Chapter 6. General Partnerships.

Subchapter I. General Provisions.

§ 29–601.01. Short title.

This chapter may be cited as the “Uniform Partnership Act of 2010”.

§ 29–601.02. Definitions.

For the purposes of this chapter, the term:

(1) “Business” includes every trade, occupation, and profession.

(2) “Contribution”, except in the phrase “right of contribution”, means property or a benefit described in § 29-604.03 provided by a person to a partnership to become a partner or in the person’s capacity as a partner.

(3) “Distribution” means a transfer of money or other property from a partnership to person on account of a transferable interest or in a person’s capacity as a partner.

(A) The term includes:

(i) A redemption or other purchase by a partnership of a transferable interest; and

(ii) A transfer to a partner in return for the partner’s relinquishment of any right to participate as a partner in the management or conduct of the partnership’s business or have access to records or other information concerning the partnership’s business; and

(B) The term does not include amounts constituting reasonable compensation for present or past service or payments made in the ordinary course of business under a bona fide retirement plan or other bona fide benefits program.

(4) “Domestic partnership” means a partnership whose internal relations are governed by the laws of the District.

(5) “Foreign limited liability partnership” means a foreign partnership whose partners have limited liability for the debts, obligations, or other liabilities of the foreign partnership under a provision similar to § 29-603.06(c).

(A) Is formed under laws other than the laws of the District; and

(B) Has the status of a limited liability partnership under those laws.

(6) “Foreign partnership” means an unincorporated entity formed under the law of a jurisdiction other than the District which would be a partnership if formed under the law of the District.

(7) “Limited liability partnership” or “domestic limited liability partnership” means a partnership that has filed a statement of qualification under § 29-610.01 and does not have a similar statement in effect in any other jurisdiction.

(8) “Partner” means a person that:

(A) Has become a partner in a partnership under § 29-604.02 or was a partner in a partnership when the partnership became subject to this chapter under § 29-611.01; and

(B) Has not dissociated as a partner under § 29-606.01.

(9) “Partnership” means an association of 2 or more persons to carry on as co-owners a business for profit formed under § 29-602.02, predecessor law, or comparable law of another jurisdiction.

(10) “Partnership agreement” means the agreement, whether written, oral, or implied, among the partners concerning the partnership, including amendments to the partnership agreement.

(11) “Partnership at will” means a partnership in which the partners have not agreed to remain partners until the expiration of a definite term or the completion of a particular undertaking.

(12) “Partnership interest” or “partner’s interest in the partnership” means all of a partner’s interests in the partnership, including the partner’s transferable interest and all management and other rights.

(13) “Registered foreign limited liability partnership” means a foreign limited liability partnership that is registered to do business in this state pursuant to a statement of registration filed by the Mayor.

(14) “Surviving partnership” means a domestic or foreign partnership into which one or more domestic or foreign partnerships are merged. A surviving partnership may preexist the merger or be created by the merger.

(15) “Transferable interest” means the right, as initially owned by a person in the person’s capacity as a partner, to receive distributions from a partnership in accordance with the partnership agreement, whether or not the person remains a partner or continues to own any part of the right. The term applies to any fraction of the interest, by whomever owned.

(16) “Transferee” means a person to which all or part of a transferable interest has been transferred, whether or not the transferor is a partner.

§ 29–601.03. Knowledge and notice.

(a) A person knows a fact if the person has actual knowledge of it.

(b) A person has notice of a fact if the person:

(1) Knows of it;

(2) Has received a notification of it; or

(3) Has reason to know it exists from all of the facts known to the person at the time in question.

(c) A person notifies or gives a notification to another by taking steps reasonably required to inform the other person in ordinary course, whether or not the other person learns of it.

(d) A person receives a notification when the notification:

(1) Comes to the person’s attention; or

(2) Is duly delivered at the person’s place of business or at any other place held out by the person as a place for receiving communications.

(e) Except as otherwise provided in subsection (f) of this section, a person other than an individual knows, has notice, or receives a notification of a fact for purposes of a particular transaction when the individual conducting the transaction knows, has notice, or receives a notification of the fact, or in any event when the fact would have been brought to the individual’s attention if the person had exercised reasonable diligence. The person exercises reasonable diligence if it maintains reasonable routines for communicating significant information to the individual conducting the transaction and there is reasonable compliance with the routines. Reasonable diligence shall not require an individual acting for the person to communicate information unless the communication is part of the individual’s regular duties or the individual has reason to know of the transaction and that the transaction would be materially affected by the information.

(f) A partner’s knowledge, notice, or receipt of a notification of a fact relating to the partnership shall be effective immediately as knowledge by notice to, or receipt of a notification by, the partnership, except in the case of a fraud on the partnership committed by or with the consent of that partner.

(g) A person that is not a partner is deemed:

(1) To know of a limitation on authority to transfer real property as provided in § 29-603.03(e); and

(2) To have notice of:

(A) A partner’s dissociation 90 days after a statement of dissociation under § 29-607.04 becomes effective; and

(B) A partnership’s:

(i) Dissolution 90 days after a statement of dissolution under § 29-608.05 becomes effective;

(ii) Termination 90 days after a statement of termination under § 29-608.02 becomes effective; and

(iii) Participation in a merger, interest exchange, conversion, or domestication 90 days after articles of merger, interest exchange, conversion, or domestication under Chapter 2 of this title becomes effective.

§ 29–601.04. Effect of partnership agreement; nonwaivable provisions.

(a) Except as otherwise provided in subsection (b) of this section, relations among the partners and between the partners and the partnership shall be governed by the partnership agreement. To the extent the partnership agreement does not otherwise provide, this chapter shall govern relations among the partners and between the partners and the partnership.

(b) A partnership agreement shall not:

(1) Vary the rights and duties under § 29-601.05, except to eliminate the duty to provide copies of statements to all of the partners;

(2) Unreasonably restrict the right of access to books and records under § 29-604.03(b);

(3) Eliminate the duty of loyalty under § 29-604.04(b) or § 29-606.03(b)(3), but:

(A) The partnership agreement may identify specific types or categories of activities that do not violate the duty of loyalty, if not manifestly unreasonable; or

(B) All of the partners or a number or percentage specified in the partnership agreement may authorize or ratify, after full disclosure of all material facts, a specific act or transaction that otherwise would violate the duty of loyalty;

(4) Unreasonably reduce the duty of care under § 29-604.04(c) or § 29-606.03(b)(3);

(5) Eliminate the obligation of good faith and fair dealing under § 29-604.04(d), but the partnership agreement may prescribe the standards by which the performance of the obligation is to be measured, if the standards are not manifestly unreasonable;

(6) Vary the power to dissociate as a partner under § 29-606.02(a), except to require the notice under § 29-606.01(1) to be in writing;

(7) Vary the right of a court to expel a partner in the events specified in § 29-606.01(5);

(8) Vary the requirement to wind up the partnership business in cases specified in § 29-608.01(4), (5), or (6);

(9) Vary the law applicable to a limited liability partnership under § 29-105.01(a);

(10) Restrict rights of third parties under this chapter;

(11) Vary the provisions of § 29-601.10;

(12) Vary the provisions of § 29-603.07;

(13) Relieve or exonerate a person from liability for conduct involving bad faith, willful or intentional misconduct, or knowing violation of the law;

(14) Vary the right of a partner to approve a merger, interest exchange, conversion, or domestication; or

(15) Vary any requirement, procedure, or other provision of this title pertaining to:

(A) Registered agents; or

(B) The Mayor, including provisions pertaining to records authorized or required to be delivered to the Mayor for filing under this title.

(c) Subject to subsection (b) of this section, without limiting other terms that may be included in a partnership agreement, the following rules apply:

(1) The partnership agreement may specify the method by which a specific act or transaction that would otherwise violate the duty of loyalty may be authorized or ratified by one or more disinterested and independent persons after full disclosure of all material facts.

(2) If not manifestly unreasonable, the partnership agreement may:

(A) Restrict or eliminate the aspects of the duty of loyalty stated in § 29-604.07(b);

(B) Identify specific types or categories of activities and affairs that do not violate the duty of loyalty;

(D) Alter or eliminate any other fiduciary duty.

(d) The court shall decide as a matter of law any claim under subsection (b)(5) or (c)(2) of this section that a term of a partnership agreement is manifestly unreasonable. The court:

(1) Shall make its determination as of the time the challenged term became part of the partnership agreement and by considering only circumstances existing at that time; and

(2) May invalidate the term only if, in light of the purposes, activities, and affairs of the limited partnership, it is readily apparent that:

(A) The objective of the term is unreasonable; or

(B) The term is an unreasonable means to achieve the provision’s objective.

(July 2, 2011, D.C. Law 18-378, § 2, 58 DCR 1720; Mar. 5, 2013, D.C. Law 19-210, § 2(f)(2)(C), 59 DCR 13171.)

Prior Codifications

2001 Ed., § 33-101.03.

1981 Ed., § 41-151.3.

Section References

This section is referenced in § 29-601.09 and § 29-604.01.

Effect of Amendments

The 2013 amendment by D.C. Law 19-210 substituted “A” for “The” in the introductory language of (b); added (b)(11) through (b)(15) and made related changes; and added (c) and (d).

Editor's Notes

Uniform Law: This section is based on § 103 of the Uniform Partnership Act (1997 Act).

Application of Law 19-210: Section 7 of D.C. Law 19-210 provided that the act shall apply as of January 1, 2012.

§ 29–601.05. Execution, filing, and recording of statements.

(a) A statement delivered to the Mayor for filing by a partnership shall be executed by at least 2 partners. Other statements shall be executed by a partner or other person authorized by this chapter.

(b) A person that delivers a statement to the Mayor for filing pursuant to this section shall promptly send a copy of the statement to every nonfiling partner and to any other person named as a partner in the statement. Failure to send a copy of a statement to a partner or other person shall not limit the effectiveness of the statement as to a person not a partner.

(c) A statement delivered to the Mayor for filing by a partnership shall be executed by at least 2 partners. Other statements shall be executed by a partner or other person authorized by this chapter An individual who executes a statement shall personally declare under penalty of making false statements that the contents of the statement are accurate.

(d) A person authorized by this chapter to deliver a statement to the Mayor for filing may amend or cancel the statement by delivering filing an amendment or cancellation to the Mayor for filing that names the partnership, identifies the statement, and states the substance of the amendment or cancellation.

(e) A person that delivers a statement to the Mayor for filing pursuant to this section shall promptly send a copy of the statement to every nonfiling partner and to any other person named as a partner in the statement. Failure to send a copy of a statement to a partner or other person shall not limit the effectiveness of the statement as to a person not a partner.

(July 2, 2011, D.C. Law 18-378, § 2, 58 DCR 1720; Mar. 5, 2013, D.C. Law 19-210, § 2(f)(2)(D), 59 DCR 13171.)

Prior Codifications

2001 Ed., § 33-101.05.

1981 Ed., § 41-151.5.

Section References

This section is referenced in § 29-601.04, § 29-603.03, § 29-609.04, and § 29-610.01.

Effect of Amendments

The 2013 amendment by D.C. Law 19-210 substituted “making false statements” for “perjury” in (c).

Editor's Notes

Uniform Law: This section is based on § 105 of the Uniform Partnership Act (1997 Act).

Application of Law 19-210: Section 7 of D.C. Law 19-210 provided that the act shall apply as of January 1, 2012.

§ 29–601.06. Governing law.

The internal affairs of a partnership and the liability of a partner as a partner for the debts, obligations, or other liabilities of the partnership are governed by:

(1) In the case of a limited liability partnership, the law of the District of Columbia; and

(2) In the case of a partnership that is not a limited liability partnership, the law of the state of the jurisdiction in which the partnership has its principal office.

§ 29–601.07. Applicability of act to foreign and interstate commerce.

(a) A partnership or limited liability partnership organized and existing under this chapter may conduct its business, carry on its operations, and exercise the powers granted by this chapter in any state, territory, district, or possession of the United States or in any foreign country.

