemption of any outstanding shares; or provisions of the restated articles. Restated articles of

incorporation may omit (a) such provisions of the (c) alter or abolish any preemptive right of such original articles of incorporation which named the holder to acquire shares or other securities; or incorporator or incorporator(s), the initial board of (d) exclude or limit the right of such holder to vote directors and the original subscribers for shares, and (b) on any matter, except as such right may be limited by such provisions contained in any amendment to the the voting rights given to new shares then being articles of incorporation as were necessary to effect a authorized of any existing or new class. [P.L. 1990-91, change, exchange, reclassification, subdivision, combina- § 9.7; amended by P.L. 2017-52.] tion or cancellation of stock, if such change, exchange, reclassification, subdivision, combination or cancellation § 93. Restated articles of incorporation. has become effective. Any such omissions shall not be deemed a further amendment. (1) Procedures for integrating document. A corporation may, whenever desired, integrate into a single instrument (4) Execution and filing. Restated articles of incorpo- all of the provisions of its articles of incorporation which ration shall be executed, acknowledged and filed in are then in effect and operative as a result of there having accordance with section 5 of this Act. Upon their filing theretofore been filed with a Registrar of Corporations with a Registrar of Corporations, the original articles of one (1) or more articles or other instruments pursuant to incorporation, as theretofore amended or supplemented, this Act, and it may at the same time also further amend shall be superseded; thenceforth, the restated articles of its articles of incorporation by adopting restated articles incorporation, including any further amendments or of incorporation. changes made thereby, shall be the articles of incorporation of the corporation, but the original date of (2) Adoption of restated articles. If the restated articles incorporation shall remain unchanged. of incorporation merely restate and integrate but do not further amend the articles of incorporation, as theretofore (5) Effect of amended and restated articles. Any amended or supplemented by any instrument that was amendment or change effected in connection with the filed pursuant to this Act, it may be adopted by the board restatement and integration of the articles of incor- of directors without a vote of the shareholders, or it may poration shall be subject to any other provision of this be proposed by the directors and submitted by them to Act, not inconsistent with this section, which would the shareholders for adoption, in which case the apply if separate articles of amendment were filed to

effect such amendment or change. [P.L. 1990-91, § 9.8; amended by P.L. 2005-27, § 93.] (a) the name of each constituent corporation, and if the name of any of them has been changed, the name DIVISION 10: under which it was formed, and the name of the MERGER OR CONSOLIDATION surviving corporation, or the name, or the method of determining it, of the consolidated corporation; § 94. Definitions. § 95. Merger or consolidation of domestic (b) as to each constituent corporation, the desig- corporations. nation and number of outstanding shares of each class § 96. Merger of subsidiary corporations. and series, specifying the classes and series entitled to § 97. Effect of merger or consolidation. vote and further specifying each class and series, if § 98. Merger or consolidation of domestic and any, entitled to vote as a class; foreign corporations. (c) the terms and conditions of the proposed merger § 99. Sale, lease, exchange or other disposition of or consolidation, including the manner and basis of assets. converting the shares of each constituent corporation § 100. Right of dissenting shareholder to receive into shares, bonds or other securities of the surviving or payment for shares. consolidated corporation, or the cash or other consi- § 101. Procedure to enforce shareholder’s right to deration to be paid or delivered in exchange for shares of receive payment for shares. each constituent corporation, or a combination thereof;

(d) in case of merger, a statement of any amendment § 94. Definitions. in the articles of incorporation of the surviving corporation to be effected by such merger; in case of Whenever used in this division: consolidation all statements required to be included in articles of incorporation for a corporation formed under (a) “merger” means a procedure whereby any two (2) this Act, except statements as to facts not available at or more corporations merge into a single corporation, the time the plan of consolidation is approved by the which is any one (1) of the constituent corporations. board;

(b) “consolidation” means a procedure whereby any (e) such other provisions with respect to the two (2) or more corporations consolidate into a new proposed merger or consolidation as the board corporation formed by the consolidation. considers necessary or desirable.

(c) “constituent corporation” means an existing (3) Authorization by shareholders. The board of each corporation that is participating in the merger or conso- constituent corporation, upon approving such plan of lidation with one (1) or more other corporations. merger or consolidation, shall submit such plan to a vote of shareholders of each such corporation in accordance (d) “surviving corporation” means the new corporation with the following: into which one (1) or more constituent corporations are merged. (a) notice of the meeting, accompanied by a copy of the plan of merger or consolidation, shall be given to (e) “consolidated corporation” means the new each shareholder of record, whether or not entitled to corporation into which two (2) or more constituent vote; corporations are consolidated. [P.L. 1990-91, § 10.1.]

§ 95. Merger or consolidation of domestic (b) the plan of merger or consolidation shall be corporations. authorized at a meeting of shareholders by vote of the holders of a majority of outstanding shares entitled to (1) Power stated. Two (2) or more domestic corpora- vote thereon, unless any class of shares of any such tions may merge or consolidate as provided in this corporation is entitled to vote thereon as a class, in division. which event, as to such corporation, the plan of merger or consolidation shall be approved upon receiving the (2) Plan of merger or consolidation. The board of affirmative vote of the holders of a majority of the each corporation proposing to participate in a merger or shares of total shares entitled to vote thereon. The consolidation shall approve a plan of merger or shareholders of the outstanding shares of a class shall consolidation setting forth: be entitled to vote as a class if the plan of merger or

consolidation contains any provisions which, if (b) the designation and number of outstanding contained in a proposed amendment to articles of shares of each class of each subsidiary corporation to incorporation, would entitle such class of shares to vote be merged and the number of such shares of each class as a class. owned by the surviving corporation;

(4) Articles of merger or consolidation. After approval (c) the terms and conditions of the proposed merger, of the plan of merger or consolidation by the board and including the manner and basis of converting the shares shareholders of each constituent corporation, the articles of of each subsidiary corporation to be merged not owned merger or consolidation shall be executed by each by the surviving corporation, into shares, bonds or corporation in accordance with section 5 of this Act and other securities of the surviving corporation, or the shall set forth: cash or other consideration to be paid or delivered in exchange for shares of each such subsidiary (a) the plan of merger or consolidation, and, in case corporation, or a combination thereof; and of consolidation, any statement required to be included in the articles of incorporation for a corporation formed (d) such other provisions with respect to the proposed under this Act but which was omitted under subsection merger as the board considers necessary or desirable. (2)(d) of this section; (2) Plan of merger. A copy of such plan of merger or (b) the date when the articles of incorporation of an outline of the material features thereof shall be each constituent corporation were filed with a Registrar delivered, personally or by mail, to all holders of shares of Corporations; and of each subsidiary corporation to be merged not owned by the surviving corporation, unless the giving of such (c) the manner in which the merger or consolidation copy or outline has been waived by such holders. was authorized with respect to each constituent corporation. (3) Filing of articles of merger. The surviving corporation shall deliver duplicate originals of the articles of (5) Filing. The articles of merger or articles of consoli- merger to a Registrar or Deputy Registrar of Corpora- dation shall be filed with a Registrar or Deputy Registrar tions. The articles shall set forth: of Corporations in accordance with the provisions of section 5 of this Act. (a) the plan of merger;

(b) the dates when the articles of incorporation of (6) Payment of fees before merger or consolidation. each constituent corporation were filed with a Registrar No corporation shall be merged or consolidated under or Deputy Registrar of Corporations; and this division until all fees to the Registrar of Corporations (c) if the surviving corporation does not own all the and Registered Agent due or which would be due or shares of each subsidiary corporation to be merged, assessable for the entire calendar month during which the either the date of the giving to holders of shares of each merger or consolidation becomes effective have been such subsidiary corporation not owned by the surviving paid by the corporation. [P.L. 1990-91, § 10.2; amended corporation of a copy of the plan of merger or an by P.L. 2000-18, § 95.] outline of the material features thereof, or a statement

that the giving of such copy or outline has been § 96. Merger of subsidiary corporations. waived, if such is the case.

(1) Without approval of shareholders authorized. Any domestic corporation owning at least ninety percent The articles of merger shall be filed with a Registrar or (90%) of the outstanding shares of each class of another Deputy Registrar of Corporations in accordance with the domestic corporation or corporations may merge such provisions of section 5 of this Act. [P.L. 1990-91, § 10.3.] other corporation or corporations into itself without the authorization of the shareholders of any such corporation. Its board shall approve a plan of merger, setting forth: § 97. Effect of merger or consolidation.

(a) the name of each subsidiary corporation to be (1) When effective. Upon the filing of the articles of merged and the name of the surviving corporation, and merger or consolidation by a Registrar or Deputy Regis- if the name of any of them has been changed, the name trar of Corporations or on such date subsequent thereto, under which it was formed; not to exceed thirty (30) days, as shall be set forth in such articles, the merger or consolidation shall be effective.

consolidated with each other in the following manner, if (2) Effects stated. When such merger or consolidation such merger or consolidation is permitted by the laws of has been effected: the jurisdiction under which each such foreign corporation is organized: (a) Such surviving or consolidated corporation shall thereafter consistent with its articles of incorporation as (a) each domestic corporation shall comply with the altered or established by the merger or consolidation, provisions of this Act with respect to the merger or possess all the rights, privileges, immunities, powers consolidation, as the case may be, of domestic and purposes of each of the constituent corporations. corporations and each foreign corporation shall comply with the applicable provisions of the laws of the (b) All the property, real and personal, including jurisdiction under which it is organized; subscriptions to shares, causes of action and every other asset of each of the constituent corporations, shall (b) if the surviving or consolidated corporation is to vest in such surviving or consolidated corporation be governed by the laws of any jurisdiction other than without further act or deed. this jurisdiction, it shall comply with the provisions of this Act with respect to foreign corporations if it is to (c) The surviving or consolidated corporation shall transact business in this jurisdiction, and in every case assume and be liable for all the liabilities, obligations it shall file with the appropriate Registrar or Deputy and penalties of each of the constituent corporations. Registrar of Corporations: No liability or obligation due or to become due, claim or demand for any cause existing against any such (i) an agreement that it may be served with corporation, or any shareholder, officer or director process in the Republic in any proceeding for the thereof, shall be released or impaired by such merger enforcement of any obligation of any domestic or consolidation. No action or proceeding, whether corporation which is a party to such merger or civil or criminal, then pending by or against any such consolidation and in any proceeding for the enforce- constituent corporation, or any shareholder, officer or ment of the rights of a dissenting shareholder of any director thereof, shall abate or be discontinued by such such domestic corporation against the surviving or merger or consolidation, but may be enforced, consolidated corporation; prosecuted, settled or compromised as if such merger or consolidation had not occurred, or such surviving or (ii) an irrevocable appointment of the Govern- consolidated corporation may be substituted in such ment’s designee as its agent to accept service of action or special proceeding in place of any constituent process in any such proceeding; corporation. (iii) an agreement that it will promptly pay to the (d) In the case of a merger, the articles of dissenting shareholders of any such domestic corpo- incorporation of the surviving corporation shall be ration the amount, if any, to which they shall be automatically amended to the extent, if any, that chan- entitled under the provisions of this Act with respect ges in its articles of incorporation are set forth in the to the rights of dissenting shareholders; and plan of merger; and, in the case of a consolidation, the statements set forth in the articles of consolidation and (iv) a certificate of merger or consolidation which are required and permitted to be set forth in issued by the appropriate official of the foreign articles of incorporation of a corporation formed under jurisdiction. this Act, shall be its articles of incorporation. (2) Effect. The effect of such merger or consolidation (e) Unless otherwise provided in the articles of shall be the same as in the case of the merger or merger or consolidation, a constituent corporation consolidation of domestic corporations if the surviving or which is not the surviving corporation or the consoli- consolidated corporation is to be governed by the laws of dated corporation, ceases to exist and is dissolved. this jurisdiction. If the surviving or consolidated corpora- [P.L. 1990-91, § 10.4.] tion is to be governed by the laws of any jurisdiction other than the Republic, the effect of such merger or § 98. Merger or consolidation of domestic and consolidation shall be the same as in the case of the foreign corporations. merger or consolidation of domestic corporations except insofar as the laws of such other jurisdiction provide (1) Method. One (1) or more foreign corporations and otherwise. one (1) or more domestic corporations may be merged or

(3) Effective date. The effective date of a merger or consolidation in cases where the surviving or consolidated § 100. Right of dissenting shareholder to receive corporation is to be governed by the laws of any jurisdiction payment for shares. other than this jurisdiction shall be determined by the filing requirements and laws of such other jurisdiction. Any shareholder of a corporation shall have the right to dissent from any of the following corporate actions and (4) Merger of subsidiary corporation. The procedure receive payment of the fair value of his shares: for the merger of a subsidiary corporation or corporations under section 96 of this division shall be available where (a) any plan of merger or consolidation to which the either a subsidiary corporation or the corporations corporation is a party; or owning at least ninety percent (90%) of the outstanding shares of each class of a subsidiary is a foreign (b) any sale or exchange of all or substantially all of corporation, and such merger is permitted by the laws of the property and assets of the corporation not made in the jurisdiction under which such foreign corporation is the usual and regular course of its business, including a incorporated. [P.L. 1990-91, § 10.5.] sale in dissolution, but not including a sale pursuant to an order of a court having jurisdiction in the premises § 99. Sale, lease, exchange or other disposition of or a sale for cash on terms requiring that all or assets. substantially all the net proceeds of sales be distributed to the shareholders in accordance with their respective (1) Method of authorizing. A sale, lease, exchange or interests within one (1) year after the date of sale; other disposition of all or substantially all the assets of a provided however, corporation, if not made in the usual or regular course of the business actually conducted by such corporation, (c) that the right of a dissenting shareholder to shall be authorized only in accordance with the following receive payment of the fair value of his shares shall not procedure: be available under this section for the shares of any class or series of stock, which shares or depository (a) the board shall approve the proposed sale, lease, receipts in respect thereof, at the record date fixed to exchange or other disposition and direct its submission determine the shareholders entitled to receive notice of to a vote of the shareholders; and to vote at the meeting of shareholders to act upon the agreement of merger or consolidation or any sale or (b) notice of meeting shall be given to each exchange of all or substantially all of the property and shareholder of record, whether or not entitled to vote; assets of the corporation not made in the usual course of its business, were either (i) listed on a securities (c) at such meeting the shareholders may authorize exchange or admitted for trading on an interdealer such sale, lease, exchange or other disposition and may quotation system or (ii) held of record by more than fix or may authorize the board to fix any or all terms 2,000 holders. The right of a dissenting shareholder to and conditions thereof and the consideration to be receive payment of the fair value of his or her shares received by the corporation therefore. Such authoriza- shall not be available under this section for any shares tion shall require the affirmative vote of the holders of of stock of the constituent corporation surviving a two-thirds of the shares of the corporation entitled to merger if the merger did not require for its approval the vote thereon unless any class of shares is entitled to vote of the shareholders of the surviving corporation as vote thereon as a class, in which event such provided in Sections 96 and 98 (4) of this Division. authorization shall require the affirmative vote of the [P.L. 1990-91, § 10.7; P.L 2009-15, § 100; amended holders of a majority of the shares of each class of by P.L. 2017-52.] shares entitled to vote as a class thereon and of the total shares entitled to vote thereon. § 101. Procedure to enforce shareholder’s right to receive payment for shares. (2) Mortgage or pledge of corporate property. The board may authorize any mortgage or pledge of, or the (1) Objection by shareholder to proposed corporate creation of a security interest in, all or any part of the action. A shareholder intending to enforce his rights corporate property, or any interest therein, wherever under section 92 or 100 of this Act to receive payment situated. Unless the articles of incorporation provide for his shares if the proposed corporate action referred to otherwise, no vote or consent of shareholders shall be therein is taken shall file with the corporation, before the required to authorize such action by the board. [P.L. meeting of shareholders at which the action is submitted 1990-91, § 10.6.] to a vote, or at such meeting but before the vote, written

objection to the action. The objection shall include a to each shareholder who has filed such notice of election statement that he intends to demand payment for his to pay for his shares at a specified price which the shares if the action is taken. Such objection is not corporation considers to be their fair value. If within required from any shareholder to whom the corporation thirty (30) days after the making of such offer, the did not give notice of such meeting in accordance with corporation making the offer and any shareholder agree this Act or where the proposed action is authorized by upon the price to be paid for his shares, payment written consent of shareholders without a meeting. therefore shall be made within thirty (30) days after the making of such offer upon the surrender of the (2) Notice by corporation to shareholders of authorized certificates representing such shares. action. Within twenty (20) days after the shareholders’ authorization date, which term as used in this section (7) Procedure on failure of corporation to pay dissen- means the date on which the shareholders’ vote ting shareholder. The following procedures shall apply if authorizing such action was taken, or the date on which the corporation fails to make such offer within such such consent without a meeting was obtained from the period of seven (7) days, or if it makes the offer and any requisite shareholders, the corporation shall give written dissenting shareholder fails to agree with it within the notice of such authorization or consent by registered mail period of thirty (30) days thereafter upon the price to be to each shareholder who filed written objections of from paid for shares owned by such shareholder: whom written objection was not required, excepting any who voted for or consented in writing to the proposed (a) The corporation shall, within twenty (20) days action. after the expiration of whichever is applicable of the two (2) periods last mentioned, institute a special (3) Notice by shareholder of election to dissent. proceeding in the High Court of the Republic in which Within twenty (20) days after the giving of notice to him, the office of the corporation is located to determine the any shareholder to whom the corporation was required to rights of dissenting shareholders and to fix the fair give such notice and who elects to dissent shall file with value of their shares. In the case of Marshall Islands the corporation a written notice of such election, stating corporations whose shares are traded on a national or his name and residence address, the number and classes local securities exchange located outside of the of shares as to which he dissents, and a demand for Marshall Islands, such proceedings may be instituted in payment of the fair value of his shares. Any shareholder any court in the country where the shares of the who elects to dissent from a merger under section 96 company are primarily traded. If, in the case of merger shall file a written notice of such election to dissent or consolidation, the surviving or consolidated cor- within twenty (20) days after the giving to him of a copy poration is a foreign corporation without an office in of the plan of merger or an outline of the material the Marshall Islands, such proceeding shall be brought features thereof under section 96 of this division. in the country where the office of the domestic corporation, whose shares are to be valued, was (4) Dissent as to fewer than all shares. A shareholder located. may not dissent as to fewer than all the shares, held by him of record, that he owns beneficially. A nominee or (b) If the corporation fails to institute such pro- fiduciary may not dissent on behalf of any beneficial ceedings within such period of twenty (20) days, any owner as to fewer than all the shares of such owner held dissenting shareholder may institute such proceeding for of record by such nominee or fiduciary. the same purpose not later than thirty (30) days after the expiration of such twenty (20) day period. If such (5) Effect of filing notice of election to dissent. Upon proceeding is not instituted within such thirty (30) day filing a notice of election to dissent, the shareholder shall period, all dissenter’s rights shall be lost unless the cease to have any of the rights of a shareholder except the court, for good cause shown, shall otherwise direct. right to be paid the fair value of his shares. (c) All dissenting shareholders, excepting those (6) Offer by corporation to dissenting shareholder to who, as provided in subsection (6) of this section have pay for shares. Within seven (7) days after the expiration agreed with the corporation upon the price to be paid of the period within which shareholders may file their for their shares, shall be made parties to such notices of election to dissent, or within seven (7) days proceeding, which shall have the effect of an action after the proposed corporate action is consummated, quasi in rem against their shares. The corporations which ever is later, the corporation or, in the case of a shall serve a copy of the petition in such proceeding merger or consolidation, the surviving or consolidated upon each dissenting shareholder in the manner corporation, shall make a written offer by registered mail provided by law for the service of a summons.

§ 105. Winding up affairs of corporation after (d) The court shall determine whether each dissen- dissolution. ting shareholder, as to whom the corporation requests § 106. Settlement of claims against corporation. the court to make such a determination, is entitled to receive payment for his shares. If the corporation does not request any such determination or if the court finds § 102. Manner of effecting dissolution. that any dissenting shareholder is so entitled, it shall proceed to fix the value of the shares, which for the (1) Meeting of shareholders. Except as otherwise pro- purposes of this section, shall be the fair value as of the vided in its articles of incorporation, a corporation may close of business on the day prior to the shareholder’s be dissolved if, at a meeting of shareholders, the holders authorization date, excluding any appreciation or of two-thirds of all outstanding shares entitled to vote on depreciation directly or indirectly induced by such a proposal to dissolve, by resolution consent that the corporate action or its proposal. The court may, if it so dissolution shall take place. elects, appoint an appraiser to receive evidence and recommend a decision on the question of fair value. (2) Consent without meeting. Whenever all the shareholders entitled to vote on a proposal to dissolve shall (e) The final order in the proceeding shall be entered consent in writing to dissolution, no meeting of against the corporation in favor of each dissenting shareholders will be necessary. shareholder who is a party to the proceeding and is entitled thereto for the value of his shares so (3) Articles of dissolution; contents, filing. Articles of determined. Within sixty (60) days after the final dissolution shall be signed and filed with the appropriate determination of the proceeding, the corporation shall Registrar or Deputy Registrar of Corporations in pay to each dissenting shareholder the amount found to accordance with the provisions of section 5 of this Act. be due him, upon surrender of the certificates repre- The articles of dissolution shall set forth the name of the senting his shares. corporation, the date of filing of the articles of incorporation, that the corporation elects to dissolve, the (8) Disposition of shares acquired by the corporation. manner in which the dissolution was authorized by the Shares acquired by the corporation upon the payment of shareholders, a statement that the directors shall be the agreed value therefore or the amount due under the trustees of the corporation for the purpose of winding up final order, as provided in this section, shall become the affairs of the corporation, and a listing of either the treasury shares or be canceled except that, in the case of a names and addresses of the directors and officers or the merger or consolidation, they may be held and disposed address of the corporation and the name and address of of as the plan of merger or consolidation may otherwise the corporation’s legal representative(s) for the purpose provide. of winding up its affairs.

(9) Right to receive payment by dissenting shareholder (4) Time when effective. The dissolution shall become as exclusive. The enforcement by a shareholder of his effective as of the filing date stated on the articles of right to receive payment for his shares in the manner dissolution. provided herein shall exclude the enforcement by such shareholder of any right to which he might otherwise be (5) Dissolution before issuance of shares or beginning of entitled by virtue of share ownership, except that this business; procedure. If a corporation has not issued shares section shall not exclude the right of such shareholder to or has not commenced the business for which the bring or maintain an appropriate action to obtain relief on corporation was organized, a majority of the incorporators, the ground that such corporate action will be or is illegal or, if directors were named in the articles of incorporation or or fraudulent as to such shareholder. [P.L. 1990-91, have been elected, a majority of the directors, may surrender § 10.8; amended by P.L. 1998-73, § 101.] all of the corporation’s rights and franchises by filing in the office of the Registrar of Corporations a certificate, exe- DIVISION 11: cuted and acknowledged by a majority of the incorporators DISSOLUTION or directors, stating that no shares of stock have been issued or that the business or activity for which the corporation was § 102. Manner of effecting dissolution. organized has not been begun; that no part of the capital of § 103. Judicial dissolution. the corporation has been paid, or, if some capital has been § 104. Dissolution on failure to pay annual registration paid, that the amount actually paid in for the corporation’s fee or appoint or maintain registered agent. shares, less any part thereof disbursed for necessary expenses, has been returned to those entitled thereto; that if

the corporation has begun business but it has not issued dissolution at the time of its dissolution have voted shares, all debts of the corporation have been paid; that if in favor of a resolution to revoke the dissolution; the corporation has not begun business but has issued stock or, if it be the fact, that, in lieu of a meeting and certificates, all issued stock certificates, if any, have been vote of the shareholders, the shareholders have surrendered and canceled; and that all rights and franchises given their written consent to the revocation in of the corporation are surrendered. Upon such certificate accordance with section 67 of this Act. becoming effective in accordance with section 5 of this Act, the corporation shall be dissolved. (b) Upon filing in the office of the Registrar of Corporations of the articles of revocation of disso- (6) Payment of fees before dissolution. No corporation lution, the Registrar or Deputy Registrar, upon being shall be dissolved under this Act until all fees to the satisfied that the requirements of this section have been Registrar of Corporations and Registered Agent due or complied with, shall issue a certificate that the which would be due or assessable for the entire calendar dissolution has been revoked. Upon the issuance of month during which the dissolution becomes effective such certificate by a Registrar or Deputy Registrar, the have been paid by the corporation. revocation of the dissolution shall become effective and the corporation may again carry on its business. (7) Voluntary revocation of dissolution. (c) Upon the issuance of the certificate by the (a) At any time prior to the expiration of three (3) Registrar or Deputy Registrar to which this subsection years following the voluntary dissolution of a refers, the provisions of section 64(3) of this Act shall corporation pursuant to this section, a corporation may govern, and the period of time the corporation was in revoke the dissolution theretofore effected by it in the dissolution shall be included within the calculation of following manner. the ninety (90) day and thirteen (13) month periods to which section 64(3) of this Act refers. An election of (i) For purposes of this subsection, the term directors, however, may be held at the special meeting “shareholders” shall mean the shareholders of record of shareholders to which this subsection refers, and in on the date the dissolution became effective. that event, that meeting of shareholders shall be deemed an annual meeting of shareholders for purposes of (ii) The board of directors shall adopt a resolu- section 64(3) of this Act. tion recommending that the dissolution be revoked and directing that the question of the revocation be (d) If, after dissolution became effective, any other submitted to a vote at a special meeting of share- corporation organized under the laws of the Marshall holders. Islands shall have adopted the same name as the corporation, or shall have adopted a name so nearly (iii) Notice of the special meeting of sharehol- similar thereto as not to distinguish it from the ders shall be given in accordance with section 64(4) corporation, then, in such case, the corporation shall of this Act to each of the shareholders. not be reinstated under the same name which it bore when its dissolution became effective, but shall adopt (iv) At the meeting a vote of the shareholders and be reinstated under some other name, and in such shall be taken on a resolution to revoke the disso- case the articles to be filed under this subsection shall lution. If a majority of the shares of the corporation set forth the name borne by the corporation at the time which was outstanding and entitled to vote upon its dissolution became effective and the new name dissolution at the time of its dissolution shall be under which the corporation is to be reinstated. [P.L. voted for the resolution, articles of revocation of 1990-91, § 11.1; amended by P.L. 2000-18, § 102; dissolution shall be executed and acknowledged in amended by P.L. 2005-27, § 102, adding new section.] accordance with section 5 of this Act, which shall state: § 103. Judicial dissolution.

(1) the name of the corporation; A shareholders’ meeting to consider adoption of a resolution to institute a special proceeding on any of the (2) the names and respective addresses of its grounds specified below, may be called, notwithstanding directors or legal representative; and any provision in the articles of incorporation, by the holders of ten percent (10%) of all outstanding shares (3) that a majority of shares of the corporation entitled to vote thereon, or if the articles of incorporation which was outstanding and entitled to vote upon a authorize a lesser proportion of shares to call the

meeting, by such lesser proportion. A meeting under this to resign as registered agent of such corporation. In either section may not be called more often than once in any case, the Registrar of Corporations shall issue a period of twelve (12) consecutive months. Except as proclamation declaring that the articles of incorporation otherwise provided in the articles of incorporation, the have been revoked and the corporation dissolved as of holders of one-half of all outstanding shares of a the date stated in the proclamation. The proclamation of corporation entitled to vote in an election of directors the Registrar of Corporations shall be filed and the date may adopt at the meeting a resolution and institute a of revocation and dissolution shall be marked on the special proceeding in the High Court of the Republic for record of the articles of incorporation of the corporation dissolution on one (1) or more of the following grounds: named in the proclamation, and notice shall be given thereof to the last recorded registered agent. Thereupon (a) that the directors are so divided respecting the the affairs of the corporation shall be wound up in management of the corporation’s affairs that the votes accordance with the procedure provided in this division. required for action by the board cannot be obtained; (2) Erroneous annulment. Whenever it is established (b) that the shareholders are so divided that the to the satisfaction of the Registrar of Corporations that votes required for the election of directors cannot be the articles of incorporation were erroneously revoked, obtained; and the corporation was involuntarily dissolved (annulled) he may restore the corporation to full existence by (c) that there is internal dissension and two (2) or publishing and filing in his office a proclamation to that more factions of shareholders are so divided that effect, provided however, that the Registrar of Corpora- dissolution would be beneficial to the shareholders; tions shall not be held liable for any such error.

(d) that the acts of the directors are illegal, oppress- (3) Reinstatement of annulled corporation. Whenever sive or fraudulent; the articles of incorporation of a corporation have been revoked and the corporation dissolved pursuant to (e) that the corporate assets are being misapplied or subsection (1) of this section, the corporation may wasted. request that the Registrar of Corporations reinstate the corporation. After being satisfied that all arrears to the If it appears, following due notice to all interested Republic of the Marshall Islands have been paid, that the persons and a hearing that any of the foregoing grounds corporation has again retained a qualified registered for dissolution of the corporation exists, the High Court agent and paid any arrears to the same, the corporation shall make a judgment that the corporation shall be may be restored to full existence in the same manner and dissolved. The Clerk of the High Court shall transmit with the same effect as provided in subsection (2) of this certified copies of the judgment to the appropriate section. [P.L. 1990-91, § 11.3; amended by P.L. 1998-73, Registrar of Corporations. Upon filing with a Registrar of § 104; amended by P.L. 2000-18, § 104; amended by Corporations, the corporation shall be dissolved. [P.L. P.L. 2005-27, § 104.] 1990-91, § 11.2.] § 105. Winding up affairs of corporation after § 104. Dissolution on failure to pay annual registration dissolution. fee or appoint or maintain registered agent. (1) Continuation of corporation for winding up. All cor- (1) Procedure for dissolution. On failure of a corpora- porations, whether they expire by their own limitations or tion to pay the annual registration fee or to maintain a are otherwise dissolved, shall nevertheless be continued registered agent for a period of one (1) year, the for a term of three (3) years from such expiration or appropriate Registrar of Corporations shall cause a dissolution as bodies corporate for the purpose of notification to be sent to the corporation through its last prosecuting and defending suits by or against them, and recorded registered agent that its articles of incorporation of enabling them gradually to settle and close their will be revoked unless within ninety (90) days of the date business, to dispose of and convey their property, to of the notice, payment of the annual registration fee has discharge their liabilities, and to distribute to the share- been received or a registered agent has been appointed, holders any remaining assets, but not for the purpose of as the case may be. Furthermore, if any corporation continuing the business for which the corporation was abuses or misuses its corporate powers, privileges or organized. With respect to any action, suit, or proceeding franchises, including, but not limited to, participating in begun by or against the corporation either prior to or activities in violation of section 3(5) of this Act, the within three (3) years after the date of its expiration or registered agent in its sole discretion shall have the power dissolution, and not concluded within such period, the corporation shall be continued as a body corporate

beyond that period for the purpose of concluding such of dissolution or if none exists in a newspaper of general action, suit or proceeding and until any judgment, order, circulation elsewhere in the Republic, or in such other or decree therein shall be fully executed. location(s) outside the Marshall Islands at which the corporation has maintained an office or conducted busi- (2) Trustees. Upon the dissolution of any corporation, ness. On or before the date of the first publication of such or upon the expiration of the period of its corporate notice, the corporation shall mail a copy thereof, postage existence, the directors shall be trustees thereof, with full prepaid and addressed to his last known address, to each power to settle the affairs, collect the outstanding debts, person believed to be a creditor of or claimant against the sell and convey the property, real and personal, as may corporation whose name and address are known to or can be required by the laws of the country where situated, with due diligence be ascertained by the corporation. The prosecute and defend all such suits as may be necessary giving of such notice shall not constitute a recognition that or proper for the purposes aforesaid, distribute the money any person is a proper creditor or claimant, and shall not and other property among the shareholders after paying revive or make valid or operate as a recognition of the or adequately providing for payment of its liabilities and validity of, or a wavier of any defense or counter claim in obligations, and do all other acts which might be done by respect of any claim against the corporation, its assets, the corporation, before dissolution, that may be necessary directors, officers, or shareholders, which has been barred for the final settlement of the unfinished business of the by any statute of limitations or become invalid by any corporation. cause, or in respect of which the corporation, its directors, officers, or shareholders, have any defense or counter- (3) Supervision by court of liquidation. At any time claim. within three (3) years after the filing of the articles of dissolution, the High Court of the Republic, in a special (2) Filing or barring claims. Any claims which shall proceeding instituted under this subsection, upon the have been filed as provided in such notice and which shall petition of the corporation, or of a creditor, claimant, be disputed by the corporation may be submitted for director, officer, shareholder, subscriber for shares, incor- determination to the High Court of the Republic. Any porator or the Attorney General on behalf of the person whose claim is, at the date of the first publication of Government of the Republic, may continue the such notice, barred by any statute of limitations is not a liquidation of the corporation under the supervision of creditor or claimant entitled to any notice under this section. the court in the Republic and may make all such orders as The claim of any such person and all other claims which are it may deem proper in all matters in connection with the not timely filed as provided in such notice except claims dissolution or in winding up the affairs of the which are the subject of litigation on the date of the first corporation, including the appointment or removal of a publication of such notice, and all claims which are so filed receiver, who may be a director, officer or shareholder of but are disallowed by the court, shall be forever barred as the corporation. [P.L. 1990-91, § 11.4.] against the corporation, its assets, directors, officers and shareholders, except to such extent, if any, as the court may § 106. Settlement of claims against corporation. allow them against any remaining assets of the corporation in the case of a creditor who shows satisfactory reason for (1) Notice to creditors. Any time within one (1) year his failure to file his claim as so provided. Any claim not after dissolution, a resident domestic corporation shall and banned by this subsection may be reviewed by the court to a non-resident corporation may give notice requiring all determine the amount and form of security sufficient to creditors and claimants, including any with unliquidated or compensate claimants. contingent claims and any with whom the corporation has unfulfilled contracts, to present their claims in writing and (3) Claims by Government. Notwithstanding this section, in detail at a specified place and by a specified day, which tax claims and other claims by the Government shall not be shall not be less than six (6) months after the first public- required to be filed under those sections, and such claims cation of such notice. Resident domestic corporations shall shall not be barred because not so filed, and distribution of publish such notice at least once a week for four (4) the assets of the corporation, or any part thereof, may be successive weeks in a newspaper of general circulation in deferred until determination of any such claims. [P.L. 1990- the county in which the office of the corporation was 91, § 11.5; amended by P.L. 1998-73, § 106.] located at the date of dissolution, or if none exists, in a newspaper of general circulation elsewhere in the Republic. If non-resident domestic corporations elect to publish notice, such notice shall be published at least once a week for four successive weeks in a newspaper of general circulation in the county in which the last known Registered Agent of the corporation is located at the date

DIVISION 12: ting and maintaining trustees or depositaries with FOREIGN ENTITIES relation to its securities;

§ 107. Authorization of foreign entities. (e) for a foreign maritime entity to maintain a § 108. Application to existing authorized foreign registered agent and registered address or carry on entities. activities authorized by section 120 of this Act; or § 109. Application for authority to do business. § 110. Amendment of authority to do business. (f) engaging in any activity which may be § 111. Termination of authority of foreign entity. conducted by a non-resident domestic corporation as § 112. Revocation of authority to do business. set forth in section 2(q) of this Act. [P.L. 1990-91, § 113. Rights and liabilities of unauthorized foreign § 12.1; amended by P.L. 2017-52, § 2(f).] entity doing business. § 114. Actions or special proceedings against foreign § 108. Application to existing authorized foreign entities. entities. § 115. Record of shareholders. § 116. Liability of foreign corporations for failure to Every foreign entity which on the effective date of this disclose information. Act is authorized to do business in the Republic shall § 117. Applicability to foreign corporations of other continue to have such authority. Such foreign entity, its provisions. shareholders, directors, officers, partners and members § 118. Fees. shall have the same rights, franchises and privileges and shall be subject to the same limitations, restrictions, liabilities and penalties as a foreign entity authorized under § 107. Authorization of foreign entities. this Act, its shareholders, directors, officers, partners and members, respectively. Reference in this Act to an (1) Authorization required. A foreign corporation, application for authority shall, unless the context other- partnership, trust, unincorporated association or other wise requires, include the statement and designation and entity (each of which is hereinafter sometimes referred to any amendment thereof required to be filed with a as a foreign “entity” and all of which are hereinafter Registrar of Corporations under prior statutes to obtain sometimes referred to as “foreign entities”) shall not do authority to do business. [P.L. 1990-91, § 12.2.] business in the Republic until it has been authorized to do so as provided in this division. A foreign entity may be § 109. Application for authority to do business. authorized to do in the Republic any business which it is authorized to do in the jurisdiction of its creation, and (1) Contents. A foreign entity, in order to procure which may be done in the Republic by a domestic entity. authority to transact business in the Republic, shall make application to a Registrar of Corporations. The applica- (2) Activities which do not constitute doing business. tion shall be signed and verified by an officer or attorney- Without excluding other activities which may not in-fact for the corporation and shall set forth: constitute doing business in the Republic, a foreign entity shall not be considered to be doing business in the (a) the name of the foreign entity; Republic, for the purposes of this Act, by reason of carrying on in the Republic any one (1) or more of the (b) the jurisdiction and date of its creation; following activities: (c) the address of the principal office of the entity in (a) maintaining or defending any action or proceeding, the state or country under the laws of which it is or effecting settlement thereof or the settlement of claims created; or disputes; (d) a statement of the business which it proposes to do in the Republic and a statement that it is authorized (b) holding meetings of its directors or shareholders; to do that business in the jurisdiction of its creation;

(c) maintaining bank accounts; (e) an atoll within the Republic in which its office is to be located; (d) for purposes outside of the Republic, maintaining facilities or agencies only for the transfer, (f) the name and address within the Republic of the exchange and registration of its securities, or appoin- registered agent and a statement that the registered

agent is to be its agent upon whom process against it poration or other document upon which its existence is may be served; based or shall be a party to a merger or consolidation shall, within thirty (30) days after the amendment or (g) a designation of the Government’s designee as merger or consolidation becomes effective, file with a its agent upon whom process against it may be served Registrar or Deputy Registrar of Corporations a copy under the circumstances stated in section 21 and the of the amendment or a copy of the articles of merger or post office address within or without the Republic to consolidation, duly certified by the proper officer of which the Government’s designee shall mail a copy of the jurisdiction in which the entity was created or any process against it served upon it; and under the laws of which the merger or consolidation was effected, together with a translation of the (h) a statement that the foreign entity has not since amendment or articles under oath of the translator. its creation or since the date its authority to do business in the Republic was last surrendered, engaged in any (2) Procedure. An application to have its authority to activity constituting the doing of business therein do business amended shall be made to a Registrar of contrary to law. Corporations. The requirements in respect to the form and contents of such application, the manner of its execu- Any foreign entity applying for authority to do tion, and the filing of duplicate originals thereof with a business in the Republic shall comply with the provisions Registrar or Deputy Registrar of Corporations shall be of the Foreign Investment Business License Act 1990 (10 the same as in the case of an original application for MIRC, Chapter 5A). authority to do business. [P.L. 1990-91, § 12.4.]

(2) Certificate of existence. Attached to the application § 111. Termination of authority of foreign entity. for authority shall be a certificate by an authorized officer of the jurisdiction of its creation that the foreign entity is (1) Surrender of authority. A foreign entity authorized an existing entity. If such certificate is in a foreign to transact business in the Republic may withdraw from language, a translation thereof under oath of the trans- the Republic upon filing with a Registrar or Deputy lator shall be attached thereto. [P.L. 1990-91, § 12.3; Registrar of Corporations an application for withdrawal, reference to the Foreign Investment Advisory Board Act, which shall set forth: 1987, in subsection (1) was changed to reflect that Act’s repeal and reference was made to the current Act (a) the name of the entity and the jurisdiction in governing licensing of foreign entities.] which it is created;

§ 110. Amendment of authority to do business. (b) the date it was authorized to do business in the Republic; (1) Requirement stated. A foreign entity authorized to do business in the Republic may have its authority (c) that the entity surrenders its authority to do amended to effect any of the following changes: business in the Republic;

(a) to change its name if such change has been (d) that the entity revokes the authority of its effected under the laws of the jurisdiction of its crea- registered agent in the Republic to accept service of tion; process and consents that service of process in any action, suit, or proceeding based upon any cause of (b) to enlarge, limit or otherwise change the busi- action arising in the Republic during the time the entity ness which it proposes to do in the Republic; was authorized to do business in the Republic may thereafter be made on such entity by service thereof on (c) to change the location of its office in the Republic; the Government’s designee; and

(d) to specify or change the post office address to (e) a post office address to which the Registrar of which the Government’s designee shall mail a copy of Corporations may mail a copy of any process against any process against it served upon it; and the entity that may be served on him.

(e) to make, revoke or change the designation of a The application for withdrawal shall be made on forms registered agent or to specify or change this address. prescribed and furnished by a Registrar or Deputy Registrar Every foreign entity authorized to do business in the of Corporations and shall be executed by the entity in Republic which shall amend its articles of incor- accordance with section 5 of this Act, or if the entity is in

the hands of a receiver or trustee, shall be executed on the validity of any contract or act of such foreign entity behalf of the entity by such receiver or trustee and verified or the right of any other party to the contract to maintain by him. The application for withdrawal shall be filed with a any action or special proceeding thereon, and shall not Registrar or Deputy Registrar of Corporations in accordance prevent such foreign entity from defending any action or with the provisions of section 5 of this Act. Upon such special proceeding in the Republic. [P.L. 1990-91, filing the authorization of the entity to do business in the § 12.7.] Republic is terminated. § 114. Actions or special proceedings against foreign (2) Termination of existence in foreign jurisdiction. entities. When an authorized foreign entity is dissolved or its authority or existence is otherwise terminated or canceled (1) By resident of the Republic or domestic corporation. in the jurisdiction of its creation or when such foreign Subject to the limitations with regard to personal juris- entity is merged into or consolidated with another foreign diction elsewhere provided by law, and action or special entity, a certificate of the official in charge of records in proceeding again a foreign entity may be maintained by a the jurisdiction of creation of such foreign entity, which resident of the Republic or by a domestic corporation of certificate attests to the occurrence of any such event, or any type or kind. a certified copy of an order or decree of a court of such jurisdiction directing the dissolution of such foreign (2) By another foreign entity or non-resident. Except entity or the termination of its existence shall be as otherwise provided in this division, an action or delivered to the appropriate Registrar of Corporations special proceeding against a foreign entity may be who shall file such document in accordance with section maintained in the Republic, by another foreign entity of 5 of this Act. The authority of the entity to transact any type or kind or by a non-resident in the following business in the Republic shall thereupon cease. Service cases only: of process in any action, suit or proceeding based upon any cause of action which arose in the Republic during (a) where the action is brought to recover damages the time the entity was authorized to transact business in for the breach of a contract made or to be performed the Republic may thereafter be made on such entity by within the Republic, or relating to property situated service on the Registrar of Corporations. [P.L. 1990-91, within the Republic at the time of the making of the § 12.5.] contract; (b) where the cause of action arose within the § 112. Revocation of authority to do business. Republic, except where the object of the action or special proceeding is to affect the title of real property The authority of a foreign entity to do business in the situated outside the Republic; Republic may be revoked by the appropriate Registrar of Corporations on the same grounds and in the same (c) where the subject matter of the litigation is manner as provided in section 104 with respect to situated within the Republic. revocation of articles of incorporation. [P.L. 1990-91, § 12.6.] (d) where the action or special proceeding is based on a liability for acts done within the Republic by a § 113. Rights and liabilities of unauthorized foreign foreign entity; and entity doing business. (e) where the defendant is a foreign entity doing (1) Actions or special proceedings by entity. A foreign business in the Republic, subject to the provisions of entity doing business in the Republic without authority subsection (3) of this section. shall not maintain any action or special proceeding in the Republic unless and until such entity has been authorized (3) Dismissal for inconvenience to parties. Any action to do business in the Republic and it has paid to the upon a cause of action not arising out of business Government all fees, penalties and taxes for the years or transacted or activities performed within the Republic parts thereof during which it did business in the Republic brought against a foreign entity by a non-resident of the without authority. This prohibition shall apply to any Republic or a foreign entity may in the discretion of the successor in interest of such foreign entity. High Court of the Republic be dismissed if it appears that the convenience of the Republic would be better served (2) Validity of contracts or acts of unauthorized entity by an action brought in some other jurisdiction. [P.L. defending action. The failure of a foreign entity to obtain 1990-91, § 12.8.] authority to do business in the Republic shall not impair

§ 115. Record of shareholders. (c) Section 101 of this Act. [P.L. 1990-91, § 12.11.]

A resident of the Republic who shall have been a § 118. Fees. shareholder of record of an authorized foreign corporation for at least six (6) months preceding his demand, Upon filing an application for authority to do business, upon at least ten (10) days’ written demand may require a fee shall be paid to the appropriate Registrar of such foreign corporation to produce a record of its Corporations in the amount prescribed from time to time Registered shareholders containing the names and by such Registrar. [P.L. 1990-91, § 12.12.] addresses of such shareholders, the number and class of shares held by each and the date when they respectively DIVISION 13: became the owners of record thereof, and, if such FOREIGN MARITIME ENTITIES corporation issues bearer shares, a record of all certificates issued in bearer form, including the number, § 119. Method of registration. class and dates of issuance of such certificates. The § 120. Powers granted on registration. shareholder requiring production of such records shall § 121. Subsequent change of business address or have the right to examine in person or by an agent or address of lawful fiduciary or legal attorney at the office of the foreign corporation in the representative; amendment of document Republic or at such other place in the Republic as may be upon which existence is based. designated by the foreign corporation, the record of § 122. Revocation of registration. shareholders or an exact copy thereof certified as correct § 123. Fees. by the corporate officer or agent for keeping or producing § 124. Termination of authority of foreign maritime such record, and to make extracts therefrom. Any entity. inspection authorized by this section may be denied to § 125. Actions or special proceedings against foreign such shareholder or other person upon his refusal to maritime entities. furnish to the corporation an affidavit that such inspection is not desired for a purpose which is in the § 119. Method of registration. interest of a business or object other than the business of the foreign corporation and that such shareholder or other (1) Eligibility. A foreign entity whose indenture or person has not within five (5) years sold or offered for instrument of trust, charter or articles of incorporation, sale any list of shareholders of any domestic or foreign agreement of partnership or other document recognized corporation or aided or abetted any person in procuring by the foreign State of its creation as the basis of its any such record of shareholders for any such purpose. existence, which document directly or by force of law of [P.L. 1990-91, § 12.9.] the State of creation comprehends the power to own or

§ 116. Liability of foreign corporations for failure to operate vessels, and which confers or recognizes the disclose information. capacity under the law of the State of creation to sue and be sued in the name of the entity or its lawful fiduciary or A foreign corporation doing business in the Republic legal representative, may apply to the appropriate shall, in the same manner as a domestic corporation, Registrar or Deputy Registrar of Corporations to be disclose to its shareholders of record who are residents of registered as a foreign maritime entity. The burden of the Republic the information required in sections 44(3), establishing the capacity to sue and be sued shall be upon 46(4), or 47(3) of this Act. [P.L. 1990-91, § 12.10.] the applicant for such registration.

§ 117. Applicability to foreign corporations of other (2) Form of Application. The application shall be provisions. executed by an authorized signatory of the entity or an attorney-in-fact. The application shall be dated and shall In addition to Divisions 1 and 3 of this Act, and the state the following: other sections of this division, the following provisions to the extent provided therein, shall apply to a foreign (a) the name of the entity; corporation doing business in the Republic, its directors, officers and shareholders: (b) the legal character or nature of the entity;

(a) Section 79 of this Act; (c) the jurisdiction and date of its creation;

(b) Section 98 of this Act; and

(d) whether the entity has the power to own or § 121. Subsequent change of business address or operate a vessel; address of lawful fiduciary or legal representative; amendment of document (e) whether the entity has the capacity to sue and be upon which existence is based. sued in its own name or, if not, in the name of its lawful fiduciary or legal representative; (1) Change of Address. Whenever a change occurs in the address(es) stated under section 119(2)(f) of this Act, (f) the address of the principal place of business of written notice of such change, stating the new the entity and, if such place is not in the jurisdiction of information, shall be mailed to the registered agent the creation of the entity, either the address of its place named under section 119(2)(h) of this Act. of business or the name and address of its lawful fiduciary or legal representative within the jurisdiction (2) Amendment of document. The appropriate Registrar of the creation of the entity; of Corporations shall be notified whenever there is an amendment in the document upon which the existence of (g) the full names and addresses of the persons the entity is based which changes any of the following: vested under law with management of the entity at the time of application; (a) name of the entity;

(h) the name and address within the Republic of the (b) legal nature of the entity; registered agent designated in accordance with the requirement of section 20(1) of this Act and a state- (c) jurisdiction of creation; ment that the registered agent is to be its agent upon whom process against it may be served; and (d) loss or restriction in the power of the entity to own or operate a vessel; and (i) the title(s), or if other than an officer of the entity, the basis of the authority of the person(s) (e) ability of the entity to sue or be sued. executing the document. Notice shall consist of filing with the Registrar or (3) Filing. Each application and any other document Deputy Registrar of the Corporations, in accordance with required or permitted to be filed pursuant to this division section 5 of this Act, a certified copy of the document shall be filed in accordance with the provisions of section filed with the jurisdiction of creation. If such amendment 5 of this Act. [P.L. 1990-91, § 13.1; amended by P.L. is in a foreign language, a translation thereof into English 2017-52, § 3.] certified by a translator shall be attached. [P.L. 1990-91, § 13.3.] § 120. Powers granted on registration. § 122. Revocation of registration. A registered foreign maritime entity shall have the following powers: The registration of a foreign maritime entity may be revoked by the appropriate Registrar of Corporations on (a) to own and operate vessels registered under the the same grounds and in the same manner provided in laws of the Republic provided all requirements of the section 104 of this Act, with respect to dissolution of a maritime law of the Republic are met. corporation for failure to pay the annual fee or to maintain a registered agent. [P.L. 1990-91, § 13.4.] (b) to do all things necessary to the conduct of the business of ownership and operation of Marshall § 123. Fees. Islands flag vessels and, for that purpose, to have one (1) or more offices in the Republic and to A foreign maritime entity shall pay to the appropriate hold, purchase, lease, mortgage and convey real Registrar of Corporations such fees as such Registrar and personal property, subject to the organic law shall from time to time prescribe. [P.L. 1990-91, § 13.5] of the Republic. [P.L. 1990-91, § 13.2] § 124. Termination of authority of foreign maritime entity.

