§ 23-16-6-2 — Liability for contribution

Indiana § 23-16-6-2

• Jurisdiction: Indiana
• Title 23: BUSINESS AND OTHER ASSOCIATIONS
• Art. 16: LIMITED PARTNERSHIPS
• Ch. 6: Finance

Text

(a) A promise by a limited partner to contribute
to the limited partnership is not enforceable unless set out in a writing
signed by the limited partner.
(b) Except as provided in the partnership agreement, a partner is
obligated to the limited partnership to perform any enforceable promise
to contribute cash or property or to perform services, even if the partner
is unable to perform because of death, disability, or any other reason.
If a partner does not make a required contribution of property or
services, the partner is obligated at the option of the limited partnership
to contribute cash equal to that portion of the agreed value (as stated in
the partnership records of the limited partnership) of the contribution
that has not been made. The option provided under this subsection is
in addition to, and is not in lieu of, any other rights, including the right
to specific performance, that the limited partnership may have against
such a partner under the partnership agreement or applicable law.
(c) Unless otherwise provided in the partnership agreement, the
obligation of a partner to make a contribution or to return money or
other property paid or distributed in violation of this article may be
compromised only by written consent of all the partners.
Notwithstanding any such compromise, a creditor of a limited
partnership who extends credit or otherwise acts in reliance on that
obligation after the partner signs a writing (including the partnership
agreement and any amendment to the partnership agreement) that
reflects the obligation and before the amendment or cancellation of the
partnership agreement to reflect the compromise, may enforce the
original obligation to the extent that, in extending credit, the creditor
reasonably relied on the obligation of a partner to make a contribution.
(d) A partnership agreement may provide that the interest of any
partner who fails to make any contribution that the partner is obligated
to make is subject to specified penalties for, or specified consequences
of, the failure. Penalties or consequences provided for in the
partnership agreement may include the following:
(1) Reducing the defaulting partner's proportionate interest in the
limited partnership.
(2) Subordinating the defaulting partner's partnership interest to
that of nondefaulting partners.
(3) A forced sale of the partner's partnership interest.
(4) Forfeiture of the partner's partnership interest.
(5) The lending by other partners of the amount necessary to meet
the defaulting partner's commitment.
(6) A fixing of the value of the defaulting partner's partnership
interest by appraisal or by formula and the redemption or sale of
the defaulting partner's partnership interest at the fixed value.
(7) Any other penalty or consequence.

Legislative History

As added by P.L.147-1988, SEC.1.