CHAPTER 1. UNIFORM PARTNERSHIP ACT
IC 23-4
ARTICLE 4. PARTNERSHIPS
IC 23-4-1
Chapter 1. Uniform Partnership Act
IC 23-4-1-1
Short title
Sec. 1. This chapter may be cited as the Uniform Partnership Act.
(Formerly: Acts 1949, c.114, s.1.) As amended by P.L.34-1987,SEC.286.
IC 23-4-1-2
Definitions
Sec. 2. In this chapter:
"Court" includes every court and judge having jurisdiction in thecase.
"Business" includes every trade, occupation, or profession.
"Person" includes individuals, partnerships, limited liabilitycompanies, corporations, and other associations.
"Bankrupt" includes bankrupt under federal bankruptcy laws orinsolvent under any state insolvent statute.
"Conveyance" includes every assignment, lease, mortgage, orencumbrance.
"Foreign limited liability partnership" means a limited liabilitypartnership formed under an agreement governed by the laws of ajurisdiction other than Indiana and registered under the laws of thejurisdiction.
"Limited liability partnership" means a partnership formed underan agreement governed by the laws of this state, registered under andcomplying with sections 45 through 52 of this chapter, and having aname that contains the words "Limited Liability Partnership" or theabbreviation "L.L.P." or "LLP" as the last words or letters of itsname.
"Real property" includes land and any interest or estate in land.
(Formerly: Acts 1949, c.114, s.2.) As amended by P.L.34-1987,SEC.287; P.L.8-1993, SEC.317; P.L.230-1995, SEC.1.
IC 23-4-1-3
Interpretation of knowledge and notice
Sec. 3. (1) A person has "knowledge" of a fact within the meaningof this chapter not only when he has actual knowledge thereof, butalso when he has knowledge of such other facts as in thecircumstances shows bad faith.
(2) A person has "notice" of a fact within the meaning of thischapter when the person who claims the benefit of the notice:
(a) states the fact to such person; or
(b) delivers through the mail, or by other means ofcommunication, a written statement of the fact to such personor to a proper person at his place of business or residence.(Formerly: Acts 1949, c.114, s.3.) As amended by P.L.34-1987,SEC.288.
IC 23-4-1-4
Rules of construction
Sec. 4. (1) The rule that statutes in derogation of the common laware to be strictly construed shall have no application to this chapter.
(2) The law of estoppel shall apply under this chapter.
(3) The law of agency shall apply under this chapter.
(4) This chapter shall be so interpreted and construed as to effectits general purpose to make uniform the law of those states whichenact it.
(5) This chapter shall not be construed so as to impair theobligations of any contract existing on January 1, 1950, nor to affectany action or proceedings begun or right accrued before January 1,1950.
(Formerly: Acts 1949, c.114, s.4.) As amended by P.L.34-1987,SEC.289.
IC 23-4-1-5
Rules for cases not provided for in chapter
Sec. 5. In any case not provided for in this chapter, the rules oflaw and equity, including the law merchant, shall govern.
(Formerly: Acts 1949, c.114, s.5.) As amended by P.L.34-1987,SEC.290.
IC 23-4-1-6
Partnership defined
Sec. 6. (1) A partnership is an association of two (2) or morepersons to carry on as co-owners a business for profit and includesfor all purposes of the laws of this state a limited liabilitypartnership.
(2) An association formed under any other statute of this state, orany statute adopted by authority, other than the authority of this state,is not a partnership under this chapter, unless such association wouldhave been a partnership in this state prior to January 1, 1950; but thischapter shall apply to limited partnerships except insofar as thestatutes relating to such partnerships are inconsistent with thischapter.
(Formerly: Acts 1949, c.114, s.6.) As amended by P.L.34-1987,SEC.291; P.L.230-1995, SEC.2.
IC 23-4-1-7
Rules for determining existence of partnership
Sec. 7. In determining whether a partnership exists, these rulesshall apply:
(1) Except as provided by section 16 of this chapter, personswho are not partners as to each other are not partners as to thirdpersons.
(2) Joint tenancy, tenancy in common, tenancy by the entireties,
joint property, common property, or part ownership does not ofitself establish a partnership, whether such co-owners do or donot share any profits made by the use of the property.
(3) The sharing of gross returns does not of itself establish apartnership, whether or not the persons sharing them have ajoint or common right or interest in any property from whichthe returns are derived.
(4) The receipt by a person of a share of the profits of abusiness is prima facie evidence that the person is a partner inthe business, but no such inference shall be drawn if suchprofits were received in payment for the following:
(a) As a debt by installments or otherwise.
(b) As wages of an employee or rent to a landlord.
(c) As an annuity to a widow or representative of a deceasedpartner.
(d) As interest on a loan though the amount of paymentvaries with the profits of the business.
(e) As the consideration for the sale of a goodwill of abusiness or other property by installments or otherwise.
(5) The existence of a partnership is not affected by thefollowing:
(a) The filing or failure or omission to file an original orrenewal registration as a limited liability partnership undersection 45 of this chapter.
(b) The expiration of a partnership's status as a limitedliability partnership.
(c) The filing of a notice of withdrawal under section 45 ofthis chapter.
(Formerly: Acts 1949, c.114, s.7.) As amended by P.L.34-1987,SEC.292; P.L.230-1995, SEC.3; P.L.34-1997, SEC.7.
IC 23-4-1-8
Partnership property
Sec. 8. (1) All property originally brought into the partnershipstock or subsequently acquired by purchase or otherwise, on accountof the partnership, is partnership property.
