Maine § 31 §1368 Limitations on distribution

Maine Statutes

§ 31 §1368 — Limitations on distribution

Maine § 31 §1368

Title 31PARTNERSHIPS AND ASSOCIATIONS

Ch. 19UNIFORM LIMITED PARTNERSHIP ACT

This text of Maine § 31 §1368 (Limitations on distribution) is published on Counsel Stack Legal Research, covering Maine primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

Me. Rev. Stat. tit. 31, § 31 §1368 (2026).

Text

1.In violation of partnership agreement. A limited partnership may not make a distribution in violation of the partnership agreement.

2.Unable to pay debts or satisfy superior preferential rights. A limited partnership may not make a distribution if after the distribution:

3.Basis for determination that distribution not prohibited. A limited partnership may base a determination that a distribution is not prohibited under subsection 2 on financial statements prepared on the basis of accounting practices and principles that are reasonable in the circumstances or on a fair valuation or other method that is reasonable in the circumstances.

4.Measuring effect of distribution. Except as otherwise provided in subsection 7, the effect of a distribution under subsection 2 is measured:

5.Indebt

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1.
In violation of partnership agreement.
A limited partnership may not make a distribution in violation of the partnership agreement.
2.
Unable to pay debts or satisfy superior preferential rights.
A limited partnership may not make a distribution if after the distribution:
3.
Basis for determination that distribution not prohibited.
A limited partnership may base a determination that a distribution is not prohibited under subsection 2 on financial statements prepared on the basis of accounting practices and principles that are reasonable in the circumstances or on a fair valuation or other method that is reasonable in the circumstances.
4.
Measuring effect of distribution.
Except as otherwise provided in subsection 7, the effect of a distribution under subsection 2 is measured:
5.
Indebtedness to partner and general, unsecured creditors.
A limited partnership's indebtedness to a partner incurred by reason of a distribution made in accordance with this section is at parity with the limited partnership's indebtedness to its general, unsecured creditors.
6.
Indebtedness not considered liability.
A limited partnership's indebtedness, including indebtedness issued in connection with or as part of a distribution, is not considered a liability for purposes of subsection 2 if the terms of the indebtedness provide that payment of principal and interest are made only to the extent that a distribution could then be made to partners under this section.
7.
Indebtedness issued as distribution; date payment made.
If indebtedness is issued as a distribution, each payment of principal or interest on the indebtedness is treated as a distribution, the effect of which is measured on the date the payment is made.