Arizona Laws 29-1077. Settlement of accounts and contributions among partners
A. In winding up a partnership‘s business, the assets of the partnership, including the contributions of the partners required by this section, shall be applied to discharge its obligations to creditors, including, to the extent permitted by law, partners who are creditors. Any surplus shall be applied to pay in cash the net amount distributable to partners in accordance with their right to distributions under subsection B of this section.
Terms Used In Arizona Laws 29-1077
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Business: includes every trade, occupation and profession. See Arizona Laws 29-1001
- Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
- Distribution: means a transfer of money or other property from a partnership to a partner in the partner's capacity as a partner or to the partner's transferee. See Arizona Laws 29-1001
- including: means not limited to and is not a term of exclusion. See Arizona Laws 1-215
- 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 general partner and, for purposes of article 9 of this chapter, both a general partner and a limited partner. See Arizona Laws 29-1001
- 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: means an association or entity formed under section 29-1012, a predecessor law or a comparable law of another jurisdiction. See Arizona Laws 29-1001
- Person: means an individual, corporation, business trust, estate, trust, partnership, association, joint venture, government, governmental subdivision, agency or instrumentality or any other legal or commercial entity. See Arizona Laws 29-1001
- Settlement: Parties to a lawsuit resolve their difference without having a trial. Settlements often involve the payment of compensation by one party in satisfaction of the other party's claims.
B. Each partner is entitled to a settlement of all partnership accounts on winding up the partnership business. In settling accounts among the partners, the profits and losses during the period of winding up, including those profits and losses that result from the liquidation of the partnership assets, shall be credited and charged to the partners’ accounts. The partnership shall make a distribution to a partner in an amount equal to any excess of the credits over the charges in the partner’s account. A partner shall contribute to the partnership an amount equal to any excess of the charges over the credits in the partner’s account except that in determining such excess, charges attributable to obligations for which the partner is personally liable under section 29-1026 shall not be considered. Damages for wrongful dissociation under section 29-1052, subsection B and all other amounts owing, whether or not presently due, from the partner to the partnership shall be offset against the amounts distributable to the partner and shall increase the amount that must be contributed by the partner pursuant to this section.
C. If a partner fails to contribute the full amount required under subsection B of this section, each of the other partners shall contribute, in the proportion in which the partner shares partnership losses, the additional amount necessary to satisfy any partnership obligations. A partner or partner’s legal representative may recover from the other partners any contributions that the partner or legal representative makes to the extent the amount contributed exceeds that partner’s share of the partnership obligations for which the partner is liable under section 29-1026.
D. After the settlement of accounts, each partner shall contribute, in the proportion in which the partner shares partnership losses, the amount necessary to satisfy partnership obligations or the amounts of obligations that were not known at the time of the settlement.
E. The estate of a deceased partner is liable for the partner’s obligation to contribute to the partnership.
F. An assignee for the benefit of creditors of a partnership or a partner, or a person appointed by a court to represent creditors of a partnership or a partner, may enforce a partner’s obligation to contribute to the partnership.
G. A person who was a partner at any time within ninety days before the commencement of winding up is a partner for the purposes of this section.