Code of Alabama - Title 10A: Alabama Business and Nonprofit Entities Code - Section 10A-9A-7.02 - Transfer of partner's transferable interest

Section 10A-9A-7.02 - Transfer of partner's transferable interest.

(a) A transfer, in whole or in part, of a partner's transferable interest:

(1) is permissible;

(2) does not by itself cause the partner's dissociation;

(3) does not by itself cause a dissolution and winding up of the limited partnership; and

(4) subject to Section 10A-9A-7.04, does not entitle the transferee to:

(A) participate in the management or conduct of the limited partnership's activities and affairs; or

(B) except as otherwise provided in subsection (d), have access to required information, records, or other information concerning the partnership's activities and affairs.

(b) A transferee has the right to receive, in accordance with the transfer, distributions to which the transferor would otherwise be entitled.

(c) A transferable interest may be evidenced by a certificate of transferable interest issued by the limited partnership. A partnership agreement may provide for the transfer of the transferable interest represented by the certificate and make other provisions with respect to the certificate. No certificate of transferable interest shall be issued in bearer form.

(d) In a dissolution and winding up, a transferee is entitled to an account of the limited partnership's transactions only from the date of dissolution.

(e) Except as otherwise provided in Sections 10A-9A-6.01(b)(3), 10A-9A-6.01(b)(10), 10A-9A-6.01(b)(11), 10A-9A-6.03(4)(B), 10A-9A-6.03(11), and 10A-9A-6.03(12) when a partner transfers a transferable interest, the transferor retains the rights of a partner other than the right to distributions transferred and retains all duties and obligations of a partner.

(f) A limited partnership need not give effect to a transferee's rights under this section until the limited partnership has notice of the transfer.

(g) When a partner transfers a transferable interest to a person that is admitted as a partner with respect to the transferred interest, the transferee is liable for the partner's obligations under Sections 10A-9A-5.02 and 10A-9A-5.08 to the extent that the obligations are known to the transferee when the transferee voluntarily accepts admission as a partner.

(Act 2016-379, §1.)

Last modified: May 3, 2021