C.R.S. § 7-60-101 Short title
7-60-101. Short title. This article shall be known and may be cited as the "Uniform Partnership Law".
Uniform Partnership Law
C.R.S. tit. 7, art. 60
in effectC.R.S. § 7-60-102 Definitions
7-60-102. Definitions. As used in this article, unless the context otherwise requires:
(1) "Bankrupt" includes bankrupt or debtor under the federal bankruptcy code of 1978, title 11 of the United States Code, or insolvent under any state insolvency act.
(2) "Business" includes every trade, occupation, or profession.
(3) "Conveyance" includes every assignment, lease, mortgage, or encumbrance.
(4) "Court" includes every court and judge having jurisdiction in the case.
(4.5) Repealed.
(4.7) "Limited liability partnership" means a partnership that has registered under section 7-60-144.
(5) Repealed.
(6) "Real property" includes land and any interest or estate in land.
(7) (Deleted by amendment, L. 2004, p. 1421, § 67, effective July 1, 2004.)
C.R.S. § 7-60-103 Knowledge and notice
7-60-103. Knowledge and notice. (1) A person has "knowledge" of a fact within the meaning of this article not only when the person has actual knowledge thereof but also when the person has knowledge of such other facts as in the circumstances show bad faith.
(2) A person has "notice" of a fact within the meaning of this article 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 of communication a written statement of the facts to such person or to a proper person at such person or recipient's place of business or residence.
C.R.S. § 7-60-104 Rules of construction
7-60-104. Rules of construction. (1) The rule that statutes in derogation of the common law are to be strictly construed shall have no application to this article.
(2) The law of estoppel shall apply under this article.
(3) The law of agency shall apply under this article.
(4) This article shall be so interpreted and construed as to effect its general purpose to make uniform the law of those states which enact it.
(5) This article shall not be construed so as to impair the obligations of any contract existing prior to April 17, 1931, nor to affect any action or proceedings begun or right accrued before said date.
C.R.S. § 7-60-105 Rules for cases not covered
7-60-105. Rules for cases not covered. In any case not provided for in this article, the rules of law and equity, including the law merchant, shall govern.
C.R.S. § 7-60-106 Partnership defined
7-60-106. Partnership defined. (1) A partnership is an association of two or more persons to carry on, as co-owners, a business for profit and includes, without limitation, a limited liability partnership.
(2) But any association formed under any other statute of this state or any statute adopted by an authority other than the authority of this state is not a partnership under this article unless such association has been a partnership in this state prior to April 17, 1931. This article shall apply to limited partnerships except insofar as the statutes relating to such partnerships are inconsistent herewith.
C.R.S. § 7-60-107 Partnership determined - how
7-60-107. Partnership determined - how. (1) In determining whether a partnership exists these rules shall apply:
(a) Except as provided by section 7-60-116, persons who are not partners as to each other are not partners as to third persons;
(b) Joint tenancy, tenancy in common, tenancy by the entireties, joint property, common property, or part ownership does not of itself establish a partnership, whether such co-owners do or do not share any profits made by the use of the property;
(c) The sharing of gross returns does not of itself establish a partnership, whether or not the persons sharing them have a joint or common right or interest in any property from which the returns are derived;
(d) The receipt by a person of a share of the profits of a business is prima facie evidence that the person is a partner in the business, but no such inference shall be drawn if such profits were received in payment:
(I) As a debt by installments or otherwise;
(II) As wages of an employee or rent to a landlord;
(III) As an annuity to a surviving spouse or representative of a deceased partner;
(IV) As interest on a loan, though the amount of payment varies with the profits of the business;
(V) As the consideration for the sale of a goodwill of a business or other property by installments or otherwise.
C.R.S. § 7-60-108 Partnership property
7-60-108. Partnership property. (1) All property originally brought into the partnership stock or subsequently acquired by purchase or otherwise on account of the partnership is partnership property.
(2) Unless the contrary intention appears, property acquired with partnership funds is partnership property.
(3) Any estate in real property may be acquired in the partnership name. Title so acquired can be conveyed only in the partnership name.
(4) A conveyance to a partnership in the partnership name, though without words of inheritance, passes the entire estate of the grantor unless a contrary intent appears.
C.R.S. § 7-60-109 Partner agent of partnership
7-60-109. Partner agent of partnership. (1) Subject to the effect of a statement of partnership authority under section 7-64-303, every partner is an agent of the partnership for the purpose of its business, and the act of every partner, including the execution in the partnership name of any instrument for apparently carrying on in the usual way the business of the partnership of which the partner is a member, binds the partnership, unless the partner so acting has in fact no authority to act for the partnership in the particular matter and the person with whom the partner is dealing has knowledge of the fact that the partner has no such authority.
(2) An act of a partner which is not apparently for the carrying on of the business of the partnership in the usual way does not bind the partnership unless authorized by the other partners.
(3) Unless authorized by the other partners or unless they have abandoned the business, one or more but less than all the partners have no authority to:
(a) Assign the partnership property in trust for creditors or on the assignee's promise to pay the debts of the partnership;
(b) Dispose of the goodwill of the business;
(c) Do any other act which would make it impossible to carry on the ordinary business of the partnership;
(d) Confess a judgment.
(e) Repealed.
(4) No act of a partner in contravention of a restriction on authority shall bind the partnership to persons having knowledge of the restriction.