(2) Unless the contrary intention appears, property acquired withpartnership funds is partnership property.
(3) Any estate in real property may be acquired in the partnershipname. Title so acquired can be conveyed only in the partnershipname.
(4) A conveyance to a partnership in the partnership name, thoughwithout words of inheritance, passes the entire estate of the grantorunless a contrary intent appears.
(Formerly: Acts 1949, c.114, s.8.)
IC 23-4-1-9
Partner as agent
Sec. 9. (1) Every partner is an agent of the partnership for thepurpose of its business, and the act of every partner, including the
execution in the partnership name of any instrument, for apparentlycarrying on in the usual way the business of the partnership of whichhe is a member binds the partnership, unless the partner so acting hasin fact no authority to act for the partnership in the particular matter,and the person with whom he is dealing has knowledge of the factthat he has no such authority.
(2) An act of a partner which is not apparently for the carrying onof the business of the partnership in the usual way does not bind thepartnership unless authorized by the other partners.
(3) Unless authorized by the other partners or unless they haveabandoned the business, one (1) or more but less than all the partnershave no authority to:
(a) Assign the partnership property in trust for creditors or on theassignee's promise to pay the debts of the partnership,
(b) Dispose of the good will of the business,
(c) Do any other act which would make it impossible to carry onthe ordinary business of a partnership,
(d) Confess a judgment,
(e) Submit a partnership claim or liability to arbitration orreference.
(4) No act of a partner in contravention of a restriction onauthority shall bind the partnership to persons having knowledge ofthe restriction.
(Formerly: Acts 1949, c.114, s.9.)
IC 23-4-1-10
Conveyance of real property of partnership
Sec. 10. (1) Where title to real property is in the partnership name,any partner may convey title to such property by a conveyanceexecuted in the partnership name; but the partnership may recoversuch property unless the partner's act binds the partnership under theprovisions of section 9(1) of this chapter, or unless such property hasbeen conveyed by the grantee or a person claiming through suchgrantee to a holder for value without knowledge that the partner, inmaking the conveyance, has exceeded his authority.
(2) Where title to real property is in the name of the partnership,a conveyance executed by a partner, in his own name, passes theequitable interest of the partnership, provided the act is one withinthe authority of the partner under the provisions of section 9(1) ofthis chapter.
(3) Where title to real property is in the name of one (1) or morebut not all the partners, and the record does not disclose the right ofthe partnership, the partners in whose name the title stands mayconvey title to such property, but the partnership may recover suchproperty if the partners' act does not bind the partnership under theprovisions of section 9(1) of this chapter, unless the purchaser or hisassignee, is a holder for value, without knowledge.
(4) Where the title to real property is in the name of one (1) ormore or all the partners, or in a third person in trust for thepartnership, a conveyance executed by a partner in the partnership
name, or in his own name, passes the equitable interest of thepartnership, provided the act is one within the authority of thepartner under the provisions of section 9(1) of this chapter.
(5) Where the title to real property is in the names of all thepartners, a conveyance executed by all the partners passes all theirrights in such property.
(Formerly: Acts 1949, c.114, s.10.) As amended by P.L.34-1987,SEC.293.
IC 23-4-1-11
Partnership bound by admission of partner
Sec. 11. An admission or representation made by any partnerconcerning partnership affairs within the scope of his authority asconferred by this chapter is evidence against the partnership.
(Formerly: Acts 1949, c.114, s.11.) As amended by P.L.34-1987,SEC.294.
IC 23-4-1-12
Partnership charged with knowledge of or notice to partner
Sec. 12. Notice to any partner of any matter relating to partnershipaffairs, and the knowledge of the partner acting in the particularmatter, acquired while a partner or then present to his mind, and theknowledge of any other partner who reasonably could and shouldhave communicated it to the acting partner, operate as notice orknowledge of the partnership, except in the case of a fraud on thepartnership committed by or with the consent of that partner.
(Formerly: Acts 1949, c.114, s.12.)
IC 23-4-1-13
Partnership bound by partner's wrongful act
Sec. 13. Where, by any wrongful act or omission of any partneracting in the ordinary course of the business of the partnership orwith the authority of his copartners, loss or injury is caused to anyperson, not being a partner in the partnership, or any penalty isincurred, the partnership is liable therefor to the same extent as thepartner so acting or omitting to act.
(Formerly: Acts 1949, c.114, s.13.)
IC 23-4-1-14
Partnership bound by partner's breach of trust
Sec. 14. The partnership is bound to make good the loss:
(a) Where one partner acting within the scope of his apparentauthority receives money or property of a third person and misappliesit; and
(b) Where the partnership in the course of its business receivesmoney or property of a third person and the money or property soreceived is misapplied by any partner while it is in the custody of thepartnership.
(Formerly: Acts 1949, c.114, s.14.)
IC 23-4-1-15
Nature of partner liability; partnerships; limited liabilitypartnerships
Sec. 15. (1) Except as provided in paragraph (2), all partners areliable:
(a) Jointly and severally for everything chargeable to thepartnership under sections 13 and 14 of this chapter.
(b) Jointly for all other debts and obligations of the partnership;but any partner may enter into a separate obligation to performa partnership contract.
