15 Pa.C.S. Ch. 84

in effect

15 Pa.C.S. § 8411 Short title and application of chapter.

(a) Short title.--This chapter shall be known and may be cited as the Pennsylvania Uniform Partnership Act of 2016. (b) Initial application.--Before April 1, 2017, this chapter governs only: (1) a partnership formed on or after February 21, 2017; and (2) except as provided in subsection (d), a partnership formed before February 21, 2017, which elects, in the manner provided in its partnership agreement or by law for amending the partnership agreement, to be subject to this chapter. (c) Full effective date.--Except as provided under subsection (d), on and after April 1, 2017, this chapter governs all partnerships. (d) Liabilities to third parties.--With respect to a partnership that elects under subsection (b)(2) to be subject to this chapter, after the election takes effect the provisions of this chapter relating to the liability of the partnership's partners to third parties apply: (1) before April 1, 2017, to: (i) a third party that had not done business with the partnership in the year before the election took effect; and (ii) a third party that had done business with the partnership in the year before the election took effect only if the third party knows or has been notified of the election; and (2) on and after April 1, 2017, to all third parties, except that those provisions remain inapplicable to any obligation incurred while those provisions were inapplicable under paragraph (1)(ii). (e) References to withdrawal.--A reference in a partnership agreement to the withdrawal of a partner shall be deemed to be a reference to the dissociation of the partner. (f) Cross reference.--See section 8415(c)(5) (relating to contents of partnership agreement). (Nov. 3, 2022, P.L.1791, No.122, eff. 60 days) 2022 Amendment. Act 122 relettered former subsec. (e) to subsec. (f) and added present subsec. (e). Cross References. Section 8411 is referred to in sections 8412, 8415 of this title.

15 Pa.C.S. § 8412 Definitions.

(a) General definitions.--The following words and phrases when used in this chapter shall have the meanings given to them in this subsection unless the context clearly indicates otherwise: "Business." Includes every trade, occupation and profession. "Contribution." Property or a benefit described in section 8443 (relating to form of contribution) which is provided by a person to a partnership to become a partner or in the person's capacity as a partner. "Distribution." A transfer of money or other property from a partnership to a person on account of a transferable interest or in a person's capacity as a partner. The term: (1) includes: (i) a redemption or other purchase by a partnership of a transferable interest; and (ii) a transfer to a partner in return for the partner's relinquishment of any right to participate as a partner in the management or conduct of the partnership's business or have access to records or other information concerning the partnership's business; and (2) does not include: (i) amounts constituting reasonable compensation for present or past service or payments made in the ordinary course of business under a bona fide retirement plan or other bona fide benefits program; (ii) the making of, or payment or performance on, a guaranty or similar arrangement by a partnership for the benefit of any or all of its partners; (iii) a direct or indirect allocation or transfer effected under Chapter 3 (relating to entity transactions) with the approval of the partners; or (iv) a direct or indirect transfer of: (A) a governance or transferable interest; or (B) options, rights or warrants to acquire a governance or transferable interest. "Partner." A person that: (1) has become a partner in a partnership under section 8442 (relating to becoming partner) or was a partner in a partnership when the partnership became subject to this chapter under section 8411 (relating to short title and application of chapter); and (2) has not dissociated as a partner under section 8461 (relating to events causing dissociation). "Partnership." An association of two or more persons to carry on as co-owners a business for profit formed under this chapter or that becomes subject to this chapter under Chapter 3 (relating to entity transactions) or section 8411 (relating to short title and application of chapter). The term includes a limited liability partnership or an electing partnership that is not also a limited partnership. "Partnership agreement." The agreement, whether or not referred to as a partnership agreement and whether oral, implied, in record form or in any combination thereof, of all the partners of a partnership concerning the matters described in section 8415(a) (relating to contents of partnership agreement). The term includes the agreement as amended or restated. "Partnership at will." A partnership in which the partners have not agreed to remain partners until the expiration of a definite term or the completion of a particular undertaking. "Transferable interest." The right, as initially owned by a person in the person's capacity as a partner, to receive distributions from a partnership, whether or not the person remains a partner or continues to own any part of the right. The term applies to any fraction of the interest, by whomever owned. "Transferee." A person to which all or part of a transferable interest has been transferred, whether or not the transferor is a partner. (b) Index of definitions.--The following is a nonexclusive list of definitions in section 102 (relating to definitions) that apply to this chapter: "Act" or "action." "Court." "Debtor in bankruptcy." "Department." "Jurisdiction." "Jurisdiction of formation." "Obligation." "Principal office." "Professional services." "Property." "Record form." "Sign." "Transfer." Cross References. Section 8412 is referred to in section 102 of this title.

15 Pa.C.S. § 8413 Knowledge and notice.

(a) Knowledge.--A person knows a fact if the person: (1) has actual knowledge of it; or (2) is deemed to know it under subsection (d)(1) or law other than this chapter. (b) Notice.--A person has notice of a fact if the person: (1) has reason to know the fact from all the facts known to the person at the time in question; or (2) is deemed to have notice of the fact under subsection (d)(2). (c) Notification.--Except as provided under section 113(b) (relating to delivery of document), a person notifies another person of a fact by taking steps reasonably required to inform the other person in ordinary course, whether or not those steps cause the other person to know the fact. (d) Constructive knowledge or notice.--A person not a partner is deemed: (1) to know of a limitation on authority to transfer real property as provided in section 8433(g) (relating to certificate of partnership authority); and (2) to have notice of: (i) a person's dissociation as a partner 90 days after a certificate of dissociation under section 8474 (relating to certificate of dissociation) becomes effective; (ii) the dissolution of the partnership 90 days after a certificate of dissolution under section 8482(b)(2)(i) (relating to winding up and filing of certificates) is effective; (iii) the termination of the partnership 90 days after a certificate of termination under section 8482(b)(2)(vi) is effective; and (iv) participation in a merger, interest exchange, conversion, division or domestication, 90 days after a statement of merger, interest exchange, conversion, division or domestication under Chapter 3 (relating to entity transactions) is effective. (e) Effect of partner's knowledge or notice.--A partner's knowledge or notice of a fact relating to the partnership is effective immediately as knowledge of or notice to the partnership, except in the case of a fraud on the partnership committed by or with the consent of that partner. Cross References. Section 8413 is referred to in sections 8433, 8474, 8702, 8705 of this title.