(b) It is the intent of the Council of the District of Columbia that the legal existence of limited liability partnerships organized in the District be recognized outside the boundaries of the District and that, subject to any reasonable requirement of registration, a District limited liability partnership doing business outside the District be granted full faith and credit.

(c) The liability of partners in a limited liability partnership organized and existing under this chapter for the debts and obligations of the limited liability partnership, or for the acts or omission of other partners, employees, or representatives of the limited liability partnership, shall at all be times determined solely and exclusively by this chapter and any rules promulgated hereunder.

§ 29–601.08. Partnership agreement; effect on partnership and person becoming partner; preformation agreement.

(a) A person that becomes a partner of a partnership is deemed to assent to the partnership agreement.

(b) A partnership is bound by and may enforce the partnership agreement, whether or not the partnership itself has manifested assent to the agreement.

(c) Two or more persons intending to become the initial partners of a partnership may make an agreement providing that upon the formation of the partnership the agreement will become the partnership agreement.

§ 29–601.09. Partnership agreement; effect on third parties and relationship to records effective on behalf of partnership.

(a) A partnership agreement may specify that its amendment requires the approval of a person that is not a party to the agreement or the satisfaction of a condition. An amendment is ineffective if its adoption does not include the required approval or satisfy the specified condition.

(b) The obligations of a partnership and its partners to a person in the person’s capacity as a transferee or person dissociated as a partner are governed by the partnership agreement. Subject only to a court order issued under § 29-605.04 to effectuate a charging order, an amendment to the partnership agreement made after a person becomes a transferee or is dissociated as a partner:

(1) Is effective with regard to any debt, obligation, or other liability of the partnership or its partners to the person in the person’s capacity as a transferee or person dissociated as a partner; and

(2) Is not effective to the extent the amendment:

(A) Imposes a new debt, obligation, or other liability on the transferee or person dissociated as a partner; or

(B) Prejudices the rights under § 29-607.01 of a person that dissociated as a partner before the amendment was made.

(c) If a record delivered by a partnership to the Mayor for filing becomes effective under this chapter and contains a provision that would be ineffective under § 29-601.04(b) or (d)(2) if contained in the partnership agreement, the provision is ineffective in the record.

(d) Subject to subsection (c) of this section, if a record delivered by a partnership to the Mayor for filing becomes effective under this chapter and conflicts with a provision of the partnership agreement:

(1) The agreement prevails as to partners, persons dissociated as partners, and transferees; and

(2) The record prevails as to other persons to the extent they reasonably rely on the record.

§ 29–601.10. Signing and filing pursuant to judicial order.

(a) If a person required by this chapter to sign a record or deliver a record to the Mayor for filing under this chapter does not do so, any other person that is aggrieved may petition the Superior Court to order:

(1) The person to sign the record;

(2) The person to deliver the record to the Mayor for filing; or

(3) The Mayor to file the record unsigned.

(b) If a petitioner under subsection (a) of this section is not the partnership or foreign limited liability partnership to which the record pertains, the petitioner shall make the partnership a party to the action.

§ 29–601.11. Liability for inaccurate information in filed record.

(a) If a record delivered to the Mayor for filing under this title and filed by the Mayor contains inaccurate information, a person that suffers loss by reliance on the information may recover damages for the loss from:

(1) A person that signed the record, or caused another to sign it on the person’s behalf, and knew the information to be inaccurate at the time the record was signed; and

(2) A partner, if:

(A) The record was delivered for filing on behalf of the partnership; and

(B) The partner had notice of the inaccuracy for a reasonably sufficient time before the information was relied upon so that, before the reliance, the partner reasonably could have:

(i) Effected an amendment under § 29-610.01(h);

(ii) Filed a petition under § 29-601.10; or

(iii) Delivered to the Mayor for filing a statement of change under § 29-104.07 or a statement of correction under § 29-102.05.

(b) An individual who signs a record authorized or required to be filed under this chapter affirms under penalty of making false statements that the information stated in the record is accurate.

Subchapter II. Nature of Partnership.

§ 29–602.01. Partnership as entity.

(a) A partnership is an entity distinct from its partners.

(b) A limited liability partnership shall continue to be the same entity that existed before the filing of a statement of qualification under § 29-610.01.

§ 29–602.02. Formation of partnership.

(a) Except as otherwise provided in subsection (b) of this section, the association of 2 or more persons to carry on as co-owners of a business for profit shall form a partnership, whether or not the persons intend to form a partnership.

(b) An association formed under a statute other than this chapter, a predecessor statute, or a comparable statute of another jurisdiction shall not be a partnership under this chapter.

(1) Joint tenancy, tenancy in common, tenancy by the entireties, joint property, common property, or part ownership shall not by itself establish a partnership, even if the co-owners share profits made by the use of the property.

(2) The sharing of gross returns shall not by itself establish a partnership, even if the persons sharing them have a joint or common right or interest in property from which the returns are derived.

(3) A person that receives a share of the profits of a business shall be presumed to be a partner in the business, unless the profits were received in payment:

(A) Of a debt by installments or otherwise;

(B) For services as an independent contractor or of wages or other compensation to an employee;

(D) Of an annuity or other retirement or health benefit to a beneficiary, representative, or designee of a deceased or retired partner;

(E) Of interest or other charge on a loan, even if the amount of payment varies with the profits of the business, including a direct or indirect present or future ownership of the collateral, or rights to income, proceeds, or increase in value derived from the collateral; or

(F) For the sale of the goodwill of a business or other property by installments or otherwise.

§ 29–602.03. Partnership property.

Property acquired by a partnership shall be property of the partnership and not of the partners individually.

§ 29–602.04. When property is partnership property.

(a) Property shall be partnership property if acquired in the name of:

(1) The partnership; or

(2) One or more partners with an indication in the instrument transferring title to the property of the person’s capacity as a partner or of the existence of a partnership but without an indication of the name of the partnership.

(b) Property shall be acquired in the name of the partnership by a transfer to:

(1) The partnership in its name; or

(2) One or more partners in their capacity as partners in the partnership, if the name of the partnership is indicated in the instrument transferring title to the property.

(c) Property shall be presumed to be partnership property if purchased with partnership assets, even if not acquired in the name of the partnership or of one or more partners with an indication in the instrument transferring title to the property of the person’s capacity as a partner or of the existence of a partnership.

(d) Property acquired in the name of one or more of the partners, without an indication in the instrument transferring title to the property of the person’s capacity as a partner or of the existence of a partnership and without use of partnership assets, shall be presumed to be separate property, even if used for partnership purposes.

Subchapter III. Relations of Partners to Persons Dealing with Partnership.

§ 29–603.01. Partner agent of partnership.

Subject to the effect of a statement of partnership authority under § 29-603.03:

(1) Each partner shall be an agent of the partnership for the purpose of its business.

(2) An act of a partner, including the execution of an instrument in the partnership name, for apparently carrying on in the ordinary course the partnership business or business of the kind carried on by the partnership shall bind the partnership, unless the partner had no authority to act for the partnership in the particular matter and the person with whom the partner was dealing knew or had received a notification that the partner lacked authority.

(3) An act of a partner which is not apparently for carrying on in the ordinary course the partnership business or business of the kind carried on by the partnership shall bind the partnership only if the act was authorized by the other partners.

§ 29–603.02. Transfer of partnership property.

(a) Partnership property may be transferred as follows:

(1) Subject to the effect of a statement of partnership authority under § 29-603.03, partnership property held in the name of the partnership may be transferred by an instrument of transfer executed by a partner in the partnership name.

(2) Partnership property held in the name of one or more partners with an indication in the instrument transferring the property to them in their capacity as partners or of the existence of a partnership, but without an indication of the name of the partnership, may be transferred by an instrument of transfer executed by the persons in whose name the property is held.

(3) Partnership property held in the name of one or more persons other than the partnership, without an indication in the instrument transferring the property to them in their capacity as partners or of the existence of a partnership, may be transferred by an instrument of transfer executed by the persons in whose name the property is held.

(b) A partnership may recover partnership property from a transferee only if it proves that execution of the instrument of initial transfer did not bind the partnership under § 29-603.01 and:

(1) As to a subsequent transferee who gave value for property transferred under subsection (a)(1) and (2) of this section, proves that the subsequent transferee knew or had received a notification that the person that executed the instrument of initial transfer lacked authority to bind the partnership; or

(2) As to a transferee who gave value for property transferred under subsection (a)(3) of this section, proves that the transferee knew or had received a notification that the property was partnership property and that the person that executed the instrument of initial transfer lacked authority to bind the partnership.

(c) A partnership shall not recover partnership property from a subsequent transferee if the partnership would not have been entitled to recover the property, under subsection (b) of this section, from any earlier transferee of the property.

(d) If a person holds all of the partners’ interests in the partnership, all of the partnership property shall vest in that person. The person may execute a document in the name of the partnership to evidence vesting of the property in that person and may file or record the document.

§ 29–603.03. Statement of partnership authority.

(a) A partnership may deliver to the Mayor for filing a statement of partnership authority, which:

(1) Shall include:

(A) The name of the partnership;

(B) The street address of its principal office and of one office in District, if there is one;

(C) The names and mailing addresses of all of the partners or of an agent appointed and maintained by the partnership for the purposes of subsection (b) of this section; and

(D) The names of the partners authorized to execute an instrument transferring real property held in the name of the partnership; and

(2) May state the authority, or limitations on the authority, of some or all of the partners to enter into other transactions on behalf of the partnership and any other matter.

(b) If a statement of partnership authority names an agent, the agent shall maintain a list of the names and mailing addresses of all of the partners and make it available to any person on request for good cause shown.

(c) If a filed statement of partnership authority is executed pursuant to § 29-601.05(c) and states the name of the partnership, but does not contain all of the other information required by subsection (a) of this section, the statement shall nevertheless operate with respect to a person not a partner as provided in subsections (d) and (e) of this section.

(d) Except as otherwise provided in subsection (g) of this section, a filed statement of partnership authority shall supplement the authority of a partner to enter into transactions on behalf of the partnership as follows:

(1) Except for transfers of real property, a grant of authority contained in a filed statement of partnership authority shall be conclusive in favor of a person that gives value without knowledge to the contrary, so long as and to the extent that a limitation on that authority is not then contained in another filed statement. A filed cancellation of a limitation on authority shall revive the previous grant of authority.

(2) A grant of authority to transfer real property held in the name of the partnership contained in a certified copy of a filed statement of partnership authority recorded in the office for recording transfers of that real property shall be conclusive in favor of a person that gives value without knowledge to the contrary, so long as and to the extent that a certified copy of a filed statement containing a limitation on that authority is not then of record in the office for recording transfers of that real property. The recording in the office for recording transfers of that real property of a certified copy of a filed cancellation of a limitation on authority shall revive the previous grant of authority[.]

(e) A person not a partner shall be deemed to know of a limitation on the authority of a partner to transfer real property held in the name of the partnership if a certified copy of the filed statement containing the limitation on authority is of record in the office for recording transfers of that real property.

(f) Except as otherwise provided in subsections (d) and (e) of this section and §§ 29-607.04 and 29-608.05, a person not a partner shall not be deemed to know of a limitation on the authority of a partner merely because the limitation is contained in a filed statement.

(g) Unless earlier canceled, a filed statement of partnership authority shall be canceled by operation of law 5 years after the date on which the statement, or the most recent amendment, was delivered to the Mayor for filing.

(July 2, 2011, D.C. Law 18-378, § 2, 58 DCR 1720; Mar. 5, 2013, D.C. Law 19-210, § 2(f)(3)(A), 59 DCR 13171.)

Prior Codifications

2001 Ed., § 33-103.03.

1981 Ed., § 41-153.3.

Section References

This section is referenced in § 29-601.03, § 29-603.01, § 29-603.02, § 29-603.04, § 29-607.02, § 29-607.03, § 29-607.04, and § 29-608.05.

