CHAPTER 152. GENERAL PARTNERSHIPS
BUSINESS ORGANIZATIONS CODE
TITLE 4. PARTNERSHIPS
CHAPTER 152. GENERAL PARTNERSHIPS
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 152.001. DEFINITIONS. In this chapter:
(1) "Event of withdrawal" or "withdrawal" means an event
specified by Section 152.501(b).
(2) "Event requiring a winding up" means an event specified by
Section 11.051 or 11.057.
(3) "Foreign limited liability partnership" means a partnership
that:
(A) is foreign; and
(B) has the status of a limited liability partnership pursuant
to the laws of the jurisdiction of formation.
(4) "Other partnership provisions" means the provisions of
Chapters 151 and 154 and Title 1 to the extent applicable to
partnerships.
(5) "Transfer" includes:
(A) an assignment;
(B) a conveyance;
(C) a lease;
(D) a mortgage;
(E) a deed;
(F) an encumbrance; and
(G) the creation of a security interest.
(6) "Withdrawn partner" means a partner with respect to whom an
event of withdrawal has occurred.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 152.002. EFFECT OF PARTNERSHIP AGREEMENT; NONWAIVABLE AND
VARIABLE PROVISIONS. (a) Except as provided by Subsection (b),
a partnership agreement governs the relations of the partners and
between the partners and the partnership. To the extent that the
partnership agreement does not otherwise provide, this chapter
and the other partnership provisions govern the relationship of
the partners and between the partners and the partnership.
(b) A partnership agreement or the partners may not:
(1) unreasonably restrict a partner's right of access to books
and records under Section 152.212;
(2) eliminate the duty of loyalty under Section 152.205, except
that the partners by agreement may identify specific types of
activities or categories of activities that do not violate the
duty of loyalty if the types or categories are not manifestly
unreasonable;
(3) eliminate the duty of care under Section 152.206, except
that the partners by agreement may determine the standards by
which the performance of the obligation is to be measured if the
standards are not manifestly unreasonable;
(4) eliminate the obligation of good faith under Section
152.204(b), except that the partners by agreement may determine
the standards by which the performance of the obligation is to be
measured if the standards are not manifestly unreasonable;
(5) vary the power to withdraw as a partner under Section
152.501(b)(1), (7), or (8), except for the requirement that
notice be in writing;
(6) vary the right to expel a partner by a court in an event
specified by Section 152.501(b)(5);
(7) restrict rights of a third party under this chapter or the
other partnership provisions, except for a limitation on an
individual partner's liability in a limited liability partnership
as provided by this chapter;
(8) select a governing law not permitted under Sections 1.103
and 1.002(43)(C); or
(9) except as provided in Subsections (c) and (d), waive or
modify the following provisions of Title 1:
(A) Chapter 1, if the provision is used to interpret a provision
or to define a word or phrase contained in a section listed in
this subsection;
(B) Chapter 2, other than Sections 2.104(c)(2), 2.104(c)(3), and
2.113;
(C) Chapter 3, other than Subchapters C and E of that chapter;
or
(D) Chapters 4, 5, 10, 11, and 12, other than Sections
11.057(a), (b), (c)(1), (c)(3), and (d).
(c) A provision listed in Subsection (b)(9) may be waived or
modified in a partnership agreement if the provision that is
waived or modified authorizes the partnership to waive or modify
the provision in the partnership's governing documents.
(d) A provision listed in Subsection (b)(9) may be waived or
modified in a partnership agreement if the provision that is
modified specifies:
(1) the person or group of persons entitled to approve a
modification; or
(2) the vote or other method by which a modification is required
to be approved.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
688, Sec. 104, eff. September 1, 2007.
Sec. 152.003. SUPPLEMENTAL PRINCIPLES OF LAW. The principles of
law and equity and the other partnership provisions supplement
this chapter unless otherwise provided by this chapter or the
other partnership provisions.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 152.004. RULE OF STATUTORY CONSTRUCTION NOT APPLICABLE.
The rule that a statute in derogation of the common law is to be
strictly construed does not apply to this chapter or the other
partnership provisions.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 152.005. APPLICABLE INTEREST RATE. If an obligation to pay
interest arises under this chapter and the rate is not specified,
the interest rate is the rate specified by Section 302.002,
Finance Code.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
SUBCHAPTER B. NATURE AND CREATION OF PARTNERSHIP
Sec. 152.051. PARTNERSHIP DEFINED. (a) In this section,
"association" does not have the meaning of the term "association"
under Section 1.002.
(b) Except as provided by Subsection (c) and Section 152.053(a),
an association of two or more persons to carry on a business for
profit as owners creates a partnership, regardless of whether:
(1) the persons intend to create a partnership; or
(2) the association is called a "partnership," "joint venture,"
or other name.
(c) An association or organization is not a partnership if it
was created under a statute other than:
(1) this title and the provisions of Title 1 applicable to
partnerships and limited partnerships;
(2) a predecessor to a statute referred to in Subdivision (1);
or
(3) a comparable statute of another jurisdiction.
(d) The provisions of this chapter govern limited partnerships
only to the extent provided by Sections 153.003 and 153.152 and
Subchapter H, Chapter 153.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 152.052. RULES FOR DETERMINING IF PARTNERSHIP IS CREATED.
(a) Factors indicating that persons have created a partnership
include the persons':
(1) receipt or right to receive a share of profits of the
business;
(2) expression of an intent to be partners in the business;
(3) participation or right to participate in control of the
business;
(4) agreement to share or sharing:
(A) losses of the business; or
(B) liability for claims by third parties against the business;
and
(5) agreement to contribute or contributing money or property to
the business.