(1) Surrender of authority. A foreign maritime entity authorized to transact business in the Republic may with-

draw from the Republic upon filing with the appropriate Republic shall thereupon cease. Service of process in any Registrar or Deputy Registrar of Corporations an action, suit or proceeding based upon any cause of action application for withdrawal, which shall set forth: which arose in the Republic during the time the foreign maritime entity was authorized to transact business in the (a) the name of the entity and the jurisdiction of its Republic may thereafter be made on such entity by creation; service on the Government’s designee. [P.L. 1990-91, § 13.6.] (b) the date it was registered as a foreign maritime entity in the Republic; § 125. Actions or special proceedings against foreign maritime entities. (c) that the entity surrenders the authority granted by its registration as a foreign maritime entity in the (1) By resident of the Republic or domestic entity. Subject Republic; to the limitations with regard to personal jurisdiction contained in applicable law, an action or special proceeding (d) that the entity revokes the authority of its against a foreign maritime entity may be maintained by a registered agent in the Republic to accept service of resident of the Republic or by a domestic entity of any process and consents that service of process in any type or kind. action, suit, or proceeding based upon any cause of action arising in the Republic during the time the entity (2) By another foreign entity or non-resident. Except was authorized to do business in the Republic may as otherwise provided in this division, an action or spe- thereafter be made on such entity by service thereof on cial proceeding against a foreign maritime entity may be the Government’s designee; maintained in the Republic by another foreign entity of any type or kind or by a non-resident in the following (e) a post office address to which the Government’s cases only: designee may mail a copy of any process against the entity that may be served on him. (a) where the action is brought to recover damages for the breach of a contract made or to be performed The application for withdrawal shall be made on forms within the Republic, or relating to property situated prescribed and furnished by the appropriate Registrar of within the Republic at the time of the making of the Corporations and shall be executed by the entity in contract; accordance with section 119 of this Act, or if the entity is in the hands of a receiver or trustee, shall be executed on (b) where the cause of action arose within the behalf of the entity by such receiver or trustee and Republic, except where the object of the action or verified by him. The application for withdrawal shall be special proceeding is to affect the title of real property filed with the appropriate Registrar or Deputy Registrar situated outside the Republic; of Corporations in accordance with the provisions of section 5 of this Act. Upon such filing the authorization (c) where the subject matter of the litigation is of the entity to do business in the Republic is terminated. situated within the Republic;

(2) Termination of existence in foreign jurisdiction. (d) where the action or special proceeding is based When an authorized foreign maritime entity is dissolved on a liability for acts done within the Republic by a or its authority or existence is otherwise terminated or foreign maritime entity; and canceled in the jurisdiction of its creation or when such foreign maritime entity is merged into or consolidated (e) where the defendant is a foreign maritime entity with another foreign maritime entity, a certificate of the doing business in the Republic, subject to the provi- official in charge of corporate records in the jurisdiction sions of subsection (3) of this section. of creation of such foreign maritime entity, which certificate attests to the occurrence of any such event, or (3) Dismissal for inconvenience to parties. Any action a certified copy of an order or decree of a court of such upon a cause of action not arising out of business jurisdiction directing the dissolution of such foreign transacted or activities performed within the Republic entity; or the termination of its existence shall be brought against a foreign maritime entity by a non- delivered to the appropriate Registrar or Deputy Registrar resident of the Republic or a foreign entity may in the of Corporations, who shall file such document in accor- discretion of the High Court of the Republic be dismissed dance with section 5 of this Act. The authority of the if it appears that the convenience of the parties would be foreign maritime entity to transact business in the

better served by an action brought in some other (c) articles of incorporation, which shall state the jurisdiction. [P.L. 1990-91, § 13.7.] information required by section 28 of this Act and which shall be executed and acknowledged in accor- DIVISION 14: dance with the provisions of section 5 of this Act and TRANSFER OF DOMICILE INTO AND OUT OF subsection (6) of this section; THE REPUBLIC (d) evidence of corporate existence; and § 126. Definitions. § 127. Domestication of foreign corporations. (e) acceptance of appointment by the corporation’s § 128. Transfer of domicile of domestic corporation registered agent in the Republic in compliance with to foreign jurisdiction. subsection 20(1) of this Act. § 129. Fees. (2) Articles of domestication. The articles of domes- § 126. Definitions. tication shall certify:

As used in this Division 14 only, the term: (a) the date on which and jurisdiction where the corporation was first formed, incorporated or otherwise (a) “underlying articles of incorporation” when came into being; referring to a foreign corporation means the articles of incorporation, certificate of incorporation, charter, (b) the name of the corporation immediately prior to statute, memorandum or other instrument defining the the filing of the articles of domestication and if the constitution of the corporation, including all amend- name of the corporation is being changed by an amendments and modifications thereto; ment filed with the articles of domestication, then the name of the corporation as amended; (b) “corporation” includes any incorporated legal entity, private law corporation or public law corpora- (c) if the name of the corporation does not comply tion, or similar entity; with the provisions of section 26(1) of this Act, then

the corporation shall within ninety (90) days of (c) “foreign domicile” means the jurisdiction or domestication file an amendment to the articles of state or province under whose laws the corporation was domestication changing the name of the corporation incorporated or constituted and which governed the otherwise the registered agent or the Government’s internal affairs of such corporation immediately prior designee will assign the corporation a new name; to its redomiciliation in the Republic;

(d) “foreign corporation” means any corporation the (d) the jurisdiction that constituted the seat, internal affairs of which are governed by the laws of domicile, siege social, sitz, principal place of business any jurisdiction or state or province other than the or central administration of the corporation, or any Republic. [P.L. 1990-91, § 14.1; amended by P.L. other equivalent thereto under applicable law, immediately 2005-27, § 126.] prior to the filing of the articles of domestication;

§ 127. Domestication of foreign corporations. (e) that the transfer of domicile has been approved by all necessary corporate action; (1) General requirements. Any foreign corporation may become domesticated in and continue in the (f) that the transfer of domicile is not expressly Republic by filing with a Registrar or Deputy Registrar prohibited under the laws of the foreign domicile; of Corporations; (g) that the transfer of domicile is made in good (a) articles of domestication which shall be executed faith and will not serve to hinder, delay or defraud and acknowledged in accordance with the provisions of existing shareholders, creditors, claimants or other section 5 of this Act, and subsection (6) of this section; parties in interest; and

(b) a copy of its underlying articles of incorporation (h) the name and address of the corporation’s and, if said documents are not in English, an English registered agent in the Republic. translation thereof, certified by a translator; (3) Existence date. Subject to the provisions of subsection (7) of this section, upon filing with a Registrar or

Deputy Registrar of Corporations of the documents effective. In such case, the domestication shall become required by subsection (1) and (2) of this section, the effective upon filing with a Registrar or Deputy Registrar of corporation shall be domesticated and continued in the Corporations of such certificate of request. If the articles of Republic and shall thereafter be subject to all the domestication contain such a provision, and a certificate of provisions of this Act; provided, that notwithstanding request is not filed with a Registrar or Deputy Registrar of section 31 of this Act, the existence of the corporation Corporations within such one (1) year period, then the shall be deemed to have commenced on the date the documents filed under subsection (1) of this section shall corporation commenced its existence in the jurisdiction lapse and be of no further force or effect. [P.L. 1990-91, in which the corporation was first formed, incorporated § 14.2; amended by P.L. 2005-27, § 127.] or otherwise came into being. § 128. Transfer of domicile of domestic corporation (4) Prior obligations. The domestication of any corpo- to foreign jurisdiction. ration in the Republic shall not affect any obligations or liabilities of the corporation incurred prior to its domes- (1) General requirement. Any corporation subject to tication nor to affect the choice of law applicable to prior this Act may transfer its domicile from the Republic to a obligations and rights of the corporation nor to affect foreign jurisdiction and continue as a corporation of that adversely the rights of the corporation or of creditors or jurisdiction if: shareholders of the corporation existing immediately prior to such domestication. Property of every descrip- (a) such foreign jurisdiction permits such transfer; tion, including rights of action and the business of the corporation shall continue to be vested in the corporation. (b) the corporation complies with all requirements of such foreign jurisdiction respecting such transfer; (5) Application of Marshall Islands law. From the date the domestication in the Republic becomes effective, the (c) the corporation has paid or remitted payment of laws of the Marshall Islands, including the provisions of all funds necessary to satisfy all payment obligations to this Act, shall apply to the corporation to the same extent the Republic which are imposed pursuant to statutes as if the corporation had been incorporated as a and regulations enacted and in force at least ninety (90) corporation in the Republic on that date. Upon their filing days prior to such transfer and all payment obligations with a Registrar of Corporations, the articles of incor- to the corporation’s registered agent in the Republic; poration referenced in subsection (1)(c) of this section, and including any further amendments or changes made (d) such transfer is not prohibited by the articles of thereby, shall be the articles of incorporation of the incorporation of the corporation. corporation, but the original date of incorporation shall remain unchanged. (2) When domestication effective; outbound. Subject to the provisions of subsection (3) of this section, any (6) Execution. The articles of domestication and the such transfer of domicile shall be effective as and when articles of incorporation, as referenced in subsection provided under the laws of the jurisdiction into which the (1)(c) of this section, shall be signed by an officer, corporation’s domicile is transferred. After the effective- director, trustee or other person performing functions for ness of such transfer of domicile the corporation shall no the corporation equivalent to those of an officer or longer be subject to the provisions of this Act or to any director, however named or described, and who is duly other provisions of the laws of the Republic except: authorized to sign the articles of domestication on behalf of the corporation. (a) in connection with actions, suits or proceedings respecting the activities of the corporation prior to such (7) Effective date of domestication. The articles of transfer of domicile; domestication may provide that the corporation will become domesticated in the Republic on a date subsequent to the (b) in connection with any contract, agreement or filing with a Registrar or Deputy Registrar of Corporations obligation incurred prior to such transfer of domicile; of the documents required by subsection (1) of this section, but not less than one (1) year after such filing has been (c) to the extent provided by the laws of the completed, upon the delivery to a Registrar or Deputy jurisdiction into which the corporation’s domicile is Registrar of Corporations of an executed and acknowledged transferred; and certificate of request of an officer or representative of the corporation (as specified in the articles of domestication) (d) to the extent any other foreign corporation would requesting that the domestication in the Republic become be subject to such provisions.

§ 129. Fees. (3) Appointment of registered agent. Concurrently with or prior to any transfer of domicile out of the There shall be paid to the appropriate Registrar of Republic, the corporation shall appoint an authorized Corporations such fees as such Registrar shall from time registered agent in the Republic to serve for a period of to time prescribe. [P.L. 1990-91, § 14.4.] three (3) years subsequent to the transfer of domicile and obtain the written acceptance of such appointment, and DIVISION 15: the corporation shall notify its registered agent of the RULES AND REGULATIONS transfer; provided, however, if such appointment or such notification cannot reasonably be made at the time, then § 129.5 Power to prescribe new rules. the transfer of domicile shall be effective without such appointment or notification as and when provided under the laws of the jurisdiction into which the corporation’s § 129.5 Power to prescribe new rules. domicile is transferred. (1) The Registrar of Corporations, with the approval (4) Certificate of transfer. Subsequent to any transfer of of the Attorney General and the Cabinet, shall have the domicile out of the Republic, the corporation shall, within a power to prescribe rules and regulations as are deemed reasonable time after such transfer of domicile, cause to be advi-sable to carry into effect the provisions of this Act. forwarded through its registered agent in the Republic or Such rules and regulations shall have the force and effect otherwise to the appropriate Registrar of Corporations a of law. certificate of transfer executed by an authorized officer or (2) The power granted to the Registrar of representative of the corporation satisfying: Corporations responsible for non-resident domestic entities under subsection (1) of this section shall include, (a) the jurisdiction which constitutes the new domicile but not be limited to, the power to prescribe rules and of the corporation (or, as the case may be, the seat, siege regulations implementing economic substance require- social, sitz, or principal place of business or central ments for non-resident domestic corporations, partner- administration of the corporation, or any other equivalent ships, limited partnerships, and limited liability comp- thereto under applicable law); anies and providing for reporting requirements and other enforcement mechanisms related thereto. [P.L. 1990-129, (b) a name and address where the corporation may §2, adding new section; amended by P.L. 2018-100, § 2.] be served with process in its new domicile; DIVISION 16: (c) the effective date of the transfer of domicile; MISCELLANEOUS

(d) the name and address of its authorized registered § 130. Merger or consolidation of domestic agent in the Republic. corporation and partnership. § 131. Merger or consolidation of domestic Upon receipt of the certificate of transfer, a Registrar corporation and limited liability company. of Corporations shall cause the certificate to be retained § 132. Conversion of other entities to a domestic with the public record for such corporation and shall corporation. issue certified copies of the certificate when requested to § 133. Conversion of domestic corporation to other do so. entities.

(5) Obligations prior to transfer of domicile. The transfer of domicile of any corporation out of the § 130. Merger or consolidation of domestic Republic shall not affect any obligations or liabilities of corporation and partnership. the corporation incurred prior to such transfer, nor affect the choice of law applicable to obligations or rights prior (1) Any one (1) or more domestic corporations of the to such transfer, nor adversely affect the rights of Marshall Islands may merge or consolidate with one (1) creditors or shareholders of the corporation existing or more partnerships or limited partnerships, of the immediately prior to such transfer. [P.L. 1990-91, § 14.3.] Marshall Islands or of any other jurisdiction unless the laws of such other jurisdiction forbid such merger or consolidation. Such corporation or corporations and such one (1) or more partnerships or limited partnerships may merge with or into a corporation, which may be any one

(1) of such corporations, or they may merge with or into occurrence of any event, including a determination or a partnership or limited partnership, which may be any action by any person or body, including the corpo- one (1) of such partnerships or limited partnerships, or ration. they may consolidate into a new corporation, partnership or limited partnership formed by the consolidation, which (3) The agreement required by subsection (2) of this shall be a corporation, partnership or limited partnership section shall be adopted, approved, certified, executed of the Marshall Islands or any other jurisdiction, which and acknowledged by each of the corporations in the permits such merger or consolidation, pursuant to an same manner as is provided in section 95 of this Act and, agreement of merger or consolidation, as the case may in the case of the partnership or limited partnership, in be, complying and approved in accordance with this accordance with their partnership agreements and in section. accordance with the laws of the jurisdiction under which they are formed, as the case may be. The agreement shall (2) Each such corporation, partnership or limited be filed and shall become effective for all purposes of the partnership shall enter into a written agreement of merger laws of the Marshall Islands when and as provided in or consolidation. The agreement shall state: section 97 of this Act. In lieu of filing the agreement of merger or consolidation, the surviving or resulting cor- (a) the terms and conditions of the merger or poration, partnership or limited partnership may file a consolidation; certificate of merger or consolidation, executed in accordance with section 5 of this Act, if the surviving or (b) the mode of carrying the same into effect; resulting entity is a corporation, by a partner, if the surviving or resulting entity is a partnership or by a (c) the manner of converting the shares of stock of general partner, if the surviving or resulting entity is a each such corporation and the partnership interests of limited partnership, which states: each such partnership or limited partnership into shares, partnership interest or other securities of the (a) the name and domicile of each of the constituent entity surviving or resulting from such merger or entities; consolidation, and if any shares of any such corporation or any partnership interest of any such partnership (b) that an agreement of merger or consolidation has or limited partnership are not to be converted solely been approved, adopted, certified, executed and acknow- into shares, partnership interests or other securities of ledged by each of the constituent entities in accordance the entity surviving or resulting from such merger or with this subsection; consolidation, the cash, property, rights or securities of any other corporation or entity which the holders of (c) the name of the surviving or resulting corpora- such shares or partnership interests are to receive in tion, partnership or limited partnership; exchange for, or upon conversion of such shares or partnership interests and the surrender of any certifi- (d) in the case of a merger in which a corporation is cates evidencing them, which cash, property, rights or the surviving entity, such amendments or changes in securities of any other corporation or entity may be in the articles of incorporation of the surviving corpora- addition to or in lieu of shares, partnership interests or tion as are desired to be effected by the merger, or, if other securities of the entity surviving or resulting from no such amendments or changes are desired, a such merger or consolidation; and statement that the articles of incorporation of the surviving corporation shall be its articles of (d) such other details or provisions as are deemed incorporation; desirable, including, without limiting the generality of the foregoing, a provision for the payment of cash in (e) in the case of a consolidation in which a lieu of the issuance of fractional shares or interests of corporation is the resulting entity, that the articles of the surviving or resulting corporation, partnership or incorporation of the resulting corporation shall be as is limited partnership. Any of the terms of the agreement set forth in an attachment to the certificate; of merger or consolidation may be made dependent upon facts ascertainable outside of such agreement, (f) that the executed agreement of consolidation or provided that the manner in which such facts shall merger is on file at an office of the surviving operate upon the terms of the agreement is clearly and corporation, partnership or limited partnership and the expressly set forth in the agreement of merger or address thereof; consolidation. The term “facts,” as used in the preceding sentence, includes, but is not limited to, the

(g) that a copy of the agreement of consolidation or liability company of the Marshall Islands or any other merger will be furnished by the surviving or resulting jurisdiction, which permits such merger or consolidation, entity, on request and without cost, to any stockholder pursuant to an agreement of merger or consolidation, as of any constituent corporation or any partner of any the case may be, complying and approved in accordance constituent partnership or limited partnership; and with this section.

(h) the agreement, if any, required by subsection (4) (2) Each such corporation and limited liability of this section. company shall enter into a written agreement of merger or consolidation. The agreement shall state: (4) If the entity surviving or resulting from the merger or consolidation is to be governed by the laws of any (a) the terms and conditions of the merger or jurisdiction other than the Marshall Islands, it shall agree consolidation; that it may be served with process in the Marshall Islands in any proceeding for enforcement of any obligation of (b) the mode of carrying the same into effect; any constituent corporation, partnership or limited partnership of the Marshall Islands, as well as for (c) the manner of converting the shares of stock of enforcement of any obligation of the surviving or each such corporation and the limited liability com- resulting corporation, partnership or limited partnership pany interests of each such limited liability company arising from the merger or consolidation, including any into shares, limited liability company interests or other suit or other proceeding to enforce the right of any securities of the entity surviving or resulting from such stockholders as determined in appraisal proceedings and merger or consolidation, and if any shares of any such shall irrevocably appoint the Government’s designee as corporation or any limited liability company interest of its agent to accept service of process in any such suit or any such limited liability company are not to be other proceedings and shall specify the address to which converted solely into shares, limited liability company a copy of such process shall be mailed by the interests or other securities of the entity surviving or Government’s designee. In the event of such service resulting from such merger or consolidation, the cash, upon the Government’s designee in accordance with this property, rights or securities of any other corporation subsection, the Government’s designee shall forthwith or entity which the holders of such shares or limited notify such surviving or resulting corporation, partner- liability company interests are to receive in exchange ship or limited partnership at its address so specified for, or upon conversion of such shares or limited unless such surviving or resulting corporation, liability company interests and the surrender of any partnership or limited partnership shall have designated certificates evidencing them, which cash, property, in writing to the Government’s designee a different rights or securities of any other corporation or entity address for such purpose, in which case it shall be mailed may be in addition to or in lieu of shares, limited to the last address so designated. Such letter shall enclose liability company interests or other securities of the a copy of the process and any other papers served on the entity surviving or resulting from such merger or Government’s designee pursuant to this subsection. [P.L. consolidation; and 2000-18, § 130, adding new section.] (d) such other details or provisions as are deemed § 131. Merger or consolidation of domestic desirable, including, without limiting the generality of corporation and limited liability company. the foregoing, a provision for the payment of cash in lieu of the issuance of fractional shares or interests of (1) Any one (1) or more domestic corporations of the the surviving or resulting corporation or limited liabi- Marshall Islands may merge or consolidate with one (1) lity company. Any of the terms of the agreement of or more limited liability companies of the Marshall merger or consolidation may be made dependent upon Islands or of any other jurisdiction unless the laws of facts ascertainable outside of such agreement, provided such other jurisdiction forbid such merger or consoli- that the manner in which such facts shall operate upon dation. Such corporation or corporations and such one (1) the terms of the agreement clearly and expressly set or more limited liability companies may merge with or forth in the agreement of merger or consolidation. The into a corporation, which may be any one (1) of such term “facts,” as used in the preceding sentence, corporations, or they may merge with or into a limited includes, but is not limited to the occurrence of any liability company, which may be any one (1) of such event, including a determination or action by any limited liability companies, or they may consolidate into person or body, including the corporation. a new corporation or limited liability company formed by the consolidation, which shall be a corporation or limited

(3) The agreement required by subsection (2) of this (h) the agreement, if any, required by subsection (4) section shall be adopted, approved, certified, executed of this section. and acknowledged by each of the corporations in the same manner as provided in section 95 of this Act and, in (4) If the entity surviving or resulting from the merger the case of the limited liability companies, in accordance or consolidation is to be governed by the laws of any with their limited liability company agreements and in other jurisdiction other than the Marshall Islands, it shall accordance with the laws of the jurisdiction under which agree that it may be served with process in the Marshall they are formed, as the case may be. The agreement shall Islands in any proceeding for enforcement of any be filed and shall become effective for all purposes of the obligation of any constituent corporation or limited laws of the Marshall Islands when and as provided in liability company of the Marshall Islands, as well as for section 97 of this Act. In lieu of filing the agreement of enforcement of any obligation of the surviving or merger or consolidation, the surviving or resulting resulting corporation or limited liability company arising corporation or limited liability company may file a from the merger or consolidation, including any suit or certificate of merger or consolidation, executed in accor- other proceeding to enforce the right of any stockholders dance with section 5 of this Act, if the surviving or as determined in appraisal proceedings and shall resulting entity is a corporation, or by an authorized irrevocably appoint the Government’s designee as its person, if the surviving or resulting entity is a limited agent to accept service of process in any such suit or liability company, which states: other proceedings and shall specify the address to which a copy of such process shall be mailed by the (a) the name and domicile of each of the constituent Government’s designee. In the event of such service entities; upon the Government’s designee in accordance with this subsection, the Government’s designee shall forthwith (b) that an agreement of merger or consolidation has notify such surviving or resulting corporation or limited been approved, adopted, certified, executed and liability company at its address so specified, unless such acknowledged by each of the constituent entities in surviving or resulting corporation or limited liability accordance with this subsection; company shall have designated in writing to the Govern- ment’s designee a different address for such purpose, in (c) the name of the surviving or resulting corpora- which case it shall be mailed to the last address so tion or limited liability company; designated. Such letter shall enclose a copy of the process and any other papers served on the Government’s (d) in the case of a merger in which a corporation is designee pursuant to this subsection. [P.L. 2000-18, the surviving entity, such amendments or changes in § 131, adding new section.] the articles of incorporation of the surviving corporation as are desired to be effected by the merger, or, if § 132. Conversion of other entities to a domestic no such amendments or change are desired, a statement corporation. that the articles of incorporation of the surviving corporation shall be its articles of incorporation; (1) As used in this section, the term “other entity” means a limited liability company, partnership, limited (e) in the case of a consolidation in which a corpora- partnership or trust of the Marshall Islands. tion is the resulting entity, that the articles of (2) Any other entity may convert to a corporation incorporation of the resulting corporation shall be as is incorporated under the laws of the Marshall Islands by set forth in an attachment to the certificate; complying with subsection (7) of this section and filing in the office of the Registrar of Corporations: (f) that the executed agreement of consolidation or merger is on file at an office of the surviving (a) a certificate of conversion that has been executed corporation or limited liability company and the in accordance with subsection (8) of this section and address thereof; filed in accordance with section 5 of this Act; and

(g) that a copy of the agreement of consolidation or (b) articles of incorporation that have been executed, merger will be furnished by the surviving or resulting acknowledged and filed in accordance with section 5 of entity, on request and without cost, to any stockholder this Act. of any constituent corporation or any member of any constituent limited liability company; and (3) The certificate of conversion shall state:

(a) the date on which the other entity was first performing functions equivalent to those of an officer or formed; director of a corporation of the Marshall Islands, however, named or described, and who is authorized to sign the (b) the name of the other entity immediately prior to certificate of conversion on behalf of the other entity. [P.L. the filing of the certificate of conversion; 2000-18, § 132, adding new section.]

(c) the name of the corporation as set forth in its § 133. Conversion of domestic corporation to other articles of incorporation filed in accordance with entities. subsection (2) of this section; and (1) A domestic corporation of the Marshall Islands (d) the fact that the other entity is a limited liability may, upon the authorization of such conversion in company, partnership, limited partnership or trust of accordance with this section, convert to a limited liability the Marshall Islands. company, partnership, limited partnership or trust of the Marshall Islands. (4) Upon the effective time of the certificate of conversion, the articles of incorporation and payment to the (2) The board of directors of the corporation which Registrar of Corporations of all fees prescribed under this desires to convert under this section shall adopt a resolu- Act, the other entity shall be converted into a corporation tion approving such conversion, specifying the type of of the Marshall Islands and the corporation shall entity into which the corporation shall be converted and thereafter be subject to all of the provisions of this Act, recommending the approval of such conversion by the except that notwithstanding section 31 of this Act, the stockholders of the corporation. Such resolution shall be existence of the corporation shall be deemed to have submitted to the stockholders of the corporation at an commenced on the date the other entity commenced its annual or special meeting. Due notice of the time and existence. purpose of the meeting shall be mailed to each holder of stock whether voting or nonvoting, of the corporation at (5) The conversion of any other entity into a corpora- the address of the stockholder as it appears on the records tion of the Marshall Islands shall not be deemed to affect of the corporation, at least twenty (20) days prior to the any obligations or liabilities of the other entity incurred date of the meeting. At the meeting the resolution shall prior to its conversion to a corporation of the Marshall be considered and a vote taken for its adoption of Islands or the personal liability of any person incurred rejection. If all outstanding shares of stock of the prior to such conversion. corporation, whether voting or nonvoting, shall be voted for the adoption of the resolution, the corporation shall (6) Unless otherwise agreed or otherwise provided by file with the Registrar of Corporations a certificate of any laws of the Marshall Islands applicable to the conversion executed in accordance with section 5 of this converting limited liability company, partnership, limited Act, which certifies: partnership or trust, the converting other entity shall not be required to wind up its affairs or pay its liabilities and (a) the name of the corporation, and if it has been distribute its assets, and the conversion shall not be changed, the name under which it was originally deemed to constitute a dissolution of such other entity incorporated; and shall constitute a continuation of the existence of the converting other entity in the form of a corporation of the (b) the date of filing of its original articles of Marshall Islands. incorporation with the Registrar of Corporations;

(7) Prior to filing a certificate of conversion with the (c) the name of the limited liability company, office of the Registrar of Corporations, the conversion partnership, or limited partnership into which the shall be approved in the manner provided for by the corporation shall be converted; and document, instrument, agreement or other writing, as the case may be, governing the internal affairs of the other (d) that the conversion has been approved in entity and the conduct of its business or by applicable accordance with the provisions of this section. law, as appropriate, and the articles of incorporation shall be approved by the same authorization required to (3) Upon the filing of a certificate of conversion in approve the conversion. accordance with subsection (2) of this section and payment to the Registrar of Corporations of all fees (8) The certificate of conversion shall be signed by any prescribed under this Act, the Registrar of Corporations officer, director, trustee, manager, partner or other person shall certify that the corporation has filed all documents

and paid all fees required by this Act, and thereupon the corporation shall cease to exist as a corporation of the Marshall Islands at the time the certificate of conversion becomes effective in accordance with section 5 of this Act. Such certificate of the Registrar of Corporations shall be prima facie evidence of the conversion by such corporation.

(4) The conversion of a corporation pursuant to a certificate of conversion under this section shall not be deemed to affect any obligations or liabilities of the corporation incurred prior to such conversion or the personal liability of any person incurred prior to such conversion.

(5) After the time the certificate of conversion becomes effective the corporation shall continue to exist as a limited liability company, partnership, limited partnership or trust of the Marshall Islands, and the laws of the Marshall Islands shall apply to the entity to the same extent as prior to such time.

(6) Unless otherwise provided in a resolution of conversion adopted in accordance with this section, the converting corporation shall not be required to wind up its affairs or pay its liabilities and distribute its assets, and the conversion shall not constitute a dissolution of such corporation and shall constitute a continuation of the existence of the converting corporation in the form of the applicable other entity of the Marshall Islands. [P.L. 2000-18, § 133, adding new section; amended by P.L. 2005-27, § 133.]

PART II:

REVISED PARTNERSHIP ACT

DIVISION 1: (3) “distribution” means a transfer of money or other GENERAL PROVISIONS property from a partnership to a partner in the partner’s capacity as a partner or to a transferee of all or a part of a § 1. Definitions. partner’s economic interest. § 2. Knowledge and notice. § 3. Effect of partnership agreement; nonwaivable (4) “economic interest” means a partner’s share of the provisions. profits and losses of a partnership and the partner’s right § 4. Supplemental principles of law. to receive distributions. § 5. Execution, filing and recording of statements and certificates. (5) “High Court” means the High Court of the Repub- § 6. Governing law. lic of the Marshall Islands. § 7. Reserved power of the Marshall Islands to alter or repeal Act. (6) “liquidating trustee” means a person, other than a § 8. Name of partnership. partner, carrying out the winding up of a partnership. § 9. Indemnification. § 10. Registered agent for the service of process. (7) “non-resident partnership” means a domestic part- § 11. Attorney General as agent for service of process. nership not doing business in the Republic of the § 12. Doing business. Marshall Islands. “Not doing business in the Marshall § 13. Restated certificate of partnership existence. Islands” will have the same meaning as found in the § 14. Execution, amendment or cancellation by Marshall Islands Business Corporations Act (BCA), 18 judicial order. MIRC 1. § 15. Certificate of correction; corrected certificate. § 16. Business transactions of partner with the (8) “partner” means a person who has been admitted partnership. to a partnership as a partner of the partnership. § 17. Contractual appraisal rights. § 18. Contested matters relating to partners; (9) “partnership” or “domestic partnership” means an contested votes. association of two (2) or more persons formed under § 19. Interpretation and enforcement of section 21 of this Act, to carry on any business, purpose partnership agreement. or activity.

(10) “partnership agreement” means the agreement, § 1. Definitions. whether written, oral or implied, among the partners concerning the partnership, including amendments to the As used in this Act, unless the context otherwise partnership agreement. A partnership is not required to requires, the term: execute its partnership agreement. A partnership is bound by its partnership agreement whether or not the (1) “business” includes every trade, occupation and partnership executes the partnership agreement. profession, the holding or ownership of property and any other activity for profit. (11) “partnership at will” means a partnership that is not a partnership for a definite term or particular (2) “certificate” means a certificate of partnership undertaking. existence under section 29 of this Act, a certificate of dissociation under section 53 of this Act, a certificate of (12) “partnership for a definite term or particular dissolution under section 59 of this Act, an amendment undertaking” means a partnership in which the partners or cancellation of any of the foregoing under section 5 of have agreed to remain partners until the expiration of a this division, a certificate of correction and a corrected definite term or the completion of a particular certificate under section 15 of this division, a certificate undertaking. of conversion to partnership under section 62 of this Act, a certificate of merger or consolidation under section 63 (13) “partnership interest” or “partner’s interest in the of this Act, a certificate of partnership domestication partnership” means all of a partner’s interests in the under section 65 of this Act, a certificate of transfer partnership, including the partner’s economic interest and under section 66 of this Act, and a certificate of all management and other rights. termination of a certificate with a future effective date and a certificate of amendment of a certificate with a (14) “person” means a natural person, partnership, future effective date under section 5(8) of this division. limited partnership, trust, estate, limited liability company,

association, corporation, custodian, nominee or any other individual or entity in its own or any representative (d) by reason of a filing or recording of a certificate capacity, in each case, whether domestic or foreign. to the extent provided by and subject to the limitations set forth in this Act. (15) “property” means all property, real, personal or mixed, tangible or intangible, or any interest therein. (3) A person notifies or gives a notification to another by taking steps reasonably required to inform the other (16) “publicly-traded company” means a company with person in the ordinary course, whether or not the other equity securities that are listed (i) on a securities person obtains knowledge of it. exchange, (ii) on an automated quotation system or (iii) otherwise on a regulated securities or commodities (4) A person receives a notification when the notifica- market that is subject to disclosure requirements tion: consistent with international standards which ensure adequate transparency of ownership information, or that (a) comes to the person’s attention; or is formed in contemplation of becoming so publicly traded or listed and shall be so publicly traded or listed (b) is received at the person’s place of business or at within 364 days of the company’s formation, and shall any other place held out by the person as a place for include all direct and indirect subsidiaries thereof. An receiving communications. entity is a subsidiary of another entity if (i) the parent holds, directly or indirectly, a beneficial interest in a (5) Except as otherwise provided in subsection (6) of majority or more of the shares, or a majority or more of this section, a person other than an individual knows, has the voting rights, in the subsidiary or (ii) such entity is notice, or receives a notification of a fact for purposes of consolidated in the financial statements of the parent that a particular transaction when the individual conducting are publicly available or will be made publicly available the transaction knows, has notice, or receives a within 364 days; notification of the fact, or in any event when the fact would have been brought to the individual’s attention if (17) “Registrar of Corporations” means the Registrar the person had exercised reasonable diligence. The of domestic partnerships. The Registrar for resident part- person exercises reasonable diligence if it maintains nerships is the Registrar of Corporations responsible for reasonable routines for communicating significant resident domestic and authorized foreign corporations. information to the individual conducting the transaction The Registrar for non-resident partnerships is The Trust and there is reasonable compliance with the routines. Company of the Marshall Islands, Inc. Reasonable diligence does not require an individual acting for the person to communicate information unless (18) “resident domestic partnership” means a domestic the communication is part of the individual’s regular partnership doing business in the Republic of the duties or the individual has reason to know of the Marshall Islands. transaction and that the transaction would be materially affected by the information. (19) “transfer” includes an assignment, conveyance, lease, mortgage, deed, and encumbrance. [P.L. 2005-28, (6) A partner’s knowledge, notice or receipt of a noti- § 1; amended P.L. 2017-52, § 16.] fication of a fact relating to the partnership is effective immediately as knowledge by, notice to or receipt of a § 2. Knowledge and notice. notification by the partnership, except in the case of a fraud on the partnership committed by or with the (1) A person knows a fact if the person has actual know- consent of that partner. [P.L. 2005-28, § 2.] ledge of it. § 3. Effect of partnership agreement; nonwaivable (2) A person has notice of a fact: provisions.

(a) if the person knows of it; (1) Except as otherwise provided in subsection (2) of this section, relations among the partners and between the (b) if the person has received a notification of it; partners and the partnership are governed by the partnership agreement. To the extent the partnership (c) if the person has reason to know it exists from agreement does not otherwise provide, this Act governs all of the facts known to the person at the time in relations among the partners and between the partners question; or and the partnership.

interpose the defense of usury with respect to any such (2) The partnership agreement may not: obligation in any action. [P.L. 2005-28, § 4.]

(a) vary the rights and duties under section 5 of this § 5. Execution, filing and recording of statements division except to eliminate the duty to provide copies and certificates. of certificates to all of the partners; (1) A certificate may be filed with the Registrar of (b) restrict a partner’s rights to obtain information as Corporations by delivery to the Registrar of Corporations provided in section 37 of this Act, except as permitted of the signed copy of the certificate. by section 37(6) of this Act; (2) A certificate filed by a partnership must be (c) eliminate the obligation of good faith and fair executed by at least one (1) partner or by one (1) or more dealing under section 38(4) of this Act, but the partner- authorized persons. The execution of a certificate by an ship agreement may restrict the obligation or prescribe individual as, or on behalf of, a partner or other person the standards by which the performance of the named as a partner in a certificate constitutes an oath or obligation is to be measured; affirmation, under the penalties of perjury, that, to the best of the individual’s knowledge and belief, the facts (d) vary the power to dissociate as a partner under stated therein are true. A person who executes a section 48(1) of this Act, except to require the notice certificate as an agent or fiduciary need not exhibit under section 47(1) of this Act to be in writing; evidence of his/her authority as a prerequisite to filing. Any signature on any certificate authorized to be filed (e) vary the right of a court to expel a partner in the with the Registrar of Corporations under any provision of events specified in section 47(5) of this Act; this Act may be a facsimile or an electronically transmitted signature. Upon delivery of any certificate, (f) vary the requirement to wind up the partnership the Registrar of Corporations shall record the date of its business in cases specified in sections 55(4)-(6) of this delivery. Unless the Registrar of Corporations finds that Act; or any statement or certificate does not conform to law, upon receipt of all filing fees required by law the (3) Notwithstanding anything to the contrary con- Registrar of Corporations shall: tained in this section, sections 20, 22 and 43 of this Act may be modified only to the extent provided in a (a) certify that the certificate has been filed with the certificate of partnership existence and in a partnership Registrar of Corporations by endorsing upon the agreement. original certificate the word “Filed”, and the date of the filing. This endorsement is conclusive of the date of its (4) It is the policy of this Act to give maximum effect filing in the absence of actual fraud; to the principle of freedom of contract and to the enforceability of partnership agreements. (b) file and index the endorsed certificate;

(5) A partner or another person shall not be liable to (c) prepare and return to the person who filed it or the partnership or the other partners or another person the person’s representative, a copy of the signed that is a party to or otherwise bound by a partnership certificate similarly endorsed, and shall certify such agreement for the partner’s or other person’s good faith copy as a true copy of the signed certificate; and reliance on the provisions of the partnership agreement. [P.L. 2005-28, § 3.] (d) cause to be entered such information from the certificate as the Registrar of Corporations deems § 4. Supplemental principles of law. appropriate into the Registrar, and such information and a copy of such certificate shall be permanently (1) In any case not provided for in this Act, the rules maintained as a public record on a suitable medium. of law and equity shall govern. (3) A person authorized by this Act to file a certificate (2) No obligation of a partner to a partnership arising may amend or cancel the certificate by filing an under a partnership agreement or a separate agreement or amendment or cancellation that names the partnership, writing, and no note, instruction or other writing identifies the certificate, and states the substance of the evidencing any such obligation of a partner, shall be amendment or cancellation. A person authorized by this subject to the defense of usury, and no partner shall Act to file a certificate who becomes aware that such

certificate was false when made, or that any matter certificate to a partner or other person does not limit the described in the certificate has changed, making the effectiveness of the certificate as to a person not a certificate false in any material respect, shall promptly partner. amend the certificate. Upon the filing of a certificate amending or correcting a certificate (or judicial decree of (5) The filing of a certificate of partnership existence amendment) with the Registrar of Corporations, or upon under section 29 of this Act with the Registrar of the future effective date of a certificate amending or Corporations shall make it unnecessary to file any other correcting a certificate (or judicial decree thereof), as document. provided for therein, the certificate being corrected or amended shall be corrected or amended as set forth (6) A certificate filed with the Registrar of Corpora- therein. Upon the filing of a certificate of cancellation (or tions shall be effective if there has been substantial judicial decree thereof), or a certificate of merger or compliance with the requirements of this Act. consolidation which acts as a certificate of cancellation, or a certificate of transfer, or upon the future effective (7) A certificate shall be effective at the time of its date of a certificate of cancellation (or a judicial decree filing with the Registrar of Corporations or at any later thereof) or of a certificate of merger or consolidation date specified in the certificate. which acts as a certificate of cancellation, or a certificate of transfer, as provided for therein, or as specified in (8) If any certificate filed in accordance with this Act section 10(3) of this division, the certificate of partner- provides for a future effective date and if, prior to such ship existence is cancelled. A certificate of partnership future effective date set forth in such certificate, the existence shall be cancelled upon the dissolution and the transaction is terminated or its terms are amended to completion of winding up of the partnership, or as change the future effective date or any other matter provided in section 10(3) of this division, or upon the described in such certificate so as to make such certifi- filing of a certificate of merger or consolidation if the cate false or inaccurate in any respect, such certificate domestic partnership is not the surviving or resulting shall, prior to the future effective date set forth in such entity in a merger or consolidation, or upon the filing of a certificate, be terminated or amended by the filing of a certificate of transfer. A certificate of cancellation shall certificate of termination or certificate of amendment of be filed with the Registrar of Corporations to accomplish such certificate, executed in the same manner as the the cancellation of a certificate of partnership existence certificate being terminated or amended is required to be upon the dissolution and the completion of winding up of executed in accordance with this section, which shall a domestic partnership and shall set forth: identify the certificate which has been terminated or amended and shall state that the certificate has been (a) the name of the partnership; terminated or the manner in which it has been amended. Upon the filing of a certificate of amendment of a (b) the date of filing of its certificate of partnership certificate with a future effective date, the certificate existence; and identified in such certificate of amendment is amended. Upon the filing of a certificate of termination of a (c) any other information the person filing the certificate with a future effective date, the certificate certificate of cancellation determines. identified in such certificate of termination is terminated.

Upon the filing of a certificate of partnership domesti- (9) A fee as determined by the Registrar shall be paid cation, or upon the future effective date of a certificate of at the time of the filing of a certificate. [P.L. 2005-28, partnership domestication, the entity filing the certificate § 5; amended by P.L. 2017-52, § 2.] of partnership domestication is domesticated as a partnership with the effect provided in section 65 of this § 6. Governing law. Act. Upon the filing of a certificate of conversion to partnership, or upon the future effective date of a (1) The law of the Marshall Islands governs relations certificate of conversion to partnership, the entity filing among the partners and between the partners and the the certificate of conversion to partnership is converted to partnership. a partnership with the effect provided in section 62 of this Act. (2) If (a) a partnership agreement provides for the

application of the laws of the Marshall Islands, and (b) (4) A person who files a certificate pursuant to this the partnership files with the Registrar of Corporations a section shall promptly send a copy of the certificate to certificate of partnership existence, then the partnership every nonfiling partner and to any other person named as a partner in the certificate. Failure to send a copy of a

agreement shall be governed by and construed under the business in the Marshall Islands or a natural person, laws of the Marshall Islands. [P.L. 2005-28, § 6.] resident of and having a business address in the Marshall Islands. § 7. Reserved power of the Marshall Islands to alter or repeal Act. (2) The registered agent for a non-resident partnership shall be The Trust Company of the Marshall Islands, Inc. All provisions of this Act may be altered from time to time or repealed and all rights of partners are subject to (3) A domestic partnership which fails to maintain a this reservation. Unless expressly stated to the contrary in registered agent as required by this Act shall be dissolved this Act, all amendments of this Act shall apply to or its authority to do business or registration shall be partnerships and partners whether or not existing at the revoked, as the case may be, in accordance with section time of the enactment of any such amendment. [P.L. 71 of this Act. 2005-28, § 7.] (4) Manner of service. § 8. Name of partnership. (a) Resident domestic partnership. Service of (1) The name of the partnership shall contain the process on a resident domestic partnership may be words “Partnership.” made on the registered agent in the manner provided (2) The name of a partnership may contain the name by law for the service of summons as if the registered of a partner. agent were a defendant.

(3) The name of a partnership to be included in the (b) Non-resident partnership. certificate of partnership existence must be such as to distinguish it upon the records of the Registrar of (i) Service of process on a non-resident domes- Corporations from the name on such records of any tic partnership may be made on the registered agent partnership or limited partnership organized under the in the manner provided by law for the service of laws of the Marshall Islands and reserved, registered, summons as if the registered agent were a defendant; formed or organized with the Registrar of Corporations; or provided, however, that a partnership may be registered under any name which is not such as to distinguish it (ii) Service of process may be sent to the upon the records of the Registrar of Corporations from registered agent via registered mail or courier as if the name on such records of any, partnership or limited the registered agent were a defendant. partnership reserved, registered, formed or organized under the laws of the Marshall Islands with the written (5) Any registered agent of a partnership may resign consent of the other partnership or limited partnership, as such agent upon filing a written notice thereof with the which written consent shall be filed with the Registrar of Registrar of Corporations; provided, however that the Corporations. [P.L. 2005-28, § 8.] registered agent shall notify the partnership not less than thirty (30) days prior to such filing and resignation. The § 9. Indemnification. registered agent shall mail or cause to be mailed to the partnership at the last known address of the partnership, Subject to such standards and restrictions, if any, as are within or without the Marshall Islands, or at the last set forth in its partnership agreement, a partnership may, known address of the person at whose request the and shall have the power to, indemnify and hold harmless partnership was formed, notice of the resignation of the any partner or other person from and against any and all agent. No designation of a new registered agent shall be claims and demands whatsoever. [P.L. 2005-28, § 9.] accepted for filing until all charges owing to the former registered agent shall have been paid. § 10. Registered agent for the service of process (6) A designation of a registered agent under this (1) Every domestic partnership formed under sections section may be made, revoked, or changed by filing an 21 and 29 of this Act, shall designate a registered agent appropriate notification with the Registrar of Corpora- in the Marshall Islands upon whom process against such tions. entity or any notice or demand required or permitted by law to be served may be served. The agent for a partner- (7) The designation of a registered agent shall termi- ship having a place of business in the Marshall Islands nate upon filing a notice of resignation provided that the shall be a resident domestic corporation having a place of registered agent certifies that the partnership was notified

not less than thirty (30) days prior to such filing as promptly send one (1) of such copies by registered mail provided by subsection (5) of this section. return receipt requested, to such partnership at the business address of its registered agent, or if there is no such office, (8) A registered agent, when served with process, the Attorney General shall mail such copy, in the case of a notice or demand for the partnership which it represents, resident domestic partnership, in care of the partner or shall transmit the same to the partnership by personal authorized person named in its certificate of partnership at notification or in the following manner: Upon receipt of his address stated therein, or in the case of a non-resident the process, notice or demand, the registered agent shall domestic partnership, at the address of the partnership cause a copy of such paper to be mailed to the part- without the Marshall Islands, or if none, at the last known nership named therein at its last known address. Such address of the partner or authorized person in the certi- mailing shall be by registered mail. As soon thereafter as ficate of partnership; or in the case of a partnership which possible if process was issued in the Marshall Islands, the has transferred its domicile out of the Marshall Islands to registered agent may file with the clerk of the Marshall such partnership’s registered agent as shown in the certi- Islands court issuing the process or with the agency of ficate of transfer of domicile. [P.L. 2005-28, § 11.] the Government issuing the notice or demand either the receipt of such registered mailing or an affidavit stating § 12. Doing business. that such mailing has been made, signed by the registered agent, or if the agent is a partnership, by an officer of the A limited partnership, a partnership, a limited liability same, properly notarized. Compliance with the provi- company, a business or other trust or association, or a sions of this subsection shall relieve the registered agent corporation formed or organized under the laws of any from any further obligation to the partnership for service foreign country or other foreign jurisdiction shall not be of the process, notice or demand, but the agent’s failure deemed to be doing business in the Marshall Islands to comply with the provisions of this subsection shall in solely by reason of its being a partner in a domestic no way affect the validity of the service of the process, partnership. [P.L. 2005-28, § 12.] notice or demand. § 13. Restated certificate of partnership existence. (9) A registered agent for service of process acting pursuant to the provisions of this section shall not be (1) A certificate of partnership existence may be resta- liable for the actions or obligations of the partnership for ted by integrating into a single instrument all of the whom it acts. The registered agent shall not be a party to provisions of the certificate of partnership existence any suit or action against the partnership or arising from which are then in effect and operative as a result of there the acts or obligations of the partnership. If the Regis- having been theretofore filed one (1) or more amend- tered agent is named in any such action, the action shall ments pursuant to section 5(3) of this division or other be dismissed as to such agent. [P.L. 2005-28, § 10.] instruments having the effect of amending a certificate of partnership existence and the certificate of partnership § 11. Attorney General as agent for service of existence may be amended or further amended by the process. filing of a restated certificate of partnership existence. The restated certificate of partnership existence shall be (1) Whenever a domestic partnership fails to maintain specifically designated as such in its heading and shall set a registered agent in the Marshall Islands, or whenever its forth: registered agent cannot be found at its business address, then the Attorney General shall be an agent of such (a) the present name of the partnership, and if it has partnership upon whom process or notice or demand been changed, the name under which the partnership required or permitted by law to be served or may be was originally formed; served. The Attorney General shall also be agent for service of process of a partnership whenever authorized (b) the date of filing of the original certificate of under this Act. partnership existence with the Registrar of Corpora- tions; (2) Service on the Attorney General as agent of a domestic partnership shall be made by personally (c) the information required to be included pursuant delivering to and leaving with him or his/her deputy or to section 29(1) of this Act; and with any person authorized by the Attorney General to receive such service, at the office of the Attorney General (d) any other information desired to be included in Majuro Atoll, duplicate copies of such process together therein. with the statutory fee. The Attorney General shall

(2) Upon the filing of the restated certificate of effective as of the date the original certificate was filed, partnership existence with the Registrar of Corporations, except as to those persons who are substantially and or upon the future effective date of a restated certificate adversely affected by the correction, and as to those of partnership existence as provided for therein, the persons the certificate of correction shall be effective initial certificate of partnership existence, as theretofore from the filing date. amended, shall be superseded; thenceforth, the restated certificate of partnership existence, including any further (2) In lieu of filing a certificate of correction, a amendment made thereby, shall be the certificate of certificate may be corrected by filing with the Registrar partnership existence of the partnership, but the original of Corporations a corrected certificate which shall be date of formation of the partnership shall remain unchanged. executed and filed as if the corrected certificate were the certificate being corrected, and a fee shall be paid to and (3) Any amendment effected in connection with the collected by the Registrar of Corporations for filing of restatement of the certificate of partnership existence the corrected certificate. The corrected certificate shall be shall be subject to any other provision of this Act, not specifically designated as such in its heading, shall inconsistent with this section, which would apply if a specify the inaccuracy or defect to be corrected, and shall separate amendment were filed to effect such amend- set forth the entire certificate in corrected form. A ment. [P.L. 2005-28, § 13.] certificate corrected in accordance with this section shall be effective as of the date the original certificate was § 14. Execution, amendment or cancellation by filed, except as to those persons who are substantially judicial order. and adversely affected by the correction and as to those persons the certificate as corrected shall be effective from (1) If a person required by this Act to execute any the filing date. [P.L. 2005-28, § 15.] certificate fails or refuses to do so, any other person who is adversely affected by the failure or refusal, may § 16. Business transactions of partner with the petition the High Court to direct the execution of the partnership. certificate. If the High Court finds that the execution of the certificate is proper and that any person so designated Except as provided in the partnership agreement, a has failed or refused to execute the certificate, the High partner may lend money to, borrow money from, act as a Court shall order the Registrar of Corporations to file an surety, guarantor or endorser for, guarantee or assume appropriate certificate. one (1) or more specific obligations of, provide collateral for and transact other business with, the partnership and, (2) If a person required to execute a partnership subject to other applicable law, has the same rights and agreement or amendment thereof fails or refuses to do so, obligations with respect thereto as a person who is not a any other person who is adversely affected by the failure partner. [P.L. 2005-28, § 16.] or refusal may petition the High Court to direct the execution of the partnership agreement or amendment § 17. Contractual appraisal rights. thereof. If the High Court finds that the partnership agreement or amendment thereof should be executed and A partnership agreement or an agreement of merger or that any person so designated has failed or refused to do consolidation may provide that contractual appraisal so, the High Court shall enter an order granting rights with respect to a partnership interest or another appropriate relief. [P.L. 2005-28, § 14.] interest in a partnership shall be available for any class or group of partners or partnership interests in connection § 15. Certificate of correction; corrected certificate. with any amendment of a partnership agreement, any merger or consolidation in which the partnership is a (1) Whenever any certificate authorized to be filed constituent party to the merger or consolidation, any with the Registrar of Corporations under any provision of conversion of the partnership to another business form, this Act has been so filed and is an inaccurate record of any transfer to or domestication in any jurisdiction by the the action therein referred to, or was defectively or partnership, or the sale of all or substantially all of the erroneously executed, such certificate may be corrected partnership’s assets. The High Court shall have juris- by filing with the Registrar of Corporations a certificate diction to hear and determine any matter relating to any of correction of such certificate. The certificate of such appraisal rights for resident domestic partnerships. correction shall specify the inaccuracy or defect to be Any court, which can assert jurisdiction pursuant to its corrected, shall set forth the portion of the certificate in rules, shall have jurisdiction to hear and determine any corrected form and shall be executed and filed as matter relating to any such appraisal rights for non- required by this Act. The certificate of correction shall be resident domestic partnerships. [P.L. 2005-28, § 17.]

§ 18. Contested matters relating to partners; § 19. Interpretation and enforcement of partnership contested votes. agreement.

(1) Upon application of any partner of a partnership Any action to interpret, apply or enforce the provisions which is formed under the laws of the Marshall Islands, of a partnership agreement of a partnership which is the High Court may hear and determine the validity of formed under the laws of the Marshall Islands or doing any admission, election, appointment or dissociation of a business in the Marshall Islands, or the duties, obliga- partner of the partnership, and the right of any person to tions or liabilities of such partnership to the partners of become or continue to be a partner of the partnership, and the partnership, or the duties, obligations or liabilities to that end make such order or decree in any such case as among partners or of partners to such partnership, or the may be just and proper, with power to enforce the rights or powers of, or restrictions on, such partnership or production of any books, papers and records relating to partners, including actions authorized by section 39 of the issue. In any such application, the partnership shall be this Act, may be brought in the High Court. [P.L. 2005- named as a party, and service of copies of the application 28, § 19.] upon the partnership shall be deemed to be service upon the partnership and upon the person or persons whose DIVISION 2: right to be a partner is contested and upon the person or NATURE OF PARTNERSHIP persons, if any, claiming to be a partner or claiming the right to be a partner; and the person upon whom service § 20. Partnership as entity. is made shall forward immediately a copy of the § 21. Formation of partnership; powers. application to the partnership and to the person or § 22. Partnership property. persons whose right to be a partner is contested and to the § 23. When property is partnership property. person or persons, if any, claiming to be a partner or the § 24. Admission without contribution or right to be a partner, in a postpaid, sealed, registered partnership interest. letter addressed to such partnership and such person or § 25. Form of contribution. persons at their post office addresses last known to the § 26. Liability for contribution. person upon whom service is made or furnished to the person upon whom service is made by the applicant partner. The High Court may make such order respecting § 20. Partnership as entity. further or other notice of such application as it deems proper under the circumstances. A partnership is a separate legal entity which is an entity distinct from its partners unless otherwise provided (2) Upon application of any partner of a partnership in a certificate of partnership existence and in a partner- which is formed under the laws of the Marshall Islands, ship agreement. [P.L. 2005-28, § 20.] the High Court may hear and determine the result of any vote of partners upon matters as to which the partners of § 21. Formation of partnership; powers. the partnership, or any class or group of partners, have the right to vote pursuant to the partnership agreement or (1) A partnership is formed when two (2) or more other agreement or this Act (other than the admission, persons agree to carry on as co-owners of a business for election, appointment or dissociation of partners). In any profit and file a certificate of partnership existence such application, the partnership shall be named as a pursuant to section 29 of this division. party, and service of the application upon the person upon whom service is made shall be deemed to be (2) A partnership shall possess and may exercise all service upon the partnership, and no other party need be the powers and privileges granted by this Act or by any joined in order for the High Court to adjudicate the result other law or by its partnership agreement, together with of the vote. The High Court may make such order any powers incidental thereto, including such powers and respecting further or other notice of such application as it privileges as are necessary or convenient to the conduct, deems proper under the circumstances. promotion or attainment of the business, purposes or activities of the limited partnership.

(3) Nothing herein contained limits or affects the right (3) Notwithstanding any provision of this Act to the to serve process in any other manner now or hereafter contrary, without limiting the general powers enumerated provided by law. This section is an extension of and not a in subsection (2) of this section, a partnership shall, limitation upon the right otherwise existing of service of subject to such standards and restrictions, if any, as are legal process upon nonresidents. [P.L. 2005-28, § 18.]

set forth in its partnership agreement, have the power and § 24. Admission without contribution or partnership authority to make contracts of guaranty and suretyship interest. and enter into interest rate, basis, currency, hedge or other swap agreements or cap, floor, put, call, option, Each person to be admitted as a partner to a partnership exchange or collar agreements, derivative agreements or formed under section 21 of this division may be admitted other agreements similar to any of the foregoing. [P.L. as a partner and may receive a partnership interest in the 2005-28, § 21.] partnership without making a contribution or being obligated to make a contribution to the partnership. Each § 22. Partnership property. person to be admitted as a partner to a partnership formed under section 21 of this division may be admitted as a Unless otherwise provided in a certificate of partner without acquiring an economic interest in the partnership existence and in a partnership agreement, partnership. Nothing contained in this section shall affect property acquired by a partnership is property of the a partner’s liability under section 32 of this Act. [P.L. partnership and not of the partners individually. [P.L. 2005-28, § 24.] 2005-28, § 22.] § 25. Form of contribution. § 23. When property is partnership property. The contribution of a partner may be in cash, property (1) Property is partnership property if acquired in the or services rendered, or a promissory note or other name of: obligation to contribute cash or property or to perform services. [P.L. 2005-28, § 25.] (a) the partnership; or § 26. Liability for contribution. (b) one (1) or more persons with an indication in the instrument transferring title to the property of the (1) A partner is obligated to the partnership to perform person’s capacity as a partner or of the existence of a any promise to contribute cash or property or to perform partnership but without an indication of the name of services, even if the partner is unable to perform because the partnership. of death, disability or any other reason. If a partner does not make the required contribution of property or (2) Property is acquired in the name of the partnership services, the partner is obligated at the option of the by a transfer to: partnership to contribute cash equal to that portion of the value of the contribution that has not been made. The (a) the partnership in its name; or foregoing option shall be in addition to, and not in lieu

of, any other rights, including the right to specific (b) one (1) or more persons in their capacity as performance, that the partnership may have against such partners in the partnership, if the name of the partner under the partnership agreement or applicable partnership is indicated in the instrument transferring law. title to the property

(3) Property is presumed to be partnership property if (2) A partnership agreement may provide that the purchased with partnership assets, even if not acquired in partnership interest of any partner who fails to make any the name of the partnership or of one (1) or more persons contribution that the partner is obligated to make shall be with an indication in the instrument transferring title to subject to specified penalties for, or specified consequences of, such failure. Such penalty or consequence may the property of the person’s capacity as a partner or of the existence of a partnership. take the form of reducing or eliminating the defaulting partner’s interest in the partnership, subordinating the (4) Property acquired in the name of one (1) or more partner’s partnership interest to that of non-defaulting persons, without an indication in the instrument trans- partners, a forced sale of the partner’s partnership ferring title to the property of the person’s capacity as a interest, forfeiture of the partner’s partnership interest, partner or of the existence of a partnership and without the lending by other partners of the amount necessary to use of partnership assets, is presumed to be separate meet the partner’s commitment, a fixing of the value of property, even if used for partnership purposes. [P.L. the partner’s partnership interest by appraisal or by 2005-28, § 23.] formula and redemption or sale of the partner’s partnership interest at such value, or other penalty or consequence. [P.L. 2005-28, § 26.]

DIVISION 3: RELATIONS OF PARTNERS TO PERSONS (c) partnership property held in the name of one (1) DEALING WITH PARTNERSHIP or more persons other than the partnership, without an indication in the instrument transferring the property to § 27. Partner agent of partnership. them of their capacity as partners or of the existence of § 28. Transfer of partnership property. a partnership, may be transferred by an instrument of § 29. Certificate of partnership existence. transfer executed by the persons in whose name the § 30. Denial of status as partner. property is held. § 31. Partnership liable for partner’s actionable conduct. (2) A partnership may recover partnership property § 32. Partner’s liability. from a transferee only if it proves that execution of the § 33. Actions by and against partnership and instrument of initial transfer did not bind the partnership partners. under section 27 of this division and: § 34. Liability of purported partner. (a) as to a subsequent transferee who gave value for

property transferred under subsections (1)(a) and (b) of

this section, proves that the subsequent transferee had § 27. Partner agent of partnership. notice that the person who executed the instrument of Subject to the effect of a certificate of partnership initial transfer lacked authority to bind the partnership; existence under section 29 of this division: or

(1) each partner is an agent of the partnership for the (b) as to a transferee who gave value for property purpose of its business, purposes or activities. An act of a transferred under subsection (1)(c) of this section, partner, including the execution of an instrument in the proves that the transferee had notice that the property partnership name, for apparently carrying on in the was partnership property and that the person who ordinary course the partnership’s business, purposes or executed the instrument of initial transfer lacked activities or business, purposes or activities of the kind authority to bind the partnership. carried on by the partnership binds the partnership, unless the partner had no authority to act for the partnership in the (3) A partnership may not recover partnership pro- particular matter and the person with whom the partner perty from a subsequent transferee if the partnership was dealing had notice that the partner lacked authority. would not have been entitled to recover the property, under subsection (2) of this section, from any earlier (2) an act of a partner which is not apparently for transferee of the property. carrying on in the ordinary course the partnership’s business, purposes or activities or business, purposes or (4) If a person holds all of the partners’ interests in the activities of the kind carried on by the partnership binds partnership, all of the partnership property vests in that the partnership only if the act was authorized by the other person. The person may execute a document in the name partners. [P.L. 2005-28, § 27.] of the partnership to evidence vesting of the property in that person and may file or record the document. [P.L. § 28. Transfer of partnership property. 2005-28, § 28.]

