This is the preview version of the Wisconsin State Legislature site.
Please see http://docs.legis.wisconsin.gov for the production version.
AB566,116,1513 (c) If an individual dissociates as a general partner under s. 179.0603 (6) (b) or
14(c), the legal representative of the individual may exercise the rights under sub. (5)
15of a person dissociated as a general partner.
AB566,116,22 16(10) In addition to any restriction or condition stated in its partnership
17agreement, a limited partnership, as a matter within the ordinary course of its
18activities and affairs, may impose reasonable restrictions and conditions on access
19to and use of information to be furnished under this section, including designating
20information confidential and imposing nondisclosure and safeguarding obligations
21on the recipient. In a dispute concerning the reasonableness of a restriction under
22this subsection, the partnership has the burden of proving reasonableness.
AB566,117,2 23179.0408 Reimbursement; indemnification; advancement; and
24insurance. (1)
A limited partnership shall reimburse a general partner for any
25payment made by the general partner in the course of the general partner's activities

1on behalf of the partnership, if the general partner complied with ss. 179.0406,
2179.0409, and 179.0504 in making the payment.
AB566,117,7 3(2) A limited partnership shall indemnify and hold harmless a person with
4respect to any claim or demand against the person and any debt, obligation, or other
5liability incurred by the person by reason of the person's former or present capacity
6as a general partner, if the claim, demand, debt, obligation, or other liability does not
7arise from the person's breach of s. 179.0406, 179.0409, or 179.0504.
AB566,117,13 8(3) In the ordinary course of its activities and affairs, a limited partnership may
9advance reasonable expenses, including attorney fees and costs, incurred by a person
10in connection with a claim or demand against the person by reason of the person's
11former or present capacity as a general partner, if the person promises to repay the
12partnership if the person ultimately is determined not to be entitled to be
13indemnified under sub. (2).
AB566,117,18 14(4) A limited partnership may purchase and maintain insurance on behalf of
15a general partner against liability asserted against or incurred by the general
16partner in that capacity or arising from that status even if, under s. 179.0105 (3) (h),
17the partnership agreement could not eliminate or limit the person's liability to the
18partnership for the conduct giving rise to the liability.
AB566,117,21 19179.0409 Standards of conduct for general partners. (1) A general
20partner owes to the limited partnership and, subject to s. 179.0901, the other
21partners the duties of loyalty and care stated in subs. (2) and (3).
AB566,117,23 22(2) The fiduciary duty of loyalty of a general partner includes all of the
23following duties:
AB566,118,3
1(a) The duty to account to the limited partnership and hold as trustee for it any
2property, profit, or benefit derived by the general partner in or from any of the
3following:
AB566,118,44 1. The conduct or winding up of the partnership's activities and affairs.
AB566,118,55 2. A use by the general partner of the partnership's property.
AB566,118,66 3. The appropriation of a partnership opportunity.
AB566,118,97 (b) The duty to refrain from dealing with the partnership in the conduct or
8winding up of the partnership's activities and affairs as or on behalf of a person
9having an interest adverse to the partnership.
AB566,118,1110 (c) The duty to refrain from competing with the partnership in the conduct or
11winding up of the partnership's activities and affairs.
AB566,118,15 12(3) The duty of care of a general partner in the conduct or winding up of the
13limited partnership's activities and affairs is to refrain from engaging in grossly
14negligent or reckless conduct or in conduct for which relief or exoneration from
15liability is not permitted under s. 179.0105 (3) (h).
AB566,118,18 16(4) A general partner shall discharge the duties and obligations under this
17chapter or under the partnership agreement and exercise any rights thereunder
18consistently with the contractual obligation of good faith and fair dealing.
AB566,118,21 19(5) A general partner does not violate a duty or obligation under this chapter
20or under the partnership agreement solely because the general partner's conduct
21furthers the general partner's own interest.
AB566,118,25 22(6) All the partners of a limited partnership, or one or more disinterested
23partners with authority to act in the matter, may authorize or ratify, after full
24disclosure of all material facts, a specific act or transaction by a general partner that
25otherwise would violate the duty of loyalty.