C.R.S. § 7-60-110 Conveyance of real property
7-60-110. Conveyance of real property. (1) Subject to the effect of a statement of partnership authority under section 7-64-303, where title to real property is in the partnership name, any partner may convey title to such property by a conveyance executed in the partnership name; except that the partnership may recover such property unless the partner's act binds the partnership under the provisions of section 7-60-109 (1) or unless such property has been conveyed by the grantee or a person claiming through such grantee to a holder for value without knowledge that the partner, in making the conveyance, has exceeded the partner's authority.
(2) Where title to real property is in the name of the partnership, a conveyance executed by a partner in the partner's own name passes the equitable interest of the partnership if the act is one within the authority of the partner under the provisions of section 7-60-109 (1).
(3) Where title to real property is in the name of one or more but not all the partners and the record does not disclose the right of the partnership, the partners in whose name the title stands may convey title to such property, but the partnership may recover such property if the partner's act does not bind the partnership under the provisions of section 7-60-109 (1), unless the purchaser or the purchaser's assignee is a holder for value, without knowledge.
(4) Where the title to real property is in the name of one or more or all the partners or in a third person in trust for the partnership, a conveyance executed by a partner in the partnership name or in the partner's own name passes the equitable interest of the partnership if the act is one within the authority of the partner under the provisions of section 7-60-109 (1).
(5) Where the title to real property is in the names of all the partners, a conveyance executed by all the partners passes all their rights in such property.
C.R.S. § 7-60-111 Admission of partner binds partnership
7-60-111. Admission of partner binds partnership. An admission or representation made by any partner concerning partnership affairs within the scope of the partner's authority as conferred by this article is evidence against the partnership.
C.R.S. § 7-60-112 Notice to partner - effect
7-60-112. Notice to partner - effect. Notice to any partner of any matter relating to partnership affairs and the knowledge of the partner acting in the particular matter acquired while a partner or then present to the partner's mind and the knowledge of any other partner who reasonably could and should have communicated it to the acting partner operate as notice to or knowledge of the partnership, except in the case of a fraud on the partnership committed by or with the consent of that partner.
C.R.S. § 7-60-113 Partner's wrongful acts - liability
7-60-113. Partner's wrongful acts - liability. Where, by any wrongful act or omission of any partner acting in the ordinary course of the business of the partnership or with the authority of the other partners, loss or injury is caused to any person, not being a partner in the partnership, or any penalty is incurred, the partnership is liable therefor to the same intent as the partner so acting or omitting to act.
C.R.S. § 7-60-114 Partner's breach of trust - liability
7-60-114. Partner's breach of trust - liability. (1) The partnership is bound to make good the loss:
(a) Where one partner acting within the scope of such partner's apparent authority receives money or property of a third person and misapplies it; and
(b) Where the partnership in the course of its business receives money or property of a third person and the money or property so received is misapplied by any partner while it is in the custody of the partnership.
C.R.S. § 7-60-115 Nature of partner's liability
7-60-115. Nature of partner's liability. (1) Except as otherwise provided in subsection (2) of this section, all partners are liable:
(a) Jointly and severally for everything chargeable to the partnership under sections 7-60-113 and 7-60-114;
(b) Jointly and severally for all other debts and obligations of the partnership, but any partner may enter into a separate obligation to perform a partnership contract.
(2) (a) Except as otherwise provided in the partnership agreement, partners in a limited liability partnership are not liable directly or indirectly, including by way of indemnification, contribution, or otherwise, under a judgment, decree, or order of a court, or in any other manner, for a debt, obligation, or liability of or chargeable to the partnership while it is a limited liability partnership; except that this subsection (2) shall not affect the liability of a partner in a limited liability partnership for such partner's own negligence, wrongful acts, or misconduct.
(b) Partners in a limited liability partnership do not become liable, directly or indirectly, for debts, obligations, or liabilities incurred while the partnership was a limited liability partnership merely because the partnership ceases to be a limited liability partnership.
C.R.S. § 7-60-116 Liability of purported partner
7-60-116. Liability of purported partner. (1) If a person, by words or conduct, purports to be a partner or consents to being represented by another as a partner, in a partnership or with one or more persons not partners, the purported partner is liable to a person to whom the representation is made, if that person, relying on the representation, enters into a transaction with the actual or purported partnership. If the representation, either by the purported partner or by a person with the purported partner's consent, is made in a public manner, the purported partner is liable to a person who relies upon the purported partnership even if the purported partner is not aware of being held out as a partner to the claimant. If a partnership obligation results, the purported partner is liable with respect to that obligation as if the purported partner were a partner in the partnership, and, if the partnership is a limited liability partnership, the purported partner's liability is subject to section 7-60-115 (2) as if the purported partner were a partner in the limited liability partnership. If no partnership obligation results, the purported partner is liable with respect to that liability jointly and severally with any other person consenting to the representation.
(2) When a partnership liability results, such person is liable as though the person were an actual member of the partnership; except that, in the case of a limited liability partnership, the person's liability is subject to section 7-60-115 (2).
(3) When no partnership liability results, such person is liable jointly with the other persons, if any, so consenting to the contract or representation as to incur liability, otherwise separately.