(b) One of the following circumstances, by itself, does not
indicate that a person is a partner in the business:
(1) the receipt or right to receive a share of profits as
payment:
(A) of a debt, including repayment by installments;
(B) of wages or other compensation to an employee or independent
contractor;
(C) of rent;
(D) to a former partner, surviving spouse or representative of a
deceased or disabled partner, or transferee of a partnership
interest;
(E) of interest or other charge on a loan, regardless of whether
the amount varies with the profits of the business, including a
direct or indirect present or future ownership interest in
collateral or rights to income, proceeds, or increase in value
derived from collateral; or
(F) of consideration for the sale of a business or other
property, including payment by installments;
(2) co-ownership of property, regardless of whether the
co-ownership:
(A) is a joint tenancy, tenancy in common, tenancy by the
entirety, joint property, community property, or part ownership;
or
(B) is combined with sharing of profits from the property;
(3) the right to share or sharing gross returns or revenues,
regardless of whether the persons sharing the gross returns or
revenues have a common or joint interest in the property from
which the returns or revenues are derived; or
(4) ownership of mineral property under a joint operating
agreement.
(c) An agreement by the owners of a business to share losses is
not necessary to create a partnership.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 152.053. QUALIFICATIONS TO BE PARTNER; NONPARTNER'S
LIABILITY TO THIRD PERSON. (a) A person may be a partner unless
the person lacks capacity apart from this chapter.
(b) Except as provided by Section 152.307, a person who is not a
partner in a partnership under Section 152.051 is not a partner
as to a third person and is not liable to a third person under
this chapter.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 152.054. FALSE REPRESENTATION OF PARTNERSHIP OR PARTNER.
(a) A false representation or other conduct falsely indicating
that a person is a partner with another person does not of itself
create a partnership.
(b) A representation or other conduct indicating that a person
is a partner in an existing partnership, if that is not the case,
does not of itself make that person a partner in the partnership.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 152.055. AUTHORITY OF CERTAIN PROFESSIONALS TO CREATE
PARTNERSHIP. (a) Persons licensed as doctors of medicine and
persons licensed as doctors of osteopathy by the Texas State
Board of Medical Examiners and persons licensed as podiatrists by
the Texas State Board of Podiatric Medical Examiners may create a
partnership that is jointly owned by those practitioners to
perform a professional service that falls within the scope of
practice of those practitioners.
(b) When doctors of medicine, osteopathy, and podiatry create a
partnership that is jointly owned by those practitioners, the
authority of each of the practitioners is limited by the scope of
practice of the respective practitioners and none can exercise
control over the other's clinical authority granted by their
respective licenses, either through agreements, bylaws,
directives, financial incentives, or other arrangements that
would assert control over treatment decisions made by the
practitioner.
(c) The Texas State Board of Medical Examiners and the Texas
State Board of Podiatric Medical Examiners continue to exercise
regulatory authority over their respective licenses.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 152.056. PARTNERSHIP AS ENTITY. A partnership is an entity
distinct from its partners.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
SUBCHAPTER C. PARTNERSHIP PROPERTY
Sec. 152.101. NATURE OF PARTNERSHIP PROPERTY. Partnership
property is not property of the partners. A partner or a
partner's spouse does not have an interest in partnership
property.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 152.102. CLASSIFICATION AS PARTNERSHIP PROPERTY. (a)
Property is partnership property if acquired in the name of:
(1) the partnership; or
(2) one or more partners, regardless of whether the name of the
partnership is indicated, if the instrument transferring title to
the property indicates:
(A) the person's capacity as a partner; or
(B) the existence of a partnership.
(b) Property is presumed to be partnership property if acquired
with partnership property, regardless of whether the property is
acquired as provided by Subsection (a).
(c) Property acquired in the name of one or more partners is
presumed to be the partner's property, regardless of whether the
property is used for partnership purposes, if the instrument
transferring title to the property does not indicate the person's
capacity as a partner or the existence of a partnership, and if
the property is not acquired with partnership property.
(d) For purposes of this section, property is acquired in the
name of the partnership by a transfer to:
(1) the partnership in its name; or
(2) one or more partners in the partners' capacity as partners
in the partnership, if the name of the partnership is indicated
in the instrument transferring title to the property.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
SUBCHAPTER D. RELATIONSHIP BETWEEN PARTNERS AND BETWEEN PARTNERS
AND PARTNERSHIPS
Sec. 152.201. ADMISSION AS PARTNER. A person may become a
partner only with the consent of all partners.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 152.202. CREDITS OF AND CHARGES TO PARTNER. (a) Each
partner is credited with an amount equal to:
(1) the cash and the value of property the partner contributes
to a partnership; and
(2) the partner's share of the partnership's profits.
(b) Each partner is charged with an amount equal to:
(1) the cash and the value of other property distributed by the
partnership to the partner; and
(2) the partner's share of the partnership's losses.
(c) Each partner is entitled to be credited with an equal share
of the partnership's profits and is chargeable with a share of
the partnership's capital or operating losses in proportion to
the partner's share of the profits.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 152.203. RIGHTS AND DUTIES OF PARTNER. (a) Each partner
has equal rights in the management and conduct of the business of
a partnership. A partner's right to participate in the management
and conduct of the business is not community property.
(b) A partner may use or possess partnership property only on
behalf of the partnership.
(c) A partner is not entitled to receive compensation for
services performed for a partnership other than reasonable
compensation for services rendered in winding up the business of
the partnership.
(d) A partner who, in the proper conduct of the business of the
partnership or for the preservation of its business or property,
reasonably makes a payment or advance beyond the amount the
partner agreed to contribute, or who reasonably incurs a
liability, is entitled to be repaid and to receive interest from
the date of the:
(1) payment or advance; or
(2) incurrence of the liability.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 152.204. GENERAL STANDARDS OF PARTNER'S CONDUCT. (a) A
partner owes to the partnership, the other partners, and a
transferee of a deceased partner's partnership interest as
designated in Section 152.406(a)(2):
(1) a duty of loyalty; and
(2) a duty of care.
(b) A partner shall discharge the partner's duties to the
partnership and the other partners under this code or under the
partnership agreement and exercise any rights and powers in the
conduct or winding up of the partnership business:
(1) in good faith; and
(2) in a manner the partner reasonably believes to be in the
best interest of the partnership.