AB566,119,2
1(7) It is a defense to a claim under sub. (2) (b) and any comparable claim in
2equity or at common law that the transaction was fair to the limited partnership.
AB566,119,6 3(8) If, as permitted by sub. (6) or the partnership agreement, a general partner
4enters into a transaction with the limited partnership which otherwise would be
5prohibited by sub. (2) (b), the general partner's rights and obligations arising from
6the transaction are the same as those of a person that is not a general partner.
AB566,119,77 subchapter V
AB566,119,8 8CONTRIBUTIONS AND DISTRIBUTIONS
AB566,119,12 9179.0501 Form of contribution. A contribution may consist of money or
10other property transferred to, services performed for, or another benefit provided to
11the limited partnership or an agreement to transfer money or property to, perform
12services for, or provide another benefit to the partnership.
AB566,119,15 13179.0502 Liability for contribution. (1) A person's obligation to make a
14contribution to a limited partnership is not excused by the person's death, disability,
15termination, or other inability to perform personally.
AB566,119,19 16(2) If a person does not fulfill an obligation to make a contribution other than
17money, the person is obligated at the option of the limited partnership to contribute
18money equal to the value, as stated in the required information, of the part of the
19contribution which has not been made.
AB566,119,24 20(3) The obligation of a person to make a contribution may be compromised only
21by the affirmative vote or consent of all the partners. If a creditor of a limited
22partnership extends credit or otherwise acts in reliance on an obligation described
23in sub. (1) without knowledge or notice of a compromise under this subsection, the
24creditor may enforce the obligation.
AB566,120,7
1179.0503 Sharing of and right to distributions before dissolution. (1)
2Any distribution made by a limited partnership before its dissolution and winding
3up must be shared among the partners on the basis of the value, as stated in the
4required information when the limited partnership decides to make the distribution,
5of the contributions the limited partnership has received from each partner, except
6to the extent necessary to comply with a transfer effective under s. 179.0702 or
7charging order in effect under s. 179.0703.
AB566,120,10 8(2) A person has a right to a distribution before the dissolution and winding
9up of a limited partnership only if the partnership decides to make an interim
10distribution. A person's dissociation does not entitle the person to a distribution.
AB566,120,15 11(3) A person does not have a right to demand or receive a distribution from a
12limited partnership in any form other than money. Except as otherwise provided in
13s. 179.0810 (5), a partnership may distribute an asset in kind only if each part of the
14asset is fungible with each other part and each person receives a percentage of the
15asset equal in value to the person's share of distributions.
AB566,120,21 16(4) If a partner or transferee becomes entitled to receive a distribution, the
17partner or transferee has the status of, and is entitled to all remedies available to,
18a creditor of the limited partnership with respect to the distribution. However, the
19partnership's obligation to make a distribution is subject to offset for any amount
20owed to the partnership by the partner or a person dissociated as a partner on whose
21account the distribution is made.
AB566,120,24 22179.0504 Limitations on distributions. (1) A limited partnership may not
23make a distribution, including a distribution under s. 179.0810, if after the
24distribution any of the following applies:
AB566,121,2
1(a) The partnership would not be able to pay its debts as they become due in
2the ordinary course of the partnership's activities and affairs.
AB566,121,73 (b) The partnership's total assets would be less than the sum of its total
4liabilities plus the amount that would be needed, if the partnership were to be
5dissolved and wound up at the time of the distribution, to satisfy the preferential
6rights upon dissolution and winding up of partners and transferees whose
7preferential rights are superior to the rights of persons receiving the distribution.
AB566,121,9 8(2) A limited partnership may base a determination that a distribution is not
9prohibited under sub. (1) on any of the following:
AB566,121,1110 (a) Financial statements prepared on the basis of accounting practices and
11principles that are reasonable in the circumstances.
AB566,121,1312 (b) A fair valuation or other method that is reasonable under the
13circumstances.