(2) A partner of a limited liability partnership is not personallyliable, directly or indirectly, including by way of indemnification,contribution, or otherwise, for:
(a) the debts, obligations, or liabilities of, or chargeable to, thelimited liability partnership or other partner or partners, whetherarising in tort, contract, or otherwise; or
(b) the acts or omissions of any other partner;
solely by reason of being a partner, acting or failing to act as apartner, or participating as an employee, a consultant, a contractor,or otherwise in the conduct of the business or activities of the limitedliability partnership while the partnership is a limited liabilitypartnership.
(3) A partner of a limited liability partnership may be personallyliable for the partner's own acts or omissions.
(4) A limited liability partnership is liable out of partnershipassets for partnership debts, obligations, and liabilities.
(5) A partner in a limited liability partnership is not a proper partyto a proceeding by or against the limited liability partnership, theobject of which is to recover any debts, obligations, or liabilities of,or chargeable to, the partnership, unless the partner is personallyliable under paragraph (3).
(6) The laws of Indiana or another jurisdiction may not imposepersonal liability on a partner in a limited liability partnership. Theonly actions required of a limited liability partnership or ofindividual partners in such a partnership in order to avail themselvesof the limited liability provisions of this chapter are those requiredby this chapter.
(Formerly: Acts 1949, c.114, s.15.) As amended by P.L.34-1987,SEC.295; P.L.230-1995, SEC.4.
IC 23-4-1-16
Partner by estoppel
Sec. 16. (1) When a person, by words spoken or written or byconduct, represents himself, or consents to another representing himor any one, as a partner in an existing partnership or with one (1) ormore persons not actual partners, he is liable to any such person towhom such representation has been made, who has, on the faith ofsuch representation, given credit to the actual or apparentpartnership, and if he has made such representation or consented toits being made in a public manner he is liable to such person,
whether the representation has or has not been made orcommunicated to such person so giving credit by or with theknowledge of the apparent partner making the representation orconsenting to its being made.
(a) When a partnership liability results, he is liable as though hewere an actual member of the partnership.
(b) When no partnership liability results, he is liable jointly withthe other persons, if any, so consenting to the contract orrepresentation as to incur liability, otherwise separately.
(2) When a person has been thus represented to be a partner in anexisting partnership, or with one (1) or more persons not actualpartners, he is an agent of the persons consenting to suchrepresentation to bind them to the same extent and in the samemanner as though he were a partner in fact, with respect to personswho rely upon the representation. Where all the members of theexisting partnership consent to the representation, a partnership actor obligation results; but in all other cases it is the joint act orobligation of the person acting and the persons consenting to therepresentation.
(Formerly: Acts 1949, c.114, s.16.)
IC 23-4-1-17
Liability of incoming partner
Sec. 17. A person admitted as a partner into an existingpartnership is liable for all the obligations of the partnership arisingbefore his admission as though he had been a partner when suchobligations were incurred, except that this liability shall be satisfiedonly out of partnership property.
(Formerly: Acts 1949, c.114, s.17.)
IC 23-4-1-18
Rules determining rights and duties of partners
Sec. 18. The rights and duties of the partners in relation to thepartnership shall be determined, subject to any agreement betweenthem, by the following rules:
(a) Each partner shall be repaid his contributions, whether by wayof capital or advances to the partnership property and share equallyin the profits and surplus remaining after all liabilities, includingthose to partners, are satisfied; and except as provided in section15(2) of this chapter, each partner must contribute toward the losses,whether of capital or otherwise, sustained by the partnershipaccording to his share in the profits.
(b) The partnership must indemnify every partner in respect ofpayments made and personal liabilities reasonably incurred by himin the ordinary and proper conduct of its business, or for thepreservation of its business or property.
(c) A partner, who in aid of the partnership makes any payment oradvance beyond the amount of capital which he agreed to contribute,shall be paid interest from the date of the payment or advance.
(d) A partner shall receive interest on the capital contributed by
him only from the date when repayment should be made.
(e) All partners have equal rights in the management and conductof the partnership business.
(f) No partner is entitled to remuneration for acting in thepartnership business, except that a surviving partner is entitled toreasonable compensation for his services in winding up thepartnership affairs.
(g) No person can become a member of a partnership without theconsent of all the partners.
(h) Any difference arising as to ordinary matters connected withthe partnership business may be decided by a majority of thepartners; but no act in contravention of any agreement between thepartners may be done rightfully without the consent of all thepartners.
(Formerly: Acts 1949, c.114, s.18.) As amended by P.L.230-1995,SEC.5.
IC 23-4-1-19
Partnership books
Sec. 19. The partnership books shall be kept, subject to anyagreement between the partners, at the principal place of business ofthe partnership, and every partner shall at all times have access toand may inspect and copy any of them.
(Formerly: Acts 1949, c.114, s.19.)
IC 23-4-1-20
Duty of partners to render information
Sec. 20. Partners shall render on demand true and full informationof all things affecting the partnership to any partner or the legalrepresentative of any deceased partner or partner under legaldisability.
(Formerly: Acts 1949, c.114, s.20.)
IC 23-4-1-21
Partner accountable as fiduciary
Sec. 21. (1) Every partner must account to the partnership for anybenefit, and hold as trustee for it any profits derived by him withoutthe consent of the other partners from any transaction connected withthe formation, conduct, or liquidation of the partnership or from anyuse by him of its property.
(2) This section applies also to the representatives of a deceasedpartner engaged in the liquidation of the affairs of the partnership asthe personal representatives of the last surviving partner.
(Formerly: Acts 1949, c.114, s.21.)
IC 23-4-1-22
Right to account
Sec. 22. Any partner shall have the right to a formal account as topartnership affairs:
(a) If he is wrongfully excluded from the partnership business
or possession of its property by his copartners.