(c) A partner does not violate a duty or obligation under this
chapter or under the partnership agreement merely because the
partner's conduct furthers the partner's own interest.
(d) A partner, in the partner's capacity as partner, is not a
trustee and is not held to the standards of a trustee.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Amended by:
Acts 2005, 79th Leg., Ch.
64, Sec. 77, eff. January 1, 2006.
Sec. 152.205. PARTNER'S DUTY OF LOYALTY. A partner's duty of
loyalty includes:
(1) accounting to and holding for the partnership property,
profit, or benefit derived by the partner:
(A) in the conduct and winding up of the partnership business;
or
(B) from use by the partner of partnership property;
(2) refraining from dealing with the partnership on behalf of a
person who has an interest adverse to the partnership; and
(3) refraining from competing or dealing with the partnership in
a manner adverse to the partnership.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 152.206. PARTNER'S DUTY OF CARE. (a) A partner's duty of
care to the partnership and the other partners is to act in the
conduct and winding up of the partnership business with the care
an ordinarily prudent person would exercise in similar
circumstances.
(b) An error in judgment does not by itself constitute a breach
of the duty of care.
(c) A partner is presumed to satisfy the duty of care if the
partner acts on an informed basis and in compliance with Section
152.204(b).
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 152.207. STANDARDS OF CONDUCT APPLICABLE TO PERSON WINDING
UP PARTNERSHIP BUSINESS. Sections 152.204-152.206 apply to a
person winding up the partnership business as the personal or
legal representative of the last surviving partner to the same
extent that those sections apply to a partner.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 152.208. AMENDMENT TO PARTNERSHIP AGREEMENT. A partnership
agreement may be amended only with the consent of all partners.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 152.209. DECISION-MAKING REQUIREMENT. (a) A difference
arising in a matter in the ordinary course of the partnership
business may be decided by a majority-in-interest of the
partners.
(b) An act outside the ordinary course of business of a
partnership may be undertaken only with the consent of all
partners.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 152.210. PARTNER'S LIABILITY TO PARTNERSHIP AND OTHER
PARTNERS. A partner is liable to a partnership and the other
partners for:
(1) a breach of the partnership agreement; or
(2) a violation of a duty to the partnership or other partners
under this chapter that causes harm to the partnership or the
other partners.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 152.211. REMEDIES OF PARTNERSHIP AND PARTNERS. (a) A
partnership may maintain an action against a partner for a breach
of the partnership agreement or for the violation of a duty to
the partnership causing harm to the partnership.
(b) A partner may maintain an action against the partnership or
another partner for legal or equitable relief, including an
accounting of partnership business, to:
(1) enforce a right under the partnership agreement;
(2) enforce a right under this chapter, including:
(A) the partner's rights under Sections 152.201-152.209,
152.212, and 152.213;
(B) the partner's right on withdrawal to have the partner's
interest in the partnership redeemed under Subchapter H or to
enforce any other right under Subchapters G and H; and
(C) the partner's rights under Subchapter I;
(3) enforce the rights and otherwise protect the interests of
the partner, including rights and interests arising independently
of the partnership relationship; or
(4) enforce a right under Chapter 11.
(c) The accrual of and a time limitation on a right of action
for a remedy under this section is governed by other applicable
law.
(d) A right to an accounting does not revive a claim barred by
law.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 152.212. BOOKS AND RECORDS OF PARTNERSHIP. (a) In this
section, "access" includes the opportunity to inspect and copy
books and records during ordinary business hours.
(b) A partnership shall keep its books and records, if any, at
its chief executive office.
(c) A partnership shall provide access to its books and records
to a partner or an agent or attorney of a partner.
(d) The partnership shall provide a former partner or an agent
or attorney of a former partner access to books and records
pertaining to the period during which the former partner was a
partner or for any other proper purpose with respect to another
period.
(e) A partnership may impose a reasonable charge, covering the
costs of labor and material, for copies of documents furnished
under this section.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 152.213. INFORMATION REGARDING PARTNERSHIP. (a) On
request and to the extent just and reasonable, each partner and
the partnership shall furnish complete and accurate information
concerning the partnership to:
(1) a partner;
(2) the legal representative of a deceased partner or a partner
who has a legal disability; or
(3) an assignee.
(b) A legal representative of a deceased partner or a partner
who has a legal disability and an assignee are subject to the
duties of a partner with respect to information made available.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 152.214. CERTAIN THIRD-PARTY OBLIGATIONS NOT AFFECTED.
Sections 152. 203, 152.208, and 152.209 do not limit a
partnership's obligations to another person under Sections
152.301 and 152.302.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
SUBCHAPTER E. RELATIONSHIP BETWEEN PARTNERS AND OTHER PERSONS
Sec. 152.301. PARTNER AS AGENT. Each partner is an agent of the
partnership for the purpose of its business.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 152.302. BINDING EFFECT OF PARTNER'S ACTION. (a) Unless a
partner does not have authority to act for the partnership in a
particular matter and the person with whom the partner is dealing
knows that the partner lacks authority, an act of a partner,
including the execution of an instrument in the partnership name,
binds the partnership if the act is apparently for carrying on in
the ordinary course:
(1) the partnership business; or
(2) business of the kind carried on by the partnership.
(b) An act of a partner that is not apparently for carrying on
in the ordinary course a business described by Subsection (a)
binds the partnership only if authorized by the other partners.
(c) A conveyance of real property by a partner on behalf of the
partnership not otherwise binding on the partnership binds the
partnership if the property has been conveyed by the grantee or a
person claiming through the grantee to a holder for value without
knowledge that the partner exceeded that partner's authority in
making the conveyance.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
688, Sec. 105, eff. September 1, 2007.
Sec. 152.303. LIABILITY OF PARTNERSHIP FOR CONDUCT OF PARTNER.