(1) Partnership property may be transferred as follows: § 29. Certificate of partnership existence.

(a) subject to the effect of a certificate of partnership existence under section 29 of this division, partnership (1) A partnership must file a certificate of partner- property held in the name of the partnership may be ship existence, which: transferred by an instrument of transfer executed by a partner in the partnership name; (a) must include:

(b) partnership property held in the name of one (1) or (i) the name of the partnership; more partners with an indication in the instrument transferring the property to them of their capacity as (ii) the name and address of the registered agent partners or of the existence of a partnership, but without for service of process required to be maintained by an indication of the name of the partnership, may be section 10 of this Act; and transferred by an instrument of transfer executed by the persons in whose name the property is held; and

(iii) a statement affirming that “the partnership copy of the certificate containing the limitation on will comply with all applicable provisions of the authority is of record in the office for recording transfers Republic of the Marshall Islands Revised Partnership of that real property. Act, including retention, maintenance, and production of accounting, partner, and beneficial owner (4) Except as otherwise provided in subsections (2) records in accordance with section 37 of the and (3) of this section and sections 53 and 59 of this Act, Republic of the Marshall Islands Revised Partnership a person not a partner is not deemed to know of a limi- Act”; this statement shall, by force of law, be tation on the authority of a partner merely because the deemed to be included in the certificate of limitation is contained in a certificate. [P.L. 2005-28, § 29; partnership existence of all partnerships, including amended by P.L. 2017-52, § 1.] those formed prior to the effective date of this law; and § 30. Denial of status as partner.

(b) may state: If a person named in a certificate of partnership existence is or may be adversely affected by being so (i) the names of the partners authorized to named, the person may petition the High Court to direct execute an instrument transferring real property held the correction of the certificate. If the High Court finds in the name of the partnership; that correction of the certificate is proper and that an authorized person has failed or refused to execute and file (ii) the authority, or limitations on the authority, a certificate of correction or a corrected certificate, the of some or all of the partners to enter into other High Court shall order the Registrar of Corporations to transactions on behalf of the partnership; and file an appropriate correction. [P.L. 2005-28, § 30.]

(iii) any other matter. § 31. Partnership liable for partner’s actionable conduct.

(2) A certificate of partnership existence supplements (1) A partnership is liable for loss or injury caused to a the authority of a partner to enter into transactions on person, or for a penalty incurred, as a result of a wrongful behalf of the partnership as follows: act or omission, or other actionable conduct, of a partner

acting in the ordinary course of business of the (a) except for transfers of real property, a grant of partnership or with authority of the partnership. authority contained in a certificate of partnership

existence is conclusive in favor of a person who gives (2) If, in the course of the partnership’s business or value without knowledge to the contrary, so long as while acting with authority of the partnership, a partner and to the extent that a limitation on that authority is receives or causes the partnership to receive money or not then contained in another certificate. A filed property of a person not a partner, and the money or cancellation of a limitation on authority revives the property is misapplied by a partner, the partnership is previous grant of authority; or liable for the loss. [P.L. 2005-28, § 31.]

(b) a grant of authority to transfer real property held in the name of the partnership contained in a certified § 32. Partner’s liability. copy of a certificate of partnership existence recorded in the office for recording transfers of that real property (1) Except as otherwise provided in subsection (2) of is conclusive in favor of a person who gives value this section, all partners are liable jointly and severally without knowledge to the contrary, so long as and to for all obligations of the partnership unless otherwise the extent that a certified copy of a statement agreed by the claimant or provided by law. containing a limitation on that authority is not then of record in the office for recording transfers of that real (2) A person admitted as a partner into an existing property. The recording in the office for recording partnership is not personally liable for any obligation of transfers of that real property of a certified copy of a the partnership incurred before the person’s admission as cancellation of a limitation on authority revives the a partner. [P.L. 2005-28, § 32.] previous grant of authority. § 33. Actions by and against partnership and partners. (3) A person not a partner is deemed to know of a limitation on the authority of a partner to transfer real (1) A partnership may sue and be sued in the name of property held in the name of the partnership if a certified the partnership.

on the representation, enters into a transaction with the (2) An action may be brought against the partnership actual or purported partnership. If the representation, and, to the extent not inconsistent with section 32 of this either by the purported partner or by a person with the division, any or all of the partners in the same action or in purported partner’s consent, is made in a public manner, separate actions. the purported partner is liable to a person who relies upon the purported partnership even if the purported partner is (3) A judgment against a partnership is not by itself a not aware of being held out as a partner to the claimant. judgment against a partner. A judgment against a partner- If a partnership obligation results, the purported partner is ship may not be satisfied from the assets of a partner liable with respect to that obligation as if the purported liable as provided in section 32 of this division for a partner were a partner. If no partnership obligation partnership obligation unless there is also a judgment results, the purported partner is liable with respect to that against the partner for such obligation. obligation jointly and severally with any other person consenting to the representation. (4) A judgment creditor of a partner may not levy execution against the assets of the partner to satisfy a (2) If a person is thus represented to be a partner in an judgment based on a claim against the partnership unless: existing partnership, or with one (1) or more persons not partners, the purported partner is an agent of persons (a) the claim is for an obligation of the partnership consenting to the representation to bind them to the same for which the partner is liable as provided in section 32 extent and in the same manner as if the purported partner of this division and either: were a partner, with respect to persons who enter into transactions in reliance upon the representation. If all of (i) a judgment based on the same claim has the partners of the existing partnership consent to the been obtained against the partnership and a writ of representation, a partnership act or obligation results. If execution on the judgment has been returned fewer than all of the partners of the existing partnership unsatisfied in whole or in part; consent to the representation, the person acting and the partners consenting to the representation are jointly and (ii) the partnership is a debtor in bankruptcy; severally liable.

(iii) the partner has agreed that the creditor need (3) A person is not liable as a partner merely because not exhaust partnership assets; or the person is named by another in a certificate of partnership existence. (iv) a court grants permission to the judgment (4) A person does not continue to be liable as a partner creditor to levy execution against the assets of a merely because of a failure to file a certificate of partner based on a finding that partnership assets dissociation or to amend a certificate of partnership subject to execution are clearly insufficient to satisfy existence to indicate the partner’s dissociation from the the judgment, that exhaustion of partnership assets is partnership. excessively burdensome, or that the grant of permission is an appropriate exercise of the court’s (5) Except as otherwise provided in subsections (1) equitable powers; or and (2) of this section, persons who are not partners as to each other are not liable as partners to other persons. (b) liability is imposed on the partner by law or con- [P.L. 2005-28, § 34.] tract independent of the existence of the partnership. DIVISION 4: (5) This section applies to any obligation of the part- RELATIONS OF PARTNERS TO EACH OTHER nership resulting from a representation by a partner or AND TO PARTNERSHIP purported partner under section 34 of this division. [P.L. 2005-28, § 33.] § 35. Partner’s rights and duties. § 36. Distributions in kind. § 34. Liability of purported partner. § 37. Requirement for keeping accounting records, minutes, and records of partners and (1) If a person, by words or conduct, purports to be a beneficial owners; partner’s rights and duties partner, or consents to being represented by another as a with respect to information. partner, in a partnership or with one (1) or more persons § 38. General standards of partner’s conduct. not partners, the purported partner is liable to a person to § 39. Actions by partnership and partners; whom the representation is made, if that person, relying derivative actions.

§ 40. Continuation of partnership beyond definite compensation for services rendered in winding up the term or particular undertaking. partnership. § 41. Classes and voting. § 42. Remedies for breach of partnership (9) A person may become a partner only with the agreement. consent of all of the partners.

(10) A difference arising as to a matter in the ordinary

course of business of a partnership may be decided by a § 35. Partner’s rights and duties. majority of the partners. An act outside the ordinary

course of business of a partnership may be undertaken (1) Each partner is deemed to have an account that is: only with the consent of all of the partners.

(a) credited with an amount equal to the money plus (11) This section does not affect the obligations of a the value of any other property, net of the amount of partnership to other persons under section 27 of this Act. any liabilities, the partner contributes to the partnership and the partner’s share of the partnership profits; and (12) A partner has the power and authority to delegate to one (1) or more other persons the partner’s rights and (b) charged with an amount equal to the money plus powers to manage and control the business and affairs of the value of any other property, net of the amount of the partnership, including to delegate to agents, officers any liabilities, distributed by the partnership to the and employees of the partner or the partnership, and to partner and the partner’s share of the partnership delegate by a management agreement or other agreement losses. with, or otherwise to, other persons. Such delegation by a partner shall not cause the partner to cease to be a partner (2) Each partner is entitled to an equal share of the of the partnership or cause the person to whom any such partnership profits and is chargeable with a share of the rights and powers have been delegated to be a partner of partnership losses in proportion to the partner’s share of the partnership. the profits. (13) Unless otherwise provided in a partnership agree- (3) In addition to indemnification under section 9 of ment or another agreement, a partner shall have no this Act, a partnership shall reimburse a partner for preemptive right to subscribe to any additional issue of payments made and indemnify a partner for liabilities partnership interests or another interest in a partnership. incurred by the partner in the ordinary course of the [P.L. 2005-28, § 35.] business of the partnership or for the preservation of its business or property; however, no person shall be § 36. Distributions in kind. required as a consequence of any such indemnification to make any payment to the extent that the payment is A partner, regardless of the nature of the partner’s inconsistent with section 32(2) of this Act. contribution, has no right to demand and receive any distribution from a partnership in kind. A partner may not (4) A partnership shall reimburse a partner for an be compelled to accept a distribution of any asset in kind advance to the partnership beyond the amount of capital from a partnership to the extent that the percentage of the the partner agreed to contribute. asset distributed to the partner exceeds a percentage of that asset which is equal to the percentage in which the (5) A payment or advance made by a partner which partner shares in distributions from the partnership. A gives rise to a partnership obligation under subsection (3) partner may be compelled to accept a distribution of any or (4) of this section constitutes a loan to the partnership asset in kind from a partnership to the extent that the which accrues interest from the date of the payment or percentage of the asset distributed to the partner is equal advance. to a percentage of that asset which is equal to the percentage in which the partner shares in distributions (6) Each partner has equal rights in the management from the partnership. [P.L. 2005-28, § 36.] and conduct of the partnership business and affairs.

(7) A partner may use or possess partnership property only on behalf of the partnership.

(8) A partner is not entitled to remuneration for services performed for the partnership, except for reasonable

§ 37. Requirement for keeping accounting records, pursuant to this subsection are being maintained in minutes, and records of partners and accordance with this section or, if applicable, that such beneficial owners; partner’s rights and duties records are not being maintained (wholly or partially). with respect to information. (b) Minutes. Every domestic partnership shall keep (1) Requirement for keeping accounting records, minutes of all meetings of partners and of actions taken minutes, and records of partners and beneficial on consent by partners. A resident domestic partnership owners. shall keep such minutes in the Republic.

(a) Accounting records. Every domestic partnership (c) Records of partners and beneficial owners. shall keep reliable and complete accounting records, to include correct and complete books and records of (i) Every domestic partnership shall keep an account. Accounting records must be sufficient to up-to-date record containing the names and correctly explain all transactions, enable the financial addresses of all partners. A resident domestic position of the partnership to be determined with partnership shall keep the records required to be reasonable accuracy at any time, and allow financial maintained by this subsection in the Republic. statements to be prepared. Additionally, every domestic partnership shall keep underlying docu- (ii) Every domestic partnership, excluding mentation for accounting records maintained pursuant publicly-traded companies, formed after the effective to this subsection, such as, but not limited to, invoices date of this law shall, in addition to the records of and contracts, which shall reflect all sums of money partners required under subparagraph (i) of this received and expended and the matters in respect of paragraph, use all reasonable efforts to obtain and which the receipt and expenditure takes place; all sales, maintain an up-to-date record of the names and purchases, and other transactions; and the assets and addresses of all beneficial owners of the partnership. liabilities of the partnership. A resident domestic Every domestic partnership, excluding publicly- partnership shall keep all accounting records and traded companies, formed on or before such date underlying documentation as described in this shall comply with the requirements of this subsection in the Republic. Upon demand of the subparagraph (ii) within 360 days of such date. registered agent for non-resident domestic entities in connection with the performance of its audit functions (iii) For the purposes of complying with or pursuant to a valid governmental request made to subparagraph (ii) of this paragraph, every domestic the registered agent for non-resident domestic entities, partnership shall use all reasonable efforts to notify every non-resident domestic partnership shall produce its partners and beneficial owners of their obligation all accounting records and underlying documentation to provide the information required to be kept by the required to be maintained pursuant to this subsection to partnership under the aforementioned subparagraph. the registered agent for non-resident domestic entities The requirement to use all reasonable efforts shall be in the Republic. The Minister of Finance or any person satisfied by at least annually requesting by written designated by him or her under or pursuant to the Tax notice to the partners the information required to be Information Exchange Agreement (Implementation) maintained by the partnership under the Act of 1989 (41 MIRC, Chapter 4) or the Tax Infor- aforementioned subparagraph. For the purpose of mation Exchange Agreement (Execution and Imple- identifying beneficial owners, a partnership is mentation) Act, 2010 (48 MIRC, Chapter 4) may entitled to rely, without further inquiry, on the require the registered agent for non-resident domestic response of a person to a written notice sent in good entities to demand production of all accounting records faith by the partnership, unless the partnership has and underlying documentation required to be main- reason to believe that the response is misleading or tained pursuant to this subsection. Additionally, upon false. formation, or in the case of a partnership existing prior to the effective date of this law, within 360 days of (iv) For the purpose of this Division, a partner or such date, and annually thereafter, an attestation, in a beneficial owner of a domestic partnership has an form prescribed by the Registrar for non-resident obligation to provide the information requested by domestic partnerships, will be made by every non- such partnership in accordance with this paragraph. resident domestic partnership, excluding publicly- traded companies, to the Registrar for non-resident (v) For the purpose of this Division, “beneficial domestic partnerships that accounting records and owner” means the natural person(s) who ultimately underlying documentation required to be maintained owns or controls, or has ultimate effective control of,

a legal entity or arrangement, whether directly or converted into clearly legible written form within a indirectly, or on whose behalf such interest in such reasonable time. Any domestic partnership shall legal entity or arrangement is held. For a domestic convert any records so kept upon the request of any partnership other than a publicly-traded company, person entitled to inspect such records. When records the natural person(s) who exercises control over such are kept in such manner, a clearly legible written form partnership through direct or indirect ownership of produced from the cards, tapes, photographs, micro- more than 25% of the partnership interests or voting photographs, or other information storage device shall rights in such partnership shall be regarded as the be admissible in evidence, and accepted for all other beneficial owner(s); if no natural person exerts purposes, to the same extent as an original written control through such an ownership interest, the record of the same information would have been, natural person(s) who exercises control over such provided the written form accurately portrays the partnership through management of the partnership record. or other means shall be regarded as the beneficial owner(s). (e) Retention period. All records required to be kept, retained, or maintained under this section shall be kept, (vi) Upon demand of the registered agent for retained, or maintained for a minimum of five (5) non-resident domestic entities in connection with the years. performance of its audit functions or pursuant to a valid governmental request made to the registered (f) Failure to maintain or produce records or to agent for non-resident domestic entities, every non- make attestations. Any person who knowingly or resident domestic partnership shall produce all recklessly fails to keep, retain, or maintain records as records of partners and beneficial owners required to required under this subsection, or who fails to produce be maintained pursuant to this subsection to the records within sixty (60) days upon demand or to make registered agent for non-resident domestic entities in attestations as required under this subsection, or who the Republic. The Minister of Finance or any person willfully keeps, retains, maintains, or produces false or designated by him or her under or pursuant to the misleading records or makes false or misleading Tax Information Exchange Agreement attestations, shall be liable to a fine not exceeding (Implementation) Act of 1989 (41 MIRC, Chapter 4) $50,000, cancellation of the partnership’s certificate of or the Tax Information Exchange Agreement partnership existence, or both. Persons shall not be (Execution and Implementation) Act, 2010 (48 liable under this subsection for any failure to keep, MIRC, Chapter 4) may require the registered agent retain or maintain the beneficial ownership information for non-resident domestic entities to demand required to be maintained and produced under this production of all records of partners and beneficial subsection if all reasonable efforts in compliance with owners required to be maintained pursuant to this the requirements of this subsection have been made to subsection. Additionally, upon formation, or in the obtain and maintain such information. case of a partnership existing prior to the effective date of this law, within 360 days of such date, and (2) Partner's rights and duties with respect to annually thereafter, an attestation, in a form information. prescribed by the Registrar for non-resident domestic partnerships, will be made by every non-resident (a) Each partner and the partnership shall provide domestic partnership, excluding publicly-traded partners, former partners and the legal representative of a companies, to the Registrar for non-resident deceased partner or partner under a legal disability and domestic partnerships that records of partners and their agents and attorneys, access to the books and beneficial owners required to be maintained pursuant records of the partnership and other information concer- to this subsection are being maintained in accordance ning the partnership’s business and affairs (in the case of with this section or, if applicable, that such records former partners, only with respect to the period during are not being maintained (wholly or partially). which they were partners) upon reasonable demand, for any purpose reasonably related to the partner’s interest as (d) Form of records. Any records maintained by a a partner in the partnership. The right of access shall domestic partnership in the regular course of its include access to: business, including its record of partners, books of account, and minute books, may be kept on, or be in (i) true and full information regarding the status of the form of, punch cards, magnetic tape, photographs, the business and financial condition of the partnership; microphotographs, or any other information storage device, provided that the records so kept can be

(ii) promptly after becoming available, a copy of the (e) Any action to enforce any right arising under this partnership’s financial statements or tax filings, if section may be brought in the High Court. If the applicable, for each year; partnership or a partner refuses to permit access as described in subsection (2)(a) of this section or does not (iii) a current list of the name and last known reply to a demand that has been made within five (5) business, residence or mailing address of each partner; business days after the demand has been made, the demanding partner, former partner, or legal representa- (iv) a copy of any certificate and written partnership tive of a deceased partner or partner under a legal agreement and all amendments thereto, together with disability may apply to the High Court for an order to executed copies of any written powers of attorney compel such disclosure. The High Court is hereby vested pursuant to which the certificate or the partnership with jurisdiction to determine whether or not the person agreement and any amendments thereto have been making the demand is entitled to the books and records executed; or other information concerning the partnership’s (v) true and full information regarding the amount business and affairs sought. The High Court may of cash and a description and statement of the agreed summarily order the partnership or partner to permit the value of any other property or services contributed by demanding partner, former partner or legal representative each partner and which each partner has agreed to of a deceased partner or partner under a legal disability contribute in the future, and the date on which each and their agents and attorneys to provide access to the partner became a partner; and information described in subsection (2)(a) of this section and to make copies or extracts therefrom; or the High (vi) other information regarding the affairs of the Court may summarily order the partnership or partner to partnership as is just and reasonable. The right of furnish to the demanding partner, former partner or legal access includes the right to examine and make extracts representative of a deceased partner or partner under a from books and records and other information con- legal disability and their agents and attorneys the cerning the partnership’s business and affairs. The information described in subsection (2)(a) of this section partnership agreement may provide for, and in the on the condition that the partner, former partner or legal absence of such provision in the partnership agreement, representative of a deceased partner or partner under a the partnership or the partner from whom access is legal disability first pay to the partnership or to the sought may impose, reasonable standards (including partner from whom access is sought the reasonable cost standards governing what information and documents of obtaining and furnishing such information and on such are to be furnished at what time and location and at other conditions as the High Court deems appropriate. whose expense) with respect to exercise of the right of When a demanding partner, former partner or legal access. representative of a deceased partner or partner under a legal disability seeks to obtain access to information (b) A partnership agreement may provide that the described in subsection (2)(a) of this section, the partnership shall have the right to keep confidential from demanding partner, former partner or legal representative partners for such period of time as the partnership deems of a deceased partner or partner under a legal disability reasonable, any information which the partnership shall first establish (a) that the demanding partner, former reasonably believes to be in the nature of trade secrets or partner or legal representative of a deceased partner or other information the disclosure of which the partnership partner under a legal disability has complied with the in good faith believes is not in the best interest of the provisions of this section respecting the form and manner partnership or could damage the partnership or its busi- of making demand for obtaining access to such ness or affairs or which the partnership is required by law information and (b) that the information the demanding or by agreement with a third party to keep confidential. partner, former partner or legal representative of a deceased partner or partner under a legal disability seeks (c) A partnership and its partners may maintain the is reasonably related to the partner’s interest as a partner books and records and other information concerning the in the partnership. The High Court may, in its discretion, partnership in other than a written form if such form is prescribe any limitations or conditions with reference to capable of conversion into written form within a the access to information, or award such other or further reasonable time. relief as the High Court may deem just and proper.

(d) Any demand by a partner under this section shall (f) The rights of a partner to obtain information as be in writing and shall state the purpose of such demand. provided in this section may be restricted in an original partnership agreement or in any subsequent amendment approved or adopted by all of the partners and in comp-

liance with any applicable requirements of the partner- (7) This section applies to a person winding up the ship agreement. [P.L. 2005-28,§37; P.L.2014-31, adding partnership business or affairs as the personal or legal new §37(1); amended by P.L. 2015-40, §37; amended by representative of the last surviving partner as if the P.L. 2017-39; amended by P.L. 2017-52, §1.] person were a partner. [P.L. 2005-28, § 38.]

§ 38. General standards of partner’s conduct. § 39. Actions by partnership and partners; derivative actions. (1) The only fiduciary duties a partner owes to the partnership and the other partners are the duty of loyalty (1) A partnership may maintain an action against a and the duty of care set forth in subsections (2) and (3) of partner for a breach of the partnership agreement, or for this section. the violation of a duty to the partnership, causing harm to the partnership. (2) A partner’s duty of loyalty to the partnership and the other partners is limited to the following: (2) A partner may maintain an action against the partnership or another partner for legal or equitable relief, (a) to account to the partnership and hold as trustee with or without an accounting as to partnership business, for it any property, profit or benefit derived by the to: partner in the conduct or winding up of the partnership business or affairs or derived from a use by the partner (a) enforce the partner’s rights under the partnership of partnership property, including the appropriation of agreement; a partnership opportunity; (b) enforce the partner’s rights under this Act, (b) to refrain from dealing with the partnership in including: the conduct or winding up of the partnership business or affairs as or on behalf of a party having an interest (i) the partner’s rights under sections 35, 37 or adverse to the partnership; and 38 of this division;

(c) to refrain from competing with the partnership in the conduct of the partnership business or affairs before (ii) the partner’s right on dissociation to have the dissolution of the partnership. the partner’s interest in the partnership purchased pursuant to section 50 of this Act or enforce any (3) A partner’s duty of care to the partnership and the other right under Division 6 or 7 of this Act; or other partners in the conduct and winding up of the partnership business or affairs is limited to refraining (iii) the partner’s right to compel a dissolution from engaging in grossly negligent or reckless conduct, and winding up of the partnership business under intentional misconduct, or a knowing violation of law. section 55 of this Act or enforce any other right under Division 8 of this Act; or (4) A partner shall discharge the duties to the partnership and the other partners under this Act or under the partner- (c) enforce the rights and otherwise protect the ship agreement and exercise any rights consistently with the interests of the partner, including rights and interests obligation of good faith and fair dealing. arising independently of the partnership relationship.

(5) A partner does not violate a duty or obligation (3) The accrual of, and any time limitation on, a right under this Act or under the partnership agreement solely of action for a remedy under this section is governed by other law. A right to an accounting upon dissolution and because the partner’s conduct furthers the partner’s own interest. winding up does not revive a claim barred by law.

(6) A partner may lend money to, borrow money from, (4) A partner may bring a derivative action in the High act as a surety, guarantor or endorser for, guarantee or Court in the right of a partnership to recover a judgment assume one (1) or more specific obligations of, provide in the partnership’s favor. collateral for and transact other business with, the (5) In a derivative action, the plaintiff must be a partnership and, subject to other applicable law, has the partner at the time of bringing the action and: same rights and obligations with respect thereto as a person who is not a partner. (a) at the time of the transaction of which the part-

ner complains; or

(b) the partner’s status as a partner had devolved the partners the right to vote separately or with all or any upon the partner by operation of law or pursuant to the class or group of the partners on any matter. Voting by terms of the partnership agreement from a person who partners may be on a per capita, number, financial inte- was a partner at the time of the transaction. rest, class, group or any other basis.

(6) In a derivative action, the complaint shall set forth (3) A partnership agreement may set forth provisions with particularity the effort, if any, of the plaintiff to relating to notice of the time, place or purpose of any secure initiation of the action by the partnership or the meeting at which any matter is to be voted on by any reason for not making the effort. partners, waiver of any such notice, action by consent without a meeting, the establishment of a record date, (7) If a derivative action is successful, in whole or in quorum requirements, voting in person or by proxy, or part, as a result of a judgment, compromise or settlement any other matter with respect to the exercise of any such of any such action, the court may award the plaintiff right to vote. reasonable expenses, including reasonable attorney’s fees, from any recovery in any such action or from a (4) Unless otherwise provided in a partnership partnership. [P.L. 2005-28, § 39.] agreement, meetings of partners may be held by means of communications equipment which permits the persons § 40. Continuation of partnership beyond definite participating in the meeting to communicate with each term or particular undertaking. other, and participation in a meeting pursuant to this subsection shall constitute presence in person at the (1) If a partnership for a definite term or particular meeting. On any matter that is to be voted on, consented undertaking is continued, without an express agreement, to or approved by partners, the partners may take such after the expiration of the term or completion of the action without a meeting, without prior notice and undertaking, the rights and duties of the partners remain without a vote, if consented to or approved, in writing, the same as they were at the expiration or completion, so by electronic transmission or by any other means far as is consistent with a partnership at will. permitted by law, by partners having not less than the minimum number of votes that would be necessary to (2) If the partners, or those of them who habitually authorize or take such action at a meeting at which all acted in the business or affairs during the term or partners entitled to vote thereon were present and voted. undertaking, continue the business or affairs without any On any matter that is to be voted on by partners, the settlement or liquidation of the partnership, they are pre- partners may vote in person or by proxy, and such proxy sumed to have agreed that the partnership will continue. may be granted in writing, by means of electronic [P.L. 2005-28, § 40.] transmission or as otherwise permit-ted by applicable law. Unless otherwise provided in a partnership § 41. Classes and voting. agreement, a consent transmitted by electro-nic transmission by a partner or by a person or persons (1) A partnership agreement may provide for classes or authorized to act for a partner shall be deemed to be groups of partners having such relative rights, powers and written and signed for purposes of this subsection. For duties as the partnership agreement may provide, and may purposes of this subsection, the term “electronic make provision for the future creation in the manner transmission” means any form of communication not provided in the partnership agreement of additional clas- directly involving the physical transmission of paper that ses or groups of partners having such relative rights, creates a record that may be retained, retrieved and powers and duties as may from time to time be established, reviewed by a recipient thereof and that may be directly including rights, powers and duties senior to existing reproduced in paper form by such a recipient through an classes and groups of partners. A partnership agreement automated process. may provide for the taking of an action, including the amendment of the partnership agreement, without the vote or approval of any partner or class or group of partners, (5) If a partnership agreement provides for the manner including an action to create under the provisions of the in which it may be amended, it may be amended in that partnership agreement a class or group of partnership manner or with the approval of all the partners or as otherwise permitted by law. If a partnership agreement interests that was not previously outstanding. A partnership agreement may provide that any partner or class or does not provide for the manner in which it may be group of partners shall have no voting rights. amended, the partnership agreement may be amended with the approval of all the partners or as otherwise (2) The partnership agreement may grant to all or permitted by law. [P.L. 2005-28, § 41; amended by P.L. certain identified partners or a specified class or group of 2017-52, § 4.]

or affairs, to require access to information concerning § 42. Remedies for breach of partnership agreement. partnership transactions, or to inspect or copy the partnership books or records. A partnership agreement may provide that (1) a partner who fails to perform in accordance with, or to comply (2) A transferee of a partner’s economic interest in the with the terms and conditions of, the partnership partnership has a right: agreement shall be subject to specified penalties or specified consequences, and (2) at the time or upon the (a) to receive, in accordance with the transfer, happening of events specified in the partnership agree- distributions to which the transferor would otherwise ment, a partner shall be subject to specified penalties or be entitled; specified consequences. Such specified penalties or specified consequences may include and take the form of (b) to receive upon the dissolution and winding up any penalty or consequence set forth in section 26(2) of of the partnership business or affairs, in accordance this Act. [P.L. 2005-28, § 42.] with the transfer, the net amount otherwise distributable to the transferor; and DIVISION 5: TRANSFEREES AND CREDITORS OF PARTNER (c) to seek under section 55(6) of this Act a judicial determination that it is equitable to wind up the § 43. Partner not co-owner of partnership property. partnership business or affairs. § 44. Partner’s economic interest in partnership; personal property. (3) In a dissolution and winding up, a transferee is § 45. Transfer of partner’s economic interest. entitled to an account of partnership transactions only § 46. Partner’s economic interest subject to charging from the date of the latest account agreed to by all of the order. partners.

(4) Upon transfer, the transferor retains the rights and duties of a partner other than the economic interest § 43. Partner not co-owner of partnership property. transferred.

Unless otherwise provided in a certificate of partner- (5) A partnership need not give effect to a transferee’s ship existence and in a partnership agreement, a partner rights under this section until it has notice of the transfer. is not a co-owner of partnership property and has no Upon request of a partnership or a partner, a transferee interest in specific partnership property. [P.L. 2005-28, must furnish reasonable proof of a transfer. § 43.]

(6) A transfer of a partner’s economic interest in the § 44. Partner’s economic interest in partnership; partnership in violation of a restriction on transfer con- personal property. tained in a partnership agreement is ineffective.

A partnership interest is personal property. Only a part- (7) Notwithstanding anything to the contrary under ner’s economic interest may be transferred. [P.L. 2005- applicable law, a partnership agreement may provide that 28, § 44.] a partner’s economic interest may not be transferred prior to the dissolution and winding up of the partnership. § 45. Transfer of partner’s economic interest. (8) A partnership interest in a partnership may be (1) A transfer, in whole or in part, of a partner’s evidenced by a certificate of partnership interest issued economic interest in the partnership: by the partnership. A partnership agreement may provide for the transfer of any partnership interest represented by (a) is permissible; such a certificate and make other provisions with respect to such certificates. (b) does not by itself cause the partner’s dissociation or a dissolution and winding up of the partnership (9) Except to the extent assumed by agreement, until a business or affairs; and transferee of a partnership interest becomes a partner, the transferee shall have no liability as a partner solely as a (c) does not entitle the transferee to participate in result of the transfer. the management or conduct of the partnership business

(10) A partnership may acquire, by purchase, redemp- DIVISION 6: tion or otherwise, any partnership interest or other PARTNER’S DISSOCIATION interest of a partner in the partnership. Any such interest so acquired by the partnership shall be deemed canceled. § 47. Events causing partner’s dissociation. [P.L. 2005-28, § 45.] § 48. Partner’s power to dissociate; wrongful dissociation. § 46. Partner’s economic interest subject to charging § 49. Effect of partner’s dissociation. order. § 47. Events causing partner’s dissociation. (1) On application by a judgment creditor of a partner or of a partner’s transferee, a court having jurisdiction A partner is dissociated from a partnership upon the may charge the economic interest of the judgment debtor occurrence of any of the following events: to satisfy the judgment. The court may appoint a receiver of the share of the distributions due or to become due to (1) the partnership’s having notice of the partner’s the judgment debtor in respect of the partnership which express will to withdraw as a partner on a later date receiver shall have only the rights of a transferee, and the specified by the partner in the notice or, if no later date is court may make all other orders, directions, accounts and specified, then upon receipt of notice; inquiries the judgment debtor might have made or which the circumstances of the case may require. (2) an event agreed to in the partnership agreement as causing the partner’s dissociation; (2) A charging order constitutes a lien on the judgment debtor’s economic interest in the partnership. The court (3) the partner’s expulsion pursuant to the partnership may order a foreclosure of the economic interest subject agreement; to the charging order at any time. The purchaser at the foreclosure sale has only the rights of a transferee. (4) the partner’s expulsion by the unanimous vote of

the other partners if: (3) At any time before foreclosure, an economic interest charged may be redeemed: (a) it is unlawful to carry on the partnership busi- (a) by the judgment debtor; ness or affairs with that partner; or

(b) with property other than partnership property, by (b) there has been a transfer of all or substantially all one (1) or more of the other partners; or of that partner’s economic interest, other than a transfer for security purposes, or a court order charging the (c) by the partnership with the consent of all of the partner’s interest which, in either case, has not been partners whose interests are not so charged. foreclosed;

(4) This Act does not deprive a partner of a right under (5) on application by or for the partnership or another exemption laws with respect to the partner’s economic partner to the High Court, the partner’s expulsion by interest in the partnership. determination by the High Court because:

(5) This section provides the exclusive remedy by (a) the partner engaged in wrongful conduct that which a judgment creditor of a partner or partner’s adversely and materially affected the partnership transferee may satisfy a judgment out of the judgment business or affairs; debtor’s economic interest in the partnership. (b) the partner willfully or persistently committed a

material breach of either the partnership agreement or (6) No creditor of a partner shall have any right to of a duty owed to the partnership or the other partners; obtain possession of, or otherwise exercise legal or or equitable remedies with respect to, the property of the partnership. [P.L. 2005-28, § 46.] (c) the partner engaged in conduct relating to the partnership business or affairs which makes it not reasonably practicable to carry on the business or affairs in partnership with the partner;

(6) the partner’s:

(9) in the case of a partner that is an estate or is acting (a) making an assignment for the benefit of credi- as a partner by virtue of being a personal representative tors; of an estate, distribution of the estate’s entire economic interest, but not merely by reason of the substitution of a (b) filing a voluntary petition in bankruptcy; successor personal representative;

(c) being adjudged as bankrupt or insolvent, or (10) the expiration of ninety (90) days after the having entered against that partner an order for relief in partnership notifies a corporate partner that it will be any bankruptcy or insolvency proceeding; expelled because it has filed a certificate of dissolution or the equivalent, its existence has been terminated or its (d) filing a petition or answer seeking for that certificate of incorporation has been revoked, or its right partner any reorganization, arrangement, composition, to conduct business has been suspended by the readjustment, liquidation, dissolution or similar relief jurisdiction of its incorporation, if there is no revocation under any statute, law or regulation; of the certificate of dissolution or no reinstatement of its existence, its certificate of incorporation or its right to (e) filing an answer or other pleading admitting or conduct business; failing to contest the material allegations of a petition filed against that partner in any proceeding of this (11) a partnership, a limited liability company, a trust nature; or a limited partnership that is a partner has been dissolved and its business is being wound up; or (f) seeking, consenting to or acquiescing in the appointment of a trustee, receiver or liquidator of that (12) termination of a partner who is not an individual, partner or of all or any substantial part of that partner’s partnership, corporation, trust, limited partnership, limited properties; or liability company or estate. [P.L. 2005-28, § 47.]

(g) failing, within 120 days after its commencement, § 48. Partner’s power to dissociate; wrongful to have dismissed any proceeding against that partner dissociation. seeking reorganization, arrangement, composition, read-

justment, liquidation, dissolution or similar relief under (1) A partner has the power to dissociate at any time, any statute, law or regulation, or failing, within ninety rightfully or wrongfully, by express will pursuant to (90) days after the appointment without that partner’s section 47(1) of this division. consent or acquiescence, to have vacated or stayed the appointment of a trustee, receiver or liquidator of that partner or of all or any substantial part of that partner’s (2) A partner’s dissociation is wrongful only if any of properties, or failing, within ninety (90) days after the the following apply: expiration of any such stay, to have the appointment vacated; (a) it is in breach of an express provision of the partnership agreement; or

(7) in the case of a partner who is an individual: (b) in the case of a partnership for a definite term or particular undertaking, before the expiration of the (a) the partner’s death; term or the completion of the undertaking if any of the following apply: (b) the appointment of a guardian or general conservator for the partner; or (i) the partner withdraws by express will, unless the withdrawal follows within ninety (90) days (c) a judicial determination that the partner has after another partner’s dissociation by death or otherwise become incapable of performing the partner’s otherwise under sections 47(6)-(12) of this division duties under the partnership agreement; or wrongful dissociation under this subsection;

(8) in the case of a partner that is a trust or is acting as (ii) the partner is expelled by judicial deter- a partner by virtue of being a trustee of a trust, mination under section 47(5) of this division; distribution of the trust’s entire economic interest, but not merely by reason of the substitution of a successor (iii) the partner is dissociated under section 47(6) trustee; of this division; or

(iv) in the case of a partner who is not an the partnership to be purchased for a buyout price individual, trust (other than a statutory trust), or determined pursuant to subsection (2) of this section. estate, the partner is expelled or otherwise dissociated because it willfully dissolved or terminated. (2) The buyout price of a dissociated partner’s partnership interest is an amount equal to the fair value of (3) A partner who wrongfully dissociates is liable to such partner’s economic interest as of the date of the partnership and to the other partners for damages dissociation based upon such partner’s right to share in caused by the dissociation. Such liability is in addition to distributions from the partnership. Interest must be paid any other obligation of the partner to the partnership or to from the date of dissociation to the date of payment. the other partners. [P.L. 2005-28, § 48.] (3) Damages for wrongful dissociation under section § 49. Effect of partner’s dissociation. 48(2) of this Act, and all other amounts owing, whether or not presently due, from the dissociated partner to the (1) If a partner’s dissociation results in a dissolution partnership, must be offset against the buyout price. and winding up of the partnership business, Division 8 of Interest must be paid from the date the amount owed this Act applies; otherwise, Division 7 of this Act applies. becomes due to the date of payment.

(2) Upon a partner’s dissociation: (4) A partnership shall indemnify a dissociated partner (a) the partner’s right to participate in the manage- whose partnership interest is being purchased against all ment and conduct of the partnership business terminates, partnership obligations, whether incurred before or after except as otherwise provided in section 57 of this Act; the dissociation, except partnership obligations incurred by an act of the dissociated partner under section 51 of (b) the partner’s duty of loyalty under section this division. 38(2)(c) of this Act terminates; and (5) If no agreement for the purchase of a dissociated (3) the partner’s duty of loyalty under section 38(2)(a) partner’s partnership interest is reached within 120 days and (b) of this Act and duty of care under section 38(3) after a written demand for payment, the partnership shall of this Act continue only with regard to matters arising pay, or cause to be paid, in cash to the dissociated partner and events occurring before the partner’s dissociation, the amount the partnership estimates to be the buyout unless the partner participates in winding up the partner- price and accrued interest, reduced by any offsets and ship’s business pursuant to section 57 of this Act. [P.L. accrued interest under subsection (3) of this section. 2005-28, § 49.] (6) If a deferred payment is authorized under subsection (8) of this section, the partnership may tender a DIVISION 7: written offer to pay the amount it estimates to be the PARTNER’S DISSOCIATION WHEN BUSINESS buyout price and accrued interest, reduced by any offsets OR AFFAIRS NOT WOUND UP under subsection (3) of this section, stating the time of payment, the amount and type of security for payment, § 50. Purchase of dissociated partner’s partnership and the other terms and conditions of the obligation. interest. § 51. Dissociated partner’s power to bind and (7) The payment or tender required by subsection (5) liability to partnership. or (6) of this section must be accompanied by the § 52. Dissociated partner’s liability to other persons. following: § 53. Certificate of dissociation. § 54. Continued use of partnership name. (a) a written statement of partnership assets and liabilities as of the date of dissociation;

§ 50. Purchase of dissociated partner’s partnership (b) the latest available partnership balance sheet and interest. income statement, if any;

(1) If a partner is dissociated from a partnership without (c) a written explanation of how the estimated resulting in a dissolution and winding up of the partnership amount of the payment was calculated; and business or affairs under section 55 of this Act, the partnership shall cause the dissociated partner’s interest in

(d) written notice which shall state that the payment the partnership under section 27 of this Act before is in full satisfaction of the obligation to purchase dissociation only if at the time of entering into the unless, within 120 days after the written notice, the transaction the other party: dissociated partner commences an action in the High Court under subsection (9) of this section to determine (a) reasonably believed that the dissociated partner the buyout price of that partner’s partnership interest, was then a partner and reasonably relied on such belief any offsets under subsection (3) of this section or other in entering into the transaction; terms of the obligation to purchase. (b) did not have notice of the partner’s dissociation; (8) A partner who wrongfully dissociates before the and expiration of a definite term or the completion of a particular undertaking is not entitled to payment of any (c) is not deemed to have had knowledge under portion of the buyout price until the expiration of the section 29(3) of this Act or notice under section 53(3) term or completion of the undertaking, unless the partner of this division. establishes to the satisfaction of the High Court that (2) A dissociated partner is liable to the partnership for earlier payment will not cause undue hardship to the any damage caused to the partnership arising from an business of the partnership. A deferred payment must obligation incurred by the dissociated partner after bear interest and, to the extent it would not cause undue dissociation for which the partnership is liable under hardship to the business of the partnership, be adequately subsection (1) of this section. [P.L. 2005-28, § 51.] secured. § 52. Dissociated partner’s liability to other persons. (9) A dissociated partner may maintain an action against the partnership, pursuant to section 39(2)(b)(ii) of (1) A partner’s dissociation does not of itself dis- this Act, to determine the buyout price of that partner’s charge the partner’s liability for a partnership obligation partnership interest, any offsets under subsection (3) of incurred before dissociation. A dissociated partner is not this section, or other terms of the obligation to purchase. liable for a partnership obligation incurred after dissocia- The action must be commenced within 120 days after the tion, except as otherwise provided in subsection (2) of partnership has tendered payment or an offer to pay or this section. within one (1) year after written demand for payment if no payment or offer to pay is tendered. The High Court (2) A partner who dissociates without resulting in a shall determine the buyout price of the dissociated dissolution and winding up of the partnership business is partner’s partnership interest, any offset due under liable as a partner to the other party in a transaction subsection (3) of this section, and accrued interest, and entered into by the partnership, or a surviving partnership enter judgment for any additional payment or refund. If under Division 9 of this Act, within one (1) year after the deferred payment is authorized under subsection (8) of partner’s dissociation, only if the partner is liable for the this section, the High Court shall also determine the obligation under section 32 of this Act and at the time of security, if any, for payment and other terms of the entering into the transaction the other party: obligation to purchase. The High Court may assess reasonable attorney’s fees and the fees and expenses of (a) reasonably believed that the dissociated partner appraisers or other experts for a party to the action, in was then a partner and reasonably relied on such belief amounts the High Court finds equitable, against a party in entering into the transaction; that the High Court finds acted arbitrarily, vexatiously or not in good faith. The finding may be based on the (b) did not have notice of the partner’s dissociation; partnership’s failure to tender payment or an offer to pay and or to comply with subsection (7) of this section. [P.L. 2005-28, § 50.] (c) is not deemed to have had knowledge under section 29(3) of this Act or notice under section 53(3) § 51. Dissociated partner’s power to bind and of this division. liability to partnership. (3) By agreement with the partnership creditor and the (1) For one (1) year after a partner dissociates without partners continuing the business, a dissociated partner resulting in a dissolution and winding up of the part- may be released from liability for a partnership obliga- nership business, the partnership, including a surviving tion. partnership under Division 9 of this Act, is bound by an act of the dissociated partner which would have bound

(4) A dissociated partner is released from liability for a partnership obligation if a partnership creditor, with (1) in a partnership at will, the partnership’s having notice of the partner’s dissociation but without the notice from a partner, other than a partner who is partner’s consent, agrees to a material alteration in the dissociated pursuant to sections 47(2)-(12) of this Act, of nature or time of payment of a partnership obligation. that partner’s express will to withdraw as a partner, on a [P.L. 2005-28, § 52.] later date specified by the partner in the notice or, if no later date is specified, then upon receipt of notice; § 53. Certificate of dissociation. (2) in a partnership for a definite term or particular (1) A dissociated partner or, after the filing by the undertaking: partnership of a certificate of partnership existence, the partnership may file a certificate of dissociation stating (a) within ninety (90) days after a partner’s the name of the partnership and that the partner is dissociation by death or otherwise under sections dissociated from the partnership. 47(6)-(12) of this act or wrongful dissociation under (2) A certificate of dissociation is a limitation on the section 48(2) of this Act, at least half of the remaining authority of a dissociated partner for the purposes of partners express the will to wind up the partnership sections 29(2) and (3) of this Act. business, for which purpose a partner’s rightful dissociation pursuant to section 48(2)(b)(i) of this Act (3) For the purposes of sections 51(1)(c) and 52(2)(c) constitutes the expression of that partner’s will to wind of this division, a person not a partner is deemed to have up the partnership business; notice of the dissociation sixty (60) days after the certificate of dissociation is filed. [P.L. 2005-28, § 53.] (b) the express will of all of the partners to wind up the partnership business or affairs; or § 54. Continued use of partnership name. (c) the expiration of the term or the completion of Continued use of a partnership name, or a dissociated the undertaking; partner’s name as part thereof, by partners continuing the business does not of itself make the dissociated partner (3) an event agreed to in the partnership agreement liable for an obligation of the partners or the partnership. resulting in the winding up of the partnership business or [P.L. 2005-28, § 54.] affairs;

DIVISION 8: (4) an event that makes it unlawful for all or substan- WINDING UP PARTNERSHIP BUSINESS OR tially all of the business or affairs of the partnership to be AFFAIRS continued, but a cure of such illegality within ninety (90) days after the partnership has notice of the event is § 55. Events causing dissolution and winding up of effective retroactively to the date of the event for partnership business or affairs. purposes of this section; § 56. Partnership continues after dissolution. § 57. Right to wind up partnership business or (5) on application by or for a partner to the High affairs. Court, the entry of a decree of dissolution of a partner- § 58. Partner’s power to bind partnership after ship by the High Court upon a determination by the High dissolution. Court that it is not reasonably practicable to carry on the § 59. Certificate of dissolution. partnership business, purpose or activity in conformity § 60. Partner’s liability to other partners after with the partnership agreement; or dissolution. § 61. Settlement of accounts and contributions (6) on application by a transferee of a partner’s among partners. economic interest to the High Court, a determination by the High Court that it is equitable to wind up the § 55. Events causing dissolution and winding up of partnership business or affairs: partnership business or affairs. (a) after the expiration of the term or completion of A partnership is dissolved, and its business must be the undertaking, if the partnership was for a definite term or particular undertaking at the time of the wound up, only upon the occurrence of any of the following events: transfer or entry of the charging order that gave rise to the transfer; or

remaining assets of the partnership, and perform other (b) at any time, if the partnership was a partnership at acts which are necessary or convenient to the winding up will at the time of the transfer or entry of the charging of the partnership’s business or affairs. [P.L. 2005-28, order that gave rise to the transfer. [P.L. 2005-28, § 57.] § 55.] § 58. Partner’s power to bind partnership after § 56. Partnership continues after dissolution. dissolution.

(1) Subject to subsection (2) of this section, a Subject to section 59 of this division, a partnership is partnership continues after dissolution only for the bound by a partner’s act after dissolution that: purpose of winding up its business or affairs. The partnership is terminated when the winding up of its (1) is appropriate for winding up the partnership business or affairs is completed. business or affairs; or

(2) At any time after the dissolution of a partnership (2) would have bound the partnership under section 27 and before the winding up of its business or affairs is of this Act before dissolution, if the other party to the completed, all of the partners, including any dissociating transaction did not have notice of the dissolution. [P.L. partner other than a wrongfully dissociating partner, may 2005-28, § 58.] waive the right to have the partnership’s business or affairs wound up and the partnership terminated. In that § 59. Certificate of dissolution. event: (1) After dissolution, a partnership may file a certi- (a) the partnership resumes carrying on its business ficate of dissolution stating the name of the partnership or affairs as if dissolution had never occurred, and any and that the partnership has dissolved and is winding up liability incurred by the partnership or a partner after its business or affairs. the dissolution and before the waiver is determined as if dissolution had never occurred; and (2) A certificate of dissolution cancels a filed certificate of partnership existence for the purposes of section (b) the rights of a third party accruing under section 29(2) of this Act and is a limitation on authority for the 58(1) of this division or arising out of conduct in purposes of section 29(3) of this Act. reliance on the dissolution before the third party knew (3) For the purposes of sections 27 and 58 of this Act, or received a notification of the waiver may not be a person not a partner is deemed to have notice of the adversely affected. [P.L. 2005-28, § 56.] dissolution and the limitation on the partners’ authority as a result of a certificate of dissolution sixty (60) days § 57. Right to wind up partnership business or after it is filed. affairs. (4) After filing a certificate of dissolution, a dissolved (1) A partner at the time of dissolution, including a partnership may file a certificate of partnership existence partner who has dissociated but not wrongfully, may which will operate with respect to a person not a partner participate in winding up the partnership’s business or as provided in sections 29(2) and (3) of this Act in any affairs, but on application of any partner or a partner’s transaction, whether or not the transaction is appropriate legal representative or transferee, the High Court for for winding up the partnership business or affairs. good cause shown, may order judicial supervision of the winding up. (5) If a partnership which has dissolved fails or refuses to file a certificate of dissolution, any partner or (2) The legal representative of the last surviving dissociated partner who is or may be adversely affected partner may wind up a partnership’s business or affairs. by the failure or refusal may petition the High Court to direct the filing. If the Court finds that the certificate of (3) The persons winding up the partnership’s business dissolution should be filed and that the partnership has or affairs may, in the name of, and for and on behalf of, failed or refused to do so, it shall enter an order granting the partnership, prosecute and defend suits, whether civil, appropriate relief. [P.L. 2005-28, § 59.] criminal or administrative, gradually settle and close the partnership’s business or affairs, dispose of and convey the partnership’s property, discharge or make reasonable provision for the partnership’s liabilities, distribute to the partners pursuant to section 61 of this division any

§ 60. Partner’s liability to other partners after amount necessary to pay or make reasonable provision to dissolution. pay the partnership obligations for which they are personally liable under section 32 of this Act. (1) Except as otherwise provided in subsection (2) of this section and section 32 of this Act, after dissolution, a (5) A partner or partner’s legal representative may partner is liable to the other partners for the partner’s recover from the other partners any contributions the share of any partnership obligation incurred under section partner makes to the extent the amount contributed 58 of this division. exceeds that partner’s share of the partnership obligations for which the partner is personally liable under section 32 (2) A partner who, with knowledge of the dissolution, of this Act. causes the partnership to incur an obligation under section 58(2) of this division by an act that is not (6) The estate of a deceased partner is liable for the appropriate for winding up the partnership business or partner’s obligation to contribute to the partnership. affairs is liable to the partnership for any damage caused to the partnership arising from the obligation. [P.L. (7) An assignee for the benefit of creditors of a 2005-28, § 60.] partnership or a partner, or a person appointed by a court to represent creditors of a partnership or a partner, may § 61. Settlement of accounts and contributions enforce a partner’s obligation to contribute to the among partners. partnership. [P.L. 2005-28, § 61.]

(1) In winding up a partnership’s business or affairs, DIVISION 9: the assets of the partnership, including the contributions CONVERSION; MERGER; DOMESTICATION; of the partners required by this section, must be applied AND TRANSFER to pay or make reasonable provision to pay the partnership’s obligations to creditors, including, to the § 62. Conversion of certain entities to a domestic extent permitted by law, partners who are creditors. Any partnership. surplus must be applied to pay in cash the net amount § 63. Merger or consolidation. distributable to partners in accordance with their right to § 64. Approval of conversion of a domestic distributions under subsection (2) of this section. partnership. § 65. Domestication of non-Marshall Islands entities. (2) Each partner is entitled to a settlement of all § 66. Transfer of domestic partnerships. partnership accounts upon winding up the partnership business or affairs. In settling accounts among the partners, profits and losses that result from the liquidation § 62. Conversion of certain entities to a domestic of the partnership assets must be credited and charged to partnership. the partners’ accounts. The partnership shall make a distribution to a partner in an amount equal to any excess (1) As used in this section, the term “other entity” of the credits over the charges in the partner’s account. A means a domestic corporation or any other unincor- partner shall contribute to the partnership an amount porated business, including a limited partnership, or a equal to any excess of the charges over the credits in the limited liability company. partner’s account but excluding from the calculation charges attributable to an obligation for which the partner (2) Any other entity may convert to a domestic is not personally liable under section 32 of this Act. partnership by complying with subsection (8) of this section and filing with the Registrar of Corporations in (3) After the settlement of accounts, each partner shall accordance with section 5 of this Act: contribute, in the proportion in which the partner shares partnership losses, the amount necessary to pay or make (a) a certificate of conversion to partnership that has reasonable provision to pay partnership obligations that been executed in accordance with section 5 of this Act; were not known at the time of the settlement and for and which the partner is personally liable under section 32 of this Act. (b) a certificate of partnership existence that complies with section 29 of this Act and has been executed (4) If a partner fails to contribute, all of the other in accordance with section 5 of this Act. partners shall contribute, in the proportions in which those partners share partnership losses, the additional

(3) The certificate of conversion to partnership shall liabilities and duties had originally been incurred or state: contracted by it in its capacity as a domestic partnership.