AB566,121,15 14(3) Except as otherwise provided in sub. (5), the effect of a distribution under
15sub. (1) is measured as follows:
AB566,121,1716 (a) In the case of a distribution as described in s. 179.0102 (4) (a) 1. and 2., as
17of the earlier of the following:
AB566,121,1918 1. The date money or other property is transferred or debt is incurred by the
19limited partnership.
AB566,121,2120 2. The date the person entitled to the distribution ceases to own the interest
21or rights being acquired by the partnership in return for the distribution.
AB566,121,2322 (b) In the case of any distribution of indebtedness other than one under par. (a),
23as of the date the indebtedness is distributed.
AB566,121,2424 (c) In all cases other than those under par. (a) or (b), as of the following:
AB566,122,2
11. The date the distribution is authorized, if the payment occurs not later than
2120 days after that date.
AB566,122,43 2. The date the payment is made, if the payment occurs more than 120 days
4after the distribution is authorized.
AB566,122,8 5(4) A limited partnership's indebtedness to a partner or transferee incurred by
6reason of a distribution made in accordance with this section is at parity with the
7partnership's indebtedness to its general, unsecured creditors, except to the extent
8subordinated by agreement.
AB566,122,15 9(5) A limited partnership's indebtedness, including indebtedness issued as a
10distribution, is not a liability for purposes of sub. (1) if the terms of the indebtedness
11provide that payment of principal and interest is made only if and to the extent that
12a payment of a distribution could then be made under this section. If the
13indebtedness is issued as a distribution, each payment of principal or interest is
14treated as a distribution, the effect of which is measured on the date the payment is
15made.
AB566,122,18 16(6) In measuring the effect of a distribution under s. 179.0810, the liabilities
17of a dissolved limited partnership do not include any claim that has been disposed
18of under s. 179.0806, 179.0807, or 179.0808.
AB566,122,23 19179.0505 Liability for improper distributions. (1) If a general partner
20consents to a distribution made in violation of s. 179.0504 and in consenting to the
21distribution fails to comply with s. 179.0409, the general partner is personally liable
22to the limited partnership for the amount of the distribution which exceeds the
23amount that could have been distributed without the violation of s. 179.0504.
AB566,123,2 24(2) A person that receives a distribution knowing that the distribution violated
25s. 179.0504 is personally liable to the limited partnership but only to the extent that

1the distribution received by the person exceeded the amount that could have been
2properly paid under s. 179.0504.
AB566,123,5 3(3) A general partner against which an action is commenced because the
4general partner is liable under sub. (1) with respect to a distribution may do any of
5the following:
AB566,123,76 (a) Implead any other person that is liable under sub. (1) with respect to the
7distribution and seek to enforce a right of contribution from the person.
AB566,123,108 (b) Implead any person that received the distribution in violation of sub. (2) and
9seek to enforce a right of contribution from the person in the amount the person
10received in violation of sub. (2).
AB566,123,12 11(4) An action under this section is barred unless commenced not later than 2
12years after the distribution.
AB566,123,1313 subchapter VI
AB566,123,14 14DISSOCIATION
AB566,123,17 15179.0601 Dissociation as limited partner. (1) A person does not have a
16right to dissociate as a limited partner before the completion of the winding up of the
17limited partnership.
AB566,123,19 18(2) A person is dissociated as a limited partner when any of the following
19applies:
AB566,123,2220 (a) The limited partnership knows or has notice of the person's express will to
21withdraw as a limited partner, but, if the person has specified a withdrawal date
22later than the date the partnership knew or had notice, on that later date.
AB566,123,2423 (b) An event stated in the partnership agreement as causing the person's
24dissociation as a limited partner occurs.
AB566,124,2
1(c) The person is expelled as a limited partner pursuant to the partnership
2agreement.
AB566,124,43 (d) The person is expelled as a limited partner by the affirmative vote or consent
4of all the other partners if any of the following applies:
AB566,124,65 1. It is unlawful to carry on the limited partnership's activities and affairs with
6the person as a limited partner.
AB566,124,97 2. There has been a transfer of all of the person's transferable interest in the
8partnership, other than a transfer for security purposes or the entry of a charging
9order that is in effect under s. 179.0703 and that has not been foreclosed.
