SECTIONS 15908.01-15908.09 - California Statutes

CORPORATIONS CODE

SECTION 15908.01-15908.09

15908.01. Except as otherwise provided in Section 15908.02, a
limited partnership is dissolved, and its activities must be wound
up, only upon the occurrence of any of the following:
(a) the happening of an event specified in the partnership
agreement;
(b) the consent of all general partners and of limited partners
owning a majority of the rights to receive distributions as limited
partners at the time the consent is to be effective;
(c) after the dissociation of a person as a general partner:
(1) if the limited partnership has at least one remaining general
partner, and a consent to dissolve the limited partnership is given
within 90 days after the dissociation by partners owning a majority
of the rights to receive distributions as partners at the time the
consent is to be effective; or
(2) if the limited partnership does not have a remaining general
partner, the passage of 90 days after the dissociation, unless before
the end of the period:
(A) consent to continue the activities of the limited partnership
and admit at least one general partner is given by limited partners
owning a majority of the rights to receive distributions as limited
partners at the time the consent is to be effective; and
(B) at least one person is admitted as a general partner in
accordance with the consent; or
(d) the passage of 90 days after the dissociation of the limited
partnership's last limited partner, unless before the end of the
period the limited partnership admits at least one limited partner.

15908.02. (a) On application by a partner, a court of competent
jurisdiction may order dissolution of a limited partnership if it is
not reasonably practicable to carry on the activities of the limited
partnership in conformity with the partnership agreement.
(b) In any suit for judicial dissolution, the other partners may
avoid the dissolution of the limited partnership by purchasing for
cash the partnership interests owned by the partners so initiating
the proceeding (the "moving parties") at their fair market value. In
fixing the value, the amount of any damages resulting if the
initiation of the dissolution is a breach by any moving party or
parties of an agreement with the purchasing party or parties,
including, without limitation, the partnership agreement, may be
deducted from the amount payable to the moving party or parties.
(c) If the purchasing parties (1) elect to purchase the
partnership interests owned by the moving parties, (2) are unable to
agree with the moving parties upon the fair market value of the
partnership interests, and (3) give bond with sufficient security to
pay the estimated reasonable expenses, including attorneys' fees, of
the moving parties if the expenses are recoverable under paragraph
(3), the court, upon application of the purchasing parties, either in
the pending action or in a proceeding initiated in the superior
court of the proper county by the purchasing parties, shall stay the
winding up and dissolution proceeding and shall proceed to ascertain
and fix the fair market value of the partnership interests owned by
the moving parties.
(d) The court shall appoint three disinterested appraisers to
appraise the fair market value of the partnership interests owned by
the moving parties, and shall make an order referring the matter to
the appraisers so appointed for the purpose of ascertaining that
value. The order shall prescribe the time and manner of producing
evidence, if evidence is required. The award of the appraisers or a
majority of them, when confirmed by the court, shall be final and
conclusive upon all parties. The court shall enter a decree that
shall provide in the alternative for winding up and dissolution of
the limited partnership unless payment is made for the partnership
interests within the time specified by the decree. If the purchasing
parties do not make payment for the partnership interests within the
time specified, judgment shall be entered against them and the surety
or sureties on the bond for the amount of the expenses, including
attorneys' fees, of the moving parties. Any member aggrieved by the
action of the court may appeal therefrom.
(e) If the purchasing parties desire to prevent the winding up and
dissolution of the limited partnership, they shall pay to the moving
parties the value of their partnership interests ascertained and
decreed within the time specified pursuant to this section, or, in
the case of an appeal, as fixed on appeal. On receiving that payment
or the tender thereof, the moving parties shall transfer their
partnership interests to the purchasing parties.
(f) For the purposes of this section, the valuation date shall be
the date upon which the action for judicial dissolution was
commenced. However, the court may, upon the hearing of a motion by
any party, and for good cause shown, designate some other date as the
valuation date.