(a) the date on which and jurisdiction where the (7) Unless otherwise agreed, the converting other other entity was first created, formed or otherwise entity shall not be required to wind up its affairs or pay came into being; its liabilities and distribute its assets, and the conversion shall not be deemed to constitute a dissolution of such (b) the name of the other entity immediately prior to other entity and shall constitute a continuation of the the filing of the certificate of conversion to partnership; existence of the converting other entity in the form of a domestic partnership. When another entity has been (c) the name of the partnership as set forth in its converted to a domestic partnership pursuant to this certificate of partnership existence filed in accordance section, the domestic partnership shall, for all purposes of with subsection (2) of this section; and the laws of the Marshall Islands, be deemed to be the same entity as the converting other entity. (d) the future effective date (which shall be a date (8) Prior to filing a certificate of conversion to certain) of the conversion to a partnership if it is not to partnership with the Registrar of Corporations, the be effective upon the filing of the certificate of conversion shall be approved in the manner provided for conversion to partnership and the certificate of by the document, instrument, agreement or other writing, partnership existence. as the case may be, governing the internal affairs of the other entity and the conduct of its business or by (4) Upon the filing with the Registrar of Corporations applicable law, as appropriate, and a partnership of the certificate of conversion to partnership and the agreement shall be approved by the same authorization certificate of partnership existence or upon the future required to approve the conversion; provided, that in any effective date of the certificate of conversion to event, such approval shall include the approval of any partnership and the certificate of partnership existence, person who, at the effective date of the conversion, shall the other entity shall be converted into a partnership and be a partner of the partnership. the partnership shall thereafter be subject to all of the provisions of this Act, except that the existence of the (9) In connection with a conversion hereunder, rights partnership shall be deemed to have commenced on the or securities of, or interests in, the other entity which is to date the other entity commenced its existence. be converted to a domestic partnership may be exchanged for or converted into cash, property, rights or (5) The conversion of any other entity into a securities of or interests in such domestic partnership or, partnership shall not be deemed to affect any obligations in addition to or in lieu thereof, may be exchanged for or or liabilities of the other entity incurred prior to its converted into cash, property, rights or securities of or conversion to a partnership, or the personal liability of interests in another domestic partnership or other entity. any person incurred prior to such conversion. (10) In connection with the conversion of any other (6) When any conversion shall have become effective entity to a domestic partnership, a person is admitted as a under this section, for all purposes of the laws of the partner of the domestic partnership at the time provided Marshall Islands, all of the rights, privileges and powers in and upon compliance with the partnership agreement. of the other entity that has converted, and all property, For the purpose of section 32(2) of this Act, a person real, personal and mixed, and all debts due to such other who, at the effective date of the conversion of any other entity, as well as all other things and causes of action entity to a domestic partnership, is a partner of the belonging to such other entity, shall remain vested in the partnership, shall be deemed admitted as a partner of the domestic partnership to which such other entity has partnership at the effective date of such conversion. converted and shall be the property of such domestic [P.L. 2005-28, § 62.] partnership, and the title to any real property vested by deed or otherwise in such other entity shall not revert or § 63. Merger or consolidation. be in any way impaired by reason of this Act; but all rights of creditors and all liens upon any property of such (1) As used in this section, “other business entity” other entity shall be preserved unimpaired, and all debts, means a corporation, association, or an unincorporated liabilities and duties of the other entity that has converted business, including a limited liability company, a limited shall remain attached to the domestic partnership to partnership and a foreign partnership, but excluding a which such other entity has converted, and may be domestic partnership. enforced against it to the same extent as if said debts,

(2) Pursuant to an agreement of merger or conso- effective upon the filing of the certificate of merger or lidation, one (1) or more domestic partnerships may consolidation; merge or consolidate with or into one (1) or more domestic partnerships or one (1) or more other business (e) that the agreement of merger or consolidation is entities formed or organized under the laws of the on file at a place of business of the surviving or Marshall Islands or any foreign country or other foreign resulting domestic partnership or other business entity, jurisdiction, or any combination thereof, with such and shall state the address thereof; domestic partnership or other business entity as the agreement shall provide being the surviving or resulting (f) that a copy of the agreement of merger or domestic partnership or other business entity. Unless consolidation will be furnished by the surviving or otherwise provided in the partnership agreement, a resulting domestic partnership or other business entity, merger or consolidation shall be approved by each on request and without cost, to any partner of any domestic partnership which is to merge or consolidate by domestic partnership or any person holding an interest all of its partners. In connection with a merger or in any other business entity which is to merge or consolidation hereunder, rights or securities of, or consolidate; and interests in, a domestic partnership or other business entity which is a constituent party to the merger or (g) if the surviving or resulting entity is not formed, consolidation may be exchanged for or converted into organized or created under the laws of the Marshall cash, property, rights or securities of, or interests in, the Islands, a statement that such surviving or resulting surviving or resulting domestic partnership or other entity agrees that it may be served with process in the business entity or, in addition to or in lieu thereof, may Marshall Islands in any action, suit or proceeding for be exchanged for or converted into cash, property, rights the enforcement of any obligation of any domestic or securities of, or interests in a domestic partnership or partnership which is to merge or consolidate, other business entity which is not the surviving or irrevocably appointing the Attorney General as its resulting domestic partnership or other business entity in agent to accept service of process in any such action, the merger or consolidation. Notwithstanding prior suit or proceeding and specifying the address to which approval, an agreement of merger or consolidation may a copy of such process shall be mailed to it by the be terminated or amended pursuant to a provision for Attorney General. In the event of service hereunder such termination or amendment contained in the upon the Attorney General, the procedures set forth in agreement of merger or consolidation. section 11 of this Act shall be applicable, except that the plaintiff in any such action, suit or proceeding shall (3) If a domestic partnership is merging or consolida- furnish the Attorney General with the address specified ting under this section, the domestic partnership or other in the certificate of merger or consolidation provided business entity surviving or resulting in or from the merger for in this section and any other address which the or consolidation shall file a certificate of merger or plaintiff may elect to furnish, together with copies of consolidation executed by at least one (1) partner on behalf each process as required by the Attorney General, and of the domestic partnership when it is the surviving or the Attorney General shall notify such surviving or resulting entity with the Registrar of Corporations. The resulting entity at all such addresses furnished by the certificate of merger or consolidation shall state: plaintiff in accordance with the procedures set forth in section 11 of this Act. (a) the name and jurisdiction of formation or organization of each of the domestic partnerships and (4) Unless a future effective date is provided in a other business entities which is to merge or certificate of merger or consolidation, in which event a consolidate; merger or consolidation shall be effective at any such future effective date, a merger or consolidation shall be (b) that an agreement of merger or consolidation has effective upon the filing with the Registrar of Cor- been approved and executed by each of the domestic porations of a certificate of merger or consolidation. partnerships and other business entities which is to merge or consolidate; (5) A certificate of merger or consolidation shall act as a certificate of cancellation of the certificate of partner- (c) the name of the surviving or resulting domestic ship existence for a domestic partnership which is not the partnership or other business entity; surviving or resulting entity in the merger or consolidation. Whenever this section requires the filing of a (d) the future effective date (which shall be a date certificate of merger or consolidation, such requirement certain) of the merger or consolidation if it is not to be shall be deemed satisfied by the filing of an agreement of

merger or consolidation containing the information nership, including a domestic partnership which is not the required by this section to be set forth in the certificate of surviving or resulting entity in the merger or consoli- merger or consolidation. dation, shall not require such domestic partnership to wind up its affairs or pay its liabilities and distribute its (6) An agreement of merger or consolidation approved assets under Division 8 of this Act. in accordance with subsection (2) of this section may (a) effect any amendment to the partnership agreement or (b) (8) Except as provided by agreement with a person to effect the adoption of a new partnership agreement for a whom a partner of a domestic partnership is obligated, a domestic partnership if it is the surviving or resulting merger or consolidation of a domestic partnership that partnership in the merger or consolidation. Any amend- has become effective shall not affect any obligation or ment to a partnership agreement or adoption of a new liability existing at the time of such merger or partnership agreement made pursuant to the foregoing consolidation of a partner of a domestic partnership sentence shall be effective at the effective date of the which is merging or consolidating. merger or consolidation. The provisions of this subsec- (9) If a domestic partnership is a constituent party to a tion shall not be construed to limit the accomplishment of merger or consolidation that shall have become effective, a merger or of any of the matters referred to herein by but the domestic partnership is not the surviving or any other means provided for in a partnership agreement resulting entity of the merger or consolidation, then a or other agreement or as otherwise permitted by law, judgment creditor of a partner of such domestic partner- including that the partnership agreement of any consti- ship may not levy execution against the assets of the tuent domestic partnership to the merger or consolidation partner to satisfy a judgment based on a claim against the (including a domestic partnership formed for the purpose surviving entity of the merger or consolidation unless: of consummating a merger or consolidation) shall be the partnership agreement of the surviving or resulting (a) the claim is for an obligation of the domestic domestic partnership. partnership for which the partner is liable as provided in section 32 of this Act and either: (7) When any merger or consolidation shall have become effective under this section, for all purposes of (i) a judgment based on the same claim has the laws of the Marshall Islands, all of the rights, been obtained against the surviving or resulting privileges and powers of each of the domestic partner- entity of the merger or consolidation and a writ of ships and other business entities that have merged or execution on the judgment has been returned unsatis- consolidated, and all property, real, personal and mixed, fied in whole or in part; and all debts due to any of said domestic partnerships and other business entities, as well as all other things and (ii) the surviving or resulting entity of the causes of action belonging to each of such domestic merger or consolidation is a debtor in bankruptcy; partnerships and other business entities, shall be vested in the surviving or resulting domestic partnership or other (iii) the partner has agreed that the creditor need business entity, and shall thereafter be the property of the not exhaust the assets of the domestic partnership surviving or resulting domestic partnership or other that was not the surviving or resulting entity of the business entity as they were of each of the domestic merger or consolidation; partnerships and other business entities that have merged or consolidated, and the title to any real property vested (iv) the partner has agreed that the creditor need by deed or otherwise, under the laws of the Marshall not exhaust the assets of the surviving or resulting Islands, in any of such domestic partnerships and other entity of the merger or consolidation; or business entities, shall not revert or be in any way impaired by reason of this Act; but all rights of creditors (v) a court grants permission to the judgment and all liens upon any property of any of said domestic creditor to levy execution against the assets of the partnerships and other business entities shall be preserved partner based on a finding that the assets of the unimpaired, and all debts, liabilities and duties of each of surviving or resulting entity of the merger or consoli- the said domestic partnerships and other business entities dation that are subject to execution are clearly that have merged or consolidated shall thenceforth attach insufficient to satisfy the judgment, that exhaustion to the surviving or resulting domestic partnership or other of the assets of the surviving or resulting entity of the business entity, and may be enforced against it to the merger or consolidation is excessively burdensome, same extent as if said debts, liabilities and duties had or that the grant of permission is an appropriate been incurred or contracted by it. Unless otherwise exercise of the court’s equitable powers; or agreed, a merger or consolidation of a domestic part-

(b) liability is imposed on the partner by law or § 65. Domestication of non-Marshall Islands entities. contract independent of the existence of the surviving or resulting entity of the merger or consolidation. (1) As used in this section, “non-Marshall Islands entity” means a foreign limited partnership, or a (10) Unless otherwise provided in an agreement of corporation, association, or any other unincorporated merger or consolidation, a person acquiring an economic business, including a general partnership or a limited interest in a surviving or resulting domestic partnership liability company, formed, incorporated, created or that pursuant to a merger or consolidation approved in otherwise came into being under the laws of any foreign accordance with subsection (2) of this section is admitted country or other foreign jurisdiction. as a partner of the surviving or resulting domestic partnership at the time provided in and upon compliance (2) Any non-Marshall Islands entity may become with the partnership agreement of the surviving or domesticated as a partnership in the Marshall Islands by resulting domestic partnership. [P.L. 2005-28, § 63.] complying with subsection (7) of this section and filing with the Registrar of Corporations: § 64. Approval of conversion of a domestic partnership. (a) a certificate of partnership domestication that has been executed in accordance with section 5 of this (1) Upon compliance with this section, a partnership Act; and may convert to a domestic corporation or any other unincorporated business, including a limited partnership, (b) a certificate of partnership existence that or a limited liability company of the Marshall Islands. complies with section 29 of this Act and has been executed in accordance with section 5 of this Act. (2) If the partnership agreement specifies the manner of authorizing a conversion of the partnership, the (3) The certificate of partnership domestication shall conversion shall be authorized as specified in the state: partnership agreement. If the partnership agreement does not specify the manner of authorizing a conversion of the (a) the date on which and jurisdiction where the partnership and does not prohibit a conversion of the non-Marshall Islands entity was first formed, incor- partnership, the conversion shall be authorized in the porated, created or otherwise came into being; same manner as is specified in the partnership agreement for authorizing a merger or consolidation that involves (b) the name of the non-Marshall Islands entity the partnership as a constituent party to the merger or immediately prior to the filing of the certificate of consolidation. If the partnership agreement does not partnership domestication; specify the manner of authorizing a conversion of the partnership or a merger or consolidation that involves the (c) the name of the partnership as set forth in the partnership as a constituent party and does not prohibit a certificate of partnership existence filed in accordance conversion of the partnership, the conversion shall be with subsection (2) of this section; authorized by the approval by all the partners. (d) the future effective date (which shall be a date (3) Unless otherwise agreed, the conversion of a certain) of the domestication as a partnership if it is not domestic partnership to another business form pursuant to be effective upon the filing of the certificate of to this section shall not require such partnership to wind partnership domestication and the certificate of part- up its affairs or pay its liabilities and distribute its assets nership existence; under Division 8 of this Act. (e) the jurisdiction that constituted the seat, siege (4) In connection with a conversion of a domestic social, or principal place of business or central partnership to another business form pursuant to this administration of the non-Marshall Islands entity, or section, rights or securities of or interests in the domestic any other equivalent thereto under applicable law, partnership which is to be converted may be exchanged immediately prior to the filing of the certificate of for or converted into cash, property, rights or securities of partnership domestication; or interests in the business form into which the domestic (f) that the transfer of the domicile has been partnership is being converted or, in addition to or in lieu approved by all necessary action; thereof, may be exchanged for or converted into cash, property, rights or securities of or interests in another (g) that the transfer of domicile is not expressly business form. [P.L. 2005-28, § 64.] prohibited under the laws of the foreign domicile;

(h) that the transfer of domicile is made in good the non-Marshall Islands entity that has been domesticated, faith and will not serve to hinder, delay or defraud and all property, real, personal and mixed, and all debts due existing partners, creditors, claimants or other parties to such non-Marshall Islands entity, as well as all other in interest; and things and causes of action belonging to such non-Marshall Islands entity, shall remain vested in the domestic (i) the name and address of the partnership’s partnership to which such non-Marshall Islands entity has registered agent in the Marshall Islands. been domesticated and shall be the property of such domestic partnership, and the title to any real property (4) Upon the filing with the Registrar of Corporations vested by deed or otherwise in such non-Marshall Islands of the certificate of partnership domestication and the entity shall not revert or be in any way impaired by reason certificate of partnership existence or upon the future of this Act; but all rights of creditors and all liens upon any effective date of the certificate of partnership domesti- property of such non-Marshall Islands entity shall be cation and the certificate of partnership existence, the preserved unimpaired, and all debts, liabilities and duties of non-Marshall Islands entity shall be domesticated as a the non-Marshall Islands entity that has been domesticated partnership in the Marshall Islands and the partnership shall remain attached to the domestic partnership to which shall thereafter be subject to all of the provisions of this such non-Marshall Islands entity has been domesticated, Act, provided that the existence of the partnership shall and may be enforced against it to the same extent as if said be deemed to have commenced on the date the non- debts, liabilities and duties had originally been incurred or Marshall Islands entity commenced its existence in the contracted by it in its capacity as a domestic partnership. jurisdiction in which the non-Marshall Islands entity was The rights, privileges, powers and interests in property of first formed, incorporated, created or otherwise came into the non-Marshall Islands entity, as well as the debts, being. liabilities and duties of the non-Marshall Islands entity, shall not be deemed, as a consequence of the domestication, to (5) The domestication of any non-Marshall Islands have been transferred to the domestic partnership to which entity as a partnership in the Registrar of Corporations such non-Marshall Islands entity has domesticated for any shall not be deemed to affect any obligations or liabilities purpose of the laws of the Marshall Islands. of the non-Marshall Islands entity incurred prior to its domestication as a partnership in the Marshall Islands, or (9) When a non-Marshall Islands entity has become the personal liability of any person therefore. domesticated as a domestic partnership pursuant to this section, the domestic partnership shall, for all purposes of (6) The filing of a certificate of partnership domestica- the laws of the Marshall Islands, be deemed to be the tion shall not affect the choice of law applicable to the non- same entity as the domesticating non-Marshall Islands Marshall Islands entity, except that from the effective date entity. Unless otherwise agreed, or as required under of the domestication, the laws of the Marshall Islands, applicable non-Marshall Islands law, the domesticating including the provisions of this Act, shall apply to the non- non-Marshall Islands entity shall not be required to wind Marshall Islands entity to the same extent as if the non- up its affairs or pay its liabilities and distribute its assets, Marshall Islands entity had been formed as a partnership on and the domestication shall not be deemed to constitute a that date. dissolution of such non-Marshall Islands entity and shall constitute a continuation of the existence of the domesti- (7) Prior to filing a certificate of partnership domestica- cating non-Marshall Islands entity in the form of a tion with the Registrar of Corporations, the domestication domestic partnership. shall be approved in the manner provided for by the document, instrument, agreement or other writing, as the (10) In connection with a domestication hereunder, case may be, governing the internal affairs of the non- rights or securities of, or interests in, the non-Marshall Marshall Islands entity and the conduct of its business or Islands entity that is to be domesticated as a domestic by applicable non-Marshall Islands law, as appropriate, partnership may be exchanged for or converted into cash, and a partnership agreement shall be approved by the same property, rights or securities of, or interests in, such authorization required to approve the domestication; domestic partnership or, in addition to or in lieu thereof, provided that, in any event, such approval shall include the may be exchanged for or converted into cash, property, approval of any person who, at the effective date of the rights or securities of, or interests in, another domestic domestication, shall be a partner of the partnership. partnership or other entity.

(8) When any domestication shall have become effective (11) In connection with the domestication of a non- under this section, for all purposes of the laws of the Marshall Islands entity as a partnership in the Marshall Marshall Islands, all of the rights, privileges and powers of Islands, a person is admitted as a partner of the domestic

partnership at the time provided in and upon compliance General as its agent to accept service of process in any with the partnership agreement. For the purpose of sec- such action, suit or proceeding; and tion 32(2) of this Act, a person who, at the effective date of the domestication of any non-Marshall Islands entity (g) the address to which a copy of the process shall as a domestic partnership, is a partner of the partnership, be mailed to it by the Attorney General. In the event of shall be deemed admitted as a partner of the partnership service hereunder upon the Attorney General, the at the effective date of such domestication. [P.L. 2005- procedures set forth in section 11 of this Act shall be 28, § 65.] applicable, except that the plaintiff in any such action, suit or proceeding shall furnish the Attorney General § 66. Transfer of domestic partnerships. with the address specified in this subsection and any other address that the plaintiff may elect to furnish, (1) Upon compliance with the provisions of this together with copies of such process as required by the section, any domestic partnership may transfer to or Attorney General, and the Attorney General shall domesticate in any jurisdiction that permits the transfer notify the partnership that has transferred or domes- or domestication in such jurisdiction of a partnership. ticated out of the Marshall Islands at all such addresses furnished by the plaintiff in accordance with the (2) Unless otherwise provided in a partnership procedures set forth in section 11 of this Act. agreement, the transfer or domestication described in subsection (1) of this section shall be approved in writing (3) Upon the filing with the Registrar of Corporations by all of the partners. If all of the partners of the of the certificate of transfer or upon the future effective partnership or such other vote as may be stated in a date of the certificate of transfer and payment to the partnership agreement shall approve the transfer or Registrar of Corporations of all fees prescribed in this domestication described in subsection (1) of this section, Act, the Registrar of Corporations shall certify that the a certificate of transfer shall be filed with the Registrar of partnership has filed all documents and paid all fees Corporations in accordance with section 5 of this Act. required by this Act, and thereupon the partnership shall The certificate of transfer shall state: cease to exist as a partnership of the Marshall Islands. Such certificate of Registrar of Corporations shall be (a) the name of the partnership and, if it has been prima facie evidence of the transfer or domestication by changed, the name under which its certificate of such partnership out of the Marshall Islands. partnership existence was originally filed; (4) The transfer or domestication of a partnership out (b) the date of the filing of its original certificate of of the Marshall Islands in accordance with this section partnership existence with the Registrar of Corporations; and the resulting cessation of its existence as a partner- (c) the jurisdiction to which the partnership shall be ship of the Marshall Islands pursuant to a certificate of transferred or in which it shall be domesticated; transfer shall not be deemed to affect any obligations or liabilities of the partnership incurred prior to such (d) the future effective date (which shall be a date transfer or domestication or the personal liability of any certain) of the transfer or domestication to the juris- person incurred prior to such transfer or domestication, diction specified in subsection (2)(c) of this section if it nor shall it be deemed to affect the choice of law is not to be effective upon the filing of the certificate of applicable to the partnership with respect to matters transfer; arising prior to such transfer or domestication. Unless otherwise agreed, the transfer or domestication of a (e) that the transfer or domestication of the partnership out of the Marshall Islands in accordance partnership has been approved in accordance with the with this section shall not require such partnership to provisions of this section; wind up its affairs or pay its liabilities and distribute its assets under Division 8 of this Act. (f) in the case of a certificate of transfer, (i) that the existence of the partnership as a partnership of the (5) In connection with a transfer or domestication of a Marshall Islands shall cease when the certificate of domestic partnership to or in another jurisdiction pur- transfer becomes effective and (ii) the agreement of the suant to subsection (1) of this section, rights or securities partnership that it may be served with process in the of, or interests in, such partnership may be exchanged for Marshall Islands in any action, suit or proceeding for or converted into cash, property, rights or securities of, or enforcement of any obligation of the partnership interests in, the business form in which the partnership arising while it was a partnership of the Marshall will exist in such other jurisdiction as a consequence of Islands, and that it irrevocably appoints the Attorney the transfer or domestication or, in addition to or in lieu

thereof, may be exchanged for or converted into cash, § 70. Fees. property, rights or securities of, or interests in, another business form. [P.L. 2005-28, § 66.] (1) No document required to be filed under this Act shall be effective until the applicable fee required by the DIVISION 10: Registrar of Corporations is paid. An annual fee must be MISCELLANEOUS paid to the Registrar of Corporations for the continued existence of the partnership. § 67. Uniformity of application and construction. § 68. Short title. (2) The annual fee shall be due and payable on the § 69. Severability clause. anniversary date of the filing of a certificate of partner- § 70. Fees. ship existence. The Registrar of Corporations shall § 71. Cancellation of certificate of partnership receive the annual fee. [P.L. 2005-28, § 70.] existence for failure to pay annual fee. § 72. Reinstatement of partnership. § 71. Cancellation of certificate of partnership § 73. Exemptions for non-resident entities. existence for failure to pay annual fee. § 74. Repeals. § 75. Applicability. The certificate of partnership existence of a partnership § 76. Effective Date. shall be deemed to be canceled if the partnership shall fail to pay the annual fee due under section 70 of this division for a period of one (1) year from the date it is § 67. Uniformity of application and construction. due, such cancellation to be effective on the first

(1) This Act shall be applied and construed to effect- anniversary of such due date. [P.L. 2005-28, § 71.] tuate its general purpose to make uniform the law with respect to the subject of this Act. The rule that statutes in § 72. Reinstatement of partnership. derogation of the common law are to be strictly construed shall have no application to this Act. (1) A partnership whose certificate of partnership existence has been canceled pursuant to sections 10(3) or (2) This Act shall be applied and construed to make 71 of this Act may be reinstated by filing with the the laws of the Marshall Islands, with respect to the Registrar of Corporations a certificate of reinstatement subject matter hereof, uniform with the laws of the State accompanied by payment of the annual fee due under of Delaware of the United States of America. Insofar as section 70 of this division and all penalties thereon for it does not conflict with any other provision of this Act, each year for which such partnership neglected, refused or the decisions of the High and Supreme Courts of the or failed to pay such annual fee, including each year Republic of the Marshall Islands which takes precedence, between the cancellation of its certificate of partnership the non-statutory law of the State of Delaware is hereby existence and its revival. The certificate of reinstatement adopted as the law of the Marshall Islands. This subsec- shall set forth: tion shall not apply to resident domestic partnerships. [P.L. 2005-28, § 67.] (a) the name of the partnership at the time its certificate of partnership existence was canceled and, if § 68. Short title. such name is not available at the time of reinstatement, the name under which the partnership is to be This Act may be cited as the “Marshall Islands Revised reinstated; Partnership Act.” [P.L. 2005-28, § 68.] (b) the date of filing of the original certificate of § 69. Severability clause. partnership existence of the partnership;

If any provision of this Act or its application to any (c) the name and address of the partnership’s person or circumstance is held invalid, the invalidity does registered agent in the Marshall Islands; not affect other provisions or applications of this Act which can be given effect without the invalid provision (d) a statement that the certificate of reinstatement is or application, and to this end the provisions of this Act filed by one (1) or more partners of the partnership are severable. [P.L. 2005-28, § 69.] authorized to execute and file the certificate of reinstatement to reinstate the partnership;

(e) that the reinstatement will not cause injury to § 73. Exemptions for non-resident entities. any person including without limitations the partners, former partners, or creditors of the partnership; (1) Notwithstanding any provision of the Income Tax Act of 1989 (11 MIRC, Chapter 1A), or any other law or (f) the petitioners agree to hold harmless the regulation imposing taxes or fees now in effect or Registrar of Corporations for any costs, fees or hereinafter enacted, a non-resident partnership, and expenses for any claims or liabilities arising from the (solely for the purposes of this section) the Administrator reinstatement of the partnership; and and Trust Company duly appointed by the Cabinet to act in the capacity of the Registrar of Corporations for non- (g) any other matters the partner or partners resident entities pursuant to this Act and as the Maritime executing the certificate of reinstatement determine to Administrator created pursuant to the Marshall Islands include therein. Maritime Act 1990 (34 MIRC, Chapter 3A), shall be exempt from any corporate tax, net income tax on (2) The certificate of reinstatement shall be deemed to unincorporated businesses, corporate profit tax, income be an amendment to the certificate of partnership tax, withholding tax on revenues of the entity, asset tax, existence of the partnership, and the partnership shall not tax reporting requirements on revenues of the entity, be required to take any further action to amend its stamp duty, exchange controls or other fees or taxes other certificate of partnership existence under section 5 of this than those imposed by section 70 of this division. Act with respect to the matters set forth in the certificate of reinstatement. (2) Interest, dividends, royalties, rents, payments (including payments to creditors), compensation or other (3) Upon the filing of a certificate of reinstatement, a distributions of income paid by a non-resident partner- partnership shall be reinstated with the same force and ship to another non-resident partnership or to individuals effect as if its certificate of partnership existence had not or entities which are not citizens or residents of the been canceled pursuant to sections 10(3) or 71 of this Marshall Islands are exempt from any tax or withholding Act. Such reinstatement shall validate all contracts, acts, provisions of the laws of the Marshall Islands. [P.L. matters and things made, done and performed by the 2005-28, § 73.] partnership, its partners, employees and agents during the time when its certificate of partnership existence was § 74. Repeals. canceled pursuant to sections 10(3) or 71 of this Act, with the same force and effect and to all intents and As of the effective date of the Marshall Islands Revised purposes as if the certificate of partnership existence had Partnership Act, the Partnership Act, P.L. 1990-91, remained in full force and effect. All real and personal § 20.1 – § 20.49, is repealed. [P.L. 2005-28, § 74.] property, and all rights and interests, which belonged to the partnership at the time its certificate of partnership § 75. Applicability. existence was canceled pursuant to sections 10(3) or 71 of this Act, or which were acquired by the partnership On and after the effective date of the Marshall Islands following the cancellation of its certificate of partnership Revised Partnership Act, this Act governs all partnerships. existence pursuant to sections 10(3) or 71 of this Act, and [P.L. 2005-28, § 75.] which were not disposed of prior to the time of its reinstatement, shall be vested in the partnership after its § 76. Effective Date. reinstatement as fully as they were held by the partnership at, and after, as the case may be, the time its This Act shall take effect in accordance with the certificate of partnership existence was canceled pursuant relevant provisions of Rules of Procedures of the Nitijela to sections 10(3) or 71 of this Act. After its rein- and the relevant provisions of the Constitution of the statement, the partnership and its partners shall have the Republic of the Marshall Islands. [P.L. 2005-28, § 76.] same liability for all contracts, acts, matters and things made, done or performed in the partnership’s name and § 77. Nature of business permitted; powers; on its behalf by its partners, employees and agents as the regulation by foreign authorities. partnership and its partners would have had if the partnership’s certificate of partnership existence had at (1) A non-resident domestic partnership may carry on all times remained in full force and effect. [P.L. 2005- any lawful business, purpose or activity with the 28, § 72.] exception of the business of granting policies of insurance or assuming insurance risks, trust services or banking.

(2) Every non-resident domestic partnership that carries out activities without the Republic which would be regulated under the Banking Act 1987 (17 MIRC, Chapter 1) or the regulations promulgated thereunder if carried out within the Republic shall be regulated by the relevant authorities in the jurisdiction(s) in which the partnership carries out these activities and shall comply with the laws, regulations, and licensing requirements of such jurisdiction(s).[P.L. 2018-100, adding new section.]

PART III:

LIMITED PARTNERSHIP ACT

DIVISION 1: (8) “limited partnership” or “domestic limited partner- GENERAL PROVISIONS ship” means a partnership formed by two (2) or more persons under the laws of the Republic of the Marshall § 1. Definitions. Islands and having one (1) or more general partners and § 2. Name set forth in certificate. one (1) or more limited partners. § 3. Registered agent for service of process. § 4. Attorney General as agent for service of (9) “liquidating trustee” means a person, other than a process. general partner, but including a limited partner, carrying § 5. Nature of business permitted; powers. out the winding up of a limited partnership. § 6. Business transactions of partner with the partnership. (10) “non-resident limited partnership” means a domestic § 7. Indemnification. limited partnership not doing business in the Republic of the § 8. Contested matters relating to general partners; Marshall Islands. “Not doing business in the Marshall contested votes. Islands” will have the same meaning as found in the § 9. Interpretation and enforcement of partnership Marshall Islands Business Corporations Act (BCA), 18 agreement. MIRC 1.

(11) “partner” means a limited or general partner.

§ 1. Definitions. (12) “partnership agreement” means any agreement, written or oral, of the partners as to the affairs of a As used in this Act unless the context otherwise limited partnership and the conduct of its business. A requires, the term: limited partnership is not required to execute its partnership agreement. A limited partnership is bound by (1) “certificate of limited partnership” means the its partnership agreement whether or not the limited certificate referred to in section 10 of this Act, and the partnership executes the partnership agreement. A written certificate as amended. partnership agreement or another written agreement or writing: (2) “contribution” means any cash, property, services rendered or a promissory note or other obligation to (a) may provide that a person shall be admitted as a contribute cash or property or to perform services, which limited partner of a limited partnership, or shall a partner contributes to a limited partnership in the capa- become an assignee of a partnership interest or other city as a partner. rights or powers of a limited partner to the extent assigned, and shall become bound by the partnership (3) “event of withdrawal of a general partner” means agreement (i) if such person (or a representative an event that causes a person to cease to be a general authorized by such person orally, in writing or by other partner as provided in section 35 of this Act. action such as payment for a partnership interest) executes the partnership agreement or any other (4) “general partner” means a person who has been writing evidencing the intent of such person to become admitted to a limited partnership as a general partner in a limited partner or assignee, or (ii) without such accordance with the partnership agreement and so named execution, if such person (or a representative in the certificate of limited partnership or similar authorized by such person orally, in writing or by other instrument under which the limited partnership is orga- action such as payment for a partnership interest) nized if so required. complies with the conditions for becoming a limited partner or assignee as set forth in the partnership (5) “High Court” means the High Court of the agreement or any other writing; and Republic of the Marshall Islands. (b) shall not be unenforceable by reason of it not (6) “knowledge” means a person’s actual knowledge having been signed by a person being admitted as a of a fact, rather than the person’s constructive knowledge limited partner or becoming an assignee as provided in of the fact. subsection 12(a) of this section, or by reason of its having been signed by a representative as provided in this Act.

(7) “limited partner” means a person who has been (13) “partnership interest” means a partner’s share of admitted to a limited partnership as a limited partner as the profits and losses of a limited partnership and the provided in section 28 of this Act. right to receive distributions of partnership assets.

(14) “person” means a natural person, partnership (3) must be such as to distinguish it upon the records (whether general or limited), limited liability company, in the Office of the Registrar of Corporations from the trust, estate, association, corporation, custodian, nominee name on such records of any partnership or limited part- or any other individual or entity in its own or any nership reserved, registered or organized under the laws representative capacity, in each case, whether domestic of the Marshall Islands. [P.L. 1990-91, § 183; amended or foreign. by P.L. 2005-26, § 2.]

(15) “personal representative” means, as to a natural § 3. Registered agent for service of process. person, the executor, administrator, guardian, conservator or other legal representative thereof and, as to a person (1) Every domestic limited partnership formed under other than a natural person, the legal representative or section 10 of this Act shall designate a registered agent in successor thereof. the Marshall Islands upon whom process against such entity or any notice or demand required or permitted by (16) “publicly-traded company” means a company law to be served may be served. The agent for a limited with equity securities that are listed (i) on a securities partnership having a place of business in the Marshall exchange, (ii) on an automated quotation system or (iii) Islands shall be a resident domestic corporation having a otherwise on a regulated securities or commodities place of business in the Marshall Islands or a natural market that is subject to disclosure requirements person, resident of and having a business address in the consistent with international standards which ensure Marshall Islands. adequate transparency of ownership information, or (2) The registered agent for a non-resident limited that is formed in contemplation of becoming so partnership shall be The Trust Company of the Marshall publicly traded or listed and shall be so publicly traded Islands, Inc. or listed within 364 days of the company’s formation, and shall include all direct and indirect subsidiaries (3) A domestic limited partnership which fails to thereof. An entity is a subsidiary of another entity if (i) maintain a registered agent as required by this Act shall the parent holds, directly or indirectly, a beneficial be dissolved or its authority to do business or registration interest in a majority or more of the shares, or a shall be revoked, as the case may be, in accordance with majority or more of the voting rights, in the subsidiary section 71 of this Act. or (ii) such entity is consolidated in the financial statements of the parent that are publicly available or (4) Manner of service. will be made publicly available within 364 days; (a) Resident domestic limited partnership. Service (17) “Registrar of Corporations” means the Registrar of process on a resident domestic limited partnership of domestic limited partnerships. The Registrar for resi- may be made on the registered agent in the manner dent limited partnerships is the Registrar of Corporations provided by law for the service of summons as if the responsible for resident domestic and authorized foreign registered agent were a defendant. corporations. The Registrar for non-resident limited partnerships is The Trust Company of the Marshall Islands, (b) Non-resident limited partnership. Inc. (i) Service of process on a non-resident (18) “resident domestic limited partnership” means a domestic limited partnership may be made on the domestic limited partnership doing business in the registered agent in the manner provided by law for Marshall Islands. [P.L. 1990-91, § 179; amended by P.L. the service of summons as if the registered agent 2005-26, § 1; amended by P.L. 2017-52, § 16.] were a defendant; or

§ 2. Name set forth in certificate. (ii) Service of process may be sent to the registered agent via registered mail or courier as if The name of each limited partnership as set forth in its the registered agent were a defendant. certificate of limited partnership: (5) Any registered agent of a limited partnership may (1) shall contain the words “Limited Partnership” or resign as such agent upon filing a written notice thereof the abbreviation “L.P.” or “LP”; with the Registrar of Corporations; provided, however that the registered agent shall notify the limited (2) may contain the name of a partner; partnership not less than thirty (30) days prior to such filing and resignation. The registered agent shall mail or cause to be mailed to the limited partnership at the last

known address of the limited partnership, within or § 4. Attorney General as agent for service of without the Marshall Islands or at the last known address process. of the person at whose request the limited partnership was formed, notice of the resignation of the agent. No (1) Whenever a domestic limited partnership fails to designation of the new registered agent shall be accepted maintain a registered agent in the Marshall Islands, or for filing until all charges owing to the former registered whenever its registered agent cannot be found at its agent shall have been paid. business address, then the Attorney General shall be an agent of such limited partnership upon whom process or (6) A designation of a registered agent under this notice or demand required or permitted by law to be section may be made, revoked, or changed by filing an served or may be served. The Attorney General shall also appropriate notification with the Registrar of Corpora- be agent for service of process of a limited partnership tions. whenever authorized under this Act.

(7) The designation of a registered agent shall ter- (2) Service on the Attorney General as agent of a minate upon filing a notice of resignation provided that domestic limited partnership shall be made by personally the registered agent certifies that the limited partnership delivering to and leaving with him or his deputy or with was notified not less than thirty (30) days prior to such any person authorized by the Attorney General to receive filing as provided by subsection (5) of this section. such service, at the office of the Attorney General in Majuro Atoll, duplicate copies of such process together (8) A registered agent, when served with process, with the statutory fee. The Attorney General shall notice or demand for the limited partnership which it promptly send one (1) of such copies by registered mail represents, shall transmit the same to the limited return receipt requested, to such limited partnership at the partnership by personal notification or in the following business address of its registered agent, or if there is no manner: Upon receipt of the process, notice or demand, such office, the Attorney General shall mail such copy, in the registered agent shall cause a copy of such paper to the case of a resident domestic limited partnership, in be mailed to the limited partnership named therein at its care of any general partner named in its Certificate of last known address. Such mailing shall be by registered Limited Partnership at his address stated therein, or in the mail. As soon thereafter as possible if process was issued case of a non-resident domestic limited partnership, at the in the Marshall Islands, the registered agent may file with address of the limited partnership without the Marshall the clerk of the Marshall Islands court issuing the process Islands, or if none, at the last known address of a general or with the agency of the Government issuing the notice partner; or in the case of a limited partnership which has or demand either the receipt of such registered mailing or transferred its domicile out of the Marshall Islands to an affidavit stating that such mailing has been made, such limited partnership’s registered agent as shown in signed by the registered agent, or if the agent is a limited the certificate of transfer of domicile. [P.L. 1990-91, partnership, by an officer of the same, properly notarized. § 180; amended by P.L. 2005-26, § 4.] Compliance with the provisions of this subsection shall relieve the registered agent from any further obligation to § 5. Nature of business permitted; powers; the limited partnership for service of the process, notice regulation by foreign authorities. or demand, but the agent’s failure to comply with the provisions of this subsection shall in no way affect the (1) A limited partnership may carry on any lawful validity of the service of the process, notice or demand. business, purpose or activity with the exception of the business of granting policies of insurance or assuming (9) A registered agent for service of process acting insurance risks, trust services or banking. pursuant to the provisions of this section shall not be liable for the actions or obligations of the limited (2) A limited partnership shall possess and may partnership for whom it acts. The registered agent shall exercise all the powers and privileges granted by this Act not be a party to any suit or action against the partnership or by any other law or by its partnership agreement, or arising from the acts or obligations of the limited together with any powers incidental thereto, including partnership. If the registered agent is named in any such such powers and privileges as are necessary or conve- action, the action shall be dismissed as to such agent. nient to the conduct, promotion or attainment of the [P.L. 1990-91, § 180; amended by P.L. 2005-26, § 3.] business, purposes or activities of the limited partnership.

(3) Notwithstanding any provision of this Act to the contrary, without limiting the general powers enumerated in subsection (2) of this section, a limited partnership shall, subject to such standards and restrictions, if any, as

are set forth in its partnership agreement, have the power records of the limited partnership relating to the issue. In and authority to make contracts of guaranty and any such application, the limited partnership shall be suretyship and enter into interest rate, basis, currency, named as a party and service of copies of the application hedge or other swap agreements or cap, floor, put, call, upon the registered agent of the limited partnership shall option, exchange or collar agreements, derivative be deemed to be service upon the limited partnership and agreements or other agreements similar to any of the upon the person or persons whose right to serve as a foregoing. general partner is contested and upon the person or persons, if any, claiming to be a general partner or (4) Every non-resident domestic limited partnership claiming the right to be a general partner; and the that carries out activities without the Republic which registered agent shall forward immediately a copy of the would be regulated under the Banking Act 1987 (17 application to the limited partnership and to the person or MIRC, Chapter 1) or the regulations promulgated there- persons whose right to serve as a general partner is under if carried out within the Republic shall be regulated contested and to the person or persons, if any, claiming to by the relevant authorities in the jurisdiction(s) in which be a general partner or the right to be a general partner, in the limited partnership carries out these activities and a postpaid, sealed, registered letter addressed to such shall comply with the laws, regulations, and licensing limited partnership and such person or persons at their requirements of such jurisdiction(s). [P.L. 1990-91, § post office addresses last known to the registered agent or 181; amended by P.L. 2004-17, § 181; amended by P.L. furnished to the registered agent by the applicant partner. 2005-26, § 5; amended by P.L. 2018-100, §§ 1 and 4.] The High Court may make such order respecting further or other notice of such application as it deems proper § 6. Business transactions of partner with the under the circumstances. partnership. (2) Upon application of any partner, the High Court Except as provided in the partnership agreement, a may hear and determine the result of any vote of partners partner may lend money to, borrow money from, act as a upon matters as to which the partners of the limited surety, guarantor or endorser for, guarantee or assume partnership, or any class or group of partners, have the one (1) or more specific obligations of, provide collateral right to vote pursuant to the partnership agreement or for and transact other business with, the limited part- other agreement or this division (other than the nership and, subject to other applicable law, has the same admission, election, appointment or removal or other rights and obligations with respect thereto as a person withdrawal of general partners). In any such application, who is not a partner. [P.L. 1990-91, § 191; amended by the limited partnership shall be named as a party and P.L. 2004-17, § 191; amended by P.L. 2005-26, § 6.] service of the application upon the registered agent of the limited partnership shall be deemed to be service upon § 7. Indemnification. the limited partnership, and no other party need be joined in order for the High Court to adjudicate the result of the Subject to such standards and restrictions, if any, as are vote. The High Court may make such order respecting set forth in its partnership agreement, a limited partner- further or other notice of such application as it deems ship may, and shall have the power to, indemnify and proper under the circumstances. hold harmless any partner or other person from and against any and all claims and demands whatsoever. (3) Nothing herein contained limits or affects the right [P.L. 2005-26, § 7, adding new section.] to serve process in any other manner now or hereafter provided by law. This section is an extension of and not a § 8. Contested matters relating to general partners; limitation upon the right otherwise existing of service of contested votes. legal process upon non-residents. [P.L. 2005-26, § 8, adding new section.] (1) Upon application of any partner, the High Court may hear and determine the validity of any admission, § 9. Interpretation and enforcement of partnership election, appointment or removal or other withdrawal of agreement. a general partner of a limited partnership, and the right of any person to become or continue to be a general partner Any action to interpret, apply or enforce the provisions of a limited partnership, and, in case the right to serve as of a partnership agreement, or the duties, obligations or a general partner is claimed by more than one (1) person, liabilities of a limited partnership to the partners of the may determine the person or persons entitled to serve as limited partnership, or the duties, obligations or liabilities general partners; and to that end make such order or among partners or of partners to the limited partnership, decree in any such case as may be just and proper, with or the rights or powers of, or restrictions on, the limited power to enforce the production of any books, papers and 91

partnership or partners, may be brought in the High statement shall, by force of law, be deemed to be Court. [P.L. 2005-26, § 9, adding new section.] included in the certificates of limited partnership of all limited partnerships, including those formed prior to DIVISION 2: the effective date of this law; and FORMATION; CERTIFICATE OF LIMITED PARTNERSHIP (e) Any other matters the partners determine to § 10. Certificate of limited partnership. include therein. § 11. Amendment to certificate. § 12. Cancellation of certificate. (2) A limited partnership is formed at the time of the § 13. Execution. filing of the initial certificate of limited partnership with § 14. Execution, amendment or cancellation by the Registrar of Corporations or at any later date or time judicial order. specified in the certificate of limited partnership if, in § 15. Filing. either case, there has been substantial compliance with § 16. Liability for false statement. the requirements of this section. A limited partnership § 17. Notice. formed under this division shall be a separate legal entity, § 18. Delivery of certificates to limited partners. the existence of which as a separate legal entity shall § 19. Restated certificate. continue until cancellation of the limited partnership’s § 20. Merger and consolidation. certificate of limited partnership. The filing of the § 21. Contractual appraisal rights. certificate of limited partnership with the Registrar of § 22. Certificate of correction. Corporations shall make it unnecessary to file any other § 23. Domestication of non-Marshall Islands documents under this Act. [P.L. 1990-91, § 180; amended entities. by P.L. 2004-17, § 180; amended by P.L. 2005-26, § 10; § 24. Transfer of domestic limited partnerships. amended by P.L. 2017-52, § 1.] § 25. Conversion of certain entities to a limited partnership. § 11. Amendment to certificate. § 26. Series of limited partners, general partners or partnership interests. (1) A certificate of limited partnership is amended by § 27. Approval of conversion of a limited filing a certificate of amendment thereto with the partnership. Registrar of Corporations. The certificate of amendment shall set forth:

§ 10. Certificate of limited partnership. (a) the name of the limited partnership; and

(1) In order to form a limited partnership, one (1) or (b) the amendment to the certificate. more persons (but not less than all of the general part- (2) A general partner who becomes aware that any ners) must execute a certificate of limited partnership. statement in a certificate of limited partnership was false The certificate of limited partnership shall be filed with when made, or that any matter described has changed the Registrar of Corporations and set forth: making the certificate false in any material respect, shall (a) The name of the limited partnership; promptly amend the certificate.

(b) The address of the registered office and the name (3) Notwithstanding the requirements of subsection and address of the registered agent for service of (2) of this section, no later than ninety (90) days after the process required to be maintained under section 3 of happening of any of the following events an amendment this Act; to a certificate of limited partnership reflecting the occurrence of the event or events shall be filed by a (c) The name and the business, residence or mailing general partner: address of each general partner; (a) the admission of a new general partner;

(d) A statement affirming that “the limited (b) the withdrawal of a general partner; or partnership will comply with all applicable provisions of the Republic of the Marshall Islands Limited (c) a change in the name of the limited partnership. Partnership Act, including retention, maintenance, and production of accounting, partner, and beneficial owner (4) A certificate of limited partnership may be records in accordance with section 32 of this Republic amended at any time for any other proper purpose the of the Marshall Islands Limited Partnership Act”; this general partners may determine. 92

(3) the future effective date (which shall be date (5) Unless otherwise provided in this Act or in the certain) of cancellation if it is not to be effective upon the certificate of amendment, a certificate of amendment filing of the certificate; and shall be effective at the time of its filing with the Regis- trar of Corporations. (4) any other information the person filing the certificate of cancellation determines. [P.L. 1990-91, (6) If after the dissolution of a limited partnership but § 202; amended by P.L. 2004-17, § 202; amended by prior to the filing of a certificate of cancellation as P.L. 2005-26, § 12; amended by P.L. 2017-39.] provided in section 12 of this Act: § 13. Execution. (a) a certificate of limited partnership has been amended to reflect the withdrawal of all general (1) Each certificate required by this Act to be filed partners of a limited partnership, the certificate of with the Registrar of Corporations shall be executed in limited partnership shall be amended to set forth the the following manner: name and the business, residence or mailing address of each person winding up the limited partnership’s (a) an initial certificate of limited partnership, a affairs, each of whom shall execute and file such certificate of limited partnership domestication, a certificate of amendment, and each of whom shall not certificate of conversion to limited partnership, a be subject to liability as a general partner by reason of certificate of transfer must be signed by all general such amendment; or partners;

(b) a person shown on a certificate of limited (b) a certificate of amendment or a certificate of partnership as a general partner is not winding up the correction must be signed by at least one (1) general limited partnership’s affairs, the certificate of limited partner and by each other general partner designated in partnership shall be amended to add the name and the the certificate of amendment or a certificate of correc- business, residence or mailing address of each person tion as a new general partner, but if the certificate of winding up the limited partnership’s affairs, each of amendment or a certificate of correction reflects the whom shall execute and file such certificate of withdrawal of a general partner as a general partner, it amendment, and each of whom shall not be subject to need not be signed by that former general partner; liability as a general partner by reason of such amendment. A person shown on a certificate of limited (c) a certificate of cancellation must be signed by all partnership as a general partner who is not winding up general partners or, if the general partners are not a limited partnership’s affairs need not execute a winding up the limited partnership’s affairs, then by all certificate of amendment which is being executed and liquidating trustees; provided, however, that if the filed as required under this subsection. [P.L. 1990-91, limited partners are winding up the limited § 203; amended by P.L. 2004-17, § 203; amended by partnership’s affairs, a certificate of cancellation shall P.L. 2005-26, § 11.] be signed by the limited partners or, if there is more than one (1) class or group of limited partners, then by § 12. Cancellation of certificate. each class or group of limited partners, in either case, by limited partners who own more than fifty percent A certificate of limited partnership shall be cancelled (50%) of the then current percentage or other interest upon the dissolution and the completion of winding up of in the profits of the limited partnership owned by all of the partnership, or as provided in section 32(1)(f) or the limited partners or by the limited partners in each section 71 of this Act, or upon the filing of a certificate of class or group, as appropriate; merger or consolidation if the limited partnership is not the surviving or resulting entity in a merger or (d) if a domestic limited partnership is filing a consolidation, or upon the filing of a certificate of certificate of merger or consolidation, the certificate of transfer. A certificate of cancellation shall be filed with merger or consolidation must be signed by at least one the Registrar of Corporations to accomplish the (1) general partner of the domestic limited partnership, cancellation of a certificate of limited partnership upon or if the certificate of merger or consolidation is being the dissolution and the completion of winding up of a filed by an other business entity (as defined in section limited partnership and shall set forth: 20(1) of this division), the certificate of merger or consolidation, must be signed by a person authorized (1) the name of the limited partnership; by such other business entity;

(2) the date of filing of its certificate of limited (e) a certificate of reinstatement must be signed by partnership; at least one (1) general partner; and

effective date or cancellation (or of any judicial decree of (f) a certificate of termination of a certificate with a amendment or cancellation), and of any certificate of future effective date or a certificate of amendment of a merger or consolidation, any restated certificate, any certificate with a future effective date being filed in corrected certificate, any certificate of transfer, any accordance with section 15(3) of this division shall be certificate of limited partnership domestication, and any signed in the same manner as the certificate with a certificate of reinstatement shall be delivered to the future effective date being amended or terminated is Registrar of Corporations. A person who executes a required to be signed under this Act. certificate as an agent or fiduciary need not exhibit evidence of that person’s authority as a prerequisite to (2) Unless otherwise provided in the partnership filing. Any signature on any certificate authorized to be agreement, any person may sign any certificate or filed with the Registrar of Corporations under any amendment thereof or enter into a partnership agreement provision of this Act may be a facsimile or an or amendment thereof by an agent, including an attorney- electronically transmitted signature. Upon delivery of any in-fact. An authorization, including a power of attorney, certificate, the Registrar of Corporations shall record the to sign any certificate or amendment thereof or to enter date of its delivery. Unless the Registrar of Corporations into a partnership agreement or amendment thereof need finds that any certificate does not conform to law, upon not be in writing, need not be sworn to, verified or receipt of all filing fees required by law the Registrar of acknowledged, and need not be filed with the Registrar Corporations shall: of Corporations, but if in writing, must be retained by a general partner. (a) certify that the certificate of limited partnership, the certificate of amendment, the certificate of (3) The execution of a certificate by a general partner correction, the certificate of amendment of a certificate constitutes an oath or affirmation, under the penalties of with a future effective date, the certificate of perjury, that, to the best of the general partner’s termination of a certificate with a future effective date, knowledge and belief, the facts stated therein are true. the certificate of cancellation (or of any judicial decree [P.L. 1990-91, § 180; amended by P.L. 2005-26, § 13.] of amendment or cancellation), the certificate of merger or consolidation, restated certificate, the § 14. Execution, amendment or cancellation by corrected certificate, the certificate of conversion to judicial order. limited partnership, the certificate of transfer, the certificate of limited partnership domestication or (1) If a person required by section 13 of this division certificate of reinstatement has been filed with the to execute any certificate fails or refuses to do so, any Registrar of Corporations by endorsing upon the signed other person who is adversely affected by the failure or certificate the word “Filed,” and the date of the filing. refusal may petition the High Court to direct the This endorsement is conclusive of the date of its filing execution of the certificate. If the Court finds that the in the absence of actual fraud; execution of the certificate is proper and that any person so designated has failed or refused to execute the (b) file and index the endorsed certificate; certificate, it shall order the Registrar of Corporations to record an appropriate certificate. (c) prepare and return to the person who filed it or that person’s representative a copy of the signed (2) If a person required to execute a partnership certificate, similarly endorsed, and shall certify such agreement or amendment thereof fails or refuses to do so, copy as a true copy of the signed certificate; and any other person who is adversely affected by the failure or refusal may petition the High Court to direct the (d) cause to be entered such information from the execution of the partnership agreement or amendment certificate as the Registrar of Corporations deems thereof. If the Court finds that the partnership agreement or appropriate into the Registrar, and such information amendment thereof should be executed and that any and a copy of such certificate shall be permanently person so designated has failed or refused to do so, it shall maintained as a public record on a suitable medium. enter an order granting appropriate relief. [P.L. 2005-26, § 14, adding new section.] (2) Upon the filing of a certificate of amendment (or judicial decree of amendment), certificate of correction, § 15. Filing. corrected certificate or restated certificate with the Registrar of Corporations, or upon the future effective (1) The signed copy of the certificate of limited date of a certificate of amendment (or judicial decree partnership and of any certificates of amendment, thereof) or restated certificate, as provided for therein, correction, amendment of a certificate with a future the certificate of limited partnership shall be amended, effective date, termination of a certificate with a future corrected or restated as set forth therein. Upon the filing 94

of a certificate of cancellation (or a judicial decree 1990-91, § 180; amended by P.L. 2005-26, § 15; amended thereof), or a certificate of merger or consolidation which by P.L. 2017-52, § 1.] acts as a certificate of cancellation, or a certificate of transfer, or upon the future effective date of a certificate § 16. Liability for false statement. of cancellation (or a judicial decree thereof) or of a certificate of merger or consolidation which acts as a (1) If any certificate of limited partnership or certifi- certificate of cancellation, or a certificate of transfer, as cate of amendment, correction, reinstatement or provided for therein, or as specified in section 3(3) of this cancellation or certificate of conversion to limited Act, the certificate of limited partnership is cancelled. partnership, certificate of transfer, or certificate of limited Upon the filing of a certificate of limited partnership partnership domestication contains a materially false domestication, or upon the future effective date of a statement, one who suffers loss by reasonable reliance on certificate of limited partnership domestication, the entity the statement may recover damages for the loss from: filing the certificate of limited partnership domestication is domesticated as a limited partnership with the effect (a) any general partner who executes the certificate provided in section 23 of this division. Upon the filing of and knew or should have known the statement to be a certificate of conversion to limited partnership, or upon false in any material respect at the time the certificate the future effective date of a certificate of conversion to was executed; and limited partnership, the entity filing the certificate of conversion to limited partnership is converted to a (b) any general partner who thereafter knows that limited partnership with the effect provided in section 25 any arrangement or other fact described in the certificate is false in any material respect or has changed, of this division. Upon the filing of a certificate of reinstatement, the limited partnership shall be reinstated making the statement false in any material respect, if with the effect provided in section 72 of this Act. that general partner had sufficient time to amend, correct or cancel the certificate, or to file a petition for

its amendment, correction or cancellation, before the (3) If any certificate filed in accordance with this Act statement was reasonably relied upon. provides for a future effective date and if, prior to such future effective date set forth in such certificate, the (2) No general partner shall have any liability for transaction is terminated or its terms are amended to failing to cause the amendment, correction or cancel- change the future effective date or any other matter lation of a certificate to be filed or failing to file a described in such certificate so as to make such petition for its amendment, correction or cancellation certificate false or inaccurate in any respect, such pursuant to subsection (1) of this section if the certificate certificate shall, prior to the future effective date set forth of amendment, certificate of correction, certificate of in such certificate, be terminated or amended by the cancellation or petition is filed within ninety (90) days of filing of a certificate of termination or certificate of when that general partner knew or should have known to amendment of such certificate, executed in accordance the extent provided in subsection (1) of this section that with section 13 of this division, which shall identify the the statement in the certificate was false in any material certificate which has been terminated or amended and respect. [P.L. 1990-91, § 184; amended by P.L. 2004-17, shall state that the certificate has been terminated or the § 184; amended by P.L. 2005-26, § 16.] manner in which it has been amended. Upon the filing of a certificate of amendment of a certificate with a future § 17. Notice. effective date, the certificate identified in such certificate of amendment is amended. Upon the filing of a The fact that a certificate of limited partnership is on certificate of termination of a certificate with a future file with the Registrar of Corporations is notice that the effective date, the certificate identified in such certificate partnership is a limited partnership and is notice of all of termination is terminated. other facts set forth therein which are required to be set forth in a certificate of limited partnership by sections (4) A fee shall be paid at the time of the filing of a certi- 10(1)(a)-(c) and 11(6) of this division and which are ficate of limited partnership, a certificate of amendment, a permitted to be set forth in a certificate of limited certificate of correction, a certificate of amendment of a partnership by section 26(2) of this division. [P.L. 2005- certificate with a future effective date, a certificate of 26, § 17, adding new section.] termination of a certificate with a future effective date, a certificate of cancellation, a certificate of merger or conso- § 18. Delivery of certificates to limited partners. lidation, a restated certificate, a corrected certificate, a certificate of conversion to limited partnership, a Upon the return by the Registrar of Corporations certificate of transfer, a certificate of limited partnership pursuant to section 15 of this division of a certificate domestication or a certificate of reinstatement. [P.L. marked “Filed,” the general partners shall promptly

deliver or mail a copy of the certificate to each limited amended or supplemented and there is no discrepancy partner if the partnership agreement so requires. [P.L. between those provisions and the restated certificate, it 2005-26, § 18, adding new section.] shall state that fact as well.

