Arizona Laws 29-338. Liability on return of contribution
A. If a partner has received the return of any part of his contribution without violation of the partnership agreement or this chapter, he is liable to the limited partnership for a period of one year thereafter for the amount of the returned contribution, but only to the extent necessary to discharge the limited partnership’s liabilities to creditors who extended credit to the limited partnership during the period the contribution was held by the partnership.
Terms Used In Arizona Laws 29-338
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Contribution: means any cash, property, services rendered, or promissory note or other binding obligation to contribute cash or property or to perform services, which a partner contributes to a limited partnership in his capacity as a partner. See Arizona Laws 29-301
- Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
- Partner: means a limited or general partner. See Arizona Laws 29-301
- 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 valid agreement, written or oral, of the partners as to the affairs of a limited partnership and the conduct of its business. See Arizona Laws 29-301
B. If a partner has received the return of any part of his contribution in violation of the partnership agreement or this chapter, he is liable to the limited partnership for a period of six years thereafter for the amount of the contribution wrongfully returned.
C. A partner receives a return of his contribution to the extent that a distribution to him reduces his share of the fair value of the net assets of the limited partnership below the value as set forth in the partnership records required to be kept pursuant to section 29-305 of his contribution which has not been distributed to him.