15 Pa.C.S. § 8414 Governing law.

(a) General rule.--The internal affairs of a partnership and the liability of a partner as a partner for the debts, obligations or other liabilities of the partnership are governed by: (1) in the case of a limited liability partnership, the laws of this Commonwealth; and (2) in the case of a partnership that is not a limited liability partnership, the laws of: (i) the jurisdiction chosen by a provision of the partnership agreement in record form; or (ii) the jurisdiction in which the partnership has its principal office if there is no choice of law under subparagraph (i). (b) Enforceability of chosen law.--A choice of law under subsection (a)(2)(i) is enforceable even though: (1) The chosen jurisdiction has no substantial relationship to the partners or the partnership and there is no other reasonable basis for the parties' choice. (2) Application of the chosen law would be contrary to a fundamental policy of a jurisdiction that has a materially greater interest in the determination of the particular issue than does the jurisdiction whose law has been chosen. (c) Cross reference.--See section 8415(c)(6) (relating to contents of partnership agreement). Cross References. Section 8414 is referred to in section 8415 of this title.

15 Pa.C.S. § 8415 Contents of partnership agreement.

(a) Scope of partnership agreement.--Except as provided in subsections (c) and (d), the partnership agreement governs: (1) relations among the partners as partners and between the partners and the partnership; (2) the rights and duties under this title of a person in the capacity of a partner; (3) the business of the partnership and the conduct of that business; (4) the means and conditions for amending the partnership agreement; and (5) the means and conditions for approving a transaction under Chapter 3 (relating to entity transactions). (b) Title applies generally.--To the extent the partnership agreement does not provide for a matter described in subsection (a), this title governs the matter. (c) Limitations.--A partnership agreement may not do any of the following: (1) Vary a provision of Chapter 1 (relating to general provisions) or Subchapter A of Chapter 2 (relating to names). (2) Vary the right of a partner to approve a merger, interest exchange, conversion or division under section 333(a)(2) (relating to approval of merger), 343(a)(2) (relating to approval of interest exchange), 353(a)(3) (relating to approval of conversion) or 363(a)(2) (relating to approval of division). (3) Vary the required contents of a plan of merger under section 332(a) (relating to plan of merger), plan of interest exchange under section 342(a) (relating to plan of interest exchange), plan of conversion under section 352(a) (relating to plan of conversion), plan of division under section 362(a) (relating to plan of division) or plan of domestication under section 372(a) (relating to plan of domestication). (4) Vary a provision of Chapter 81 (relating to general provisions) or 82 (relating to limited liability partnerships and limited liability limited partnerships), except as provided in subsection (d). (5) Vary the provisions of section 8411(b), (c) and (d) (relating to short title and application of chapter). (6) Vary the law applicable under section 8414(a)(1) (relating to governing law). (7) Vary any requirement, procedure or other provision of this title pertaining to: (i) registered offices; or (ii) the department, including provisions pertaining to documents authorized or required to be delivered to the department for filing under this title. (8) Vary the provisions of section 8437 (relating to actions by and against partnership and partners). (9) Unreasonably restrict the duties and rights under section 8446 (relating to rights to information), except as provided in subsection (d). (10) Eliminate the duty of loyalty provided for under section 8447(b)(1)(i) or (ii) or (2) (relating to standards of conduct for partners) or the duty of care, except as provided in subsection (d). (11) Vary the contractual obligation of good faith and fair dealing under section 8447(d), except as provided under subsection (d). (12) Unreasonably restrict the right of a person to maintain an action under section 8448(b) (relating to actions by partnership and partners). (13) Provide indemnification or exoneration in violation of the limitations in sections 8441(m) (relating to partner's rights and duties) and 8447(i). (14) Vary the power of a person to dissociate as a partner under section 8462(a) (relating to power to dissociate as partner and wrongful dissociation), except to require that the notice under section 8461(1) (relating to events causing dissociation) be in record form. (15) Vary the causes of dissolution specified in section 8481(a)(4) or (5) (relating to events causing dissolution). (16) Vary the requirement to wind up the partnership's business as specified in section 8482(a), (b)(1) and (d) (relating to winding up and filing of certificates). (17) Except as provided in section 8417(b) (relating to amendment and effect of partnership agreement), restrict the rights under this title of a person other than a partner. (d) Permitted terms.--Subject to subsection (c)(13), the following rules apply: (1) The partnership agreement may: (i) specify the method by which a specific act or transaction that would otherwise violate the duty of loyalty may be authorized or ratified by one or more disinterested and independent persons after full disclosure of all material facts; (ii) alter the prohibition in section 8231(a)(2) (relating to limitations on distributions by limited liability partnership) so that the prohibition requires only that the partnership's total assets not be less than the sum of its total liabilities; and (iii) impose reasonable restrictions on the availability and use of information obtained under section 8446 and may define appropriate remedies, including liquidated damages, for a breach of any reasonable restriction on use. (2) To the extent the partnership agreement expressly relieves a partner of a responsibility that the partner would otherwise have under this title and imposes the responsibility on one or more other partners, the agreement also may eliminate or limit any fiduciary duty of the partner relieved of the responsibility which would have pertained to the responsibility. (3) If not manifestly unreasonable, the partnership agreement may: (i) alter the aspects of the duty of loyalty stated in section 8447(b)(1)(i) or (ii) or (2); (ii) prescribe the standards by which the performance of the contractual obligation of good faith and fair dealing under section 8447(d) is to be measured; (iii) identify specific types or categories of activities that do not violate the duty of loyalty; (iv) alter the duty of care; and (v) alter or eliminate any other fiduciary duty. (e) Determination of manifest unreasonableness.--The court shall decide as a matter of law whether a term of a partnership agreement is manifestly unreasonable under subsection (d)(3). The court: (1) shall make its determination as of the time the challenged term became part of the partnership agreement and by considering only circumstances existing at that time; and (2) may invalidate the term only if, in light of the purposes and business of the partnership, it is readily apparent that: (i) the objective of the term is unreasonable; or (ii) the term is an unreasonable means to achieve the term's objective. (July 15, 2024, P.L.728, No.59, eff. 60 days) 2024 Amendment. Act 59 amended subsec. (c)(2). Cross References. Section 8415 is referred to in sections 8231, 8411, 8412, 8414, 8417, 8437, 8446, 8447, 8448, 8462, 8481, 8482 of this title.

