1.If a partner is dissociated from a partnership without resulting in a dissolution and
winding up of the partnership business under section 486A.801, the partnership shall cause
the dissociated partner’s interest in the partnership to be purchased for a buyout price
determined pursuant to subsection 2.
2.The buyout price of a dissociated partner’s interest is the amount that would have been
distributable to the dissociating partner under section 486A.807, subsection 2, if, on the date
of dissociation, the assets of the partnership were sold at a price equal to the greater of the
liquidationvalueorthevaluebasedonasaleoftheentirebusinessasagoingconcernwithout
the dissociated partner and the partnership were wound up as of that date. Interest must be
paid from the date of dissociation to t
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1. If a partner is dissociated from a partnership without resulting in a dissolution and
winding up of the partnership business under section 486A.801, the partnership shall cause
the dissociated partner’s interest in the partnership to be purchased for a buyout price
determined pursuant to subsection 2.
2. The buyout price of a dissociated partner’s interest is the amount that would have been
distributable to the dissociating partner under section 486A.807, subsection 2, if, on the date
of dissociation, the assets of the partnership were sold at a price equal to the greater of the
liquidationvalueorthevaluebasedonasaleoftheentirebusinessasagoingconcernwithout
the dissociated partner and the partnership were wound up as of that date. Interest must be
paid from the date of dissociation to the date of payment.
3. Damages for wrongful dissociation under section 486A.602, subsection 2, and all other
amountsowing,whetherornotpresentlydue,fromthedissociatedpartnertothepartnership,
must be offset against the buyout price. Interest must be paid from the date the amount owed
becomes due to the date of payment.
4. 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 section 486A.702.
5. If no agreement for the purchase of a dissociated partner’s interest is reached within
one hundred twenty 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 3.
6. If a deferred payment is authorized under subsection 8, the partnership may tender a
written offer to pay the amount the partnership estimates to be the buyout price and accrued
interest, reduced by any offsets under subsection 3, stating the time of payment, the amount
and type of security for payment, and the other terms and conditions of the obligation.
7. The payment or tender required by subsection 5 or 6 must be accompanied by all of the
following:
a. A written statement of partnership assets and liabilities as of the date of dissociation.
b. The latest available partnership balance sheet and income statement, if any.
c. A written explanation of how the estimated amount of the payment was calculated.
d. Written notice that the payment is in full satisfaction of the obligation to purchase
unless, within one hundred twenty days after the written notice, the dissociated partner
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commences an action to determine the buyout price, any offsets under subsection 3, or other
terms of the obligation to purchase.
8. A partner who wrongfully dissociates before the expiration of a definite term or the
completion of a particular undertaking is not 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 must be adequately secured and bear
interest.
9. A dissociated partner may maintain an action against the partnership, pursuant to
section 486A.405, subsection 2, paragraph “b”, subparagraph (2), to determine the buyout
price of that partner’s interest, any offsets under subsection 3, or other terms of the
obligation to purchase. The action must be commenced within one hundred twenty 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 3,
and accrued interest, and enter judgment for any additional payment or refund. If deferred
payment is authorized under subsection 8, the court shall also determine the security for
payment and other terms of the obligation to purchase. The court may assess reasonable
attorney’s 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 7.