§ 19. Restated certificate. (4) Upon the filing of the restated certificate of limited partnership with the Registrar of Corporations, or upon (1) A limited partnership may, whenever desired, inte- the future effective date of a restated certificate of limited grate into a single instrument all of the provisions of its partnership as provided for therein, the initial certificate certificate of limited partnership which are then in effect of limited partnership, as theretofore amended or supple- and operative as a result of there having theretofore been mented, shall be superseded; thenceforth, the restated filed with the Registrar of Corporations one (1) or more certificate of limited partnership, including any further certificates or other instruments pursuant to any of the amendment or changes made thereby, shall be the certi- sections referred to in this Act and it may at the same ficate of limited partnership of the limited partnership, time also further amend its certificate of limited part- but the original effective date of formation shall remain nership by adopting a restated certificate of limited unchanged. partnership. (5) Any amendment or change effected in connection (2) If the restated certificate of limited partnership with the restatement and integration of the certificate of merely restates and integrates but does not further amend limited partnership shall be subject to any other provision the initial certificate of limited partnership, as theretofore of this division, not inconsistent with this section, which amended or supplemented by any instrument that was would apply if a separate certificate of amendment were executed and filed pursuant to any of the sections in this filed to effect such amendment or change. [P.L. 2005- Act, it shall be specifically designated in its heading as a 26, § 19, adding new section.] “Restated Certificate of Limited Partnership” together with such other words as the partnership may deem § 20. Merger and consolidation. appropriate and shall be executed by a general partner and filed as provided in section 15 of this division with (1) As used in this section, “other business entity” the Registrar of Corporations. If the restated certificate means a corporation, association, a limited liability restates and integrates and also further amends in any company, or an unincorporated business, including a respect the certificate of limited partnership, as there- partnership, but excluding a domestic limited partnership. tofore amended or supplemented, it shall be specifically designated in its heading as an “Amended and Restated (2) Pursuant to an agreement of merger or conso- Certificate of Limited Partnership” together with such lidation, one (1) or more domestic limited partnerships other words as the partnership may deem appropriate and may merge or consolidate with or into one (1) or more shall be executed by at least one (1) general partner and domestic limited partnerships or one (1) or more other by each other general partner designated in the restated business entities formed or organized under the laws of certificate of limited partnership as a new general partner, the Marshall Islands or any foreign country or other but if the restated certificate reflects the withdrawal of a foreign jurisdiction, or any combination thereof, with general partner as a general partner, such restated certi- such domestic limited partnership or other business entity ficate of limited partnership need not be signed by that as the agreement shall provide being the surviving or former general partner, and filed as provided in section resulting domestic limited partnership or other business 15 of this division with the Registrar of Corporations. entity. Unless otherwise provided in the partnership agreement, a merger or consolidation shall be approved (3) A restated certificate of limited partnership shall by each domestic limited partnership which is to merge state, either in its heading or in an introductory or consolidate (a) by all general partners, and (b) by the paragraph, the limited partnership’s present name, and, if limited partners or, if there is more than one (1) class or it has been changed, the name under which it was group of limited partners, then by each class or group of originally filed, and the date of filing of its original limited partners, in either case, by limited partners who certificate of limited partnership with the Registrar of own more than fifty percent (50%) of the then current Corporations, and the future effective date (which shall percentage or other interest in the profits of the domestic be date certain) of the restated certificate if it is not to be limited partnership owned by all of the limited partners effective upon the filing of the restated certificate. A or by the limited partners in each class or group, as restated certificate shall also state that it was duly appropriate. In connection with a merger or consolidation executed and is being filed in accordance with this hereunder, rights or securities of, or interests in, a limited section. If the restated certificate only restates and partnership or other business entity which is a constituent integrates and does not further amend the limited partner- party to the merger or consolidation may be exchanged ship’s certificate of limited partnership as theretofore for or converted into cash, property, rights or securities 96

of, or interests in, the surviving or resulting limited resulting other business entity agrees that it may be partnership or other business entity or, in addition to or in served with process in the Marshall Islands in any lieu thereof, may be exchanged for or converted into action, suit or proceeding for the enforcement of any cash, property, rights or securities of, or interests in, a obligation of any domestic limited partnership which is limited partnership or other business entity which is not to merge or consolidate, irrevocably appointing the the surviving or resulting limited partnership or other Attorney General as its agent to accept service of business entity in the merger or consolidation. Notwith- process in any such action, suit or proceeding and standing prior approval, an agreement of merger or specifying the address to which a copy of such process consolidation may be terminated or amended pursuant to shall be mailed to it by the Attorney General. In the a provision for such termination or amendment contained event of service hereunder upon the Attorney General in the agreement of merger or consolidation. the procedures set forth in section 4 of this Act shall be applicable, except that the plaintiff in any such action, (3) If a domestic limited partnership is merging or suit or proceeding shall furnish the Attorney General consolidating under this section, the domestic limited with the address specified in the certificate of merger partnership or other business entity surviving or resulting or consolidation provided for in this section and any in or from the merger or consolidation shall file a other address which the plaintiff may elect to furnish, certificate of merger or consolidation executed by at least together with copies of such process as required by the one (1) general partner on behalf of the domestic limited Attorney General and the Attorney General shall notify partnership when it is the surviving or resulting entity such surviving or resulting other business entity at all with the Registrar of Corporations. The certificate of such addresses furnished by the plaintiff in accordance merger or consolidation shall state: with the procedures set forth in section 4 of this Act.

(a) the name and jurisdiction of formation or (4) Unless a future effective date is provided in a organization of each of the domestic limited partner- certificate of merger or consolidation, in which event a ships and other business entities which is to merge or merger or consolidation shall be effective at any such consolidate; future effective date, a merger or consolidation shall be effective upon the filing with the Registrar of Corpora- (b) that an agreement of merger or consolidation has tions a certificate of merger or consolidation. been approved and executed by each of the domestic limited partnerships and other business entities which (5) A certificate of merger or consolidation shall act as is to merge or consolidate; a certificate of cancellation for a domestic limited

partnership which is not the surviving or resulting entity (c) the name of the surviving or resulting domestic in the merger or consolidation. Whenever this section limited partnership or other business entity; requires the filing of a certificate of merger or conso-

lidation, such requirement shall be deemed satisfied by (d) the future effective date (which shall be date the filing of an agreement of merger or consolidation certain) of the merger or consolidation if it is not to be containing the information required by this section to be effective upon the filing of the certificate of merger or set forth in the certificate of merger or consolidation. consolidation;

(6) Notwithstanding anything to the contrary contained (e) that the agreement of merger or consolidation is in a partnership agreement, a partnership agreement con- on file at a place of business of the surviving or taining a specific reference to this subsection may provide resulting domestic limited partnership or other business that an agreement of merger or consolidation approved in entity, and shall state the address thereof; accordance with subsection (2) of this section may (a)

effect any amendment to the partnership agreement or (b) (f) that a copy of the agreement of merger or effect the adoption of a new partnership agreement for a consolidation will be furnished by the surviving or limited partnership if it is the surviving or resulting limited resulting domestic limited partnership or other business partnership in the merger or consolidation. Any amend- entity, on request and without cost, to any partner of ment to a partnership agreement or adoption of a new any domestic limited partnership or any person holding partnership agreement made pursuant to the foregoing an interest in any other business entity which is to sentence shall be effective at the effective date of the merge or consolidate; and merger or consolidation. The provisions of this subsection

shall not be construed to limit the accomplishment of a (g) if the surviving or resulting entity is not a merger or of any of the matters referred to herein by any domestic limited partnership or corporation or limited other means provided for in a partnership agreement or liability company organized under the laws of the other agreement or as otherwise permitted by law, Marshall Islands, a statement that such surviving or 97

including that the partnership agreement of any constituent resulting entity of the merger or consolidation, then a limited partnership to the merger or consolidation (inclu- judgment creditor of a general partner of such limited ding a limited partnership formed for the purpose of partnership may not levy execution against the assets of consummating a merger or consolidation) shall be the the general partner to satisfy a judgment based on a claim partnership agreement of the surviving or resulting limited against the surviving or resulting entity of the merger or partnership. consolidation unless:

(7) When any merger or consolidation shall have (a) a judgment based on the same claim has been become effective under this section, for all purposes of obtained against the surviving or resulting entity of the the laws of the Marshall Islands, all of the rights, merger or consolidation and a writ of execution on the privileges and powers of each of the domestic limited judgment has been returned unsatisfied in whole or in partnerships and other business entities that have merged part; or consolidated, and all property, real, personal and mixed, and all debts due to any of said domestic limited (b) the surviving or resulting entity of the merger or partnerships and other business entities, as well as all consolidation is a debtor in bankruptcy; other things and causes of action belonging to each of such domestic limited partnerships and other business (c) the general partner has agreed that the creditor entities, shall be vested in the surviving or resulting need not exhaust the assets of the limited partnership domestic limited partnership or other business entity, and that was not the surviving or resulting entity of the shall thereafter be the property of the surviving or merger or consolidation; resulting domestic limited partnership or other business entity as they were of each of the domestic limited (d) the general partner has agreed that the creditor partnerships and other business entities that have merged need not exhaust the assets of the surviving or resulting or consolidated, and the title to any real property vested entity of the merger or consolidation; by deed or otherwise, under the laws of the Marshall Islands, in any of such domestic limited partnerships and (e) A court grants permission to the judgment creditor other business entities, shall not revert or be in any way to levy execution against the assets of the general partner impaired by reason of this Act; but all rights of creditors based on a finding that the assets of the surviving or and all liens upon any property of any of said domestic resulting entity of the merger or consolidation that are limited partnerships and other business entities shall be subject to execution are clearly insufficient to satisfy the preserved unimpaired, and all debts, liabilities and duties judgment, that exhaustion of the assets of the surviving or of each of the said domestic limited partnerships and resulting entity of the merger or consolidation is other business entities that have merged or consolidated excessively burdensome, or that the grant of permission is shall thenceforth attach to the surviving or resulting an appropriate exercise of the court’s equitable powers; or domestic limited partnership or other business entity, and may be enforced against it to the same extent as if said (f) liability is imposed on the general partner by law debts, liabilities and duties had been incurred or or contract independent of the existence of the survi- contracted by it. Unless otherwise agreed, a merger or ving or resulting entity of the merger or consolidation. consolidation of a domestic limited partnership, including [P.L. 2005-26, § 20, adding new section.] a domestic limited partnership which is not the surviving or resulting entity in the merger or consolidation, shall § 21. Contractual appraisal rights. not require such domestic limited partnership to wind up its affairs under section 59 of this Act or pay its liabilities A partnership agreement or an agreement of merger or and distribute its assets under section 60 of this Act. consolidation may provide that contractual appraisal rights with respect to a partnership interest or another (8) Except as provided by agreement with a person to interest in a limited partnership shall be available for any whom a general partner of a limited partnership is class or group of partners or partnership interests in obligated, a merger or consolidation of a limited partner- connection with any amendment of a partnership ship that has become effective shall not affect any agreement, any merger or consolidation in which the obligation or liability existing at the time of such merger limited partnership is a constituent party to the merger or or consolidation of a general partner of a limited consolidation, any conversion of the limited partnership partnership which is merging or consolidating. to another business form, any transfer to or domestication in any jurisdiction by the limited partnership, or the sale (9) If a limited partnership is a constituent party to a of all or substantially all of the limited partnership’s merger or consolidation that shall have become effective, assets. The High Court shall have jurisdiction to hear and but the limited partnership is not the surviving or determine any matter relating to any such appraisal rights. [P.L. 2005-26, § 21, adding new section.] 98

(a) a certificate of limited partnership domestication § 22. Certificate of correction. that has been executed in accordance with section 13 of this division; and (1) Whenever any certificate authorized to be filed with the Registrar of Corporations under any provision of (b) a certificate of limited partnership that complies this Act has been so filed and is an inaccurate record of with section 10 of this division and has been executed the action therein referred to, or was defectively or in accordance with section 13 of this division. erroneously executed, such certificate may be corrected by filing with the Registrar of Corporations a certificate (3) The certificate of limited partnership domesti- of correction of such certificate. The certificate of cation shall state: correction shall specify the inaccuracy or defect to be corrected, shall set forth the portion of the certificate in (a) the date on which and jurisdiction where the corrected form and shall be executed and filed as non-Marshall Islands entity was first formed, incor- required by this Act. The certificate of correction shall be porated, created or otherwise came into being; effective as of the date the original certificate was filed except as to those persons who are substantially and (b) the name of the non-Marshall Islands entity adversely affected by the correction, and as to those immediately prior to the filing of the certificate of persons, the certificate of correction shall be effective limited partnership domestication; from the filing date. (c) the name of the limited partnership as set forth in (2) In lieu of filing a certificate of correction, a the certificate of limited partnership filed in accordance certificate may be corrected by filing with the Registrar of with subsection (2) of this section; Corporations a corrected certificate which shall be executed and filed as if the corrected certificate were the (d) the future effective date (which shall be date certificate being corrected, and a fee equal to the fee certain) of the domestication as a limited partnership if payable to the Registrar of Corporations if the certificate it is not to be effective upon the filing of the certificate being corrected were then being filed shall be paid to and of limited partnership domestication and the certificate collected by the Registrar of Corporations for the use of of limited partnership; the Marshall Islands in connection with the filing of the corrected certificate. The corrected certificate shall be (e) the jurisdiction that constituted the seat, siege specifically designated as such in its heading, shall specify social, or principal place of business or central the inaccuracy or defect to be corrected and shall set forth administration of the non-Marshall Islands entity, or the entire certificate in corrected form. A certificate any other equivalent thereto under applicable law, corrected in accordance with this section shall be effective immediately prior to the filing of the certificate of as of the date the original certificate was filed except as to limited partnership domestication; those persons who are substantially and adversely affected by the correction and, as to those persons, the certificate as (f) that the transfer of the domicile has been corrected shall be effective from the filing date. [P.L. approved by all necessary action;

2005-26, § 22, adding new section.] (g) that the transfer of domicile is not expressly prohibited under the laws of the foreign domicile; § 23. Domestication of non-Marshall Islands entities. (h) that the transfer of domicile is made in good (1) As used in this section, “non-Marshall Islands faith and will not serve to hinder, delay or defraud entity” means a foreign limited partnership, or a corpora- existing general or limited partners, creditors, claimants tion, an association, or any other unincorporated busi- or other parties in interest; and ness, a general partnership or a limited liability company, formed, incorporated, created or that otherwise came into (i) the name and address of the limited partnership’s being under the laws of any foreign country or other registered agent in the Marshall Islands. foreign jurisdiction. (4) Upon the filing with the Registrar of Corporations (2) Any non-Marshall Islands entity may become the certificate of limited partnership domestication and domesticated as a limited partnership in the Marshall the certificate of limited partnership or upon the future Islands by complying with subsection (7) of this section effective date of the certificate of limited partnership and filing with the Registrar of Corporations in domestication and the certificate of limited partnership, accordance with section 15 of this division: the non-Marshall Islands entity shall be domesticated as a limited partnership in the Marshall Islands and the

limited partnership shall thereafter be subject to all of the attached to the domestic limited partnership to which provisions of this Act, except that notwithstanding such non-Marshall Islands entity has been domesticated, section 10 of this division, the existence of the limited and may be enforced against it to the same extent as if partnership shall be deemed to have commenced on the said debts, liabilities and duties had originally been date the non-Marshall Islands entity commenced its incurred or contracted by it in its capacity as a domestic existence in the jurisdiction in which the non-Marshall limited partnership. The rights, privileges, powers and Islands entity was first formed, incorporated, created or interests in property of the non-Marshall Islands entity, as otherwise came into being. well as the debts, liabilities and duties of the non- Marshall Islands entity, shall not be deemed, as a conse- (5) The domestication of any non-Marshall Islands quence of the domestication, to have been transferred to entity as a limited partnership in the Marshall Islands the domestic limited partnership to which such non- shall not be deemed to affect any obligations or liabilities Marshall Islands entity has domesticated for any purpose of the non-Marshall Islands entity incurred prior to its of the laws of the Marshall Islands. domestication as a limited partnership in the Marshall Islands, or the personal liability of any person therefore. (9) When a non-Marshall Islands entity has become domesticated as a limited partnership pursuant to this (6) The filing of a certificate of limited partnership section, the limited partnership shall, for all purposes of domestication shall not affect the choice of law applicable the laws of the Marshall Islands, be deemed to be the to the non-Marshall Islands entity, except that from the same entity as the domesticating non-Marshall Islands effective date or time of the domestication, the law of the entity. Unless otherwise agreed, or as required under Marshall Islands, including the provisions of this Act, shall applicable non-Marshall Islands law, the domesticating apply to the non-Marshall Islands entity to the same extent non-Marshall Islands entity shall not be required to wind as if the non-Marshall Islands entity had been formed as a up its affairs or pay its liabilities and distribute its assets, limited partnership on that date. and the domestication shall not be deemed to constitute a dissolution of such non-Marshall Islands entity and shall (7) Prior to filing a certificate of limited partnership constitute a continuation of the existence of the domestication with the Registrar of Corporations, the domesticating non-Marshall Islands entity in the form of domestication shall be approved in the manner provided a domestic limited partnership. If, following domesti- for by the document, instrument, agreement or other cation, a non-Marshall Islands entity that has become writing, as the case may be, governing the internal affairs domesticated as a limited partnership continues its of the non-Marshall Islands entity and the conduct of its existence in the foreign country or other foreign juris- business or by applicable non-Marshall Islands law, as diction in which it was existing immediately prior to appropriate, and a partnership agreement shall be domestication, the limited partnership and such non- approved by the same authorization required to approve Marshall Islands entity shall, for all purposes of the laws the domestication; provided that, in any event, such of the Marshall Islands, constitute a single entity formed, approval shall include the approval of any person who, at incorporated, created or otherwise having come into the effective date or time of the domestication, shall be a being, as applicable, and existing under the laws of the general partner of the limited partnership. Marshall Islands and the laws of such foreign country or other foreign jurisdiction. (8) When any domestication shall have become effective under this section, for all purposes of the laws of the (10) In connection with a domestication hereunder, Marshall Islands, all of the rights, privileges and powers rights or securities of, or interests in, the non-Marshall of the non-Marshall Islands entity that has been domes- Islands entity that is to be domesticated as a domestic ticated, and all property, real, personal and mixed, and all limited partnership may be exchanged for or converted debts due to such non-Marshall Islands entity, as well as into cash, property, rights or securities of, or interests in, all other things and causes of action belonging to such such domestic limited partnership or, in addition to or in non-Marshall Islands entity, shall remain vested in the lieu thereof, may be exchanged for or converted into domestic limited partnership to which such non-Marshall cash, property, rights or securities of, or interests in, Islands entity has been domesticated and shall be the another domestic limited partnership or other entity. property of such domestic limited partnership, and the [P.L. 2005-26, § 23, adding new section.] title to any real property vested by deed or otherwise in such non-Marshall Islands entity shall not revert or be in § 24. Transfer of domestic limited partnerships. any way impaired by reason of this Act; but all rights of creditors and all liens upon any property of such non- (1) Upon compliance with the provisions of this Marshall Islands entity shall be preserved unimpaired, section, any limited partnership may transfer to or and all debts, liabilities and duties of the non-Marshall domesticate in any jurisdiction that permits the transfer Islands entity that has been domesticated shall remain 100

or domestication in such jurisdiction of a limited part- suit or proceeding shall furnish the Attorney General nership. with the address specified in this subsection and any other address that the plaintiff may elect to furnish, (2) Unless otherwise provided in a partnership agree- together with copies of such process as required by the ment, the transfer or domestication described in subsec- Attorney General, and the Attorney General shall tion (1) of this section shall be approved in writing by all notify the limited partnership that has transferred or of the partners. If all of the partners of the limited domesticated out of the Marshall Islands at all such partnership or such other vote as may be stated in a addresses furnished by the plaintiff in accordance with partnership agreement shall approve the transfer or the procedures set forth in section 4 of this Act. domestication described in subsection (1) of this section, a certificate of transfer if the limited partnership’s (3) Upon the filing in the office of the Registrar of existence as a limited partnership of the Marshall Islands Corporations of the certificate of transfer or upon the is to cease, executed in accordance with section 13 of this future effective date of the certificate of transfer and division, shall be filed with the Registrar of Corporations payment to the Registrar of Corporations of all fees pres- in accordance with section 15 of this division. The cribed in this Act, the Registrar of Corporations shall cer- certificate of transfer shall state: tify that the limited partnership has filed all documents and paid all fees required by this Act and thereupon the (a) the name of the limited partnership and, if it has limited partnership shall cease to exist as a limited been changed, the name under which its certificate of partnership of the Marshall Islands. Such certificate of limited partnership was originally filed; the Registrar of Corporations shall be prima facie evidence of the transfer or domestication by such limited (b) the date of the filing of its original certificate of partnership out of the Marshall Islands. limited partnership with the Registrar of Corporations; (4) The transfer or domestication of a limited part- (c) the jurisdiction to which the limited partnership nership out of the Marshall Islands in accordance with shall be transferred or in which it shall be domesticated; this section and the resulting cessation of its existence as a limited partnership of the Marshall Islands pursuant to a (d) the future effective date (which shall be date certificate of transfer shall not be deemed to affect any certain) of the transfer or domestication to the obligations or liabilities of the limited partnership jurisdiction specified in subsection (2)(c) of this incurred prior to such transfer or domestication or the section if it is not to be effective upon the filing of the personal liability of any person incurred prior to such certificate of transfer; transfer or domestication, nor shall it be deemed to affect the choice of law applicable to the limited partnership (e) that the transfer or domestication of the limited with respect to matters arising prior to such transfer or partnership has been approved in accordance with the domestication. Unless otherwise agreed, the transfer or provisions of this section; domestication of a limited partnership out of the Marshall Islands in accordance with this section shall not require (f) in the case of a certificate of transfer, (i) that the such limited partnership to wind up its affairs under existence of the limited partnership as a limited section 59 of this Act or pay its liabilities and distribute partnership of the Marshall Islands shall cease when its assets under section 60 of this Act. the certificate of transfer becomes effective and (ii) the agreement of the limited partnership that it may be (5) In connection with a transfer or domestication of a served with process in the Marshall Islands in any domestic limited partnership to or in another jurisdiction action, suit or proceeding for enforcement of any pursuant to subsection (1) of this section, rights or obligation of the limited partnership arising while it securities of, or interests in, such limited partnership may was a limited partnership of the Marshall Islands, and be exchanged for or converted into cash, property, rights that it irrevocably appoints the Attorney General as its or securities of, or interests in, the business form in agent to accept service of process in any such action, which the limited partnership will exist in such other suit or proceeding; and jurisdiction as a consequence of the transfer or domestication or, in addition to or in lieu thereof, may be (g) the address to which a copy of the process exchanged for or converted into cash, property, rights or referred to in subsection (2)(f) of this section shall be securities of, or interests in, another business form. [P.L. mailed to it by the Attorney General. In the event of 2005-26, § 24, adding new section.] service hereunder upon the Attorney General, the procedures set forth in section 4 of this Act shall be applicable, except that the plaintiff in any such action,

101

§ 25. Conversion of certain entities to a limited (5) The conversion of any other entity into a domestic partnership. limited partnership shall not be deemed to affect any obligations or liabilities of the other entity incurred prior (1) As used in this section, the term “other entity” to its conversion to a domestic limited partnership, or the means a domestic corporation or any other unincorpora- personal liability of any person incurred prior to such ted business, including a general partnership or a limited conversion. liability company of the Marshall Islands. (6) When any conversion shall have become effective (2) Any other entity may convert to a domestic limited under this section, for all purposes of the laws of the partnership by complying with subsection (8) of this Marshall Islands, all of the rights, privileges and powers section and filing in the office of the Registrar of of the other entity that has converted, and all property, Corporations in accordance with section 15 of this real, personal and mixed, and all debts due to such other division: entity, as well as all other things and causes of action belonging to such other entity, shall remain vested in the (a) a certificate of conversion to limited partnership domestic limited partnership to which such other entity that has been executed in accordance with section 13 of has converted and shall be the property of such domestic this division; and limited partnership, and the title to any real property vested by deed or otherwise in such other entity shall not (b) a certificate of limited partnership that complies revert or be in any way impaired by reason of this Act; with section 10 of this division and has been executed but all rights of creditors and all liens upon any property in accordance with section 13 of this division. of such other entity shall be preserved unimpaired, and all debts, liabilities and duties of the other entity that has (3) The certificate of conversion to limited partnership converted shall remain attached to the domestic limited shall state: partnership to which such other entity has converted, and may be enforced against it to the same extent as if said (a) the date on which the other entity was first debts, liabilities and duties had originally been incurred formed or otherwise came into being; or contracted by it in its capacity as a domestic limited partnership. (b) the name of the other entity immediately prior to the filing of the certificate of conversion to limited (7) Unless otherwise agreed, the converting other partnership; Marshall Islands entity shall not be required to wind up its affairs or pay its liabilities and distribute its assets, and (c) the name of the limited partnership as set forth in the conversion shall not be deemed to constitute a its certificate of limited partnership filed in accordance dissolution of such other entity and shall constitute a with subsection (2) of this section; and continuation of the existence of the converting other entity in the form of a domestic limited partnership. (d) the future effective date (which shall be date When an other entity has been converted to a limited certain) of the conversion to a limited partnership if it partnership pursuant to this section, the limited is not to be effective upon the filing of the certificate of partnership shall, for all purposes of the laws of the conversion to limited partnership and the certificate of Marshall Islands, be deemed to be the same entity as the limited partnership. converting other entity.

(4) Upon the filing with the Registrar of Corporations (8) Prior to filing a certificate of conversion to limited of the certificate of conversion to limited partnership and partnership with the Registrar of Corporations, the the certificate of limited partnership or upon the future conversion shall be approved in the manner provided for effective date of the certificate of conversion to limited by the document, instrument, agreement or other writing, partnership and the certificate of limited partnership, the as the case may be, governing the internal affairs of the other entity shall be converted into a domestic limited other entity and the conduct of its business or by partnership and the limited partnership shall thereafter be applicable law, as appropriate, and a partnership subject to all of the provisions of this Act, except that agreement shall be approved by the same authorization notwithstanding section 10 of this division, the existence required to approve the conversion; provided, that in any of the limited partnership shall be deemed to have event, such approval shall include the approval of any commenced on the date the other entity commenced its person who, at the effective date of the conversion, shall existence. be a general partner of the limited partnership.

102

(9) In connection with a conversion hereunder, rights the limited partnership has established any series when or securities of, or interests in, the other entity which is to such notice is included in the certificate of limited be converted to a domestic limited partnership may be partnership, and there shall be no requirement that any exchanged for or converted into cash, property, rights or specific series of the limited partnership be referenced in securities of, or interests in, such domestic limited such notice. The fact that a certificate of limited partner- partnership or, in addition to or in lieu thereof, may be ship that contains the notice of the limitation on liabilities exchanged for or converted into cash, property, rights or of a series or a general partner as referenced in securities of, or interests in, another domestic limited subsection (2) of this section is on file with the Registrar partnership or other entity. [P.L. 2005-26, § 25, adding of Corporations shall constitute notice of such limitation new section.] on liabilities.

§ 26. Series of limited partners, general partners or (4) A limited partner may possess or exercise any of partnership interests. the rights and powers or act or attempt to act in one (1) or more of the capacities as permitted under section 30 of (1) A partnership agreement may establish or provide this Act, with respect to any series, without participating for the establishment of one (1) or more designated series in the control of the business of the limited partnership or of limited partners, general partners or partnership inte- with respect to any series thereof within the meaning of rests having separate rights, powers or duties with respect section 30(1) of this Act. A partnership agreement may to specified property or obligations of the limited provide for classes or groups of general partners or partnership or profits and losses associated with specified limited partners associated with a series having such property or obligations, and any such series may have a relative rights, powers and duties as the partnership separate business purpose or investment objective. agreement may provide, and may make provision for the future creation in the manner provided in the partnership (2) Notwithstanding anything to the contrary set forth agreement of additional classes or groups of general in this Act or under other applicable law, in the event that partners or limited partners associated with the series a partnership agreement establishes or provides for the having such relative rights, powers and duties as may establishment of one (1) or more series or states that the from time to time be established, including rights, powers liabilities of a general partner are limited to the liabilities and duties senior to existing classes and groups of of a designated series, and if separate and distinct records general partners or limited partners associated with the are maintained for any such series and the assets series. A partnership agreement may provide for the associated with any such series are held (directly or taking of an action, including the amendment of the indirectly, including through a nominee or otherwise) and partnership agreement, without the vote or approval of accounted for separately from the other assets of the any general partner or limited partner or class or group of limited partnership, or any other series thereof, and if the general partners or limited partners, including an action partnership agreement so provides, and if notice of the to create under the provisions of the partnership limitation on liabilities of a series or a general partner as agreement a class or group of the series of partnership referenced in this subsection is set forth in the certificate interests that was not previously outstanding. of limited partnership, then the debts, liabilities, obligations and expenses incurred, contracted for or (5) A partnership agreement may grant to all or certain otherwise existing with respect to a particular series or identified general partners or limited partners or a general partner shall be enforceable only against the specified class or group of the general partners or limited assets of such series or a general partner associated with partners associated with a series the right to vote such series and not against the assets of the limited separately or with all or any class or group of the general partnership generally, any other series thereof, or any partners or limited partners associated with the series, on general partner not associated with such series, and, any matter. Voting by general partners or limited partners unless otherwise provided in the partnership agreement, associated with a series may be on a per capita, number, none of the debts, liabilities, obligations and expenses financial interest, class, group or any other basis. incurred, contracted for or otherwise existing with respect to the limited partnership generally or any other (6) Section 47 of this Act shall apply to a limited series thereof shall be enforceable against the assets of partner with respect to any series with which the limited such series or a general partner associated with such partner is associated. Except as otherwise provided in a series. partnership agreement, any event under this subsection or in a partnership agreement that causes a limited partner to (3) Notice in a certificate of limited partnership of the cease to be associated with a series shall not, in itself, limitation on liabilities of a series as referenced in cause such limited partner to cease to be associated with subsection (2) of this section shall be sufficient for all any other series or to be a limited partner of the limited purposes of subsection (2) of this section whether or not 103

partnership or cause the termination of the series, section to a partner to the extent that at the time of the regardless of whether such limited partner was the last distribution, after giving effect to the distribution, all remaining limited partner associated with such series. A liabilities of such series, other than liabilities to partners limited partner shall cease to be a limited partner with on account of their partnership interests with respect to respect to a series and to have the power to exercise any such series and liabilities for which the recourse of rights or powers of a limited partner with respect to such creditors is limited to specified property of such series, series upon the happening of either of the following exceed the fair value of the assets associated with such events: series, except that the fair value of property of the series that is subject to a liability for which the recourse of (a) the limited partner withdraws with respect to the creditors is limited shall be included in the assets series in accordance with section 47 of this Act; or associated with such series only to the extent that the fair value of that property exceeds that liability. For purposes (b) except as otherwise provided in the partnership of the immediately preceding sentence, the term “distri- agreement, the limited partner assigns all of his or her bution” shall not include amounts constituting reasonable partnership interest with respect to the series. compensation for present or past services or reasonable payments made in the ordinary course of business (7) Section 46 of this Act shall apply to a general pursuant to a bona fide retirement plan or other benefits partner with respect to any series with which the general program. A limited partner who receives a distribution in partner is associated. A general partner shall cease to be a violation of this subsection, and who knew at the time of general partner with respect to a series and to have the the distribution that the distribution violated this power to exercise any rights or powers of a general subsection, shall be liable to a series for the amount of partner with respect to such series upon an event of the distribution. A limited partner who receives a withdrawal of the general partner with respect to such distribution in violation of this subsection, and who did series. Except as otherwise provided in a partnership not know at the time of the distribution that the agreement, either of the following events or any event in distribution violated this subsection, shall not be liable a partnership agreement that causes a general partner to for the amount of the distribution. Subject to section cease to be associated with a series shall not, in itself, 51(3) of this Act, which shall apply to any distribution cause such general partner to cease to be associated with made with respect to a series under this subsection, this any other series or to be a general partner of the limited subsection shall not affect any obligation or liability of a partnership: limited partner under an agreement or other applicable law for the amount of a distribution. (a) the general partner withdraws with respect to the series in accordance with section 46 of this Act; or (10) Subject to section 57 of this Act, except to the extent otherwise provided in the partnership agreement, a (b) the general partner assigns all of the general series may be terminated and its affairs wound up partner’s partnership interest with respect to the series. without causing the dissolution of the limited partnership. The termination of a series established in accordance (8) Notwithstanding section 50 of this Act, but subject with subsection (2) of this section shall not affect the to subsections (9) and (10) of this section, and unless limitation on liabilities of such series provided by otherwise provided in a partnership agreement, at the subsection (2) of this section. A series is terminated and time a partner associated with a series that has been its affairs shall be wound up upon the dissolution of the established in accordance with subsection (2) of this limited partnership under section 57 of this Act or section becomes entitled to receive a distribution with otherwise upon the first to occur of the following: respect to such series, the partner has the status of, and is entitled to all remedies available to, a creditor of the (a) at the time specified in the partnership agree- series, with respect to the distribution. A partnership ment; agreement may provide for the establishment of a record date with respect to allocations and distributions with (b) upon the happening of events specified in the respect to a series. partnership agreement;

(9) Notwithstanding section 51 of this Act, a limited (c) unless otherwise provided in the partnership partnership may make a distribution with respect to a agreement, upon the affirmative vote or written consent series that has been established in accordance with of (i) all general partners associated with such series subsection (2) of this section. A limited partnership shall and (ii) the limited partners associated with such series not make a distribution with respect to a series that has or, if there is more than one (1) class or group of been established in accordance with subsection (2) of this limited partners associated with such series, then by

104

each class or group of limited partners associated with general partner associated with a series who has not such series, in either case, by limited partners wrongfully terminated the series or, if none, the limited associated with such series who own more than two- partners associated with the series or a person approved thirds of the then current percentage or other interest in by the limited partners associated with the series or, if the profits of the limited partnership associated with there is more than one (1) class or group of limited such series owned by all of the limited partners partners associated with the series, then by each class or associated with such series or by the limited partners in group of limited partners associated with the series, in each class or group associated with such series, as either case, by limited partners who own more than fifty appropriate; percent (50%) of the then current percentage or other interest in the profits of the series owned by all of the (d) an event of withdrawal of a general partner limited partners associated with the series or by the associated with the series unless at the time there is at limited partners in each class or group associated with the least one (1) other general partner associated with the series, as appropriate, may wind up the affairs of the series and the partnership agreement permits the series; but, if the series has been established in business of the series to be carried on by the remaining accordance with subsection (2) of this section, the High general partner and that partner does so, but the series Court, upon cause shown, may wind up the affairs of the is not terminated and is not required to be wound up by series upon application of any partner associated with the reason of any event of withdrawal if (i) within ninety series, the partner’s personal representative or assignee, (90) days or such other period as is provided for in the and in connection therewith, may appoint a liquidating partnership agreement after the withdrawal either (A) if trustee. The persons winding up the affairs of a series provided for in the partnership agreement, the then may, in the name of the limited partnership and for and current percentage or other interest in the profits of the on behalf of the limited partnership and such series, take series specified in the partnership agreement owned by all actions with respect to the series as are permitted the remaining partners associated with the series agree, under section 59(2) of this Act. The persons winding up in writing or vote, to continue the business of the series the affairs of a series shall provide for the claims and and to appoint, effective as of the date of withdrawal, obligations of the series and distribute the assets of the one (1) or more additional general partners for the series as provided in section 60 of this Act, which section series if necessary or desired, or (B) if no such right to shall apply to the winding up and distribution of assets of agree or vote to continue the business of the series of a series. Actions taken in accordance with this subsection the limited partnership and to appoint one (1) or more shall not affect the liability of limited partners and shall additional general partners for such series is provided not impose liability on a liquidating trustee. for in the partnership agreement, then more than fifty percent (50%) of the then current percentage or other (12) On application by or for a partner associated interest in the profits of the series owned by the with a series established in accordance with subsection remaining partners associated with the series or, if (2) of this section, the High Court may decree termi- there is more than one (1) class or group of remaining nation of such series whenever it is not reasonably partners associated with the series, then more than fifty practicable to carry on the business of the series in percent (50%) of the then current percentage or other conformity with a partnership agreement. [P.L. 2005-26, interest in the profits of the series owned by each class § 26, adding new section.] or classes or group or groups of remaining partners associated with the series agree, in writing or vote, to § 27. Approval of conversion of a limited continue the business of the series and to appoint, partnership.

effective as of the date of withdrawal, one (1) or more (1) Upon compliance with this section, a domestic additional general partners for the series if necessary or limited partnership may convert to a domestic corpora- desired, or (ii) the business of the series is continued tion or any other unincorporated business, including a pursuant to a right to continue stated in the partnership general partnership or a limited liability company of the agreement and the appointment, effective as of the date Marshall Islands. of withdrawal, of one (1) or more additional general partners to be associated with the series if necessary or (2) If the partnership agreement specifies the manner desired; or of authorizing a conversion of the limited partnership, the conversion shall be authorized as specified in the (e) the termination of such series under subsection partnership agreement. If the partnership agreement does (12) of this section. not specify the manner of authorizing a conversion of the limited partnership and does not prohibit a conversion of (11) Notwithstanding section 59(2) of this Act, unless the limited partnership, the conversion shall be autho- otherwise provided in the partnership agreement, a rized in the same manner as is specified in the 105

partnership agreement for authorizing a merger or consolidation that involves the limited partnership as a (a) the formation of the limited partnership; or constituent party to the merger or consolidation. If the partnership agreement does not specify the manner of (b) the time provided in and upon compliance with authorizing a conversion of the limited partnership or a the partnership agreement or, if the partnership agree- merger or consolidation that involves the limited ment does not so provide, when the person’s admission partnership as a constituent party and does not prohibit a is reflected in the records of the limited partnership. conversion of the limited partnership, the conversion shall be authorized by the approval (a) by all general (2) After the formation of a limited partnership, a person partners, and (b) by the limited partners or, if there is is admitted as a limited partner of the limited partnership: more than one (1) class or group of limited partners, then by each class or group of limited partners, in either case, (a) in the case of a person who is not an assignee of by limited partners who own more than fifty percent a partnership interest, including a person acquiring a (50%) of the then current percentage or other interest in partnership interest directly from the limited part- the profits of the domestic limited partnership owned by nership and a person to be admitted as a limited partner all of the limited partners or by the limited partners in of the limited partnership without acquiring a partner- each class or group, as appropriate. ship interest in the limited partnership, at the time provided in and upon compliance with the partnership (3) Unless otherwise agreed, the conversion of a agreement or, if the partnership agreement does not so domestic limited partnership to another business form provide, upon the consent of all partners and when the pursuant to this section shall not require such limited person’s admission is reflected in the records of the partnership to wind up its affairs under section 59 of this limited partnership; Act or pay its liabilities and distribute its assets under section 60 of this Act. (b) in the case of an assignee of a partnership interest, as provided in section 55 of this Act and at the (4) In connection with a conversion of a domestic time provided in and upon compliance with the limited partnership to another business form pursuant to partnership agreement or, if the partnership agreement this section, rights or securities of or interests in the does not so provide, when any such person’s permitted domestic limited partnership which is to be converted admission is reflected in the records of the limited may be exchanged for or converted into cash, property, partnership; or rights or securities of or interests in the business form into which the domestic limited partnership is being (c) unless otherwise provided in an agreement of converted or, in addition to or in lieu thereof, may be merger or consolidation, in the case of a person exchanged for or converted into cash, property, rights or acquiring a partnership interest in a surviving or securities of or interests in another business form. [P.L. resulting limited partnership pursuant to a merger or 2005-26, § 27, adding new section.] consolidation approved in accordance with section 20(2) of this Act, at the time provided in and upon DIVISION 3: compliance with the partnership agreement of the LIMITED PARTNERS surviving or resulting limited partnership.

§ 28. Admission of limited partners. (3) In connection with the domestication of a non- § 29. Classes and voting. Marshall Islands entity (as defined in section 23 of this § 30. Liability to third parties. Act) as a limited partnership in the Republic of the § 31. Person erroneously believing himself or Marshall Islands in accordance with section 23 of this herself limited partner. Act or the conversion of an other entity (as defined in § 32. Requirement for keeping accounting records, section 25 of this Act) to a domestic limited partnership minutes, and records of partners and in accordance with section 25 of this Act, a person is beneficial owners; access to and admitted as a limited partner of the limited partnership at confidentiality of information. the time provided in and upon compliance with the § 33. Remedies for breach of partnership partnership agreement. agreement by limited partner. (4) A person may be admitted to a limited partnership § 28. Admission of limited partners. as a limited partner of the limited partnership and may receive a partnership interest in the limited partnership (1) In connection with the formation of a limited without making a contribution or being obligated to make partnership, a person is admitted as a limited partner of a contribution to the limited partnership. Unless other- the limited partnership upon the later to occur of: wise provided in a partnership agreement, a person may 106

be admitted to a limited partnership as a limited partner of this Act shall be deemed to be permitted by this of the limited partnership without acquiring a partnership section. interest in the limited partnership. Unless otherwise provided in a partnership agreement, a person may be (5) Unless otherwise provided in a partnership admitted as the sole limited partner of a limited partner- agreement, meetings of limited partners may be held by ship. means of communications equipment which permits the persons participating in the meeting to communicate with (5) Unless otherwise provided in a partnership each other, and participation in a meeting pursuant to this agreement or another agreement, a limited partner shall subsection shall constitute presence in person at the have no preemptive right to subscribe to any additional meeting. Unless otherwise provided in a partnership issue of partnership interests or another interest in a agreement, on any matter that is to be voted on, limited partnership. [P.L. 1990-91, § 186; amended by consented to or approved by limited partners, the limited P.L. 2004-17, § 186; amended by P.L. 2005-26, § 28.] partners may take such action without a meeting, without prior notice and without a vote if consented to or § 29. Classes and voting. approved, in writing, by electronic transmission or by any other means permitted by law, by limited partners (1) A partnership agreement may provide for classes having not less than the minimum number of votes that or groups of limited partners having such relative rights, would be necessary to authorize or take such action at a powers and duties as the partnership agreement may meeting at which all limited partners entitled to vote provide, and may make provision for the future creation thereon were present and voted. Unless otherwise in the manner provided in the partnership agreement of provided in a partnership agreement, on any matter that is additional classes or groups of limited partners having to be voted on by limited partners, the limited partners such relative rights, powers and duties as may from time may vote in person or by proxy, and such proxy may be to time be established, including rights, powers and granted in writing, by means of electronic transmission or duties senior to existing classes and groups of limited as otherwise permitted by applicable law. Unless partners. otherwise provided in a partnership agreement, a consent transmitted by electronic transmission by a limited A partnership agreement may provide for the taking of partner or by a person or persons authorized to act for a an action, including the amendment of the partnership limited partner shall be deemed to be written and signed agreement, without the vote or approval of any limited for purposes of this subsection. For purposes of this partner or class or group of limited partners, including an subsection, the term “electronic transmission” means any action to create under the provisions of the partnership form of communication not directly involving the agreement a class or group of partnership interests that physical transmission of paper that creates a record that was not previously outstanding. may be retained, retrieved and reviewed by a recipient thereof and that may be directly reproduced in paper (2) Subject to section 30 of this division, the partner- form by such a recipient through an automated process. ship agreement may grant to all or certain identified limited partners or a specified class or group of the (6) If a partnership agreement provides for the manner limited partners the right to vote separately or with all or in which it may be amended, it may be amended in that any class or group of the limited partners or the general manner or with the approval of all the partners or as partners, on any matter. Voting by limited partners may otherwise permitted by law. If a partnership agreement be on a per capita, number, financial interest, class, group does not provide for the manner in which it may be or any other basis. amended, the partnership agreement may be amended with the approval of all the partners or as otherwise (3) A partnership agreement may set forth provisions permitted by law. A limited partner and any class or relating to notice of the time, place or purpose of any group of limited partners have the right to vote only on meeting at which any matter is to be voted on by any matters as specifically set forth in this Act, on matters limited partners, waiver of any such notice, action by specifically provided by agreement, including a consent without a meeting, the establishment of a record partnership agreement, and on any matter with respect to date, quorum requirements, voting in person or by proxy, which a general partner may determine in its discretion to or any other matter with respect to the exercise of any seek a vote of a limited partner or a class or group of such right to vote. limited partners if a vote on such matter is not contrary to a partnership agreement or another agreement to which a (4) Any right or power, including voting rights, general partner or the limited partnership is a party. A granted to limited partners as permitted under section 30 limited partner and any class or group of limited partners have no other voting rights. A partnership agreement may provide that any limited partner or class or group of 107

limited partners shall have no voting rights. [P.L. 2005- or to provide collateral for the limited partnership or a 26, § 29, adding new section.] general partner;

§ 30. Liability to third parties. (d) to call, request, or attend or participate at a meeting of the partners or the limited partners; (1) A limited partner is not liable for the obligations of a limited partnership unless he or she is also a general (e) to wind up a limited partnership pursuant to partner or, in addition to the exercise of the rights and section 59 of this Act; powers of a limited partner, he or she participates in the control of the business. However, if the limited partner (f) to take any action required or permitted by law does participate in the control of the business, he or she is to bring, pursue or settle or otherwise terminate a liable only to persons who transact business with the derivative action in the right of the limited partnership; limited partnership reasonably believing, based upon the limited partner’s conduct, that the limited partner is a (g) to serve on a committee of the limited general partner. partnership or the limited partners or partners or to appoint, elect or otherwise participate in the choice of a (2) A limited partner does not participate in the control representative or another person to serve on any such of the business within the meaning of subsection (1) of committee, and to act as a member of any such com- this section by virtue of possessing or, regardless of mittee directly or by or through any such representative whether or not the limited partner has the rights or or other person; powers, exercising or attempting to exercise one (1) or more of the following rights or powers or having or, (h) to act or cause the taking or refraining from the regardless of whether or not the limited partner has the taking of any action, including by proposing, appro- rights or powers, acting or attempting to act in one (1) or ving, consenting or disapproving, by voting or more of the following capacities: otherwise, with respect to one (1) or more of the following matters: (a) to be an independent contractor for or to transact business with, including being a contractor for, or to be (i) the dissolution and winding up of the limited an agent or employee of, the limited partnership or a partnership or an election to continue the limited general partner, or to be an officer, director or partnership or an election to continue the business of stockholder of a corporate general partner, or to be a the limited partnership; limited partner of a partnership that is a general partner of the limited partnership, or to be a trustee, admini- (ii) the sale, exchange, lease, mortgage, assign- strator, executor, custodian or other fiduciary or ment, pledge or other transfer of, or granting of a beneficiary of an estate or trust which is a general security interest in, any asset or assets of the limited partner, or to be a trustee, officer, advisor, stockholder partnership; or beneficiary of a business trust or a statutory trust which is a general partner or to be a member, manager, (iii) the incurrence, renewal, refinancing or pay- agent or employee of a limited liability company which ment or other discharge of indebtedness by the is a general partner; limited partnership;

(b) to consult with or advise a general partner or any (iv) a change in the nature of the business; other person with respect to any matter, including the business of the limited partnership, or to act or cause a (v) the admission, removal or retention of a general partner or any other person to take or refrain general partner; from taking any action, including by proposing, approving, consenting or disapproving, by voting or (vi) the admission, removal or retention of a otherwise, with respect to any matter, including the limited partner; business of the limited partnership; (vii) a transaction or other matter involving an (c) to act as surety, guarantor or endorser for the actual or potential conflict of interest; limited partnership or a general partner, to guaranty or assume one (1) or more obligations of the limited (viii) an amendment to the partnership agreement partnership or a general partner, to borrow money from or certificate of limited partnership; the limited partnership or a general partner, to lend money to the limited partnership or a general partner, (ix) the indemnification of any partner or other person; 108

the rights or powers, exercising or attempting to exercise (x) the making of, or calling for, or the making one (1) or more of the rights or powers or having or, of other determinations in connection with, contribu- regardless of whether or not the limited partner has the tions; rights or powers, acting or attempting to act in one (1) or more of the capacities which are permitted under this (xi) the making of, or the making of other section. [P.L. 1990-91, § 185; amended by P.L. 2004- determinations in connection with or concerning, 17, § 185; amended by P.L. 2005-26, § 30.] investments, including investments in property, whether real, personal or mixed, either directly or § 31. Person erroneously believing himself or indirectly, by the limited partnership; herself limited partner.

(1) Except as provided in subsection (2) of this (xii) such other matters as are stated in the section, a person who makes a contribution to a partnership agreement or in any other agreement or partnership and erroneously but in good faith believes in writing; or that he or she has become a limited partner in the

partnership is not a general partner in the partnership and (xiii) the merger or consolidation of a limited is not bound by its obligations by reason of making the partnership. contribution, receiving distributions from the partnership

or exercising any rights of a limited partner, if, within a (i) to serve on the board of directors or a committee reasonable time after ascertaining the mistake: of, to consult with or advise, to be an officer, director, stockholder, partner (other than a general partner of a (a) in the case of a person who wishes to be a limi- general partner of the limited partnership), member, ted partner, he or she causes an appropriate certificate manager, trustee, agent or employee of, or to be a to be executed and filed; or fiduciary or contractor for, any person in which the limited partnership has an interest or any person (b) in the case of a person who wishes to withdraw providing management, consulting, advisory, custody from the partnership, that person takes such action as or other services or products for, to or on behalf of, or may be necessary to withdraw. otherwise having a business or other relationship with, the limited partnership or a general partner of the (2) A person who makes a contribution under the limited partnership; or circumstances described in subsection (1) of this section is liable as a general partner to any third party who (j) any right or power granted or permitted to transacts business with the partnership prior to the occur- limited partners under this chapter and not specifically rence of either of the events referred to in subsection (1) enumerated in this subsection. of this section:

(3) The enumeration in subsection (2) of this section (a) if such person knew or should have known either does not mean that the possession or exercise of any that no certificate has been filed or that the certificate other powers or having or acting in other capacities by a inaccurately refers to the person as a general partner; limited partner constitutes participation by him or her in and the control of the business of the limited partnership.

(4) A limited partner does not participate in the control (b) if the third party actually believed in good faith of the business within the meaning of subsection (1) of that such person was a general partner at the time of this section by virtue of the fact that all or any part of the the transaction, acted in reasonable reliance on such name of such limited partner is included in the name of belief and extended credit to the partnership in the limited partnership. reasonable reliance on the credit of such person. [P.L. 1990-91, § 189; amended by P.L. 2005-26, § 31.] (5) This section does not create rights or powers of limited partners. Such rights and powers may be created § 32. Requirement for keeping accounting records, only by a certificate of limited partnership, a partnership minutes, and records of partners and agreement or any other agreement or in writing, or other beneficial owners; access to and sections of this chapter. confidentiality of information.

(6) A limited partner does not participate in the (1) Requirement for keeping accounting records, control of the business within the meaning of subsection minutes, and records of partners and beneficial owners. (1) of this section regardless of the nature, extent, scope, number or frequency of the limited partner’s possessing (a) Accounting records. Every domestic limited or, regardless of whether or not the limited partner has partnership shall keep reliable and complete accounting 109

records, to include correct and complete books and (c) Records of partners and beneficial owners. records of account. Accounting records must be (i) Every domestic limited partnership shall sufficient to correctly explain all transactions, enable keep an up-to-date record containing the names and the financial position of the limited partnership to be addresses of all partners. A resident domestic limited determined with reasonable accuracy at any time, and partnership shall keep the records required to be allow financial statements to be prepared. Additionally, maintained by this subsection in the Republic. every domestic limited partnership shall keep underlying documentation for accounting records (ii) Every domestic limited partnership, maintained pursuant to this subsection, such as, but not excluding publicly-traded companies, formed after limited to, invoices and contracts, which shall reflect the effective date of this law shall, in addition to the all sums of money received and expended and the records of partners required under subparagraph (i) matters in respect of which the receipt and expenditure of this paragraph, use all reasonable efforts to obtain takes place; all sales, purchases, and other transactions; and maintain an up-to-date record of the names and and the assets and liabilities of the limited partnership. addresses of all beneficial owners of the limited A resident domestic limited partnership shall keep all partnership. Every domestic limited partnership, accounting records and underlying documentation as excluding publicly-traded companies, formed on or described in this subsection in the Republic. Upon before such date shall comply with the requirements demand of the registered agent for non-resident of this subparagraph (ii) within 360 days of such domestic entities in connection with the performance date. of its audit functions or pursuant to a valid governmental request made to the registered agent for (iii) For the purposes of complying with non-resident domestic entities, every non-resident subparagraph (ii) of this paragraph, every domestic domestic limited partnership shall produce all limited partnership shall use all reasonable efforts to accounting records and underlying documentation notify its partners and beneficial owners of their required to be maintained pursuant to this subsection to obligation to provide the information required to be the registered agent for non-resident domestic entities kept by the limited partnership under the in the Republic. The Minister of Finance or any person aforementioned subparagraph. The requirement to designated by him or her under or pursuant to the Tax use all reasonable efforts shall be satisfied by at least Information Exchange Agreement (Implementation) annually requesting by written notice to the partners Act of 1989 (41 MIRC, Chapter 4) or the Tax the information required to be maintained by the Information Exchange Agreement (Execution and limited partnership under the aforementioned Implementation) Act, 2010 (48 MIRC, Chapter 4) may subparagraph. For the purpose of identifying require the registered agent for non-resident domestic beneficial owners, a limited partnership is entitled to entities to demand production of all accounting records rely, without further inquiry, on the response of a and underlying documentation required to be person to a written notice sent in good faith by the maintained pursuant to this subsection. Additionally, limited partnership, unless the limited partnership upon formation, or in the case of a limited partnership has reason to believe that the response is misleading existing prior to the effective date of this law, within or false. 360 days of such date, and annually thereafter, an attestation, in a form prescribed by the Registrar for (iv) For the purpose of this Division, a partner or non-resident domestic limited partnerships, will be beneficial owner of a domestic limited partnership made by every non-resident domestic limited has an obligation to provide the information partnership, excluding publicly-traded companies, to requested by such limited partnership in accordance the Registrar for non-resident domestic limited with this paragraph. partnerships that accounting records and underlying documentation required to be maintained pursuant to (v) For the purpose of this Division, “beneficial this subsection are being maintained in accordance owner” means the natural person(s) who ultimately with this section or, if applicable, that such records are owns or controls, or has ultimate effective control of, not being maintained (wholly or partially). a legal entity or arrangement, whether directly or indirectly, or on whose behalf such interest in such (b) Minutes. Every domestic limited partnership legal entity or arrangement is held. For a domestic shall keep minutes of all meetings of partners and of limited partnership other than a publicly-traded actions taken on consent by partners. A resident company, the natural person(s) who exercises control domestic limited partnership shall keep such minutes in over such limited partnership through direct or the Republic. indirect ownership of more than 25% of the partnership interests or voting rights in such limited

110

partnership shall be regarded as the beneficial evidence, and accepted for all other purposes, to the owner(s); if no natural person exerts control through same extent as an original written record of the same such an ownership interest, the natural person(s) who information would have been, provided the written exercises control over such limited partnership form accurately portrays the record. through management of the limited partnership or other means shall be regarded as the beneficial (e) Retention period. All records required to be kept, owner(s). retained, or maintained under this section shall be kept, retained, or maintained for a minimum of five (5) (vi) Upon demand of the registered agent for years. non-resident domestic entities in connection with the performance of its audit functions or pursuant to a (f) Failure to maintain or produce records or to valid governmental request made to the registered make attestations. Any person who knowingly or agent for non-resident domestic entities, every non- recklessly fails to keep, retain, or maintain records as resident domestic limited partnership shall produce required under this subsection, or who fails to produce all records of partners and beneficial owners required records within sixty (60) days upon demand or to make to be maintained pursuant to this subsection to the attestations as required under this subsection, or who registered agent for non-resident domestic entities in willfully keeps, retains, maintains, or produces false or the Republic. The Minister of Finance or any person misleading records or makes false or misleading designated by him or her under or pursuant to the attestations, shall be liable to a fine not exceeding Tax Information Exchange Agreement $50,000, cancellation of the limited partnership’s (Implementation) Act of 1989 (41 MIRC, Chapter 4) certificate of limited partnership, or both. Persons shall or the Tax Information Exchange Agreement not be liable under this subsection for any failure to (Execution and Implementation) Act, 2010 (48 keep, retain or maintain the beneficial ownership MIRC, Chapter 4) may require the registered agent information required to be maintained and produced for non-resident domestic entities to demand under this subsection if all reasonable efforts in production of all records of partners and beneficial compliance with the requirements of this subsection owners required to be maintained pursuant to this have been made to obtain and maintain such subsection. Additionally, upon formation, or in the information. case of a limited partnership existing prior to the effective date of this law, within 360 days of such (2) Access to and confidentiality of information. date, and annually thereafter, an attestation, in a form prescribed by the Registrar for non-resident domestic (a) Each limited partner has the right, subject to such limited partnerships, will be made by every non- reasonable standards (including standards governing resident domestic limited partnership, excluding what information and documents are to be furnished, at publicly-traded companies, to the Registrar for non- what time and location and at whose expense) as may be resident domestic limited partnerships that records of set forth in the partnership agreement or otherwise partners and beneficial owners required to be established by the general partners, to obtain from the maintained pursuant to this subsection are being general partners from time to time upon reasonable maintained in accordance with this section or, if demand for any purpose reasonably related to the limited applicable, that such records are not being partner’s interest as a limited partner: maintained (wholly or partially). (i) true and full information regarding the status of (d) Form of records. Any records maintained by a the business and financial condition of the limited limited partnership in the regular course of its business, partnership; including its record of partners, books of account, and minute books, may be kept on, or be in the form of, (ii) promptly after becoming available, a copy of the punch cards, magnetic tape, photographs, micro- limited partnership’s financial statements or income tax photographs, or any other information storage device, returns, if applicable, for each year; provided that the records so kept can be converted into clearly legible written form within a reasonable time. (iii) a current list of the name and last known Any limited partnership shall so convert any records so business, residence or mailing address of each partner; kept upon the request of any person entitled to inspect such records. When records are kept in such manner, a (iv) a copy of any written partnership agreement and clearly legible written form produced from the cards, certificate of limited partnership and all amendments tapes, photographs, microphotographs, or other thereto, together with executed copies of any written information storage device shall be admissible in powers of attorney pursuant to which the partnership

111

agreement and any certificate and all amendments and (b) that the information the limited partner seeks is thereto have been executed; reasonably related to the limited partner’s interest as a limited partner. The High Court may, in its discretion, (v) true and full information regarding the amount prescribe any limitations or conditions with reference to of cash and a description and statement of the agreed the obtaining of information, or award such other or value of any other property or services contributed by further relief as the High Court may deem just and proper. each partner and which each partner has agreed to The High Court may order books, documents and records, contribute in the future, and the date on which each pertinent extracts therefrom, or duly authenticated copies became a partner; and thereof, to be brought and kept in the Marshall Islands upon such terms and conditions as the order may (vi) other information regarding the affairs of the prescribe. limited partnership as is just and reasonable. (f) The rights of a limited partner to obtain infor- (b) A general partner shall have the right to keep mation as provided in this section may be restricted in an confidential from limited partners for such period of time original partnership agreement or in any subsequent as the general partner deems reasonable, any information amendment approved or adopted by all of the partners which the general partner reasonably believes to be in the and in compliance with any applicable requirements of nature of trade secrets or other information the disclosure the partnership agreement. The provisions of this subsec- of which the general partner in good faith believes is not tion shall not be construed to limit the ability to impose in the best interest of the limited partnership or could restrictions on the rights of a limited partner to obtain damage the limited partnership or its business or which information by any other means permitted under this the limited partnership is required by law or by agree- section. [P.L. 1990-91, § 188; amended by P.L. 2004-17, ment with a third party to keep confidential. § 188; amended by P.L. 2005-26, § 32; amended by P.L. 2014-31, adding new §32(1); amended by P.L. 2015-40, (c) A limited partnership may maintain its records in §32; amended by P.L. 2017-39; P.L. 2017-52, § 1.] other than a written form if such form is capable of conversion into written form within a reasonable time. § 33. Remedies for breach of partnership agreement by limited partner. (d) Any demand under this section shall be in writing and shall state the purpose of such demand. A partnership agreement may provide that:

(e) Any action to enforce any right arising under this (1) a limited partner who fails to perform in accordance section shall be brought in the High Court. If a general with, or to comply with the terms and conditions of, the partner refuses to permit a limited partner to obtain from partnership agreement shall be subject to specified the general partner the information described in subsection penalties or specified consequences; and (2)(a) of this section or does not reply to the demand that has been made within five (5) business days after the (2) at the time or upon the happening of events demand has been made, the limited partner may apply to specified in the partnership agreement, a limited partner the High Court for an order to compel such disclosure. The shall be subject to specified penalties or specified conse- High Court is hereby vested with exclusive jurisdiction to quences. determine whether or not the person seeking such information is entitled to the information sought. The High Such specified penalties or specified consequences may Court may summarily order the general partner to permit include and take the form of any penalty or consequence the limited partner to obtain the information described in set forth in section 41 of this Act. [P.L. 2005-26, § 33, subsection (2)(a) of this section and to make copies or adding new section.] abstracts therefrom, or the High Court may summarily order the general partner to furnish to the limited partner DIVISION 4: the information described in subsection (2)(a) of this GENERAL PARTNERS section on the condition that the limited partner first pay to the limited partnership the reasonable cost of obtaining § 34. Admission of general partners. and furnishing such information and on such other § 35. Events of withdrawal. conditions as the High Court deems appropriate. When a § 36. General powers and liabilities. limited partner seeks to obtain the information described in § 37. Contributions by a general partner. subsection (2)(a) of this section, the limited partner shall § 38. Classes and voting. first establish (a) that the limited partner has complied with § 39. Remedies for breach of partnership the provisions of this section respecting the form and agreement by general partner. manner of making demand for obtaining such information, 112

(iii) is adjudged bankrupt or insolvent, or has § 34. Admission of general partners. entered against him or her an order for relief in any bankruptcy or insolvency proceeding; (1) A person may be admitted to a limited partnership as a general partner of the limited partnership and may (iv) files a petition or answer seeking for himself receive a partnership interest in the limited partnership or herself any reorganization, arrangement, composi- without making a contribution or being obligated to make tion, readjustment, liquidation, dissolution or similar a contribution to the limited partnership. Unless other- relief under any statute, law or regulation; wise provided in a partnership agreement, a person may be admitted to a limited partnership as a general partner (v) files an answer or other pleading admitting of the limited partnership without acquiring a partnership or failing to contest the material allegations of a interest in the limited partnership. Unless otherwise petition filed against him or her in any proceeding of provided in a partnership agreement, a person may be this nature; or admitted as the sole general partner of a limited partnership without making a contribution or being obligated to (vi) seeks, consents to or acquiesces in the make a contribution to the limited partnership or without appointment of a trustee, receiver or liquidator of the acquiring a partnership interest in the limited partnership. general partner or of all or any substantial part of his Nothing contained in this subsection shall affect the first properties; sentence of section 36(2) of this division. (e) unless otherwise provided in the partnership (2) After the filing of a limited partnership’s initial agreement, or with the written consent of all partners, certificate of limited partnership, unless otherwise 120 days after the commencement of any proceeding provided in the partnership agreement, additional general against the general partner seeking reorganization, partners may be admitted only with the written consent of arrangement, composition, readjustment, liquidation, each partner. dissolution or similar relief under any statute, law or regulation, the proceeding has not been dismissed, or if (3) Unless otherwise provided in a partnership within ninety (90) days after the appointment without agreement or another agreement, a general partner shall the general partner’s consent or acquiescence of a have no preemptive right to subscribe to any additional trustee, receiver or liquidator of the general partner or issue of partnership interests or another interest in a limi- of all or any substantial part of his or her properties, the ted partnership. [P.L. 2005-26, § 34, adding new section.] appointment is not vacated or stayed, or within ninety (90) days after the expiration of any such stay, the § 35. Events of withdrawal. appointment is not vacated;

(1) A person ceases to be a general partner of a limited (f) in the case of a general partner who is a natural partnership upon the happening of any of the following person: events: (i) the general partner’s death; or (a) the general partner withdraws from the limited partnership as provided in section 46 of this Act; (ii) the entry by a court of competent jurisdiction adjudicating the general partner incompetent to (b) the general partner ceases to be a general partner manage his or her person or property; of the limited partnership as provided in section 53 of this Act; (g) in the case of a general partner who is acting as a general partner by virtue of being a trustee of a trust, (c) the general partner is removed as a general the termination of the trust (but not merely the partner in accordance with the partnership agreement; substitution of a new trustee);

(d) unless otherwise provided in the partnership (h) in the case of a general partner that is a separate agreement, or with the written consent of all partners, partnership, the dissolution and commencement of the general partner: winding up of the separate partnership;

(i) makes an assignment for the benefit of (i) in the case of a general partner that is a creditors; corporation, the filing of a certificate of dissolution, or its equivalent, for the corporation or the revocation of (ii) files a voluntary petition in bankruptcy; its charter and the expiration of ninety (90) days after the date of notice to the corporation of revocation without a reinstatement of its charter; 113

person to whom any such rights and powers have been (j) unless otherwise provided in the partnership delegated to be a general partner of the limited partnership. agreement, or with the written consent of all partners, in the case of a general partner that is an estate, the (4) A judgment creditor of a general partner of a distribution by the fiduciary of the estate’s entire limited partnership may not levy execution against the interest in the limited partnership; assets of the general partner to satisfy a judgment based on a claim against the limited partnership unless: (k) in the case of a general partner that is a limited liability company, the dissolution and commencement (a) a judgment based on the same claim has been of winding up of the limited liability company; or obtained against the limited partnership and a writ of execution on the judgment has been returned unsatis- (l) in the case of a general partner who is not an fied in whole or in part; individual, partnership, limited liability company, corporation, trust or estate, the termination of the (b) the limited partnership is a debtor in bankruptcy; general partner. (c) the general partner has agreed that the creditor (2) A general partner who suffers an event that with need not exhaust the assets of the limited partnership; the passage of the specified period becomes an event of withdrawal under subsections (1)(d) or (e) of this section (d) a court grants permission to the judgment shall notify each other general partner, or in the event creditor to levy execution against the assets of the that there is no other general partner, each limited general partner based on a finding that the assets of the partner, of the occurrence of the event within thirty (30) limited partnership that are subject to execution are days after the date of occurrence of the event of clearly insufficient to satisfy the judgment, that withdrawal. [P.L. 2005-26, § 35, adding new section.] exhaustion of the assets of the limited partnership is excessively burdensome, or that the grant of permis- § 36. General powers and liabilities. sion is an appropriate exercise of the court’s equitable powers; or (1) Except as provided in this Act or in the partnership agreement, a general partner of a limited partnership has (e) liability is imposed on the general partner by law the rights and powers and is subject to the restrictions of or contract independent of the existence of the limited a partner in a partnership that is governed by the partnership. [P.L. 1990-91, § 187; amended by P.L. Marshall Islands Revised Partnership Act. 2004-17, § 187; amended by P.L. 2005-26, § 36.]

(2) Except as provided in this Act, a general partner of § 37. Contributions by a general partner. a limited partnership has the liabilities of a partner in a partnership that is governed by the Marshall Islands A general partner of a limited partnership may make Revised Partnership Act to persons other than the contributions to the limited partnership and share in the partnership and the other partners. Except as provided in profits and losses of, and in distributions from, the this Act or in the partnership agreement, a general partner limited partnership as a general partner. A general partner of a limited partnership has the liabilities of a partner in a also may make contributions to and share in profits, partnership that is governed by the Marshall Islands losses and distributions as a limited partner. A person Revised Partnership Act to the partnership and to the who is both a general partner and a limited partner has other partners. the rights and powers, and is subject to the restrictions and liabilities, of a general partner and, except as (3) Unless otherwise provided in the partnership agree- provided in the partnership agreement, also has the rights ment, a general partner of a limited partnership has the and powers, and is subject to the restrictions, of a limited power and authority to delegate to one (1) or more other partner to the extent of his or her participation in the persons the general partner’s rights and powers to manage partnership as a limited partner. [P.L. 2005-26, § 37, and control the business and affairs of the limited adding new section.] partnership, including to delegate to agents, officers and employees of the general partner or the limited partner- § 38. Classes and voting. ship, and to delegate by a management agreement or another agreement with, or otherwise to, other persons. (1) A partnership agreement may provide for classes Unless otherwise provided in the partnership agreement, or groups of general partners having such relative rights, such delegation by a general partner of a limited partner- powers and duties as the partnership agreement may ship shall not cause the general partner to cease to be a provide, and may make provision for the future creation general partner of the limited partnership or cause the in the manner provided in the partnership agreement of 114

additional classes or groups of general partners having act for a general partner shall be deemed to be written such relative rights, powers and duties as may from time and signed for purposes of this subsection. For purposes to time be established, including rights, powers and of this subsection, the term “electronic transmission” duties senior to existing classes and groups of general means any form of communi-cation not directly partners. involving the physical transmission of paper that creates a record that may be retained, retrieved and reviewed by A partnership agreement may provide for the taking of a recipient thereof and that may be directly reproduced in an action, including the amendment of the partnership paper form by such a recipient through an automated agreement, without the vote or approval of any general process. [P.L. 2005-26, § 38, adding new section; partner or class or group of general partners, including an amended by P.L. 2017-52, § 4.] action to create under the provisions of the partnership agreement a class or group of partnership interests that § 39. Remedies for breach of partnership was not previously outstanding. agreement by general partner.

(2) The partnership agreement may grant to all or A partnership agreement may provide that (1) a general certain identified general partners or a specified class or partner who fails to perform in accordance with, or to group of the general partners the right to vote, separately comply with the terms and conditions of, the partnership or with all or any class or group of the limited partners or agreement shall be subject to specified penalties or the general partners, on any matter. Voting by general specified consequences, and (2) at the time or upon the partners may be on a per capita, number, financial happening of events specified in the partnership interest, class, group or any other basis. agreement, a general partner shall be subject to specified penalties or specified consequences. Such specified (3) A partnership agreement may set forth provisions penalties or specified consequences may include and take relating to notice of the time, place or purpose of any the form of any penalty or consequence set forth in meeting at which any matter is to be voted on by any section 41(3) of this Act. [P.L. 2005-26, § 39, adding general partner, waiver of any such notice, action by new section.] consent without a meeting, the establishment of a record date, quorum requirements, voting in person or by proxy, DIVISION 5: or any other matter with respect to the exercise of any FINANCE such right to vote. § 40. Form of contribution. (4) Unless otherwise provided in a partnership § 41. Liability for contribution. agreement, meetings of general partners may be held by § 42. Allocation of profits and losses. means of communications equipment which permits the § 43. Allocation of distributions. persons participating in the meeting to communicate with § 44. Defense of usury not available. each other, and participation in a meeting pursuant to this subsection shall constitute presence in person at the meeting. Unless otherwise provided in a partnership § 40. Form of contribution. agree-ment, on any matter that is to be voted on, consented to or approved by general partners, the general The contribution of a partner may be in cash, property partners may take such action without a meeting, without or services rendered, or a promissory note or other prior notice and without a vote if consented to or obligation to contribute cash or property or to perform approved, in writing, by electronic transmission or by services. [P.L. 1990-91, § 182; amended by P.L. 2004- any other means permitted by law, by general partners 17, § 182; amended by P.L. 2005-26, § 40.] having not less than the minimum number of votes that would be necessary to authorize or take such action at a § 41. Liability for contribution. meeting at which all general partners entitled to vote thereon were present and voted. Unless otherwise (1) (a) Except as provided in the partnership provided in a partnership agreement, on any matter that is agreement, a partner is obligated to the limited part- to be voted on by general partners, the general partners nership to perform any promise to contribute cash or may vote in person or by proxy, and such proxy may be property or to perform services, even if that partner is granted in writing, by means of electronic transmission or unable to perform because of death, disability or any as otherwise permitted by applicable law. Unless other reason. If a partner does not make the required otherwise provided in a partner-ship agreement, a contribution of property or services, he or she is consent transmitted by electronic transmission by a obligated at the option of the limited partnership to general partner or by a person or persons authorized to contribute cash equal to that portion of the agreed

115

value (as stated in the records of the limited part- basis of the agreed value (as stated in the records of the nership) of the contribution that has not been made. limited partnership) of the contributions made by each partner to the extent they have been received by the (b) The foregoing option shall be in addition to, and limited partnership and have not been returned. [P.L. not in lieu of, any other rights, including the right to 1990-91, § 193; amended by P.L. 2005-26, § 42.] specific performance, that the limited partnership may § 43. Allocation of distributions. have against such partner under the partnership agreement or applicable law. Distributions of cash or other assets of a limited partnership shall be allocated among the partners, and (2) (a) Unless otherwise provided in the partnership among classes or groups of partners, in the manner agreement, the obligation of a partner to make a provided in the partnership agreement. If the partnership contribution or return money or other property paid or agreement does not so provide, distributions shall be distributed in violation of this Act may be compro- made on the basis of the agreed value (as stated in the mised only by consent of all the partners. Notwith- records of the limited partnership) of the contributions standing the compromise, a creditor of a limited made by each partner to the extent they have been partnership who extends credit, after the entering into received by the limited partnership and have not been of a partnership agreement or an amendment thereto returned. [P.L. 1990-91, § 192; amended by P.L. 2004- which, in either case, reflects the obligation, and before 17, § 192; amended by P.L. 2005-26, § 43.] the amendment thereof to reflect the compromise, may enforce the original obligation to the extent that, in § 44. Defense of usury not available. extending credit, the creditor reasonably relied on the obligation of a partner to make a contribution or return. No obligation of a partner of a limited partnership to the limited partnership arising under the partnership (b) A conditional obligation of a partner to make a agreement or a separate agreement or writing, and no contribution or return money or other property to a note, instrument or other writing evidencing any such limited partnership may not be enforced unless the obligation of a partner, shall be subject to the defense of conditions to the obligation have been satisfied or usury, and no partner shall interpose the defense of usury waived as to or by such partner. Conditional obli- with respect to any such obligation in any action. [P.L. gations include contributions payable upon a discre- 2005-26, § 44, adding new section.] tionary call of a limited partnership or a general partner prior to the time the call occurs. DIVISION 6: DISTRIBUTIONS AND WITHDRAWAL (3) A partnership agreement may provide that the interest of any partner who fails to make any contribution § 45. Interim distributions. that he or she is obligated to make shall be subject to § 46. Withdrawal of general partner and specified penalties for, or specified consequences of, assignment of general partner’s partnership such failure. Such penalty or consequence may take the interest. form of reducing or eliminating the defaulting partner’s § 47. Withdrawal of limited partner. proportionate interest in the limited partnership, subor- § 48. Distribution upon withdrawal. dinating the partnership interest to that of nondefaulting § 49. Distribution in kind. partners, a forced sale of his or her partnership interest, § 50. Right to distribution. forfeiture of that partnership interest, the lending by other § 51. Limitations on distribution. partners of the amount necessary to meet his or her § 52. Nature of partnership interest. commitment, a fixing of the value of that partnership interest by appraisal or by formula and redemption or sale of the partnership interest at such value, or other penalty or consequence. [P.L. 1990-91, § 195; amended § 45. Interim distributions. by P.L. 2005-26, § 41.] Except as provided in this division, to the extent and at § 42. Allocation of profits and losses. the times or upon the happening of the events specified in the partnership agreement, a partner is entitled to receive The profits and losses of a limited partnership shall be from a limited partnership distributions before withdrawing allocated among the partners, and among classes or from the limited partnership and before the dissolution groups of partners, in the manner provided in the and winding up thereof. [P.L. 2005-26, § 45, adding new partnership agreement. If the partnership agreement does section.] not so provide, profits and losses shall be allocated on the 116

§ 46. Withdrawal of general partner and partnership as of the date of withdrawal based upon such assignment of general partner’s partnership partner’s right to share in distributions from the limited interest. partnership. [P.L. 1990-91, § 201; amended by P.L. 2004-17, § 201; amended by P.L. 2005-26, § 48.] (1) A general partner may withdraw from a limited partnership at the time or upon the happening of events § 49. Distribution in kind. specified in the partnership agreement and in accordance with the partnership agreement. A partnership agreement Except as provided in the partnership agreement, a may provide that a general partner shall not have the partner, regardless of the nature of the partner’s contribu- right to withdraw as a general partner of a limited part- tion, has no right to demand and receive any distribution nership. Notwithstanding that a partnership agreement from a limited partnership in any form other than cash. provides that a general partner does not have the right to Except as provided in the partnership agreement, a withdraw as a general partner of a limited partnership, a partner may not be compelled to accept a distribution of general partner may withdraw from a limited partnership any asset in kind from a limited partnership to the extent at any time by giving written notice to the other partners. that the percentage of the asset distributed exceeds a If the withdrawal of a general partner violates a partner- percentage of that asset which is equal to the percentage ship agreement, in addition to any remedies otherwise in which the partner shares in distributions from the available under applicable law, the limited partnership limited partnership. Except as provided in the partnership may recover from the withdrawing general partner agreement, a partner may be compelled to accept a distri- damages for breach of the partnership agreement and bution of any asset in kind from a limited partnership to offset the damages against the amount otherwise the extent that the percentage of the asset distributed is distributable to the withdrawing general partner. equal to a percentage of that asset which is equal to the percentage in which the partner shares in distributions (2) Notwithstanding anything to the contrary set forth from the limited partnership. [P.L. 1990-91, § 201; amended in this Act, a partnership agreement may provide that a by P.L. 2005-26, § 49.] general partner may not assign a partnership interest in a limited partnership prior to the dissolution and winding § 50. Right to distribution. up of the limited partnership. [P.L. 2005-26, § 46, adding new section.] (1) Subject to sections 51 and 60 of this Act, and unless otherwise provided in the partnership agreement, § 47. Withdrawal of limited partner. at the time a partner becomes entitled to receive a distribution, he or she has the status of, and is entitled to A limited partner may withdraw from a limited all remedies available to, a creditor of the limited partnership only at the time or upon the happening of partnership with respect to the distribution. events specified in the partnership agreement and in accordance with the partnership agreement. Notwith- (2) A partnership agreement may provide for the standing anything to the contrary under applicable law, establishment of a record date with respect to allocations unless a partnership agreement provides otherwise, a and distributions by a limited partnership. [P.L. 1990-91, limited partner may not withdraw from a limited partner- § 192; amended by P.L. 2004-17, § 192; amended by ship prior to the dissolution and winding up of the limited P.L. 2005-26, § 50.] partnership. Notwithstanding anything to the contrary under applicable law, a partnership agreement may § 51. Limitations on distribution. provide that a partnership interest may not be assigned prior to the dissolution and winding up of the limited (1) A limited partnership shall not make a distribution partnership. [P.L. 1990-91, § 194; amended by P.L. to a partner to the extent that at the time of the distri- 2004-17, § 194; amended by P.L. 2005-26, § 47.] bution, after giving effect to the distribution, all liabilities of the limited partnership, other than liabilities to partners § 48. Distribution upon withdrawal. on account of their partnership interests and liabilities for which the recourse of creditors is limited to specified Except as provided in this division, upon withdrawal property of the limited partnership, exceed the fair value any withdrawing partner is entitled to receive any of the assets of the limited partnership, except that the distribution to which such partner is entitled under a fair value of property that is subject to a liability for partnership agreement and, if not otherwise provided in a which the recourse of creditors is limited shall be partnership agreement, such partner is entitled to receive, included in the assets of the limited partnership only to within a reasonable time after withdrawal, the fair value the extent that the fair value of that property exceeds that of such partner’s partnership interest in the limited liability. For purposes of this subsection, the term “distri-

117

bution” shall not include amounts constituting reasonable become or to exercise any rights or powers of a compensation for present or past services or reasonable partner; payments made in the ordinary course of business pursuant to a bona fide retirement plan or other benefits (c) an assignment of a partnership interest entitles program. the assignee to share in such profits and losses, to receive such distribution or distributions, and to receive (2) A limited partner who receives a distribution in such allocation of income, gain, loss, deduction, or violation of subsection (1) of this section, and who knew credit or similar item to which the assignor was at the time of the distribution that the distribution entitled, to the extent assigned; and violated subsection (1) of this section, shall be liable to the limited partnership for the amount of the distribution. (d) A partner ceases to be a partner and to have the A limited partner who receives a distribution in violation power to exercise any rights or powers of a partner of subsection (1) of this section, and who did not know at upon assignment of all partnership interests. Unless the time of the distribution that the distribution violated otherwise provided in a partnership agreement, the subsection (1) of this section, shall not be liable for the pledge of, or granting of a security interest, lien or amount of the distribution. Subject to subsection (3) of other encumbrance in or against, any or all of the this section, this subsection shall not affect any obligation partnership interest of a partner shall not cause the or liability of a limited partner under an agreement or partner to cease to be a partner or to have the power to other applicable law for the amount of a distribution. exercise any rights or powers of a partner.

(3) Unless otherwise agreed, a limited partner who (2) Unless otherwise provided in a partnership receives a distribution from a limited partnership shall agreement, a partner’s interest in a limited partnership have no liability under this Act or other applicable law may be evidenced by a certificate of partnership interest for the amount of the distribution after the expiration of issued by the limited partnership. A partnership agree- three (3) years from the date of the distribution. [P.L. ment may provide for the assignment or transfer of any 1990-91, § 194; amended by P.L. 2004-17, § 194; amend partnership interest represented by such a certificate and by P.L. 2005-26, § 51.] make other provisions with respect to such certificates.

§ 52. Nature of partnership interest. (3) Unless otherwise provided in a partnership agreement and except to the extent assumed by A partnership interest is personal property. A partner agreement, until an assignee of a partnership interest has no interest in specific limited partnership property. becomes a partner, the assignee shall have no liability as [P.L. 1990-91, § 196; amended by P.L. 2005-26, § 52.] a partner solely as a result of the assignment.

DIVISION 7: (4) Unless otherwise provided in the partnership ASSIGNMENT OF PARTNERSHIP INTERESTS agreement, a limited partnership may acquire, by purchase, redemption or otherwise, any partnership interest § 53. Assignment of partnership interest. or other interest of a partner in the limited partnership. § 54. Partner’s partnership interest subject to Unless otherwise provided in the partnership agreement, charging order. any such interest so acquired by the limited partnership § 55. Right of assignee to become limited partner. shall be deemed canceled. [P.L. 1990-91, § 197; amended § 56. Powers of estate of deceased or incompetent by P.L. 2004-17; § 197; amended by P.L. 2005-26, § 53.] partner. § 54. Partner’s partnership interest subject to charging order. § 53. Assignment of partnership interest. (1) On application by a judgment creditor of a partner (1) Unless otherwise provided in the partnership or of a partner’s assignee, a court having jurisdiction may agreement: charge the partnership interest of the judgment debtor to satisfy the judgment. The court may appoint a receiver of (a) a partnership interest is assignable in whole or in the share of the distributions due or to become due to the part; judgment debtor in respect of the limited partnership, which receiver shall have only the rights of an assignee, (b) an assignment of a partnership interest does not and the court may make all other orders, directions, dissolve a limited partnership or entitle the assignee to accounts and inquiries the judgment debtor might have

118

made or which the circumstances of the case may of this Act, unknown to the assignee at the time the require. assignee became a limited partner and which could not be ascertained from the partnership agreement. (2) A charging order constitutes a lien on the judgment debtor’s partnership interest. The court may order a (3) Whether or not an assignee of a partnership foreclosure of the partnership interest subject to the interest becomes a limited partner, the assignor is not charging order at any time. The purchaser at the released from liability to the limited partnership under foreclosure sale has only the rights of an assignee. this Act. [P.L. 1990-91, § 197; amended by P.L. 2004- 17, § 197; amended by P.L. 2005-26, § 55.] (3) Unless otherwise provided in a partnership agreement, at any time before foreclosure, a partnership § 56. Powers of estate of deceased or incompetent interest charged may be redeemed: partner.

(a) by the judgment debtor; If a partner who is an individual dies or a court of competent jurisdiction adjudges the partner to be incom- (b) with property other than partnership property, by petent to manage the partner’s person or property, the one (1) or more of the other partners; or partner’s personal representative may exercise all of the partner’s rights for the purpose of settling the partner’s (c) by the limited partnership with the consent of all estate or administering the partner’s property, including of the partners whose interests are not so charged. any power under the partnership agreement of an assignee to become a limited partner. If a partner is a (4) This Act does not deprive a partner of a right under corporation, trust or other entity and is dissolved or exemption laws with respect to the partner’s partnership terminated, the powers of that partner may be exercised interest. by its personal representative. [P.L. 1990-91, § 199; amended by P.L. 2005-26, § 56.] (5) This section provides the exclusive remedy by

which a judgment creditor of a partner or partner’s DIVISION 8: assignee may satisfy a judgment out of the judgment DISSOLUTION debtor’s partnership interest.

(6) No creditor of a partner shall have any right to § 57. Nonjudicial dissolution. obtain possession of, or otherwise exercise legal or § 58. Judicial dissolution. equitable remedies with respect to, the property of the § 59. Winding up. limited partnership. [P.L. 1990-91, § 200; amended by § 60. Distribution of assets. § 61. Trustees or receivers for limited partnerships; P.L. 2004-17, § 200; amended by P.L. 2005-26, § 54.] appointment; powers; duties. § 55. Right of assignee to become limited partner.

(1) An assignee of a partnership interest, including an § 57. Nonjudicial dissolution. assignee of a general partner, may become a limited partner if and to the extent that: A limited partnership is dissolved and its affairs shall be wound up upon the first to occur of the following: (a) the partnership agreement so provides; or (1) At the time specified in a partnership agreement, (b) all partners consent. but if no such time is set forth in the partnership agreement, then the limited partnership shall have a (2) An assignee who has become a limited partner has, perpetual existence; to the extent assigned, the rights and powers, and is subject to the restrictions and liabilities, of a limited (2) Unless otherwise provided in a partnership agree- partner under the partnership agreement and this Act. ment, upon the affirmative vote or written consent of (i) Notwithstanding the foregoing, unless otherwise provi- all general partners and (ii) the limited partners of a ded in the partnership agreement, an assignee who limited partnership or, if there is more than one (1) class or group of limited partners, then by each class or group becomes a limited partner is liable for the obligations of his or her assignor to make contributions as provided in of limited partners, in either case, by limited partners section 41 of this Act, but shall not be liable for the who own more than two-thirds of the then current obligations of the assignor. However, the assignee is not percentage or other interest in the profits of the limited obligated for liabilities, including the obligations of the partnership owned by all of the limited partners or by the assignor to make contributions as provided in section 41 limited partners in each class or group, as appropriate; 119

partners or the personal representative of the last (3) An event of withdrawal of a general partner unless remaining limited partner shall be obligated to agree in at the time there is at least one (1) other general partner writing to continue the business of the limited partnership and the partnership agreement permits the business of the and to the admission of the personal representative of limited partnership to be carried on by the remaining such limited partner or its nominee or designee to the general partner and that partner does so, but the limited limited partnership as a limited partner, effective as of the partnership is not dissolved and is not required to be occurrence of the event that caused the last limited partner wound up by reason of any event of withdrawal if (a) to cease to be a limited partner; or within ninety (90) days or such other period as is provided for in a partnership agreement after the (b) a limited partner is admitted to the limited withdrawal either (i) if provided for in the partnership partnership in the manner provided for in the agreement, the then current percentage or other interest in partnership agreement, effective as of the occurrence of the profits of the limited partnership specified in the the event that caused the last remaining limited partner partnership agreement owned by the remaining partners to cease to be a limited partner, within ninety (90) days agree, in writing by vote, to continue the business of the or such other period as is provided for in the limited partnership and to appoint, effective as of the date partnership agreement after the occurrence of the event of withdrawal, one (1) or more additional general that caused the last remaining limited partner to cease partners if necessary or desired, or (ii) if no such right to to be a limited partner, pursuant to a provision of the agree or vote to continue the business of the limited partnership agreement that specifically provides for the partnership and to appoint one (1) or more additional admission of a limited partner to the limited partner- general partners is provided for in the partnership ship after there is no longer a remaining limited partner agreement, then more than fifty percent (50%) of the then of the limited partnership. current percentage or other interest in the profits of the limited partnership owned by the remaining partners or, (5) Upon the happening of events specified in a if there is more than one (1) class or group of remaining partnership agreement; or partners, then more than fifty percent (50%) of the then current percentage or other interest in the profits of the (6) Entry of a decree of judicial dissolution under sec- limited partnership owned by each class or classes or tion 58 of this division. [P.L. 1990-91, § 198; amended group or groups of remaining partners agree, in writing by P.L. 2004-17, § 198; amended by P.L. 2005-26, § 57.] or by vote, to continue the business of the limited partnership and to appoint, effective as of the date of § 58. Judicial dissolution. withdrawal, one (1) or more additional general partners if necessary or desired, or (b) the business of the limited On application by or for a partner the High Court may partnership is continued pursuant to a right to continue decree dissolution of a limited partnership whenever it is stated in the partnership agreement and the appointment, not reasonably practicable to carry on the business in effective as of the date of withdrawal, of one (1) or more conformity with the partnership agreement. [P.L. 1990- additional general partners if necessary or desired; 91, § 198; amended by P.L. 2004-17, § 198; amended by P.L. 2005-26, § 58.] (4) At the time there are no limited partners; provided, that the limited partnership is not dissolved and is not § 59. Winding up. required to be wound up if: (1) Unless otherwise provided in the partnership (a) unless otherwise provided in a partnership agree- agreement, the general partners who have not wrongfully ment, within ninety (90) days or such other period as is dissolved a limited partnership or, if none, the limited provided for in the partnership agreement after the partners, or a person approved by the limited partners or, occurrence of the event that caused the last remaining if there is more than one (1) class or group of limited limited partner to cease to be a limited partner, the partners, then by each class or group of limited partners, personal representative of the last remaining limited in either case, by limited partners who own more than partner and all of the general partners agree, in writing or fifty percent (50%) of the then current percentage or by vote, to continue the business of the limited other interest in the profits of the limited partnership partnership and to the admission of the personal represen- owned by all of the limited partners or by the limited tative of such limited partner or its nominee or designee to partners in each class or group, as appropriate may wind the limited partnership as a limited partner, effective as of up the limited partnership’s affairs; but the High Court, the occurrence of the event that caused the last remaining upon cause shown, may wind up the limited partnership’s limited partner to cease to be a limited partner; provided, affairs upon application of any partner, the partner’s that a partnership agreement may provide that the general

120

personal representative or assignee, and in connection (c) shall make such provision as will be reasonably therewith, may appoint a liquidating trustee. likely to be sufficient to provide compensation for claims that have not been made known to the limited (2) Upon dissolution of a limited partnership and until partnership or that have not arisen but that, based on the filing of a certificate of cancellation as provided in facts known to the limited partnership, are likely to section 12 of this Act, the persons winding up the limited arise or to become known to the limited partnership partnership’s affairs may, in the name of, and for and on within ten (10) years after the date of dissolution. behalf of, the limited partnership, prosecute and defend suits, whether civil, criminal or administrative, gradually If there are sufficient assets, such claims and settle and close the limited partnership’s business, obligations shall be paid in full and any such provision dispose of and convey the limited partnership’s property, for payment made shall be made in full. If there are discharge or make reasonable provision for the limited insufficient assets, such claims and obligations shall be partnership’s liabilities, and distribute to the partners any paid or provided for according to their priority and, remaining assets of the limited partnership, all without among claims of equal priority, ratably to the extent of affecting the liability of limited partners and without assets available therefore. Unless otherwise provided in imposing the liability of a general partner on a liquidating the partnership agreement, any remaining assets shall be trustee. [P.L. 1990-91, § 201; amended by P.L. 2005-26, distributed as provided in this Act. Any liquidating § 59.] trustee winding up a limited partnership’s affairs who has complied with this section shall not be personally liable § 60. Distribution of assets. to the claimants of the dissolved limited partnership by (1) Upon the winding up of a limited partnership, the reason of such person’s actions in winding up the limited assets shall be distributed as follows: partnership.

(a) to creditors, including partners who are credi- (3) A limited partner who receives a distribution in tors, to the extent otherwise permitted by law, in violation of subsection (1) of this section, and who knew satisfaction of liabilities of the limited partnership at the time of the distribution that the distribution (whether by payment or the making of reasonable violated subsection (1) of this section, shall be liable to provision for payment thereof) other than liabilities for the limited partnership for the amount of the distribution. which reasonable provision for payment has been made For purposes of the immediately preceding sentence, the and liabilities for distributions to partners and former term “distribution” shall not include amounts constituting partners under sections 45 or 48 of this Act; reasonable compensation for present or past services or reasonable payments made in the ordinary course of (b) unless otherwise provided in the partnership business pursuant to a bona fide retirement plan or other agreement, to partners and former partners in satisfac- benefits program. A limited partner who receives a tion of liabilities for distributions under sections 45 or distribution in violation of subsection (1) of this section, 48 of this Act; and and who did not know at the time of the distribution that the distribution violated subsection (1) of this section, (c) unless otherwise provided in the partnership shall not be liable for the amount of the distribution. agreement, to partners first for the return of their Subject to subsection (4) of this section, this subsection contributions and second respecting their partnership shall not affect any obligation or liability of a limited interests, in the proportions in which the partners share partner under an agreement or other applicable law for in distributions. the amount of a distribution.

(2) A limited partnership which has dissolved: (4) Unless otherwise agreed, a limited partner who

receives a distribution from a limited partnership to (a) shall pay or make reasonable provision to pay all which this section applies shall have no liability under claims and obligations, including all contingent, condi- this Act or other applicable law for the amount of the tional or unmatured contractual claims, known to the distribution after the expiration of three (3) years from limited partnership; the date of the distribution.

(b) shall make such provision as will be reasonably (5) Section 51 of this Act shall not apply to a likely to be sufficient to provide compensation for any distribution to which this section applies. [P.L. 1990-91, claim against the limited partnership which is the § 201; amended by P.L. 2005-26, § 60.] subject of a pending action, suit or proceeding to which

the limited partnership is a party; and

121

§ 61. Trustees or receivers for limited (2) The plaintiff’s status as a partner or an assignee of partnerships; appointment; powers; duties. a partnership interest had devolved upon the plaintiff by operation of law or pursuant to the terms of the When the certificate of limited partnership of any partnership agreement from a person who was a partner limited partnership formed under this Act shall be or an assignee of a partnership interest at the time of the canceled by the filing of a certificate of cancellation transaction. [P.L. 2005-26, § 63, adding new section.] pursuant to section 12 of this Act, the High Court, on application of any creditor or partner of the limited § 64. Complaint. partnership, or any other person who shows good cause therefore, at any time, may either appoint one (1) or more In a derivative action, the complaint shall set forth with of the general partners of the limited partnership to be particularity the effort, if any, of the plaintiff to secure trustees, or appoint one (1) or more persons to be initiation of the action by a general partner or the reasons receivers, of and for the limited partnership, to take for not making the effort. [P.L. 2005-26, § 64, adding charge of the limited partnership’s property, and to new section.] collect the debts and property due and belonging to the limited partnership, with the power to prosecute and § 65. Expenses. defend, in the name of the limited partnership, or otherwise, all such suits as may be necessary or proper If a derivative action is successful, in whole or in part, for the purposes aforesaid, and to appoint an agent or as a result of a judgment, compromise or settlement of agents under them, and to do all other acts which might any such action, the court may award the plaintiff be done by the limited partnership, if in being, that may reasonable expenses, including reasonable attorney’s be necessary for the final settlement of the unfinished fees, from any recovery in any such action or from a business of the limited partnership. The powers of the limited partnership. [P.L. 2005-26, § 64, adding new trustees or receivers may be continued as long as the section.] High Court shall think necessary for the purposes aforesaid. [P.L. 2005-26, § 61, adding new section.] DIVISION 10: MISCELLANEOUS DIVISION 9: DERIVATIVE ACTIONS § 66. Construction and application of Act and partnership agreement. § 62. Right to bring action. § 67. Short title. § 63. Proper plaintiff. § 68. Severability. § 64. Complaint. § 69. Fees. § 65. Expenses. § 70. Reserved power of the Republic of the Marshall Islands to alter or repeal Act. § 71. Cancellation of certificate of limited § 62. Right to bring action. partnership for failure to pay annual fee. § 72. Reinstatement of domestic limited partnership. A limited partner or an assignee of a partnership § 73. Exemptions for non-resident entities. interest may bring an action in the High Court in the right of a limited partnership to recover a judgment in its favor if general partners with authority to do so have refused to § 66. Construction and application of Act and bring the action or if an effort to cause those general partnership agreement. partners to bring the action is not likely to succeed. [P.L. 1990-91, § 204; amended by P.L. 2005-26, § 62.] (1) This Act shall be so applied and construed to effectuate its general purpose to make uniform the law § 63. Proper plaintiff. with respect to the subject of this Act.

In a derivative action, the plaintiff must be a partner or (2) The rule that statutes in derogation of the common an assignee of a partnership interest at the time of law are to be strictly construed shall have no application bringing the action and: to this Act.

(1) At the time of the transaction of which the plaintiff (3) It is the policy of this Act to give maximum effect complains; or to the principle of freedom of contract and to the enforceability of partnership agreements.

122

(4) To the extent that, at law or in equity, a partner or § 70. Reserved power of the Republic of the other person has duties (including fiduciary duties) and Marshall Islands to alter or repeal Act. liabilities relating thereto to a limited partnership or to another partner or to another person that is a party to or is All provisions of this Act may be altered from time to otherwise bound by a partnership agreement, (a) any such time or repealed and all rights of partners are subject to partner or other person acting under the partnership this reservation. Unless expressly stated to the contrary in agreement shall not be liable to the limited partnership or this Act, all amendments of this Act shall apply to limited to any such other partner or to any such other person for partnerships and partners whether or not existing as such the partner’s or other person’s good faith reliance on the at the time of the enactment of any such amendment. provisions of the partnership agreement, and (b) the [P.L. 2005-26, § 70, adding new section.] partner’s or other person’s duties and liabilities may be expanded or restricted by provisions in the partnership § 71. Cancellation of certificate of limited agreement. partnership for failure to pay annual fee.

(5) This Act shall be applied and construed to make The certificate of limited partnership of a domestic the laws of the Marshall Islands, with respect to the limited partnership shall be deemed to be canceled if the subject matter hereof, uniform with the laws of the State limited partnership shall fail to pay the annual fee due of Delaware of the United States of America. Insofar as under section 69 of this division for a period of one (1) it does not conflict with any other provision of this Act, year from the date it is due, such cancellation to be or the decisions of the High and Supreme Courts of the effective on the first anniversary of such due date. [P.L. Republic of the Marshall Islands which take precedence, 2005-26, § 71, adding new section.] the non-statutory law of the State of Delaware is hereby adopted as the law of the Marshall Islands. This § 72. Reinstatement of domestic limited partnership. subsection shall not apply to resident domestic limited partnerships. [P.L. 1990-91, § 206; amended by P.L. (1) A domestic limited partnership whose certificate of 2004-17, § 206; amended by P.L. 2005-26, § 66.] limited partnership has been canceled pursuant to sections 3(3) or 71 of this Act may be reinstated by filing § 67. Short title. a certificate of reinstatement with the Registrar of Corporations a certificate of reinstatement accompanied This Act may be cited as the “Marshall Islands Limited by the payment of the annual fee due under section 69 of Partnership Act.” [P.L. 1990-91, § 205; amended by P.L. this division and all penalties thereon for each year for 2005-26, § 67.] which such domestic limited partnership neglected, refused or failed to pay such annual fee, including each § 68. Severability. year between the cancellation of its certificate of limited partnership and its reinstatement. The certificate of If any provision of this Act or its application to any reinstatement shall set forth: person or circumstances is held invalid, the invalidity does not affect other provisions or applications of the Act (a) the name of the limited partnership at the time its which can be given effect without the invalid provision certificate of limited partnership was canceled and, if or application, and to this end the provisions of this Act such name is not available at the time of reinstatement, are severable. [P.L. 2005-26, § 68, adding new section.] the name under which the limited partnership is to be reinstated; § 69. Fees. (b) the date of filing of the original certificate of (1) No document required to be filed under this Act limited partnership of the limited partnership; shall be effective until the applicable fee required by the Registrar of Corporations is paid. An annual fee must be (c) the name and address of the limited partnership’s paid to the Registrar of Corporations for the continued registered agent in the Marshall Islands; existence of the limited partnership. (d) a statement that the certificate of reinstatement is (2) The annual fee shall be due and payable on the filed by one (1) or more general partners of the limited anniversary date of the filing of a certificate of limited partnership authorized to execute and file the partnership. The Registrar of Corporations shall receive certificate of reinstatement to reinstate the limited the annual fee. [P.L. 1990-91, § 180; amended by P.L. partnership; 2005-26, § 69.]

123

(e) that the reinstatement will not cause injury to § 73. Exemptions for non-resident entities. any person including without limitations the partners or limited partners, former partners or limited partners, or Notwithstanding any provision of the Income Tax Act creditors of the limited partnership; of 1989 (11 MIRC, Chapter 1A), or any other law or regulation imposing taxes or fees now in effect or (f) the petitioners agree to hold harmless the hereinafter enacted, a non-resident limited partnership Registrar of Corporations for any costs, fees or and (solely for the purposes of this section) the expenses for any claims or liabilities arising from the Administrator and Trust Company duly appointed by the reinstatement of the limited partnership; and Cabinet to act in the capacity of the Registrar of Corporations for non-resident entities pursuant to this Act (g) any other matters the general partner or general and as the Maritime Administrator created pursuant to partners executing the certificate of reinstatement the Marshall Islands Maritime Act 1990 (34 MIRC, determine to include therein. Chapter 3A), shall be exempt from any corporate tax, net income tax on unincorporated businesses, corporate (2) The certificate of reinstatement shall be deemed to profit tax, income tax, withholding tax on revenues of the be an amendment to the certificate of limited partnership entity, asset tax, tax reporting requirements on revenues of the limited partnership, and the limited partnership of the entity, stamp duty, exchange controls or other fees shall not be required to take any further action to amend or taxes other than those imposed by section 69 of this its certificate of limited partnership under section 11 of division. this Act with respect to the matters set forth in the certificate of reinstatement. Interest, dividends, royalties, rents, payments (including payments to creditors), compensation or other (3) Upon the filing of a certificate of reinstatement, a distributions of income paid by a non-resident part- limited partnership shall be reinstated with the same nership to another non-resident limited partnership or to force and effect as if its certificate of limited partnership individuals or entities which are not citizens or residents had not been canceled pursuant to sections 3(3) or 71 of of the Marshall Islands are exempt from any tax or this Act. Such reinstatement shall validate all contracts, withholding provisions of the laws of the Marshall acts, matters and things made, done and performed by the Islands. [P.L. 2005-26, § 73, adding new section.] limited partnership, its partners, employees and agents during the time when its certificate of limited partnership was canceled pursuant to sections 3(3) or 71 of this Act, with the same force and effect and to all intents and purposes as if the certificate of limited partnership had remained in full force and effect. All real and personal property, and all rights and interests, which belonged to the limited partnership at the time its certificate of limited partnership was canceled pursuant to sections 3(3) or 71 of this Act, or which were acquired by the limited partnership following the cancellation of its certificate of limited partnership pursuant to sections 3(3) or 71 of this Act, and which were not disposed of prior to the time of its revival, shall be vested in the limited partnership after its reinstatement as fully as they were held by the limited partnership at, and after, as the case may be, the time its certificate of limited partnership was canceled pursuant to sections 3(3) or 71 of this Act. After its reinstatement, the limited partnership and its partners shall have the same liability for all contracts, acts, matters and things made, done or performed in the limited partnership’s name and on its behalf by its partners, employees and agents as the limited partnership and its partners would have had if the limited partnership’s certificate of limited partnership had at all times remained in full force and effect. [P.L. 2005-26, § 72, adding new section.]

124

PART IV:

LIMITED LIABILITY COMPANY ACT

DIVISION 1: (8) “limited liability company agreement” means any PRELIMINARY; GENERAL agreement, written or oral, of the member or members as to the affairs of a limited liability company and the § 1. Short title. conduct of its business. A written limited liability § 2. Definitions. company agreement or another written agreement or § 3. Name set forth in certificate. writing: § 4. Reservation of name. § 5. Service of process; registered agent. (a) may provide that a person shall be admitted as a § 6. Nature of business permitted; powers. member of a limited liability company, or shall become § 7. Business transactions of member or manager an assignee of a limited liability company interest or with the limited liability company. other rights or powers of a member to the extent § 8. Indemnification. assigned, and shall become bound by the limited liability company agreement:

§ 1. Short title. (i) if such person (or a representative authorized by such person orally, in writing or by other This Act may be cited as the Limited Liability action such as payment for a limited liability Company Act of 1996. [P.L. 1996-14, § 1.] company interest) executes the limited liability company agreement or any other writing evidencing § 2. Definitions. the intent of such person to become a member or assignee; or As used in this Act unless the context otherwise requires: (ii) without such execution, if such person (or a representative authorized by such person orally, in (1) “bankruptcy” means an event that causes a person writing or by other action such as payment for a to cease to be a member as provided in section 21 of this limited liability company interest) complies with the act. conditions for becoming a member or assignee as set forth in the limited liability company agreement or (2) “certificate of formation” means the certificate any other writing; and referred to in section 9 of this Act, and the certificate as amended. (b) shall not be unenforceable by reason of its not having been signed by a person being admitted as a (3) “contribution” means any cash, property, services member or becoming an assignee as provided in rendered or a promissory note or other obligation to subsection (a) of this section, or by reason of it having contribute cash or property or to perform services, which been signed by a representative as provided in this Act. a person contributes to a limited liability company in his capacity as a member. (9) “limited liability company interest” means a member’s share of the profits and losses of a limited (4) “foreign limited liability company” means a liability company and a member’s right to receive limited liability company formed under the laws of any distributions of the limited liability company’s assets. foreign country or other foreign jurisdiction and denominated as such under the laws of a foreign country (10) “liquidating trustee” means a person carrying out or other foreign jurisdiction. the winding up of a limited liability company.

(5) “High Court” means the High Court of the (11) “manager” means a person who is named as a Republic of the Marshall Islands. manager of a limited liability company in, or designated as a manager of a limited liability company pursuant to, a (6) “knowledge” means a person’s actual knowledge limited liability company agreement or similar of a fact, rather than the person’s constructive knowledge instrument under which the limited liability company is of the fact. formed.