Effect of Amendments

The 2013 amendment by D.C. Law 19-210 substituted “deliver to the Mayor for filing” for “file” in (a); and substituted “delivered to the Mayor for filing” for “filed with the Mayor” in (g).

Editor's Notes

Uniform Law: This section is based on § 303 of the Uniform Partnership Act (1997 Act).

Application of Law 19-210: Section 7 of D.C. Law 19-210 provided that the act shall apply as of January 1, 2012.

§ 29–603.04. Statement of denial.

A partner or other person named as a partner in a filed statement of partnership authority or in a list maintained by an agent pursuant to § 29-603.03(b) may deliver to the Mayor for filing a statement of denial stating the name of the partnership and the fact that is being denied, which may include denial of a person’s authority or status as a partner. A statement of denial shall be a limitation on authority as provided in § 29-603.03(d) and (e).

§ 29–603.05. Partnership liable for partner’s actionable conduct.

(a) A partnership shall be liable for loss or injury caused to a person, or for a penalty incurred, as a result of a wrongful act or omission, or other actionable conduct, of a partner acting in the ordinary course of business of the partnership or with authority of the partnership.

(b) If, in the course of the partnership’s business or while acting with authority of the partnership, a partner receives or causes the partnership to receive money or property of a person not a partner, and the money or property is misapplied by a partner, the partnership shall be liable for the loss.

§ 29–603.06. Partner’s liability.

(a) Except as otherwise provided in subsections (b) and (c) of this section, all partners shall be liable jointly and severally for all debts, obligations, or other liabilities of the partnership unless otherwise agreed by the claimant or provided by law.

(b) A person admitted as a partner into an existing partnership shall not be personally liable for any partnership debt, obligation, or other liability incurred before the person’s admission as a partner.

(c) An obligation of a partnership incurred while the partnership is a limited liability partnership, whether arising in contract, tort, or otherwise, shall be solely the debt, obligation, or other liability of the partnership. A partner shall not be personally liable, directly or indirectly, by way of contribution or otherwise, for such a debt, obligation, or other liability solely by reason of being or so acting as a partner. This subsection shall apply notwithstanding anything inconsistent in the partnership agreement that existed immediately before the vote required to become a limited liability partnership under § 29-610.01(b).

(d) The failure of a limited liability partnership to observe any formalities relating to the exercise of its powers or management of its business is not a ground for imposing liability on any partner of the partnership for any debt, obligation, or other liability of the partnership.

(e) The cancellation or administrative revocation of a limited liability partnership’s statement of qualification does not affect this section’s limitation on the liability of a partner for a debt, obligation, or other liability of the partnership incurred while the statement was in effect.

(July 2, 2011, D.C. Law 18-378, § 2, 58 DCR 1720; Mar. 5, 2013, D.C. Law 19-210, § 2(f)(3)(C), 59 DCR 13171.)

Prior Codifications

2001 Ed., § 33-103.06.

1981 Ed., § 41-153.6.

Section References

This section is referenced in § 29-601.02, § 29-603.07, § 29-607.03, § 29-608.06, § 29-608.07, § 29-608.08, § 29-608.09, § 29-608.11, and § 29-609.03.

Effect of Amendments

The 2013 amendment by D.C. Law 19-210 substituted “debt, obligation, or other liability” or a variant thereof for “obligation” or a variant thereof in (a), (b), and (c); and added (d) and (e).

Editor's Notes

Uniform Law: This section is based on § 306 of the Uniform Partnership Act (1997 Act).

Application of Law 19-210: Section 7 of D.C. Law 19-210 provided that the act shall apply as of January 1, 2012.

§ 29–603.07. Actions by and against partnership and partners.

(a) A partnership may sue and be sued in the name of the partnership.

(b) Except as otherwise provided in subsection (f) of this section, action may be brought against the partnership and, to the extent not inconsistent with § 29-603.06, any or all of the partners in the same action or in separate actions.

(c) A judgment against a partnership shall not by itself be a judgment against a partner. A judgment against a partnership shall not be satisfied from a partner’s assets unless there is also a judgment against the partner.

(d) A judgment creditor of a partner may not levy execution against the assets of the partner to satisfy a judgment based on a claim against the partnership unless the partner is personally liable for the claim under § 29-603.06 and:

(1) A judgment based on the same claim has been obtained against the partnership and a writ of execution on the judgment has been returned unsatisfied in whole or in part;

(2) The partnership is a debtor in bankruptcy;

(3) The partner has agreed that the creditor need not exhaust partnership assets;

(4) A court grants permission to the judgment creditor to levy execution against the assets of a partner based on a finding that partnership assets subject to execution are clearly insufficient to satisfy the judgment, that exhaustion of partnership assets is excessively burdensome, or that the grant of permission is an appropriate exercise of the court’s equitable powers; or

(5) Liability is imposed on the partner by law or contract independent of the existence of the partnership.

(e) This section shall apply to any partnership debt, obligation, or other liability resulting from a representation by a partner or purported partner under § 29-603.08.

(f) A partner is not a proper party to an action against a partnership if that partner is not personally liable for the claim under § 29-603.06.

(July 2, 2011, D.C. Law 18-378, § 2, 58 DCR 1720; Mar. 5, 2013, D.C. Law 19-210, § 2(f)(3)(D), 59 DCR 13171.)

Prior Codifications

2001 Ed., § 33-103.07.

1981 Ed., § 41-153.7.

Section References

This section is referenced in § 29-601.04.

Effect of Amendments

The 2013 amendment by D.C. Law 19-210 substituted “debt, obligation, or other liability” for “liability or obligation” in (e); and substituted “is not” for “shall not be” in (f).

Editor's Notes

Uniform Law: This section is based on § 307 of the Uniform Partnership Act (1997 Act).

Application of Law 19-210: Section 7 of D.C. Law 19-210 provided that the act shall apply as of January 1, 2012.

§ 29–603.08. Liability of purported partner.

(a) If a person, by words or conduct, purports to be a partner, or consents to being represented by another as a partner, in a partnership or with one or more persons not partners, the purported partner shall be liable to a person to whom the representation is made, if that person, relying on the representation, enters into a transaction with the actual or purported partnership. If the representation, either by the purported partner or by a person with the purported partner’s consent, is made in a public manner, the purported partner shall be liable to a person that relies upon the purported partnership even if the purported partner is not aware of being held out as a partner to the claimant. If partnership liability results, the purported partner shall be liable with respect to that liability as if the purported partner were a partner. If no partnership liability results, the purported partner shall be liable with respect to that liability jointly and severally with any other person consenting to the representation.

(b) If a person is thus represented to be a partner in an existing partnership, or with one or more persons not partners, the purported partner shall be an agent of persons consenting to the representation to bind them to the same extent and in the same manner as if the purported partner were a partner, with respect to persons that enter into transactions in reliance upon the representation. If all of the partners of the existing partnership consent to the representation, a partnership act or obligation shall result. If fewer than all of the partners of the existing partnership consent to the representation, the person acting and the partners consenting to the representation shall be jointly and severally liable.

(c) A person shall not be liable as a partner merely because the person is named by another in a statement of partnership authority.

(d) A person shall not continue to be liable as a partner merely because of a failure to file a statement of dissociation or to amend a statement of partnership authority to indicate the partner’s dissociation from the partnership.

(e) Except as otherwise provided in subsections (a) and (b) of this section, persons that are not partners as to each other shall not be liable as partners to other persons.

Subchapter IV. Relations of Partners to Each Other and to Partnership.

§ 29–604.01. Partner’s rights and duties.

(a) Each partner shall deemed to have an account that is:

(1) Credited with an amount equal to the money plus the value of any other property, net of the amount of any liabilities, the partner contributes to the partnership and the partner’s share of the partnership profits; and

(2) Charged with an amount equal to the money plus the value of any other property, net of the amount of any liabilities, distributed by the partnership to the partner and the partner’s share of the partnership losses.

(b) Each partner shall be entitled to an equal share of the partnership profits and shall be chargeable with a share of the partnership losses in proportion to the partner’s share of the profits.

(c) A partnership shall reimburse a partner for payments made, and indemnify a partner for liabilities incurred, by the partner in the ordinary course of the business of the partnership or for the preservation of its business or property.

(d) A partnership shall reimburse a partner for an advance to the partnership beyond the amount of capital the partner agreed to contribute.

(e) A payment or advance made by a partner which gives rise to a partnership obligation under subsection (c) or (d) of this section shall constitute a loan to the partnership which accrues interest from the date of the payment or advance.

(f) A partnership shall indemnify and hold harmless a person with respect to any claim or demand against the person and any debt, obligation, or other liability incurred by the person by reason of the person’s former or present capacity as partner, if the claim, demand, debt, obligation, or other liability does not arise from the person’s breach of this section, § 29-604.07, or § 29-610.02.

(g) In the ordinary course of its business, a partnership may advance reasonable expenses, including attorney’s fees and costs, incurred by a person in connection with a claim or demand against the person by reason of the person’s former or present capacity as a partner, if the person promises to repay the partnership if the person ultimately is determined not to be entitled to be indemnified under subsection (f) of this section.

(h) A partnership may purchase or maintain insurance against liability arising from a partner’s status and asserted against or incurred by a partner acting in his or her capacity. Such insurance may be purchased and maintained even if, under § 29-601.04(b)(13), the partnership agreement does not permit limitation or elimination of partner liability.

(i) Each partner shall have equal rights in the management and conduct of the partnership business.

(j) A partner shall use or possess partnership property only on behalf of the partnership.

(k) A partner shall not be entitled to remuneration for services performed for the partnership, except for reasonable compensation for services rendered in winding up the business of the partnership.

(l) A difference arising as to a matter in the ordinary course of business of a partnership shall be decided by a majority of the partners. An act outside the ordinary course of business of a partnership and an amendment to the partnership agreement shall be undertaken only with the consent of all of the partners.

(m) This section shall not affect the debts, liabilities, or other obligations of a partnership to other persons under § 29-603.01.

(July 2, 2011, D.C. Law 18-378, § 2, 58 DCR 1720; Mar. 5, 2013, D.C. Law 19-210, § 2(f)(4)(A), 59 DCR 13171.)

Prior Codifications

1981 Ed., § 41-154.1.

2001 Ed., § 33-104.01.

Section References

This section is referenced in § 29-604.08 and § 29-609.03.

Effect of Amendments

The 2013 amendment by D.C. Law 19-210 added (f), (g), and (h); repealed former (i) and (j); and redesignated former (f) through (h) as (i) through (k), respectively; and redesignated former (k) and (l) as (l) and (m), respectively.

Editor's Notes

Uniform Law: This section is based on § 401 of the Uniform Partnership Act (1997 Act).

Application of Law 19-210: Section 7 of D.C. Law 19-210 provided that the act shall apply as of January 1, 2012.

§ 29–604.02. Becoming partner.

(a) Upon formation of a partnership under § 29-602.02(a), a person becomes a partner.

(b) After formation of a partnership, a person becomes a partner:

(1) As provided in the partnership agreement;

(2) As a result of a transaction effective under Subchapter [subchapter] IX of this chapter or Chapter 2 of this title; or

(3) With the consent of all the partners.

(1) Acquiring a transferable interest; or

(2) Making or being obligated to make a contribution to the partnership.

(July 2, 2011, D.C. Law 18-378, § 2, 58 DCR 1720; Mar. 5, 2013, D.C. Law 19-210, § 2(f)(4)(B), (D), 59 DCR 13171.)

Prior Codifications

1981 Ed., § 41-154.2.

2001 Ed., § 33-104.02.

Section References

This section is referenced in § 29-601.02.

Effect of Amendments

The 2013 amendment by D.C. Law 19-210 rewrote the section, which formerly read: “Distributions in kind. A partner shall have no right to receive, and shall not be required to accept, a distribution in kind.”

Editor's Notes

Uniform Law: This section is based on § 402 of the Uniform Partnership Act (1997 Act). See Vol. 6, Part I , Uniform Laws Annotated, Master Edition.

