CHAPTER 1. UNIFORM PARTNERSHIP ACT
IC 23-4
ARTICLE 4. PARTNERSHIPS
IC 23-4-1
Chapter 1. Uniform Partnership Act
IC 23-4-1-1
Short title
Sec. 1. This chapter may be cited as the Uniform Partnership Act.
(Formerly: Acts 1949, c.114, s.1.) As amended by P.L.34-1987,
SEC.286.
IC 23-4-1-2
Definitions
Sec. 2. In this chapter:
"Court" includes every court and judge having jurisdiction in the
case.
"Business" includes every trade, occupation, or profession.
"Person" includes individuals, partnerships, limited liability
companies, corporations, and other associations.
"Bankrupt" includes bankrupt under federal bankruptcy laws or
insolvent under any state insolvent statute.
"Conveyance" includes every assignment, lease, mortgage, or
encumbrance.
"Foreign limited liability partnership" means a limited liability
partnership formed under an agreement governed by the laws of a
jurisdiction other than Indiana and registered under the laws of the
jurisdiction.
"Limited liability partnership" means a partnership formed under
an agreement governed by the laws of this state, registered under and
complying with sections 45 through 52 of this chapter, and having a
name that contains the words "Limited Liability Partnership" or the
abbreviation "L.L.P." or "LLP" as the last words or letters of its
name.
"Real property" includes land and any interest or estate in land.
(Formerly: Acts 1949, c.114, s.2.) As amended by P.L.34-1987,
SEC.287; P.L.8-1993, SEC.317; P.L.230-1995, SEC.1.
IC 23-4-1-3
Interpretation of knowledge and notice
Sec. 3. (1) A person has "knowledge" of a fact within the meaning
of this chapter not only when he has actual knowledge thereof, but
also when he has knowledge of such other facts as in the
circumstances shows bad faith.
(2) A person has "notice" of a fact within the meaning of this
chapter when the person who claims the benefit of the notice:
(a) states the fact to such person; or
(b) delivers through the mail, or by other means of
communication, a written statement of the fact to such person
or to a proper person at his place of business or residence.
(Formerly: Acts 1949, c.114, s.3.) As amended by P.L.34-1987,
SEC.288.
IC 23-4-1-4
Rules of construction
Sec. 4. (1) The rule that statutes in derogation of the common law
are to be strictly construed shall have no application to this chapter.
(2) The law of estoppel shall apply under this chapter.
(3) The law of agency shall apply under this chapter.
(4) This chapter shall be so interpreted and construed as to effect
its general purpose to make uniform the law of those states which
enact it.
(5) This chapter shall not be construed so as to impair the
obligations of any contract existing on January 1, 1950, nor to affect
any action or proceedings begun or right accrued before January 1,
1950.
(Formerly: Acts 1949, c.114, s.4.) As amended by P.L.34-1987,
SEC.289.
IC 23-4-1-5
Rules for cases not provided for in chapter
Sec. 5. In any case not provided for in this chapter, the rules of
law and equity, including the law merchant, shall govern.
(Formerly: Acts 1949, c.114, s.5.) As amended by P.L.34-1987,
SEC.290.
IC 23-4-1-6
Partnership defined
Sec. 6. (1) A partnership is an association of two (2) or more
persons to carry on as co-owners a business for profit and includes
for all purposes of the laws of this state a limited liability
partnership.
(2) An association formed under any other statute of this state, or
any statute adopted by authority, other than the authority of this state,
is not a partnership under this chapter, unless such association would
have been a partnership in this state prior to January 1, 1950; but this
chapter shall apply to limited partnerships except insofar as the
statutes relating to such partnerships are inconsistent with this
chapter.
(Formerly: Acts 1949, c.114, s.6.) As amended by P.L.34-1987,
SEC.291; P.L.230-1995, SEC.2.
IC 23-4-1-7
Rules for determining existence of partnership
Sec. 7. In determining whether a partnership exists, these rules
shall apply:
(1) Except as provided by section 16 of this chapter, persons
who are not partners as to each other are not partners as to third
persons.
(2) Joint tenancy, tenancy in common, tenancy by the entireties,
joint property, common property, or part ownership does not of
itself establish a partnership, whether such co-owners do or do
not share any profits made by the use of the property.
(3) The sharing of gross returns does not of itself establish a
partnership, whether or not the persons sharing them have a
joint or common right or interest in any property from which
the returns are derived.
(4) The receipt by a person of a share of the profits of a
business is prima facie evidence that the person is a partner in
the business, but no such inference shall be drawn if such
profits were received in payment for the following:
(a) As a debt by installments or otherwise.
(b) As wages of an employee or rent to a landlord.
(c) As an annuity to a widow or representative of a deceased
partner.
(d) As interest on a loan though the amount of payment
varies with the profits of the business.
(e) As the consideration for the sale of a goodwill of a
business or other property by installments or otherwise.
(5) The existence of a partnership is not affected by the
following:
(a) The filing or failure or omission to file an original or
renewal registration as a limited liability partnership under
section 45 of this chapter.
(b) The expiration of a partnership's status as a limited
liability partnership.
(c) The filing of a notice of withdrawal under section 45 of
this chapter.
(Formerly: Acts 1949, c.114, s.7.) As amended by P.L.34-1987,
SEC.292; P.L.230-1995, SEC.3; P.L.34-1997, SEC.7.
IC 23-4-1-8
Partnership property
Sec. 8. (1) All property originally brought into the partnership
stock or subsequently acquired by purchase or otherwise, on account
of the partnership, is partnership property.