(4) When a person has been thus represented to be a partner in an existing partnership or with one or more persons not actual partners, the purported partner is an agent of the persons consenting to such representation to bind them to the same extent and in the same manner as though the purported partner were a partner in fact with respect to persons who rely upon the representation. Where all the members of the existing partnership consent to the representation, a partnership act or obligation results; but in all other cases it is the joint act or obligation of the person acting and the persons consenting to the representation.
C.R.S. § 7-60-117 Liability of incoming partner
7-60-117. Liability of incoming partner. A person admitted as a partner into an existing partnership is liable for all the obligations of the partnership arising before such admission as though the person had been a partner when such obligations were incurred; except that this liability shall be satisfied only out of partnership property.
C.R.S. § 7-60-118 Rights and duties of partners
7-60-118. Rights and duties of partners. (1) The rights and duties of the partners in relation to the partnership shall be determined, subject to any agreement between them, by the following rules:
(a) Each partner shall be repaid such partner's contributions, whether by way of capital or advances to the partnership property and share equally in the profits and surplus remaining after all liabilities, including those to partners, are satisfied and shall contribute toward the losses whether of capital or otherwise sustained by the partnership according to such partner's share in the profits; except that a partner in a limited liability partnership shall not be obligated to contribute to partnership losses in excess of the partner's interest in the partnership beyond the extent:
(I) Such obligation to contribute is set out in a writing signed by the partner; or
(II) Such loss is attributable to an obligation or liability for which the partner would have individual liability under section 7-60-115 (2).
(b) The partnership shall indemnify every partner in respect of payments made and personal liabilities reasonably incurred by the partner in the ordinary and proper conduct of its business or for the preservation of its business or property.
(c) A partner who in aid of the partnership makes any payment or advance beyond the amount of capital that the partner 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 the partner only from the date when repayment should be made.
(e) All partners have equal rights in the management and conduct of the partnership business.
(f) No partner is entitled to remuneration for acting in the partnership business, but a surviving partner is entitled to reasonable compensation for the partner's services in winding up the partnership affairs.
(g) No person can become a member of a partnership without the consent of all the partners.
(h) Any difference arising as to ordinary matters connected with the partnership business may be decided by a majority of the partners; but no act in contravention of any agreement between the partners may be done rightfully without the consent of all the partners.
C.R.S. § 7-60-119 Partnership books
7-60-119. Partnership books. The partnership books shall be kept, subject to any agreement between the partners, at the principal place of business of the partnership, and every partner shall at all times have access to and may inspect and copy any of them.
C.R.S. § 7-60-120 Duty to render information
7-60-120. Duty to render information. Partners shall render on demand true and full information of all things affecting the partnership to any partner or the legal representative of any deceased partner under legal disability.
C.R.S. § 7-60-121 Accountable as a fiduciary
7-60-121. Accountable as a fiduciary. (1) Every partner shall account to the partnership for any benefit and hold as trustee for it any profits derived by such partner without the consent of the other partners from any transaction connected with the formation, conduct, or liquidation of the partnership or from any use by such partner of its property.
(2) This section applies also to the representatives of a deceased partner engaged in the liquidation of the affairs of the partnership as the personal representatives of the last surviving partner.
C.R.S. § 7-60-122 Right to an account
7-60-122. Right to an account. (1) Any partner shall have the right to a formal account as to partnership affairs:
(a) If the partner is wrongfully excluded from the partnership business or possession of its property by the other partners;
(b) If the right exists under the terms of any agreement;
(c) As provided by section 7-60-121;
(d) Whenever other circumstances render it just and reasonable.
C.R.S. § 7-60-123 Rights and duties beyond term
7-60-123. Rights and duties beyond term. (1) When a partnership for a fixed term or particular undertaking is continued after the termination of such term or particular undertaking without any express agreement, the rights and duties of the partners remain the same as they were at such termination, insofar as is consistent with a partnership at will.
(2) A continuation of the business by the partners or such of them as habitually acted therein during the term, without any settlement or liquidation of the partnership affairs, is prima facie evidence of a continuation of the partnership.
C.R.S. § 7-60-124 Property rights of a partner
7-60-124. Property rights of a partner. (1) The property rights of a partner are:
(a) Such partner's rights in specific partnership property;
(b) Such partner's interest in the partnership; and
(c) Such partner's right to participate in the management.
C.R.S. § 7-60-125 Right in specific property
7-60-125. Right in specific property. (1) A partner is co-owner with the other partners of specific partnership property holding as a tenant in partnership.
(2) The incidents of tenancy in partnership are such that:
(a) A partner, subject to the provisions of this article and to any agreement between the partners, has an equal right with the other partners to possess specific partnership property for partnership purposes; except that a partner has no right to possess such property for any other purpose without the consent of the other partners;
(b) A partner's right in specific partnership property is not assignable except in connection with the assignment of rights of all the partners in the same property;
(c) A partner's right in specific partnership property is not subject to attachment or execution except on a claim against the partnership. When partnership property is attached for a partnership debt the partners, or any of them, or the representatives of a deceased partner, cannot claim any right under the homestead or exemption laws.
(d) On the death of a partner, the deceased partner's right in specific partnership property vests in the surviving partner or partners, except where the deceased partner was the last surviving partner, when the right in such property vests in the deceased partner's legal representative. The surviving partner or partners or the legal representative of the last surviving partner has no right to possess the partnership property for any but a partnership purpose.
(e) A partner's right in specific partnership property is not subject to dower, curtesy, or allowances to widows, heirs, or next of kin.