Application of Law 19-210: Section 7 of D.C. Law 19-210 provided that the act shall apply as of January 1, 2012.

§ 29–604.03. Form of contribution.

A contribution may consist of property transferred, services performed, or other benefit provided to the partnership or an agreement to transfer property, perform services, or provide another benefit.

§ 29–604.04. Liability for contributions.

(a) A person’s obligation to make a contribution to a partnership is not excused by the person’s death, disability, or other inability to perform personally.

(b) If a person does not fulfill an obligation to make a contribution other than money, the person is obligated at the option of the partnership to contribute money equal to the value of the part of the contribution which has not been made.

(c) The obligation of a person to make a contribution may be compromised only by consent of all partners. If a creditor of a limited liability partnership extends credit or otherwise acts in reliance on an obligation described in subsection (a) of this section, without notice of a compromise under this subsection, the creditor may enforce the obligation.

§ 29–604.05. Distributions in kind; sharing of and right to distribution before dissolution.

(a) Any distributions made by a partnership before its dissolution and winding up must be in equal shares among partners, except to the extent necessary to comply with a transfer effective under § 29-605.03 or charging order in effect under § 29-605.04.

(b) A person has a right to a distribution before the dissolution and winding up of a partnership only if the partnership decides to make an interim distribution.

(c) A person does not have a right to demand or receive a distribution from a partnership in any form other than money. Except as otherwise provided in § 29-608.09, a partnership may distribute an asset in kind only if each part of the asset is fungible with each other part and each person receives a percentage of the asset equal in value to the person’s share of distributions.

(d) If a partner or transferee becomes entitled to receive a distribution, the partner or transferee has the status of, and is entitled to all remedies available to, a creditor of the partnership with respect to the distribution. However, the partnership’s obligation to make a distribution is subject to offset for any amount owed to the partnership by the partner or a person dissociated as partner on whose account the distribution is made.

§ 29–604.06. Partner’s rights and duties with respect to information.

(a) A partnership shall keep its books and records, if any, at its principal office.

(b) A partnership shall provide partners and their agents and attorneys access to its books and records. It shall provide former partners and their agents and attorneys access to books and records pertaining to the period during which they were partners. The right of access provides the opportunity to inspect and copy books and records during ordinary business hours. A partnership may impose a reasonable charge, covering the costs of labor and material, for copies of documents furnished.

(c) Each partner and the partnership shall furnish to a partner, and to the legal representative of a deceased partner or partner under legal disability:

(1) Without demand, any information concerning the partnership’s business [activities] and affairs reasonably required for the proper exercise of the partner’s rights and duties under the partnership agreement or this chapter; and

(2) On demand, any other information concerning the partnership’s business [activities] and affairs, except to the extent the demand or the information demanded is unreasonable or otherwise improper under the circumstances.

(July 2, 2011, D.C. Law 18-378, § 2, 58 DCR 1720; Mar. 5, 2013, D.C. Law 19-210, §§ 2(f)(4)(C), (D), 59 DCR 13171.)

Prior Codifications

1981 Ed., § 41-154.3.

2001 Ed., § 33-104.03.

2001 Ed., § 29-604.03.

Section References

This section is referenced in § 29-605.05.

Effect of Amendments

The 2013 amendment by D.C. Law 19-210 redesignated former § 20-604.03 as § 29-604.06; and apparently intended to substitute “activities” for “business” twice in (c).

Editor's Notes

Uniform Law: This section is based on § 403 of the Uniform Partnership Act (1997 Act).

Section 2(f)(4)(C) of D.C. Law 19-210 redesignated former § 20-604.06 as § 29-604.09.

Application of Law 19-210: Section 7 of D.C. Law 19-210 provided that the act shall apply as of January 1, 2012.

§ 29–604.07. General standards of partner’s conduct.

(a) The only fiduciary duties a partner owes to the partnership and the other partners are the duty of loyalty and the duty of care set forth in subsections (b) and (c) of this section.

(b) A partner’s duty of loyalty to the partnership and the other partners include the following:

(1) To account to the partnership and hold as trustee for it any property, profit, or benefit derived by the partner in the conduct and winding up of the partnership business or derived from a use by the partner of partnership property, including the appropriation of a partnership opportunity;

(2) To refrain from dealing with the partnership in the conduct or winding up of the partnership business as or on behalf of a party having an interest adverse to the partnership; and

(3) To refrain from competing with the partnership in the conduct of the partnership business before the dissolution of the partnership.

(c) A partner’s duty of care to the partnership and the other partners in the conduct and winding up of the partnership business shall be limited to refraining from engaging in grossly negligent or reckless conduct, intentional misconduct, or a knowing violation of law.

(d) A partner shall discharge the duties to the partnership and the other partners under this chapter or under the partnership agreement and exercise any rights consistently with the obligation of good faith and fair dealing.

(e) A partner does not violate a duty or obligation under this chapter or under the partnership agreement merely because the partner’s conduct furthers the partner’s own interest.

(f) A partner may lend money to and do other business with the partnership, and, as to each loan or transaction, the rights and obligations of the partner shall be the same as those of a person that is not a partner, subject to other applicable law.

(g) This section shall apply to a person winding up the partnership business as the personal or legal representative of the last surviving partner as if the person were a partner.

(h) All the partners may authorize or ratify, after full disclosure of all material facts, a specific act or transaction that otherwise would violate the duty of loyalty.

(i) It is a defense to a claim under subsection (b)(2) of this section and any comparable claim in equity or at common law that the transaction was fair to the partnership.

(j) If, as permitted by subsection (f) of this section or the partnership agreement, a partner enters into a transaction with the partnership which otherwise would be prohibited by subsection (b)(2) of this section, the partner’s rights and obligations arising from the transaction are the same as those of a person that is not a partner.

(July 2, 2011, D.C. Law 18-378, § 2, 58 DCR 1720; Mar. 5, 2013, D.C. Law 19-210, §§ 2(f)(4)(C), (E), 59 DCR 13171.)

Prior Codifications

1981 Ed., § 41-154.4.

2001 Ed., § 33-104.04.

2001 Ed., § 29-604.04.

Section References

This section is referenced in § 29-601.04, § 29-604.01, and § 29-610.03.

Effect of Amendments

The 2013 amendment by D.C. Law 19-210 redesignated former § 20-604.04 as § 29-604.07; substituted “include” for “shall be limited to” in (b); substituted “does” for “shall” in (e); and added (h), (i), and (j).

Editor's Notes

Uniform Law: This section is based on § 404 of the Uniform Partnership Act (1997 Act).

Application of Law 19-210: Section 7 of D.C. Law 19-210 provided that the act shall apply as of January 1, 2012.

§ 29–604.08. Actions by partnership and partners.

(a) A partnership may maintain an action against a partner for a breach of the partnership agreement, or for the violation of a duty to the partnership, causing harm to the partnership.

(b) A partner may maintain an action against the partnership or another partner for legal or equitable relief, with or without an accounting as to partnership business, to enforce the:

(1) Partner’s rights under the partnership agreement;

(2) Partner’s rights under this chapter, including:

(A) The partner’s rights under § 29-604.01, § 29-604.03, or § 29-604.04;

(B) The partner’s right on dissociation to have the partner’s interest in the partnership purchased pursuant to § 29-607.01 or enforce any other right under subchapter VI or VII of this chapter; or

(C) The partner’s right to compel a dissolution and winding up of the partnership business under § 29-608.01 or enforce any other right under subchapter VIII of this chapter; or

(3) Rights and otherwise protect the interests of the partner, including rights and interests arising independently of the partnership relationship.

(c) The accrual of, and any time limitation on, a right of action for a remedy under this section shall be governed by other law. A right to an accounting upon a dissolution and winding up shall not revive a claim barred by law.

§ 29–604.09. Continuation of partnership beyond definite term or particular undertaking.

(a) If a partnership for a definite term or particular undertaking is continued, without an express agreement, after the expiration of the term or completion of the undertaking, the rights and duties of the partners shall remain the same as they were at the expiration or completion, so far as is consistent with a partnership at will.

(b) If the partners, or those of them who habitually acted in the business during the term or undertaking, continue the business without any settlement or liquidation of the partnership, they shall be presumed to have agreed that the partnership will continue.

Subchapter V. Transferees and Creditors of Partner.

§ 29–605.01. Partner not co-owner of partnership property.

A partner shall not be a co-owner of partnership property and has no interest in partnership property which can be transferred, either voluntarily or involuntarily.

§ 29–605.02. Partner’s transferable interest in partnership.

Except as otherwise provided in subchapter IX of this chapter or Chapter 2 of this title, the only transferable interest of a partner in the partnership is the partner’s share of the profits and losses of the partnership and the partner’s right to receive distributions. The interest of a partner, whether or not transferable, shall be personal property.

§ 29–605.03. Transfer of partner’s transferable interest.

(a) A transfer, in whole or in part, of a partner’s transferable interest in the partnership:

(1) Is permissible;

(2) Shall not by itself cause the partner’s dissociation or a dissolution and winding up of the partnership business; and

(3) Shall not, as against the other partners or the partnership, entitle the transferee, during the continuance of the partnership, to participate in the management or conduct of the partnership business, to require access to information concerning partnership transactions, or to inspect or copy the partnership books or records.

(b) A transferee of a partner’s transferable interest in the partnership shall have a right to:

(1) Receive, in accordance with the transfer, distributions to which the transferor would otherwise be entitled;

(2) Receive upon the dissolution and winding up of the partnership business, in accordance with the transfer, the net amount otherwise distributable to the transferor; and

(3) Seek under § 29-608.01(6) a judicial determination that it is equitable to wind up the partnership business.

(c) In a dissolution and winding up, a transferee shall be entitled to an account of partnership transactions only from the date of the latest account agreed to by all of the partners.

(d) Upon transfer, the transferor shall retain the rights and duties of a partner other than the interest in distributions transferred.

(e) A partnership need not give effect to a transferee’s rights under this section until it has notice of the transfer.

(f) A transfer of a partner’s transferable interest in the partnership in violation of a restriction on transfer contained in the partnership agreement shall be ineffective as to a person having notice of the restriction at the time of transfer.

(g) If a partner transfers a transferable interest to a person that becomes a partner with respect to the transferred interest, the transferee is liable for the partner’s obligations under §§ 29-604.04 and 29-610.03 known to the transferee when the transferee becomes a partner.

§ 29–605.04. Partner’s transferable interest subject to charging order.

(a) On application by a judgment creditor of a partner or of a partner’s transferee, a court having jurisdiction may charge the transferable interest of the judgment debtor to satisfy the judgment. The court may appoint a receiver of the share of the distributions due or to become due to the judgment debtor in respect of the partnership and make all other orders, directions, accounts, and inquiries the judgment debtor might have made or which the circumstances of the case may require.

(b) A charging order shall constitute a lien on the judgment debtor’s transferable interest in the partnership. The court may order a foreclosure of the interest subject to the charging order at any time. The purchaser at the foreclosure sale shall have the rights of a transferee.

(1) By the judgment debtor;

(2) With property other than partnership property, by one or more of the other partners; or

(3) With partnership property, by one or more of the other partners with the consent of all of the partners whose interests are not so charged.

(d) This chapter shall not deprive a partner of a right under exemption laws with respect to the partner’s interest in the partnership.

(e) This section provides the exclusive remedy by which a judgment creditor of a partner or partner’s transferee may satisfy a judgment out of the judgment debtor’s transferable interest in the partnership.

§ 29–605.05. Power of legal representative of deceased partner.

If a partner dies, the deceased partner’s legal representative may exercise:

(1) The rights of a transferee provided in § 29-605.03(c); and

(2) For purposes of settling the estate, the rights the deceased partner had under § 29-604.06.

Subchapter VI. Partner’s Dissociation.

§ 29–606.01. Events causing partner’s dissociation.