(2) Unless the contrary intention appears, property acquired with
partnership funds is partnership property.
(3) Any estate in real property may be acquired in the partnership
name. Title so acquired can be conveyed only in the partnership
name.
(4) A conveyance to a partnership in the partnership name, though
without words of inheritance, passes the entire estate of the grantor
unless a contrary intent appears.
(Formerly: Acts 1949, c.114, s.8.)
IC 23-4-1-9
Partner as agent
Sec. 9. (1) Every partner is an agent of the partnership for the
purpose of its business, and the act of every partner, including the
execution in the partnership name of any instrument, for apparently
carrying on in the usual way the business of the partnership of which
he is a member binds the partnership, unless the partner so acting has
in fact no authority to act for the partnership in the particular matter,
and the person with whom he is dealing has knowledge of the fact
that he has no such authority.
(2) An act of a partner which is not apparently for the carrying on
of the business of the partnership in the usual way does not bind the
partnership unless authorized by the other partners.
(3) Unless authorized by the other partners or unless they have
abandoned the business, one (1) or more but less than all the partners
have no authority to:
(a) Assign the partnership property in trust for creditors or on the
assignee's promise to pay the debts of the partnership,
(b) Dispose of the good will of the business,
(c) Do any other act which would make it impossible to carry on
the ordinary business of a partnership,
(d) Confess a judgment,
(e) Submit a partnership claim or liability to arbitration or
reference.
(4) No act of a partner in contravention of a restriction on
authority shall bind the partnership to persons having knowledge of
the restriction.
(Formerly: Acts 1949, c.114, s.9.)
IC 23-4-1-10
Conveyance of real property of partnership
Sec. 10. (1) Where title to real property is in the partnership name,
any partner may convey title to such property by a conveyance
executed in the partnership name; but the partnership may recover
such property unless the partner's act binds the partnership under the
provisions of section 9(1) of this chapter, or unless such property has
been conveyed by the grantee or a person claiming through such
grantee to a holder for value without knowledge that the partner, in
making the conveyance, has exceeded his authority.
(2) Where title to real property is in the name of the partnership,
a conveyance executed by a partner, in his own name, passes the
equitable interest of the partnership, provided the act is one within
the authority of the partner under the provisions of section 9(1) of
this chapter.
(3) Where title to real property is in the name of one (1) or more
but not all the partners, and the record does not disclose the right of
the partnership, the partners in whose name the title stands may
convey title to such property, but the partnership may recover such
property if the partners' act does not bind the partnership under the
provisions of section 9(1) of this chapter, unless the purchaser or his
assignee, is a holder for value, without knowledge.
(4) Where the title to real property is in the name of one (1) or
more or all the partners, or in a third person in trust for the
partnership, a conveyance executed by a partner in the partnership
name, or in his own name, passes the equitable interest of the
partnership, provided the act is one within the authority of the
partner under the provisions of section 9(1) of this chapter.
(5) Where the title to real property is in the names of all the
partners, a conveyance executed by all the partners passes all their
rights in such property.
(Formerly: Acts 1949, c.114, s.10.) As amended by P.L.34-1987,
SEC.293.
IC 23-4-1-11
Partnership bound by admission of partner
Sec. 11. An admission or representation made by any partner
concerning partnership affairs within the scope of his authority as
conferred by this chapter is evidence against the partnership.
(Formerly: Acts 1949, c.114, s.11.) As amended by P.L.34-1987,
SEC.294.
IC 23-4-1-12
Partnership charged with knowledge of or notice to partner
Sec. 12. Notice to any partner of any matter relating to partnership
affairs, and the knowledge of the partner acting in the particular
matter, acquired while a partner or then present to his mind, and the
knowledge of any other partner who reasonably could and should
have communicated it to the acting partner, operate as notice or
knowledge of the partnership, except in the case of a fraud on the
partnership committed by or with the consent of that partner.
(Formerly: Acts 1949, c.114, s.12.)
IC 23-4-1-13
Partnership bound by partner's wrongful act
Sec. 13. Where, by any wrongful act or omission of any partner
acting in the ordinary course of the business of the partnership or
with the authority of his copartners, loss or injury is caused to any
person, not being a partner in the partnership, or any penalty is
incurred, the partnership is liable therefor to the same extent as the
partner so acting or omitting to act.
(Formerly: Acts 1949, c.114, s.13.)
IC 23-4-1-14
Partnership bound by partner's breach of trust
Sec. 14. The partnership is bound to make good the loss:
(a) Where one partner acting within the scope of his apparent
authority receives money or property of a third person and misapplies
it; and
(b) Where the partnership in the course of its business receives
money or property of a third person and the money or property so
received is misapplied by any partner while it is in the custody of the
partnership.
(Formerly: Acts 1949, c.114, s.14.)
IC 23-4-1-15
Nature of partner liability; partnerships; limited liability
partnerships
Sec. 15. (1) Except as provided in paragraph (2), all partners are
liable:
(a) Jointly and severally for everything chargeable to the
partnership under sections 13 and 14 of this chapter.
(b) Jointly for all other debts and obligations of the partnership;
but any partner may enter into a separate obligation to perform
a partnership contract.