C.R.S. § 7-60-126 Nature of partner's interest
7-60-126. Nature of partner's interest. A partner's interest in the partnership is the partner's share of the profits and surplus, and the same is personal property.
C.R.S. § 7-60-127 Assignment of partner's interest
7-60-127. Assignment of partner's interest. (1) A conveyance by a partner of the partner's interest in the partnership does not of itself dissolve the partnership, nor, as against the other partners in the absence of agreement, entitle the assignee, during the continuance of the partnership, to interfere in the management or administration of the partnership business or affairs, to require any information or account of partnership transactions, or to inspect the partnership books; but it merely entitles the assignee to receive in accordance with the assignee's contract the profits to which the assigning partner would otherwise be entitled.
(2) In a dissolution of the partnership, the assignee is entitled to receive the assignor's interest and may require an account only from the date of the last account agreed to by all the partners.
C.R.S. § 7-60-128 Interest subject to charging order
7-60-128. Interest subject to charging order. (1) On due application to a court of competent jurisdiction by any judgment creditor of a partner, the court that entered the judgment, order, or decree, or any other court, may charge the interest of the debtor partner with payment of the unsatisfied amount of the judgment with interest thereon; and may then or later appoint a receiver of the debtor partner's share of the profits and of any other money due or to fall due to the debtor partner in respect of the partnership and make all other orders, directions, accounts, and inquiries that the debtor partner might have made, or that the circumstances of the case may require.
(2) The interest charged may be redeemed at any time before foreclosure or, in case of a sale being directed by the court, may be purchased without thereby causing a dissolution:
(a) With separate property by any one or more of the partners; or
(b) With partnership property by any one or more of the partners with the consent of all the partners whose interests are not so charged or sold.
(3) Nothing in this article shall be held to deprive a partner of the partner's right, if any, under the exemption laws, as regards the partner's interest in the partnership.
C.R.S. § 7-60-129 Dissolution defined
7-60-129. Dissolution defined. The dissolution of a partnership is the change in the relation of the partners caused by any partner ceasing to be associated in the carrying on as distinguished from the winding up of the business.
C.R.S. § 7-60-130 Dissolution is not termination
7-60-130. Dissolution is not termination. On dissolution the partnership is not terminated but continues until the winding up of partnership affairs is completed.
C.R.S. § 7-60-131 Causes of dissolution
7-60-131. Causes of dissolution. (1) Dissolution is caused:
(a) Without violation of the agreement between the partners:
(I) By the termination of the definite term or particular undertaking stated in the agreement;
(II) By the express will of any partner when no definite term or particular undertaking is stated;
(III) By the express will of all the partners who have not assigned their interests or allowed them to be charged for their separate debts either before or after the termination of any stated term or particular undertaking;
(IV) By the expulsion of any partner from the business bona fide in accordance with such a power conferred by the agreement between the partners;
(b) In contravention of the agreement between the partners, where the circumstances do not permit a dissolution under any other provision of this section, by the express will of any partner at any time;
(c) By any event which makes it unlawful for the business of the partnership to be carried on or for the members to carry it on in partnership;
(d) By the death of any partner;
(e) By the bankruptcy of any partner or the partnership;
(f) By decree of court under section 7-60-132.
C.R.S. § 7-60-132 Dissolution by decree of court
7-60-132. Dissolution by decree of court. (1) On application by or for a partner, the court shall decree a dissolution if:
(a) A partner has been determined by the court to be mentally incompetent to such a degree that the partner is incapable of performing the partner's part of the partnership contract or a court of competent jurisdiction has made such a finding pursuant to part 3 or part 4 of article 14 of title 15 or section 27-65-110 (4) or 27-65-127;
(b) A partner becomes in any other way incapable of performing the partner's part of the partnership contract;
(c) A partner has been guilty of such conduct as tends to affect prejudicially the carrying on of business;
(d) A partner willfully or persistently commits a breach of the partnership agreement or otherwise so acts in matters relating to the partnership business that it is not reasonably practicable to carry on the business in partnership with the partner;
(e) The business of the partnership can only be carried on at a loss;
(f) Other circumstances render a dissolution equitable.
(2) On the application of the purchaser of a partner's interest under sections 7-60-127 and 7-60-128, the court shall decree a dissolution:
(a) After the termination of the stated term or particular undertaking;
(b) At any time if the partnership was a partnership at will when the interest was assigned or when the charging order was issued.
C.R.S. § 7-60-133 General effect of dissolution
7-60-133. General effect of dissolution. (1) Except insofar as may be necessary to wind up partnership affairs or to complete transactions begun but not then finished, dissolution terminates all authority of any partner to act for the partnership:
(a) With respect to the partners:
(I) When the dissolution is not by the act, bankruptcy, or death of a partner; or
(II) When the dissolution is by such act, bankruptcy, or death of a partner, in cases where section 7-60-134 so requires.
(b) With respect to persons not partners, as declared in section 7-60-135.
C.R.S. § 7-60-134 Right of partner to contribution
7-60-134. Right of partner to contribution. (1) Except as otherwise provided in subsection (2) of this section, where the dissolution is caused by the act, death, or bankruptcy of a partner, each partner is liable to the other partners for such partner's share of any liability created by any partner acting for the partnership as if the partnership had not been dissolved unless:
(a) The dissolution being by act of any partner, the partner acting for the partnership had knowledge of the dissolution; or
(b) The dissolution being by the death or bankruptcy of a partner, the partner acting for the partnership had knowledge or notice of the death or bankruptcy.