A partner shall be dissociated from a partnership when:

(1) The partnership has notice of the partner’s express will to withdraw as a partner or on a later date specified by the partner;

(2) An event agreed to in the partnership agreement as causing the partner’s dissociation occurs;

(3) The partner is expelled pursuant to the partnership agreement;

(4) The partner is expelled by the unanimous vote of the other partners if:

(A) It is unlawful to carry on the partnership business with that partner;

(B) There has been a transfer of all or substantially all of that partner’s transferable interest in the partnership, other than a transfer for security purposes, or a court order charging the partner’s interest, which has not been foreclosed;

(C) Within 90 days after the partnership notifies a corporate partner that it will be expelled because it has filed a certificate of dissolution or the equivalent, its charter has been revoked, or its right to conduct business has been suspended by the jurisdiction of its incorporation, there is no revocation of the certificate of dissolution or no reinstatement of its charter or its right to conduct business; or

(D) A partnership that is a partner has been dissolved and its business is being wound up;

(5) On application by the partnership or another partner, the partner is expelled by judicial determination because the partner:

(A) Engaged in wrongful conduct that adversely and materially affected the partnership business;

(B) Willfully or persistently committed a material breach of the partnership agreement or of a duty owed to the partnership or the other partners under § 29-604.04; or

(C) Engaged in conduct relating to the partnership business which makes it not reasonably practicable to carry on the business in partnership with the partner;

(6) The partner:

(A) Became a debtor in bankruptcy;

(B) Executed an assignment for the benefit of creditors;

(C) Sought, consented to, or acquiesced in the appointment of a trustee, receiver, or liquidator of that partner or of all or substantially all of that partner’s property; or

(D) Failed, within 90 days after the appointment, to have vacated or stayed the appointment of a trustee, receiver, or liquidator of the partner or of all or substantially all of the partner’s property obtained without the partner’s consent or acquiescence, or failed within 90 days after the expiration of a stay to have the appointment vacated;

(7) In the case of a partner who is an individual:

(A) The partner dies;

(B) A guardian or general conservator is appointed for the partner; or

(C) There is a judicial determination that the partner has otherwise become incapable of performing the partner’s duties under the partnership agreement;

(8) In the case of a partner that is a trust or is acting as a partner by virtue of being a trustee of a trust, the trust’s entire transferable interest in the partnership is distributed;

(9) In the case of a partner that is an estate or is acting as a partner by virtue of being a personal representative of an estate, the estate’s entire transferable interest in the partnership is distributed;

(10) A partner that is not an individual, partnership, corporation, trust, or estate dissolves and completes winding up; or

(11) The partnership participates in a merger, interest exchange, conversion, or domestication under Chapter 2 of this title or Subchapter [subchapter] IX of this chapter and, as a result, the person ceases to be a partner.

(July 2, 2011, D.C. Law 18-378, § 2, 58 DCR 1720; Mar. 5, 2013, D.C. Law 19-210, § 2(f)(6)(A), 59 DCR 13171.)

Prior Codifications

1981 Ed., § 41-156.1.

2001 Ed., § 33-106.01.

Section References

This section is referenced in § 29-601.02, § 29-601.04, § 29-606.02, and § 29-608.01.

Effect of Amendments

The 2013 amendment by D.C. Law 19-210 substituted “dissolves and completes winding up; or” for “is terminated” in (10); added (11); and made a related change.

Editor's Notes

Uniform Law: This section is based on § 601 of the Uniform Partnership Act (1997 Act).

Application of Law 19-210: Section 7 of D.C. Law 19-210 provided that the act shall apply as of January 1, 2012.

§ 29–606.02. Partner’s power to dissociate; wrongful dissociation.

(a) A partner may dissociate at any time, rightfully or wrongfully, by express will pursuant to § 29-606.01(1).

(b) A partner’s dissociation shall be wrongful only if:

(1) It is in breach of an express provision of the partnership agreement; or

(2) In the case of a partnership for a definite term or particular undertaking, before the expiration of the term or the completion of the undertaking:

(A) The partner withdraws by express will, unless the withdrawal follows within 90 days after another partner’s dissociation by death or otherwise under § 29-606.01(6) through (10) or wrongful dissociation under this subsection;

(B) The partner is expelled by judicial determination under § 29-606.01(5);

(D) In the case of a partner that is not an individual, trust other than a business trust, or estate, the partner is expelled or otherwise dissociated because it willfully dissolved or terminated.

(c) A partner that wrongfully dissociates shall be liable to the partnership and to the other partners for damages caused by the dissociation. The liability shall be in addition to any other obligation of the partner to the partnership or to the other partners.

§ 29–606.03. Effect of partner’s dissociation.

(a) If a partner’s dissociation results in a dissolution and winding up of the partnership business, subchapter VIII of this chapter shall apply; otherwise, subchapter VII of this chapter applies.

(b) Upon a partner’s dissociation:

(1) The partner’s right to participate in the management and conduct of the partnership business terminates, except as otherwise provided in § 29-608.03;

(2) The partner’s duty of loyalty under § 29-604.04(b)(3) terminates; and

(3) The partner’s duty of loyalty under § 29-604.04(b)(1) and (2) and duty of care under § 29-604.04(c) continue only with regard to matters arising and events occurring before the partner’s dissociation, unless the partner participates in winding up the partnership’s business pursuant to § 29-608.03.

(c) A person’s dissociation alone does not discharge the person from a debt, obligation, or other liability to the partnership or to the other partners which the person incurred while a partner.

Subchapter VII. Partner’s Dissociation When Business Not Wound Up.

§ 29–607.01. Purchase of dissociated partner’s interest.

(a) If a partner is dissociated from a partnership without resulting in a dissolution and winding up of the partnership business under § 29-608.01, the partnership shall cause the dissociated partner’s interest in the partnership to be purchased for a buyout price determined pursuant to subsection (b) of this section.

(b) The buyout price of a dissociated partner’s interest shall be the amount that would have been distributable to the dissociating partner under § 29-608.07(b) if, on the date of dissociation, the assets of the partnership were sold at a price equal to the greater of the liquidation value or the value based on a sale of the entire business as a going concern without the dissociated partner and the partnership were wound up as of that date. Interest shall be paid from the date of dissociation to the date of payment.

(c) Damages for wrongful dissociation under § 29-606.02(b), and all other amounts owing, whether or not presently due, from the dissociated partner to the partnership, shall be offset against the buyout price. Interest shall be paid from the date the amount owed becomes due to the date of payment.

(d) A partnership shall indemnify a dissociated partner whose interest is being purchased against all partnership liabilities, whether incurred before or after the dissociation, except liabilities incurred by an act of the dissociated partner under § 29-607.02.

(e) If no agreement for the purchase of a dissociated partner’s interest is reached within 120 days after a written demand for payment, the partnership shall pay, or cause to be paid, in cash to the dissociated partner the amount the partnership estimates to be the buyout price and accrued interest, reduced by any offsets and accrued interest under subsection (c) of this section.

(f) If a deferred payment is authorized under subsection (h) of this section, the partnership may tender a written offer to pay the amount it estimates to be the buyout price and accrued interest, reduced by any offsets under subsection (c) of this section, stating the time of payment, the amount and type of security for payment, and the other terms and conditions of the obligation.

(g) The payment or tender required by subsection (e) or (f) of this section shall be accompanied by the following:

(1) A statement of partnership assets and liabilities as of the date of dissociation;

(2) The latest available partnership balance sheet and income statement, if any;

(3) An explanation of how the estimated amount of the payment was calculated; and

(4) Written notice that the payment is in full satisfaction of the obligation to purchase unless, within 120 days after the written notice, the dissociated partner commences an action to determine the buyout price, any offsets under subsection (c) of this section, or other terms of the obligation to purchase.

(h) A partner that wrongfully dissociates before the expiration of a definite term or the completion of a particular undertaking shall not be entitled to payment of any portion of the buyout price until the expiration of the term or completion of the undertaking, unless the partner establishes to the satisfaction of the court that earlier payment will not cause undue hardship to the business of the partnership. A deferred payment shall be adequately secured and bear interest.

(i) A dissociated partner may maintain an action against the partnership, pursuant to § 29-604.05(b)(2)(B), to determine the buyout price of that partner’s interest, any offsets under subsection (c) of this section, or other terms of the obligation to purchase. The action shall be commenced within 120 days after the partnership has tendered payment or an offer to pay or within one year after written demand for payment if no payment or offer to pay is tendered. The court shall determine the buyout price of the dissociated partner’s interest, any offset due under subsection (c) of this section, and accrued interest, and enter judgment for any additional payment or refund. If deferred payment is authorized under subsection (h) of this section, the court shall also determine the security for payment and other terms of the obligation to purchase. The court may assess reasonable attorneys’ fees and the fees and expenses of appraisers or other experts for a party to the action, in amounts the court finds equitable, against a party that the court finds acted arbitrarily, vexatiously, or not in good faith. The finding may be based on the partnership’s failure to tender payment or an offer to pay or to comply with subsection (g) of this section.

§ 29–607.02. Dissociated partner’s power to bind and liability to partnership.

(a) For 2 years after a partner dissociates without resulting in a dissolution and winding up of the partnership business, the partnership, including a surviving partnership under subchapter IX of this chapter, shall be bound by an act of the dissociated partner which would have bound the partnership under § 29-603.01 before dissociation only if at the time of entering into the transaction the other party:

(1) Reasonably believed that the dissociated partner was then a partner;

(2) Did not have notice of the partner’s dissociation; and

(3) Is not deemed to have had knowledge under § 29-603.03(e) or notice under § 29-607.04(c).

(b) A dissociated partner shall be liable to the partnership for any damage caused to the partnership arising from a debt, obligation, or other liability incurred by the dissociated partner after dissociation for which the partnership is liable under subsection (a) of this section.

(July 2, 2011, D.C. Law 18-378, § 2, 58 DCR 1720; Mar. 5, 2013, D.C. Law 19-210, § 2(f)(7)(A), 59 DCR 13171.)

Prior Codifications

1981 Ed., § 41-157.2.

2001 Ed., § 33-107.02.

Section References

This section is referenced in § 29-607.01, § 29-607.04, and § 29-609.03.

Effect of Amendments

The 2013 amendment by D.C. Law 19-210 substituted “’a debt, obligation, or other liability” for “an obligation” in (b).

Editor's Notes

Uniform Law: This section is based on § 702 of the Uniform Partnership Act (1997 Act).

Application of Law 19-210: Section 7 of D.C. Law 19-210 provided that the act shall apply as of January 1, 2012.

§ 29–607.03. Dissociated partner’s liability to other persons.

(a) A partner’s dissociation shall not of itself discharge the partner’s liability for a partnership debt, obligation, or other liability incurred before dissociation. A dissociated partner shall not be liable for a partnership debt, obligation, or other liability incurred after dissociation, except as otherwise provided in subsection (b) of this section.

(b) A partner that dissociates without resulting in a dissolution and winding up of the partnership business shall be liable as a partner to the other party in a transaction entered into by the partnership, or a surviving partnership under subchapter IX of this chapter, within 2 years after the partner’s dissociation, only if the partner is liable for the obligation under § 29-603.06 and at the time of entering into the transaction the other party:

(1) Reasonably believed that the dissociated partner was then a partner;

(2) Did not have notice of the partner’s dissociation; and

(3) Is not deemed to have had knowledge under § 29-603.03(e) or notice under § 29-607.04(c).

(c) By agreement with the partnership creditor and the partners continuing the business, a dissociated partner may be released from liability for a partnership debt, obligation, or other liability.

(d) A dissociated partner shall be released from liability for a partnership debt, obligation, or other liability if a partnership creditor, with notice of the partner’s dissociation but without the partner’s consent, agrees to a material alteration in the nature or time of payment of a partnership debt, obligation, or other liability.

(July 2, 2011, D.C. Law 18-378, § 2, 58 DCR 1720; Mar. 5, 2013, D.C. Law 19-210, § 2(f)(7)(B), 59 DCR 13171.)