(2) A partner of a limited liability partnership is not personally
liable, directly or indirectly, including by way of indemnification,
contribution, or otherwise, for:
(a) the debts, obligations, or liabilities of, or chargeable to, the
limited liability partnership or other partner or partners, whether
arising in tort, contract, or otherwise; or
(b) the acts or omissions of any other partner;
solely by reason of being a partner, acting or failing to act as a
partner, or participating as an employee, a consultant, a contractor,
or otherwise in the conduct of the business or activities of the limited
liability partnership while the partnership is a limited liability
partnership.
(3) A partner of a limited liability partnership may be personally
liable for the partner's own acts or omissions.
(4) A limited liability partnership is liable out of partnership
assets for partnership debts, obligations, and liabilities.
(5) A partner in a limited liability partnership is not a proper party
to a proceeding by or against the limited liability partnership, the
object of which is to recover any debts, obligations, or liabilities of,
or chargeable to, the partnership, unless the partner is personally
liable under paragraph (3).
(6) The laws of Indiana or another jurisdiction may not impose
personal liability on a partner in a limited liability partnership. The
only actions required of a limited liability partnership or of
individual partners in such a partnership in order to avail themselves
of the limited liability provisions of this chapter are those required
by this chapter.
(Formerly: Acts 1949, c.114, s.15.) As amended by P.L.34-1987,
SEC.295; P.L.230-1995, SEC.4.
IC 23-4-1-16
Partner by estoppel
Sec. 16. (1) When a person, by words spoken or written or by
conduct, represents himself, or consents to another representing him
or any one, as a partner in an existing partnership or with one (1) or
more persons not actual partners, he is liable to any such person to
whom such representation has been made, who has, on the faith of
such representation, given credit to the actual or apparent
partnership, and if he has made such representation or consented to
its being made in a public manner he is liable to such person,
whether the representation has or has not been made or
communicated to such person so giving credit by or with the
knowledge of the apparent partner making the representation or
consenting to its being made.
(a) When a partnership liability results, he is liable as though he
were an actual member of the partnership.
(b) When no partnership liability results, he is liable jointly with
the other persons, if any, so consenting to the contract or
representation as to incur liability, otherwise separately.
(2) When a person has been thus represented to be a partner in an
existing partnership, or with one (1) or more persons not actual
partners, he is an agent of the persons consenting to such
representation to bind them to the same extent and in the same
manner as though he were a partner in fact, with respect to persons
who rely upon the representation. Where all the members of the
existing partnership consent to the representation, a partnership act
or obligation results; but in all other cases it is the joint act or
obligation of the person acting and the persons consenting to the
representation.
(Formerly: Acts 1949, c.114, s.16.)
IC 23-4-1-17
Liability of incoming partner
Sec. 17. A person admitted as a partner into an existing
partnership is liable for all the obligations of the partnership arising
before his admission as though he had been a partner when such
obligations were incurred, except that this liability shall be satisfied
only out of partnership property.
(Formerly: Acts 1949, c.114, s.17.)
IC 23-4-1-18
Rules determining rights and duties of partners
Sec. 18. The rights and duties of the partners in relation to the
partnership shall be determined, subject to any agreement between
them, by the following rules:
(a) Each partner shall be repaid his contributions, whether by way
of capital or advances to the partnership property and share equally
in the profits and surplus remaining after all liabilities, including
those to partners, are satisfied; and except as provided in section
15(2) of this chapter, each partner must contribute toward the losses,
whether of capital or otherwise, sustained by the partnership
according to his share in the profits.
(b) The partnership must indemnify every partner in respect of
payments made and personal liabilities reasonably incurred by him
in the ordinary and proper conduct of its business, or for the
preservation of its business or property.
(c) A partner, who in aid of the partnership makes any payment or
advance beyond the amount of capital which he agreed to contribute,
shall be paid interest from the date of the payment or advance.
(d) A partner shall receive interest on the capital contributed by
him only from the date when repayment should be made.
(e) All partners have equal rights in the management and conduct
of the partnership business.
(f) No partner is entitled to remuneration for acting in the
partnership business, except that a surviving partner is entitled to
reasonable compensation for his services in winding up the
partnership affairs.
(g) No person can become a member of a partnership without the
consent of all the partners.
(h) Any difference arising as to ordinary matters connected with
the partnership business may be decided by a majority of the
partners; but no act in contravention of any agreement between the
partners may be done rightfully without the consent of all the
partners.
(Formerly: Acts 1949, c.114, s.18.) As amended by P.L.230-1995,
SEC.5.
IC 23-4-1-19
Partnership books
Sec. 19. The partnership books shall be kept, subject to any
agreement between the partners, at the principal place of business of
the partnership, and every partner shall at all times have access to
and may inspect and copy any of them.
(Formerly: Acts 1949, c.114, s.19.)
IC 23-4-1-20
Duty of partners to render information
Sec. 20. Partners shall render on demand true and full information
of all things affecting the partnership to any partner or the legal
representative of any deceased partner or partner under legal
disability.
(Formerly: Acts 1949, c.114, s.20.)
IC 23-4-1-21
Partner accountable as fiduciary
Sec. 21. (1) Every partner must account to the partnership for any
benefit, and hold as trustee for it any profits derived by him without
the consent of the other partners from any transaction connected with
the formation, conduct, or liquidation of the partnership or from any
use by him of its property.
(2) This section applies also to the representatives of a deceased
partner engaged in the liquidation of the affairs of the partnership as
the personal representatives of the last surviving partner.
(Formerly: Acts 1949, c.114, s.21.)
IC 23-4-1-22
Right to account
Sec. 22. Any partner shall have the right to a formal account as to
partnership affairs:
(a) If he is wrongfully excluded from the partnership business
or possession of its property by his copartners.