(2) A partner in a limited liability partnership shall not be liable to the other partners except to the extent that:
(a) The partner's liability is set out in a writing signed by the partner; or
(b) The partner's obligation to contribute is attributable to a liability for which the partner would have individual liability under section 7-60-115 (2).
C.R.S. § 7-60-135 Power of partner to bind partnership after dissolution
7-60-135. Power of partner to bind partnership after dissolution. (1) After dissolution, a partner can bind the partnership, except as provided in subsection (3) of this section:
(a) By any act appropriate for winding up partnership affairs or completing transactions unfinished at dissolution;
(b) By any transaction which would bind the partnership if dissolution had not taken place, if the other party to the transaction:
(I) Had extended credit to the partnership prior to dissolution and had no knowledge or notice of the dissolution; or
(II) Though the other party had not so extended credit, had nevertheless known of the partnership prior to dissolution, and had no knowledge or notice of dissolution, the fact of dissolution having not been advertised in a newspaper of general circulation in the place, or in each place if more than one, at which the partnership business was regularly carried on.
(2) The liability of a partner under subsection (1)(b) of this section shall be satisfied out of partnership assets alone when such partner had been, prior to dissolution:
(a) Unknown as a partner to the person with whom the contract is made; and
(b) So far unknown and inactive in partnership affairs that the business reputation of the partnership could not be said to have been in any degree due to the partner's connection with it.
(3) The partnership is in no case bound by any act of a partner after dissolution:
(a) Where the partnership is dissolved because it is unlawful to carry on the business, unless the act is appropriate for winding up partnership affairs; or
(b) Where the partner has become bankrupt; or
(c) Where the partner has no authority to wind up partnership affairs except by transaction with one who:
(I) Had extended credit to the partnership prior to dissolution and had no knowledge or notice of the partner's want of authority; or
(II) Had not extended credit to the partnership prior to dissolution, and had no knowledge or notice of the partner's want of authority, the fact of the partner's want of authority having not been advertised in the manner provided for advertising the fact of dissolution in subsection (1)(b)(II) of this section.
(4) Nothing in this section shall affect the liability under section 7-60-116 of any person who, after dissolution, purports to be a partner or consents to being represented by another as a partner in a partnership engaged in carrying on business.
C.R.S. § 7-60-136 Effect of dissolution on existing liability
7-60-136. Effect of dissolution on existing liability. (1) The dissolution of the partnership does not of itself discharge the existing liability of any partner.
(2) A partner is discharged from any existing liability upon dissolution of the partnership by an agreement to that effect between such partner, the partnership creditor, and the person or partnership continuing the business; and such agreement may be inferred from the course of dealing between the creditor having knowledge of the dissolution and the person or partnership continuing the business.
(3) Where a person agrees to assume the existing obligations of a dissolved partnership, the partners whose obligations have been assumed shall be discharged from any liability to any creditor of the partnership who, knowing of the agreement, consents to a material alteration in the nature or time of payment of the creditor's obligations.
(4) The individual property of a deceased person who was a partner shall be liable, to the extent the deceased person was or would have been liable under section 7-60-115, 7-60-118, or 7-60-134, for all obligations of the partnership incurred while the deceased person was a partner but subject to the prior payment of the deceased person's separate debts.
C.R.S. § 7-60-137 Right to wind up
7-60-137. Right to wind up. Unless otherwise agreed, the partners who have not wrongfully dissolved the partnership or the legal representative of the last surviving partner, not bankrupt, has the right to wind up the partnership affairs; except that any partner or any partner's legal representative or assignee, upon cause shown, may obtain winding up by the court.
C.R.S. § 7-60-138 Application of partnership property
7-60-138. Application of partnership property. (1) When dissolution is caused in any way, except in contravention of the partnership agreement, each partner as against the other partners and all persons claiming through them in respect of their interests in the partnership, unless otherwise agreed, may have the partnership property applied to discharge its liabilities and the surplus applied to pay in cash the net amount owing to the respective partners. But if dissolution is caused by expulsion of a partner, bona fide under the partnership agreement, and if the expelled partner is discharged from all partnership liabilities, either by payment or agreement under section 7-60-136 (2), the expelled partner shall receive in cash only the net amount due the expelled partner from the partnership.
(2) When dissolution is caused in contravention of the partnership agreement, the rights of the partners shall be as follows:
(a) Each partner who has not caused dissolution wrongfully shall have:
(I) All the rights stated in subsection (1) of this section;
(II) The right, as against each partner who has caused the dissolution wrongfully, to damages for breach of the agreement.
(b) The partners who have not caused the dissolution wrongfully, if they all desire to continue the business in the same name either by themselves or jointly with others, may do so during the agreed term of the partnership and for that purpose may possess the partnership property, if they secure the payment by bond approved by the court or pay to any partner who has caused the dissolution wrongfully the value of such partner's interest in the partnership at the dissolution, less any damages recoverable under subparagraph (II) of paragraph (a) of this subsection (2), and in like manner indemnify such partner against all present or future partnership liabilities.
