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CHAPTER 805 BUSINESS ORGANIZATIONS
Uniform Limited Partnership Act. (2001)
Dissociation
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     (805 ILCS 215/Art. 6 heading)

ARTICLE 6

DISSOCIATION

(Source: P.A. 93-967, eff. 1-1-05.)



    (805 ILCS 215/601)
    Sec. 601. Dissociation as limited partner.
    (a) A person does not have a right to dissociate as a limited partner before the termination of the limited partnership.
    (b) A person is dissociated from a limited partnership as a limited partner upon the occurrence of any of the following events:
        (1) the limited partnership's having notice of the

    

person's express will to withdraw as a limited partner or on a later date specified by the person;

        (2) an event agreed to in the partnership agreement

    

as causing the person's dissociation as a limited partner;

        (3) the person's expulsion as a limited partner

    

pursuant to the partnership agreement;

        (4) the person's expulsion as a limited partner by

    

the unanimous consent of the other partners if:

            (A) it is unlawful to carry on the limited

        

partnership's activities with the person as a limited partner;

            (B) there has been a transfer of all of the

        

person's transferable interest in the limited partnership, other than a transfer for security purposes, or a court order charging the person's interest, which has not been foreclosed;

            (C) the person is a corporation and, within 90

        

days after the limited partnership notifies the person that it will be expelled as a limited partner because it has filed a certificate of dissolution or the equivalent, its charter has been revoked, or its right to conduct business has been suspended by the jurisdiction of its incorporation, there is no revocation of the certificate of dissolution or no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

            (D) the person is a limited liability company or

        

partnership that has been dissolved and whose business is being wound up;

        (5) on application by the limited partnership, the

    

person's expulsion as a limited partner by judicial order because:

            (A) the person engaged in wrongful conduct that

        

adversely and materially affected the limited partnership's activities;

            (B) the person willfully or persistently

        

committed a material breach of the partnership agreement or of the obligation of good faith and fair dealing under Section 305(b); or

            (C) the person engaged in conduct relating to the

        

limited partnership's activities which makes it not reasonably practicable to carry on the activities with the person as limited partner;

        (6) in the case of a person who is an individual, the

    

person's death;

        (7) in the case of a person that is a trust or is

    

acting as a limited partner by virtue of being a trustee of a trust, distribution of the trust's entire transferable interest in the limited partnership, but not merely by reason of the substitution of a successor trustee;

        (8) in the case of a person that is an estate or is

    

acting as a limited partner by virtue of being a personal representative of an estate, distribution of the estate's entire transferable interest in the limited partnership, but not merely by reason of the substitution of a successor personal representative;

        (9) termination of a limited partner that is not an

    

individual, partnership, limited liability company, corporation, trust, or estate;

        (10) the limited partnership's participation in a

    

conversion or merger under Article 11, if the limited partnership:

            (A) is not the converted or surviving entity; or
            (B) is the converted or surviving entity but, as

        

a result of the conversion or merger, the person ceases to be a limited partner.

(Source: P.A. 93-967, eff. 1-1-05.)



    (805 ILCS 215/602)
    Sec. 602. Effect of dissociation as limited partner.
    (a) Upon a person's dissociation as a limited partner:
        (1) subject to Section 704, the person does not have

    

further rights as a limited partner;

        (2) the person's obligation of good faith and fair

    

dealing as a limited partner under Section 305(b) continues only as to matters arising and events occurring before the dissociation; and

        (3) subject to Section 704 and Article 11, any

    

transferable interest owned by the person in the person's capacity as a limited partner immediately before dissociation is owned by the person as a mere transferee.

    (b) A person's dissociation as a limited partner does not

    

of itself discharge the person from any obligation to the limited partnership or the other partners which the person incurred while a limited partner.

(Source: P.A. 93-967, eff. 1-1-05.)



    (805 ILCS 215/603)
    Sec. 603. Dissociation as general partner. A person is dissociated from a limited partnership as a general partner upon the occurrence of any of the following events:
        (1) the limited partnership's having notice of the

    

person's express will to withdraw as a general partner or on a later date specified by the person;

        (2) an event agreed to in the partnership agreement

    

as causing the person's dissociation as a general partner;

        (3) the person's expulsion as a general partner

    

pursuant to the partnership agreement;

        (4) the person's expulsion as a general partner by

    

the unanimous consent of the other partners if:

            (A) it is unlawful to carry on the limited

        

partnership's activities with the person as a general partner;

            (B) there has been a transfer of all or

        

substantially all of the person's transferable interest in the limited partnership, other than a transfer for security purposes, or a court order charging the person's interest, which has not been foreclosed;

            (C) the person is a corporation and, within 90

        

days after the limited partnership notifies the person that it will be expelled as a general partner 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

            (D) the person is a limited liability company or

        

partnership that has been dissolved and whose business is being wound up;

        (5) on application by the limited partnership, the

    

person's expulsion as a general partner by judicial determination because:

            (A) the person engaged in wrongful conduct that

        

adversely and materially affected the limited partnership activities;

            (B) the person 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 408; or

            (C) the person engaged in conduct relating to the

        

limited partnership's activities which makes it not reasonably practicable to carry on the activities of the limited partnership with the person as a general partner;

        (6) the person's:
            (A) becoming a debtor in bankruptcy;
            (B) execution of an assignment for the benefit of

        

creditors;

            (C) seeking, consenting to, or acquiescing in the

        

appointment of a trustee, receiver, or liquidator of the person or of all or substantially all of the person's property; or

            (D) failure, within 90 days after the

        

appointment, to have vacated or stayed the appointment of a trustee, receiver, or liquidator of the general partner or of all or substantially all of the person's property obtained without the person'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 person who is an individual:
            (A) the person's death;
            (B) the appointment of a guardian or general

        

conservator for the person; or

            (C) a judicial determination that the person has

        

otherwise become incapable of performing the person's duties as a general partner under the partnership agreement;

        (8) in the case of a person that is a trust or is

    

acting as a general partner by virtue of being a trustee of a trust, distribution of the trust's entire transferable interest in the limited partnership, but not merely by reason of the substitution of a successor trustee;

        (9) in the case of a person that is an estate or is

    

acting as a general partner by virtue of being a personal representative of an estate, distribution of the estate's entire transferable interest in the limited partnership, but not merely by reason of the substitution of a successor personal representative;

        (10) termination of a general partner that is not an

    

individual, partnership, limited liability company, corporation, trust, or estate; or

        (11) the limited partnership's participation in a