(b) If the right exists under the terms of any agreement.
(c) As provided by section 21 of this chapter.
(d) Whenever other circumstances render it just and reasonable.
(Formerly: Acts 1949, c.114, s.22.) As amended by P.L.34-1987,SEC.296.
IC 23-4-1-23
Continuation of partnership beyond fixed term
Sec. 23. (1) When a partnership for a fixed term or particularundertaking is continued after the termination of such term orparticular undertaking without any express agreement, the rights andduties of the partners remain the same as they were at suchtermination, so far as is consistent with a partnership at will.
(2) A continuation of the business by the partners or such of themas habitually acted therein during the term, without any settlement orliquidation of the partnership affairs, is prima facie evidence of acontinuation of the partnership.
(Formerly: Acts 1949, c.114, s.23.)
IC 23-4-1-24
Extent of property rights of partner
Sec. 24. The property rights of a partner are (1) his rights inspecific partnership property, (2) his interest in the partnership, and(3) his right to participate in the management.
(Formerly: Acts 1949, c.114, s.24.)
IC 23-4-1-25
Nature of partner's right in specific partnership property
Sec. 25. (1) A partner is co-owner with his partners of specificpartnership property holding as a tenant in partnership.
(2) The incidents of this tenancy are such that:
(a) A partner, subject to the provisions of this chapter and toany agreement between the partners, has an equal right with hispartners to possess specific partnership property for partnershippurposes; but he has no right to possess such property for anyother purpose without the consent of his partners.
(b) A partner's right in specific partnership property is notassignable except in connection with the assignment of rights ofall the partners in the same property.
(c) A partner's right in specific partnership property is notsubject to attachment or execution, except on a claim againstthe partnership. When partnership property is attached for apartnership debt, the partners, or any of them, or therepresentatives of a deceased partner, cannot claim any rightunder the homestead or exemption laws.
(d) On the death of a partner, his right in specific partnershipproperty vests in the surviving partner or partners, except wherethe deceased was the last surviving partner, when his right insuch property vests in his legal representative. Such surviving
partner or partners, or the legal representative of the lastsurviving partner, has no right to possess the partnershipproperty for any but a partnership purpose.
(e) A partner's right in specific partnership property is notsubject to allowances to surviving spouses, heirs, or next of kin.
(Formerly: Acts 1949, c.114, s.25.) As amended by P.L.34-1987,SEC.297.
IC 23-4-1-26
Nature of partner's interest in partnership
Sec. 26. A partner's interest in the partnership is his share of theprofits and surplus, and the same is personal property.
(Formerly: Acts 1949, c.114, s.26.)
IC 23-4-1-27
Assignment of partner's interest
Sec. 27. (1) A conveyance by a partner of his interest in thepartnership does not of itself dissolve the partnership, nor, as againstthe other partners in the absence of agreement, entitle the assignee,during the continuance of the partnership, to interfere in themanagement or administration of the partnership business or affairs,or to require any information or account of partnership transactions,or to inspect the partnership books; but it merely entitles the assigneeto receive in accordance with his contract the profits to which theassigning partner would otherwise be entitled.
(2) In case of a dissolution of the partnership, the assignee isentitled to receive his assignor's interest and may require an accountfrom the date only of the last account agreed to by all the partners.
(Formerly: Acts 1949, c.114, s.27.)
IC 23-4-1-28
Partner's interest subject to charging order
Sec. 28. (1) On due application to a competent court by anyjudgment creditor of a partner, the court which entered the judgment,order, or decree, or any other court, may charge the interest of thedebtor partner with payment of the unsatisfied amount of suchjudgment debt with interest thereon; and may then or later appoint areceiver of his share of the profits, and of any other money due or tofall due to him in respect of the partnership, and make all otherorders, directions, accounts, and inquiries which the debtor partnermight have made, or which the circumstances of the case mayrequire.
(2) The interest charge may be redeemed at any time beforeforeclosure, or in case of a sale being directed by the court may bepurchased without thereby causing a dissolution:
(a) with separate property, by any one (1) or more of thepartners; or
(b) with partnership property, by any one (1) or more of thepartners with the consent of all the partners whose interests arenot so charged or sold. (3) Nothing in this chapter shall be held to deprive a partner of hisright, if any, under the exemption laws, as regards his interest in thepartnership.
(Formerly: Acts 1949, c.114, s.28.) As amended by P.L.34-1987,SEC.298.
IC 23-4-1-29
Dissolution defined
Sec. 29. The dissolution of a partnership is the change in therelation of the partners caused by any partner ceasing to beassociated in the carrying on as distinguished from the winding up ofthe business.
(Formerly: Acts 1949, c.114, s.29.)
IC 23-4-1-30
Partnership not terminated by dissolution
Sec. 30. On dissolution the partnership is not terminated, butcontinues until the winding up of partnership affairs is completed.
(Formerly: Acts 1949, c.114, s.30.)
IC 23-4-1-31
Causes of dissolution
Sec. 31. Dissolution is caused:
(1) Without violation of the agreement between the partners:
(a) By the termination of the definite term or particularundertaking specified in the agreement.
(b) By the express will of any partner when no definite termor particular undertaking is specified.
(c) By the express will of all the partners who have notassigned their interests or suffered them to be charged fortheir separate debts, either before or after the termination ofany specified term or particular undertaking.
(d) By the expulsion of any partner from the business bonafide in accordance with such a power conferred by theagreement between the partners.