(a) A partnership is liable for loss or injury to a person,
including a partner, or for a penalty caused by or incurred as a
result of a wrongful act or omission or other actionable conduct
of a partner acting:
(1) in the ordinary course of business of the partnership; or
(2) with the authority of the partnership.
(b) A partnership is liable for the loss of money or property of
a person who is not a partner that is:
(1) received in the course of the partnership's business; and
(2) misapplied by a partner while in the custody of the
partnership.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 152.304. NATURE OF PARTNER'S LIABILITY. (a) Except as
provided by Subsection (b) or Section 152.801(a), all partners
are liable jointly and severally for a debt or obligation of the
partnership unless otherwise:
(1) agreed by the claimant; or
(2) provided by law.
(b) A person who is admitted as a partner into an existing
partnership does not have personal liability under Subsection (a)
for an obligation of the partnership that:
(1) arises before the partner's admission to the partnership;
(2) relates to an action taken or omission occurring before the
partner's admission to the partnership; or
(3) arises before or after the partner's admission to the
partnership under a contract or commitment entered into before
the partner's admission.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
688, Sec. 106, eff. September 1, 2007.
Sec. 152.305. REMEDY. An action may be brought against a
partnership and any or all of the partners in the same action or
in separate actions.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 152.306. ENFORCEMENT OF REMEDY. (a) A judgment against a
partnership is not by itself a judgment against a partner. A
judgment may be entered against a partner who has been served
with process in a suit against the partnership.
(b) Except as provided by Subsection (c), a creditor may proceed
against one or more partners or the property of the partners to
satisfy a judgment based on a claim against the partnership only
if a judgment:
(1) is also obtained against the partner; and
(2) based on the same claim:
(A) is obtained against the partnership;
(B) has not been reversed or vacated; and
(C) remains unsatisfied for 90 days after:
(i) the date on which the judgment is entered; or
(ii) the date on which the stay expires, if the judgment is
contested by appropriate proceedings and execution on the
judgment is stayed.
(c) Subsection (b) does not prohibit a creditor from proceeding
directly against one or more partners or the property of the
partners without first seeking satisfaction from partnership
property if:
(1) the partnership is a debtor in bankruptcy;
(2) the creditor and the partnership agreed that the creditor is
not required to comply with Subsection (b);
(3) a court orders otherwise, based on a finding that
partnership property subject to execution in the state is clearly
insufficient to satisfy the judgment or that compliance with
Subsection (b) is excessively burdensome; or
(4) liability is imposed on the partner by law independently of
the person's status as a partner.
(d) This section does not limit the effect of Section 152.801
with respect to a limited liability partnership.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 152.307. EXTENSION OF CREDIT IN RELIANCE ON FALSE
REPRESENTATION. (a) The rights of a person extending credit in
reliance on a representation described by Section 152.054 are
determined by applicable law other than this chapter and the
other partnership provisions, including the law of estoppel,
agency, negligence, fraud, and unjust enrichment.
(b) The rights and duties of a person held liable under
Subsection (a) are also determined by law other than the law
described by Subsection (a).
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
SUBCHAPTER F. TRANSFER OF PARTNERSHIP INTERESTS
Sec. 152.401. TRANSFER OF PARTNERSHIP INTEREST. A partner may
transfer all or part of the partner's partnership interest.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 152.402. GENERAL EFFECT OF TRANSFER. A transfer of all or
part of a partner's partnership interest:
(1) is not an event of withdrawal;
(2) does not by itself cause a winding up of the partnership
business; and
(3) against the other partners or the partnership, does not
entitle the transferee, during the continuance of the
partnership, to participate in the management or conduct of the
partnership business.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 152.403. EFFECT OF TRANSFER ON TRANSFEROR. After transfer,
the transferor continues to have the rights and duties of a
partner other than the interest transferred.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 152.404. RIGHTS AND DUTIES OF TRANSFEREE. (a) A
transferee of a partner's partnership interest is entitled to
receive, to the extent transferred, distributions to which the
transferor otherwise would be entitled.
(b) If an event requires a winding up of partnership business
under Subchapter I, a transferee is entitled to receive, to the
extent transferred, the net amount otherwise distributable to the
transferor.
(c) Until a transferee becomes a partner, the transferee does
not have liability as a partner solely as a result of the
transfer.
(d) For a proper purpose the transferee may require reasonable
information or an account of a partnership transaction and make
reasonable inspection of the partnership books. In a winding up
of partnership business, a transferee may require an accounting
only from the date of the latest account agreed to by all of the
partners.
(e) Until receipt of notice of a transfer, a partnership is not
required to give effect to a transferee's rights under this
section and Sections 152.401-152.403.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 152.405. POWER TO EFFECT TRANSFER OR GRANT OF SECURITY
INTEREST. A partnership is not required to give effect to a
transfer prohibited by a partnership agreement.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 152.406. EFFECT OF DEATH OR DIVORCE ON PARTNERSHIP
INTEREST. (a) For purposes of this code:
(1) on the divorce of a partner, the partner's spouse, to the
extent of the spouse's partnership interest, is a transferee of
the partnership interest from the partner;
(2) on the death of a partner, the partner's surviving spouse,
if any, and an heir, legatee, or personal representative of the
partner, to the extent of their respective partnership interest,
is a transferee of the partnership interest from the partner; and
(3) on the death of a partner's spouse, an heir, legatee, or
personal representative of the spouse, to the extent of their
respective partnership interest, is a transferee of the
partnership interest from the partner.
(b) An event of the type described by Section 152.501 occurring
with respect to a partner's spouse is not an event of withdrawal.
(c) This chapter does not impair an agreement for the purchase
or sale of a partnership interest at any time, including the
death of an owner of the partnership interest.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
SUBCHAPTER G. WITHDRAWAL OF PARTNER
Sec. 152.501. EVENTS OF WITHDRAWAL. (a) A person ceases to be
a partner on the occurrence of an event of withdrawal.
