Section 260.140.116.2 - Voting Rights of Limited Partners(a) General Requirement. (1) Without the necessity for concurrence by the general partner(s), a majority of the outstanding limited partnership interests may vote to (A) amend the partnership agreement, (B) remove the general partner(s), (C) elect a new general partner(s), (D) approve or disapprove the sale of all or substantially all of the assets of the partnership other than in the ordinary course of its business and (E) dissolve the partnership.(2) Without concurrence of a majority of the outstanding limited partnership interests, the general partner(s) may not (A) amend the partnership agreement except for those amendments which do not adversely affect the rights of the limited partners, (B) voluntarily withdraw as a general partner, (C) appoint a new general partner(s), (D) sell all or substantially all of the assets of the program other than in the ordinary course of the program's business, (E) cause the merger or other reorganization of the program or (F) dissolve the partnership. Notwithstanding clause (C) of paragraph (2), an additional general partner may be appointed without obtaining the consent of the participants if the addition of such person is necessary to preserve the tax status of the program, such person has no authority to manage or control the program under the program agreement, there is no change in the identity of persons who have authority to manage or control the program, and the admission of such person as an additional general partner does not materially adversely affect the participants. Any amendment to the partnership agreement which modifies the compensation or distributions to which a general partner is entitled or which affects the duties of a general partner may be conditioned upon the consent of the general partner. If the law of the state of formation provides that the program will dissolve upon termination of a general partner(s) unless the remaining general partner(s) continues the existence of the program, the program agreement shall obligate the remaining general partner(s) to continue the program's existence; and if there will be no remaining general partner(s), the termination of the last general partner shall not be effective for a period of at least 120 days during which time a majority of the outstanding program interests shall have the right to elect a general partner who shall agree to continue the existence of the program. The partnership agreement should provide for a successor general partner where the only general partner of the program is an individual.(b) Foreign Limited Partnerships. In those applications filed by limited partnerships organized in states where the investor voting rights are not provided as set forth in subsection (a), the limited partnership shall provide all such investor voting rights set forth in subsection (a) which can be afforded in the jurisdiction where the limited partnership is organized and limit the sale of limited partnership interests in California to no more than 25 percent of the total interests to be sold. In the discretion of the Commissioner, the sale of foreign limited partnership interests in excess of the 25 percent limitation may be authorized. The Commissioner may impose investor suitability standards higher than those set forth in Section 260.140.112.2 in these cases.
(c) Prospectus Legend. To the extent that a foreign limited partnership does not provide all of the investor voting rights as set forth in subsection (a), a legend in bold face type shall appear prominently in the prospectus containing substantially the following: THE PARTNERSHIP UNITS OF __________ DO NOT PROVIDE TO LIMITED PARTNERS THE UNCONDITIONAL RIGHT TO VOTE UPON MATTERS AFFECTING THE BASIC STRUCTURE OF THE PARTNERSHIP, WHICH RIGHTS ARE REQUIRED BY THE CALIFORNIA COMMISSIONER OF CORPORATIONS TO BE PROVIDED IN THE PARTNERSHIP AGREEMENT OF PARTNERSHIPS FORMED UNDER CALIFORNIA LAW, INCLUDING THE FOLLOWING MATTERS:
(1) ELECTION OR REMOVAL OF GENERAL PARTNERS,(2) TERMINATION OF THE PARTNERSHIP,(3) AMENDMENT OF THE PARTNERSHIP AGREEMENT, AND(4) SALE OF ALL OR SUBSTANTIALLY ALL OF THE ASSETS OF THE PARTNERSHIP. THE ABSENCE OR CONDITIONING OF ANY OF THESE RIGHTS MEANS THAT THE LIMITED PARTNERS' ABILITY TO PARTICIPATE IN BASIC INVESTOR VOTING IS EITHER NONEXISTENT OR SUBSTANTIALLY LIMITED.Cal. Code Regs. Tit. 10, § 260.140.116.2
1. Amendment filed 3-12-74; effective thirtieth day thereafter (Register 74, No. 11).
2. Amendment filed 1-27-84; effective thirtieth day thereafter (Register 84, No. 4).
3. Amendment of subsection (a) filed 5-18-92; operative 6-17-92 (Register 92, No. 22). Note: Authority cited: Section 25610, Corporations Code. Reference: Section 25140, Corporations Code.
1. Amendment filed 3-12-74; effective thirtieth day thereafter (Register 74, No. 11).
2. Amendment filed 1-27-84; effective thirtieth day thereafter (Register 84, No. 4).
3. Amendment of subsection (a) filed 5-18-92; operative 6-17-92 (Register 92, No. 22).