(1)  If a general partner consents to a distribution made in violation of Section 48-2e-504 and in consenting to the distribution fails to comply with Section 48-2e-409, the general partner is personally liable to the limited partnership for the amount of the distribution which exceeds the amount that could have been distributed without the violation of Section 48-2e-504.

Terms Used In Utah Code 48-2e-505

  • Distribution: means a transfer of money or other property from a limited partnership to a person on account of a transferable interest or in the person's capacity as a partner. See Utah Code 48-2e-102
  • General partner: means a person that:
(a) has become a general partner under Section 48-2e-401 or was a general partner in a limited partnership when the limited partnership became subject to this chapter under Section 48-2e-1205; and
(b) has not dissociated as a general partner under Section 48-2e-603. See Utah Code 48-2e-102
  • Limited partnership: means an entity formed under this chapter or which becomes subject to this chapter under 11, or Section 48-2e-1205. See Utah Code 48-2e-102
  • Partner: means a limited partner or general partner. See Utah Code 48-2e-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.
  • Person: means an individual, business corporation, nonprofit corporation, partnership, limited partnership, limited liability company, limited cooperative association, unincorporated nonprofit association, statutory trust, business trust, common-law business trust, estate, trust, association, joint venture, public corporation, government or governmental subdivision, agency, or instrumentality, or any other legal or commercial entity. See Utah Code 48-2e-102
  • right of contribution: means property or a benefit described in Section 48-2e-501 which is provided by a person to a limited partnership to become a partner or in the person's capacity as a partner. See Utah Code 48-2e-102
    • (2)  A person that receives a distribution knowing that the distribution violated Section 48-2e-504 is personally liable to the limited partnership but only to the extent that the distribution received by the person exceeded the amount that could have been properly paid under Section 48-2e-504.

    (3)  A general partner against which an action is commenced because the general partner is liable under Subsection (1) may:

    (a)  implead any other person that is liable under Subsection (1) and seek to enforce a right of contribution from the person; and

    (b)  implead any person that received a distribution in violation of Subsection (2) and seek to enforce a right of contribution from the person in the amount the person received in violation of Subsection (2).

    (4)  An action under this section is barred unless commenced not later than two years after the distribution.

    Enacted by Chapter 412, 2013 General Session

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