15908.03. (a) A limited partnership continues after dissolution
only for the purpose of winding up its activities.
(b) In winding up its activities, the limited partnership:
(1) may amend its certificate of limited partnership to state that
the limited partnership is dissolved, preserve the limited
partnership business or property as a going concern for a reasonable
time, prosecute and defend actions and proceedings, whether civil,
criminal, or administrative, transfer the limited partnership's
property, settle disputes by mediation or arbitration, file a
certificate of cancellation as provided in Section 15902.03, and
perform other necessary acts; and
(2) shall discharge the limited partnership's liabilities, settle
and close the limited partnership's activities, and marshal and
distribute the assets of the partnership.
(c) If a dissolved limited partnership does not have a general
partner, a person to wind up the dissolved limited partnership's
activities may be appointed by the consent of limited partners owning
a majority of the rights to receive distributions as limited
partners at the time the consent is to be effective. A person
appointed under this subdivision:
(1) has the powers of a general partner under Section 15908.04;
and
(2) shall promptly amend the certificate of limited partnership to
state:
(A) that the limited partnership does not have a general partner;
(B) the name of the person that has been appointed to wind up the
limited partnership; and
(C) the address of the person.
(d) On the application of any partner, the appropriate court may
order judicial supervision of the winding up, including the
appointment of a person to wind up the dissolved limited partnership'
s activities, if:
(1) a limited partnership does not have a general partner and
within a reasonable time following the dissolution no person has been
appointed pursuant to subdivision (c); or
(2) the applicant establishes other good cause.
(e) Unless otherwise provided in the partnership agreement, the
limited partners winding up the affairs of the partnership pursuant
to this section shall be entitled to reasonable compensation.

15908.04. (a) A limited partnership is bound by a general partner's
act after dissolution which:
(1) is appropriate for winding up the limited partnership's
activities; or
(2) would have bound the limited partnership under Section
15904.02 before dissolution, if, at the time the other party enters
into the transaction, the other party does not have notice of the
dissolution.
(b) A person dissociated as a general partner binds a limited
partnership through an act occurring after dissolution if:
(1) at the time the other party enters into the transaction:
(A) less than two years have passed since the dissociation; and
(B) the other party does not have notice of the dissociation and
reasonably believes that the person is a general partner; and
(2) the act:
(A) is appropriate for winding up the limited partnership's
activities; or
(B) would have bound the limited partnership under Section
15904.02 before dissolution and at the time the other party enters
into the transaction the other party does not have notice of the
dissolution.

15908.05. (a) If a general partner having knowledge of the
dissolution causes a limited partnership to incur an obligation under
subdivision (a) of Section 15908.04 by an act that is not
appropriate for winding up the partnership's activities, the general
partner is liable:
(1) to the limited partnership for any damage caused to the
limited partnership arising from the obligation; and
(2) if another general partner or a person dissociated as a
general partner is liable for the obligation, to that other general
partner or person for any damage caused to that other general partner
or person arising from the liability.
(b) If a person dissociated as a general partner causes a limited
partnership to incur an obligation under subdivision (b) of Section
15908.04, the person is liable:
(1) to the limited partnership for any damage caused to the
limited partnership arising from the obligation; and
(2) if a general partner or another person dissociated as a
general partner is liable for the obligation, to the general partner
or other person for any damage caused to the general partner or other
person arising from the liability.

15908.06. (a) A dissolved limited partnership may dispose of the
known claims against it by following the procedure described in
subdivision (b).
(b) A dissolved limited partnership may notify its known claimants
of the dissolution in a record. The notice must:
(1) specify the information required to be included in a claim;
(2) provide a mailing address to which the claim is to be sent;
(3) state the deadline for receipt of the claim, which may not be
less than 120 days after the date the notice is received by the
claimant; and
(4) state that the claim will be barred if not received by the
deadline.
(c) A claim against a dissolved limited partnership is barred if
the requirements of subdivision (b) are met and:
(1) the claim is not received by the specified deadline; or
(2) in the case of a claim that is timely received but rejected in
writing by the dissolved limited partnership, the claimant does not
commence an action to enforce the claim against the limited
partnership within 90 days after the receipt of a written notice of
the rejection.
(d) This section does not apply to a claim based on an event
occurring after the effective date of dissolution or a liability that
is contingent on that date.