(b) An event of withdrawal of a partner occurs on:
(1) receipt by the partnership of notice of the partner's
express will to withdraw as a partner on:
(A) the date on which the notice is received; or
(B) a later date specified by the notice;
(2) an event specified in the partnership agreement as causing
the partner's withdrawal;
(3) the partner's expulsion as provided by the partnership
agreement;
(4) the partner's expulsion by vote of a majority-in-interest 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 partnership interest, other than:
(i) a transfer for security purposes that has not been
foreclosed; or
(ii) the substitution of a successor trustee or successor
personal representative;
(C) not later than the 90th day after the date on which the
partnership notifies an entity partner, other than a nonfiling
entity or foreign nonfiling entity partner, that it will be
expelled because it has filed a certificate of termination or the
equivalent, its existence has been involuntarily terminated or
its charter has been revoked, or its right to conduct business
has been terminated or suspended by the jurisdiction of its
formation, if the certificate of termination or the equivalent is
not revoked or its existence, charter, or right to conduct
business is not reinstated; or
(D) an event requiring a winding up has occurred with respect to
a nonfiling entity or foreign nonfiling entity that is a partner;
(5) the partner's expulsion by judicial decree, on application
by the partnership or another partner, if the judicial decree
determines that the partner:
(A) engaged in wrongful conduct that adversely and materially
affected the partnership business;
(B) wilfully or persistently committed a material breach of:
(i) the partnership agreement; or
(ii) a duty owed to the partnership or the other partners under
Sections 152.204-152.206; or
(C) engaged in conduct relating to the partnership business that
made it not reasonably practicable to carry on the business in
partnership with that partner;
(6) the partner's:
(A) becoming a debtor in bankruptcy;
(B) executing an assignment for the benefit of a creditor;
(C) seeking, consenting to, or acquiescing in the appointment of
a trustee, receiver, or liquidator of that partner or of all or
substantially all of that partner's property; or
(D) failing, not later than the 90th day after the appointment,
to have vacated or stayed the appointment of a trustee, receiver,
or liquidator of the partner or of all or substantially all of
the partner's property obtained without the partner's consent or
acquiescence, or not later than the 90th day after the date of
expiration of a stay, failing to have the appointment vacated;
(7) if a partner is an individual:
(A) the partner's death;
(B) the appointment of a guardian or general conservator for the
partner; or
(C) a judicial determination that the partner has otherwise
become incapable of performing the partner's duties under the
partnership agreement;
(8) termination of a partner's existence;
(9) if a partner has transferred all of the partner's
partnership interest, redemption of the transferee's interest
under Section 152.611; or
(10) an agreement to continue the partnership under Section
11.057(d) if the partnership has received a notice from the
partner under Section 11.057(d) requesting that the partnership
be wound up.
(c) Repealed by Acts 2007, 80th Leg., R.S., Ch. 688, Sec.
144(2), eff. September 1, 2007.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Amended by:
Acts 2005, 79th Leg., Ch.
64, Sec. 78, eff. January 1, 2006.
Acts 2007, 80th Leg., R.S., Ch.
688, Sec. 107, eff. September 1, 2007.
Acts 2007, 80th Leg., R.S., Ch.
688, Sec. 144(2), eff. September 1, 2007.
Sec. 152.502. EFFECT OF EVENT OF WITHDRAWAL ON PARTNERSHIP AND
OTHER PARTNERS. A partnership continues after an event of
withdrawal. The event of withdrawal affects the relationships
among the withdrawn partner, the partnership, and the continuing
partners as provided by Sections 152.503-152.506 and Subchapter
H.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 152.503. WRONGFUL WITHDRAWAL; LIABILITY. (a) At any time
before the occurrence of an event requiring a winding up of
partnership business, a partner may withdraw from the partnership
and cease to be a partner as provided by Section 152.501.
(b) A partner's withdrawal is wrongful only if:
(1) the withdrawal breaches an express provision of the
partnership agreement;
(2) in the case of a partnership that has a period of duration,
is for a particular undertaking, or is required under its
partnership agreement to wind up the partnership on occurrence of
a specified event, before the expiration of the period of
duration, the completion of the undertaking, or the occurrence of
the event, as appropriate:
(A) the partner withdraws by express will;
(B) the partner withdraws by becoming a debtor in bankruptcy; or
(C) in the case of a partner that is not an individual, a trust
other than a business trust, or an estate, the partner is
expelled or otherwise withdraws because the partner wilfully
dissolved or terminated; or
(3) the partner is expelled by judicial decree under Section
152.501(b)(5).
(c) In addition to other liability of the partner to the
partnership or to the other partners, a wrongfully withdrawing
partner is liable to the partnership and to the other partners
for damages caused by the withdrawal.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
688, Sec. 108, eff. September 1, 2007.
Sec. 152.504. WITHDRAWN PARTNER'S POWER TO BIND PARTNERSHIP.
(a) The action of a withdrawn partner occurring not later than
the first anniversary of the date of the person's withdrawal
binds the partnership if the transaction would bind the
partnership before the person's withdrawal and the other party to
the transaction:
(1) does not have notice of the person's withdrawal as a
partner;
(2) had done business with the partnership within one year
preceding the date of withdrawal; and
(3) reasonably believed that the withdrawn partner was a partner
at the time of the transaction.
(b) A withdrawn partner is liable to the partnership for loss
caused to the partnership arising from an obligation incurred by
the withdrawn partner after the withdrawal date and for which the
partnership is liable under Subsection (a).
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 152.505. EFFECT OF WITHDRAWAL ON PARTNER'S EXISTING
LIABILITY. (a) Withdrawal of a partner does not by itself
discharge the partner's liability for an obligation of the
partnership incurred before the date of withdrawal.
(b) The estate of a deceased partner is liable for an obligation
of the partnership incurred while the deceased was a partner to
the same extent that a withdrawn partner is liable for an
obligation of the partnership incurred before the date of
withdrawal.
(c) A withdrawn partner is discharged from liability incurred
before the date of withdrawal by an agreement to that effect
between the partner and a partnership creditor.
(d) If a creditor of a partnership has notice of a partner's
withdrawal and without the consent of the withdrawn partner
agrees to a material alteration in the nature or time of payment
of an obligation of the partnership incurred before the date of
withdrawal, the withdrawn partner is discharged from the
obligation.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 152.506. LIABILITY OF WITHDRAWN PARTNER TO THIRD PARTY. A
person who withdraws as a partner in a circumstance that is not
an event requiring a winding up of partnership business under
Section 11.051 or 11.057 is liable to another party as a partner
in a transaction entered into by the partnership or a surviving
partnership under Section 10.001 not later than the second
anniversary of the date of the partner's withdrawal only if the
other party to the transaction:
(1) does not have notice of the partner's withdrawal; and
(2) reasonably believed that the withdrawn partner was a partner
at the time of the transaction.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
SUBCHAPTER H. REDEMPTION OF WITHDRAWING PARTNER'S OR TRANSFEREE'S
INTEREST
Sec. 152.601. REDEMPTION IF PARTNERSHIP NOT WOUND UP. The
partnership interest of a withdrawn partner automatically is
redeemed by the partnership as of the date of withdrawal in
accordance with this subchapter if:
(1) the event of withdrawal occurs under Sections
152.501(b)(1)-(9) and an event requiring a winding up of
partnership business does not occur before the 61st day after the
date of the withdrawal; or
(2) the event of a withdrawal occurs under Section
152.501(b)(10).
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 152.602. REDEMPTION PRICE. (a) Except as provided by
Subsection (b) , the redemption price of a withdrawn partner's
partnership interest is the fair value of the interest on the
date of withdrawal.
(b) The redemption price of the partnership interest of a
partner who wrongfully withdraws before the expiration of the
partnership's period of duration, the completion of a particular
undertaking, or the occurrence of a specified event requiring a
winding up of partnership business is the lesser of:
(1) the fair value of the withdrawn partner's partnership
interest on the date of withdrawal; or
(2) the amount that the withdrawn partner would have received if
an event requiring a winding up of partnership business had
occurred at the time of the partner's withdrawal.
(c) Interest is payable on the amount owed under this section.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
688, Sec. 109, eff. September 1, 2007.
Sec. 152.603. CONTRIBUTION OBLIGATION. If a wrongfully
withdrawing partner would have been required to make
contributions to the partnership under Section 152.707 or 152.708
if an event requiring winding up of the partnership business had
occurred at the time of withdrawal, the withdrawn partner is
liable to the partnership to make contributions to the
partnership in that amount and pay interest on the amount owed.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 152.604. SETOFF FOR CERTAIN DAMAGES. The partnership may
set off against the redemption price payable to the withdrawn
partner the damages for wrongful withdrawal under Section
152.503(b) and all other amounts owed by the withdrawn partner to
the partnership, whether currently due, including interest.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 152.605. ACCRUAL OF INTEREST. Interest payable under
Sections 152.602-152.604 accrues from the date of the withdrawal
to the date of payment.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 152.606. INDEMNIFICATION FOR CERTAIN LIABILITY. (a) A
partnership shall indemnify a withdrawn partner against a
partnership liability incurred before the date of withdrawal,
except for a liability:
(1) that is unknown to the partnership at the time; or
(2) incurred by an act of the withdrawn partner under Section
152.504.
(b) For purposes of this section, a liability is unknown to the
partnership if it is not known to a partner other than the
withdrawn partner.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 152.607. DEMAND OR PAYMENT OF ESTIMATED REDEMPTION. (a)
If a deferred payment is not authorized under Section 152.608 and
an agreement on the redemption price of a withdrawn partner's
interest is not reached before the 121st day after the date a
written demand for payment is made by either party, not later
than the 30th day after the expiration of the period, the
partnership shall:
(1) pay to the withdrawn partner in cash the amount the
partnership estimates to be the redemption price and any accrued
interest, reduced by any setoffs and accrued interest under
Section 152.604; or
(2) make written demand for payment of its estimate of the
amount owed by the withdrawn partner to the partnership, minus
any amount owed to the withdrawn partner by the partnership.
(b) If a deferred payment is authorized under Section 152.608 or
a contribution or other amount is owed by the withdrawn partner
to the partnership, the partnership may offer in writing to pay,
or deliver a written statement of demand for, the amount it
estimates to be the net amount owed, stating the amount and other
terms of the obligation.
(c) On request of the other party, the payment, tender, offer,
or demand required or allowed by Subsection (a) or (b) must be
accompanied or followed promptly by:
(1) if payment, tender, offer, or demand is made or delivered by
the partnership, a statement of partnership property and
liabilities from the date of the partner's withdrawal and the
most recent available partnership balance sheet and income
statement, if any; and
(2) an explanation of the computation of the estimated payment
obligation.
(d) The terms of a payment, tender, offer, or demand under
Subsection (a) or (b) govern a redemption if:
(1) accompanied by written notice that:
(A) the payment or tendered amount, if made, fully satisfies a
party's obligations relating to the redemption of the withdrawn
partner's partnership interest; and
(B) an action to determine the redemption price, a contribution
obligation or setoff under Section 152.603 or 152.604, or other
terms of the redemption obligation must be commenced not later
than the first anniversary of the later of:
(i) the date on which the written notice is given; or
(ii) the date on which the information required by Subsection
(c) is delivered; and
(2) the party receiving the payment, tender, offer, or demand
does not commence an action in the period described by
Subdivision (1)(B).
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 152.608. DEFERRED PAYMENT ON WRONGFUL WITHDRAWAL. (a) A
partner who wrongfully withdraws before the expiration of the
partnership's period of duration, the completion of a particular
undertaking, or the occurrence of a specified event requiring a
winding up of partnership business is not entitled to receive any
portion of the redemption price until the expiration of the
period, the completion of the undertaking, or the occurrence of
the specified event, as appropriate, unless the partner
establishes to the satisfaction of a court that earlier payment
will not cause undue hardship to the partnership.
(b) A deferred payment accrues interest.
(c) The withdrawn partner may seek to demonstrate to the
satisfaction of the court that security for a deferred payment is
appropriate.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
688, Sec. 110, eff. September 1, 2007.
Sec. 152.609. ACTION TO DETERMINE TERMS OF REDEMPTION. (a) A
withdrawn partner or the partnership may maintain an action
against the other party under Section 152.211 to determine:
(1) the terms of redemption of that partner's interest,
including a contribution obligation or setoff under Section
152.603 or 152.604; or
(2) other terms of the redemption obligations of either party.
(b) The action must be commenced not later than the first
anniversary of the later of:
(1) the date of delivery of information required by Section
152.607(c); or
(2) the date written notice is given under Section 152.607(d).
(c) The court shall determine the terms of the redemption of the
withdrawn partner's interest, any contribution obligation or
setoff due under Section 152.603 or 152.604, and accrued interest
and shall enter judgment for an additional payment or refund.
(d) If deferred payment is authorized under Section 152.608, the
court shall also determine the security for payment if requested
to consider whether security is appropriate.
(e) If the court finds that a party failed to tender payment or
make an offer to pay or to comply with the requirements of
Section 152.607(c) or otherwise acted arbitrarily, vexatiously,
or not in good faith, the court may assess damages against the
party, including, if appropriate, in an amount the court finds
equitable:
(1) a share of the profits of the continuing business;
(2) reasonable attorney's fees; and
(3) fees and expenses of appraisers or other experts for a party
to the action.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 152.610. DEFERRED PAYMENT ON WINDING UP PARTNERSHIP. If a
partner withdraws under Section 152.501 and not later than the
60th day after the date of withdrawal an event requiring winding
up occurs under Section 11.051 or 11.057:
(1) the partnership may defer paying the redemption price to the
withdrawn partner until the partnership makes a winding up
distribution to the remaining partners; and
(2) the redemption price or contribution obligation is the
amount the withdrawn partner would have received or contributed
if the event requiring winding up had occurred at the time of the
partner's withdrawal.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 152.611. REDEMPTION OF TRANSFEREE'S PARTNERSHIP INTEREST.
(a) A partnership must redeem the partnership interest of a
transferee for its fair value if:
(1) the interest was transferred when:
(A) the partnership had a period of duration that had not yet
expired;
(B) the partnership was for a particular undertaking not yet
completed; or
(C) the partnership agreement provided for winding up of the
partnership business on a specified event that had not yet
occurred;
(2) the partnership's period of duration has expired, the
particular undertaking has been completed, or the specified event
has occurred; and
(3) the transferee makes a written demand for redemption.
(b) If an agreement for the redemption price of a transferee's
interest is not reached before the 121st day after the date a
written demand for redemption is made, the partnership must pay
to the transferee in cash the amount the partnership estimates to
be the redemption price and any accrued interest from the date of
demand not later than the 30th day after the expiration of the
period.
(c) On request of the transferee, the payment required by
Subsection (b) must be accompanied or followed by:
(1) a statement of partnership property and liabilities from the
date of the demand for redemption;
(2) the most recent available partnership balance sheet and
income statement, if any; and
(3) an explanation of the computation of the estimated payment
obligation.
(d) If the payment required by Subsection (b) is accompanied by
written notice that the payment is in full satisfaction of the
partnership's obligations relating to the redemption of the
transferee's interest, the payment, less interest, is the
redemption price unless the transferee, not later than the first
anniversary of the written notice, commences an action to
determine the redemption price.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
688, Sec. 111, eff. September 1, 2007.
Sec. 152.612. ACTION TO DETERMINE TRANSFEREE'S REDEMPTION PRICE.
(a) A transferee may maintain an action against a partnership
to determine the redemption price of the transferee's interest.
(b) The court shall determine the redemption price of the
transferee's interest and accrued interest and enter judgment for
payment or refund.
(c) If the court finds that the partnership failed to make
payment or otherwise acted arbitrarily, vexatiously, or not in
good faith, the court may assess against the partnership in an
amount the court finds equitable:
(1) reasonable attorney's fees; and
(2) fees and expenses of appraisers or other experts for a party
to the action.
(d) The redemption of a transferee's interest under Sections
152.611(a) and (b) may be deferred as determined by the court if
the partnership establishes to the satisfaction of the court that
failure to defer redemption will cause undue hardship to the
partnership business.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
SUBCHAPTER I. SUPPLEMENTAL WINDING UP AND TERMINATION PROVISIONS
Sec. 152.701. EFFECT OF EVENT REQUIRING WINDING UP. On the
occurrence of an event requiring winding up of a partnership
business under Section 11.051 or 11.057:
(1) the partnership continues until the winding up of its
business is completed, at which time the partnership is
terminated; and
(2) the relationship among the partners is changed as provided
by this subchapter.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 152.702. PERSONS ELIGIBLE TO WIND UP PARTNERSHIP BUSINESS.
(a) After the occurrence of an event requiring a winding up of a
partnership business, the partnership business may be wound up
by:
(1) the partners who have not withdrawn;
(2) the legal representative of the last surviving partner; or
(3) a person appointed by the court to carry out the winding up
under Subsection (b).
(b) On application of a partner, a partner's legal
representative or transferee, or a withdrawn partner whose
interest is not redeemed under Section 152.608, a court, for good
cause, may appoint a person to carry out the winding up and may
make an order, direction, or inquiry that the circumstances
require.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 152.703. RIGHTS AND DUTIES OF PERSON WINDING UP PARTNERSHIP
BUSINESS. (a) To the extent appropriate for winding up, as soon
as reasonably practicable, and in the name of and for and on
behalf of the partnership, a person winding up a partnership's
business may take the actions specified in Sections 11.052,
11.053, and 11.055.
(b) Section 11.052(a)(2) shall not be applicable to a
partnership.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 152.704. BINDING EFFECT OF PARTNER'S ACTION AFTER EVENT
REQUIRING WINDING UP. After the occurrence of an event requiring
winding up of the partnership business, a partnership is bound by
a partner's act that:
(1) is appropriate for winding up; or
(2) would bind the partnership under Sections 152.301 and
152.302 before the occurrence of the event requiring winding up,
if the other party to the transaction does not have notice that
an event requiring winding up has occurred.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 152.705. PARTNER'S LIABILITY TO OTHER PARTNERS AFTER EVENT
REQUIRING WINDING UP. (a) Except as provided by Subsection (b),
after the occurrence of an event requiring winding up of the
partnership business, the losses with respect to which a partner
must contribute under Section 152.708(a) include losses from a
liability incurred under Section 152.704.
(b) A partner who incurs, with notice that an event requiring a
winding up of the partnership business has occurred, a
partnership liability under Section 152.704(2) by an act that is
not appropriate for winding up is liable to the partnership for a
loss caused to the partnership arising from that liability.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 152.706. DISPOSITION OF ASSETS. (a) In winding up the
partnership business, the property of the partnership, including
any required contributions of the partners under Sections 152.707
and 152.708, shall be applied to discharge its obligations to
creditors, including partners who are creditors other than in the
partners' capacities as partners.
(b) A surplus shall be applied to pay in cash the net amount
distributable to partners in accordance with their right to
distributions under Section 152.707.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 152.707. SETTLEMENT OF ACCOUNTS. (a) Each partner is
entitled to a settlement of all partnership accounts on winding
up the partnership business.
(b) In settling accounts among the partners, the partnership
interest of a withdrawn partner that is not redeemed under
Subchapter H is credited with a share of any profits for the
period after the partner's withdrawal but is charged with a share
of losses for that period only to the extent of profits credited
for that period.
(c) The profits and losses that result from the liquidation of
the partnership property must be credited and charged to the
partners' capital accounts.
(d) The partnership shall make a distribution to a partner in an
amount equal to that partner's positive balance in the partner's
capital account. Except as provided by Section 152.304(b) or
152.801, a partner shall contribute to the partnership an amount
equal to that partner's negative balance in the partner's capital
account.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 152.708. CONTRIBUTIONS TO DISCHARGE OBLIGATIONS. (a)
Except as provided by Sections 152.304(b) and 152.801, to the
extent not taken into account in settling the accounts among
partners under Section 152.707:
(1) each partner shall contribute, in the proportion in which
the partner shares partnership losses, the amount necessary to
satisfy partnership obligations, excluding liabilities that
creditors have agreed may be satisfied only with partnership
property without recourse to individual partners;
(2) if a partner fails to contribute, the other partners shall
contribute the additional amount necessary to satisfy the
partnership obligations in the proportions in which the partners
share partnership losses; and
(3) a partner or partner's legal representative may enforce or
recover from the other partners, or from the estate of a deceased
partner, contributions the partner or estate makes to the extent
the amount contributed exceeds that partner's or the estate's
share of the partnership obligations.
(b) The estate of a deceased partner is liable for the partner's
obligation to contribute to the partnership.
(c) The following persons may enforce the obligation of a
partner or the estate of a deceased partner to contribute to a
partnership:
(1) the partnership;
(2) an assignee for the benefit of creditors of a partnership or
a partner; or
(3) a person appointed by a court to represent creditors of a
partnership or a partner.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Sec. 152.709. CANCELLATION OR REVOCATION OF EVENT REQUIRING
WINDING UP; CONTINUATION OF PARTNERSHIP. (a) If a partnership
has a period of duration, is for a particular undertaking, or is
required under its partnership agreement to wind up the
partnership on occurrence of a specified event, all of the
partners in the partnership may cancel under Section 11.152 an
event requiring a winding up specified in Section 11.051(1) or
(3), or Section 11.057(c)(1), by agreeing to continue the
partnership business notwithstanding the expiration of the
partnership's period of duration, the completion of the
undertaking, or the occurrence of the event, as appropriate,
other than the withdrawal of a partner. On reaching that
agreement, the event requiring a winding up is canceled, the
partnership is continued, and the partnership agreement is
considered amended to provide that the expiration, the
completion, or the occurrence of the event did not result in an
event requiring winding up of the partnership.
(b) A continuation of the business for 90 days by the partners
or those who habitually acted in the business during the
partnership's period of duration or the undertaking or preceding
the event, without a settlement or liquidation of the partnership
business and without objection from a partner, is prima facie
evidence of agreement by all partners to continue the business
under Subsection (a).
(c) All of the partners of a partnership, by agreeing to
continue the partnership, may cancel under Section 11.152 an
event requiring winding up specified in Section 11.057(d) that
arises from a request to wind up from a partner.
(d) To approve a revocation under Section 11.151 by a
partnership of a voluntary decision to wind up pursuant to the
express will of all the partners as specified in Section
11.057(b), prior to completion of the winding up process, all the
partners must agree in writing to revoke the voluntary decision
to wind up and to continue the business of the partnership.
(e) To approve a revocation under Section 11.151 by a
partnership of a voluntary decision to wind up pursuant to the
express will of a majority-in-interest of the partners as
specified in Section 11.057(a), prior to completion of the
winding up process, a majority-in-interest of the partners must
agree in writing to revoke the voluntary decision to wind up and
to continue the business of the partnership.
(f) All of the partners of a partnership, by agreeing to
continue the partnership, may cancel under Section 11.152 an
event requiring winding up specified in Section 11.057(c)(3) that
arises from the sale of all or substantially all of the property
of the partnership.
Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
688, Sec. 112, eff. September 1, 2007.
Sec. 152.710. REINSTATEMENT. To approve a reinstatement of a
partnership under Section 11.202, all remaining partners, or
anot