(7) “limited liability company” and “domestic limited (12) “member” means a person who has been liability company” means a limited liability company admitted to a limited liability company as a member as formed under the laws of the Republic of the Marshall provided in section 18 of this Act or, in the case of a Islands and having one (1) or more members. foreign limited liability company, in accordance with the laws of the state or foreign country or other foreign

124

jurisdiction under which the foreign limited liability authorized foreign corporations. The Registrar of Cor- company is organized. porations for non-resident domestic limited liability companies shall be The Trust Company of the Marshall (13) “non-resident limited liability company” means Islands, Inc. either a domestic limited liability company or a foreign limited liability company not doing business in the (19) “resident domestic limited liability company” Marshall Islands. “Not doing business in the Marshall means a domestic limited liability company doing Islands” will have the same meaning as found in the business in the Marshall Islands. [P.L. 1996-14, § 2; Marshall Islands Business Corporations Act (BCA), 18 amended by P.L. 1997-54, § 2; amended by P.L. 1998- MIRC 1. 65, § 2; amended by P.L. 2000-14, § 2; amended by P.L. 2017-52, § 16.] (14) “person” means a natural person, partnership (whether general or limited and whether domestic or § 3. Name set forth in certificate. foreign), limited liability company, foreign limited liability company, trust, estate, association, corporation, The name of each limited liability company as set forth custodian, nominee or any other individual or entity in its in its certificate of formation: own or any representative capacity. (1) shall contain the word “Limited Liability Company” (15) “personal representative” means, as to a natural or the abbreviation “L.L.C.” or “LLC”; person, the executer, administrator, guardian, conservator, or other legal representative thereof and, as to a (2) may contain the name of a member or manager; person other than a natural person, the legal representative or successor thereof. (3) shall be such as to distinguish it upon the records in the Office of the Registrar of Corporations from the (16) “publicly-traded company” means a company with name of any corporation, partnership, limited partnership, equity securities that are listed (i) on a securities business trust, foreign maritime entity or limited liability exchange, (ii) on an automated quotation system or (iii) company reserved, registered, formed or organized under otherwise on a regulated securities or commodities the laws of the Republic of the Marshall Islands or market that is subject to disclosure requirements qualified to do business or registered as a foreign consistent with international standards which ensure corporation, foreign limited partnership or foreign limited adequate transparency of ownership information, or that liability company in the Republic of the Marshall Islands. is formed in contemplation of becoming so publicly [P.L. 1996-14, § 3; amended by P.L. 2017-52, § 1.] traded or listed and shall be so publicly traded or listed within 364 days of the company’s formation, and shall § 4. Reservation of name. include all direct and indirect subsidiaries thereof. An The exclusive right to the use of a name may be entity is a subsidiary of another entity if (i) the parent reserved by: holds, directly or indirectly, a beneficial interest in a majority or more of the shares, or a majority or more of (1) any person intending to organize a limited liability the voting rights, in the subsidiary or (ii) such entity is company under this Act and to adopt that name; consolidated in the financial statements of the parent that are publicly available or will be made publicly available (2) any domestic limited liability company or any within 364 days; foreign limited liability company registered in the Republic of the Marshall Islands which, in either case, (17) “publicly traded limited liability company proposes to change its name; interest” means any limited liability company interest that is: (3) any foreign limited liability company intending to register in the Republic of the Marshall Islands and adopt (a) listed on a securities exchange; or that name; and

(b) authorized for quotation on an interdealer (4) any person intending to organize a foreign limited quotation system or a registered national securities company and intending to have it register in the Republic association. of the Marshall Islands and adopt that name. [P.L. 1996- 14, § 4.] (18) “Registrar of Corporations” means the Registrar of domestic limited liability companies. The Registrar for § 5. Service of process; registered agent. resident limited liability companies is the Registrar of Corporations responsible for resident domestic and (1) Registered agent for service of process. 125

registered agent shall be accepted for filing until all (a) Registered agent. Every domestic limited lia- charges owing to the former registered agent shall have bility company or foreign limited liability company been paid. authorized to do business in the Marshall Islands under the provision of section 50 of this Act shall designate a (d) Making, revoking or changing designation by registered agent in the Marshall Islands upon whom the limited liability company. A designation of a process against such limited liability company or any registered agent under this section may be made, notice or demand required or permitted by law to be revoked, or changed by filing an appropriate served may be served. The agent for a limited liability notification with the Registrar of Corporations. company having a place of business in the Marshall Islands shall be a resident domestic corporation having (e) Termination of designation. The designation of a a place of business in the Marshall Islands or a natural registered agent shall terminate upon filing a notice of person, resident of and having a business address in the resignation provided that the registered agent certifies Marshall Islands. The registered agent for a domestic that the limited liability company was notified not less or foreign limited liability company not having a place than thirty (30) days prior to such filing as provided by of business in the Marshall Islands shall be The Trust subsection (1)(c) of this section. Company of The Marshall Islands, Inc. A domestic limited liability company or an authorized foreign (f) Notification by registered agent to the limited limited liability company which fails to maintain a liability company. A registered agent, when served registered agent shall be dissolved or its authority to do with process, notice or demand for the limited liability business or registration shall be revoked or its company which he represents, shall transmit the same certificate canceled, as the case may be. to the limited liability company by personal notification or in the following manner: Upon receipt of the (b) Manner of service. process, notice or demand, the registered agent shall cause a copy of such paper to be mailed to the limited (i) Domestic limited liability company. Service liability company named therein at its last known of process on a domestic limited liability company address. Such mailing shall be by registered mail. As may be made on the registered agent in the manner soon thereafter as possible if process was issued in the provided by law for the service of summons as if the Marshall Islands, the registered agent may file with the registered agent were a defendant. clerk of the Marshall Islands court issuing the process or with the agency of the Marshall Islands government (ii) Non-resident domestic limited liability com- issuing the notice or demand either the receipt of such pany. registered mailing or an affidavit stating that such mailing has been made, signed by the registered agent, (1) Service of process on a non-resident domes- or if the agent is a corporation, by an officer of the tic limited liability company may be made on the same, properly notarized. Compliance with the provi- registered agent in the manner provided by law for sions of this paragraph shall relieve the registered agent the service of summons as if the registered agent from any further obligation to the corporation for were a defendant; or service of the process, notice or demand, but the agent’s failure to comply with the provisions of this (2) Service of process may be sent to the Regis- paragraph shall in no way affect the validity of the tered agent via registered mail or courier as if the service of the process, notice or demand. registered agent were a defendant. (g) Liability of registered agent; dismissal of action (c) Resignation by registered agent. Any registered against. A registered agent for service of process agent of a limited liability company may resign as such acting pursuant to the provisions of this section shall agent upon filing a written notice thereof with the not be liable for the actions or obligations of the Registrar of Corporations, provided however that the limited liability company for whom it acts. The Regis- registered agent shall notify the limited liability tered agent shall not be a party to any suit or action company not less than thirty (30) days prior to such against the limited liability company or arising from filing and resignation. The registered agent shall mail the acts or obligations of the limited liability company. or cause to be mailed to the limited liability company If the registered agent is named in any such action, the at the last known address of the limited liability action shall be dismissed, without prejudice to the company, within or without the Marshall Islands or at plaintiff to bring an action against the correct party. the last known address of the person at whose request the limited liability company was formed, notice of the resignation of the agent. No designation of a new 126

(2) Attorney General as agent for service of process. (b) Manner of service. Service of such process upon the Attorney General shall be made by personally (a) When Attorney General is agent for service. delivering to and leaving with him or his deputy, or Whenever a domestic limited liability company or with any person authorized by the Attorney General to foreign limited liability company authorized to do receive such service, at the office of the Attorney business in the Marshall Islands fails to maintain a General in Majuro Atoll, a copy of such process registered agent in the Marshall Islands, or whenever together with the statutory fee. Such service shall be its registered agent cannot with reasonable diligence be sufficient if a copy of the process is: found at his business address, then the Attorney General shall be an agent of such limited liability (i) delivered personally without the Marshall company upon whom any process or notice or demand Islands to such foreign limited liability company by a required or permitted by law to be served may be person and in the manner authorized to serve process served. by law of the jurisdiction in which service is made; or (b) Manner of service. Service on the Attorney General as agent of a domestic or foreign limited (ii) sent by or on behalf of the plaintiff to such liability company authorized to do business shall be foreign limited liability company by registered mail made by personally delivering to and leaving with him at the post office address specified for the purpose of or his deputy or with any person authorized by the mailing process, on file in the Attorney General in Attorney General to receive such service, at the office the jurisdiction of its formation or with any official of the Attorney General in Majuro Atoll, duplicate or body performing the equivalent function thereof, copies of such process together with the statutory fee. or if no such address is there specified, to its The Attorney General shall promptly send one (1) of registered agent or other office there specified, or if such copies by registered mail return receipt requested, no such office is specified, to the last address of such to such limited liability company at the business foreign limited liability company known to the address of its registered agent, or if there is no such plaintiff. office, the Attorney General shall mail such copy, in the case of a resident domestic limited liability (c) Proof of service. Proof of service shall be by company, in care of any member named in its affidavit of compliance with this section filed, together certificate of formation at his address stated therein, or with the process, within thirty (30) days after such in the case of a nonresident domestic limited liability service with the clerk of the court in which the action company, at the address of the limited liability or special proceeding is pending. If a copy of the company without the Marshall Islands, or if none, at process is mailed in accordance with this section, there the last known address of a person at whose request the shall be filed with the affidavit of compliance either the limited liability company authorized to do business, to return receipt signed by such foreign limited liability such limited liability company at its address as stated company or other official proof of delivery or, if in its application for authority to do business. acceptance was refused, the original envelope with a notation by the postal authorities that acceptance was (3) Service of process on foreign limited liability refused. If acceptance was refused, a copy of the company not authorized to do business. process together with notice of the mailing by registered mail and refusal to accept shall be promptly (a) Attorney General as agent to receive service. sent to such foreign corporation at the same address by Every foreign limited liability company not authorized ordinary mail and the affidavit of compliance shall so to do business which itself or through an agent does state. Service of process shall be complete ten (10) any business in the Marshall Islands or does any other days after such papers are filed with the clerk of the act in the Marshall Islands which under section 51 of court. The refusal to accept delivery of the registered the Judiciary Act, 27 MIRC 2, confers jurisdiction on mail or to sign the return receipt shall not affect the the Marshall Islands courts as to claims arising out of validity of the service and such foreign limited liability such act, is deemed to have designated the Attorney company refusing to accept such registered mail shall General as its agent upon whom process against it may be charged with knowledge of the contents thereof. be served, in any action or special proceeding arising out of or in connection with the doing of such business (4) Records and certificates of the Attorney General. or the doing of such other act. Such process may issue The Attorney General shall keep a record of each process in any court in the Marshall Islands having jurisdiction served upon the Attorney General under this division, of the subject matter. including the date of service. It shall, upon request made within five (5) years of such service, issue a certificate under its seal certifying as to the receipt of the process by 127

an authorized person, the date and place of such service, DIVISION 2: and the receipt of the statutory fee. FORMATION; CERTIFICATE OF FORMATION

(5) Limitation on effect of division. Nothing con- § 9. Certificate of formation. tained in this division shall affect the validity of service § 10. Amendment to certificate of formation. of process on a corporation effected in any other manner § 11. Cancellation of certificate. permitted by law. [P.L. 1996-14, § 5.] § 12. Execution. § 13. Execution, amendment or cancellation by § 6. Nature of business permitted; powers; judicial order. regulation by foreign authorities. § 14. Filing. § 15. Notice. (1) A limited liability company may carry on any § 16. Restated certificate. lawful business, purpose or activity with the exception of § 17. Merger and consolidation. the business of granting policies of insurance or assuming insurance risks, trust services or banking. § 9. Certificate of formation. (2) A limited liability company shall possess and may exercise all the powers and privileges granted by this Act (1) In order to form a limited liability company, one or by any other law or by its limited liability company (1) or more authorized persons must execute a certificate agreement, together with any powers incidental thereto, of formation. The certificate of formation shall be filed in so far as such powers and privileges are necessary or the Office of the Registrar of Corporations and set forth: convenient to the conduct, promotion or attainment of the business, purposes or activities of the limited liability (a) the name of the limited liability company; company. (b) the name and address of the registered agent for (3) Every non-resident domestic limited liability service of process required to be maintained by section company that carries out activities without the Republic 5 of this Act; which would be regulated under the Banking Act 1987 (17 MIRC, Chapter 1) or the regulations promulgated (c) if the limited liability company is to have a thereunder if carried out within the Republic shall be specific date of dissolution, the latest date on which the regulated by the relevant authorities in the jurisdiction(s) limited liability company is to dissolve but if no such in which the limited liability company carries out these time is set forth in the certificate of formation, then the activities and shall comply with the laws, regulations, limited liability company shall have perpetual and licensing requirements of such jurisdiction(s). [P.L. existence; 1996-14, § 6; amended by P.L. 2018-100, § 3.] (d) a statement affirming that “the limited liability § 7. Business transactions of member or manager company will comply with all applicable provisions of with the limited liability company. the Republic of the Marshall Islands Limited Liability Company Act, including retention, maintenance, and Except as provided in a limited liability company production of accounting, member, manager, and agreement, a member or manager may lend money to, beneficial owner records in accordance with section 22 borrow money from, act as a surety, guarantor or of the Republic of the Marshall Islands Limited endorser for, guarantee or assume one (1) or more Liability Company Act”; this statement shall, by force specific obligations of, provide collateral for, and transact of law, be deemed to be included in the certificates of other business with a limited liability company and, formation of all limited liability companies, including subject to other applicable law, has the same rights and those formed prior to the effective date of this law; and obligations with respect to any such matter as a person who is not a member or manager. [P.L. 1996-14, § 7.] (e) any other matters the members determine to include therein. § 8. Indemnification. (2) A limited liability company is formed at the time Subject to such standards and restrictions, if any, as are of the filing of the initial certificate of formation in the set forth in its limited liability company agreement, a Office of the Registrar of Corporations or at any later limited liability company may, and shall have the power date or time specified in the certificate of formation if, in to, indemnify and hold harmless any member or manager either case, there has been substantial compliance with or other person from and against any and all claims and the requirements of this section. A limited liability demands whatsoever. [P.L. 1996-14, § 8.] company formed under this Act shall be a separate legal 128

entity, the existence of which as a separate legal entity shall continue until cancellation of the limited liability (1) the name of the limited liability company; company’s certificate of formation. (2) the date of filing of its certificate of formation; (3) The filing of the certificate of formation in the Office of the Registrar of Corporations shall make it (3) the reason for filing a certificate of cancellation; unnecessary to file any other documents under this (4) the future effective date (which shall be a date or section. [P.L. 1996-14, § 9; amended by P.L. 2009-32, time certain) of cancellation if it is not to be effective amending subsection (1)(c).] upon the filing of the certificate;

§ 10. Amendment to certificate of formation. (5) in the case of the conversion of a domestic limited liability company, the name of the entity to which the (1) A certificate of formation is amended by filing a domestic limited liability company has been converted; certificate of amendment thereto in the Office of the and, Registrar of Corporations. The certificate of amendment shall set forth: (6) any other information the person filing the certificate of cancellation determines. [P.L. 1996-14, (a) the name of the limited liability company and § 11; amended by P.L. 1998-65, § 11; amended by P.L. date of the original filing of the certificate of 2000-14, § 11; amended by P.L. 2017-39.] formation; and § 12. Execution. (b) the amendment to the certificate of formation. (1) Each certificate required by this Act to be filed in (2) A manager or, if there is no manager, then any the Office of the Registrar of Corporations shall be member who becomes aware that any statement in a executed by one (1) or more authorized persons. certificate of formation is false in any material respect, shall promptly amend the certificate of formation. (2) Unless otherwise provided in a limited liability company agreement, any person may sign any certificate (3) A certificate of formation may be amended at any or amendment thereof or enter into a limited liability time for any proper purpose. company agreement or amendment thereof by an agent, including an attorney-in-fact. An authorization, including (4) Unless otherwise provided in this division or a power of attorney, to sign any certificate or amendment unless a later effective date or time (which shall be a date thereof or to enter into a limited liability company or time certain) is provided for in the certificate of agreement or amendment thereof need not be in writing, amendment, a certificate of amendment shall be effective need not be sworn to, verified or acknowledged, and need at the time of its filing with the Registrar of Corporations. not be filed in the Office of the Registrar of Corporations, [P.L. 1996-14, § 10.] but if in writing, must be retained by the limited liability company. § 11. Cancellation of certificate. (3) The execution of a certificate by an authorized A certificate of formation shall be canceled upon the person constitutes an oath or affirmation, under the dissolution and completion of winding up of a limited penalties of perjury that, to the best of the authorized liability company, or at any other time that there are no person’s knowledge and belief, the facts stated therein members, or as provided in section 5 or section 22(1)(f) are true. [P.L. 1996-14, § 12.] of this Act, or upon the filing of a certificate of merger or consolidation if the limited liability company is not the § 13. Execution, amendment or cancellation by surviving or resulting entity in a merger or consolidation, judicial order. or upon the conversion of a domestic limited liability company approved in accordance with section 80 of this (1) If a person required to execute a certificate Act. A certificate of cancellation shall be filed in the required by this Act fails or refuses to do so, any other Office of the Registrar of Corporations to accomplish the person who is adversely affected by the failure or refusal cancellation of a certificate of formation upon the may petition the High Court of the Republic to direct the dissolution and the completion of winding up of a limited execution of the certificate. If the Court finds that the liability company or at any other time there are no execution of the certificate is proper and that any person members or upon the conversion of a domestic limited so designated has failed or refused to execute the liability company approved in accordance with section 80 certificate, it shall order the Registrar of Corporations to of this Act and shall set forth: record an appropriate certificate. 129

(2) Upon the filing of a certificate of amendment (or (2) If a person required to execute a limited liability judicial decree of amendment) a certificate of correction company agreement or amendment thereof fails or or restated certificate in the Office of the Registrar of refuses to do so, any other person who is adversely Corporations, or upon the future effective date or time of affected by the failure or refusal may petition the High a certificate of amendment (or judicial decree thereof) or Court of the Republic to direct the execution of the restated certificate, as provided for therein, the certificate limited liability company agreement or amendment of formation shall be amended or restated as set forth thereof. If the Court finds that the limited liability therein. Upon the filing of a certificate of cancellation (or company agreement or amendment thereof should be a judicial decree thereof), or a certificate of merger or executed and that any person required to execute the consolidation which acts as a certificate of cancellation, limited liability company agreement or amendment or upon the future effective date or time of a certificate of thereof has failed or refused to do so, it shall enter an cancellation (or a judicial decree thereof) or of a order granting appropriate relief. [P.L. 1996-14, § 13.] certificate or merger or consolidation which acts as a certificate of cancellation, or a certificate of transfer as § 14. Filing. provided for therein, the certificate of formation is canceled. Upon the filing of a certificate of limited (1) The original signed copy of the certificate of liability company domestication or upon the future formation and of any certificates of amendment, effective date or time of a certificate of limited liability correction, amendment of a certificate of merger or company domestication, the entity filing the certificate of consolidation, termination of a merger or consolidation limited liability company domestication is domesticated or cancellation (or of any judicial decree of amendment as a limited liability company with the effect provided in or cancellation), and of any certificate of merger or section 76 of this Act. Upon the filing of a certificate of consolidation, any restated certificate, any certificate of conversion to limited liability company or upon the conversion to limited liability company, any certificate of future effective date or time of a certificate of conversion transfer, and of any certificate of limited liability to limited liability company, the entity filing the company domestication shall be delivered to the certificate of conversion to limited liability company is Registrar of Corporations. A person who executes a converted to a limited liability company with the effect certificate as an agent or fiduciary need not exhibit provided in section 78 of this Act. Upon the filing of a evidence of his authority as a prerequisite to filing. Any certificate of amendment of a certificate of merger or signature on any certificate authorized to be filed with the consolidation, the certificate of merger or consolidation Registrar of Corporations under any provision of this Act identified in the certificate of amendment of a certificate may be a facsimile or an electronically transmitted of merger or consolidation is amended. Upon the filing of signature. Unless the Registrar of Corporations finds that a certificate of termination of a merger or consolidation, any certificate does not conform to law, upon receipt of the certificate of merger or consolidation identified in the all filing fees required by law he shall: certificate of termination of a merger or consolidation is terminated. (a) certify that the certificate of formation, the certificate of amendment, the certificate of correction, (3) A fee as set forth in section 68 of this Act, shall be the certificate of amendment of a certificate of merger paid at the time of the filing of a certificate of formation, or consolidation, the certificate of cancellation (or of a certificate of amendment, a certificate of correction, a any judicial decree of amendment or cancellation), the certificate of amendment of a certificate of merger or certificate of merger or consolidation, the restated consolidation, a certificate of termination of a merger or certificate, the certificate of conversion to limited consolidation, a certificate of cancellation, a certificate of liability company, the certificate of transfer, or the merger or consolidation, a restated certificate, a certi- certificate of limited liability domestication has been ficate of conversion to limited liability company, a filed in the Registrar’s office by endorsing upon the certificate of transfer, or a certificate of limited liability original certificate the word “Filed.” This endorsement company domestication. is conclusive of the date of its filing in the absence of actual fraud; (4) A fee as set forth in section 68 of this Act shall be paid for a certified copy of any document on file as (b) file and index the endorsed certificate; and, provided for by this division.

(c) prepare and return to the person who filed it or (5) Correction of filed instruments. Any instrument his representative a copy of the original signed relating to a domestic or foreign limited liability instrument, similarly endorsed, and shall certify such company and filed with the Registrar of Corporations copy as a true copy of the original signed instrument. under this Act may be corrected with respect to any error

130

apparent on the face or defect in the execution thereof by (2) If a restated certificate of formation merely restates filing with the Registrar of Corporations a certificate of and integrates but does not further amend the initial correction, executed and acknowledged in the manner certificate of formation, as theretofore amended or required for the original instrument. The certificate of supplemented by any instrument that was executed and correction shall specify the error or defect to be corrected filed pursuant to any of the sections in this Act, it shall be and shall set forth the portion of the instrument in correct specifically designated in its heading as a “Restated form. The corrected instrument when filed shall be Certificate of Formation” together with such other words effective as of the date the original instrument was filed. as the limited liability company may deem appropriate In lieu of filing a certificate of correction, a certificate and shall be executed by an authorized person and filed may be corrected by filing with the Registrar of as provided in section 14 of this division in the Office of Corporations a corrected certificate which shall be the Registrar of Corporations. If a restated certificate executed and filed as if the corrected certificate were the restates and integrates and also further amends in any certificate being corrected, and a fee equal to the fee respect the certificate of formation, as theretofore payable to the Registrar of Corporations if the certificate amended or supplemented, it shall be specifically being corrected were then being filed shall be paid and designated in its heading as an “Amended and Restated collected by the Registrar of Corporations for use of the Certificate of Formation” together with such other words Marshall Islands in connection with the filing of as the limited liability company may deem appropriate corrected certificate. The corrected certificate shall be and shall be executed by at least one (1) authorized specifically designated as such in its heading, shall person, and filed as provided in section 14 of this specify the inaccuracy or defect to be corrected and shall division in the Office of the Registrar of Corporations. set forth the entire certificate in corrected form. A certificate corrected in accordance with this section shall (3) A restated certificate of formation shall state, either be effective as of the date of the original certificate was in its heading or in an introductory paragraph, the limited filed, except as to those persons who are substantially liability company’s present name, and, if it has been and adversely affected by the correction and as to those changed, the name under which it was originally filed, persons the certificate as corrected shall be effective from and the date of filing of its original certificate of the filing date. [P.L. 1996-14, §14; amended by P.L. formation with the Registrar of Corporations, and the 2000-14, § 14; amended by P.L. 2017-52, § 1.] future effective date or time (which shall be a date or time certain) of the restated certificate if it is not to be § 15. Notice. effective upon the filing of the restated certificate. A restated certificate shall also state that it was duly The fact that a certificate of formation is on file in the executed and is being filed in accordance with this Office of the Registrar of Corporations is notice that the section. If a restated certificate only restates and entity formed in connection with the filing of the integrates and does not further amend a limited liability certificate of formation is a limited liability company company’s certificate of formation as theretofore formed under the laws of the Republic of the Marshall amended or supplemented and there is no discrepancy Islands and is notice of all other facts set forth therein between those provisions and the restated certificate, it which are required to be set forth in a certificate of shall state that fact as well. formation by sections 9(1)(a), (b), and (c) of this Act and which are permitted to be set forth in a certificate of (4) Upon the filing of a restated certificate of forma- formation by section 79(2) of this Act. [P.L. 1996-14, § tion with the Registrar of Corporations, or upon the 15; amended by P.L. 2017-52.] future effective date or time of a restated certificate of formation as provided for therein, the initial certificate of § 16. Restated certificate. formation, as theretofore amended or supplemented, shall be superseded; thenceforth, the restated certificate of (1) A limited liability company may, whenever desired, formation, including any further amendment or changes integrate into a single instrument all of the provisions of made thereby, shall be the certificate of formation of the its certificate of formation which are then in effect and limited liability company, but the original effective date operative as a result of there having theretofore been filed of formation shall remain unchanged. with the Registrar of Corporations one (1) or more certificates or other instruments pursuant to any of the (5) Any amendment or change effected in connection sections referred to in this Act, and it may at the same with the restatement and integration of the certificate of time also further amend its certificate of formation by formation shall be subject to any other provision of this adopting a restated certificate of formation. division, not inconsistent with this section, which would apply if a separate certificate of amendment were filed to

131

effect such amendment or change. [P.L. 1996-14, § 16; resulting entity in the Office of the Registrar of Corpo- amended by P.L. 2017-52, §§ 1, 3, and 4.] rations. The certificate of merger or consolidation shall state: § 17. Merger and consolidation. (a) the name and jurisdiction of formation or (1) As used in this section, “other business entity” organization of each of the domestic limited liability means a corporation, trust, or any other unincorporated companies or other business entities which is to merge business, including a partnership (whether general or or consolidate; limited), and a foreign limited liability company, but excluding a domestic limited liability company. (b) that an agreement of merger or consolidation has been approved and executed by each of the domestic (2) Pursuant to an agreement of merger or consolida- limited liability companies and other business entities tion, one (1) or more domestic limited liability companies which is to merge or consolidate; may merge or consolidate with or into one (1) or more domestic limited liability companies or one (1) or more (c) the name of the surviving or resulting domestic other business entities formed or organized under the limited liability company and other business entity; laws of the Republic of the Marshall Islands or any foreign country or other foreign jurisdiction or any (d) the future effective date or time (which shall be a combination thereof, with such domestic limited liability date or time certain) of the merger or consolidation if it company or other business entity as the agreement shall is not to be effective upon the filing of the certificate of merger or consolidation; provide being the surviving or resulting domestic limited liability company or other business entity. Unless (e) that the agreement of merger or consolidation is otherwise provided in the limited liability company on file at a place of business of the surviving or agreement, a merger or consolidation shall be approved resulting domestic limited liability company or other by each domestic limited liability company which is to business entity, and shall state the address thereof; merge or consolidate by the members or, if there is more than one (1) class or group of members, then by each (f) that a copy of the agreement of merger or class or group of members, in either case, by members consolidation will be furnished by the surviving or who own more than fifty percent (50%) of the then resulting domestic limited liability company or any current percentage or other interest in the profits of the person holding an interest in any other business entity domestic limited liability company owned by all of the which is to merge or consolidate; and members or by the members in each class or group, as appropriate. In connection with a merger or consolida- (g) if the surviving or resulting entity is not a tion hereunder, rights or securities of, or interests in, a domestic limited liability company, or a corporation or domestic limited liability company or other business limited partnership or partnership organized under the entity which is a constituent party to the merger or laws of the Republic of the Marshall Islands, a consolidation may be exchanged for or converted into statement that such surviving or resulting other cash, property, rights or securities of, or interests in, the business entity agrees that it may be served with surviving or resulting domestic limited liability company process in the Republic of the Marshall Islands in any or other business entity or, in addition to or in lieu action, suit or proceeding for the enforcement of any thereof, may be exchanged for or converted into cash, obligation of any domestic limited liability company property, rights or securities of, or interests in, a domestic which is to merge or consolidate, irrevocably limited liability company or other business entity which appointing the Attorney General as its agent to accept is not the surviving or resulting limited liability company service of process in any such action, suit or or other business entity in the merger or consolidation. proceeding and specifying the address to which a copy Notwithstanding prior approval, an agreement of merger of such process shall be mailed to it by the Attorney or consolidation may be terminated or amended pursuant General. In the event of service hereunder upon the to a provision for such termination or amendment Attorney General, the procedures set forth in section contained in the agreement of merger or consolidation. 60(3) of this Act shall be applicable, except that the plaintiff in any such action, suit or proceeding shall (3) If a domestic limited liability company is merging furnish the Attorney General with the address specified or consolidating under this section, the domestic limited in the certificate of merger or consolidation provided liability company or other business entity surviving or for in this section and any other address which the resulting in or from the merger or consolidation shall file plaintiff may elect to furnish, together with copies of a certificate of merger or consolidation executed by one such process as required by the Attorney General, and (1) or more authorized persons on behalf of the domestic the Attorney General shall notify such surviving or limited liability company when it is the surviving or 132

resulting other business entity at all such addresses furnished by the plaintiff in accordance with the (a) effect any amendment to the limited liability procedures set forth in section 60(3) of this Act. company agreement; or

(4) Unless a future effective date or time is provided (b) effect the adoption of a new limited liability in a certificate of merger or consolidation, in which event company agreement, for a limited liability company if a merger or consolidation shall be effective at any such it is the surviving or resulting limited liability company future effective date or time, a merger or consolidation in the merger or consolidation. shall be effective upon the filing in the Office of the Registrar of Corporations of a certificate of merger or Any amendment to a limited liability company agree- consolidation. If a certificate of merger or consolidation ment or adoption of a new limited liability company provides for a future effective date or time and if an agreement made pursuant to the foregoing sentence shall agreement of merger or consolidation is amended to be effective at the effective time or date of the merger or change the future effective date or time, or if an consolidation. The provisions of this subsection shall not agreement of merger or consolidation permits a be construed to limit the accomplishment of a merger or certificate of merger or consolidation to be amended to of any of the matters referred to herein by any other change the future effective date or time without an means provided for in a limited liability company amendment to the agreement of merger or consolidation, agreement or other agreement or as otherwise permitted or if an agreement of merger or consolidation is amended by law, including that the limited liability company to change any other matter described in the certificate of agreement of any constituent limited liability company to merger or consolidation so as to make the certificate of the merger or consolidation (including a limited liability merger or consolidation false in any material respect, as company formed for the purpose of consummating a permitted by subsection (2) of this section prior to the merger or consolidation) shall be the limited liability future effective date or time, the certificate of merger or company agreement of the surviving or resulting limited consolidation shall be amended by the filing of a liability company. certificate of amendment of a certificate of merger or consolidation which shall identify the certificate of (7) When any merger or consolidation shall have merger or consolidation and the agreement of merger or become effective under this section, for all purposes of consolidation, if applicable, which has been amended and the laws of the Republic of the Marshall Islands, all of shall state that the agreement of merger or consolidation, the rights, privileges and powers of each of the domestic if applicable, has been amended and shall set forth the limited liability companies and other business entities amendment to the certificate of merger or consolidation. that have merged or consolidated, and all property, real, If a certificate of merger or consolidation provides for a personal and mixed, and all debts due to any of said future effective date or time, and if an agreement of domestic limited liability companies and other business merger or consolidation is terminated as permitted by entities, as well as all other things and causes of action subsection (2) of this section prior to the future effective belonging to each of such domestic limited liability date or time, the certificate of merger or consolidation companies and other business entities, shall be vested in shall be terminated by the filing of a certificate of the surviving or resulting domestic limited liability termination of a merger or consolidation which shall company or other business entity, and shall thereafter be identify the certificate of merger or consolidation and the the property of the surviving or resulting domestic agreement of merger or consolidation which has been limited liability company or other business entity, and terminated and shall state that the agreement of merger or may be enforced against it to the same extent as if said consolidation has been terminated. debts, liabilities and duties have been incurred or contracted by it. Unless otherwise agreed, a merger or (5) A certificate of merger or consolidation shall act as consolidation of a domestic limited liability company, a certificate of cancellation for a domestic limited including a domestic limited liability company, which is liability company which is not the surviving or resulting not the surviving or resulting entity in the merger or entity in the merger or consolidation. Whenever this consolidation, shall not require such domestic limited section requires the filing of a certificate of merger or liability company to wind up its affairs under section 48 consolidation, such requirement shall be deemed satisfied of this Act or pay its liabilities and distribute its assets by the filing of an agreement of merger of consolidation under section 49 of this Act. [P.L. 1996-14, § 17; containing the information required by this section to be amended by P.L. 2000-14, § 17; amended by P.L. 2005- set forth in the certificate of merger or consolidation. 29, § 17.]

(6) An agreement of merger or consolidation approved in accordance with subsection (3)(b) of this section may: 133

DIVISION 3: viving or resulting limited liability company pursuant MEMBERS to a merger or consolidation approved in accordance with section 17(2) of this Act, at the time provided in § 18. Admission of members. and upon compliance with the limited liability § 19. Classes and voting. company agreement of the surviving or resulting § 20. Liability to third parties. limited liability company. § 21. Events of bankruptcy. § 22. Requirement for keeping accounting records, (3) In connection with the domestication of a non- minutes, and records of members, managers, Marshall Islands entity (as defined in section 76 of this and beneficial owners; access to and Act) as a limited liability company in the Marshall confidentiality of information. Islands in accordance with section 76 of this Act or the § 23. Remedies for breach of limited liability conversion of another entity (as defined in section 78 of company agreement by member. this Act) to a domestic limited liability company in accordance with section 78 of this Act, a person is admitted as a member of the limited liability company at the time provided in and upon compliance with the § 18. Admission of members. limited liability company agreement.

(1) In connection with the formation of a limited (4) A person may be admitted to a limited liability liability company, a person acquiring a limited liability company as a member of the limited liability company company interest is admitted as a member of the limited and may receive a limited liability company interest in liability company upon the later to occur of: the limited liability company without making a contribution or being obligated to make a contribution to the (a) the formation of the limited liability company; or limited liability company. Unless otherwise provided in a limited liability company agreement, a person may be (b) the time provided in and upon compliance with admitted to a limited liability company as a member of the limited liability company agreement or, if the the limited liability company without acquiring a limited limited liability company agreement does not so liability company interest in the limited liability provide, when the person’s admission is reflected in company. Unless otherwise provided in a limited liability the records of the limited liability company. company agreement, a person may be admitted as the sole member of a limited liability company without (2) After the formation of a limited liability company, making a contribution or being obligated to make a a person acquiring a limited liability company interest is contribution to the limited liability company or without admitted as a member of the limited liability company: acquiring a limited liability company interest in the limited liability company. [P.L. 1996-14, § 18; amended (a) in the case of a person acquiring a limited liabi- by P.L. 2000-14, § 18.] lity company interest directly from the limited liability company, at the time provided in and upon compliance § 19. Classes and voting. with the limited liability company agreement or, if the limited liability company agreement does not so pro- (1) A limited liability company agreement may vide, upon the consent of all members and when the provide for classes or groups of members having such person’s admission is reflected in the records of the relative rights, powers and duties as the limited liability limited liability company; or company agreement may provide, and may make provision for the future creation in the manner provided in the limited liability company agreement of additional (b) in the case of an assignee of a limited liability classes or groups of members having such relative rights, company interest, as provided in section 44(1) of the powers and duties as may from time to time be Act and at the time provided in and upon compliance established, including rights, powers and duties senior to with the limited liability company agreement or, if the existing classes and groups of members. A limited limited liability company agreement does not so liability company agreement may provide for the taking provide, when any such person’s permitted admission of an action, including the amendment of the limited is reflected in the records of the limited liability liability company agreement, without the vote or company; or approval of any member or class or group of members,

including an action to create under the provisions of the (c) unless otherwise provided in an agreement of limited liability company agreement a class or group of merger or consolidation, in the case of a person limited liability company interests that was not acquiring a limited liability company interest in a sur- previously outstanding. 134

§ 20. Liability to third parties. (2) A limited liability company agreement may grant to all or certain identified members or a specified class or (1) Except as otherwise provided by the Act, the debts, group of the members the right to vote separately or with obligations and liabilities of a limited liability company, all or any class or group of the members or managers, on whether arising in contract, tort or otherwise, shall be any matter. Voting by members may be on a per capita, solely the debts, obligations and liabilities of the limited number, financial interest, class, group or any other basis. liability company; and no member or manager of a limited liability company shall be obligated personally (3) A limited liability company agreement may set for such debt, obligation or liability of the limited forth provisions relating to notice of the time, place or liability company solely by reason of being a member or purpose of any meeting at which any matter is to be acting as a manager of the limited liability company. voted on by any members, waiver of any such notice, action by consent without a meeting, the establishment of (2) Notwithstanding the provisions of subsection (1) a record date, quorum requirements, voting in person or of this section, under a limited liability company by proxy, or any other matter with respect to the exercise agreement or under another agreement, a member or of any such right to vote. manager may agree to be obligated personally for any or all of the debts, obligations and liabilities of the limited (4) Unless otherwise provided in a limited liability liability company. [P.L. 1996-14, § 20; amended by P.L. company agreement, meetings of members may be held 2000-14, § 20.] by means of communications equipment which permits the persons participating in the meeting to communicate § 21. Events of bankruptcy. with each other, and participation in a meeting pursuant to this subsection shall constitute presence in person at A person ceases to be a member of a limited liability the meeting. Unless otherwise provided in a limited company upon the happening of any of the following liability company agreement, on any matter that is to be events: voted on, consented to or approved by members, the members may take such action without a meeting, (1) Unless otherwise provided in a limited liability without prior notice and without a vote if consented to or company agreement, or with the written consent of all approved, in writing, by electronic transmission or by members, a member: any other means permitted by law, by members having not less than the minimum number of votes that would be (a) makes an assignment for the benefit of creditors; necessary to authorize or take such action at a meeting at which all members entitled to vote thereon were present (b) files a voluntary petition in bankruptcy; and voted. Unless otherwise provided in a limited liability company agreement, on any matter that is to be (c) is adjudged bankrupt or insolvent, or has entered voted on by members, the members may vote in person against him an order for relief, in any bankruptcy or or by proxy, and such proxy may be granted in writing, insolvency proceeding; by means of electronic transmission or as otherwise permitted by applicable law. Unless otherwise provided (d) files a petition or answers seeking for himself in a limited liability company agreement, a consent any reorganization, arrangement, composition, read- transmitted by electronic transmission by a member or by justment, liquidation, dissolution or similar relief under a person or persons authorized to act for a member shall any statute, law or regulation; be deemed to be written and signed for purposes of this subsection. For purposes of this subsection, the term (e) files an answer or other pleading admitting or “electronic transmission” means any form of failing to contest the material allegations of a petition communication not directly involving the physical filed against him in any proceeding of this nature; transmission of paper that creates a record that may be retained, retrieved and reviewed by a recipient thereof (f) seeks, consents to or acquiesces in the appoint- and that may be directly reproduced in paper form by ment of a trustee, receiver or liquidator of the member such a recipient through an automated process. [P.L. or of all or any substantial part of his properties; or 1996-14, § 19; amended by P.L. 2000-14, § 19; P.L. 2017-52, § 4.] (2) Unless otherwise provided in a limited liability company agreement, or with the written consent of all members, one hundred and twenty (120) days after the commencement of any proceeding against the member seeking reorganization, arrangement, composition, 135

readjustment, liquidation, dissolution or similar relief required to be maintained pursuant to this subsection. under any statute, law or regulation, if the proceeding Additionally, upon formation, or in the case of a limited has not been dismissed, or if within ninety (90) days liability company existing prior to the effective date of after the appointment without his consent or this law, within 360 days of such date, and annually acquiescence of a trustee, receiver or liquidator of the thereafter, an attestation, in a form prescribed by the member or of all or any substantial part of his Registrar for non-resident domestic limited liability properties, the appointment is not vacated or stayed, or companies, will be made by every non-resident domestic within ninety (90) days after the expiration of any such limited liability company, excluding publicly-traded stay, the appointment is not vacated. [P.L. 1996-14, § companies, to the Registrar for non-resident domestic 21.] limited liability companies that accounting records and underlying documentation required to be maintained § 22. Requirement for keeping accounting records, pursuant to this subsection are being maintained in minutes, and records of members, managers, accordance with this section or, if applicable, that such and beneficial owners; access to and records are not being maintained (wholly or partially). confidentiality of information. (b) Minutes. Every domestic limited liability company (1) Requirement for keeping accounting records, shall keep minutes of all meetings of members, of actions minutes, and records of members, managers, and taken on consent by members, of all meetings of the beneficial owners. managers, and of actions taken on consent by managers. A resident domestic limited liability company shall keep (a) Accounting records. Every domestic limited such minutes in the Republic. liability company shall keep reliable and complete accounting records, to include correct and complete (c) Records of members, managers, and beneficial books and records of account. Accounting records must owners. be sufficient to correctly explain all transactions, enable the financial position of the limited liability company to (i) Every domestic limited liability company be determined with reasonable accuracy at any time, and shall keep an up-to-date record containing the names allow financial statements to be prepared. Additionally, and addresses of all members. A resident domestic every domestic limited liability company shall keep limited liability company shall keep the records underlying documentation for accounting records required to be maintained by this subsection in the maintained pursuant to this subsection, such as, but not Republic. limited to, invoices and contracts, which shall reflect all sums of money received and expended and the matters in (ii) Every domestic limited liability company, respect of which the receipt and expenditure takes place; excluding publicly-traded companies, formed after all sales, purchases, and other transactions; and the assets the effective date of this law shall, in addition to the and liabilities of the limited liability company. A resident records of members required under subparagraph (i) domestic limited liability company shall keep all of this paragraph, use all reasonable efforts to obtain accounting records and underlying documentation as and maintain an up-to-date record of the names and described in this subsection in the Republic. Upon addresses of all managers and beneficial owners of demand of the registered agent for non-resident domestic the limited liability company. Every domestic limited entities in connection with the performance of its audit liability company, excluding publicly-traded functions or pursuant to a valid governmental request companies, formed on or before such date shall made to the registered agent for non-resident domestic comply with the requirements of this subparagraph entities, every non-resident domestic limited liability (ii) within 360 days of such date. company shall produce all accounting records and underlying documentation required to be maintained (iii) For the purposes of complying with pursuant to this subsection to the registered agent for subparagraph (ii) of this paragraph, every domestic non-resident domestic entities in the Republic. The limited liability company shall use all reasonable Minister of Finance or any person designated by him or efforts to notify its members, managers, and her under or pursuant to the Tax Information Exchange beneficial owners of their obligation to provide the Agreement (Implementation) Act of 1989 (41 MIRC, information required to be kept by the limited Chapter 4) or the Tax Information Exchange Agreement liability company under the aforementioned (Execution and Implementation) Act, 2010 (48 MIRC, subparagraph. The requirement to use all reasonable Chapter 4) may require the registered agent for non- efforts shall be satisfied by at least annually resident domestic entities to demand production of all requesting by written notice to the members and accounting records and underlying documentation managers the information required to be maintained

136

by the limited liability company under the effective date of this law, within 360 days of such aforementioned subparagraph. For the purpose of date, and annually thereafter, an attestation, in a form identifying beneficial owners, a limited liability prescribed by the Registrar for non-resident domestic company is entitled to rely, without further inquiry, limited liability companies, will be made by every on the response of a person to a written notice sent in non-resident domestic limited liability company, good faith by the limited liability company, unless excluding publicly-traded companies, to the the limited liability company has reason to believe Registrar for non-resident domestic limited liability that the response is misleading or false. companies that records of members, managers, and beneficial owners required to be maintained pursuant (iv) For the purpose of this Division, a member, to this subsection are being maintained in accordance manager, or beneficial owner of a domestic limited with this section or, if applicable, that such records liability company has an obligation to provide the are not being maintained (wholly or partially). information requested by such limited liability company in accordance with this paragraph. (d) Form of records. Any records maintained by a limited liability company in the regular course of its (v) For the purpose of this Division, “beneficial business, including its record of members, books of owner” means the natural person(s) who ultimately account, and minute books, may be kept on, or be in the owns or controls, or has ultimate effective control of, form of, punch cards, magnetic tape, photographs, a legal entity or arrangement, whether directly or microphotographs, or any other information storage indirectly, or on whose behalf such interest in such device, provided that the records so kept can be legal entity or arrangement is held. For a domestic converted into clearly legible written form within a limited liability company other than a publicly- reasonable time. Any limited liability company shall so traded company, the natural person(s) who exercises convert any records so kept upon the request of any control over such limited liability company through person entitled to inspect such records. When records are direct or indirect ownership of more than 25% of the kept in such manner, a clearly legible written form limited liability company interests or voting rights in produced from the cards, tapes, photographs, micro- such limited liability company shall be regarded as photographs, or other information storage device shall be the beneficial owner(s); if no natural person exerts admissible in evidence, and accepted for all other control through such an ownership interest, the purposes, to the same extent as an original written record natural person(s) who exercises control over such of the same information would have been, provided the limited liability company through management of the written form accurately portrays the record. limited liability company or other means shall be regarded as the beneficial owner(s). (e) Retention period. All records required to be kept, retained, or maintained under this section shall be kept, (iv) Upon demand of the registered agent for retained, or maintained for a minimum of five (5) years. non-resident domestic entities in connection with the performance of its audit functions or pursuant to a (f) Failure to maintain or produce records or to valid governmental request made to the registered make attestations. Any person who knowingly or reck- agent for non-resident domestic entities, every non- lessly fails to keep, retain, or maintain records as required resident domestic limited liability company shall under this subsection, or who fails to produce records produce all records of members, managers, and within sixty (60) days upon demand or to make beneficial owners required to be maintained pursuant attestations as required under this subsection, or who to this subsection to the registered agent for non- willfully keeps, retains, maintains, or produces false or resident domestic entities in the Republic. The misleading records or makes false or misleading Minister of Finance or any person designated by him attestations, shall be liable to a fine not exceeding or her under or pursuant to the Tax Information $50,000, cancellation of the limited liability company’s Exchange Agreement (Implementation) Act of 1989 certificate of formation, or both. Persons shall not be (41 MIRC, Chapter 4) or the Tax Information liable under this subsection for any failure to keep, retain Exchange Agreement (Execution and or maintain the beneficial ownership information Implementation) Act, 2010 (48 MIRC, Chapter 4) required to be maintained under this subsection if all may require the registered agent for non-resident reasonable efforts in compliance with the requirements of domestic entities to demand production of all records this subsection have been made to obtain and maintain of members, managers, and beneficial owners such information. required to be maintained pursuant to this subsection. Additionally, upon formation, or in the case of a (2) Access to and confidentiality of information. limited liability company existing prior to the

137

(a) Each member of a limited liability company has the capable of conversion into written form within a right, subject to such reasonable standards (including reasonable time. standards governing what information and documents are to be furnished at what time and location and at whose (e) Any demand by a member under this section shall expense) as may be set forth in a limited liability be in writing and shall state the purpose of such demand. company agreement or otherwise established by the manager or, if there is no manager, then by the members, (f) Any action to enforce any right arising under this to obtain from the limited liability company from time to section shall be brought in the High Court of the time upon reasonable demand for any purpose reasonably Republic. [P.L. 1996-14, § 22; P.L. 2014-31, adding new related to the member’s interest as a member of the §22(1); amended by P.L. 2015-40, §22; amended by P.L. limited liability company: 2017-52, § 1.]

(i) true and full information regarding the status of § 23. Remedies for breach of limited liability the business and financial condition of the limited company agreement by member. liability company; A limited liability company agreement may provide (ii) a current list of the name and last known that: business, residence or mailing address of each member and manager; (1) a member who fails to perform in accordance with, or to comply with the terms and conditions of, the limited (iii) a copy of any written limited liability company liability company agreement shall be subject to specified agreement and certificate of formation and amend- penalties or specific consequences; and ments thereto, together with executed copies of any written powers of attorney pursuant to which the (2) at the time or upon the happening of events limited liability company agreement and any certificate specified in the limited liability company agreement, a and all amendments thereto have been executed; member shall be subject to specified penalties or specified consequences. [P.L. 1996-14, § 23.] (iv) true and full information regarding the amount of cash and a description and statement of the agreed DIVISION 4: value of any other property or services contributed by MANAGERS each member and which each member has agreed to contribute in the future, and the date on which each § 24. Admission of managers. became a member; and § 25. Management of limited liability company. § 26. Contributions by a manager. (v) other information regarding the affairs of the § 27. Classes and voting. limited liability company as is just and reasonable. § 28. Remedies for breach of limited liability company agreement by manager. (b) Each manager shall have the right to examine all § 29. Reliance on reports and information by of the information described in subsection (a) of this member or manager. section for a purpose reasonably related to his position as a manager. § 24. Admission of managers. (c) The manager of a limited liability company shall have the right to keep confidential from the members, for A person may be named or designated as a manager of each period of time as the manager deems reasonable, the limited liability company as provided in section 2(11) any information which the manager reasonably believes of this Act. [P.L. 1996-14, § 24; amended by P.L. 2005- to be in the nature of trade secrets or other information 29, § 24; amended by P.L. 2017-39.] the disclosure of which the manager in good faith believes is not in the best interest of the limited liability § 25. Management of limited liability company. company or could damage the limited liability company or its business or which the limited liability company is Unless otherwise provided in a limited liability com- required by law or by agreement with a third party to pany agreement, the management of a limited liability keep confidential. company shall be vested in its members in proportions to the then current percentage or other interest of members (d) A limited liability company may maintain its in the profits of the limited liability company owned by records in other than a written form if such form is all of the members, the decision of members owning

138

more than fifty percent (50%) of the said percentage of other interest in the profits controlling; provided, (3) A limited liability company agreement may set forth however, that if a limited liability company agreement provisions relating to notice of the time, place or purpose provides for the management in whole or in part, of a of any meeting at which any matter is to be voted on by limited liability company by a manager, the management any manager or class or group of managers, waiver of any of the limited liability company, to the extent so such notice, action by consent without a meeting, the provided, shall be vested in the manager who shall be establishment of a record date, quorum requirements, chosen in the manner provided in the limited liability voting in person or by proxy, or any other matter with company agreement. The manager shall also hold the respect to the exercise of any such right to vote. offices and have the responsibilities accorded to him by the members and set forth in a limited liability company (4) Unless otherwise provided in a limited liability agreement. Subject to section 35 of this Act, a manager company agreement, meetings of managers may be held shall cease to be a manager as provided in a limited by means of communications equipment which permits liability company agreement. [P.L. 1996-14, § 25; amen- the persons participating in the meeting to communicate ded by P.L. 2000-14, § 25.] with each other, and participation in a meeting pursuant to this subsection shall constitute presence in person at § 26. Contributions by a manager. the meeting. Unless otherwise provided in a limited liability company agreement, on any matter that is to be A manager of a limited liability company may make voted on, consented to or approved by managers, the contributions to the limited liability company and share managers may take such action without a meeting, in the profits and losses of, and in distributions from, the without prior notice and without a vote if consented to or limited liability company as a member. A person who is approved, in writing, by electronic transmission or by both a manager and a member has the rights and powers, any other means permitted by law, by managers having and is subject to the restrictions and liabilities, of a not less than the minimum number of votes that would be manager and, except as provided in a limited liability necessary to authorize or take such action at a meeting at company agreement, also has the rights and powers, and which all managers entitled to vote thereon were present is subject to the restrictions and liabilities, of a member and voted. Unless otherwise provided in a limited to the extent of his participating in the limited liability liability company agreement, on any matter that is to be company as a member. [P.L. 1996-14, § 26.] voted on by managers, the managers may vote in person or by proxy, and such proxy may be granted in writing, § 27. Classes and voting. by means of electronic transmission or as otherwise permitted by applicable law. Unless otherwise provided (1) A limited liability company agreement may pro- in a limited liability company agreement, a consent vide for classes or groups of managers having such transmitted by electronic transmission by a manager or relative rights, powers and duties as the limited liability by a person or persons authorized to act for a manager company agreement may provide, and may make provi- shall be deemed to be written and signed for purposes of sion for the future creation in the manner provided in the this subsection. For purposes of this subsection, the term limited liability company agreement of additional classes “electronic transmission” means any form of or groups of managers having such relative rights, communication not directly involving the physical powers and duties senior to existing classes and groups of transmission of paper that creates a record that may be managers. A limited liability company agreement may retained, retrieved and reviewed by a recipient thereof provide for the taking of an action, including the and that may be directly reproduced in paper form by amendment of the limited liability company agreement, such a recipient through an automated process. [P.L. without the vote or approval of any manager or class or 1996-14, § 27; amended by P.L. 2000-14, § 27; amended group of managers, including an action to create under by P.L. 2017-52, § 4.] the provisions of the limited liability company agreement a class or group of limited liability company interests that § 28. Remedies for breach of limited liability was not previously outstanding. company agreement by manager.

(2) A limited liability company agreement may grant A limited liability company agreement may provide to all or certain identified managers or a specified class that: or group of the managers the right to vote, separately or with all or any class or group of managers or members, on any matter. Voting by managers may be on a per (1) a manager who fails to perform in accordance with, or to comply with the terms and conditions of, the capita, number, financial interest, class, group or any other basis. limited liability company agreement shall be subject to specified penalties or specific consequences; and 139

been made. The foregoing option shall be in addition to, (2) at the time or upon the happening of events and not in lieu of, any other rights, including the right to specified in the limited liability company agreement, a specific performance, that the limited liability company member shall be subject to specified penalties or may have against such member under the limited liability specified consequences. [P.L. 1996-14, § 28.] company agreement or applicable law.

§ 29. Reliance on reports and information by (2) Unless otherwise provided in a limited liability member or manager. company agreement, the obligation of a member to make a contribution or return money or other property paid or A member or manager of a limited liability company distributed in violation of this Act may be compromised shall be fully protected in relying in good faith upon the only by consent of all the members. Notwithstanding the records of the limited liability company and upon such compromise, a creditor of a limited liability company information, opinions, reports or statements presented to who extends credit, after the entering into of a limited the limited liability company by any of its other liability company agreement or an amendment thereto managers, members, officers, employees, or committees which, in either case, reflects the obligation, and before of the limited liability company, or by any other person the amendment thereof to reflect the compromise, may as to matters the member or manager reasonably believes enforce the original obligation to the extent that, in are within such other person’s professional or expert extending credit, the creditor reasonably relied on the competence and who has been selected with reasonable obligation of a member to make a contribution or return. care by or on behalf of the limited liability company, A conditional obligation of a member to make a including information, opinions, reports or statements as contribution or return money or other property to a to the value and amount of the assets, liabilities, profits limited liability company may not be enforced unless the or losses of the limited liability company or any other conditions of the obligation have been satisfied or waived facts pertinent to the existence and amount of assets from as to or by such member. Conditional obligations include which distributions to members might properly be paid. contributions payable upon a discretionary call of a [P.L. 1996-14, § 29.] limited liability company prior to the time the call occurs.

DIVISION 5: (3) A limited liability company agreement may FINANCE provide that the interest of any member who fails to make any contribution that he is obligated to make shall § 30. Form of contribution. be subject to specified penalties for, or specified § 31. Liability for contribution. consequences of, such failure. Such penalty or conse- § 32. Allocation of profits and losses. quence may take the form of reducing or eliminating the § 33. Allocation of distributions. defaulting member’s proportionate interest to that of nondefaulting members, a forced sale of his limited liability company interest, forfeiture of his limited liability § 30. Form of contribution. company interest, the lending by other members of the amount necessary to meet his commitment, a fixing of The contribution of a member to a limited liability the value of his limited liability company interest by company may be in cash, property or services rendered, appraisal or by formula and redemption or sale of his or a promissory note or other obligation to contribute limited liability company interest at such value, or other cash or property or to perform services. [P.L. 1996-14, penalty or consequence. [P.L. 1996-14, § 31.] § 30.] § 32. Allocation of profits and losses. § 31. Liability for contribution. The profits and losses of a limited liability company (1) Except as provided in a limited liability company shall be allocated among the members, and among agreement, a member is obligated to a limited liability classes or groups of members, in the manner provided in company to perform any promise to contribute cash or a limited liability company agreement. If the limited property or to perform services, even if he is unable to liability company agreement does not so provide, profits perform because of death, disability or any other reason. and losses shall be allocated on the basis of the agreed If a member does not make the required contribution of value (as stated in the records of the limited liability property or services, he is obligated at the option of the company) of the contributions made by each member to limited liability company to contribute cash equal to that the extent they have been received by the limited liability portion of the agreed value (as stated in the records of the company and have not been returned. [P.L. 1996-14, limited liability company) of the contribution that has not § 32.] 140

company agreement and offset the damages against the § 33. Allocation of distributions. amount otherwise distributable to the resigning manager. [P.L. 1996-14, § 35; amended by P.L. 2000-14, § 35.] Distributions of cash or other assets of a limited liability company shall be allocated among the members, and § 36. Resignation of member. among classes or groups of members, in the manner provided in a limited liability company agreement. If the A member may resign from a limited liability company limited liability company agreement does not so provide, at the time or upon the happening of events specified in a distributions shall be made on the basis of the agreed limited liability company agreement and in accordance value (as stated in the records of the limited liability with the limited liability company agreement. If a limited company) of the contributions made by each member to liability company agreement does not specify the time or the extent they have been received by the limited liability the events upon the happening of which a member may company and have not been returned. [P.L. 1996-14, resign or a definite time for the dissolution and winding § 33.] up of a limited liability company, a member may resign upon not less than six (6) months prior written notice to DIVISION 6: the limited liability company at its registered office as set DISTRIBUTIONS AND RESIGNATION forth in the certificate of formation filed in the Office of the Registrar of Corporations and to each member and § 34. Interim distribution. manager at each member’s and manager’s address as set § 35. Resignation of manager. forth on the records of the limited liability company. § 36. Resignation of member. Notwithstanding anything to the contrary set forth in this § 37. Distribution upon resignation. division, a limited liability company agreement may § 38. Distribution in kind. provide that a member may not resign from a limited § 39. Right to distribution. liability company or assign his limited liability company § 40. Limitations on distribution. interest prior to the dissolution and winding up of the limited liability company. [P.L. 1996-14, § 36.]

