Ala. Code § 10A-8A-5.02

Current through the 2024 Regular Session.

Section 10A-8A-5.02 - Transfer of partner's transferable interest

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

(1) is permissible;

(2) does not by itself cause the partner's dissociation;

(3) does not by itself cause a dissolution and winding up of the partnership; and

(4) subject to Section 10A-8A-5.05, does not entitle the transferee to:

(A) participate in the management or conduct of the partnership's business or not for profit activity; or

(B) except as otherwise provided in subsection (d), have access to required information, records, or other information concerning the partnership's business or not for profit activity.

(b) A transferee has a right:

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

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

(3) to seek under Section 10A-8A-8.01(5) a judicial determination that it is equitable to wind up the partnership business or not for profit activity.

(c) A transferable interest may be evidenced by a certificate of transferable interest issued by the partnership. A partnership agreement may provide for the transfer of the transferable interest represented by the certificate and make other provisions with respect to the certificate. No certificate of transferable interest shall be issued in bearer form.

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

(e) Except as otherwise provided in Sections 10A-8A-6.01(4), 10A-8A-6.01(11), and 10A-8A-6.01(12), when a partner transfers a transferable interest, the transferor retains the rights of a partner other than the right to distributions transferred and retains all duties and obligations of a partner.

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

(g) When a partner transfers a transferable interest to a person that is admitted as a partner with respect to the transferred interest, the transferee is liable for the partner's obligations under Sections 10A-8A-4.04 and 10A-8A-4.09 to the extent that the obligations are known to the transferee when the transferee voluntarily accepts admission as a partner.

Ala. Code § 10A-8A-5.02 (1975)

Added by Act 2018-125,§ 7, eff. 1/1/2019.