Partner Actions in California

Title 2, Chapter 4.5, Article 10 of the Corporations Code deals with actions by partners under the California Uniform Limited Partnership Act of 2008.

Section 15910.01 allows a partner to maintain a direct action against the limited partnership or another partner for legal or equitable relief, with or without an accounting as to the partnership’s activities, to enforce the rights and otherwise protect the interests of the partner, including rights and interests under the partnership agreement or this chapter or arising independently of the partnership relationship.

A partner bringing a direct action under this section is required to plead and prove an actual or threatened injury that is not solely the result of an injury suffered or threatened to be suffered by the limited partnership.

Section 15910.02 authorizes a partner to bring a derivative action to enforce a right of a limited partnership if two specified conditions are met.

Section 15910.03 provides that a derivative action may be maintained only by a person that is a partner at the time the action is commenced and that two specified conditions are met. Any partner who does not meet these requirements may nevertheless be allowed in the discretion of the court to maintain the action on a preliminary showing to and determination by the court, five specified forms of relief.

Section 15910.04 requires, in a derivative action, the complaint to state with particularity two specified items.

Section 15910.06 explains that, in any derivative action, at any time within 30 days after service of summons upon the limited partnership or the general partner, the limited partnership or general partner may move the court for an order, upon notice and hearing, requiring the plaintiff to furnish a bond as hereinafter provided. The motion is to be based upon one or both of the specified grounds.