The Case of Partners Who Aren’t Partners And Chicken Guts


The California Uniform Limited Partnership Act of 2008 defines the term “partner” to mean a limited partner or a general partner.  Cal. Corp. Code § 15901.02(w).  California’s limited offering exemption requires, among other things, that “all purchasers have a preexisting personal or business relationship with the offeror or any of its partners . . . “.  Cal. Corp. Code § 25102(f)(2).  Thus, one might expect that a preexisting relationship with a limited partner would satisfy this condition.  However, the Commissioner sees things differently.  Rule 260.102.12(e) provides that the term “partners” in Section 25102(f)(2) means general partners.

What about the conflict with Section 15901.02(w)?  The definitions in that statute apply only to the California Uniform Limited Partnership Act.

But chicken guts are hard to read and invite flights of fancy or corruption*

Before there were Romans, there were Etruscans.  The Etruscans had a nifty way to tell the future – haruspication.  In general, this involved slicing open a bird and taking a gander at its guts.  The priest that performed this was called a haruspex, a word that combines the Proto-Indo-European word for guts and the Latin word to look.

Earlier this year, I practiced a bit of prediction but without the benefit of bird or entrails.  In January, I wrote:

Professor Bebchuk published this post on the Harvard Law School Forum on Corporate Governance and Financial Regulation announcing that the Securities and Exchange Commission recently updated its entry in the Office of Management and Budget’s Unified Agenda to indicate that, by April, it plans to issue a Notice of Proposed Rulemaking on requiring public companies to disclose their spending on politics.

I expressed my doubts, however, noting “multa cadunt inter calicem supremaque labra.” In the meantime, the flowers of spring have given way to the frosts of fall.  Yesterday, Professor Bebchuk published this post acknowledging that the SEC has delayed its consideration of proposed rules requiring disclosure of political spending.


* Ian Hacking, The Emergence of Probability at p.3


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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