Prior Codifications

1981 Ed., § 41-157.3.

2001 Ed., § 33-107.03.

Section References

This section is referenced in § 29-607.04, § 29-608.09, § 29-608.11, and § 29-609.03.

Effect of Amendments

The 2013 amendment by D.C. Law 19-210 substituted “debt, obligation, or other liability” for “obligation” in (a), (c) and (d).

Editor's Notes

Uniform Law: This section is based on § 703 of the Uniform Partnership Act (1997 Act).

Application of Law 19-210: Section 7 of D.C. Law 19-210 provided that the act shall apply as of January 1, 2012.

§ 29–607.04. Statement of dissociation.

(a) A dissociated partner or the partnership may file a statement of dissociation stating the name of the partnership and that the partner is dissociated from the partnership.

(b) A statement of dissociation shall be a limitation on the authority of a dissociated partner for the purposes of § 29-603.03(d) and (e).

(c) For the purposes of §§ 29-607.02(a)(3) and 29-607.03(b)(3), a person not a partner shall be deemed to have notice of the dissociation 90 days after the statement of dissociation is filed.

§ 29–607.05. Continued use of partnership name.

Continued use of a partnership name, or a dissociated partner’s name as part thereof, by partners continuing the partnership’s activities and affairs shall not of itself make the dissociated partner liable for a debt, obligation, or other liability of the partners or the partnership continuing the activities and affairs.

(July 2, 2011, D.C. Law 18-378, § 2, 58 DCR 1720; Mar. 5, 2013, D.C. Law 19-210, § 2(f)(7)(C), 59 DCR 13171.)

Prior Codifications

1981 Ed., § 41-157.5.

2001 Ed., § 33-107.05.

Effect of Amendments

The 2013 amendment by D.C. Law 19-210 substituted “partnership’s activities and affairs” for the first occurrence of “business”; substituted “a debt, obligation, or other liability” for “an obligation”; and substituted “activities and affairs” for the second occurrence of “business.”

Editor's Notes

Uniform Law: This section is based on § 705 of the Uniform Partnership Act (1997 Act).

Application of Law 19-210: Section 7 of D.C. Law 19-210 provided that the act shall apply as of January 1, 2012.

Subchapter VIII. Dissolution and Winding Up.

§ 29–608.01. Events causing dissolution and winding up of partnership business.

A partnership is dissolved, and its activities and affairs shall be wound up, only upon the occurrence of any of the following events:

(1) In a partnership at will, the partnership’s having notice from a partner, other than a partner that is dissociated under § 29-606.01(2) through (10), of that partner’s express will to withdraw as a partner, or on a later date specified by the partner;

(2) In a partnership for a definite term or particular undertaking:

(A) Within 90 days after a partner’s dissociation by death or otherwise under § 29-606.01(6) through (10) or wrongful dissociation under § 29-606.02(b), the express will of at least half of the remaining partners to wind up the partnership’s activities and affairs, for which purpose a partner’s rightful dissociation pursuant to § 29-606.02(b)(2)(A) constitutes the expression of that partner’s will to wind up the partnership’s activities and affairs;

(B) The express will of all of the partners to wind up the partnership’s activities and affairs; or

(3) An event agreed to in the partnership agreement resulting in the winding up of the partnership activities and affairs;

(4) An event that makes it unlawful for all or substantially all of the business of the partnership to be continued, but a cure of illegality within 90 days after notice to the partnership of the event shall be effective retroactively to the date of the event for purposes of this section;

(5) On application by a partner, a judicial determination that:

(A) The economic purpose of the partnership is likely to be unreasonably frustrated;

(B) Another partner has engaged in conduct relating to the partnership activities and affairs which makes it not reasonably practicable to carry on the activities and affairs in partnership with that partner; or

(C) It is not otherwise reasonably practicable to carry on the partnership activities and affairs in conformity with the partnership agreement.

(6) On application by a transferee of a partner’s transferable interest, a judicial determination that it is equitable to wind up the partnership activities and affairs:

(A) After the expiration of the term or completion of the undertaking, if the partnership was for a definite term or particular undertaking at the time of the transfer or entry of the charging order that gave rise to the transfer; or

(B) At any time, if the partnership was a partnership at will at the time of the transfer or entry of the charging order that gave rise to the transfer.

(7) The passage of 90 consecutive days during which the partnership does not have at least 2 partners.

(July 2, 2011, D.C. Law 18-378, § 2, 58 DCR 1720; Mar. 5, 2013, D.C. Law 19-210, § 2(f)(8)(B), 59 DCR 13171.)

Prior Codifications

1981 Ed., § 41-158.1.

2001 Ed., § 33-108.01.

Section References

This section is referenced in § 29-601.04, § 29-604.08, § 29-605.03, § 29-607.01, and § 29-608.12.

Effect of Amendments

The 2013 amendment by D.C. Law 19-210 substituted “activities and affairs” or variants thereof for “business”; made related stylistic changes; and added (7).

Editor's Notes

Uniform Law: This section is based on § 801 of the Uniform Partnership Act (1997 Act).

Section 2(f)(8)(A) of D.C. Law 19-210 substituted “Dissolution and Winding Up” for “Winding up Partnership Business” in the subchapter heading.

Application of Law 19-210: Section 7 of D.C. Law 19-210 provided that the act shall apply as of January 1, 2012.

§ 29–608.02. Partnership continues after dissolution.

(a) Subject to subsection (b) of this section, a partnership shall continue after dissolution only for the purpose of winding up its activities and affairs. The partnership shall be terminated when the winding up of its activities and affairs is completed.

(b) At any time after the dissolution of a partnership and before the winding up of its activities and affairs is completed, all of the partners, including any dissociating partner other than a wrongfully dissociating partner, may waive the right to have the partnership’s activities and affairs wound up and the partnership terminated. In that event:

(1) The partnership shall resume carrying on its activities and affairs as if dissolution had never occurred, and any liability incurred by the partnership or a partner after the dissolution and before the waiver shall be determined as if dissolution had never occurred; and

(2) The rights of a third party accruing under § 29-608.04(1) or arising out of conduct in reliance on the dissolution before the third party knew or received a notification of the waiver shall not be adversely affected.

(July 2, 2011, D.C. Law 18-378, § 2, 58 DCR 1720; Mar. 5, 2013, D.C. Law 19-210, § 2(f)(8)(C), 59 DCR 13171.)

Prior Codifications

1981 Ed., § 41-158.2.

2001 Ed., § 33-108.02.

Section References

This section is referenced in § 29-601.03.

Effect of Amendments

The 2013 amendment by D.C. Law 19-210 substituted “activities and affairs” for “business” throughout (a) and (b).

Editor's Notes

Uniform Law: This section is based on § 802 of the Uniform Partnership Act (1997 Act).

Application of Law 19-210: Section 7 of D.C. Law 19-210 provided that the act shall apply as of January 1, 2012.

§ 29–608.03. Right to wind up partnership.

(a) After dissolution, a partner that has not wrongfully dissociated may participate in winding up the partnership’s activities and affairs, but on application of any partner, partner’s legal representative, or transferee, the Superior Court, for good cause shown, may order judicial supervision of the winding up.

(b) The legal representative of the last surviving partner may wind up a partnership’s activities and affairs.

(c) A person winding up a partnership’s activities and affairs may preserve the partnership activities or property as a going concern for a reasonable time, prosecute and defend actions and proceedings, whether civil, criminal, or administrative, settle and close the partnership’s activities, dispose of and transfer the partnership’s property, discharge the partnership’s liabilities, distribute the assets of the partnership pursuant to § 29-608.07, settle disputes by mediation or arbitration, and perform other necessary acts.

(July 2, 2011, D.C. Law 18-378, § 2, 58 DCR 1720; Mar. 5, 2013, D.C. Law 19-210, § 2(f)(8)(D), 59 DCR 13171.)

Prior Codifications

1981 Ed., § 41-158.3.

2001 Ed., § 33-108.03.

Section References

This section is referenced in § 29-606.03.

Effect of Amendments

The 2013 amendment by D.C. Law 19-210 substituted “activities and affairs” for “business” in (a) and (b) and for the first occurrence of “business” in (c); and substituted “activities” for the second and third occurrences of “business” in (c).

Editor's Notes

Uniform Law: This section is based on § 803 of the Uniform Partnership Act (1997 Act).

Application of Law 19-210: Section 7 of D.C. Law 19-210 provided that the act shall apply as of January 1, 2012.

§ 29–608.04. Partner’s power to bind partnership after dissolution.

Subject to § 29-608.05, a partnership shall be bound by a partner’s act after dissolution that:

(1) Is appropriate for winding up the partnership activities and affairs; or

(2) Would have bound the partnership under § 29-603.01 before dissolution, if the other party to the transaction did not have notice of the dissolution.

(July 2, 2011, D.C. Law 18-378, § 2, 58 DCR 1720; Mar. 5, 2013, D.C. Law 19-210, § 2(f)(8)(E), 59 DCR 13171.)

Prior Codifications

1981 Ed., § 41-158.4.

2001 Ed., § 33-108.04.

Section References

This section is referenced in § 29-608.02, § 29-608.05, and § 29-608.06.

Effect of Amendments

The 2013 amendment by D.C. Law 19-210 substituted “activities and affairs” for “business” in (1).

Editor's Notes

Uniform Law: This section is based on § 804 of the Uniform Partnership Act (1997 Act).

Application of Law 19-210: Section 7 of D.C. Law 19-210 provided that the act shall apply as of January 1, 2012.

§ 29–608.05. Statement of dissolution.

(a) After dissolution, a partner that has not wrongfully dissociated may file a statement of dissolution stating the name of the partnership and that the partnership has dissolved and is winding up its activities and affairs.

(b) A statement of dissolution shall cancel a filed statement of partnership authority for the purposes of § 29-603.03(d) and shall be a limitation on authority for the purposes of § 29-603.03(e).

(c) For the purposes of §§ 29-603.01 and 29-608.04, a person not a partner shall be deemed to have notice of the dissolution and the limitation on the partners’ authority as a result of the statement of dissolution 90 days after it is filed.

(d) After filing and, if appropriate, recording a statement of dissolution, a dissolved partnership may file and, if appropriate, record a statement of partnership authority which will operate with respect to a person not a partner as provided in § 29-603.03(d) and (e) in any transaction, whether or not the transaction is appropriate for winding up the partnership activities and affairs.

(July 2, 2011, D.C. Law 18-378, § 2, 58 DCR 1720; Mar. 5, 2013, D.C. Law 19-210, § 2(f)(8)(F), 59 DCR 13171.)

Prior Codifications

1981 Ed., § 41-158.5.

2001 Ed., § 33-108.05.

Section References

This section is referenced in § 29-601.03, § 29-603.03, and § 29-608.04.

Effect of Amendments

The 2013 amendment by D.C. Law 19-210 substituted “activities and affairs” for “business” in (a) and (d).

Editor's Notes

Uniform Law: This section is based on § 805 of the Uniform Partnership Act (1997 Act).

Application of Law 19-210: Section 7 of D.C. Law 19-210 provided that the act shall apply as of January 1, 2012.

§ 29–608.06. Partner’s liability to other partners after dissolution.

(a) Except as otherwise provided in subsection (b) of this section and § 29-603.06, after dissolution, a partner shall be liable to the other partners for the partner’s share of any partnership liability incurred under § 29-608.04.

(b) A partner that, with knowledge of the dissolution, incurs a partnership liability under § 29-608.04(2) by an act that is not appropriate for winding up the partnership activities and affairs shall be liable to the partnership for any damage caused to the partnership arising from the liability.

(July 2, 2011, D.C. Law 18-378, § 2, 58 DCR 1720; Mar. 5, 2013, D.C. Law 19-210, § 2(f)(8)(G), 59 DCR 13171.)

Prior Codifications

1981 Ed., § 41-158.6.

2001 Ed., § 33-108.06.

Section References

This section is referenced in § 29-608.09 and § 29-608.11.

Effect of Amendments

The 2013 amendment by D.C. Law 19-210 substituted “activities and affairs” for “business” in (b).

