Delaware Code Title 6 Sec. 15-503 – Transfer of partner’s economic interest
(a) A transfer, in whole or in part, of a partner‘s economic interest in the partnership:
(1) Is permissible;
(2) Does not by itself cause the partner’s dissociation or a dissolution and winding up of the partnership business or affairs; and
(3) Does not entitle the transferee to participate in the management or conduct of the partnership business or affairs, to require access to information concerning partnership transactions, or to inspect or copy the partnership books or records.
Terms Used In Delaware Code Title 6 Sec. 15-503
- Business: includes every trade, occupation and profession, the holding or ownership of property and any other activity for profit. See Delaware Code Title 6 Sec. 15-101
- Certificate: means a certificate of conversion to partnership under § 15-901 of this title, a certificate of conversion to a non-Delaware entity under § 15-903 of this title, a certificate of merger or consolidation or a certificate of ownership and merger under § 15-902 of this title, a certificate of partnership domestication under § 15-904 of this title, a certificate of transfer and a certificate of transfer and domestic continuance under § 15-905 of this title, a certificate of correction and a corrected certificate under § 15-118 of this title, and a certificate of termination of a certificate with a future effective date or time and a certificate of amendment of a certificate with a future effective date or time under § 15-105(i) of this title. See Delaware Code Title 6 Sec. 15-101
- Economic interest: means a partner's share of the profits and losses of a partnership and the partner's right to receive distributions. See Delaware Code Title 6 Sec. 15-101
- Equitable: Pertaining to civil suits in "equity" rather than in "law." In English legal history, the courts of "law" could order the payment of damages and could afford no other remedy. See damages. A separate court of "equity" could order someone to do something or to cease to do something. See, e.g., injunction. In American jurisprudence, the federal courts have both legal and equitable power, but the distinction is still an important one. For example, a trial by jury is normally available in "law" cases but not in "equity" cases. Source: U.S. Courts
- Partner: means a person who is admitted to a partnership as a partner of the partnership. See Delaware Code Title 6 Sec. 15-101
- 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: means an association of 2 or more persons formed under § 15-202 of this title, predecessor law or comparable law of another jurisdiction to carry on any business, purpose or activity. See Delaware Code Title 6 Sec. 15-101
- Partnership agreement: means the agreement, whether written, oral or implied, among the partners concerning the partnership, including amendments to the partnership agreement. See Delaware Code Title 6 Sec. 15-101
- Partnership interest: means a partner's share of the profits and losses of a limited partnership and the right to receive distributions of partnership assets. See Delaware Code Title 6 Sec. 17-101
- Transfer: includes an assignment, conveyance, lease, mortgage, deed, and encumbrance. See Delaware Code Title 6 Sec. 15-101
(b) A transferee of a partner’s economic interest in the partnership has a right:
(1) To receive, in accordance with the transfer, distributions to which the transferor would otherwise be entitled;
(2) To receive upon the dissolution and winding up of the partnership business or affairs, in accordance with the transfer, the net amount otherwise distributable to the transferor; and
(3) To seek under § 15-801(6) of this title a judicial determination that it is equitable to wind up the partnership business or affairs.
(c) In a dissolution and winding up, a transferee is entitled to an account of partnership transactions only from the date of the latest account agreed to by all of the partners.
(d) Upon transfer, the transferor retains the rights and duties of a partner other than the economic interest transferred.
(e) A partnership need not give effect to a transferee’s rights under this section until it has notice of the transfer. Upon request of a partnership or a partner, a transferee must furnish reasonable proof of a transfer.
(f) A transfer of a partner’s economic interest in the partnership in violation of a restriction on transfer contained in a partnership agreement is ineffective.
(g) Notwithstanding anything to the contrary under applicable law, a partnership agreement may provide that a partner’s economic interest may not be transferred prior to the dissolution and winding up of the partnership.
(h) A partnership interest in a partnership may be evidenced by a certificate of partnership interest issued by the partnership. A partnership agreement may provide for the transfer of any partnership interest represented by such a certificate and make other provisions with respect to such certificates. A partnership shall not have the power to issue a certificate of partnership interest in bearer form.
(i) Except to the extent assumed by agreement, until a transferee of a partnership interest becomes a partner, the transferee shall have no liability as a partner solely as a result of the transfer.
(j) A partnership may acquire, by purchase, redemption or otherwise, any partnership interest or other interest of a partner in the partnership. Any such interest so acquired by the partnership shall be deemed canceled.
72 Del. Laws, c. 151, § ?1; 73 Del. Laws, c. 85, § ?12; 76 Del. Laws, c. 106, § ?10;