(b) If the right exists under the terms of any agreement.
(c) As provided by section 21 of this chapter.
(d) Whenever other circumstances render it just and reasonable.
(Formerly: Acts 1949, c.114, s.22.) As amended by P.L.34-1987,
SEC.296.
IC 23-4-1-23
Continuation of partnership beyond fixed term
Sec. 23. (1) When a partnership for a fixed term or particular
undertaking is continued after the termination of such term or
particular undertaking without any express agreement, the rights and
duties of the partners remain the same as they were at such
termination, so far as is consistent with a partnership at will.
(2) A continuation of the business by the partners or such of them
as habitually acted therein during the term, without any settlement or
liquidation of the partnership affairs, is prima facie evidence of a
continuation of the partnership.
(Formerly: Acts 1949, c.114, s.23.)
IC 23-4-1-24
Extent of property rights of partner
Sec. 24. The property rights of a partner are (1) his rights in
specific partnership property, (2) his interest in the partnership, and
(3) his right to participate in the management.
(Formerly: Acts 1949, c.114, s.24.)
IC 23-4-1-25
Nature of partner's right in specific partnership property
Sec. 25. (1) A partner is co-owner with his partners of specific
partnership property holding as a tenant in partnership.
(2) The incidents of this tenancy are such that:
(a) A partner, subject to the provisions of this chapter and to
any agreement between the partners, has an equal right with his
partners to possess specific partnership property for partnership
purposes; but he has no right to possess such property for any
other purpose without the consent of his partners.
(b) A partner's right in specific partnership property is not
assignable except in connection with the assignment of rights of
all the partners in the same property.
(c) A partner's right in specific partnership property is not
subject to attachment or execution, except on a claim against
the partnership. When partnership property is attached for a
partnership debt, the partners, or any of them, or the
representatives of a deceased partner, cannot claim any right
under the homestead or exemption laws.
(d) On the death of a partner, his right in specific partnership
property vests in the surviving partner or partners, except where
the deceased was the last surviving partner, when his right in
such property vests in his legal representative. Such surviving
partner or partners, or the legal representative of the last
surviving partner, has no right to possess the partnership
property for any but a partnership purpose.
(e) A partner's right in specific partnership property is not
subject to allowances to surviving spouses, heirs, or next of kin.
(Formerly: Acts 1949, c.114, s.25.) As amended by P.L.34-1987,
SEC.297.
IC 23-4-1-26
Nature of partner's interest in partnership
Sec. 26. A partner's interest in the partnership is his share of the
profits and surplus, and the same is personal property.
(Formerly: Acts 1949, c.114, s.26.)
IC 23-4-1-27
Assignment of partner's interest
Sec. 27. (1) A conveyance by a partner of his interest in the
partnership does not of itself dissolve the partnership, nor, as against
the other partners in the absence of agreement, entitle the assignee,
during the continuance of the partnership, to interfere in the
management or administration of the partnership business or affairs,
or to require any information or account of partnership transactions,
or to inspect the partnership books; but it merely entitles the assignee
to receive in accordance with his contract the profits to which the
assigning partner would otherwise be entitled.
(2) In case of a dissolution of the partnership, the assignee is
entitled to receive his assignor's interest and may require an account
from the date only of the last account agreed to by all the partners.
(Formerly: Acts 1949, c.114, s.27.)
IC 23-4-1-28
Partner's interest subject to charging order
Sec. 28. (1) On due application to a competent court by any
judgment creditor of a partner, the court which entered the judgment,
order, or decree, or any other court, may charge the interest of the
debtor partner with payment of the unsatisfied amount of such
judgment debt with interest thereon; and may then or later appoint a
receiver of his share of the profits, and of any other money due or to
fall due to him in respect of the partnership, and make all other
orders, directions, accounts, and inquiries which the debtor partner
might have made, or which the circumstances of the case may
require.
(2) The interest charge may be redeemed at any time before
foreclosure, or in case of a sale being directed by the court may be
purchased without thereby causing a dissolution:
(a) with separate property, by any one (1) or more of the
partners; or
(b) with partnership property, by any one (1) or more of the
partners with the consent of all the partners whose interests are
not so charged or sold.
(3) Nothing in this chapter shall be held to deprive a partner of his
right, if any, under the exemption laws, as regards his interest in the
partnership.
(Formerly: Acts 1949, c.114, s.28.) As amended by P.L.34-1987,
SEC.298.
IC 23-4-1-29
Dissolution defined
Sec. 29. The dissolution of a partnership is the change in the
relation of the partners caused by any partner ceasing to be
associated in the carrying on as distinguished from the winding up of
the business.
(Formerly: Acts 1949, c.114, s.29.)
IC 23-4-1-30
Partnership not terminated by dissolution
Sec. 30. On dissolution the partnership is not terminated, but
continues until the winding up of partnership affairs is completed.
(Formerly: Acts 1949, c.114, s.30.)
IC 23-4-1-31
Causes of dissolution
Sec. 31. Dissolution is caused:
(1) Without violation of the agreement between the partners:
(a) By the termination of the definite term or particular
undertaking specified in the agreement.
(b) By the express will of any partner when no definite term
or particular undertaking is specified.
(c) By the express will of all the partners who have not
assigned their interests or suffered them to be charged for
their separate debts, either before or after the termination of
any specified term or particular undertaking.
(d) By the expulsion of any partner from the business bona
fide in accordance with such a power conferred by the
agreement between the partners.