Editor's Notes

Uniform Law: This section is based on § 806 of the Uniform Partnership Act (1997 Act).

Application of Law 19-210: Section 7 of D.C. Law 19-210 provided that the act shall apply as of January 1, 2012.

§ 29–608.07. Settlement of accounts and contributions among partners.

(a) In winding up a partnership’s activities and affairs, the assets of the partnership, including the contributions of the partners required by this section, shall be applied to discharge its obligations to creditors, including, to the extent permitted by law, partners who are creditors. Any surplus shall be applied to pay in cash the net amount distributable to partners in accordance with their right to distributions under subsection (b) of this section.

(b) Each partner shall be entitled to a settlement of all partnership accounts upon winding up the partnership activities and affairs. In settling accounts among the partners, profits and losses that result from the liquidation of the partnership assets shall be credited and charged to the partners’ accounts. The partnership shall make a distribution to a partner in an amount equal to any excess of the credits over the charges in the partner’s account. A partner shall contribute to the partnership an amount equal to any excess of the charges over the credits in the partner’s account but excluding from the calculation charges attributable to an obligation for which the partner is not personally liable under § 29-603.06.

(c) If a partner fails to contribute the full amount required under subsection (b) of this section, all of the other partners shall contribute, in the proportions in which those partners share partnership losses, the additional amount necessary to satisfy the partnership obligations for which they are personally liable under § 29-603.06. A partner or partner’s legal representative may recover from the other partners any contributions the partner makes to the extent the amount contributed exceeds that partner’s share of the partnership obligations for which the partner is personally liable under § 29-603.06.

(d) After the settlement of accounts, each partner shall contribute, in the proportion in which the partner shares partnership losses, the amount necessary to satisfy partnership obligations that were not known at the time of the settlement and for which the partner is personally liable under § 29-603.06.

(e) The estate of a deceased partner shall be liable for the partner’s obligation to contribute to the partnership.

(f) An assignee for the benefit of creditors of a partnership or a partner, or a person appointed by a court to represent creditors of a partnership or a partner, may enforce a partner’s obligation to contribute to the partnership.

(July 2, 2011, D.C. Law 18-378, § 2, 58 DCR 1720; Mar. 5, 2013, D.C. Law 19-210, § 2(f)(8)(H), 59 DCR 13171.)

Prior Codifications

1981 Ed., § 41-158.7.

2001 Ed., § 33-108.07.

Section References

This section is referenced in § 29-607.01, § 29-608.03, § 29-609.03, and § 29-610.02.

Effect of Amendments

The 2013 amendment by D.C. Law 19-210 substituted “activities and affairs” for “business” in (a) and (b).

Editor's Notes

Uniform Law: This section is based on § 807 of the Uniform Partnership Act (1997 Act).

Application of Law 19-210: Section 7 of D.C. Law 19-210 provided that the act shall apply as of January 1, 2012.

§ 29–608.08. Known claims against dissolved limited liability partnership.

(a) Except as otherwise provided in subsection (d) of this section, a dissolved limited liability partnership may give notice of a known claim under subsection (b) of this section, which has the effect provided in subsection (c) of this section.

(b) A dissolved limited liability partnership may, in a record, notify its known claimants of the dissolution. The notice must:

(1) Specify the information required to be included in a claim;

(2) State that a claim must be in writing and provide a mailing address to which the claim is to be sent;

(3) State the deadline for receipt of a claim, which may not be less than 120 days after the date the notice is received by the claimant;

(4) State that the claim will be barred if it is not received by the deadline; and

(5) Unless the partnership has been throughout its existence a limited liability partnership, state that the barring of a claim against the partnership will also bar any corresponding claim against any partner or person dissociated as a partner which is based on § 29-603.06.

(c) A claim against a dissolved limited liability partnership is barred if the notice requirements of subsection (b) of this section are met and:

(1) The claim is not received by the specified deadline; or

(2) If the claim is timely received but rejected by the limited liability partnership:

(A) The partnership causes the claimant to receive a notice in a record stating that the claim is rejected and will be barred unless the claimant commences an action against the partnership to enforce the claim not later than 90 days after the date the claimant receives the notice; and

(B) The claimant does not commence the required action not later than 90 days after the claimant receives the notice.

(d) This section does not apply to a claim based on an event occurring after the effective date of dissolution or a liability that on that date is contingent.

§ 29–608.09. Other claims against dissolved limited liability partnership.

(a) A dissolved limited liability partnership may publish notice of its dissolution and request persons having claims against the partnership to present them in accordance with the notice.

(b) A notice under subsection (a) of this section must:

(1) Be published at least once in a newspaper of general circulation in the District of Columbia, or, if the principal office is not located in the District of Columbia, in the appropriate court where the partnership’s principal office is or was last located;

(2) Describe the information required to be contained in a claim, state that the claim must be in writing, and provide a mailing address to which the claim is to be sent;

(3) State that a claim against the partnership is barred unless an action to enforce the claim is commenced not later than 3 years after publication of the notice; and

(4) Unless the partnership has been throughout its existence a limited liability partnership, state that if a claim against the partnership is barred, any corresponding claim against any partner or person dissociated as a partner which is based on § 29-603.06 is also barred.

(c) If a dissolved limited liability partnership publishes a notice in accordance with subsection (b) of this section, the claim of each of the following claimants is barred unless the claimant commences an action to enforce the claim against the partnership not later than 3 years after the publication date of the notice:

(1) A claimant that did not receive notice in a record under § 29-608.08;

(2) A claimant whose claim was timely sent to the partnership but not acted on; and

(3) A claimant whose claim is contingent on or based on an event occurring after the effective date of dissolution.

(d) A claim not barred under this section or § 29-608.08(c) may be enforced as follows:

(1) Against a dissolved limited liability partnership, a claim may be enforced to the extent of its undistributed assets;

(2) Except as otherwise provided in § 29-608.10(d), if assets of the partnership have been distributed after dissolution, a claim may be enforced against a partner or transferee to the extent of that person’s proportionate share of the claim or of the partnership’s assets distributed to the partner or transferee after dissolution, whichever is less, but a person’s total liability for all claims under this paragraph may not exceed the total amount of assets distributed to the person after dissolution; and

(3) A claim may be enforced against any person liable on the claim under § 29-603.06, 29-607.03, or 29-608.06.

§ 29–608.10. Court proceedings.

(a) A dissolved limited liability partnership that has published a notice under § 29-608.09 may file an application with the Superior Court, or, if the principal office is not located in the District, an appropriate court where the office of its principal office is located, for a determination of the amount and form of security to be provided for payment of claims that are contingent, have not been made known to the partnership, or are based on an event occurring after the effective date of dissolution but which, based on the facts known to the dissolved partnership, are reasonably expected to arise after the effective date of dissolution. Security is not required for any claim that is or is reasonably anticipated to be barred under § 29-608.08(c).

(b) Not later than 10 days after the filing of an application under subsection (a) of this section, the dissolved limited liability partnership shall give notice of the proceeding to each claimant holding a contingent claim known to the partnership.

(c) In any proceeding under this section, the court may appoint a guardian ad litem to represent all claimants whose identities are unknown. The reasonable fees and expenses of the guardian, including all reasonable expert witness fees, must be paid by the dissolved limited liability partnership.

(d) A dissolved limited liability partnership that provides security in the amount and form ordered by the court under subsection (a) of this section satisfies the partnership’s obligations with respect to claims that are contingent, have not been made known to the partnership, or are based on an event occurring after the effective date of dissolution, and the claims may not be enforced against a partner or transferee who receives assets in liquidation.

(e) This section applies only to a debt, obligation, or liability incurred while a partnership was a limited liability partnership.

§ 29–608.11. Liability of partner and person dissociated as partner when claim against limited liability partnership is barred.

If a claim against a dissolved limited liability partnership is barred under § 29-608.08(c), 29-608.09(c), or 29-608.10, any corresponding claim under § 29-603.06, 29-607.03, or 29-608.06 is also barred.

§ 29–608.12. Rescinding dissolution.

(a) A partnership may rescind its dissolution, unless a statement of termination applicable to the partnership is effective or the Superior Court has entered an order under § 29-608.01(5) or (6) dissolving the partnership.

(b) Rescinding dissolution under this section requires:

(1) The consent of each partner;

(2) If a statement of dissolution applicable to the partnership has been filed by the Mayor but has not become effective, delivery to the Mayor for filing of a statement of withdrawal under § 29-102.04 applicable to the statement of dissolution; and

(3) If a statement of dissolution applicable to the partnership is effective, the delivery to the Mayor for filing of a statement of correction under § 29-102.05 stating that dissolution has been rescinded under this section.

(1) The partnership resumes carrying on its activities and affairs as if dissolution had never occurred;

(2) Subject to paragraph (3) of this subsection, any liability incurred by the partnership after the dissolution and before the rescission is effective is determined as if dissolution had never occurred; and

(3) The rights of a third party arising out of conduct in reliance on the dissolution before the third party knew or had notice of the rescission may not be adversely affected.

Subchapter IX. Mergers and Internal Exchanges.

§ 29–609.01. Definitions.

For the purposes of this subchapter, the term:

(1) “General partner” means a partner in a partnership and a general partner in a limited partnership.

(2) “Limited partner” means a limited partner in a limited partnership.

(3) “Limited partnership” means a limited partnership created under Chapter 2 of this title, predecessor law, or comparable law of another jurisdiction.

(4) “Partner” includes both a general partner and a limited partner.

§ 29–609.02. Merger of partnerships.

(a) Pursuant to a plan of merger approved as provided in subsection (c) of this section, a partnership may be merged with one or more partnerships.

(b) The plan of merger shall set forth:

(1) The name of each partnership that is a party to the merger;

(2) The name of the surviving partnership into which the other partnerships will merge;

(3) The terms and conditions of the merger;

(4) The manner and basis of converting the interests of each party to the merger into interests or obligations of the surviving partnership, or into money or other property in whole or part; and

(5) The street address of the surviving partnership’s principal office.

(c) The plan of merger shall be approved by all of the partners, or a number or percentage specified for merger in the partnership agreement.

(d) After a plan of merger is approved and before the merger takes effect, the plan may be amended or abandoned as provided in the plan.

(e) The merger shall be effective on the later of:

(1) The filing of all documents required by law to be filed as a condition to the effectiveness of the merger; or

(2) Any effective date specified in the plan of merger.

(f) A merger in which a partnership and another form of entity are parties shall be governed by Chapter 2 of this title.

§ 29–609.03. Effect of merger.

(a) When a merger takes effect:

(1) The separate existence of every partnership that is a party to the merger, other than the surviving partnership, shall cease;

(2) All property owned by each of the merged partnerships vests in the surviving partnership;

(3) All obligations of every partnership that is a party to the merger shall be the obligations of the surviving partnership;

(4) An action or proceeding pending against a partnership that is a party to the merger may be continued as if the merger had not occurred, or the surviving partnership may be substituted as a party to the action or proceeding; and

(5) If the plan of merger provides for a person to become a partner in a surviving domestic partnership, the person becomes a partner without the need for the consent that would otherwise be required by § 29-604.01(i).

(b) Service of process in an action or proceeding against a surviving foreign partnership to enforce an obligation of a domestic partnership that is a party to a merger may be served pursuant to § 29-104.12.

(1) All obligations of a party to the merger for which the partner was personally liable before the merger;

(2) All other obligations of the surviving partnership incurred before the merger by a party to the merger, but those obligations shall be satisfied only out of property of the partnership; and

(3) Except as otherwise provided in § 29-603.06, all obligations of the surviving partnership incurred after the merger takes effect.

(d) Except as otherwise provided in § 29-603.06, if the obligations incurred before the merger by a party to the merger are not satisfied out of the property of the surviving partnership, the general partners of that party immediately before the effective date of the merger shall contribute the amount necessary to satisfy that party’s obligations to the surviving partnership, in the manner provided in § 29-608.07 as if the merged party were dissolved.

