SB566: Bill Text

SB566,127,24 (c) Engaged, or is engaging, in conduct relating to the partnership's activities and affairs which makes it not reasonably practicable to carry on the activities and affairs of the limited partnership with the person as a general partner.

SB566,127,25 (6) In the case of an individual, any of the following applies:

SB566,128,1 (a) The individual dies.

SB566,128,2 (b) A guardian or general conservator for the individual is appointed.

SB566,128,5 (c) A court orders that the individual has otherwise become incapable of performing the individual's duties as a general partner under this chapter or the partnership agreement.

SB566,128,6 (7) Any of the following applies to the person:

SB566,128,7 (a) The person becomes a debtor in bankruptcy.

SB566,128,8 (b) The person signs an assignment for the benefit of creditors.

SB566,128,10 (c) The person seeks, consents to, or acquiesces in the appointment of a trustee, receiver, or liquidator of the person or of all or substantially all the person's property.

SB566,128,13 (8) In the case of a person that is a testamentary or living trust or is acting as a general partner by virtue of being a trustee of such a trust, the trust's entire transferable interest in the limited partnership is distributed.

SB566,128,16 (9) In the case of a person that is an estate or is acting as a general partner by virtue of being a personal representative of an estate, the estate's entire transferable interest in the limited partnership is distributed.

SB566,128,18 (10) In the case of a person that is not an individual, the existence of the person terminates.

SB566,128,19 (15) The limited partnership dissolves and completes winding up.

SB566,128,23 179.0604 Power to dissociate as general partner; wrongful dissociation. (1) A person has the power to dissociate as a general partner at any time, rightfully or wrongfully, by withdrawing as a general partner by express will under s. 179.0603 (1).

SB566,128,25 (2) A person's dissociation as a general partner is wrongful only if any of the following applies:

SB566,129,2 (a) The dissociation is in breach of an express provision of the partnership agreement.

SB566,129,4 (b) The dissociation occurs before the completion of the winding up of the limited partnership and any of the following applies:

SB566,129,5 1. The person withdraws as a general partner by express will.

SB566,129,7 2. The person is expelled as a general partner by judicial order under s. 179.0603 (5).

SB566,129,8 3. The person is dissociated as a general partner under s. 179.0603 (7).

SB566,129,11 4. In the case of a person that is not a trust other than a business trust, an estate, or an individual, the person is expelled or otherwise dissociated as a general partner because it willfully dissolved or terminated.

SB566,129,15 (3) A person that wrongfully dissociates as a general partner is liable to the limited partnership and, subject to s. 179.0901, to the other partners for damages caused by the dissociation. The liability is in addition to any debt, obligation, or other liability of the general partner to the partnership or the other partners.

SB566,129,17 179.0605 Effect of dissociation as general partner. (1) If a person is dissociated as a general partner, all of the following apply:

SB566,129,19 (a) The person's right to participate as a general partner in the management and conduct of the limited partnership's activities and affairs terminates.

SB566,129,22 (b) The person's duties and obligations as a general partner under s. 179.0409 end with regard to matters arising and events occurring after the person's dissociation.

SB566,130,2 (c) 1. The person may sign and deliver to the department for filing a statement of dissociation pertaining to the person and, at the request of the limited partnership, shall sign an amendment to the certificate of limited partnership which states that the person has dissociated as a general partner.

SB566,130,4 2. The statement of dissociation or amendment under subd. 1. is a limitation on the authority of a person dissociated as a partner for the purposes of s. 179.04023.

SB566,130,7 (d) Subject to s. 179.0704 and subch. XI, any transferable interest owned by the person in the person's capacity as a general partner immediately before dissociation is owned by the person solely as a transferee.

SB566,130,10 (2) A person's dissociation as a general partner does not of itself discharge the person from any debt, obligation, or other liability to the limited partnership or the other partners which the person incurred while a general partner.

SB566,130,15 (3m) Continued use of a limited partnership name, or the name of a person dissociated as a partner as part of the partnership name, by partners continuing the partnership's activities and affairs does not of itself make the person dissociated as a partner liable for an obligation of the partners or the partnership continuing the partnership's activities and affairs.

SB566,130,20 179.0606 Power to bind and liability of person dissociated as general partner. (1) After a person is dissociated as a general partner and before the limited partnership is merged out of existence or converted under subch. XI, or dissolved, the partnership is bound by an act of the person with respect to a transaction with another party only if all of the following apply:

SB566,130,22 (a) The act would have bound the partnership under s. 179.0402 before dissociation.