(2) In contravention of the agreement between the partners,
where the circumstances do not permit a dissolution under any
other provision of this section, by the express will of any
partner at any time.
(3) By any event which makes it unlawful for the business of
the partnership to be carried on or for the members to carry it on
in partnership.
(4) By the death of any partner.
(5) By the bankruptcy of any partner or the partnership.
(6) By decree of court under section 32 of this chapter.
(Formerly: Acts 1949, c.114, s.31.) As amended by P.L.34-1987,
SEC.299.
IC 23-4-1-32
Dissolution by decree of court
Sec. 32. (1) On application by or for a partner, the court shall
decree a dissolution whenever:
(a) A partner has been declared mentally incompetent in any
judicial proceeding.
(b) A partner becomes in any other way incapable of
performing the partner's part of the partnership contract.
(c) A partner has been guilty of conduct that tends to affect
prejudicially the carrying on of the business.
(d) A partner willfully or persistently commits a breach of the
partnership agreement, or otherwise acts in matters relating to
the partnership business so that it is not reasonably practicable
to carry on the business in partnership with that partner.
(e) The business of the partnership can only be carried on at a
loss.
(f) Other circumstances render a dissolution equitable.
(2) On the application of the purchaser of a partner's interest
under sections 27 or 28 of this chapter:
(a) After the termination of the specified term or particular
undertaking.
(b) At any time if the partnership was a partnership at will when
the interest was assigned or when the charging order was
issued.
(Formerly: Acts 1949, c.114, s.32.) As amended by P.L.34-1987,
SEC.300; P.L.33-1989, SEC.21.
IC 23-4-1-33
General effect of dissolution on authority of partner
Sec. 33. Except so far as may be necessary to wind up partnership
affairs or to complete transactions begun but not then finished,
dissolution terminates all authority of any partner to act for the
partnership:
(1) With respect to the partners:
(a) When the dissolution is not by the act, bankruptcy, or
death of a partner; or
(b) When the dissolution is by such act, bankruptcy, or death
of a partner, in cases where section 34 of this chapter so
requires.
(2) With respect to persons not partners, as declared in section
35 of this chapter.
(Formerly: Acts 1949, c.114, s.33.) As amended by P.L.34-1987,
SEC.301.
IC 23-4-1-34
Right of partner to contribution from copartners after dissolution
Sec. 34. Where the dissolution is caused by the act, death or
bankruptcy of a partner, each partner is liable to his copartners for
his share of any liability created by any partner acting for the
partnership as if the partnership had not been dissolved except in the
case of one (1) of the following:
(a) The dissolution being by act of any partner, the partner acting
for the partnership had knowledge of the dissolution.
(b) The dissolution being by the death or bankruptcy of a partner,
the partner acting for the partnership had knowledge or notice of the
death or bankruptcy.
(c) The liability is for a debt, an obligation, or a liability for which
the partner is not liable as provided in section 15(2) of this chapter.
(Formerly: Acts 1949, c.114, s.34.) As amended by P.L.230-1995,
SEC.6.
IC 23-4-1-35
Power of partner to bind partnership to third person after
dissolution
Sec. 35. (1) After dissolution a partner can bind the partnership
except as provided in paragraph (3):
(a) By any act appropriate for winding up partnership affairs or
completing transactions unfinished at dissolution.
(b) By any transaction which would bind the partnership if
dissolution had not taken place, provided the other party to the
transaction:
(I) had extended credit to the partnership prior to dissolution
and had no knowledge or notice of the dissolution; or
(II) though he had not so extended credit, had nevertheless
known of the partnership prior to dissolution, and, having no
knowledge or notice of dissolution, the fact of dissolution
had not been advertised in a newspaper of general
circulation in the place (or in each place if more than one) at
which the partnership business was regularly carried on.
(2) The liability of a partner under paragraph (1)(b) shall be
satisfied out of partnership assets alone when such partner had been
prior to dissolution:
(a) unknown as a partner to the person with whom the contract
is made; and
(b) so far unknown and inactive in partnership affairs that the
business reputation of the partnership could not be said to have
been in any degree due to his connection with it.
(3) The partnership is in no case bound by any act of a partner
after dissolution:
(a) where the partnership is dissolved because it is unlawful to
carry on the business, unless the act is appropriate for winding
up partnership affairs; or
(b) where the partner has become bankrupt; or
(c) where the partner has no authority to wind up partnership
affairs; except by a transaction with one who:
(I) had an extended credit to the partnership prior to
dissolution and had no knowledge or notice of his want of
authority; or
(II) had not extended credit to the partnership prior to
dissolution, and, having no knowledge or notice of his want
of authority, the fact of his want of authority has not been
advertised in the manner provided for advertising the fact of
dissolution in paragraph (1)(b)(II).
(4) Nothing in this section shall affect the liability under section
16 of this chapter of any person who after dissolution represents
himself or consents to another representing him as a partner in a
partnership engaged in carrying on business.
(Formerly: Acts 1949, c.114, s.35.) As amended by P.L.34-1987,
SEC.302.
IC 23-4-1-36
Effect of dissolution on partner's existing liability
Sec. 36. (1) The dissolution of the partnership does not of itself
discharge the existing liability of any partner.
(2) A partner is discharged from any existing liability upon
dissolution of the partnership by an agreement to that effect between
himself, the partnership creditor and the person or partnership
continuing the business; and such agreement may be inferred from
the course of dealing between the creditor having knowledge of the
dissolution and the person or partnership continuing the business.
