Iowa Code 486A.602 – Partner’s power to dissociate — wrongful dissociation
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1. A partner has the power to dissociate at any time, rightfully or wrongfully, by express will pursuant to section 486A.601, subsection 1.
Terms Used In Iowa Code 486A.602
- 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.
- Business: includes every trade, occupation, and profession. See Iowa Code 486A.101
- Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
- following: when used by way of reference to a chapter or other part of a statute mean the next preceding or next following chapter or other part. See Iowa Code 4.1
- 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: means an association of two or more persons to carry on as co-owners a business for profit formed under section 486A. See Iowa Code 486A.101
- 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.
- undertaking: means a promise or security in any form. See Iowa Code 4.1
2. A partner’s dissociation is wrongful only if any of the following applies:
a. It is in breach of an express provision of the partnership agreement.
b. In the case of a partnership for a definite term or particular undertaking, before the expiration of the term or the completion of the undertaking if any of the following occur:
(1) The partner withdraws by express will, unless the withdrawal follows within ninety days after another partner’s dissociation by death or otherwise under section 486A.601, subsections 6 through 10, or wrongful dissociation under this subsection.
(2) The partner is expelled by judicial determination under section 486A.601, subsection 5.
(3) The partner is dissociated by becoming a debtor in bankruptcy.
(4) In the case of a partner who is not an individual, trust other than a business trust, or estate, the partner is expelled or otherwise dissociated because it willfully dissolved or terminated.
3. A partner who wrongfully dissociates is liable to the partnership and to the other partners for damages caused by the dissociation. The liability is in addition to any other obligation of the partner to the partnership or to the other partners.