Rhode Island General Laws 7-13.1-601. Dissociation as limited partner
(a) A person does not have a right to dissociate as a limited partner before the completion of the winding up of the limited partnership.
Terms Used In Rhode Island General Laws 7-13.1-601
- Inter vivos: Transfer of property from one living person to another living person.
- Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
- Limited partner: means a person that:
(i) Has become a limited partner under Rhode Island General Laws 7-13.1-102
- 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 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
- 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
- Trustee: A person or institution holding and administering property in trust.
(b) A person is dissociated as a limited partner when:
(1) The limited partnership knows or has notice of the person’s express will to withdraw as a limited partner, but, if the person has specified a withdrawal date later than the date the partnership knew or had notice, on that later date;
(2) An event stated in the partnership agreement as causing the person’s dissociation as a limited partner occurs;
(3) The person is expelled as a limited partner pursuant to the partnership agreement;
(4) The person is expelled as a limited partner by the affirmative vote or consent of all the other partners if:
(i) It is unlawful to carry on the limited partnership’s activities and affairs with the person as a limited partner;
(ii) There has been a transfer of all the person’s transferable interest in the partnership, other than:
(A) A transfer for security purposes; or
(B) A charging order in effect under § 7-13.1-703 which has not been foreclosed;
(iii) The person is an entity and:
(A) The partnership notifies the person that it will be expelled as a limited partner because the person has filed a statement of dissolution or the equivalent, the person has been administratively dissolved, the person’s charter or the equivalent has been revoked, or the person’s right to conduct business has been suspended by the person’s jurisdiction of formation; and
(B) Not later than ninety (90) days after the notification, the statement of dissolution or the equivalent has not been withdrawn, rescinded, or revoked, the person has not been reinstated, or the person’s charter or the equivalent or right to conduct business has not been reinstated; or
(iv) The person is an unincorporated entity that has been dissolved and whose activities and affairs are being wound up;
(5) On application by the limited partnership or a partner in a direct action under § 7-13.1-901, the person is expelled as a limited partner by judicial order because the person:
(i) Has engaged or is engaging in wrongful conduct that has affected adversely and materially, or will affect adversely and materially, the partnership’s activities and affairs;
(ii) Has committed willfully or persistently, or is committing willfully and persistently, a material breach of the partnership agreement or the contractual obligation of good faith and fair dealing under § 7-13.1-305(a); or
(iii) Has engaged or is engaging in conduct relating to the partnership’s activities and affairs which makes it not reasonably practicable to carry on the activities and affairs with the person as a limited partner;
(6) In the case of an individual, the individual dies;
(7) In the case of a person that is a testamentary or inter vivos trust or is acting as a limited partner by virtue of being a trustee of such a trust, the trust’s entire transferable interest in the limited partnership is distributed;
(8) In the case of a person that is an estate or is acting as a limited partner by virtue of being a personal representative of an estate, the estate’s entire transferable interest in the limited partnership is distributed;
(9) In the case of a person that is not an individual, the existence of the person terminates;
(10) The limited partnership participates in a merger under part 11 of this chapter and:
(i) The partnership is not the surviving entity; or
(ii) Otherwise as a result of the merger, the person ceases to be a limited partner;
(11) The limited partnership participates in an interest exchange under part 11 of this chapter and, as a result of the interest exchange, the person ceases to be a limited partner;
(12) The limited partnership participates in a conversion under part 11 of this chapter;
(13) The limited partnership participates in a domestication under part 11 of this chapter and, as a result of the domestication, the person ceases to be a limited partner; or
(14) The limited partnership dissolves and completes winding up.
History of Section.
P.L. 2022, ch. 121, § 2, effective January 1, 2023; P.L. 2022, ch. 122, § 2, effective January 1, 2023.