North Carolina General Statutes 59-70. Rules for distribution
In settling accounts between the partners after dissolution, the following rules shall be observed, subject to any agreement to the contrary:
(1) The assets of the partnership are all of the following:
a. The partnership property.
b. The contributions of the partners necessary for the payment of all the liabilities specified in subdivision (2) of this section.
Terms Used In North Carolina General Statutes 59-70
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- following: when used by way of reference to any section of a statute, shall be construed to mean the section next preceding or next following that in which such reference is made; unless when some other section is expressly designated in such reference. See North Carolina General Statutes 12-3
- Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
- Lien: A claim against real or personal property in satisfaction of a debt.
- 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.
- property: shall include all property, both real and personal. See North Carolina General Statutes 12-3
(2) The liabilities of the partnership rank in order of payment, as follows:
a. Those owing to creditors other than partners.
b. Those owing to partners other than for capital and profits.
c. Those owing to partners in respect of capital.
d. Those owing to partners in respect of profits.
(3) The assets shall be applied in the order of their declaration in subdivision (1) of this section to the satisfaction of the liabilities.
(4) The partners shall contribute, as provided by N.C. Gen. Stat. § 59-48(1), the amount necessary to satisfy any liabilities incurred when the partnership was not a registered limited liability partnership; but if any, but not all, of the partners are insolvent, or, not being subject to process, refuse to contribute, the other partners shall contribute their share of these liabilities, and, in the relative proportions in which they share the profits, the additional amount necessary to pay these liabilities.
(5) An assignee for the benefit of creditors or any person appointed by the court has the right to enforce the contributions specified in subdivision (4) of this section.
(6) A partner has the right to enforce the contributions specified in subdivision (4) of this section to the extent of the amount that the partner has paid in excess of the partner’s share of the liability.
(7) The individual property of a deceased partner is subject to the contributions specified in subdivision (4) of this section.
(8) When partnership property and the individual properties of the partners are in possession of a court for distribution, partnership creditors have priority on partnership property and separate creditors have priority on individual property, saving the rights of lien or secured creditors.
(9) Where a partner has become bankrupt or the partner’s estate is insolvent, the claims against the separate property rank in the following order:
a. Those owing to separate creditors.
b. Those owing to partnership creditors.
c. Those owing to partners by way of contribution. (1941, c. 374, s. 40; 2022-64, s. 4(b).)