(2) In contravention of the agreement between the partners,where the circumstances do not permit a dissolution under anyother provision of this section, by the express will of anypartner at any time.
(3) By any event which makes it unlawful for the business ofthe partnership to be carried on or for the members to carry it onin partnership.
(4) By the death of any partner.
(5) By the bankruptcy of any partner or the partnership.
(6) By decree of court under section 32 of this chapter.
(Formerly: Acts 1949, c.114, s.31.) As amended by P.L.34-1987,SEC.299.
IC 23-4-1-32
Dissolution by decree of court Sec. 32. (1) On application by or for a partner, the court shalldecree a dissolution whenever:
(a) A partner has been declared mentally incompetent in anyjudicial proceeding.
(b) A partner becomes in any other way incapable ofperforming the partner's part of the partnership contract.
(c) A partner has been guilty of conduct that tends to affectprejudicially the carrying on of the business.
(d) A partner willfully or persistently commits a breach of thepartnership agreement, or otherwise acts in matters relating tothe partnership business so that it is not reasonably practicableto carry on the business in partnership with that partner.
(e) The business of the partnership can only be carried on at aloss.
(f) Other circumstances render a dissolution equitable.
(2) On the application of the purchaser of a partner's interestunder sections 27 or 28 of this chapter:
(a) After the termination of the specified term or particularundertaking.
(b) At any time if the partnership was a partnership at will whenthe interest was assigned or when the charging order wasissued.
(Formerly: Acts 1949, c.114, s.32.) As amended by P.L.34-1987,SEC.300; P.L.33-1989, SEC.21.
IC 23-4-1-33
General effect of dissolution on authority of partner
Sec. 33. Except so far as may be necessary to wind up partnershipaffairs or to complete transactions begun but not then finished,dissolution terminates all authority of any partner to act for thepartnership:
(1) With respect to the partners:
(a) When the dissolution is not by the act, bankruptcy, ordeath of a partner; or
(b) When the dissolution is by such act, bankruptcy, or deathof a partner, in cases where section 34 of this chapter sorequires.
(2) With respect to persons not partners, as declared in section35 of this chapter.
(Formerly: Acts 1949, c.114, s.33.) As amended by P.L.34-1987,SEC.301.
IC 23-4-1-34
Right of partner to contribution from copartners after dissolution
Sec. 34. Where the dissolution is caused by the act, death orbankruptcy of a partner, each partner is liable to his copartners forhis share of any liability created by any partner acting for thepartnership as if the partnership had not been dissolved except in thecase of one (1) of the following:
(a) The dissolution being by act of any partner, the partner acting
for the partnership had knowledge of the dissolution.
(b) The dissolution being by the death or bankruptcy of a partner,the partner acting for the partnership had knowledge or notice of thedeath or bankruptcy.
(c) The liability is for a debt, an obligation, or a liability for whichthe partner is not liable as provided in section 15(2) of this chapter.
(Formerly: Acts 1949, c.114, s.34.) As amended by P.L.230-1995,SEC.6.
IC 23-4-1-35
Power of partner to bind partnership to third person afterdissolution
Sec. 35. (1) After dissolution a partner can bind the partnershipexcept as provided in paragraph (3):
(a) By any act appropriate for winding up partnership affairs orcompleting transactions unfinished at dissolution.
(b) By any transaction which would bind the partnership ifdissolution had not taken place, provided the other party to thetransaction:
(I) had extended credit to the partnership prior to dissolutionand had no knowledge or notice of the dissolution; or
(II) though he had not so extended credit, had neverthelessknown of the partnership prior to dissolution, and, having noknowledge or notice of dissolution, the fact of dissolutionhad not been advertised in a newspaper of generalcirculation in the place (or in each place if more than one) atwhich the partnership business was regularly carried on.
(2) The liability of a partner under paragraph (1)(b) shall besatisfied out of partnership assets alone when such partner had beenprior to dissolution:
(a) unknown as a partner to the person with whom the contractis made; and
(b) so far unknown and inactive in partnership affairs that thebusiness reputation of the partnership could not be said to havebeen in any degree due to his connection with it.
(3) The partnership is in no case bound by any act of a partnerafter dissolution:
(a) where the partnership is dissolved because it is unlawful tocarry on the business, unless the act is appropriate for windingup partnership affairs; or
(b) where the partner has become bankrupt; or
(c) where the partner has no authority to wind up partnershipaffairs; except by a transaction with one who:
(I) had an extended credit to the partnership prior todissolution and had no knowledge or notice of his want ofauthority; or
(II) had not extended credit to the partnership prior todissolution, and, having no knowledge or notice of his wantof authority, the fact of his want of authority has not beenadvertised in the manner provided for advertising the fact of
dissolution in paragraph (1)(b)(II).
(4) Nothing in this section shall affect the liability under section16 of this chapter of any person who after dissolution representshimself or consents to another representing him as a partner in apartnership engaged in carrying on business.
(Formerly: Acts 1949, c.114, s.35.) As amended by P.L.34-1987,SEC.302.
IC 23-4-1-36
Effect of dissolution on partner's existing liability
Sec. 36. (1) The dissolution of the partnership does not of itselfdischarge the existing liability of any partner.
(2) A partner is discharged from any existing liability upondissolution of the partnership by an agreement to that effect betweenhimself, the partnership creditor and the person or partnershipcontinuing the business; and such agreement may be inferred fromthe course of dealing between the creditor having knowledge of thedissolution and the person or partnership continuing the business.
