SECTIONS 16801-16807 - California Statutes

CORPORATIONS CODE

SECTION 16801-16807

16801. A partnership is dissolved, and its business shall be wound
up, only upon the occurrence of any of the following events:
(1) In a partnership at will, by the express will to dissolve and
wind up the partnership business of at least half of the partners,
including partners, other than wrongfully dissociating partners, who
have dissociated within the preceding 90 days, and for which purpose
a dissociation under paragraph (1) of Section 16601 constitutes an
expression of that partner's will to dissolve and wind up the
partnership business.
(2) In a partnership for a definite term or particular
undertaking, when any of the following occurs:
(A) After the expiration of 90 days after a partner's dissociation
by death or otherwise under paragraphs (6) to (10), inclusive, of
Section 16601, or a partner's wrongful dissociation under subdivision
(b) of Section 16602 unless before that time a majority in interest
of the partners, including partners who have rightfully dissociated
pursuant to subparagraph (A) of paragraph (2) of subdivision (b) of
Section 16602, agree to continue the partnership.
(B) The express will of all of the partners to wind up the
partnership business.
(C) The expiration of the term or the completion of the
undertaking.
(3) An event agreed to in the partnership agreement resulting in
the winding up of the partnership business.
(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 is effective retroactively to the date of the event for
purposes of this section.
(5) On application by a partner, a judicial determination that any
of the following apply:
(A) The economic purpose of the partnership is likely to be
unreasonably frustrated.
(B) Another partner has engaged in conduct relating to the
partnership business that makes it not reasonably practicable to
carry on the business in partnership with that partner.
(C) It is not otherwise reasonably practicable to carry on the
partnership business 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 business 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.

16802. (a) Subject to subdivision (b), a partnership continues
after dissolution only for the purpose of winding up its business.
The partnership is terminated when the winding up of its business is
completed.
(b) At any time after the dissolution of a partnership and before
the winding up of its business 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
business wound up and the partnership terminated. In that event both
of the following apply:
(1) The partnership resumes carrying on its business as if
dissolution had never occurred, and any liability incurred by the
partnership or a partner after the dissolution and before the waiver
is determined as if dissolution had never occurred.
(2) The rights of a third party accruing under paragraph (1) of
Section 16804 or arising out of conduct in reliance on the
dissolution before the third party knew or received a notification of
the waiver may not be adversely affected.

16803. (a) After dissolution, a partner who has not dissociated may
participate in winding up the partnership's business, but on
application of any partner, partner's legal representative, or
transferee, the 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 business.
(c) A person winding up a partnership's business may preserve the
partnership business 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
business, dispose of and transfer the partnership's property,
discharge the partnership's liabilities, distribute the assets of the
partnership pursuant to Section 16807, settle disputes by mediation
or arbitration, and perform other necessary acts.

16804. Subject to Section 16805, a partnership is bound by a
partner's act after dissolution that is either of the following:
(1) Appropriate for winding up the partnership business.
(2) Would have bound the partnership under Section 16301 before
dissolution, if the other party to the transaction did not have
notice of the dissolution.

16805. (a) After dissolution, a partner who has not wrongfully
dissociated may file a statement of dissolution stating the name of
the partnership as filed with the Secretary of State, any
identification number issued by the Secretary of State, and that the
partnership has dissolved and is winding up its business.
(b) A statement of dissolution cancels a filed statement of
partnership authority for the purposes of subdivision (d) of Section
16303 and is a limitation on authority for the purposes of
subdivision (e) of Section 16303.
(c) For the purposes of Sections 16301 and 16804, a person not a
partner is 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 that will operate with
respect to a person not a partner as provided in subdivisions (d) and
(e) of Section 16303 in any transaction, whether or not the
transaction is appropriate for winding up the partnership business.

16806. (a) Except as otherwise provided in subdivision (b) and
except for registered limited liability partnerships and foreign
limited liability partnerships, after dissolution a partner is liable
to the other partners for the partner's share of any partnership
liability incurred under Section 16804.
(b) Except for registered limited liability partnerships and
foreign limited liability partnerships, a partner who, with knowledge
of the dissolution, incurs a partnership liability under paragraph
(2) of Section 16804 by an act that is not appropriate for winding up
the partnership business is liable to the partnership for any damage
caused to the partnership arising from the liability.

16807. (a) In winding up a partnership's business, 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 subdivision (b).
(b) Each partner is entitled to a settlement of all partnership
accounts upon winding up the partnership business. In settling
accounts among the partners, the 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. Except for
registered limited liability partnerships and foreign limited
liability partnerships, a partner shall contribute to the partnership
an amount equal to any excess of the charges over the credits in the
partner's account.
(c) If a partner fails to contribute the full amount that the
partner is obligated to contribute under subdivision (b), 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 liable under
Section 16306. 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 Section 16306.
(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 Section 16306.
(e) The estate of a deceased partner is 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.