(e) A partner of a party to a merger who is not a partner of the surviving partnership shall be dissociated from the partnership of which that partner was a partner, as of the date the merger takes effect. A surviving domestic partnership shall be bound under § 29-607.02 by an act of a general partner dissociated under this subsection, and the partner shall be liable under § 29-607.03 for transactions entered into by the surviving partnership after the merger takes effect.

§ 29–609.04. Statement of merger.

(a) After a merger, the surviving partnership may file a statement that the parties to the merger have merged into the surviving partnership.

(b) A statement of merger shall contain:

(1) The name of each partnership that is a party to the merger;

(2) The name of the surviving partnership into which the other partnerships were merged; and

(3) The street address of the surviving partnership’s principal office and of an office in the District, if any.

(c) Except as otherwise provided in subsection (d) of this section, for the purposes of § 29-603.02, property of the surviving partnership that before the merger was held in the name of another party to the merger shall be property held in the name of the surviving partnership upon filing a statement of merger.

(d) For the purposes of § 29-603.02, real property of the surviving partnership that before the merger was held in the name of another party to the merger shall be property held in the name of the surviving partnership upon recording a certified copy of the statement of merger in the office for recording transfers of that real property.

(e) A filed and, if appropriate, recorded statement of merger, executed and declared to be accurate pursuant to § 29-601.05(c), stating the name of a partnership that is a party to the merger in whose name property was held before the merger and the name of the surviving partnership, but not containing all of the other information required by subsection (b) of this section, shall operate with respect to the partnerships named to the extent provided in subsections (c) and (d) of this section.

§ 29–609.05. Interest exchanges.

(a) One or more domestic or foreign partnerships may adopt a plan of interest exchange by which a domestic or foreign partnership acquires all of the outstanding partnership interests of one or more domestic partnerships in exchange for cash or securities of the acquiring domestic or foreign partnership, if:

(1) Each domestic or foreign partnership, the partnership interests of which are to be acquired under the plan of exchange, approves the plan of exchange in the manner prescribed in its partnership agreement; and

(2) Each acquiring domestic or foreign partnership takes all action that may be required by the laws of the state under which it was formed and as required by its partnership agreement in order to effect the exchange.

(b) A statement of interest exchange shall be signed on behalf of a domestic acquired entity and delivered to the Mayor for filing in accordance with § 29-102.03(a). When an interest exchange takes effect as provided in the plan of exchange:

(1) The partnership interest of each domestic partnership that is to be acquired under the plan of exchange shall be considered exchanged as provided in the plan of exchange;

(2) The former holders of the partnership interests exchanged under the plan of exchange shall be entitled only to the exchange rights provided in the plan of exchange; and

(3) The acquiring domestic or foreign partnership shall be entitled to all rights, title, and interest with respect to the partnership interests so acquired and exchanged, subject to the provisions in the plan of exchange.

§ 29–609.06. Nonexclusive.

This subchapter shall not be exclusive. Partnerships may merge or engage in interest exchanges in any other manner provided or permitted by law.

Subchapter X. Limited Liability Partnership.

§ 29–610.01. Statement of qualification.

(a) A partnership may become a limited liability partnership pursuant to this section.

(b) The terms and conditions on which a partnership becomes a limited liability partnership shall be approved by the vote necessary to amend the partnership agreement except, in the case of a partnership agreement that expressly considers obligations to contribute, the vote necessary to amend those provisions.

(c) After the approval required by subsection (b) of this section, a partnership may become a limited liability partnership by delivering to the Mayor for filing a statement of qualification. The statement shall contain:

(1) The name of the partnership, which shall satisfy the requirements of §§ 29-103.01 and 29-103.02(e);

(2) The street address of the partnership’s principal office and, if different, the street address of an office in District, if any;

(3) If the partnership does not have an office in District, the information required by § 29-104.04;

(4) A statement that the partnership elects to be a limited liability partnership; and

(5) A deferred effective date, if any.

(d) The agent of a limited liability partnership for service of process shall be an individual who is a resident of the District or other person authorized to do business in the District.

(e) The status of a partnership as a limited liability partnership shall be effective on the later of the filing of the statement or a date specified in the statement. The status shall remain effective, regardless of changes in the partnership, until it is canceled pursuant to § 29-601.05(d) or revoked pursuant to § 29-106.01(3).

(f) The status of a partnership as a limited liability partnership and the liability of its partners shall not be affected by errors or later changes in the information required to be contained in the statement of qualification under subsection (c) of this section.

(g) The filing of a statement of qualification establishes that a partnership has satisfied all conditions precedent to the qualification of the partnership as a limited liability partnership.

(h) An amendment or cancellation of a statement of qualification shall be effective when it is filed or on a deferred effective date specified in the amendment or cancellation.

§ 29–610.02. Limitations on distributions by limited liability partnership.

(a) A limited liability partnership may not make a distribution, including a distribution under § 29-608.08, if after the distribution:

(1) The limited liability partnership would not be able to pay its debts as they become due in the ordinary course of the partnership’s activities and affairs; or

(2) Except as permitted in the partnership agreement, the limited liability partnership’s total assets would be less than the sum of its total liabilities plus the amount that would be needed, if the partnership were to be dissolved and wound up at the time of the distribution, to satisfy the preferential rights of the partners and transferees upon dissolution and winding up whose preferential rights are superior to the right to receive distributions of the persons receiving the distribution.

(b) A limited liability partnership may base a determination that a distribution is not prohibited under subsection (a) of this section on:

(1) Financial statements prepared on the basis of accounting practices and principles that are reasonable in the circumstances; or

(2) A fair valuation or other method that is reasonable under the circumstances.

(c) Except as otherwise provided in subsection (e) of this section, the effect of a distribution under subsection (a) of this section is measured:

(1) In the case of a distribution as defined in § 29-601.02(3), as of the earlier of the date:

(A) Money or other property is transferred or debt is incurred by the limited liability partnership; or

(B) The person entitled to the distribution ceases to own the interest or rights being acquired by the limited liability partnership in return for the distribution;

(2) In the case of any other distribution of indebtedness, as of the date the indebtedness is distributed; and

(3) In all other cases, as of the date:

(A) The distribution is authorized, if the payment occurs not later than 120 days after that date; or

(B) The payment is made, if the payment occurs more than 120 days after the distribution is authorized.

(d) A limited liability partnership’s indebtedness to a partner or transferee incurred by reason of a distribution made in accordance with this section is at parity with the limited liability company’s indebtedness to its general, unsecured creditors, except to the extent subordinated by agreement.

(e) A limited liability partnership’s indebtedness, including indebtedness issued as a distribution, is not a liability for purposes of subsection (a) of this section if the terms of the indebtedness provide that payment of principal and interest is made only if and to the extent that a payment of a distribution could then be made under this section. If the indebtedness is issued as a distribution, each payment of principal or interest is treated as a distribution, the effect of which is measured on the date the payment is made.

(f) In measuring the effect of a distribution under § 29-608.07, the debts and liabilities of a dissolved limited liability partnership do not include any claim that has been disposed of under § 29-608.08, 29-608.09, or 29-608.10.

§ 29–610.03. Liability for improper distributions by limited liability partnership.

(a) If a partner of a limited liability partnership consents to a distribution made in violation of § 29-610.02 and in consenting to the distribution fails to comply with § 29-604.07, the partner is personally liable to the partnership for the amount of the distribution which exceeds the amount that could have been distributed pursuant to § 29-610.02.

(b) A person that receives a distribution knowing that the distribution violated of § 29-604.07 is personally liable to the limited liability partnership but only to the extent that the distribution received by the person exceeded the amount that could have been properly paid in accordance with § 29-604.07.

(1) Implead any other person that is liable under subsection (a) of this section and seek to enforce a right of contribution from the person; and

(2) Implead any person that received a distribution in violation of subsection (b) of this section and seek to enforce a right of contribution from the person in the amount the person received in violation of subsection (b) of this section.

(d) An action under this section is barred if not commenced not later than 2 years after the distribution.

§ 29–610.04. Administrative revocation of statement of qualification.

(a) The Mayor may commence a proceeding under subsections (b) and (c) of this section to revoke the statement of qualification of a limited liability partnership administratively if the partnership does not:

(1) Pay any fee, tax, or penalty required to be paid to the Mayor not later than 6 months after it is due;

(2) Deliver a biennial report to the Mayor not later than 6 months after it is due; or

(3) Have a registered agent in this state for 60 consecutive days. “(b) If the Mayor determines that one or more grounds exist for administratively revoking a statement of qualification, the Mayor shall serve the partnership with notice in a record of the Mayor’s determination.

(c) If a limited liability partnership, not later than 60 days after service of the notice is effected under subsection (b) of this section, does not cure or demonstrate to the satisfaction of the Mayor the nonexistence of each ground determined by the Mayor, the Mayor shall administratively revoke the statement of qualification by signing a statement of administrative revocation that recites the grounds for revocation and the effective date of the revocation. The Mayor shall file the statement and serve a copy on the partnership pursuant to § 29-102.10.

(d) An administrative revocation under subsection (c) of this section affects only a partnership’s status as a limited liability partnership and is not an event causing dissolution of the partnership.

(e) The administrative revocation of a statement of qualification of a limited liability partnership does not terminate the authority of its registered agent.

§ 29–610.05. Reinstatement.

(a) A partnership whose statement of qualification has been revoked administratively under § 29-610.04 may apply to the Mayor for reinstatement of the statement of qualification not later than 2 years after the effective date of the revocation. The application must state:

(1) The name of the partnership at the time of the statement of qualification was administratively revoked, and, if needed, a different name that satisfies §§ 29-103.01 and 29-103.02;

(2) The address of the principal office of the partnership and the name and address of its registered agent;

(3) The effective date of administrative revocation of the partnership’s statement of qualification; and

(4) That the grounds for revocation did not exist or have been cured.

(b) To have its statement of qualification reinstated, a partnership must pay all fees, taxes, and penalties that were due to the Mayor at the time of the administrative revocation and all fees, taxes, and penalties that would have been due to the Mayor while the partnership’s statement of qualification was revoked administratively.

(c) If the Mayor determines that the application contains the information required by subsection (a) of this section, is satisfied that the information is correct, and determines that all payments required to be made to the Mayor by subsection (b) of this section have been made, the Mayor shall:

(1) Cancel the statement of revocation;

(2) Prepare a statement of reinstatement stating the Mayor’s determination and the effective date of reinstatement;

(3) File the statement of reinstatement; and

(4) Serve a copy on the partnership.

(d) When reinstatement under this section is effective:

(1) It relates back to and takes effect as of the effective date of the administrative revocation; and

(2) The partnership’s status as a limited liability partnership continues as if the revocation had never occurred, except for the rights of a person arising out of an act or omission in reliance on the revocation before the person knew or had notice of the reinstatement.

§ 29–610.06. Judicial review of denial of reinstatement.

(a) If the Mayor denies a partnership’s application for reinstatement following administrative revocation of the partnership’s statement of qualification, the Mayor shall serve the partnership with notice in a record that explains the reasons for the denial.

(b) A partnership may seek judicial review of a denial of reinstatement in Superior Court not later than 30 days after service of the notice of denial.

Subchapter XI. Transition Provisions.

§ 29–611.01. Application to existing relations.

(a) This chapter shall apply to a partnership formed after the applicability date of this chapter and to a partnership that elects, as provided by subsection (c) of this section, to be governed by this chapter.

(b) On and after one year after the applicability date of this chapter, this chapter shall govern all partnerships, whenever formed.

(c) After the applicability date of this chapter, a partnership voluntarily may elect, in the manner provided in its partnership agreement or by law for amending the partnership agreement, to be governed by this chapter. The provisions of this chapter relating to the liability of the partnership’s partners to third parties shall apply to limit those partners’ liability to a third party that had done business with the partnership within one year before the partnership’s election to be governed by this chapter only if the third party knows or has received a notification of the partnership’s election to be governed by this chapter.