(3) Where a person agrees to assume the existing obligations of
a dissolved partnership, the partners whose obligations have been
assumed shall be discharged from any liability to any creditor of the
partnership who, knowing of the agreement, consents to a material
alteration in the nature or time of payment of such obligations.
(4) The individual property of a deceased partner shall be liable
for those obligations of the partnership incurred while he was a
partner but subject to the prior payment of his separate debts and for
which the partner was liable under section 15 of this chapter.
(Formerly: Acts 1949, c.114, s.36.) As amended by P.L.230-1995,
SEC.7.
IC 23-4-1-37
Right to wind up
Sec. 37. Unless otherwise agreed the partners who have not
wrongfully dissolved the partnership or the legal representative of
the last surviving partner, not bankrupt, has the right to wind up the
partnership affairs: Provided, however, That any partner, his legal
representative or his assignee, upon cause shown, may obtain
winding up by the court.
(Formerly: Acts 1949, c.114, s.37.)
IC 23-4-1-38
Rights of partners to application of partnership property
Sec. 38. (1) When dissolution is caused in any way, except in
contravention of the partnership agreement, each partner, as against
his copartners and all persons claiming through them in respect of
their interests in the partnership, unless otherwise agreed, may have
the partnership property applied to discharge its liabilities, and the
surplus applied to pay in cash the net amount owing to the respective
partners. But if dissolution is caused by expulsion of a partner, bona
fide under the partnership agreement and if the expelled partner is
discharged from all partnership liabilities, either by payment or
agreement under section 36(2) of this chapter, he shall receive in
cash only the net amount due him from the partnership.
(2) When dissolution is caused in contravention of the partnership
agreement the rights of the partners shall be as follows:
(a) Each partner who has not caused dissolution wrongfully
shall have:
(I) All the rights specified in paragraph (1) of this section,
and
(II) The right, as against each partner who has caused the
dissolution wrongfully, to damages for breach of the
agreement.
(b) The partners who have not caused the dissolution
wrongfully, if they all desire to continue the business in the
same name, either by themselves or jointly with others, may do
so, during the agreed term for the partnership and for that
purpose may possess the partnership property, provided they
secure the payment by bond approved by the court, or pay to
any partner who has caused the dissolution wrongfully, the
value of his interest in the partnership at the dissolution, less
any damages recoverable under clause (2)(a)(II) of this section,
and in like manner indemnify him against all present or future
partnership liabilities.
(c) A partner who has caused the dissolution wrongfully shall
have:
(I) If the business is not continued under the provisions of
paragraph (2)(b) all the rights of a partner under paragraph
(1), subject to clause (2)(a)(II), of this section.
(II) If the business is continued under paragraph (2)(b) of
this section the right as against his copartners and all
claiming through them in respect of their interests in the
partnership, to have the value of his interest in the
partnership, less any damages caused to his copartners by the
dissolution, ascertained and paid to him in cash, or the
payment secured by bond approved by the court, and to be
released from all existing liabilities of the partnership; but in
ascertaining the value of the partner's interest the value of
the goodwill of the business shall not be considered.
(Formerly: Acts 1949, c.114, s.38.) As amended by P.L.34-1987,
SEC.303.
IC 23-4-1-39
Rights where partnership is dissolved for fraud or
misrepresentation
Sec. 39. Where a partnership contract is rescinded on the ground
of the fraud or misrepresentation of one of the parties thereto, the
party entitled to rescind is, without prejudice to any other right,
entitled,
(a) To a lien on, or right of retention of, the surplus of the
partnership property after satisfying the partnership liabilities to third
persons for any sum of money paid by him for the purchase of an
interest in the partnership and for any capital or advances contributed
by him; and
(b) To stand, after all liabilities to third persons have been
satisfied, in the place of the creditors of the partnership for any
payments made by him in respect of the partnership liabilities; and
(c) To be indemnified by the person guilty of the fraud or making
the representation against all debts and liabilities of the partnership.
(Formerly: Acts 1949, c.114, s.39.)
IC 23-4-1-40
Rules for distribution
Sec. 40. In settling accounts between the partners after
dissolution, the following rules shall be observed, subject to any
agreement to the contrary:
(a) The assets of the partnership are:
(I) The partnership property.
(II) The contribution of the partners specified in clause (d)
of this paragraph.
(b) The liabilities of the partnership shall rank in order of
payment, as follows:
(I) Those owing to creditors other than partners.
(II) Those owing to partners other than for capital and
profits.
(III) Those owing to partners in respect of capital.
(IV) Those owing to partners in respect of profits.
(c) The assets shall be applied in the order of their declaration
in clause (a) of this paragraph to the satisfaction of the
liabilities.
(d) Except as provided in section 15(2) of this chapter, the
partners shall contribute, as provided by section 18(a) of this
chapter, the amount necessary to satisfy the liabilities; but if
any, but not all, of the partners are insolvent, or, not being
subject to process, refuse to contribute, the other partners shall
contribute their share of the liabilities, and, in the relative
proportions in which they share the profits, the additional
amount necessary to pay the liabilities.
(e) An assignee for the benefit of creditors or any person
appointed by the court shall have the right to enforce the
contributions specified in clause (d) of this paragraph.
(f) Any partner or his legal representative shall have the right to
enforce the contributions specified in clause (d) of this
paragraph, to the extent of the amount which he has paid in
excess of his share of the liability.
(g) The individual property of a deceased partner shall be liable
for the contributions specified in clause (d) of this paragraph.