(3) Where a person agrees to assume the existing obligations ofa dissolved partnership, the partners whose obligations have beenassumed shall be discharged from any liability to any creditor of thepartnership who, knowing of the agreement, consents to a materialalteration in the nature or time of payment of such obligations.
(4) The individual property of a deceased partner shall be liablefor those obligations of the partnership incurred while he was apartner but subject to the prior payment of his separate debts and forwhich the partner was liable under section 15 of this chapter.
(Formerly: Acts 1949, c.114, s.36.) As amended by P.L.230-1995,SEC.7.
IC 23-4-1-37
Right to wind up
Sec. 37. Unless otherwise agreed the partners who have notwrongfully dissolved the partnership or the legal representative ofthe last surviving partner, not bankrupt, has the right to wind up thepartnership affairs: Provided, however, That any partner, his legalrepresentative or his assignee, upon cause shown, may obtainwinding up by the court.
(Formerly: Acts 1949, c.114, s.37.)
IC 23-4-1-38
Rights of partners to application of partnership property
Sec. 38. (1) When dissolution is caused in any way, except incontravention of the partnership agreement, each partner, as againsthis copartners and all persons claiming through them in respect oftheir interests in the partnership, unless otherwise agreed, may havethe partnership property applied to discharge its liabilities, and thesurplus applied to pay in cash the net amount owing to the respectivepartners. But if dissolution is caused by expulsion of a partner, bonafide under the partnership agreement and if the expelled partner is
discharged from all partnership liabilities, either by payment oragreement under section 36(2) of this chapter, he shall receive incash only the net amount due him from the partnership.
(2) When dissolution is caused in contravention of the partnershipagreement the rights of the partners shall be as follows:
(a) Each partner who has not caused dissolution wrongfullyshall have:
(I) All the rights specified in paragraph (1) of this section,and
(II) The right, as against each partner who has caused thedissolution wrongfully, to damages for breach of theagreement.
(b) The partners who have not caused the dissolutionwrongfully, if they all desire to continue the business in thesame name, either by themselves or jointly with others, may doso, during the agreed term for the partnership and for thatpurpose may possess the partnership property, provided theysecure the payment by bond approved by the court, or pay toany partner who has caused the dissolution wrongfully, thevalue of his interest in the partnership at the dissolution, lessany damages recoverable under clause (2)(a)(II) of this section,and in like manner indemnify him against all present or futurepartnership liabilities.
(c) A partner who has caused the dissolution wrongfully shallhave:
(I) If the business is not continued under the provisions ofparagraph (2)(b) all the rights of a partner under paragraph(1), subject to clause (2)(a)(II), of this section.
(II) If the business is continued under paragraph (2)(b) ofthis section the right as against his copartners and allclaiming through them in respect of their interests in thepartnership, to have the value of his interest in thepartnership, less any damages caused to his copartners by thedissolution, ascertained and paid to him in cash, or thepayment secured by bond approved by the court, and to bereleased from all existing liabilities of the partnership; but inascertaining the value of the partner's interest the value ofthe goodwill of the business shall not be considered.
(Formerly: Acts 1949, c.114, s.38.) As amended by P.L.34-1987,SEC.303.
IC 23-4-1-39
Rights where partnership is dissolved for fraud ormisrepresentation
Sec. 39. Where a partnership contract is rescinded on the groundof the fraud or misrepresentation of one of the parties thereto, theparty entitled to rescind is, without prejudice to any other right,entitled,
(a) To a lien on, or right of retention of, the surplus of thepartnership property after satisfying the partnership liabilities to third
persons for any sum of money paid by him for the purchase of aninterest in the partnership and for any capital or advances contributedby him; and
(b) To stand, after all liabilities to third persons have beensatisfied, in the place of the creditors of the partnership for anypayments made by him in respect of the partnership liabilities; and
(c) To be indemnified by the person guilty of the fraud or makingthe representation against all debts and liabilities of the partnership.
(Formerly: Acts 1949, c.114, s.39.)
IC 23-4-1-40
Rules for distribution
Sec. 40. In settling accounts between the partners afterdissolution, the following rules shall be observed, subject to anyagreement to the contrary:
(a) The assets of the partnership are:
(I) The partnership property.
(II) The contribution of the partners specified in clause (d)of this paragraph.
(b) The liabilities of the partnership shall rank in order ofpayment, as follows:
(I) Those owing to creditors other than partners.
(II) Those owing to partners other than for capital andprofits.
(III) Those owing to partners in respect of capital.
(IV) Those owing to partners in respect of profits.
(c) The assets shall be applied in the order of their declarationin clause (a) of this paragraph to the satisfaction of theliabilities.
(d) Except as provided in section 15(2) of this chapter, thepartners shall contribute, as provided by section 18(a) of thischapter, the amount necessary to satisfy the liabilities; but ifany, but not all, of the partners are insolvent, or, not beingsubject to process, refuse to contribute, the other partners shallcontribute their share of the liabilities, and, in the relativeproportions in which they share the profits, the additionalamount necessary to pay the liabilities.
(e) An assignee for the benefit of creditors or any personappointed by the court shall have the right to enforce thecontributions specified in clause (d) of this paragraph.
(f) Any partner or his legal representative shall have the right toenforce the contributions specified in clause (d) of thisparagraph, to the extent of the amount which he has paid inexcess of his share of the liability.
(g) The individual property of a deceased partner shall be liablefor the contributions specified in clause (d) of this paragraph.