(c) A partner who has caused the dissolution wrongfully shall have:
(I) If the business is not continued under the provisions of paragraph (b) of this subsection (2), all the rights of a partner under subsection (1) of this section, subject to paragraph (a)(II) of this subsection (2);
(II) If the business is continued under paragraph (b) of this subsection (2), the right as against the other partners and all claiming through them, in respect of their interests in the partnership, to have the value of such partner's interest in the partnership, less any damages caused to the other partners by the dissolution, ascertained and paid to such partner in cash or the payment secured by bond approved by the court, and to be released from all existing liabilities of the partnership; except that, in ascertaining the value of such partner's interest, the value of the goodwill of the business shall not be considered.
C.R.S. § 7-60-139 Rights dissolved for fraud
7-60-139. Rights dissolved for fraud. (1) Where a partnership contract is rescinded on the ground of fraud or misrepresentation of one of the parties, the party entitled to rescind is, without prejudice to any other right, entitled:
(a) To a lien on or right of retention of the surplus of the partnership property after satisfying the partnership liabilities to third persons for any sum of money paid by such party for the purchase of an interest in the partnership and for any capital or advances contributed by such party; and
(b) To stand, after all liabilities to third persons have been satisfied, in the place of the creditors of the partnership for any payments made by such party in respect of the partnership liabilities, subject to the limitations in section 7-60-115, if the partnership was a limited liability partnership at the time of its dissolution; and
(c) To be indemnified by the person guilty of the fraud or making the representation against all debts and liabilities of the partnership.
C.R.S. § 7-60-140 Rules for distribution
7-60-140. Rules for distribution. (1) In settling accounts between the partners after dissolution, the following rules shall be observed, subject to any agreement to the contrary:
(a) The assets of the partnership are:
(I) The partnership property;
(II) The contributions of the partners, as limited by paragraph (d) of this subsection (1), necessary for the payment of all the liabilities specified in paragraph (b) of this subsection (1).
(b) The liabilities of the partnership shall rank in order of payment, as follows:
(I) Those owing to creditors other than a partner;
(II) Those owing to partners other than for capital and profits;
(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 declaration in paragraph (a) of this subsection (1) to the satisfaction of the liabilities.
(d) The partners shall contribute the amount necessary to satisfy the liabilities as provided by section 7-60-118 (1)(a) and as limited by said section and sections 7-60-115 and 7-60-134; but if any but not all of the partners are insolvent or, not being subject to process, refuse to contribute, the other partners shall contribute their share of the liabilities and, in the relative proportions in which they share the profits, the additional amount necessary to pay the liabilities.
(e) An assignee for the benefit of creditors or any person appointed by the court shall have the right to enforce the contributions specified in paragraph (d) of this subsection (1).
(f) Any partner or legal representative of a partner shall have the right to enforce the contributions specified in paragraph (d) of this subsection (1), to the extent of the amount that the partner has paid in excess of the partner's share of the liability.
(g) The individual property of a deceased partner shall be liable for the contributions specified in paragraph (d) of this subsection (1).
(h) When partnership property and the individual properties of the partners are in possession of a court for distribution, partnership creditors shall have priority on partnership property and separate creditors on individual property, saving the rights of lien or secured creditors as heretofore.
(i) Where a partner has become bankrupt or the estate of a partner is insolvent, the claims against the partner's separate property shall rank in the following order:
(I) Those owing to separate creditors;
(II) Those owing to partnership creditors;
(III) Those owing to partners by way of contributions.
C.R.S. § 7-60-141 Liability of persons continuing business
7-60-141. Liability of persons continuing business. (1) When any new partner is admitted into an existing partnership, or when any partner retires and assigns or the representative of the deceased partner assigns the deceased partner's right in partnership property to two or more of the partners or to one or more of the partners and one or more third persons, if the business is continued without liquidation of the partnership affairs, creditors of the first or dissolved partnership are also creditors of the partnership so continuing the business.
(2) When all but one partner retire and assign or the representative of a deceased partner assigns the deceased partner's rights in the partnership property to the remaining partner who continues the business without liquidation of partnership affairs, either alone or with others, creditors of the dissolved partnership are also creditors of the person or partnership so continuing the business.
(3) When any partner retires or dies and the business of the dissolved partnership is continued, as set forth in subsections (1) and (2) of this section, with the consent of the retired partner or the representative of the deceased partner but without any assignment of such partner's right in partnership property, rights of creditors of the dissolved partnership and of the creditors of the person or partnership continuing the business shall be as if such assignment had been made.
(4) When all the partners or their representatives assign their rights in partnership property to one or more third persons who promise to pay the debts and who continue the business of the dissolved partnership, creditors of the dissolved partnership are also creditors of the person or partnership continuing the business.
(5) When a partner wrongfully causes a dissolution and the remaining partners continue the business, under the provisions of section 7-60-138 (2)(b), either alone or with others and without liquidation of the partnership affairs, creditors of the dissolved partnership are also creditors of the person or partnership continuing the business.
(6) When a partner is expelled and the remaining partners continue the business either alone or with others without liquidation of the partnership affairs, creditors of the dissolved partnership are also creditors of the person or partnership continuing the business.
(7) The liability of a third person who becomes a partner in the partnership continuing the business under this section to the creditors of the dissolved partnership shall be satisfied out of partnership property only.
