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3 Cards in this Set
- Front
- Back
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What events cause the disassociation of a partner?
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A partner may be disassociated:
(i) By providing notice of his/her intention to disassociate. (ii) The triggering of an event named in the partnership agreement, or his/her expulsion pursuant to its provisions. (iii) The unanimous votes of the partners, pursuant to the conditions set out in §323A.0601(4) (includes dissolution of a partner that is a partnership/corporation, illegality and transfer of interest). (iv) Judicial order, pursuant to the conditions set out in §323A.0601(5) (includes wrongful conduct and willful/persistant breach of partnership agreement). (v) If he/she becomes bankrupt, or assigns his/her interest for the benefit of creditors. (vi) Death, or a judicial determination that he/she is unable/unfit to continue his duties. (§323A.0601) |
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How is a disassociated partner's interest divided?
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When a partner disassociates from a partnership, a "hypothetical dissolution" takes place and his interest is divided as if the partnership were being dissolved. §323A.807 becomes the governing statute, and he is returned his capital contribution and the share of profits he is entitled to.
(§323A.0701) |
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Does disassociation cause a partnership to be disolved? In what circumstances is a partnership disolved?
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No, unless the partnership is a partnership-at-will (i.e. has no definite term and entitles the partners to dissolve it at will).
Otherwise, a partnership may be dissolved: (i) With the unanimous vote of the partners. (ii) With the vote of 50% of the remaining partners when a partner is disassociated/dies. (iii) As per the provisions of the partnership agreement. (iv) If the partnership's business becomes illegal and such illegality is not rectified with 90 days; (v) A judicial determination is made that the economic purpose is frustrated, a partner acted in a manner that makes continuation impractical or impracticality to continue under the partnership agreement, or a judicial determination is made that it is equitable to wind up the business on the basis of the partnership's purpose being satisfied if it is for a definite term. (§323A.801) |