SB566,130,24 (b) At the time the other party enters into the transaction, less than 2 years has passed since the dissociation.

SB566,131,3 (c) At the time the other party enters into the transaction, the other party does not know or have notice of the dissociation and reasonably believes that the person is a general partner.

SB566,131,6 (2) If a limited partnership is bound under sub. (1), the person dissociated as a general partner which caused the partnership to be bound is liable to all of the following:

SB566,131,8 (a) The partnership, for any damage caused to the partnership arising from the obligation incurred under sub. (1).

SB566,131,11 (b) If a general partner or another person dissociated as a general partner is liable for the obligation, the general partner or other person, for any damage caused to the general partner or other person arising from the liability.

SB566,131,17 179.0607 Liability of person dissociated as general partner to other persons. (1) A person's dissociation as a general partner does not of itself discharge the person's liability as a general partner for a debt, obligation, or other liability of the limited partnership incurred before dissociation. Except as otherwise provided in subs. (2) and (3), the person is not liable for a partnership obligation incurred after dissociation.

SB566,131,21 (2) A person whose dissociation as a general partner results in a dissolution and winding up of the limited partnership's activities and affairs is liable on an obligation incurred by the partnership under s. 179.0804 to the same extent as a general partner under s. 179.0404.

SB566,131,25 (3) A person that is dissociated as a general partner without the dissociation resulting in a dissolution and winding up of the limited partnership's activities and affairs is liable to a party on a transaction entered into by the partnership after the dissociation only if all of the following apply:

SB566,132,1 (a) A general partner would be liable on the transaction.

SB566,132,3 (b) At the time the other party enters into the transaction, less than 2 years has passed since the dissociation.

SB566,132,6 (c) At the time the other party enters into the transaction, the other party does not have knowledge or notice of the dissociation and reasonably believes that the person is a general partner.

SB566,132,9 (4) By agreement with a creditor of a limited partnership and the partnership, a person dissociated as a general partner may be released from liability for a debt, obligation, or other liability of the partnership to the creditor.

SB566,132,14 (5) A person dissociated as a general partner is released from liability for a debt, obligation, or other liability of the limited partnership if the partnership's creditor, with knowledge or notice of the person's dissociation as a general partner but without the person's consent, agrees to a material alteration in the nature or time of payment of the debt, obligation, or other liability.

SB566,132,15 subchapter VII

SB566,132,18 TRANSFERABLE INTERESTS AND RIGHTS OF TRANSFEREES AND CREDITORS

SB566,132,20 179.0701 Nature of transferable interest. A transferable interest is personal property.

SB566,132,22 179.0702 Transfer of transferable interest. (1) All of the following apply to a transfer, in whole or in part, of a transferable interest:

SB566,132,23 (a) It is permissible.

SB566,132,25 (b) It does not by itself cause a partner's dissociation or a dissolution and winding up of the limited partnership's activities and affairs.

SB566,133,2 (c) Subject to s. 179.0704, it does not entitle the transferee to do any of the following:

SB566,133,4 1. Participate in the management or conduct of the partnership's activities and affairs.

SB566,133,6 2. Except as otherwise provided in sub. (3), have access to required information, records, or other information concerning the partnership's activities and affairs.

SB566,133,8 (2) A transferee has the right to receive, in accordance with the transfer, distributions to which the transferor would otherwise be entitled.

SB566,133,11 (3) In a dissolution and winding up of a limited partnership, a transferee is entitled to an account of the partnership's transactions only from the date of dissolution.

SB566,133,14 (4) A transferable interest may be evidenced by a certificate of the interest issued by a limited partnership in a record, and, subject to this section, the interest represented by the certificate may be transferred by a transfer of the certificate.

SB566,133,16 (5) A limited partnership need not give effect to a transferee's rights under this section until the partnership knows or has notice of the transfer.

SB566,133,19 (6) A transfer of a transferable interest in violation of a valid restriction on transfer contained in the partnership agreement is ineffective if the intended transferee has knowledge or notice of the restriction at the time of transfer.

SB566,133,23 (7) Except as otherwise provided in ss. 179.0601 (2) (d) 2. and 179.0603 (4) (b), if a general or limited partner transfers a transferable interest, the transferor retains the rights of a general or limited partner other than the transferable interest transferred and retains all the duties and obligations of a general or limited partner.