15 Pa.C.S. § 8416 Application of partnership agreement.

(a) Partnership bound.--A partnership is bound by and may enforce the partnership agreement, whether or not the partnership has itself manifested assent to the agreement. (b) Deemed assent.--A person that becomes a partner is deemed to assent to the partnership agreement. (c) Preformation agreement.--Two or more persons intending to become the initial partners of a partnership may make an agreement providing that upon the formation of the partnership the agreement will become the partnership agreement. (d) Cross reference.--See section 8422(a) (relating to formation of partnership). Cross References. Section 8416 is referred to in section 8422 of this title.

15 Pa.C.S. § 8417 Amendment and effect of partnership agreement.

(a) Approval of amendments.--A partnership agreement may specify that its amendment requires the approval of a person that is not a party to the agreement or the satisfaction of a condition. An amendment is ineffective if its adoption does not include the required approval or satisfy the specified condition. See section 8441(j) (relating to partner's rights and duties). (b) Obligations to nonpartners.--The obligations of a partnership and its partners to a person in the person's capacity as a transferee or person dissociated as a partner are governed by the partnership agreement. Except as provided in section 8445(d) (relating to sharing of and right to distribution before dissolution) or in a court order issued under section 8454(b)(2) (relating to charging order) to effectuate a charging order, an amendment to the partnership agreement made after a person becomes a transferee or is dissociated as a partner: (1) is effective with regard to any debt, obligation or other liability of the partnership or its partners to the person in the person's capacity as a transferee or person dissociated as a partner; and (2) is not effective to the extent the amendment: (i) imposes a new debt, obligation or other liability on the transferee or person dissociated as a partner; or (ii) prejudices the rights under section 8471 (relating to purchase of interest of person dissociated as partner) of a person that dissociated as a partner before the amendment was made. (c) Provisions in filed documents.--If a document delivered by a partnership to the department for filing becomes effective and contains a provision that would be ineffective under section 8415(c) or (d)(3) (relating to contents of partnership agreement) if contained in the partnership agreement, the provision is ineffective in the document. (d) Conflicts with partnership agreement.--Subject to subsection (c), if a document delivered by a partnership to the department for filing becomes effective and conflicts with a provision of the partnership agreement: (1) the agreement prevails as to partners, persons dissociated as partners and transferees; and (2) the document prevails as to other persons to the extent they reasonably rely on the document. (e) Prohibition of oral amendments.--If a provision of a partnership agreement in record form provides that the partnership agreement cannot be amended, modified or rescinded except in record form, an oral agreement, amendment, modification or rescission shall not be enforceable. Cross References. Section 8417 is referred to in section 8415 of this title.

15 Pa.C.S. § 8418 Signing of filed documents.

(a) Required signatures.--Except as provided in this title, a document delivered to the department for filing under this title relating to a partnership must be signed as follows: (1) Except as provided under paragraphs (2) and (3), a document signed on behalf of a partnership must be signed by a person authorized by the partnership. (2) A document filed on behalf of a dissolved partnership that has no partner must be signed by the person winding up the partnership's business under section 8482(c) (relating to winding up and filing of certificates) or a person appointed under section 8482(d) to wind up the business. (3) A certificate of denial by a person under section 8434 (relating to certificate of denial) must be signed by that person. (4) Any other document delivered on behalf of a person to the department for filing must be signed by that person. (b) Cross reference.--See section 142 (relating to effect of signing filings). Cross References. Section 8418 is referred to in sections 8433, 8434, 8474, 8482 of this title.

15 Pa.C.S. § 8419 Liability of general partner or other person for false or missing information in filed document.

(a) General rule.--If a document delivered to the department for filing under this title and filed by the department contains a materially false statement or fails to state a material fact required to be stated, a person that suffers loss by reasonable reliance on the statement or failure to state a material fact may recover damages for the loss from: (1) a person that signed the document or caused another to sign it on the person's behalf and knew there was false or missing information in the document at the time it was signed; and (2) subject to subsection (b), a partner if: (i) the document was delivered for filing on behalf of the partnership; and (ii) the partner knew or had notice there was false or missing information for a reasonably sufficient time before the document was relied upon so that, before the reliance, the partner reasonably could have: (A) filed a petition under section 144 (relating to signing and filing pursuant to judicial order); or (B) delivered to the department for filing a statement of correction under section 138 (relating to statement of correction) or a statement of abandonment under section 141 (relating to abandonment of filing before effectiveness). (b) Partner relieved of responsibility.--To the extent the partnership agreement expressly relieves a partner of responsibility for maintaining the accuracy of information contained in records delivered on behalf of the partnership to the department for filing under this title and imposes that responsibility on one or more other partners, the liability stated in subsection (a)(2) applies to those other partners and not to the partner that the partnership agreement relieves of the responsibility. (c) Cross reference.--See section 143 (relating to liability for inaccurate information in filing).

15 Pa.C.S. § 8421 Partnership as entity.

(a) General rule.--A partnership is an entity distinct from its partners. (b) Limited liability partnership.--A partnership is the same entity regardless of whether the partnership has a statement of registration in effect under section 8201 (relating to scope).

15 Pa.C.S. § 8422 Formation of partnership.

(a) General rule.--Except as provided in subsection (b), the association of two or more persons to carry on as co-owners a business for profit forms a partnership, whether or not the persons intend to form a partnership. (b) Excluded associations.--An association formed under a statute other than this chapter, a predecessor statute or a comparable statute of another jurisdiction is not a partnership under this chapter. (c) Rules for determining formation of partnership.--In determining whether a partnership is formed, the following rules apply: (1) Joint tenancy, tenancy in common, tenancy by the entireties, joint property, common property or part ownership does not by itself establish a partnership, even if the co-owners share profits made by the use of the property. (2) The sharing of gross returns does not by itself establish a partnership, even if the persons sharing them have a joint or common right or interest in property from which the returns are derived. (3) A person who receives a share of the profits of a business is presumed to be a partner in the business, unless the profits were received in payment: (i) of a debt by installments or otherwise; (ii) for services as an independent contractor or of wages or other compensation to an employee; (iii) of rent; (iv) of an annuity or other retirement or health benefit to a deceased or retired partner or a beneficiary, representative or designee of a deceased or retired partner; (v) of interest or other charge on a loan, even if the amount of payment varies with the profits of the business, including a direct or indirect present or future ownership of the collateral, rights to income, proceeds or increase in value derived from the collateral; or (vi) for the sale of the goodwill of a business or other property by installments or otherwise. (d) Cross reference.--See section 8416(c) (relating to application of partnership agreement). Cross References. Section 8422 is referred to in sections 102, 8416, 8442 of this title.

15 Pa.C.S. § 8423 Partnership property.

Property owned by a partnership is partnership property and is not owned by the partners individually.

