(805 ILCS 206/601)
Sec. 601. Events causing partner's dissociation. A partner is dissociated from a partnership upon the occurrence of any of the following events:
(1) the partnership's having notice of the partner's
express will to withdraw as a partner or on a later date specified by the partner;
(2) an event agreed to in the partnership agreement
as causing the partner's dissociation;
(3) the partner's expulsion pursuant to the
partnership agreement;
(4) the partner's expulsion by the unanimous vote of
the other partners if:
(i) it is unlawful to carry on the partnership
business with that partner;
(ii) there has been a transfer of all or
substantially all of that partner's transferable interest in the partnership, other than a transfer for security purposes, or a court order charging the partner's interest, which has not been foreclosed;
(iii) within 90 days after the partnership
notifies a corporate partner that it will be expelled because it has filed a certificate of dissolution or the equivalent, its charter has been revoked, or its right to conduct business has been suspended by the jurisdiction of its incorporation, there is no revocation of the certificate of dissolution or no reinstatement of its charter or its right to conduct business; or
(iv) a partnership that is a partner has been
dissolved and its business is being wound up;
(5) on application by the partnership or another
partner, the partner's expulsion by judicial determination because:
(i) the partner engaged in wrongful conduct that
adversely and materially affected the partnership business;
(ii) the partner willfully or persistently
committed a material breach of the partnership agreement or of a duty owed to the partnership or the other partners under Section 404 of this Act; or
(iii) the partner engaged in conduct relating to
the partnership business which makes it not reasonably practicable to carry on the business in partnership with the partner;
(6) the partner's:
(i) becoming a debtor in bankruptcy;
(ii) executing an assignment for the benefit of
creditors;
(iii) seeking, consenting to, or acquiescing in
the appointment of a trustee, receiver, or liquidator of that partner or of all or substantially all of that partner's property; or
(iv) failing, within 90 days after the
appointment, to have vacated or stayed the appointment of a trustee, receiver, or liquidator of the partner or of all or substantially all of the partner's property obtained without the partner's consent or acquiescence, or failing within 90 days after the expiration of a stay to have the appointment vacated;
(7) in the case of a partner who is an individual:
(i) the partner's death;
(ii) the appointment of a guardian or general
conservator for the partner; or
(iii) a judicial determination that the partner
has otherwise become incapable of performing the partner's duties under the partnership agreement;
(8) in the case of a partner that is a trust or is
acting as a partner by virtue of being a trustee of a trust, distribution of the trust's entire transferable interest in the partnership, but not merely by reason of the substitution of a successor trustee;
(9) in the case of a partner that is an estate or is
acting as a partner by virtue of being a personal representative of an estate, distribution of the estate's entire transferable interest in the partnership, but not merely by reason of the substitution of a successor personal representative; or
(10) termination of a partner who is not an
individual, partnership, corporation, trust, or estate.
(Source: P.A. 92-740, eff. 1-1-03.)
Last modified: February 18, 2015