Ohio Code 1776.24 – Partner contributions – penalties for failure to contribute
(A) The contribution of a partner may be in cash, property, or services rendered, or a promissory note or other obligation to contribute cash or property or to perform services.
Terms Used In Ohio Code 1776.24
- Appraisal: A determination of property value.
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Partner: means a person admitted to a partnership as a partner. See Ohio Code 1776.01
- 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 two or more persons to carry on as co-owners a business for-profit formed under section 1776. See Ohio Code 1776.01
- Partnership agreement: means the agreement among the partners concerning the partnership, whether written, oral, or implied. See Ohio Code 1776.01
- Property: means all property, real, personal, or mixed, tangible or intangible, or any interest therein. See Ohio Code 1776.01
(B) A partner is obligated to the partnership to perform any promise to contribute cash, property, or services even if the partner is unable to perform because of death, disability, or any other reason. If a partner does not make the required contribution of property or services, the partner is obligated, at the option of the partnership, to contribute cash equal to the value of the contribution that has not been made. The foregoing option is in addition to, and not in lieu of, any other rights, including the right to specific performance, that the partnership may have against a partner under the partnership agreement or applicable law.
(C) A partnership agreement may provide that the partnership interest of any partner who fails to make any required contribution is subject to specified penalties for, or specified consequences of, that failure. The penalty or consequence may take the form of reducing or eliminating the defaulting partner’s interest in the partnership, subordinating the partner’s partnership interest to that of nondefaulting partners, a forced sale of the partner’s partnership interest, forfeiture of the partner’s partnership interest, the lending by other partners of the amount necessary to meet the partner’s commitment, a fixing of the value of the partner’s partnership interest by appraisal or by formula and the redemption or sale of the partner’s partnership interest at that value, or any other penalty or consequence.