15 Pa.C.S. § 8424 When property is partnership property.

(a) General rule.--Property is owned by a partnership and not by the partners individually if the property is acquired in the name of: (1) the partnership by a transfer to: (i) the partnership in its name; or (ii) one or more partners in their capacity as partners in the partnership, if the name of the partnership is indicated in the instrument transferring title to the property; or (2) one or more partners with an indication in the instrument transferring title to the property of the person's capacity as a partner or of the existence of a partnership but without an indication of the name of the partnership. (b) Property purchased with partnership assets.--Property is presumed to be partnership property if purchased with partnership assets, even if not acquired in the name of the partnership or of one or more partners with an indication in the instrument transferring title to the property of the person's capacity as a partner or of the existence of a partnership. (c) Property acquired in name of partner.--Property acquired in the name of one or more of the partners is presumed to be separate property owned by the individual partner or partners, even if used for partnership purposes, if the property is acquired without: (1) an indication in the instrument transferring title to the property of the person's capacity as a partner or of the existence of a partnership; and (2) use of partnership assets.

15 Pa.C.S. § 8431 Partner agent of partnership.

Subject to the effect of a certificate of partnership authority under section 8433 (relating to certificate of partnership authority), the following rules apply: (1) Each partner is an agent of the partnership for the purpose of its business. An act of a partner, including the signing of an instrument in the partnership name, for apparently carrying on in the ordinary course the partnership business or business of the kind carried on by the partnership binds the partnership, unless the partner did not have authority to act for the partnership in the particular matter and the person with which the partner was dealing knew or had notice that the partner lacked authority. (2) An act of a partner which is not apparently for carrying on in the ordinary course the partnership's business or business of the kind carried on by the partnership binds the partnership only if the partner had actual authority to take the action. Cross References. Section 8431 is referred to in sections 8432, 8472, 8484 of this title.

15 Pa.C.S. § 8432 Transfer of partnership property.

(a) General rule.--Partnership property may be transferred as follows: (1) Subject to the effect of a certificate of partnership authority under section 8433 (relating to certificate of partnership authority), partnership property held in the name of the partnership may be transferred by an instrument of transfer signed by a partner in the partnership name. (2) Partnership property held in the name of one or more partners with an indication in the instrument transferring the property to them of their capacity as partners or of the existence of a partnership, but without an indication of the name of the partnership, may be transferred by an instrument of transfer signed by the persons in whose name the property is held. (3) Partnership property held in the name of one or more persons other than the partnership, without an indication in the instrument transferring the property to them of their capacity as partners or of the existence of a partnership, may be transferred by an instrument of transfer signed by the persons in whose name the property is held. (b) Recovery of property by partnership.--A partnership may recover partnership property from a transferee only if it proves that the signing of the instrument of initial transfer did not bind the partnership under section 8431 (relating to partner agent of partnership) and: (1) as to a subsequent transferee who gave value for property transferred under subsection (a)(1) or (2), proves that the subsequent transferee knew or had notice that the person who signed the instrument of initial transfer lacked authority to bind the partnership; or (2) as to a transferee who gave value for property transferred under subsection (a)(3), proves that the transferee knew or had notice that the property was partnership property and that the person who signed the instrument of initial transfer lacked authority to bind the partnership. (c) Subsequent transferees.--A partnership may not recover partnership property from a subsequent transferee if the partnership would not have been entitled to recover the property under subsection (b) from any earlier transferee of the property. (d) Sole partner.--If one person holds all the interests in a partnership, all the partnership property vests in that person. The person may sign a document in the name of the partnership to evidence vesting of the property in that person and may file or record the document.

15 Pa.C.S. § 8433 Certificate of partnership authority.

(a) General rule.--A partnership may deliver to the department for filing a certificate of partnership authority. The certificate: (1) must include the name of the partnership and: (i) if the partnership is not a registered foreign limited liability partnership, the street and mailing addresses of its principal office; or (ii) if the partnership is a registered foreign limited liability partnership, subject to section 109 (relating to name of commercial registered office provider in lieu of registered address), the address, including street and number, if any, of its registered office; (2) with respect to any position that exists in or with respect to the partnership, may state the authority, or limitations on the authority, of all persons holding the position to: (i) sign an instrument transferring real property held in the name of the partnership; or (ii) enter into other transactions on behalf of, or otherwise act for or bind, the partnership; and (3) may state the authority, or limitations on the authority, of a specific person to: (i) sign an instrument transferring real property held in the name of the partnership; or (ii) enter into other transactions on behalf of, or otherwise act for or bind, the partnership. (b) Amendment or cancellation.--To amend or cancel a certificate of authority filed by the department, a partnership must deliver to the department for filing an amendment or cancellation stating: (1) the name of the partnership; (2) if the partnership is not a registered foreign limited liability partnership, the street and mailing addresses of the partnership's principal office; (3) if the partnership is a registered foreign limited liability partnership, subject to section 109, the address, including street and number, if any, of its registered office; (4) the date the certificate being affected became effective; and (5) the contents of the amendment or a statement that the certificate is canceled. (c) Effect of certificate.--A certificate of authority: (1) affects only the power of a person to bind a partnership to persons that are not partners; and (2) is not binding on the department for purposes of the administration of this title or any other provision of law. (d) Effect of limitation on authority.--Subject to subsection (c) and section 8413(d)(1) (relating to knowledge and notice), and except as provided in subsections (f), (g) and (h), a limitation on the authority of a person or a position contained in an effective certificate of authority is not by itself evidence of any person's knowledge or notice of the limitation. (e) Authority not relating to real property.--A grant of authority not pertaining to transfers of real property and contained in an effective certificate of authority is conclusive in favor of a person that gives value in reliance on the grant, unless when the person gives value: (1) the person has knowledge to the contrary; (2) the certificate has been canceled or restrictively amended under subsection (b); or (3) a limitation on the grant is contained in another certificate of authority that became effective after the certificate containing the grant became effective. (f) Authority relating to real property.--An effective certificate of authority that grants authority to transfer real property held in the name of the partnership, a certified copy of which certificate is recorded in the office of the recorder of deeds for the county in which the real property is located, is conclusive in favor of a person that gives value in reliance on the grant without knowledge to the contrary, except to the extent that when the person gives value: (1) the certificate has been canceled or restrictively amended under subsection (b), and a certified copy of the cancellation or restrictive amendment has been recorded in the office of the recorder of deeds for the county in which the real property is located; or (2) a limitation on the grant is contained in another certificate of authority that became effective after the certificate containing the grant became effective and a certified copy of the later-effective certificate is recorded in the office of the recorder of deeds for the county in which the real property is located. (g) Constructive knowledge of limitation.--Subject to subsection (c), if a certified copy of an effective certificate containing a limitation on the authority to transfer real property held in the name of a partnership is recorded in the office of the recorder of deeds for the county in which real property is located, all persons are deemed to know of the limitation. (h) Effect of certificate of dissolution.--Subject to subsection (i), an effective certificate of dissolution is a cancellation of any filed certificate of authority for the purposes of subsection (f) and is a limitation on authority for purposes of subsection (g). (i) Post-dissolution certificate of authority.--After a certificate of dissolution becomes effective, a partnership may deliver to the department for filing and, if appropriate, may record a certificate of authority that is designated as a post-dissolution certificate of authority. The certificate operates as provided in subsections (f) and (g). (j) Cancellation by operation of law.--Unless canceled earlier, an effective certificate of authority is canceled by operation of law five years after the date on which the certificate, or its most recent amendment, becomes effective. The cancellation is effective without recording under subsection (f) or (g). (k) Effect of certificate of denial.--An effective certificate of denial under section 8434 (relating to certificate of denial): (1) operates as a restrictive amendment under this section and a certified copy may be recorded as provided in subsection (f)(1) by the partnership or the person that delivered the certificate of denial to the department for filing; and (2) affects only the authority of a person to bind a partnership with respect to persons that are not partners. (l) Foreign partnerships.--A foreign partnership, regardless of whether it is registered to do business in this Commonwealth, may deliver a certificate of authority to the department for filing and may record a copy as provided in this section in the same manner and with the same effect is if it were a domestic partnership. (m) Cross references.--See: Section 134 (relating to docketing statement). Section 135 (relating to requirements to be met by filed documents). Section 136(c) (relating to processing of documents by Department of State). Section 8418 (relating to signing of filed documents). Section 8482 (relating to winding up and filing of certificates). Cross References. Section 8433 is referred to in sections 8413, 8431, 8432, 8474 of this title.