AB566,124,1010 3. The person is an entity and all of the following apply:
AB566,124,1511 a. The partnership notifies the person that it will be expelled as a limited
12partner because the person has filed a statement of dissolution or the equivalent, the
13person has been administratively dissolved, the person's charter or the equivalent
14has been revoked, or the person's right to conduct activities and affairs has been
15suspended by the jurisdiction of the person's governing law.
AB566,124,1916 b. The statement of dissolution or the equivalent has not been withdrawn,
17rescinded, or revoked, the person has not been reinstated, or the person's charter or
18the equivalent or right to conduct activities and affairs has not been reinstated,
19within 90 days after the notification under subd. 3. a.
AB566,124,2120 4. The person is an unincorporated entity that has been dissolved and whose
21activities and affairs are being wound up.
AB566,124,2422 (e) On application by the limited partnership or a partner in a direct action
23under s. 179.0901, the person is expelled as a limited partner by judicial order
24because the person has done any of the following:
AB566,125,3
11. Engaged, or is engaging, in wrongful conduct that has affected adversely and
2materially, or will affect adversely and materially, the partnership's activities and
3affairs.
AB566,125,64 2. Committed willfully or persistently, or is committing willfully or persistently,
5a material breach of the partnership agreement or of the contractual obligation of
6good faith and fair dealing under s. 179.0305 (1).
AB566,125,97 3. Engaged, or is engaging, in conduct relating to the partnership's activities
8and affairs which makes it not reasonably practicable to carry on the partnership's
9activities and affairs with the person as a limited partner.
AB566,125,1010 (f) In the case of an individual, the individual dies.
AB566,125,1311 (g) In the case of a person that is a testamentary or living trust or is acting as
12a limited partner by virtue of being a trustee of such a trust, the trust's entire
13transferable interest in the limited partnership is distributed.
AB566,125,1614 (h) In the case of a person that is an estate or is acting as a limited partner by
15virtue of being a personal representative of an estate, the estate's entire transferable
16interest in the limited partnership is distributed.
AB566,125,1817 (i) In the case of a person that is not an individual, the existence of the person
18terminates.
AB566,125,1919 (n) The limited partnership dissolves and completes winding up.
AB566,125,21 20179.0602 Effect of dissociation as limited partner. (1) If a person is
21dissociated as a limited partner, all of the following apply:
AB566,125,2322 (a) Subject to s. 179.0704, the person does not have further rights as a limited
23partner.
AB566,126,3
1(b) The person's contractual obligation of good faith and fair dealing as a limited
2partner under s. 179.0305 (1) ends with regard to matters arising and events
3occurring after the person's dissociation.
AB566,126,64 (c) Subject to s. 179.0704 and subch. XI, any transferable interest owned by the
5person in the person's capacity as a limited partner immediately before dissociation
6is owned by the person solely as a transferee.
AB566,126,9 7(2) A person's dissociation as a limited partner does not of itself discharge the
8person from any debt, obligation, or other liability to the limited partnership or the
9other partners which the person incurred while a limited partner.
AB566,126,11 10179.0603 Dissociation as general partner. A person is dissociated as a
11general partner when any of the following applies:
AB566,126,14 12(1) The limited partnership knows or has notice of the person's express will to
13withdraw as a general partner, but, if the person has specified a withdrawal date
14later than the date the partnership knew or had notice, on that later date.
AB566,126,16 15(2) An event stated in the partnership agreement as causing the person's
16dissociation as a general partner occurs.
AB566,126,18 17(3) The person is expelled as a general partner pursuant to the partnership
18agreement.
AB566,126,20 19(4) The person is expelled as a general partner by the affirmative vote or
20consent of all the other partners if any of the following applies:
AB566,126,2221 (a) It is unlawful to carry on the limited partnership's activities and affairs with
22the person as a general partner.
AB566,126,2523 (b) There has been a transfer of all of the person's transferable interest in the
24partnership, other than a transfer for security purposes or the entry of a charging
25order that is in effect under s. 179.0703 and that has not been foreclosed.
AB566,127,1
1(c) The person is an entity and all of the following apply:
Loading...
Loading...