Rhode Island General Laws 7-13.1-702. Transfer of transferable interest
(a) A transfer, in whole or in part, of a transferable interest:
(1) Is permissible;
(2) Does not by itself cause a person‘s dissociation as a partner or a dissolution and winding up of the limited partnership‘s activities and affairs; and
(3) Subject to § 7-13.1-704, does not entitle the transferee to:
(i) Participate in the management or conduct of the partnership’s activities and affairs; or
(ii) Except as otherwise provided in subsection (c) of this section, have access to required information, records, or other information concerning the partnership’s activities and affairs.
Terms Used In Rhode Island General Laws 7-13.1-702
- Limited partner: means a person that:
(i) Has become a limited partner under Rhode Island General Laws 7-13.1-102
- Partner: means a limited partner or general partner. See Rhode Island General Laws 7-13.1-102
- Partnership: A voluntary contract between two or more persons to pool some or all of their assets into a business, with the agreement that there will be a proportional sharing of profits and losses.
- Partnership agreement: means the agreement, whether or not referred to as a partnership agreement and whether oral, implied, in a record, or in any combination thereof, of all the partners of a limited partnership concerning the matters described in Rhode Island General Laws 7-13.1-102
- Person: means an individual, business corporation, nonprofit corporation, partnership, limited partnership, limited liability company, general cooperative association, limited cooperative association, unincorporated nonprofit association, cooperative housing corporation, workers' cooperative, producers' cooperative, consumer's cooperative, statutory trust, business trust, common-law business trust, estate, trust, association, joint venture, public corporation, government or governmental subdivision, agency, or instrumentality, or any other legal or commercial entity. See Rhode Island General Laws 7-13.1-102
- Required information: means the information that a limited partnership is required to maintain under Rhode Island General Laws 7-13.1-102
- Transfer: includes :
(i) An assignment;
(ii) A conveyance;
(iii) A sale;
(iv) A lease;
(v) An encumbrance, including a mortgage or security interest;
(vi) A gift; and
(vii) A transfer by operation of law. See Rhode Island General Laws 7-13.1-102
- Transferable interest: means the right, as initially owned by a person in the person's capacity as a partner, to receive distributions from a limited partnership, whether or not the person remains a partner or continues to own any part of the right. See Rhode Island General Laws 7-13.1-102
- Transferee: means a person to which all or part of a transferable interest has been transferred, whether or not the transferor is a partner. See Rhode Island General Laws 7-13.1-102
(b) A transferee has the right to receive, in accordance with the transfer, distributions to which the transferor would otherwise be entitled.
(c) In a dissolution and winding up of a limited partnership, a transferee is entitled to an account of the partnership’s transactions only from the date of dissolution.
(d) A transferable interest may be evidenced by a certificate of the interest issued by a limited partnership in a record, and, subject to this section, the interest represented by the certificate may be transferred by a transfer of the certificate.
(e) A limited partnership need not give effect to a transferee’s rights under this section until the partnership knows or has notice of the transfer.
(f) A transfer of a transferable interest in violation of a restriction on transfer contained in the partnership agreement is ineffective if the intended transferee has knowledge or notice of the restriction at the time of transfer.
(g) Except as otherwise provided in §§ 7-13.1-601(b)(4)(ii) and 7-13.1-603(4)(ii), if a general or limited partner transfers a transferable interest, the transferor retains the rights of a general or limited partner other than the transferable interest transferred and retains all the duties and obligations of a general or limited partner.
(h) If a general or limited partner transfers a transferable interest to a person that becomes a general or limited partner with respect to the transferred interest, the transferee is liable for the transferor’s obligations under § 7-13.1-502 and § 7-13.1-505 known to the transferee when the transferee becomes a partner.
History of Section.
P.L. 2022, ch. 121, § 2, effective January 1, 2023; P.L. 2022, ch. 122, § 2, effective January 1, 2023.