15 Pa.C.S. § 8434 Certificate of denial.

(a) General rule.--A person named in a filed certificate of authority granting that person authority may deliver to the department for filing a certificate of denial that: (1) provides the name of the partnership and: (i) if the partnership is not a registered foreign limited liability partnership, the street and mailing addresses of its principal office; or (ii) if the partnership is a registered foreign limited liability partnership, subject to section 109 (relating to name of commercial registered office provider in lieu of registered address), the address, including street and number, if any, of its registered office; (2) states the caption of the certificate of authority to which the certificate of denial pertains; and (3) denies the grant of authority. (b) Cross references.--See: Section 134 (relating to docketing statement). Section 135 (relating to requirements to be met by filed documents). Section 136(c) (relating to processing of documents by Department of State). Section 8418 (relating to signing of filed documents). Cross References. Section 8434 is referred to in sections 8418, 8433, 8636 of this title.

15 Pa.C.S. § 8435 Partnership liable for partner's actionable conduct.

(a) General rule.--A partnership is liable for loss or injury caused to a person, or for a penalty incurred, as a result of a wrongful act or other actionable conduct, of a partner acting in the ordinary course of business of the partnership or with the actual or apparent authority of the partnership. (b) Misapplication of property.--If, in the course of the partnership's business or while acting with actual or apparent authority of the partnership, a partner receives or causes the partnership to receive money or property of a person not a partner and the money or property is misapplied by a partner, the partnership is liable for the loss.

15 Pa.C.S. § 8436 Partner's liability.

(a) General rule.--Except as provided in subsection (b) or section 8204 (relating to limitation on liability of partners), all partners are jointly and severally liable for all debts, obligations and other liabilities of the partnership unless otherwise agreed by the claimant or provided by law. (b) Preexisting liabilities.--A person that becomes a partner is not personally liable for a debt, obligation or other liability of the partnership incurred before the person became a partner. Cross References. Section 8436 is referred to in sections 8241, 8242, 8244, 8437 of this title.

15 Pa.C.S. § 8437 Actions by and against partnership and partners.

(a) Partnership as party.--A partnership may sue and be sued in the name of the partnership. (b) Partner as party.--To the extent not inconsistent with section 8436 (relating to partner's liability), a partner may be joined in an action against the partnership or named in a separate action. (c) Judgment against partnership only.--A judgment against a partnership: (1) is not by itself a judgment against a partner; and (2) except as provided in subsection (d), may not be satisfied from a partner's assets. (d) Judgment against partnership and partner.--If there is a judgment against a partnership and a partner on the same claim, the judgment creditor may levy execution against the assets of the partner if both of the following apply: (1) The partner is personally liable for the claim under section 8436. (2) One of the following subparagraphs applies: (i) A writ of execution on the judgment against the partnership has been returned unsatisfied in whole or in part. (ii) The partnership is a debtor in bankruptcy. (iii) The partner has agreed that the creditor need not exhaust partnership assets. (iv) A court grants permission to levy execution based on a finding that: (A) partnership assets subject to execution are clearly insufficient to satisfy the judgment; (B) exhaustion of partnership assets is excessively burdensome; or (C) the grant of permission is an appropriate exercise of the court's equitable powers. (v) Liability is imposed on the partner by law or contract independent of the existence of the partnership. (e) Liability for representations.--This section also applies to any debt, liability or other obligation of a partnership which results from a representation by a partner or purported partner under section 8438 (relating to liability of purported partner). (f) Cross reference.--See section 8415(c)(8) (relating to contents of partnership agreement). Cross References. Section 8437 is referred to in section 8415 of this title.

15 Pa.C.S. § 8438 Liability of purported partner.

(a) General rule.--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 partnership liability results, the purported partner is liable with respect to that liability as if the purported partner were a partner. If no partnership liability results, the purported partner is jointly and severally liable, with any other person consenting to the representation, with respect to that liability. (b) Authority of purported partner.--If a person is represented in the manner described in subsection (a) to be a partner in an existing partnership, or with one or more persons not partners, the purported partner is an agent of persons consenting to the representation to bind them to the same extent and in the same manner as if the purported partner were a partner with respect to persons who enter into transactions in reliance upon the representation. If all the partners of the existing partnership consent to the representation, a partnership act or obligation results. If fewer than all the partners of the existing partnership consent to the representation, the person acting and the partners consenting to the representation are jointly and severally liable. (c) Effect of certificate of partnership authority.--A person is not liable as a partner merely because the person is named by another as a partner in a certificate of partnership authority. (d) No effect of failure to disclaim authority.--A person does not continue to be liable as a partner merely because of a failure to file a certificate of dissociation or to amend a certificate of partnership authority to indicate the person's dissociation as a partner. (e) Nonliability of persons not partners.--Except as provided in subsections (a) and (b), persons who are not partners as to each other are not liable as partners to other persons. Cross References. Section 8438 is referred to in section 8437 of this title.