§ 34. Interim distribution. § 37. Distribution upon resignation.

Except as provided in this Act, to the extent and at the Except as otherwise provided in this division, a times or upon the happening of the events specified in a member who resigns or otherwise ceases for any reason limited liability company agreement, a member is entitled to to be a member is entitled to receive on the terms and receive from a limited liability company contributions conditions provided in a limited liability company before his resignation from the limited liability company agreement any distribution to which such member is and before the dissolution and winding up thereof. [P.L. entitled under the limited liability company agreement, 1996-14, § 34.] and if not otherwise provided in the limited liability company agreement, such member is entitled to receive, § 35. Resignation of manager. within a reasonable time after the date on which such member resigned or otherwise ceased to be a member, A manager may resign as a manager of a limited the fair value of such member’s interest in the limited liability company at the time or upon the happening of liability company as of the date on which such member events specified in a limited liability company agreement resigned or otherwise ceased to be a member based upon and in accordance with the limited liability company such member’s right to share in distributions from the agreement. A limited liability company agreement may limited liability company. [P.L. 1996-14, § 37; amended provide that a manager shall not have the right to resign by P.L. 2000-14, § 37.] as a manager of a limited liability company. Notwith- standing that a limited liability company agreement § 38. Distribution in kind. provides that a manager does not have the right to resign as a manager of a limited liability company, a manager Except as provided in a limited liability company may resign as a manager of a limited liability company at agreement, a member, regardless of the nature of his any time by giving written notice to the members and contribution, has no right to demand and receive any other managers. If the resignation of a manager violates a distribution from a limited liability company in any form limited liability company agreement, in addition to any other than cash. Except as provided in a limited liability remedies otherwise available under applicable law, a company agreement, a member may not be compelled to limited liability company may recover from the resigning accept a distribution of any asset in kind from a limited manager damages for breach of the limited liability liability company to the extent that the percentage of the asset distributed to him exceeds a percentage of that asset 141

which is equal to the percentage in which he shares in and an adjudication of liability against such member is distributions from the limited liability company. [P.L. made in the said action. [P.L. 1996-14, § 40.] 1996-14, § 38.] DIVISION 7: § 39. Right to distribution. ASSIGNMENT OF LIMITED LIABILITY COMPANY INTERESTS Subject to sections 40 and 49 of this Act, and unless otherwise provided in a limited liability company agree- § 41. Nature of limited liability company interest. ment, at the time a member becomes entitled to receive a § 42. Assignment of limited liability company distribution, he has the status of, and is entitled to all interest. remedies available to, a creditor of a limited liability § 43. Rights of judgment creditor. company with respect to the distribution. A limited § 44. Right of assignee to become member. liability company agreement may provide for the § 45. Powers of estate of deceased or incompetent establishment of a record date with respect to allocations member. and distributions by a limited liability company. [P.L. 1996-14, § 39.]

§ 41. Nature of limited liability company interest. § 40. Limitations on distribution.

(1) A limited liability company shall not make a A limited liability company interest is personal pro- distribution to a member to the extent that at the time of perty. A member has no interest in specific limited the distribution, after giving effect to the distribution, all liability company property. [P.L. 1996-14, § 41.] liabilities of the limited liability company, other than liabilities to members on account of their limited liability § 42. Assignment of limited liability company company interests and liabilities for which the recourse interest. of creditors is limited to specified property of the limited liability company, exceed the fair value of the assets of (1) A limited liability company interest is assignable the limited liability company, except that the fair value of in whole or in part except as provided in a limited lia- property that is subject to a liability for which the bility company agreement. The assignee of a member’s recourse of creditors is limited shall be included in the limited liability company interest shall have no right to assets of the limited liability company only to the extent participate in the management of the business and affairs that the fair value of that property exceeds that liability. of a limited liability company except as provided in the limited liability company agreement and upon: (2) A member who receives a distribution in violation (a) the approval of all of the members of the limited of subsection (1) of this section, and who knew at the time of the distribution that the distribution violated liability company other than the member assigning his subsection (1) of this section, shall be liable to the limited limited liability company interest; or liability company for the amount of the distribution. A member who receives a distribution in violation of (b) compliance with any procedure provided for in subsection (1) of this section, and who did not know at the limited liability company agreement. the time of the distribution that the distribution violated subsection (1) of this section, shall not be liable for the (2) Unless otherwise provided in a limited liability company agreement: amount of the distribution. Subject to subsection (3) of this section, this subsection (2) shall not affect any obligation or liability of a member under a limited (a) an assignment entitles the assignee to share in liability company agreement or other applicable law for such profits and losses, to receive such distribution or the amount of a distribution. distributions, and to receive such allocation of income, gain, loss, deduction, or credit or similar item to which

the assignor was entitled, to the extent assigned; and (3) Unless otherwise agreed, a member who receives a distribution from a limited liability company shall have (b) a member ceases to be a member and to have the no liability under this Act or other applicable law for the power to exercise any rights or powers of a member amount of the distribution after the expiration of three (3) upon assignment of all of his limited liability company years from the date of the distribution unless an action to interest. Unless otherwise provided in a limited liability recover the distribution from such member is commenced company agreement, the pledge of, or granting of a prior to the expiration of the said three (3) year period security interest, lien or other encumbrance in or against, any or all of the limited liability company 142

interest of a member shall not cause the member to (2) An assignee who has become a member has, to the cease to be a member or to have the power to exercise extent assigned, the rights and powers, and is subject to any rights or powers of a member. the restrictions and liabilities, of a member under a limi- (3) A limited liability company agreement may ted liability company agreement and this Act. Notwith- provide that a member’s interest in a limited liability standing the foregoing, unless otherwise provided in a company may be evidenced by a certificate of limited limited liability company agreement, an assignee who liability company interest issued by the limited liability becomes a member is liable for the obligations of his company. assignor to make contributions as provided in section 31 of this Act, but shall not be liable for the obligations of (4) Unless otherwise provided in a limited liability his assignor under Division 6 of this Act. However, the company agreement and except to the extent assumed by assignee is not obligated for liabilities, including the obli- agreement, until an assignee of a limited liability com- gations of his assignor to make contributions as provided pany interest becomes a member, the assignee shall have in section 31 of this Act, unknown to the assignee at the no liability as a member solely as result of the time he became a member and which could not be assignment. ascertained from a limited liability company agreement.

(5) Unless otherwise provided in the limited liability (3) Whether or not an assignee of a limited liability company agreement, a limited liability company may company interest becomes a member, the assignor is not acquire, by purchase, redemption or otherwise, any limi- released from his liability to a limited liability company ted liability company interest or other interest of a under Divisions 5 and 6 of this Act. [P.L. 1996-14, § 44.] member or manager in the limited liability company. Unless otherwise provided in the limited liability com- § 45. Powers of estate of deceased or incompetent pany agreement, any such interest so acquired by the member. limited liability company shall be deemed canceled. [P.L. 1996-14, § 42; amended by P.L. 1998-65, § 42; amended If a member who is an individual dies or a court of by P.L. 2000-14, § 42.] competent jurisdiction adjudges him to be incompetent to mange his person or his property, the member’s executor, § 43. Rights of judgment creditor. administrator, guardian, conservator, or the member’s personal representative may exercise all of the member’s On application to a court of competent jurisdiction by rights for the purpose of settling his estate or any judgment creditor of a member, the court may charge administering his property, including any power under a the limited liability company interest of the member with limited liability company agreement of an assignee to payment of the unsatisfied amount of the judgment with become a member. If a member is a corporation, trust or interest. To the extent so charged, the judgment creditor other entity and is dissolved or terminated, the powers of has only the rights of an assignee of the limited liability that member may be exercised by its legal representative company interest. This Act does not deprive any member or successor or personal representative. [P.L. 1996-14, of the benefit of any exemption laws applicable to the § 45; amended by P.L. 2000-14, § 45.] member’s limited liability company interest. Notwith- standing any other law, the remedies provided by this DIVISION 8: section shall be the sole remedies available to any DISSOLUTION creditor of a member’s interest. [P.L. 1996-14, § 43; amended by P.L. 2005-29, § 43.] § 46. Dissolution. § 47. Judicial dissolution. § 44. Right of assignee to become member. § 48. Winding up. § 49. Distribution of assets. (1) An assignee of a limited liability company interest may become a member as provided in a limited liability company agreement and upon: § 46. Dissolution.

(a) the approval of all of the members of the limited (1) A limited liability company is dissolved and its liability company other than the member assigning his affairs shall be wound up upon the first to occur of the limited liability company interest; or following:

(b) compliance with any procedure provided for in (a) at the time specified in the certificate of the limited liability company agreement. formation;

143

(b) upon the happening of events specified in a limited liability company agreement; (c) Reinstatement of Dissolved Limited Liability Com- pany. Whenever the certificate of formation of a (c) unless otherwise provided in the limited liability limited liability company has been revoked by the company agreement, the written consent of all Registrar of Corporations pursuant to subsection (3) of members; or, if there is more than one (1) class or this section, the limited liability company may request group of members, then by each class or group of that the Registrar of Corporations reinstate its certifi- members, in either case, by members who own more cate of formation. After being satisfied that all than two-thirds of the then current percentage or other statutory arrears to the Republic of the Marshall Islands interest in the profits of the limited liability company have been paid, that the limited liability company has owned by all of the members or by the members in again retained a qualified registered agent and paid any each class or group, as appropriate; or arrears to same, the limited liability company may be restored to full existence in the same manner and with (d) the entry of a decree of judicial dissolution under the same effect as provided by subsection (3) of this section 47 of this division. section. Requests for reinstatement may not be submitted after three (3) years from the date of the (2) Upon dissolution, a certificate of cancellation shall proclamation which revoked the certificate of be filed in accordance to section 11 of this Act. formation.

(3) Dissolution on failure to pay annual registration (4) Unless otherwise provided in a limited liability fee or appoint or maintain registered agent. company agreement, the death, retirement, resignation, expulsion, bankruptcy or dissolution of any member or (a) Procedure for Dissolution. On failure of a the occurrence of any other event that terminates the limited liability company to pay the annual registration continued membership of any member shall not cause the fee or to maintain a registered agent for a period of one limited liability company to be dissolved or its affairs to (1) year, the Registrar of Corporations on or about the be wound up, and upon the occurrence of any such event, first day of November of each year or on such other the limited liability company shall be continued without date as shall be determined by regulation, shall cause a dissolution, unless within ninety (90) days following the notification to be sent to the limited liability company occurrence of such event, members of the limited liability through its last recorded registered agent that its company or, if there is more than one (1) class or group certificate of formation will be revoked unless within of members, then each class or group of members, in ninety (90) days of the date of the notice, payment of either case, by members who own more than fifty percent the annual registration fee has been received or a (50%) of the then current percentage or other interest in registered agent has been appointed, as the case may the profits of the limited liability company owned by all be. On the expiration of the ninety (90) day period, the of the members or by the members in each class or Registrar of Corporations, in the event the limited group, as appropriate, agree in writing to dissolve the liability company has not remedied its default, shall limited liability company. [P.L. 1996-14, § 46; amended issue a proclamation declaring that the certificate of by P.L. 1998-65, § 46; amended by P.L. 2000-14, § 46; formation has been revoked and the limited liability amended by P.L. 2009-32, amending subsection (1)(a) company dissolved as of the date stated in the and removing subsection (1)(d); amended by P.L. 2017- proclamation. The proclamation of the Registrar of 52, § 1.] Corporations shall be filed in his office and he shall mark on the record of the certificate of formation § 47. Judicial dissolution. named in the proclamation the date of revocation and dissolution, and shall give notice to the last recorded On application by or for a member or manager, the registered agent. Thereupon the affairs of the corpora- High Court of the Republic may decree dissolution of a tion shall be wound up in accordance with the limited liability company whenever it is not reasonably procedures provided in section 48 of this division. practicable to carry on the business in conformity with a limited liability company agreement. [P.L. 1996-14, (b) Erroneous dissolution. Whenever it is estab- § 47.] lished to the satisfaction of the Registrar of Corpora- tions that the certificate of formation was erroneously § 48. Winding up.

revoked by the Registrar of Corporations, he may (1) Unless otherwise provided in a limited liability restore the limited liability company to full existence company agreement, a manager who has not wrongfully by publishing and filing in his office a proclamation to dissolved a limited liability company or, if none, the that effect. members or a person approved by the members or, if 144

there is more than one (1) class or group of members in (2) A limited liability company which has dissolved either case, by members who own more than fifty percent shall pay or make reasonable provision to pay all claims (50%) of the then current percentage or other interest in and obligations, including all contingent, conditional or the profits of the limited liability company owned by all unmatured claims and obligations, known to the limited of the members or by the members in each class or liability company and all claims and obligations which group, as appropriate, may wind up the limited liability are known to the limited liability company but for which company’s affairs; but the High Court of the Republic, the identity of the claimant is unknown. If there are upon cause shown, may wind up the limited liability sufficient assets, such claims and obligations shall be company’s affairs upon application of any member or paid in full and any such provision for payment made manager, the member’s or manager’s personal represen- shall be made in full. If there are insufficient assets, such tative or assignee, and in connection therewith, may claims and obligations shall be paid or provided for appoint a liquidating trustee. according to their priority and, among claims and obligations of equal priority, ratably to the extent of (2) Upon dissolution of a limited liability company assets available therefore. Unless otherwise provided in a and until the filing of a certificate of cancellation as limited liability company agreement, any remaining provided in section 11 of this Act, the persons winding assets shall be distributed as provided in this Act. Any up the limited liability company’s affairs may, in the liquidating trustee winding up a limited liability name of, and for and on behalf of, the limited liability company’s affairs who has complied with this section company, prosecute and defend suits, whether civil, shall not be personally liable to the claimants of the criminal or administrative, gradually settle and close the dissolved limited liability company by reason of such limited liability company’s business, dispose of and person’s actions in winding up the limited liability convey the limited liability company’s property, dis- company. [P.L. 1996-14, § 49.] charge or make reasonable provision for the limited liability company’s liabilities, and distribute to the DIVISION 9: members any remaining assets of the limited liability FOREIGN LIMITED LIABILITY COMPANIES company, all without affecting the liability of members and managers and without imposing liability on a § 50. Law governing. liquidating trustee. [P.L. 1996-14, § 48; amended by P.L. § 51. Registration required; application. 2000-14, § 48.] § 52. Issuance of registration. § 53. Name; registered agent. § 49. Distribution of assets. § 54. Amendments to application. § 55. Cancellation of registration. (1) Upon the winding up of a limited liability § 56. Doing business without registration. company, the assets shall be distributed as follows: § 57. Foreign limited liability companies doing business without having qualified; injunctions. (a) to creditors, including members and managers § 58. Execution; liability. who are creditors, to the extent otherwise permitted by § 59. Service of process on registered foreign law, in satisfaction of liabilities of the limited liability limited liability companies. company (whether by payment or the making of § 60. Service of process on unregistered foreign reasonable provision for payment thereof) other than limited liability companies. liabilities for which reasonable provision for payment has been made and liabilities for distributions to members under sections 34 or 37 of this Act; § 50. Law governing.

(b) unless otherwise provided in a limited liability (1) Subject to the Constitution and laws of the company agreement, to members and former members Republic of the Marshall Islands: in satisfaction of liabilities for distributions under section 34 or 37 of this Act; and, (a) the laws of the jurisdiction or country under which a foreign limited liability company is organized (c) unless otherwise provided in a limited liability govern its organization and internal affairs and the company agreement, to members first for the return of liability of its members and managers; their contributions and second respecting their limited liability company interests, in the proportions in which (b) a foreign limited liability company may not be the members share in distributions. denied registration by reason of any difference between those laws and the laws of the Republic of the Marshall

145

Islands and can function in the same fashion as a § 52. Issuance of registration. resident domestic limited liability company; and (1) If the Registrar of Corporations finds that an (c) a foreign limited liability company shall be application for registration conforms to law and all requi- subject to section 5 of this Act. [P.L. 1996-14, § 50.] site fees have been paid, he shall:

§ 51. Registration required; application. (a) certify that the application has been filed in this office by endorsing upon the original application the (1) Before doing business in the Republic of the word “Filed.” This endorsement is conclusive of the Marshall Islands, a foreign limited liability company date of its filing in the absence of actual fraud; shall register with the Registrar of Corporations. In order to register, a foreign limited liability company shall (b) file and index the endorsed application. submit to the Registrar of Corporations: (2) The duplicate of the application, similarly en- (a) a copy executed by an authorized person of an dorsed, shall be returned to the person who filed the application for registration as a foreign limited liability application or his representative. company, setting forth: (3) The filing of the application with the Registrar of (i) the name of the foreign limited liability Corporations shall make it unnecessary to file any other company and, if different, the name under which it documents under this section. [P.L. 1996-14, § 52.] proposes to register and do business in the Republic of the Marshall Islands; § 53. Name; registered agent.

(ii) the state, territory, possession or other (1) A foreign limited liability company may register jurisdiction or country where formed, and the date of with the Registrar of Corporations under any name its formation and a statement from an authorized (whether or not it is the name under which it is registered person that, as of the date of filing, the foreign in the jurisdiction of its formation) that includes the limited liability company validly exists as a limited words “Limited Liability Company” or the abbreviation liability company under the laws of the jurisdiction “L.L.C.” and that could be registered as a domestic of its formation; limited liability company; provided, however, that a foreign limited liability company may register under any (iii) the nature of the business or purposes to be name which is not such as to distinguish it upon the conducted or promoted in the Republic of the Mar- records in the office of the Registrar of Corporations shall Islands; from the name of any domestic or foreign corporation, trust, limited liability company or limited partnership or (iv) the name and address of the registered agent partnership or foreign maritime entity reserved, regis- for service of process required to be maintained by tered or organized under the laws of the Republic of the section 53(2) of this division; Marshall Islands with the written consent of the other corporation, business trust, limited liability company or (v) a statement that the Attorney General is limited partnership, which written consent shall be filed appointed the agent of the foreign limited liability with the Registrar of Corporations. company for service of process under the circumstances set forth in section 60 of this division; and (2) Each foreign limited liability company shall have and maintain in the Republic of the Marshall Islands a (vi) the date on which the foreign limited liability registered agent for service of process on the foreign company first did, or intends to do, business in the limited liability company. The provisions as set forth in Republic of the Marshall Islands. section 5 of this Act apply. [P.L. 1996-14, § 53; amended by P.L. 2000-14, § 53.] (b) a fee as set forth in section 68 of this Act shall be paid. § 54. Amendments to application.

(c) a person shall not be deemed to be doing If any statement in the application for registration of a business in the Republic of the Marshall Islands solely foreign limited liability company was false when made or by reason of being a member or manager of a domestic any arrangements or other facts described have changed, limited liability company or a foreign limited liability making the application false in any respect, the foreign company. [P.L. 1996-14, § 51.] limited liability company shall promptly file in the office of the Registrar of Corporations a certificate, executed by 146

an authorized person, correcting such statement, together § 57. Foreign limited liability companies doing with a fee as set forth in section 68 of this Act. [P.L. business without having qualified; injunctions. 1996-14, § 54.] The High Court of the Republic shall have jurisdiction § 55. Cancellation of registration. to enjoin any foreign limited liability company, or any agent thereof, from doing any business in the Republic of A foreign limited liability company may cancel its the Marshall Islands if such foreign limited liability registration by filing with the Registrar of Corporations a company has failed to register under this Act or if such certificate of cancellation, executed by an authorized foreign limited liability company has secured a certificate person, together with a fee as set forth in section 68 of of the Registrar of Corporations under section 52 of this this Act. A cancellation does not terminate the authority division on the basis of false or misleading represen- of the Registrar of Corporations to accept service of tations. The Attorney General shall, upon his own motion process on the foreign limited liability company with or upon the relation of proper parties, proceed for this respect to causes of action arising out of the doing of purpose by complaint. [P.L. 1996-14, § 57.] business in the Republic of the Marshall Islands. [P.L. 1996-14, § 55.] § 58. Execution; liability.

§ 56. Doing business without registration. Section 12(3) of this Act shall be applicable to foreign limited liability companies as if they were domestic (1) A foreign limited liability company doing business limited liability companies. [P.L. 1996-14, § 58.] in the Republic of the Marshall Islands may not maintain any action, suit or proceeding in the Republic of the § 59. Service of process on registered foreign Marshall Islands until it has registered in the Republic of limited liability companies. the Marshall Islands, and has paid to the Republic of the Marshall Islands all fees and penalties for the years or The provisions as set forth in section 5 of this Act parts thereof, during which it did business in the Republic apply. [P.L. 1996-14, § 59.] of the Marshall Islands without having registered. § 60. Service of process on unregistered foreign (2) The failure of a foreign limited liability company limited liability companies. to register in the Republic of the Marshall Islands does not impair: (1) Any foreign limited liability company which shall do business in the Republic of the Marshall Islands (a) the validity of any contract or act of the foreign without having registered under section 51 of this limited liability company; division shall be deemed to have thereby appointed and constituted the Attorney General of the Republic of the (b) the right of any other party to the contract to Marshall Islands its agent for the acceptance of legal maintain any action, suit or proceeding on the contract; process in any civil action, suit or proceeding against it in or any court in the Republic of the Marshall Islands arising or growing out of any business done by it within the (c) prevent the foreign limited liability company Republic of the Marshall Islands. The doing of business from defending any action, suit or proceeding in any in the Republic of the Marshall Islands by such foreign court of the Republic of the Marshall Islands. limited liability company shall be a signification of the agreement of such foreign limited liability company that (3) A member or a manager of a foreign limited any such process when so served shall be of the same liability company is not liable for the obligations of the legal force and validity as if served upon an authorized foreign limited liability company solely by reason of the manager or agent personally within the Republic of the limited liability company’s having done business in the Marshall Islands. Republic of the Marshall Islands without registration. (2) Whenever the words “doing business”, “the doing (4) Any foreign limited liability company doing of business” or “business done in this country”, by any business in the Republic of the Marshall Islands without such foreign limited liability company are used in this first having registered shall be fined and shall pay to the section, they shall mean the course or practice of carrying Registrar of Corporations two hundred dollars (U.S. on any business activities in the Republic of the Marshall $200) for each year or part thereof during which the Islands, including, without limiting the generality of the foreign limited liability company failed to register in the foregoing, the solicitation of business or orders in the Republic of the Marshall Islands. [P.L. 1996-14, § 56.] Republic of the Marshall Islands.

147

(3) In the event of service upon the Attorney General limited liability company agreement from a person in accordance with subsection (1) of this section, the who was a member or an assignee of a limited liability Registrar of Corporations shall forthwith notify the company interest at the time of the transaction. [P.L. foreign limited liability company thereof by letter, 1996-14, § 62.] certified mail, return receipt requested, directed to the foreign limited liability company at the address furnished § 63. Complaint. to the Attorney General by the plaintiff in such action, suit or proceeding. Such letter shall enclose a copy of the In a derivative action, the complaint shall set forth with process and any other papers served upon the Attorney particularity the effort, if any of the plaintiff to secure General. It shall be the duty of the plaintiff in the event of initiation of the action by a manager or member or the such service to serve process and any other papers in reasons for not making the effort. [P.L. 1996-14, § 63.] duplicate, to notify the Attorney General that service is being made pursuant to this subsection and to pay to the § 64. Expenses. Attorney General a sum for the use of the Republic of the Marshall Islands, which sum shall be taxed as part of the If a derivative action is successful, in whole or in part, costs in the proceeding, if the plaintiff shall prevail as a result of a judgment, compromise or settlement of therein. The Attorney General shall maintain an any such action, the court may award the plaintiff alphabetical record of any such process setting forth the reasonable expenses, including reasonable attorney’s name of the plaintiff and defendant, the title, docket fees, from any recovery in any such action or from a number and nature of the proceeding in which process limited liability company. [P.L. 1996-14, § 64.] has been served upon him, the return date thereof, and the day and hour when the service was made. The DIVISION 11: Attorney General shall not be required to retain such MISCELLANEOUS information for a period longer than five (5) years from his receipt of the service of process. [P.L. 1996-14, § 60.] § 65. Construction and application of Act and limited liability company agreement. DIVISION 10: § 66. Severability. DERIVATIVE ACTIONS § 67. Cases not provided for in this Act. § 68. Filing fees. § 61. Right to bring action. § 69. Reserved power of the Republic of the § 62. Proper plaintiff. Marshall Islands to alter or repeal Act. § 63. Complaint. § 70. Annual fees associated with limited liability § 64. Expenses. companies. § 71. Construction; adoption of Delaware limited liability company law. § 61. Right to bring action. § 72. Immunity from liability and suit.

A member or an assignee of a limited liability § 73. Contested matters relating to managers; company interest may bring an action in the High Court contested votes. of the Republic in the right of a limited liability company § 74. Interpretation and enforcement of limited to recover a judgment in its favor if managers or liability company agreement. members with authority to do so have refused to bring § 75. Contractual appraisal rights. the action or if an effort to cause those managers or § 76. Domestication of non-Marshall Island entities. members to bring the action is not likely to succeed. § 77. Transfer of domestic limited liability companies. [P.L. 1996-14, § 61; amended by P.L. 2000-14, § 61.] § 78. Conversion of other entities to a limited liability company. § 62. Proper plaintiff. § 79. Series of members, managers of limited liability company interest. In a derivative action, the plaintiff must be a member § 80. Conversion of a domestic limited liability or an assignee of a limited liability company interest at company to other entities. the time of bringing the action and: § 81. Delegation of rights and powers to manage. § 82. Defense of usury not available. (a) at the time of the transaction of which he § 83. Reserved. complains; or

(b) his status as a member or an assignee of a limited liability company interest had devolved upon him by operation of law or pursuant to the terms of a 148

§ 65. Construction and application of Act and § 69. Reserved power of the Republic of the limited liability company agreement. Marshall Islands to alter or repeal Act.

(1) The rule that statutes in derogation of the common All provisions of this Act may be altered from time to law are to be strictly construed shall have no application time or repealed by legislation or regulation and all rights to this Act. of members and managers are subject to this reservation. [P.L. 1996-14, § 69.] (2) It is the policy of this Act to give the maximum effect to the principle of freedom of contract and to the § 70. Annual fees associated with limited liability enforceability of limited liability company agreements. companies.

(3) To the extent that, at law or in equity, a member or (1) Every domestic limited liability company and manager has duties (including fiduciary duties) and every foreign limited liability company registered to do liabilities relating thereto to a limited liability company business in the Republic of the Marshall Islands shall pay or to another member or manager: an annual fee.

(a) any such member or manager acting under a (2) The annual fee shall be due and payable on the limited liability company agreement shall not be liable anniversary day of the filing of a certificate of formation. to the limited liability company or to any such other The Registrar of Corporations shall receive the annual member or manager for the member’s or manager’s fee. good faith reliance on the provisions of the limited liability company agreement; and (3) Government fees shall be the same as those outlined in Division 1 of the Business Corporations Act (b) the member’s or manager’s duties and liabilities and non-resident domestic limited liability companies may be expanded or restricted by provisions in a shall be exempt from all forms of taxation as provided in limited liability company agreement. section 12 of the Business Corporations Act. [P.L. 1996- 14, § 70; amended by P.L. 2005-29, § 70.] (4) Unless the context otherwise requires, as used herein, the singular shall include the plural and the plural § 71. Construction; adoption of Delaware limited may refer to only the singular. The use of any gender liability company law. shall be applicable to all genders. The captions contained herein are for purposes of convenience only and shall not This Act shall be applied and construed to make the control or affect the construction of this Act. [P.L. 1996- laws of the Republic, with respect to the subject matter 14, § 65.] hereof, uniform with the laws of the State of Delaware in the United States of America. Insofar as it does not § 66. Severability. conflict with any other provision of this Act, or the decisions of the High and Supreme Courts of the If any provision of this Act or its application to any Republic of the Marshall Islands which shall take person or circumstances is held invalid, the invalidity precedence, the non-statutory law of the State of does not affect other provisions or applications of the Act Delaware is hereby adopted as the law of the Republic. which can be given effect without the invalid provision This section shall not apply to resident domestic limited or application, and to this end, the provisions of this Act liability companies. [P.L. 1997-35, § 71, adding new are severable. [P.L. 1996-14, § 66.] section.]

§ 67. Cases not provided for in this Act. § 72. Immunity from liability and suit.

In any case not provided for in this Act, the rules of In the performance of their duties, the Registrar, any law and equity, including the law merchant, shall govern. Deputy Registrar, and/or any trust corporation and/or any [P.L. 1996-14, § 67.] agent appointed, authorized, recognized, and/or designated by the Registrar or any Deputy Registrar, or trust § 68. Filing fees. corporation, or by any person acting on their behalf for the administration of the provisions of this Act or any The applicable filing fees for all filed documentation regulation promulgated pursuant thereto or for the shall be according to a fee schedule determined and performance of any services, pursuant to this Act, amendable by the Registrar of Corporations. [P.L. 1996- together with any affiliate of any such agent, their 14, § 68.] stockholders, members, directors, officers and emplo-

149

yees, wherever located, shall have full immunity from members or managers of the limited liability company, or liability and from suit with respect to any act or omission any class or group of members or managers, have the or thing done by any of them in good faith in the exercise right to vote pursuant to the limited liability company or performance, or in the purported exercise or agreement or other agreement or this division (other than performance, of any power, authority or duty conferred the admission, election, appointment, removal or resig- or imposed upon any of them under or in connection with nation of managers). In any such application, the limited this Act or any regulation, as amended or any other law liability company shall be named as a party and service or rule applicable to the performance of any of their said of the application upon the registered agent of the limited duties. liability company shall be deemed to be service upon the limited liability company, and no other party need be The immunity provided by this section shall only apply joined in order for the High Court to adjudicate the result to those acts or omissions of agents and/or employees of of the vote. The High Court may make such order the entities described in this section, done by them in the respecting further or other notice of such application as it course and scope of the Republic of the Marshall Islands deems proper under the circumstances. [P.L. 2000-14, Limited Liability Companies Program. [P.L. 1997-32, § 73, adding new section.] § 72, adding new section.] § 74. Interpretation and enforcement of limited § 73. Contested matters relating to managers; liability company agreement. contested votes. Any action to interpret, apply or enforce the provisions (1) Upon application of a member or manager, the of a limited liability company agreement, or the duties, High Court may hear and determine the validity of any obligations or liabilities of a limited liability company to admission, election, appointment, removal or resignation the members or managers of the limited liability of a manager of a limited liability company, and the right company, or the duties, obligations or liabilities among of any person to become or continue to be a manager of a members or managers and of members or managers to limited liability company, and, in case the right to serve the limited liability company, or the rights or powers of, as a manager is claimed by more the one (1) person, may or restrictions on, the limited liability company, members determine the person or persons entitled to serve as or managers, may be brought in the High Court. [P.L. managers; and to that end make such order or decree in 2000-14, § 74, adding new section.] any such case as may be just and proper, with power to enforce the production of any books, papers and records § 75. Contractual appraisal rights. of the limited liability company relating to the issue. In any such application, the limited liability company shall A limited liability company agreement or an agreement be named as a party and service of copies of the of merger or consolidation may provide that contractual application upon the registered agent of the limited appraisal rights with respect to a limited liability liability company shall be deemed to be service upon the company interest or another interest in a limited liability limited liability company and upon the person or persons company shall be available for any class or group of whose right to serve as a manager is contested and upon members or limited liability company interests in the person or persons, if any, claiming to be a manager or connection with any amendment of a limited liability claiming the right to be a manager, and the registered company agreement, any merger or consolidation in agent shall forward immediately a copy of the application which the limited liability company is a constituent party to the limited liability company and to the person or to the merger or consolidation, or the sale of all or persons whose right to serve as a manager is contested substantially all of the limited liability company’s assets. and to the person or persons, if any, claiming to be a The High Court shall have jurisdiction to hear and manager or the right to be a manager, in a postpaid, determine any matter relating to any such appraisal sealed, registered letter addressed to such limited liability rights. [P.L. 2000-14, § 75, adding new section.] company and such person or persons at their post office addresses last known to the registered agent or furnished § 76. Domestication of non-Marshall Islands to the registered agent by the applicant member or entities. manager. The High Court may make such order respecting further or other notice of such application as it (1) As used in this section, “non-Marshall Islands entity” deems proper under these circumstances. means a foreign limited liability company (other than one (1) formed under the laws of the Marshall Islands) or a (2) Upon application of a member or manager, the corporation, a trust, or any other unincorporated business, High Court may hear and determine the result of any vote including a partnership (whether general (including a of members or managers upon matters as to which the registered limited liability partnership) or limited 150

partnership (including a registered limited liability limited existing members, managers, creditors, claimants or partnership)) formed, incorporated, created or that otherwise other parties in interest; and came into being under the laws of any foreign country or other foreign jurisdiction (other than the Marshall Islands). (i) the name and address of the corporation’s Regis- tered agent in the Republic. (2) Any non-Marshall Islands entity may become domesticated as a limited liability company in the (4) Upon the filing in the office of the Registrar of Marshall Islands by complying with subsection (7) of this Corporations of the certificate of limited liability section and filing in the office of the Registrar of company domestication and the certificate of formation Corporations in accordance with section 14 of this Act: or upon the future effective date or time of the certificate of limited liability company domestication and the (a) a certificate of limited liability company certificate of formation, the non-Marshall Islands entity domestication that has been executed by one (1) or shall be domesticated as a limited liability company in more authorized persons in accordance with section 12 the Marshall Islands and the limited liability company of this Act; and shall thereafter be subject to all of the provisions of this division, except that notwithstanding section 9 of this (b) a certificate of formation that complies with Act, the existence of the limited liability company shall section 9 of this Act and has been executed by one (1) be deemed to have commenced on the date the non- or more authorized persons in accordance with section Marshall Islands entity commenced its existence in the 12 of this Act. jurisdiction in which the non-Marshall Islands entity was first formed, incorporated, created or otherwise came into (3) The certificate of limited liability company domes- being. tication shall state: (5) The domestication of any non-Marshall Islands (a) the date on which and jurisdiction where the entity as a limited liability company in the Marshall non-Marshall Islands entity was first formed, incorpo- Islands shall not be deemed to affect any obligations or rated, created or otherwise came into being; liabilities of the non-Marshall Islands entity incurred prior to its domestication as a limited liability company (b) the name of the non-Marshall Islands entity in the Marshall Islands, or the personal liability of any immediately prior to the filing of the certificate of person therefore. limited liability company domestication; (6) The filing of a certificate of limited liability com- (c) the name of the limited liability company as set pany domestication shall not affect the choice of law forth in the certificate of formation filed in accordance applicable to the non-Marshall Islands entity, except that with subsection (2) of this section; from the effective date or time of the domestication, the law of the Marshall Islands, including the provisions of (d) the future effective date or time (which shall be a this division, shall apply to the non-Marshall Islands date or time certain) of the domestication as a limited entity to the same extent as if the non-Marshall Islands liability company if it is not to be effective upon the entity had been formed as a limited liability company on filing of the certificate of limited liability company that date. domestication and the certificate of formation; (7) Prior to filing a certificate of limited liability (e) the jurisdiction that constituted the seat, siege company domestication with the office of the Registrar social, or principal place of business or central of Corporations, the domestication shall be approved in administration of the non-Marshall Islands entity, or the manner provided for by the document, instrument, any other equivalent thereto under applicable law, agreement or other writing, as the case may be, immediately prior to the filing of the certificate of governing the internal affairs of the non-Marshall Islands limited liability company domestication; entity and the conduct of its business or by applicable

non-Marshall Islands law, as appropriate, and a limited (f) that the transfer of domicile has been approved liability company agreement shall be approved by the by all necessary action; same authorization required to approve the domes-

(g) that the transfer of domicile is not expressly tication. prohibited under the laws of the foreign domicile; (8) When any domestication shall become effective (h) that the transfer of domicile is made in good under this section, for all purposes of the laws of the faith and will not serve to hinder, delay or defraud Marshall Islands, all of the rights, privileges and powers 151

of the non-Marshall Islands entity that has been (d) the future effective date or time (which shall be a domesticated, and all property, real, personal and mixed, date or time certain) of the transfer or domestication to and all debts due to such non-Marshall Islands entity, as the jurisdiction specified in subsection (2)(c) of this well as all other things and causes of action belonging to section if it is not to be effective upon the filing of the such non-Marshall Islands entity, shall be vested in the certificate of transfer; domestic limited liability company and shall thereafter be the property of the domestic limited liability company as (e) that the transfer or domestication of the limited they were of the non-Marshall Islands entity immediately liability company has been approved in accordance prior to its domestication, and the title to any real with this section; property vested by deed or otherwise in such non- Marshall Islands entity shall not revert or be in any way (f) that the existence of the limited liability impaired by reason of this division, but all rights of company as a limited liability company of the Marshall creditors and all liens upon any property of such non- Islands shall cease when the certificate of transfer Marshall Islands entity shall be preserved unimpaired and becomes effective. The agreement of the limited all debts, liabilities and duties of the non-Marshall liability company that it may be served with process in Islands entity that has been domesticated shall thence- the Marshall Islands in any action, suit or proceeding forth attach to the domestic limited liability company and for enforcement of any obligation of the limited may be enforced against it to the same extent as if said liability company arising while it was a limited liability debts, liabilities and duties had been incurred or company of the Marshall Islands, and that it contracted by the domestic limited liability company. irrevocably appoints the Registrar of Corporations as [P.L. 2000-14, § 76, adding new section; amended by its agent to accept service of process in any such P.L. 2005-29, § 76.] action, suit or proceeding; and,

§ 77. Transfer of domestic limited liability (g) the address to which a copy of the process companies. referred to in subsection (2)(f) of this section shall be mailed to it by the Registrar of Corporations. In the (1) Upon compliance with this section, any limited event of service hereunder upon the Registrar of liability company may transfer to or domesticate in any Corporations, the procedures set forth in this Act shall jurisdiction that permits the transfer to or domestication be applicable, except that the plaintiff in any such in such jurisdiction of a limited liability company. action, suit or proceeding shall furnish the Registrar of Corporations with the address specified in this (2) Unless otherwise provided in a limited liability subsection and any other address that the plaintiff may company agreement, a transfer or domestication elect to furnish, together with copies of such process as described in subsection (1) of this section shall be required by the Registrar of Corporations, and the approved in writing by all of the managers and all of the Registrar of Corporations shall notify the limited members. If all of the managers and all of the members liability company that has transferred or domesticated of the limited liability company or such other vote as out of the Marshall Islands at all such addresses may be stated in a limited liability company agreement furnished by the plaintiff in accordance with the shall approve the transfer or domestication described in procedures set forth in this Act. subsection (1) of this section, a certificate of transfer, executed in accordance with section 12 of this Act, shall (3) Upon the filing in the office of the Registrar of be filed in the office of the Registrar of Corporations in Corporations of the certificate of transfer or upon the accordance with section 14 of this Act. The certificate of future effective date or time of the certificate of transfer transfer shall state: and payment to the Registrar of Corporations of all fees prescribed in this Act, the Registrar of Corporations shall (a) the name of the limited liability company and, if certify that the limited liability company has filed all it has been changed, the name under which its documents and paid all fees required by this division, and certificate of formation was originally filed; thereupon the limited liability company shall cease to exist as a limited liability company of the Marshall (b) the date of the filing of its original certificate of Islands. Such certificate of the Registrar of Corporations formation with the Registrar of Corporations; shall be prima facie evidence of the transfer or domestication by such limited liability company out of (c) the jurisdiction to which the limited liability the Marshall Islands. company shall be transferred or in which it shall be domesticated; (4) The transfer or domestication of a limited liability company out of the Marshall Islands in accordance with

152

this section and the resulting cessation of its existence as the future effect date or time of the certificate of a limited liability company of the Marshall Islands conversion to limited liability company and the pursuant to a certificate of transfer shall not be deemed to certificate of formation, the other entity shall be affect any obligations or liabilities of the limited liability converted into a domestic limited liability company and company incurred prior to such transfer or domestication the limited liability company shall thereafter be subject to or the personal liability of any person incurred prior to all of the provisions of this division, except that such transfer or domestication, nor shall it be deemed to notwithstanding section 9 of this Act, the existence of the affect the choice of law applicable to the limited liability limited liability company shall be deemed to have company with respect to matters arising prior to such commenced on the date the other entity commenced its transfer or domestication. [P.L. 2000-14, § 77, adding existence. new section.] (5) The conversion of any other entity into a domestic § 78. Conversion of other entities to a limited limited liability company shall not be deemed to affect liability company. any obligations or liabilities of the other entity incurred prior to its conversion to a domestic limited liability (1) As used in this section, the term, “other entity” company or the personal liability of any person incurred means a corporation, trust or association or any other prior to such conversion. unincorporated business, including a partnership (whether general or limited) of the Marshall Islands. (6) When any conversion shall have become effective under this section, for all purposes of the laws of the (2) Any other entity may convert to a domestic limited Marshall Islands, all of the rights, privileges and powers liability company by complying with subsection (8) of of the other entity that has converted, and all property, this section and filing in the office of the Registrar of real, personal and mixed, and all debts due to such other Corporations in accordance with section 14 of this Act: entity, as well as all other things and causes of action

belonging to such other entity, shall be vested in the (a) a certificate of conversion to limited liability domestic limited liability company and shall thereafter be company that has been executed by one (1) or more the property of the domestic limited liability company as authorized persons in accordance with section 12 of they were of the other entity that has converted, and the this Act; and title to any real property vested by deed or otherwise in (b) a certificate of formation that complies with such other entity shall not revert or be in any way section 9 of this Act and has been executed by one (1) impaired by reason of this division, but all rights of or more authorized persons in accordance with section creditors and all liens upon any property of such other 12 of this Act. entity shall be preserved unimpaired and all debts, liabilities and duties of the other entity that has converted (3) The certificate of conversion to limited liability shall thenceforth attach to the domestic limited liability company shall state: company and may be enforced against it to the same extent as if said debts, liabilities and duties had been (a) the date on which the other entity was first incurred or contracted by it. created, formed or otherwise came into being; (7) Unless otherwise agreed, the converting other (b) the name of the other entity immediately prior to entity shall not be required to wind up its affairs or pay the filing of the certificate of conversion to limited its liabilities and distribute its assets, and the conversion liability company; shall not be deemed to constitute a dissolution of such other entity and shall constitute a continuation of the (c) the name of the limited liability company as set existence of the converting other entity in the form of a forth in the certificate of formation filed in accordance domestic limited liability company. with subsection (2) of this section; and (8) Prior to filing a certificate of conversion to limited (d) the future effective date or time (which shall be a liability company with the office of the Registrar of date or time certain) of the conversion to a limited Corporations, the conversion shall be approved in the liability company if it is not to be effective upon the manner provided for by the document, instrument, filing of the certificate of conversion to limited liability agreement or other writing, as the case may be, company and the certificate of formation. governing the internal affairs of the other entity and the conduct of its business, and a limited liability company (4) Upon the filing in the office of the Registrar of agreement shall be approved by the same authorization Corporations of the certificate of conversion to limited required to approve the conversion. [P.L. 2000-14, § 78, liability company and the certificate of formation or upon 153

adding new section; amended by P.L. 2000-19, § 78; future creation in the manner provided in the limited amended by P.L. 2005-29, § 78.] liability company agreement of additional classes or groups of members or managers associated with the § 79. Series of members, managers of limited series having such relative rights, powers and duties as liability company interest. may from time to time be established, including rights, powers and duties senior to existing classes and groups of (1) A limited liability company agreement may members or managers associated with the series. A establish or provide for the establishment of designated limited liability company agreement may provide for the series of members, managers, or limited liability taking of an action, including the amendment of the company interests having separate rights, powers or limited liability company agreement, without the vote or duties with respect to specified property or obligations of approval of any member or manager or class or group of the limited liability company or profits and losses members or managers, including an action to create associated with specified property or obligations, and, to under the provisions of the limited liability company the extent provided in the limited liability company agreement a class or group of the series of limited agreement, any such series may have a separate business liability company interests that was not previously purpose or investment objective. outstanding. A limited liability company agreement may provide that any member or class or group of members (2) Notwithstanding anything to the contrary set forth associated with a series shall have no voting rights. in this Act or under other applicable law, in the event that (5) A limited liability company agreement may grant a limited liability company agreement creates one (1) or to all or certain identified members or managers or a more series, and if separate and distinct records are specified class or group of the members or managers by maintained for any such series and the assets associated members or managers associated with a series may be on with any such series are held and accounted for a per capita, number, financial interest, class, group or separately from the other assets of the limited liability any other basis. company, or any other series thereof, and if the limited liability company agreement so provides, and notice of (6) Unless otherwise provided in a limited liability the limitation on liabilities of a series as referenced in company agreement, the management of a series shall be this subsection is set forth in the certificate of formation vested in the members associated with such series in of the limited liability company, then the debts, liabilities proportion to the then current percentage or other interest and obligations incurred, contracted for or otherwise of members in the profits of the series owned by all of existing with respect to a particular series shall be the members associated with such series, the decision of enforceable against the assets of such series only, and not members owning more than fifty percent (50%) of the against the assets of the limited liability company said percentage or other interest in the profits controlling; generally or any other series thereof, and unless provided, however, that if a limited liability company otherwise provided in the limited liability company agreement provides for the management of the series, in agreement none of the debts, liabilities, obligations and whole or in part, by a manager, the management of the expenses incurred, contracted for or otherwise existing series, to the extent so provided, shall be vested in the with respect to the limited liability company generally or manager who shall be chosen in the manner provided in any other series thereof shall be enforceable against the the limited liability company agreement. The manager of assets of such series. The fact that a certificate of the series shall also hold the offices and have the formation that contains the foregoing notice of the responsibilities accorded to the manager as set forth in a limitation on liabilities of a series is on file in the office limited liability company agreement. A series may have of the Registrar of Corporations shall constitute notice of more than one (1) manager. Subject to section 35 of this such limitation on liabilities of a series. Act, a manager shall cease to be a manager with respect to a series as provided in a limited liability company (3) Notwithstanding section 20 of this Act, under a agreement. Except as otherwise provided in a limited limited liability company agreement or under another liability company agreement, any event under this agreement, a member or manager may agree to be division or in a limited liability company agreement that obligated personally for any or all of the debts, causes a manager to cease to be a manager with respect obligations and liabilities of one (1) or more series. to a series shall not, in itself, cause such manager to cease to be a manager of the limited liability company or with (4) A limited liability company agreement may pro- respect to any other series thereof. vide for classes or groups of members or managers associated with a series having such relative rights, (7) Notwithstanding section 39 of this Act, but subject powers and duties as the limited liability company to subsections (8) and (11) of this section, and unless agreement may provide, and may make provision for the otherwise provided in a limited liability company

154

agreement, at the time a member associated with a series or cause the termination of the series, regardless of that has been established in accordance with subsection whether such member was the last remaining member (2) of this section becomes entitled to receive a associated with such series. distribution with respect to such series, the member has the status of, and is entitled to all remedies available to, a (10) Subject to section 46 of this Act, except to the creditor of the series, with respect to the distribution. A extent otherwise provided in the limited liability limited liability company agreement may provide for the company agreement, a series may be terminated and its establishment of a record date with respect to allocations affairs wound up without causing the dissolution of the and distributions with respect to a series. limited liability company. The termination of a series established in accordance with subsection (2) of this (8) Notwithstanding section 40(1) of this Act, a section shall not affect the limitation on liabilities of such limited liability company may make a distribution with series provided by subsection (2) of this section. A series respect to a series that has been established in accordance is terminated and its affairs shall be wound up upon the with subsection (2) of this section; provided, that a dissolution of the limited liability company under section limited liability company shall not make a distribution 46 of this Act or otherwise upon the first to occur of the with respect to a series that has been established in following: accordance with subsection (2) of this section to a member to the extent that at the time of the distribution, (a) at the time specified in the limited liability after giving effect to the distribution, all liabilities of company agreement; such series, other than liabilities to members on account of their limited liability company interests with respect to (b) upon the happening of events specified in the such series and liabilities for which the recourse of limited liability company agreement; creditors is limited to specified property of such series, exceed the fair value of the assets associated with such (c) unless otherwise provided in the limited liability series, except that the fair value of property of the series company agreement, upon the written consent of the that is subject to a liability for which the recourse of members of the limited liability company associated creditors is limited shall be included in the assets with such series, or if there is more than one (1) class associated with such series only to the extent that the fair or group of members associated with such series, then value of that property exceeds that liability. A member by each class or group of members associated with who receives a distribution in violation of this subsection, such series, in either case, by members associated with and who knew at the time of the distribution that the such series who own more than two-thirds of the then distribution violated this subsection, shall be liable to a current percentage or other interest in the profits of the series for the amount of the distribution. A member who series of the limited liability company owned by all of receives a distribution in violation of this subsection, and the members associated with such series or by the who did not know at the time of the distribution that the members in each class or group of such series, as distribution violated this subsection, shall not be liable appropriate; for the amount of the distribution. Subject to section 40(3) of this Act, which shall apply to any distribution (d) at any time there are no members associated made with respect to a series under this subsection, this with the series; provided, that, unless otherwise subsection shall not affect any obligation or liability of a provided in the limited liability company agreement, member under an agreement or other applicable law for the series is not terminated and is not required to be the amount of a distribution. wound up if, within ninety (90) days or such other period as is provided for in the limited liability (9) Unless otherwise provided in the limited liability company agreement after the occurrence of the event company agreement, a member shall cease to be that terminated the continued membership of the last associated with a series and to have the power to exercise remaining member associated with the series, the any rights or powers of a member with respect to such personal representative of the last member associated series upon the assignment of all of the member’s limited with the series agrees in writing to continue the liability company interest with respect to such series. business of the series and to the admission of a Except as otherwise provided in a limited liability personal representative of such member or its nominee company agreement, any event under this division or a or designee to the limited liability company as a limited liability company agreement that causes a member associated with the series, effective as of the member to cease to be associated with a series shall not, occurrence of the event that terminated the continued in itself, cause such member to cease to be associated membership of the last remaining member associated with any other series or terminate the continued with the series; or membership of a member in the limited liability company

155

(e) the termination of such series under subsection for or otherwise existing with respect to a particular (1) of this section. series, if any, shall be enforceable against the assets of such series only, and not against the assets of the foreign (11) Notwithstanding section 48(1) of this Act, unless limited liability company generally or any other series otherwise provided in the limited liability company thereof, and unless otherwise provided in the limited agreement, a manager associated with a series who has liability company agreement, none of the debts, not wrongfully terminated the series or, if none, the liabilities, obligations and expenses incurred, contracted members associated with the series or a person approved for or otherwise existing with respect to the foreign by the members associated with the series or, if there is limited liability company generally or any other series more than one (1) class or group of members associated thereof shall be enforceable against the assets of such with the series, then by each class or group of members series. [P.L. 2000-14, § 79, adding new section; amended associated with the series, in either case, by members by P.L. 2005-29, § 79.] who own more than fifty percent (50%) of the then current percentage or other interest in the profits of the § 80. Conversion of a domestic limited liability series owned by all of the members associated with the company to other entities. series or by the members in each class or group associated with the series, as appropriate, may wind up A domestic limited liability company may convert to a the affairs of the series; but, if the series has been corporation, trust, a general partnership or a limited established in accordance with subsection (2) of this partnership organized, formed or created under the laws section, the High Court, upon cause shown, may wind up of the Marshall Islands, upon the authorization of such the affairs of the series upon application of any member conversion in accordance with this section. If the limited associated with the series, the member’s personal liability company agreement specifies the manner of representative or assignee, and in connection therewith, authorizing a conversion of the limited liability company, may appoint a liquidating trustee. The persons winding the conversion shall be authorized as specified in the up the affairs of a series may, in the name of the limited limited liability company agreement. If the limited liability company and for and on behalf of the limited liability company agreement does not specify the manner liability company and such series, take all actions with of authorizing a conversion of the limited liability respect to the series as are permitted under section 48(2) company, and does not prohibit a conversion of the of this Act. The persons winding up the affairs of a series limited liability company, the conversion shall be shall provide for the claims and obligations of the series authorized in the same manner as is specified in the as provided in section 49(2) of this Act and distribute the limited liability company agreement for authorizing a assets of the series as provided in section 49(1) of this merger or consolidation that involves the limited liability Act. Actions taken in accordance with this subsection company as a constituent party to the merger or con- shall not affect the liability of members and shall not solidation. If the limited liability company agreement impose liability on a liquidating trustee. does not specify the manner of authorizing a conversion of the limited liability company or a merger or (12) On application by or for a member or manager consolidation that involves the limited liability company associated with a series established in accordance with as a constituent party and does not prohibit a conversion subsection (2) of this section, the High Court may decree of the limited liability company, the conversion shall be termination of such series whenever it is not reasonably authorized by the approval of the members or, if there is practicable to carry on the business of the series in more than one (1) class or group of members, then by conformity with a limited liability company agreement. each class or group of members, in either case, by members who own more than fifty percent (50%) of the (13) If a foreign limited liability company that is then current percentage or other interest in the profits of registering to do business in the Marshall Islands in the domestic limited liability company owned by all of accordance with section 51 of this Act is governed by a the members or by the members in each class or group as limited liability company agreement that establishes or appropriate. [P.L. 2000-14, § 80, adding new section; provides for the establishment of designated series of amended by P.L. 2000-19, § 80.] members, managers, or limited liability company interests having separate rights, powers or duties with § 81. Delegation of rights and powers to manage. respect to specified property or obligations of the foreign limited liability company or profits and losses associated Unless otherwise provided in the limited liability with specified property or obligations, that fact shall be company agreement, a member or manager of a limited so stated on the application for registration as a foreign liability company has the power and authority to delegate limited liability company. In addition, the foreign limited to one (1) or more other persons the member’s or liability company shall state on such application whether manager’s, as the case may be, rights and powers to the debts, liabilities and obligations incurred, contracted 156

manage and control the business and affairs of the limited liability company, including to delegate to agents, officers and employees of a member or manager of the limited liability company, and to delegate by a management agreement or another agreement with or otherwise to, other persons. Unless otherwise provided in the limited liability company agreement, such delegation by a member or manager of a limited liability company shall not cause the member or manager to cease to be a member or manager, as the case may be, of the limited liability company. [P.L. 2000-14, § 81, adding new section.]

§ 82. Defense of usury not available.

No obligation of a member or manager of a limited liability company to the limited liability company arising under the limited liability company agreement or a separate agreement or writing, and no note, instrument or other writing evidencing any such obligation of a member or manager shall be subject to the defense of usury, and no member or manager shall interpose the defense of usury with respect to any such obligation in any action. [P.L. 2000-14, § 82, adding new section.]

§ 83. RESERVED.

157