15908.07. (a) A dissolved limited partnership may publish notice of
its dissolution and request persons having claims against the
limited partnership to present them in accordance with the notice.
(b) The notice must:
(1) be published at least once in a newspaper of general
circulation in the county in which the dissolved limited partnership'
s principal office is located or, if it has none in this state, in
the county in which the limited partnership's designated office is or
was last located;
(2) describe the information required to be contained in a claim
and provide a mailing address to which the claim is to be sent; and
(3) state that a claim against the limited partnership is barred
unless an action to enforce the claim is commenced within four years
after publication of the notice.
(c) If a dissolved limited partnership publishes a notice in
accordance with subdivision (b), the claim of each of the following
claimants is barred unless the claimant commences an action to
enforce the claim against the dissolved limited partnership within
four years after the publication date of the notice:
(1) a claimant that did not receive notice in a record under
Section 15908.06;
(2) a claimant whose claim was timely sent to the dissolved
limited partnership but not acted on; and
(3) a claimant whose claim is contingent or based on an event
occurring after the effective date of dissolution.
(d) A claim not barred under this section may be enforced:
(1) against the dissolved limited partnership, to the extent of
its undistributed assets;
(2) if the assets have been distributed in liquidation, against a
partner or transferee to the extent of that person's proportionate
share of the claim or the limited partnership's assets distributed to
the partner or transferee in liquidation, whichever is less, but a
person's total liability for all claims under this paragraph does not
exceed the total amount of assets distributed to the person as part
of the winding up of the dissolved limited partnership; or
(3) against any person liable on the claim under Section 15904.04.
(e) Publication of a notice of dissolution of a limited
partnership pursuant to this section shall not bar the collection of
any tax, interest, penalty or addition to tax under Part 10
(commencing with Section 17001) of, Part 10.20 (commencing with
Section 18401) of, and Part 11 (commencing with Section 23001) of,
Division 2 of the Revenue and Taxation Code.

15908.08. If a claim against a dissolved limited partnership is
barred under Section 15908.06 or 15908.07, any corresponding claim
under Section 15904.04 is also barred.

15908.09. (a) In winding up a limited partnership's activities, the
assets of the limited partnership, including the contributions
required by this section, must be applied to satisfy the limited
partnership's obligations to creditors, including, to the extent
permitted by law, partners that are creditors.
(b) Any surplus remaining after the limited partnership complies
with subdivision (a) must be returned to the partners as they share
in distributions.
(c) If a limited partnership's assets are insufficient to satisfy
all of its obligations under subdivision (a) the following rules
apply:
(1) Each person that was a general partner when the obligation was
incurred and that has not been released from the obligation under
Section 15906.07 shall contribute to the limited partnership for the
purpose of enabling the limited partnership to satisfy the
obligation. The contribution due from each of those persons is in
proportion to the right to receive distributions in the capacity of
general partner in effect for each of those persons when the
obligation was incurred.
(2) If a person does not contribute the full amount required under
paragraph (1) with respect to an unsatisfied obligation of the
limited partnership, the other persons required to contribute by
paragraph (1) on account of the obligation shall contribute the
additional amount necessary to discharge the obligation. The
additional contribution due from each of those other persons is in
proportion to the right to receive distributions in the capacity of
general partner in effect for each of those other persons when the
obligation was incurred.
(3) If a person does not make the additional contribution required
by paragraph (2), further additional contributions are determined
and due in the same manner as provided in that paragraph.
(d) A person that makes an additional contribution under paragraph
(2) or (3) of subdivision (c) may recover from any person whose
failure to contribute under paragraph (1) or (2) of subdivision (c)
necessitated the additional contribution. A person may not recover
under this subdivision more than the amount additionally contributed.
A person's liability under this subdivision may not exceed the
amount the person failed to contribute.
(e) The estate of a deceased individual is liable for the person's
obligations under this section.
(f) An assignee for the benefit of creditors of a limited
partnership or a partner, or a person appointed by a court to
represent creditors of a limited partnership or a partner, may
enforce a person's obligation to contribute under subdivision (c).