15 Pa.C.S. § 8441 Partner's rights and duties.

(a) Distributions.--Each partner is entitled to share in distributions as provided in section 8445 (relating to sharing of and right to distribution before dissolution). (b) Reimbursement.--A partnership shall reimburse a partner for: (1) Any payment made by the partner in the course of the partner's activities on behalf of the partnership, if the partner complied with this section and section 8447 (relating to standards of conduct for partners) in making the payment. (2) An advance to the partnership beyond the amount of capital the partner agreed to contribute. (c) Indemnification.--A partnership shall indemnify and hold harmless a person with respect to any claim or demand against the person and any debt, obligation or other liability incurred by the person by reason of the person's former or present capacity as partner, if the claim, demand, debt, obligation or other liability does not arise from the person's breach of this section or section 8232 (relating to liability for improper distributions by limited liability partnership) or 8447. (d) Advances.--In the ordinary course of its business, a partnership may advance expenses, including attorney fees and costs, incurred by a person in connection with a claim or demand against the person by reason of the person's former or present capacity as a partner, if the person promises to repay the partnership if the person ultimately is determined not to be entitled to be indemnified under subsection (c). (e) Insurance.--A partnership may purchase and maintain insurance on behalf of a partner against liability asserted against or incurred by the partner in that capacity or arising from that status even if, under subsection (m), the partnership agreement could not eliminate or limit the person's liability to the partnership for the conduct giving rise to the liability. (f) Loan to partnership.--A payment or advance made by a partner which gives rise to a partnership obligation under subsection (b) constitutes a loan to the partnership which accrues interest from the date of the payment or advance. (g) Management rights.--Each partner has equal rights in the management and conduct of the partnership's business. (h) Rights to property.--A partner may use or possess partnership property only on behalf of the partnership. (i) Compensation for services.--A partner is not entitled to remuneration for services performed for the partnership, except for reasonable compensation for services rendered in winding up the business of the partnership. (j) Required approvals by partners.--A difference arising as to a matter in the ordinary course of business of a partnership may be decided by a majority of the partners. An act outside the ordinary course of business of a partnership and an amendment to the partnership agreement may be undertaken only with the affirmative vote or consent of all the partners. (k) Nonexclusivity.--The rights provided by subsections (b), (c), (d) and (e) shall not be deemed exclusive of any other rights to which a person seeking reimbursement, indemnification, advancement of expenses or insurance may be entitled under the partnership agreement, vote of partners, contract or otherwise, both as to action in his official capacity and as to action in another capacity while holding that position. Section 8447(f) shall be applicable to a vote, contract or other action under this subsection. A partnership may create a fund of any nature, which may, but need not be, under the control of a trustee, or otherwise secure or insure in any manner its indemnification obligations, whether arising under this section or otherwise. (l) Grounds.--Indemnification under subsection (k) may be granted for any action taken and may be made whether or not the partnership would have the power to indemnify the person under any other provision of law except as provided in this section and whether or not the indemnified liability arises or arose from any threatened, pending or completed action by or in the right of the partnership. Indemnification under subsection (k) is declared to be consistent with the public policy of this Commonwealth. (m) Limitation.--Indemnification under this section shall not be made in any case where the act giving rise to the claim for indemnification is determined by a court to constitute recklessness, willful misconduct or a knowing violation of law. (Nov. 3, 2022, P.L.1791, No.122, eff. 60 days) 2022 Amendment. Act 122 amended subsec. (a). Cross References. Section 8441 is referred to in sections 8415, 8417, 8486 of this title.

15 Pa.C.S. § 8442 Becoming a partner.

(a) Upon formation.--Upon formation of a partnership, a person becomes a partner under section 8422(a) (relating to formation of partnership). (b) After formation.--After formation of a partnership, a person becomes a partner: (1) as provided in the partnership agreement; (2) as a result of a transaction effective under Chapter 3 (relating to entity transactions); or (3) with the affirmative vote or consent of all the partners. (c) Noneconomic partners.--A person may become a partner without: (1) acquiring a transferable interest; or (2) making or being obligated to make a contribution to the partnership. (d) Nature of interest.--The interest of a partner in a partnership is personal property. Cross References. Section 8442 is referred to in section 8412 of this title.

15 Pa.C.S. § 8443 Form of contribution.

A contribution may consist of: (1) property transferred to, services performed for or another benefit provided to the partnership; (2) an agreement to transfer property to, perform services for or provide another benefit to the partnership; or (3) any combination of items listed in paragraphs (1) and (2). Cross References. Section 8443 is referred to in section 8412 of this title.

15 Pa.C.S. § 8444 Liability for contribution.

(a) Obligation not excused.--A person's obligation to make a contribution to a partnership is not excused by the person's death, disability, termination or other inability to perform personally. (b) Substitute payment.--If a person does not fulfill an obligation to make a contribution other than money, the person is obligated, at the option of the partnership, to contribute money equal to the value, as stated in the records of the partnership, of the part of the contribution which has not been made. (c) Compromise of obligation.--The obligation of a person to make a contribution may be compromised only by the affirmative vote or consent of all the partners. If a creditor of a limited liability partnership extends credit or otherwise acts in reliance on an obligation described under subsection (a) without knowledge or notice of a compromise under this subsection, the creditor may enforce the obligation.

15 Pa.C.S. § 8445 Sharing of and right to distribution before dissolution.

(a) Distributions before dissolution.--Any distribution made by a partnership before its dissolution and winding up shall be in equal shares among partners and persons dissociated as partners whose interests in the partnership have not been purchased under section 8471 (relating to purchase of interest of person dissociated as partner), except as provided in section 8453(b) (relating to transfer of transferable interest) or to the extent necessary to comply with a charging order in effect under section 8454 (relating to charging order). (b) No right to distribution.--Subject to section 8471, a person has a right to a distribution before the dissolution and winding up of a partnership only if the partnership decides to make an interim distribution. (c) Form of distribution.--A person does not have a right to demand or receive a distribution from a partnership in any form other than money. Except as provided in section 8486 (relating to disposition of assets in winding up and required contributions), a partnership may distribute an asset in kind only if each part of the asset is fungible with each other part and each person receives a percentage of the asset equal in value to the person's share of distributions. (d) Status as creditor.--If a partner or transferee becomes entitled to receive a distribution, the partner or transferee has the status of, and is entitled to all remedies available to, a creditor of the partnership with respect to the distribution. The partnership's obligation to make a distribution is subject to offset for any amount owed to the partnership by the partner or a person dissociated as partner on whose account the distribution is made. Cross References. Section 8445 is referred to in sections 8417, 8441 of this title.