(h) When partnership property and the individual properties ofthe partners are in possession of a court for distribution,partnership creditors shall have priority on partnership propertyand separate creditors on individual property, saving the rights
of lien or secured creditors as heretofore.
(i) Where a partner has become bankrupt or his estate isinsolvent, the claims against his separate property shall rank inthe following order:
(I) Those owing to separate creditors.
(II) Those owing to partnership creditors.
(III) Those owing to partners by way of contribution.
(Formerly: Acts 1949, c.114, s.40.) As amended by P.L.34-1987,SEC.304; P.L.230-1995, SEC.8.
IC 23-4-1-41
Liability of persons continuing business in certain cases
Sec. 41. (1) When any new partner is admitted into an existingpartnership, or when any partner retires and assigns (or therepresentative of the deceased partner assigns) his rights inpartnership property to two (2) or more of the partners, or to one (1)or more of the partners and one (1) or more third persons, if thebusiness is continued without liquidation of the partnership affairs,creditors of the first or dissolved partnership are also creditors of thepartnership so continuing the business.
(2) When all but one (1) partner retire and assign (or therepresentative of a deceased partner assigns) their rights inpartnership property to the remaining partner, who continues thebusiness without liquidation of partnership affairs, either alone orwith others, creditors of the dissolved partnership are also creditorsof the person or partnership so continuing the business.
(3) When any partner retires or dies and the business of thedissolved partnership is continued as set forth in paragraphs (1) and(2) of this section, with the consent of the retired partners or therepresentative of the deceased partner, but without any assignmentof his right in partnership property, rights of creditors of thedissolved partnership and of the creditors of the person orpartnership continuing the business shall be as if such assignmenthad been made.
(4) When all the partners or their representatives assign theirrights in partnership property to one (1) or more third persons whopromise to pay the debts and who continue the business of thedissolved partnership, creditors of the dissolved partnership are alsocreditors of the person or partnership continuing the business.
(5) When any partner wrongfully causes a dissolution and theremaining partners continue the business under the provisions ofsection 38(2)(b) of this chapter, either alone or with others, andwithout liquidation of the partnership affairs, creditors of thedissolved partnership are also creditors of the person or partnershipcontinuing the business.
(6) When a partner is expelled and the remaining partnerscontinue the business either alone or with others, without liquidationof the partnership affairs, creditors of the dissolved partnership arealso creditors of the person or partnership continuing the business.
(7) The liability of a third person becoming a partner in the
partnership continuing the business, under this section, to thecreditors of the dissolved partnership shall be satisfied out ofpartnership property only.
(8) When the business of a partnership after dissolution iscontinued under any conditions set forth in this section, the creditorsof the dissolved partnership, as against the separate creditors of theretiring or deceased partner or the representative of the deceasedpartners, have a prior right to any claim of the retired partner or therepresentative of the deceased partner against the person orpartnership continuing the business, on account of the retired ordeceased partner's interest in the dissolved partnership or on accountof any consideration promised for such interest or for his right inpartnership property.
(9) Nothing in this section shall be held to modify any right ofcreditors to set aside any assignment on the ground of fraud.
(10) The use by the person of partnership continuing the businessof the partnership name, or the name of a deceased partner, as partthereof, shall not of itself make the individual property of thedeceased partner liable for any debts contracted by such person orpartnership.
(Formerly: Acts 1949, c.114, s.41.) As amended by P.L.34-1987,SEC.305.
IC 23-4-1-42
Rights of retiring or estate of deceased partner when business iscontinued
Sec. 42. When any partner retires or dies, and the business iscontinued under any of the conditions set forth in section 41(1),41(2), 41(3), 41(5), 41(6), or (38)(2)(b) of this chapter, without anysettlement of accounts as between him or his estate and the person orpartnership continuing the business, unless otherwise agreed, he orhis legal representative as against such persons or partnership mayhave the value of his interest at the date of dissolution ascertained,and shall receive as an ordinary creditor an amount equal to the valueof his interest in the dissolved partnership with interest, or, at hisoption or at the option of his legal representative, in lieu of interest,the profits attributable to the use of his right in the property of thedissolved partnership; provided that the creditors of the dissolvedpartnership as against the separate creditors, or the representative ofthe retired or deceased partner shall have priority on any claimarising under this section, as provided by section 41(8) of thischapter.
(Formerly: Acts 1949, c.114, s.42.) As amended by P.L.34-1987,SEC.306.
IC 23-4-1-43
Accrual of actions
Sec. 43. The right to an account of his interest shall accrue to anypartner, or his legal representative, as against the winding-up partnersor the surviving partners or the person or partnership continuing the
business, at the date of dissolution, in the absence of any agreementto the contrary.
(Formerly: Acts 1949, c.114, s.43.)
IC 23-4-1-44
Limited liability partnerships; legislative intent and policy
Sec. 44. (1) It is the intent of the legislature that the legalexistence of limited liability partnerships formed under an agreementgoverned by this chapter be recognized outside the boundaries of thisstate and that the laws of this state governing such limited liabilitypartnerships transacting business outside this state be granted theprotection of full faith and credit of the Constitution of the UnitedStates.
(2) It is the policy of this state that the internal affairs ofpartnerships, including limited liability partnerships, formed underan agreement governed by this chapter, including the liability ofpartners for debts, obligations, and liabilities of or chargeable to thepartnership, a partner, or partners, are subject to and governed by thelaws of this state.
As added by P.L.230-1995, SEC.9.
