§ 7-12.1-503. 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 partnership business; and
(3) Subject to § 7-12.1-505, does not entitle the transferee to:
(i) Participate in the management or conduct of the partnership’s business; or
(ii) Except as otherwise provided in subsection (c) of this section, have access to records or other information concerning the partnership’s business.
(b) A transferee has the right to:
(1) Receive, in accordance with the transfer, distributions to which the transferor would otherwise be entitled; and
(2) Seek under § 7-12.1-801(5) a judicial determination that it is equitable to wind up the partnership business.
(c) In a dissolution and winding up of a partnership, a transferee is entitled to an account of the partnership’s transactions only from the date of dissolution.
(d) A partnership need not give effect to a transferee’s rights under this section until the partnership knows or has notice of the transfer.
(e) 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.
(f) Except as otherwise provided in § 7-12.1-601(4)(ii), if a partner transfers a transferable interest, the transferor retains the rights of a partner other than the transferable interest transferred and retains all the duties and obligations of a partner.
(g) If a partner transfers a transferable interest to a person that becomes a partner with respect to the transferred interest, the transferee is liable for the partner’s obligations under §§ 7-12.1-404 and 7-12.1-407 known to the transferee when the transferee becomes a partner.
History of Section.
P.L. 2022, ch. 123, § 2, effective January 1, 2023; P.L. 2022, ch. 124, § 2, effective
January 1, 2023.