15 Pa.C.S. § 8446 Rights to information.

(a) Location of records.--A partnership shall keep its books and records, if any, at its principal office. (b) Right to inspection.--On reasonable notice, a partner may inspect and copy during regular business hours, at a reasonable location specified by the partnership, any record maintained by the partnership regarding the partnership's business, financial condition and other circumstances. (c) Material information.--The partnership shall furnish to each partner, without demand, any information concerning the partnership's business, financial condition and other circumstances which the partnership knows and is material to the proper exercise of the partner's rights and duties under the partnership agreement or this title, except to the extent the partnership can establish that it reasonably believes the member already knows the information. (d) Duty of partners.--The duty to furnish information under subsection (c) also applies to each partner to the extent the partner knows any of the information described in subsection (c). (e) Rights after dissociation.--Subject to subsection (j), within 10 days after receipt by a partnership of a demand made in record form, a person dissociated as a partner may have access to information to which the person was entitled while a partner if: (1) the information pertains to the period during which the person was a partner; (2) the person seeks the information in good faith; and (3) the information is material to the person's rights and duties under the partnership agreement or this title. (f) Partnership response to demand.--Within 10 days after receiving a demand under subsection (e), the partnership shall, in record form, inform the person that made the demand of: (1) the information that the partnership will provide in response to the demand and when and where the partnership will provide the information; and (2) the partnership's reasons for declining, if the partnership declines to provide any demanded information. (g) Costs of copying.--A partnership may charge a person that makes a demand under this section the reasonable costs of copying. (h) Exercise of rights.--A partner or person dissociated as a partner may exercise the rights under this section through an agent or, in the case of an incapacitated person, a guardian. Any restriction or condition imposed by the partnership agreement or under subsection (j) applies both to the agent or guardian and to the partner or person dissociated as a partner. (i) No rights of transferee.--Subject to section 8455 (relating to power of personal representative of deceased partner), the rights under this section do not extend to a person as transferee. (j) Reasonable restrictions permitted.--In addition to any restriction or condition stated in its partnership agreement, a partnership, as a matter within the ordinary course of its business, may impose reasonable restrictions and conditions on access to and use of information to be furnished under this section, including designating information confidential and imposing nondisclosure and safeguarding obligations on the recipient. In a dispute concerning the reasonableness of a restriction under this subsection, the partnership has the burden of proving reasonableness. (k) Enforcement of right to information.--If the partnership, or a partner or agent thereof, refuses to permit an inspection sought by a partner or person dissociated as a partner or attorney or other agent acting for the partner or person dissociated as a partner pursuant to subsection (b) or (e), or does not reply to the demand made under either of those subsections within 10 days after the demand has been received, the partner or person dissociated as a partner may file an action in the court for an order to compel the inspection. The court is vested with exclusive jurisdiction to determine whether or not the person seeking inspection is entitled to the inspection sought. The court may summarily order the partnership to permit the partner or person dissociated as a partner to inspect the information and to make copies or extracts therefrom. (l) Cross reference.--See section 8415 (relating to contents of partnership agreement). (Nov. 3, 2022, P.L.1791, No.122, eff. 60 days) 2022 Amendment. Act 122 relettered former subsec. (k) to subsec. (l) and added present subsec. (k). Cross References. Section 8446 is referred to in sections 8415, 8455 of this title.

15 Pa.C.S. § 8447 Standards of conduct for partners.

(a) General rule.--A partner owes to the partnership and the other partners the duties of loyalty and care stated in subsections (b) and (c). (b) Duty of loyalty.--The fiduciary duty of loyalty of a partner includes the duties: (1) to account to the partnership and hold as trustee for it any property, profit or benefit derived by the partner: (i) in the conduct or winding up of the partnership's business; (ii) from a use by the partner of the partnership's property; or (iii) from the appropriation of a partnership opportunity; (2) to refrain from dealing with the partnership in the conduct or winding up of the partnership business as or on behalf of a person having an interest adverse to the partnership; and (3) to refrain from competing with the partnership in the conduct of the partnership's business before the dissolution of the partnership. (c) Duty of care.--The duty of care of a partner in the conduct or winding up of the partnership business is to refrain from engaging in gross negligence, recklessness, willful misconduct or a knowing violation of law. (d) Good faith and fair dealing.--A partner shall discharge the duties and obligations under this title or under the partnership agreement and exercise any rights consistent with the contractual obligation of good faith and fair dealing. (e) Self-serving conduct.--A partner does not violate a duty or obligation under this title or under the partnership agreement solely because the partner's conduct furthers the partner's own interest. (f) Authorization or ratification.--All the partners may authorize or ratify, after disclosure of all material facts, a specific act or transaction that otherwise would violate the duty of loyalty of a partner. (g) Fairness as a defense.--It is a defense to a claim under subsection (b)(2) and any comparable claim in equity or at common law that the transaction was fair to the partnership at the time it was authorized or ratified under subsection (f). (h) Rights and obligations in approved transaction.--If a partner enters into a transaction with the partnership which otherwise would be prohibited under subsection (b)(2), but the transaction is authorized or ratified as provided under subsection (f) or the partnership agreement, the partner's rights and obligations arising from the transaction are the same as those of a person that is not a partner. (i) Exoneration.--The partnership agreement may provide that a partner shall not be personally liable for monetary damages to the partnership or the other partners for a breach of subsection (c), except that a partner may not be exonerated for an act that constitutes recklessness, willful misconduct or a knowing violation of law. (j) Cross reference.--See section 8415 (relating to contents of partnership agreement). Cross References. Section 8447 is referred to in sections 8231, 8232, 8415, 8441, 8461, 8463 of this title.

