N.Y. Partnership Law 121-702 – Assignment of partnership interest
§ 121-702. Assignment of partnership interest. (a) Except as provided in the partnership agreement,
Terms Used In N.Y. Partnership Law 121-702
- Lien: A claim against real or personal property in satisfaction of a debt.
- Partner: means a limited or general partner. See N.Y. Partnership Law 121-101
- 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 agreement: means any written agreement of the partners as to the affairs of a limited partnership and the conduct of its business. See N.Y. Partnership Law 121-101
- Partnership interest: means : (i) a partner's share of the profits and losses of a limited partnership; and (ii) a partner's right to receive distributions. See N.Y. Partnership Law 121-101
- Uniform Commercial Code: A set of statutes enacted by the various states to provide consistency among the states' commercial laws. It includes negotiable instruments, sales, stock transfers, trust and warehouse receipts, and bills of lading. Source: OCC
(1) A partnership interest is assignable in whole or in part;
(2) An assignment of a partnership interest does not dissolve a limited partnership or entitle the assignee to become or to exercise any rights or powers of a partner;
(3) The only effect of an assignment is to entitle the assignee to receive, to the extent assigned, the distributions and allocations of profits and losses to which the assignor would be entitled; and
(4) A partner ceases to be a partner and to have the power to exercise any rights or powers of a partner upon assignment of all of his partnership interest. Unless otherwise provided in the partnership agreement, the pledge of, or the granting of a security interest, lien or other encumbrance in or against, any or all of the partnership interest of a partner shall not cause the partner to cease to be a partner or to have the power to exercise any rights or powers of a partner.
(b) The partnership agreement may provide that a limited partner's interest may be evidenced by a certificate issued by the partnership and may also provide for the assignment or transfer of any of the interest represented by such a certificate. A limited partner's interest may be a certificated security or an uncertificated security within the meaning of section 8–102 of the uniform commercial code if the requirements of section 8–103(c) are met, and if the requirements are not met shall be deemed to be a general intangible.
(c) Unless otherwise provided in a partnership agreement and except to the extent assumed by agreement, until an assignee of a partnership interest becomes a partner, the assignee shall have no liability as a partner solely as a result of the assignment.