(h) When partnership property and the individual properties of
the partners are in possession of a court for distribution,
partnership creditors shall have priority on partnership property
and separate creditors on individual property, saving the rights
of lien or secured creditors as heretofore.
(i) Where a partner has become bankrupt or his estate is
insolvent, the claims against his separate property shall rank in
the following order:
(I) Those owing to separate creditors.
(II) Those owing to partnership creditors.
(III) Those owing to partners by way of contribution.
(Formerly: Acts 1949, c.114, s.40.) As amended by P.L.34-1987,
SEC.304; P.L.230-1995, SEC.8.
IC 23-4-1-41
Liability of persons continuing business in certain cases
Sec. 41. (1) When any new partner is admitted into an existing
partnership, or when any partner retires and assigns (or the
representative of the deceased partner assigns) his rights in
partnership property to two (2) or more of the partners, or to one (1)
or more of the partners and one (1) or more third persons, if the
business is continued without liquidation of the partnership affairs,
creditors of the first or dissolved partnership are also creditors of the
partnership so continuing the business.
(2) When all but one (1) partner retire and assign (or the
representative of a deceased partner assigns) their rights in
partnership property to the remaining partner, who continues the
business without liquidation of partnership affairs, either alone or
with others, creditors of the dissolved partnership are also creditors
of the person or partnership so continuing the business.
(3) When any partner retires or dies and the business of the
dissolved partnership is continued as set forth in paragraphs (1) and
(2) of this section, with the consent of the retired partners or the
representative of the deceased partner, but without any assignment
of his right in partnership property, rights of creditors of the
dissolved partnership and of the creditors of the person or
partnership continuing the business shall be as if such assignment
had been made.
(4) When all the partners or their representatives assign their
rights in partnership property to one (1) or more third persons who
promise to pay the debts and who continue the business of the
dissolved partnership, creditors of the dissolved partnership are also
creditors of the person or partnership continuing the business.
(5) When any partner wrongfully causes a dissolution and the
remaining partners continue the business under the provisions of
section 38(2)(b) of this chapter, either alone or with others, and
without liquidation of the partnership affairs, creditors of the
dissolved partnership are also creditors of the person or partnership
continuing the business.
(6) When a partner is expelled and the remaining partners
continue the business either alone or with others, without liquidation
of the partnership affairs, creditors of the dissolved partnership are
also creditors of the person or partnership continuing the business.
(7) The liability of a third person becoming a partner in the
partnership continuing the business, under this section, to the
creditors of the dissolved partnership shall be satisfied out of
partnership property only.
(8) When the business of a partnership after dissolution is
continued under any conditions set forth in this section, the creditors
of the dissolved partnership, as against the separate creditors of the
retiring or deceased partner or the representative of the deceased
partners, have a prior right to any claim of the retired partner or the
representative of the deceased partner against the person or
partnership continuing the business, on account of the retired or
deceased partner's interest in the dissolved partnership or on account
of any consideration promised for such interest or for his right in
partnership property.
(9) Nothing in this section shall be held to modify any right of
creditors to set aside any assignment on the ground of fraud.
(10) The use by the person of partnership continuing the business
of the partnership name, or the name of a deceased partner, as part
thereof, shall not of itself make the individual property of the
deceased partner liable for any debts contracted by such person or
partnership.
(Formerly: Acts 1949, c.114, s.41.) As amended by P.L.34-1987,
SEC.305.
IC 23-4-1-42
Rights of retiring or estate of deceased partner when business is
continued
Sec. 42. When any partner retires or dies, and the business is
continued under any of the conditions set forth in section 41(1),
41(2), 41(3), 41(5), 41(6), or (38)(2)(b) of this chapter, without any
settlement of accounts as between him or his estate and the person or
partnership continuing the business, unless otherwise agreed, he or
his legal representative as against such persons or partnership may
have the value of his interest at the date of dissolution ascertained,
and shall receive as an ordinary creditor an amount equal to the value
of his interest in the dissolved partnership with interest, or, at his
option or at the option of his legal representative, in lieu of interest,
the profits attributable to the use of his right in the property of the
dissolved partnership; provided that the creditors of the dissolved
partnership as against the separate creditors, or the representative of
the retired or deceased partner shall have priority on any claim
arising under this section, as provided by section 41(8) of this
chapter.
(Formerly: Acts 1949, c.114, s.42.) As amended by P.L.34-1987,
SEC.306.
IC 23-4-1-43
Accrual of actions
Sec. 43. The right to an account of his interest shall accrue to any
partner, or his legal representative, as against the winding-up partners
or the surviving partners or the person or partnership continuing the
business, at the date of dissolution, in the absence of any agreement
to the contrary.
(Formerly: Acts 1949, c.114, s.43.)
IC 23-4-1-44
Limited liability partnerships; legislative intent and policy
Sec. 44. (1) It is the intent of the legislature that the legal
existence of limited liability partnerships formed under an agreement
governed by this chapter be recognized outside the boundaries of this
state and that the laws of this state governing such limited liability
partnerships transacting business outside this state be granted the
protection of full faith and credit of the Constitution of the United
States.
(2) It is the policy of this state that the internal affairs of
partnerships, including limited liability partnerships, formed under
an agreement governed by this chapter, including the liability of
partners for debts, obligations, and liabilities of or chargeable to the
partnership, a partner, or partners, are subject to and governed by the
laws of this state.
As added by P.L.230-1995, SEC.9.
