(a) A person does not have a right to dissociate as a limited partner before the dissolution and winding up of the limited partnership.
Terms Used In Alabama Code 10A-9A-6.01
Bankruptcy: Refers to statutes and judicial proceedings involving persons or businesses that cannot pay their debts and seek the assistance of the court in getting a fresh start. Under the protection of the bankruptcy court, debtors may discharge their debts, perhaps by paying a portion of each debt. Bankruptcy judges preside over these proceedings.
Guardian: A person legally empowered and charged with the duty of taking care of and managing the property of another person who because of age, intellect, or health, is incapable of managing his (her) own affairs.
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) with respect to a limited partnership, a person that: (i) is admitted as a limited partner under Section 10A-9A-3. See Alabama Code 10A-9A-1.02
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.
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 any agreement (whether referred to as a partnership agreement or otherwise), written, oral or implied, of the partners as to the activities and affairs of a limited partnership. See Alabama Code 10A-9A-1.02
person: includes a corporation as well as a natural person. See Alabama Code 1-1-1
property: includes both real and personal property. See Alabama Code 1-1-1
transfer: means an assignment, conveyance, deed, bill of sale, lease, mortgage, security interest, encumbrance, gift, or transfer by operation of law. See Alabama Code 10A-9A-1.02
TRANSFERABLE INTEREST: means a partner's right to receive distributions from a limited partnership. See Alabama Code 10A-9A-1.02
transferee: means a person to which all or part of a transferable interest has been transferred, whether or not the transferor is a partner. See Alabama Code 10A-9A-1.02
Trustee: A person or institution holding and administering property in trust.
(b) A person is dissociated from a limited partnership as a limited partner upon the occurrence of any of the following events:
(1) an event stated in the partnership agreement as causing the person’s dissociation as a limited partner;(2) the person is expelled as a limited partner pursuant to the partnership agreement;(3) the person is expelled as a limited partner by the unanimous consent of the other partners if:
(A) it is unlawful to carry on the limited partnership’s activities and affairs with the person as a limited partner;(B) there has been a transfer of all of the person’s transferable interest in the limited partnership, other than a transfer for security purposes;(C) the person is an organization and, within 90 days after the limited partnership notifies the person that it will be expelled as a limited partner because it has filed a statement of dissolution or the equivalent, or its right to conduct activities and affairs has been suspended by its jurisdiction of formation, the statement of dissolution or the equivalent has not been revoked or its right to conduct activities and affairs has not been reinstated; or(D) the person is an organization and, within 90 days after the limited partnership notifies the person that it will be expelled as a limited partner because the person has been dissolved and its activities and affairs are being wound up, the organization has not been reinstated or the dissolution and winding up have not been revoked or cancelled;(4) on application by the limited partnership, the person is expelled as a limited partner by judicial order because the person:
(A) has engaged, or is engaging, in wrongful conduct that has adversely and materially affected, or will adversely and materially affect, the limited partnership’s activities and affairs;(B) has willfully or persistently committed, or is willfully or persistently committing, a material breach of the partnership agreement or the person’s duty or obligation under this chapter or other applicable law; or(C) has engaged, or is engaging, in conduct relating to the activities and affairs of the limited partnership that makes it not reasonably practicable to carry on the activities and affairs with the person as limited partner;(5) in the case of a person who is an individual, the person dies, there is appointed a guardian or general conservator for the person or there is a judicial determination that the person has otherwise become incapable of performing the person’s duties as a limited partner under this chapter or the partnership agreement;(6) the person becomes a debtor in bankruptcy, executes an assignment for the benefit of creditors, or seeks, consents, or acquiesces to the appointment of a trustee, receiver, or liquidator of the person or of all or substantially all of the person’s property, but this subsection (6) shall not apply to a person who is the sole remaining limited partner of the limited partnership;(7) in the case of a person that is a trust or is acting as a limited partner by virtue of being a trustee of a trust, the trust’s entire transferable interest in the limited partnership is distributed, but not solely by reason of the substitution of a successor trustee;(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, but not solely by reason of the substitution of a successor personal representative;(9) in the case of a person that is not an individual, the legal existence of the person otherwise terminates;(10) the transfer of a limited partner’s entire remaining transferable interest to another partner;(11) the transfer of a limited partner’s entire remaining transferable interest to a transferee upon the transferee’s becoming a partner; or(12) the limited partnership’s participation in a conversion or merger under Article 10 of this chapter or Article 8 of Chapter 1 if the limited partnership:
(A) is not the converted or surviving entity; or(B) is the converted or surviving entity but, as a result of the conversion or merger, the person ceases to be a limited partner.
