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45-18 Partner's Dissociation

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CHAPTER 45-18PARTNER'S DISSOCIATION45-18-01. (601) Events causing partner's dissociation. A partner is dissociated froma partnership upon the occurrence of any of the following events:1.The partnership's having notice of the partner's express will to withdraw as a partner<br>or on a later date specified by the partner.2.An event agreed to in the partnership agreement as causing the partner's<br>dissociation.3.The partner's expulsion pursuant to the partnership agreement.4.The partner's expulsion by the unanimous vote of the other partners if:a.It is unlawful to carry on the partnership business with that partner;b.There has been a transfer of all or substantially all of that partner's transferable<br>interest in the partnership, other than a transfer for security purposes, or a court<br>order charging the partner's interest, which has not been foreclosed;c.Within ninety days after the partnership notifies a corporate partner that it will<br>be expelled because it has filed a certificate of dissolution or the equivalent, its<br>charter has been revoked, or its right to conduct business has been suspended<br>by the jurisdiction of its incorporation, there is no revocation of the certificate of<br>dissolution or no reinstatement of its charter or its right to conduct business; ord.A partnership that is a partner has been dissolved and its business is being<br>wound up.5.On application by the partnership or another partner, the partner's expulsion by<br>judicial determination because:a.The partner engaged in wrongful conduct that adversely and materially affected<br>the partnership business;b.The partner willfully or persistently committed a material breach of the<br>partnership agreement or of a duty owed to the partnership or the other<br>partners under section 45-16-04; orc.The partner engaged in conduct relating to the partnership business which<br>makes it not reasonably practicable to carry on the business in partnership with<br>the partner.6.The partner's:a.Becoming a debtor in bankruptcy;b.Executing an assignment for the benefit of creditors;c.Seeking, consenting to, or acquiescing in the appointment of a trustee,<br>receiver, or liquidator of that partner or of all or substantially all of that partner's<br>property; ord.Failing, within ninety days after the appointment, to have vacated or stayed the<br>appointment of a trustee, receiver, or liquidator of the partner or of all or<br>substantially all of the partner's property obtained without the partner's consentPage No. 1or acquiescence, or failing within ninety days after the expiration of a stay to<br>have the appointment vacated.7.In the case of a partner who is an individual:a.The partner's death;b.The appointment of a guardian or general conservator for the partner; orc.A judicial determination that the partner has otherwise become incapable of<br>performing the partner's duties under the partnership agreement.8.In the case of a partner that is a trust or is acting as a partner by virtue of being a<br>trustee of a trust, distribution of the trust's entire transferable interest in the<br>partnership, but not merely by reason of the substitution of a successor trustee.9.In the case of a partner that is an estate or is acting as a partner by virtue of being a<br>personal representative of an estate, distribution of the estate's entire transferable<br>interest in the partnership, but not merely by reason of the substitution of a<br>successor personal representative.10.Termination of a partner who is not an individual, partnership, corporation, trust, or<br>estate.45-18-02. (602) Partner's power to dissociate - Wrongful dissociation.1.A partner has the power to dissociate at any time, rightfully or wrongfully, by express<br>will pursuant to subsection 1 of section 45-18-01.2.A partner's dissociation is wrongful only if:a.It is in breach of an express provision of the partnership agreement; orb.In the case of a partnership for a definite term or particular undertaking, before<br>the expiration of the term or the completion of the undertaking:(1)The partner withdraws by express will, unless the withdrawal follows<br>within ninety days after another partner's dissociation by death or<br>otherwise under subsections 6 through 10 of section 45-18-01 or<br>wrongful dissociation under this subsection;(2)The partner is expelled by judicial determination under subsection 5 of<br>section 45-18-01;(3)The partner is dissociated by becoming a debtor in bankruptcy; or(4)In the case of a partner who is not an individual, trust other than a<br>business trust, or estate, the partner is expelled or otherwise dissociated<br>because it willfully dissolved or terminated.3.A partner who wrongfully dissociates is liable to the partnership and to the other<br>partners for damages caused by the dissociation. The liability is in addition to any<br>other obligation of the partner to the partnership or to the other partners.45-18-03. (603) Effect of partner's dissociation.1.If a partner's dissociation results in a dissolution and winding up of the partnership<br>business, chapter 45-20 applies, otherwise, chapter 45-19 applies.Page No. 22.Upon a partner's dissociation:a.The partner's right to participate in the management and conduct of the<br>partnership business terminates, except as otherwise provided in section<br>45-20-03;b.The partner's duty of loyalty under subdivision c of subsection 2 of section<br>45-16-04 terminates; andc.The partner's duty of loyalty under subdivisions a and b of subsection 2 of<br>section 45-16-04 and duty of care under subsection 3 of section 45-16-04<br>continue only with regard to matters arising and events occurring before the<br>partner's dissociation, unless the partner participates in winding up the<br>partnership's business pursuant to section 45-20-03.Page No. 3Document Outlinechapter 45-18 partner's dissociation