IC 23-4-1-45
Limited liability partnerships; registration; notice
Sec. 45. (a) To qualify as a limited liability partnership, apartnership under this chapter must do the following:
(1) File a registration with the secretary of state in a formdetermined by the secretary of state that satisfies the following:
(A) Is signed by one (1) or more partners authorized to signthe registration. A signature on a document under this clausethat is transmitted and filed electronically is sufficient if theperson transmitting and filing the document:
(i) has the intent to file the document as evidenced by asymbol executed or adopted by a party with presentintention to authenticate the filing; and
(ii) enters the filing party's name on the electronic form ina signature box or other place indicated by the secretary ofstate.
(B) States the name of the limited liability partnership,which must:
(i) contain the words "Limited Liability Partnership" or theabbreviation "L.L.P." or "LLP" as the last words or lettersof the name; and
(ii) be distinguishable upon the records of the secretary ofstate from the name of a limited liability partnership orother business entity registered to transact business inIndiana.
(C) States the address of the partnership's principal office.
(D) States the name of the partnership's registered agent andthe address of the partnership's registered office for serviceof process as required to be maintained by section 50 of this
chapter.
(E) Contains a brief statement of the business in which thepartnership engages.
(F) States any other matters that the partnership determinesto include.
(G) States that the filing of the registration is evidence of thepartnership's intention to act as a limited liabilitypartnership.
(2) Except as provided in subdivision (3), file a ninety dollar($90) registration fee with the registration.
(3) If the registration required under subdivision (1) is filedelectronically, file a filing fee of seventy-five dollars ($75).
(b) The secretary of state shall grant limited liability partnershipstatus to any partnership that submits a completed registration withthe required fee.
(c) Registration is effective and a partnership becomes a limitedliability partnership on the date a registration is filed with thesecretary of state or at any later date or time specified in theregistration. The registration remains effective until it is voluntarilywithdrawn by filing with the secretary of state a written withdrawalnotice under section 45.2 of this chapter.
(d) The status of a partnership as a limited liability partnershipand the liability of a partner of a limited liability partnership is notadversely affected by errors or subsequent changes in the informationstated in a registration under subsection (a).
(e) A registration on file with the secretary of state is notice thatthe partnership is a limited liability partnership and is notice of allother facts set forth in the registration.
As added by P.L.230-1995, SEC.10. Amended by P.L.11-1996,SEC.21; P.L.34-1997, SEC.8; P.L.277-2001, SEC.6; P.L.178-2002,SEC.101; P.L.60-2007, SEC.2.
IC 23-4-1-45.1
Limited liability partnerships; amendment of registration
Sec. 45.1. (a) As used in this section, “limited liabilitypartnership” refers to a:
(1) limited liability partnership; or
(2) foreign limited liability partnership;
as defined in section 2 of this chapter.
(b) The registration of a limited liability partnership may beamended by filing in the office of the secretary of state a certificateof amendment executed by at least one (1) partner authorized toexecute an amendment to the registration.
(c) A certificate of amendment must contain the following:
(1) The name of the limited liability partnership.
(2) The date the registration was filed.
(3) The amendment to the registration.
(d) A certificate of amendment must be accompanied by a thirtydollar ($30) filing fee.
(e) Subject to subsection (f), the registration of a limited liability
partnership may be amended at any time.
(f) An amended registration must contain only provisions that maybe lawfully contained in the registration when the amendment ismade.
As added by P.L.34-1997, SEC.9.
IC 23-4-1-45.2
Limited liability partnerships; withdrawal of registration
Sec. 45.2. (a) As used in this section, “limited liabilitypartnership” refers to a:
(1) limited liability partnership; or
(2) foreign limited liability partnership;
as defined in section 2 of this chapter.
(b) The registration of a limited liability partnership may bewithdrawn by filing in the office of the secretary of state awithdrawal notice executed by at least one (1) partner authorized toexecute a withdrawal notice.
(c) A withdrawal notice must contain the following:
(1) The name of the limited liability partnership.
(2) The date the registration was filed.
(3) A brief statement regarding the reason for filing thewithdrawal notice.
(4) Any other information considered appropriate by the limitedliability partnership.
(d) A withdrawal notice must be accompanied by a thirty dollar($30) filing fee.
(e) The withdrawal notice is effective and the partnership ceasesto be a limited liability partnership on the date a withdrawal noticeis filed with the secretary of state or at any later date or timespecified in the notice.
As added by P.L.34-1997, SEC.10.
IC 23-4-1-45.3
Limited liability partnerships; reservation of name
Sec. 45.3. (a) A person may reserve the exclusive right to the useof a name, including a fictitious name for a foreign limited liabilitypartnership whose name is not available, by delivering an applicationto the secretary of state for filing. The application must set forth thename and address of the applicant and the name proposed to bereserved. If the secretary of state finds that the name is available, thesecretary of state shall reserve the name for the exclusive use of theapplicant for renewable one hundred twenty (120) day periods.
(b) The owner of a reserved name may transfer the reservation toanother person by delivering to the secretary of state a signed noticeof the transfer that states the name and address of the transferee.
As added by P.L.34-1997, SEC.11. Amended by P.L.277-2001,SEC.7.
IC 23-4-1-45.4
Foreign limited liability partnerships; registration of name Sec. 45.4. (a) A foreign limited liability partnership may registerits name, or its name with any addition required by section 45 of thischapter, if the name is distinguishable upon the records of thesecretary of state as provided in section 45 of this chapter.
(b) A foreign limited liability partnership register