TITLE 7
Corporations, Associations, and Partnerships

CHAPTER 7-13
Limited Partnerships

SECTION 7-13-37


§ 7-13-37 Limitations on distribution.

(a) A limited partnership shall not make a distribution to a partner to the extent that at the time of the distribution, after giving effect to the distribution, all liabilities of the limited partnership, other than liabilities to partners on account of their partnership interests and liabilities for which the recourse of creditors is limited to specified property of the limited partnership, exceed the fair value of the assets of the limited partnership, except that the fair value of property that is subject to a liability for which the recourse of creditors is limited shall be included in the assets of the limited partnership only to the extent that the fair value of that property exceeds that liability.

(b) A limited partner who received a distribution in violation of subsection (a), and who knew or reasonably should have known at the time of the distribution that the distribution violated subsection (a), is liable to the limited partnership for the amount of the distribution. A limited partner who receives a distribution in violation of subsection (a) and who did not know and reasonably should not have known at the time of the distribution that the distribution violated subsection (a), is not liable for the amount of the distribution. Subject to subsection (c), this subsection does not affect any obligation or liability of a limited partner under a partnership agreement or other applicable law for the amount of a distribution.

(c) Unless otherwise agreed, a limited partner who received a distribution from a limited partnership has no liability under this chapter or other applicable law for the amount of the distribution after the expiration of three (3) years from the date of the distribution.

History of Section.
(P.L. 1985, ch. 390, § 2; P.L. 1989, ch. 379, § 1.)