SB566,134,2 (8) If a general or limited partner transfers a transferable interest to a person that becomes a general or limited partner with respect to the transferred interest, the transferee is liable for the transferor's obligations under ss. 179.0502 and 179.0505 known to the transferee when the transferee becomes a partner.

SB566,134,8 179.0703 Charging order. (1) On application by a judgment creditor of a partner or transferee, a court may enter a charging order against the transferable interest of the judgment debtor for the unsatisfied amount of the judgment. A charging order constitutes a lien on a judgment debtor's transferable interest and requires the limited partnership to pay over to the person to which the charging order was issued any distribution that otherwise would be paid to the judgment debtor.

SB566,134,10 (2) To the extent necessary to effectuate the collection of distributions pursuant to a charging order in effect under sub. (1), the court may do any of the following:

SB566,134,12 (a) Appoint a receiver of the distributions subject to the charging order, with the power to make all inquiries the judgment debtor might have made.

SB566,134,13 (b) Make all other orders necessary to give effect to the charging order.

SB566,134,18 (3) Upon a showing that distributions under a charging order will not pay the judgment debt within a reasonable time, the court may foreclose the lien and order the sale of the transferable interest. The purchaser at the foreclosure sale obtains only the transferable interest, does not thereby become a partner, and is subject to s. 179.0702.

SB566,134,22 (4) At any time before foreclosure under sub. (3), the partner or transferee whose transferable interest is subject to a charging order under sub. (1) may extinguish the charging order by satisfying the judgment and filing a certified copy of the satisfaction with the court that issued the charging order.

SB566,135,2 (5) At any time before foreclosure under sub. (3), a limited partnership or one or more partners whose transferable interests are not subject to the charging order may pay to the judgment creditor the full amount due under the judgment and thereby succeed to the rights of the judgment creditor, including the charging order.

SB566,135,4 (6) This chapter does not deprive any partner or transferee of the benefit of any exemption law applicable to the transferable interest of the partner or transferee.

SB566,135,8 (7) This section provides the exclusive remedy by which a person seeking, in the capacity of a judgment creditor, to enforce a judgment against a partner or transferee may satisfy the judgment from the judgment debtor's transferable interest.

SB566,135,10 179.0704 Power of legal representative of deceased partner. If a partner dies, the deceased partner's legal representative may exercise any of the following:

SB566,135,11 (1) The rights of a transferee provided in s. 179.0702 (3).

SB566,135,13 (2) For purposes of settling the estate, the rights of a current limited partner under s. 179.0304.

SB566,135,14 subchapter VIII

SB566,135,15 DISSOLUTION AND WINDING UP

SB566,135,18 179.0801 Events causing dissolution. (1) A limited partnership is dissolved, and its activities and affairs must be wound up, upon the occurrence of any of the following:

SB566,135,20 (a) An event or circumstance that the partnership agreement states causes dissolution.

SB566,135,24 (b) The affirmative vote or consent to dissolve of all general partners and of limited partners owning a majority of the rights to receive distributions, whether as a general partner, a limited partner, or both, at the time the vote or consent is to be effective.

SB566,136,2 (c) After the dissociation of a person as a general partner if any of the following applies:

SB566,136,7 1. If the partnership has at least one remaining general partner, the affirmative vote or consent to dissolve the partnership not later than 90 days after the dissociation by partners owning a majority of the rights to receive distributions, whether as a general partner, a limited partner, or both, at the time the vote or consent is to be effective.

SB566,136,10 2. If the partnership does not have a remaining general partner, the passage of 90 days after the dissociation unless, before the end of the period, all of the following occur:

SB566,136,14 a. Consent to continue the activities and affairs of the partnership and admit at least one general partner is given by limited partners owning a majority of the rights to receive distributions as limited partners at the time the consent is to be effective.

SB566,136,16 b. At least one person is admitted as a general partner in accordance with the consent.

SB566,136,19 (d) The passage of 90 consecutive days after the dissociation of the partnership's last limited partner unless, before the end of the period, the partnership admits at least one limited partner.

SB566,136,21 (e) The passage of 90 consecutive days during which the partnership has only one partner unless, before the end of the period, all of the following are satisfied:

SB566,136,22 1. The partnership admits at least one person as a partner.

SB566,136,24 2. If the previously sole remaining partner is only a general partner, the partnership admits the person as a limited partner.

SB566,137,2 3. If the previously sole remaining partner is only a limited partner, the partnership admits a person as a general partner.

SB566,137,4 (f) On application by a partner, the entry by the circuit court of an order dissolving the partnership on any of the following grounds: