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Texas Business Organizations Code - Section 153.202. Enforceability Of Promise To Make Contribution

Legal Research Home > Texas Lawyer > Business Organizations Code > Texas Business Organizations Code - Section 153.202. Enforceability Of Promise To Make Contribution

§ 153.202. ENFORCEABILITY OF PROMISE TO MAKE 
CONTRIBUTION.  (a) A promise by a limited partner to make a 
contribution to, or pay cash or transfer other property to, a 
limited partnership is not enforceable unless the promise is in 
writing and signed by the limited partner.
	(b)  Except as otherwise provided by the partnership 
agreement, a partner or the partner's legal representative or 
successor is obligated to the limited partnership to perform an 
enforceable promise to make a contribution to or pay cash or 
transfer other property to a limited partnership, notwithstanding 
the partner's death, disability, or other change in circumstances.
	(c)  If a partner or a partner's legal representative or 
successor does not make a contribution or other payment of cash or 
transfer of other property required by the enforceable promise, 
whether as a contribution or with respect to a contribution 
previously made, that partner or the partner's legal representative 
or successor is obligated, at the option of the limited 
partnership, to pay to the partnership an amount of cash equal to 
the portion of the agreed value, as stated in the partnership 
agreement or in the partnership records required to be kept under 
Sections 153.551 and 153.552, of the contribution represented by 
the amount of cash that has not been paid or the value of the 
property that has not been transferred.
	(d)  A partnership agreement may provide that the 
partnership interest of a partner who fails to make a payment of 
cash or transfer of other property to the partnership, whether as a 
contribution or with respect to a contribution previously made, 
required by an enforceable promise is subject to specified 
consequences, which may include:
		(1)  a reduction of the defaulting partner's percentage 
or other interest in the limited partnership;
		(2)  subordination of the partner's partnership 
interest to the interest of nondefaulting partners;
		(3)  a forced sale of the partner's partnership 
interest;                   
		(4)  forfeiture of the partner's partnership interest;                        
		(5)  the lending of money to the defaulting partner by 
other partners of the amount necessary to meet the defaulting 
partner's commitment;
		(6)  a determination of the value of the defaulting 
partner's partnership interest by appraisal or by formula and 
redemption or sale of the partnership interest at that value;  or
		(7)  another penalty or consequence.                                          

Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.                     

Last modified: August 11, 2007