Iowa Code 488.702 – Transfer of partner’s transferable interest
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1. All of the following apply to a transfer, in whole or in part, of a partner‘s transferable interest:
a. It is permissible.
b. It does not by itself cause the partner’s dissociation or a dissolution and winding up of the limited partnership‘s activities.
c. It does not, as against the other partners or the limited partnership, entitle the transferee to participate in the management or conduct of the limited partnership’s activities, to require access to information concerning the limited partnership’s transactions except as otherwise provided in subsection 3, or to inspect or copy the required information or the limited partnership’s other records.
Terms Used In Iowa Code 488.702
- 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
- Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
- Partner: means a limited partner or general partner. See Iowa Code 488.102
- 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 the partners' agreement, whether oral, implied, in a record, or in any combination, concerning the limited partnership. See Iowa Code 488.102
- Person: means an individual, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture, or government; governmental subdivision, agency, or instrumentality; public corporation; or any other legal or commercial entity. See Iowa Code 488.102
- Required information: means the information that a limited partnership is required to maintain under section 488. See Iowa Code 488.102
- Transfer: includes an assignment, conveyance, deed, bill of sale, lease, mortgage, security interest, encumbrance, gift, and transfer by operation of law. See Iowa Code 488.102
- Transferable interest: means a partner's right to receive distributions. See Iowa Code 488.102
- 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 Iowa Code 488.102
2. A transferee has a right to receive, in accordance with the transfer, all of the following:
a. Distributions to which the transferor would otherwise be entitled.
b. Upon the dissolution and winding up of the limited partnership’s activities, the net amount otherwise distributable to the transferor.
3. In a dissolution and winding up, a transferee is entitled to an account of the limited partnership’s transactions only from the date of dissolution.
4. Upon transfer, the transferor retains the rights of a partner other than the interest in distributions transferred and retains all duties and obligations of a partner.
5. A limited partnership need not give effect to a transferee’s rights under this section until the limited partnership has notice of the transfer.
6. A transfer of a partner’s transferable interest in the limited partnership in violation of a restriction on transfer contained in the partnership agreement is ineffective as to a person having notice of the restriction at the time of transfer.
7. A transferee that becomes a partner with respect to a transferable interest is liable for the transferor’s obligations under sections 488.502 and 488.509. However, the transferee is not obligated for liabilities unknown to the transferee at the time the transferee became a partner.