N.Y. Partnership Law 121-502 – Liability for contributions
§ 121-502. Liability for contributions. (a) Except as provided in the partnership agreement, a partner is obligated to perform any promise, to contribute cash or property or to perform services which is otherwise enforceable in accordance with applicable law, even if he is unable to perform because of death, disability or any other reason. Except as provided in the partnership agreement, if a partner does not make any required contribution of property or services, he is obligated at the option of the limited partnership to contribute cash equal to that portion of the value, as stated in the partnership records if so stated, of the contribution that has not been made. The foregoing option shall be in addition to, and not in lieu of, any other rights, including the right to specific performance, that the limited partnership may have against such partner under the partnership agreement or applicable law.
Terms Used In N.Y. Partnership Law 121-502
- Appraisal: A determination of property value.
- Contribution: means any cash, property, services rendered, or a promissory note or other binding obligation to contribute cash or property or to render services, which a partner contributes to a limited partnership in his capacity as a partner. See N.Y. Partnership Law 121-101
- 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 limited or general partner. See N.Y. Partnership Law 121-101
- 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.
- Partnership agreement: means any written agreement of the partners as to the affairs of a limited partnership and the conduct of its business. See N.Y. Partnership Law 121-101
- Partnership interest: means : (i) a partner's share of the profits and losses of a limited partnership; and (ii) a partner's right to receive distributions. See N.Y. Partnership Law 121-101
(b) Unless otherwise provided in the partnership agreement and except as provided in section 121-705 of this article, the obligation of a partner to make a contribution or to return money or other property paid or distributed in violation of this article may be compromised only by consent of all the partners. Notwithstanding the compromise, a creditor of a limited partnership who extends credit in reliance on that obligation may enforce the original obligation to the extent he reasonably relied on such obligation.
(c) A partnership agreement may provide that the interest of any partner who fails to make any required contribution shall be subject to specified consequences of such failure. Such consequences may take the form of reducing or eliminating the defaulting partner's interest in the limited partnership, subordinating his partnership interest to that of nondefaulting partners, a forced sale of his partnership interest, the lending by other partners of the amount necessary to meet his commitment, a fixing of the value of his partnership interest by appraisal or by formula and redemption or sale of his partnership interest at such value, or other consequences.