(8) When the business of a partnership after dissolution is continued under any conditions set forth in this section, the creditors of the dissolved partnership, as against the separate creditors of the retiring or deceased partner or the representative of the deceased partner, have a prior right to any claim of the retired partner or the representative of the deceased partner against the person or partnership continuing the business on account of the retired or deceased partner's interest in the dissolved partnership or on account of any consideration promised for such interest or for the retired or deceased partner's right in partnership property.
(9) Nothing in this section shall be held to modify any right of creditors to set aside any assignment on the ground of fraud.
(10) The use by the person or partnership continuing the business of the partnership name or the name of a deceased partner as part thereof shall not of itself make the individual property of the deceased partner liable for any debts contracted by such person or partnership.
(11) If the business of a limited liability partnership is continued after the death, retirement, or expulsion of a partner or the admission of a new partner, the partnership continuing the business is a limited liability partnership.
C.R.S. § 7-60-142 Rights of retiring partner
7-60-142. Rights of retiring partner. When any partner retires or dies and the business is continued under any of the conditions set forth in section 7-60-141 (1), (2), (3), (5), and (6), or in section 7-60-138 (2)(b), without any settlement of accounts as between the partner or the partner's estate and the person or partnership continuing the business, unless otherwise agreed, the partner or the partner's legal representative as against such persons or partnership may have the value of the partner's interest at the date of dissolution ascertained and shall receive as an ordinary creditor an amount equal to such value with interest, or, at the partner's option or at the option of the partner's legal representative in lieu of interest, the profits attributable to the use of the partner's right in the property of the dissolved partnership; except that the creditors of the dissolved partnership as against the separate creditors, or the representative of the retired or deceased partner, shall have priority on any claim arising under this section as provided by section 7-60-141 (8).
C.R.S. § 7-60-143 Accrual of actions
7-60-143. Accrual of actions. The right to an account of the partner's interest shall accrue to any partner or any partner's legal representative, as against the winding up partners, the surviving partners, or the person or partnership continuing the business at the date of dissolution, in the absence of any agreement to the contrary.
C.R.S. § 7-60-144 Registration of partnerships
7-60-144. Registration of partnerships. (1) A partnership governed by this article may register as a limited liability partnership, and a limited partnership that has not made the election provided for in section 7-61-129 or 7-62-1104 may register as a limited liability limited partnership, by delivering to the secretary of state, for filing pursuant to part 3 of article 90 of this title, a statement of registration. If a certificate of limited partnership is being filed, the statement of registration may be included in the certificate of limited partnership. The statement of registration shall be approved in the manner provided in the partnership agreement or, if not so provided, shall be approved by all of the general partners. The statement of registration shall state:
(a) The name that has been the true name of the partnership or limited partnership and the name that will be the domestic entity name of the partnership or limited partnership, which domestic entity name shall comply with part 6 of article 90 of this title;
(b) The principal office address of its principal office; and
(c) The registered agent name and registered agent address of its registered agent.
(d) (Deleted by amendment, L. 2004, p. 1432, § 99, effective July 1, 2004.)
(2) (Deleted by amendment, L. 2003, p. 2236, § 115, effective July 1, 2004.)
(3) (Deleted by amendment, L. 2004, p. 1432, § 99, effective July 1, 2004.)
(4) Part 8 of article 90 of this title, providing for the transaction of business or the conduct of activities by foreign entities, applies to foreign limited liability partnerships and foreign limited liability limited partnerships.
(4.5) A limited liability partnership or a limited liability limited partnership may cease to be a limited liability partnership or a limited liability limited partnership by delivering to the secretary of state, for filing pursuant to part 3 of article 90 of this title, a statement of withdrawal of registration. The statement of withdrawal of registration shall be approved in the manner provided in the partnership agreement or, if not so provided, shall be approved by all of the general partners. The withdrawal of registration shall be effective upon the effective date of the statement of withdrawal of registration.
(5) A partnership or a limited partnership that has been registered under this article is for all purposes the same entity that existed before it registered. A partnership or a limited partnership that withdraws its registration as a limited liability partnership or a limited liability limited partnership is for all purposes the same entity that existed before it withdrew its registration.
(6) Unless the partnership agreement otherwise provides, registration of a partnership shall require the unanimous consent of the general partners in the partnership at the time the statement of registration is delivered to the secretary of state for filing pursuant to part 3 of article 90 of this title. The filing of a statement of registration shall be conclusive as to third parties and shall be incontestable by third parties that all conditions precedent to registering as a limited liability partnership or limited liability limited partnership, as the case may be, have been met.
(7) Except as to persons who were partners at the time of filing, the filing of a statement of registration shall be conclusive that all conditions precedent to registration under this section have been met.
C.R.S. § 7-60-144.5 Statement of partnership authority or statement of denial
7-60-144.5. Statement of partnership authority or statement of denial. With respect to a partnership governed by this article or a limited partnership that has not made the election provided for in section 7-61-129 (1)(a) or 7-62-1104 (2)(a), a statement of partnership authority may be delivered to the secretary of state pursuant to section 7-64-303, and a statement of denial may be delivered to the secretary of state pursuant to section 7-64-304, as if the partnership were governed by article 64 of this title or the limited partnership had made the election. Such statements have the effects specified in sections 7-64-303 and 7-64-304, respectively.