IC 23-4-1-45
Limited liability partnerships; registration; notice
Sec. 45. (a) To qualify as a limited liability partnership, a
partnership under this chapter must do the following:
(1) File a registration with the secretary of state in a form
determined by the secretary of state that satisfies the following:
(A) Is signed by one (1) or more partners authorized to sign
the registration. A signature on a document under this clause
that is transmitted and filed electronically is sufficient if the
person transmitting and filing the document:
(i) has the intent to file the document as evidenced by a
symbol executed or adopted by a party with present
intention to authenticate the filing; and
(ii) enters the filing party's name on the electronic form in
a signature box or other place indicated by the secretary of
state.
(B) States the name of the limited liability partnership,
which must:
(i) contain the words "Limited Liability Partnership" or the
abbreviation "L.L.P." or "LLP" as the last words or letters
of the name; and
(ii) be distinguishable upon the records of the secretary of
state from the name of a limited liability partnership or
other business entity registered to transact business in
Indiana.
(C) States the address of the partnership's principal office.
(D) States the name of the partnership's registered agent and
the address of the partnership's registered office for service
of process as required to be maintained by section 50 of this
chapter.
(E) Contains a brief statement of the business in which the
partnership engages.
(F) States any other matters that the partnership determines
to include.
(G) States that the filing of the registration is evidence of the
partnership's intention to act as a limited liability
partnership.
(2) Except as provided in subdivision (3), file a ninety dollar
($90) registration fee with the registration.
(3) If the registration required under subdivision (1) is filed
electronically, file a filing fee of seventy-five dollars ($75).
(b) The secretary of state shall grant limited liability partnership
status to any partnership that submits a completed registration with
the required fee.
(c) Registration is effective and a partnership becomes a limited
liability partnership on the date a registration is filed with the
secretary of state or at any later date or time specified in the
registration. The registration remains effective until it is voluntarily
withdrawn by filing with the secretary of state a written withdrawal
notice under section 45.2 of this chapter.
(d) The status of a partnership as a limited liability partnership
and the liability of a partner of a limited liability partnership is not
adversely affected by errors or subsequent changes in the information
stated in a registration under subsection (a).
(e) A registration on file with the secretary of state is notice that
the partnership is a limited liability partnership and is notice of all
other facts set forth in the registration.
As added by P.L.230-1995, SEC.10. Amended by P.L.11-1996,
SEC.21; P.L.34-1997, SEC.8; P.L.277-2001, SEC.6; P.L.178-2002,
SEC.101; P.L.60-2007, SEC.2.
IC 23-4-1-45.1
Limited liability partnerships; amendment of registration
Sec. 45.1. (a) As used in this section, “limited liability
partnership” refers to a:
(1) limited liability partnership; or
(2) foreign limited liability partnership;
as defined in section 2 of this chapter.
(b) The registration of a limited liability partnership may be
amended by filing in the office of the secretary of state a certificate
of amendment executed by at least one (1) partner authorized to
execute an amendment to the registration.
(c) A certificate of amendment must contain the following:
(1) The name of the limited liability partnership.
(2) The date the registration was filed.
(3) The amendment to the registration.
(d) A certificate of amendment must be accompanied by a thirty
dollar ($30) filing fee.
(e) Subject to subsection (f), the registration of a limited liability
partnership may be amended at any time.
(f) An amended registration must contain only provisions that may
be lawfully contained in the registration when the amendment is
made.
As added by P.L.34-1997, SEC.9.
IC 23-4-1-45.2
Limited liability partnerships; withdrawal of registration
Sec. 45.2. (a) As used in this section, “limited liability
partnership” refers to a:
(1) limited liability partnership; or
(2) foreign limited liability partnership;
as defined in section 2 of this chapter.
(b) The registration of a limited liability partnership may be
withdrawn by filing in the office of the secretary of state a
withdrawal notice executed by at least one (1) partner authorized to
execute a withdrawal notice.
(c) A withdrawal notice must contain the following:
(1) The name of the limited liability partnership.
(2) The date the registration was filed.
(3) A brief statement regarding the reason for filing the
withdrawal notice.
(4) Any other information considered appropriate by the limited
liability partnership.
(d) A withdrawal notice must be accompanied by a thirty dollar
($30) filing fee.
(e) The withdrawal notice is effective and the partnership ceases
to be a limited liability partnership on the date a withdrawal notice
is filed with the secretary of state or at any later date or time
specified in the notice.
As added by P.L.34-1997, SEC.10.
IC 23-4-1-45.3
Limited liability partnerships; reservation of name
Sec. 45.3. (a) A person may reserve the exclusive right to the use
of a name, including a fictitious name for a foreign limited liability
partnership whose name is not available, by delivering an application
to the secretary of state for filing. The application must set forth the
name and address of the applicant and the name proposed to be
reserved. If the secretary of state finds that the name is available, the
secretary of state shall reserve the name for the exclusive use of the
applicant for renewable one hundred twenty (120) day periods.
(b) The owner of a reserved name may transfer the reservation to
another person by delivering to the secretary of state a signed notice
of the transfer that states the name and address of the transferee.
As added by P.L.34-1997, SEC.11. Amended by P.L.277-2001,
SEC.7.
IC 23-4-1-45.4
Foreign limited liability partnerships; registration of name
Sec. 45.4. (a) A foreign limited liability partnership may register
its name, or its name with any addition required by section 45 of this
chapter, if the name is distinguishable upon the records of the
secretary of state as provided in section 45 of this chapter.
(b) A foreign limited liability partnership register