C.R.S. § 7-60-145 Name of registered limited liability partnership
7-60-145. Name of registered limited liability partnership. (Repealed)
C.R.S. § 7-60-146 Limitations on distribution from limited liability partnerships
7-60-146. Limitations on distribution from limited liability partnerships. (1) A limited liability partnership or limited liability limited partnership shall not make a distribution to a general partner to the extent that, at the time of the distribution, after giving effect to the distribution, all liabilities of the limited liability partnership or limited liability limited partnership, other than liabilities to general partners on account of their partnership interests and liabilities for which the recourse of creditors is limited to specified property of the partnership, exceed the fair value of the assets of the partnership; except that the fair value of property that is subject to a liability for which the recourse of creditors is limited shall be included in the assets of the partnership only to the extent that the fair value of that property exceeds that liability. For purposes of this section and sections 7-62-607 and 7-62-608, the term "distribution" shall not include payments to the extent that the payments do not exceed amounts equal to or constituting reasonable compensation for present or past services or reasonable payments made in the ordinary course of business pursuant to a bona fide retirement plan or other benefits program.
(2) A general partner in a limited liability partnership or limited liability limited partnership who receives a distribution in violation of subsection (1) of this section, and who knew at the time of the distribution that such distribution violated subsection (1) of this section, shall be liable to the partnership for the amount of the distribution. A general partner in a limited liability partnership or limited liability limited partnership who receives a distribution in violation of subsection (1) of this section, and who did not know at the time of the distribution that the distribution violated subsection (1) of this section, shall not be liable for the amount of the distribution. Subject to subsection (3) of this section, this subsection (2) shall not affect any obligation or liability of a general partner under an agreement or other applicable law for the amount of a distribution.
(3) Unless otherwise agreed, a partner in a limited liability partnership or limited liability limited partnership who receives a distribution from the partnership shall have no liability under this article or other applicable law for the amount of the distribution after the expiration of three years after the date of the distribution unless an action to recover the distribution from such partner is commenced prior to the expiration of the said three-year period and an adjudication of liability against such partner is made in the said action.
C.R.S. § 7-60-147 Liability of partner in limited liability partnership upon return of contribution
7-60-147. Liability of partner in limited liability partnership upon return of contribution. (Repealed)
C.R.S. § 7-60-148 Law governing foreign limited liability partnerships - repeal
7-60-148. Law governing foreign limited liability partnerships - repeal. (Repealed)
C.R.S. § 7-60-149 Limited liability partnership periodic reports
7-60-149. Limited liability partnership periodic reports. Part 5 of article 90 of this title, providing for periodic reports from reporting entities, applies to limited liability partnerships subject to this article.
C.R.S. § 7-60-150 Filing of report - repeal
7-60-150. Filing of report - repeal. (Repealed)
C.R.S. § 7-60-151 Filing, service, and copying fees
7-60-151. Filing, service, and copying fees. (Repealed)
C.R.S. § 7-60-152 Failure of limited liability partnerships to comply with part 5 of article 90 of this title
7-60-152. Failure of limited liability partnerships to comply with part 5 of article 90 of this title. (Repealed)
C.R.S. § 7-60-152.5 Registered agent - service of process
7-60-152.5. Registered agent - service of process. Part 7 of article 90 of this title, providing for registered agents and service of process, shall apply to limited liability partnerships and limited liability limited partnerships and to foreign limited liability partnerships and foreign limited liability limited partnerships that are authorized to transact business or conduct activities in this state pursuant to part 8 of article 90 of this title.
C.R.S. § 7-60-153 Application of corporation case law to set aside limited liability
7-60-153. Application of corporation case law to set aside limited liability. (1) In any case in which a party seeks to hold the partners of a limited liability partnership or limited liability limited partnership personally responsible for the alleged improper actions of the limited liability partnership or limited liability limited partnership, the court shall apply the case law that interprets the conditions and circumstances under which the corporate veil of a corporation may be pierced under Colorado law.
(2) For purposes of this section, the failure of a limited liability partnership or limited liability limited partnership to observe the formalities or requirements relating to the management of its business and affairs is not in itself a ground for imposing personal liability on the partners for liabilities of the limited liability partnership or limited liability limited partnership.
C.R.S. § 7-60-154 Scope of article - choice of law - application to professions and occupations
7-60-154. Scope of article - choice of law - application to professions and occupations. (1) A partnership, including a limited liability partnership or limited liability limited partnership, may conduct its business, carry on its operations, and exercise the powers granted by this article within and without the state.
(2) (a) It is the intent of the general assembly that the legal existence of limited liability partnerships and limited liability limited partnerships be recognized outside the boundaries of this state and that the law of this state governing the limited liability partnership or limited liability limited partnership transacting business outside this state be granted the protection of full faith and credit under section 1 of article IV of the constitution of the United States.
(b) It is the intent of the general assembly that the internal affairs of a limited liability partnership or limited liability limited partnership formed in this state be subject to and governed by the law of this state, including the provisions governing liability of partners for debts, obligations, and liabilities chargeable to partnerships.
(3) Nothing in this article shall be construed to permit a limited liability partnership to engage in a profession or occupation as described in title 12, C.R.S., for which there is a specific statutory provision applicable to the practice of such profession or occupation by a corporation or professional corporation in this state unless authorized under applicable provisions of title 12, C.R.S.
Source: Open US Law by Vaquill AI (CC BY 4.0)URL: https://leg.colorado.gov/sites/default/files/images/olls/crs2024-title-07.docxFetched: 10/6/2026