15 Pa.C.S. § 8448 Actions by partnership and partners.

(a) Action by partnership.--A partnership may maintain an action against a partner for either of the following that causes or threatens harm to the partnership: (1) a breach of the partnership agreement; or (2) the violation of a duty to the partnership. (b) Action by partner.--A partner may maintain an action against the partnership or another partner, with or without an accounting as to partnership business, to enforce the partner's rights and protect the partner's interests, including rights and interests under the partnership agreement or this title or arising independently of the partnership relationship. (c) Claims not revived.--A right to an accounting on dissolution and winding up does not revive a claim barred by law. (d) Cross reference.--See section 8415(c)(12)(relating to contents of partnership agreement). Cross References. Section 8448 is referred to in sections 8415, 8471 of this title.

15 Pa.C.S. § 8449 Continuation of partnership beyond definite term or particular undertaking.

(a) Effect of continuation.--If a partnership for a definite term or particular undertaking is continued, without an express agreement, after the expiration of the term or completion of the undertaking, the rights and duties of the partners remain the same as they were at the expiration or completion, so far as is consistent with a partnership at will. (b) Presumed agreement to continue partnership.--If the partners, or those partners who habitually acted in the business during the term or undertaking, continue the business without any settlement or liquidation of the partnership, they are presumed to have agreed that the partnership will continue.

15 Pa.C.S. § 8451 Partner not co-owner of partnership property.

A partner is not a co-owner of partnership property and has no interest in partnership property which can be transferred, either voluntarily or involuntarily.

15 Pa.C.S. § 8452 Nature of transferable interest.

(a) Personal property.--A transferable interest is personal property. (b) Only right that may be transferred.--A person may not transfer to a person not a partner any rights in a partnership other than a transferable interest.

15 Pa.C.S. § 8453 Transfer of transferable interest.

(a) General rule.--A transfer, in whole or in part, of a transferable interest: (1) is permissible; (2) does not by itself cause the dissociation of the transferor as a partner or a dissolution and winding up of the partnership's business; and (3) subject to section 8455 (relating to power of personal representative of deceased partner), does not entitle the transferee to: (i) participate in the management or conduct of the partnership's business; or (ii) except as provided in subsection (c), have access to records or other information concerning the partnership's business. (b) Rights of transferee.--A transferee has the right to: (1) receive, in accordance with the terms of the transfer: (i) distributions to which the transferor would otherwise be entitled; and (ii) allocations of income, gain, loss, deduction or credit or similar item which would otherwise be made to the transferor; and (2) seek under section 8481(a)(5) (relating to events causing dissolution) a judicial determination that it is equitable to wind up the partnership business. (c) Right to account on dissolution.--In a dissolution and winding up of a partnership, a transferee is entitled to an account of the partnership's transactions only from the date of dissolution. (d) Recognition of transferee's rights.--A partnership need not give effect to a transferee's rights under this section until the partnership knows or has notice of the transfer. (e) Transfer restrictions.--A transfer of a transferable interest in violation of a restriction on transfer contained in the partnership agreement is ineffective if the intended transferee has knowledge or notice of the restriction at the time of transfer. (f) Rights retained by transferor.--Except as provided in section 8461(4)(ii) (relating to events causing dissociation), if a partner transfers a transferable interest, the transferor retains the rights of a partner other than the transferable interest transferred and retains all the duties and obligations of a partner. Cross References. Section 8453 is referred to in sections 8445, 8454, 8455 of this title.

15 Pa.C.S. § 8454 Charging order.

(a) General rule.--On application by a judgment creditor of a partner or transferee, a court may enter a charging order against the transferable interest of the judgment debtor for the unsatisfied amount of the judgment. A charging order constitutes a lien on a judgment debtor's transferable interest and requires the partnership to pay over to the person to which the charging order was issued any distribution that otherwise would be paid to the judgment debtor. (b) Available relief.--To the extent necessary to effectuate the collection of distributions pursuant to a charging order in effect under subsection (a), the court may: (1) appoint a receiver of the distributions subject to the charging order, with the power to make all inquiries the judgment debtor might have made; and (2) make all other orders necessary to give effect to the charging order. (c) Foreclosure.--Upon a showing that distributions under a charging order will not pay the judgment debt within a reasonable time, the court may foreclose the lien and order the sale of the transferable interest. The purchaser at the foreclosure sale obtains only the transferable interest, does not thereby become a partner and is subject to section 8453 (relating to transfer of transferable interest). (d) Satisfaction of judgment.--At any time before foreclosure under subsection (c), the partner or transferee whose transferable interest is subject to a charging order under subsection (a) may extinguish the charging order by satisfying the judgment and filing a certified copy of the satisfaction with the court that issued the charging order. (e) Purchase of rights.--At any time before foreclosure under subsection (c), a partnership or one or more partners whose transferable interests are not subject to the charging order may pay to the judgment creditor the full amount due under the judgment and thereby succeed to the rights of the judgment creditor, including the charging order. (f) Exemption laws preserved.--This chapter shall not deprive any partner or transferee of the benefit of any exemption law applicable to the transferable interest of the partner or transferee. (g) Exclusive remedy.--This section provides the exclusive remedy by which a person seeking, in the capacity of a judgment creditor, to enforce a judgment against a partner or transferee may satisfy the judgment from the judgment debtor's transferable interest. Cross References. Section 8454 is referred to in sections 8417, 8445, 8461, 8486 of this title.

15 Pa.C.S. § 8455 Power of personal representative of deceased partner.

If a partner dies, the deceased partner's personal representative may exercise: (1) the rights of a transferee provided in section 8453(c) (relating to transfer of transferable interest); and (2) for purposes of settling the estate, the rights the deceased partner had under section 8446 (relating to rights to information). Cross References. Section 8455 is referred to in sections 8446, 8453 of this title.

15 Pa.C.S. § 8461 Events causing dissociation.

A person is dissociated as a partner when any of the following occurs: (1) The partnership knows or has notice of the person's express will to withdraw as a partner, except that, if the person has specified a withdrawal date later than the date the partnership knew or had notice, on that later date. (2) An event stated in the partnership agreement as causing the person's dissociation occurs. (3) The person is expelled as a partner pursuant to the partnership agreement. (4) The person is expelled as a partner by the affirmative vote or consent of all the other partners if: (i) it is unlawful to carry on the partnership business with the person as a partner; (ii) there has been a transfer of all of the person's transferable interest in the partnership, other than: (A) a transfer for security purposes; or (B) a charging order in effect under section 8454 (relating to charging order) which has not been foreclosed; (iii) the person is an association and: (A) the partnership notifies the person that the person will be expelled as a partner because: (I) the person has filed a certificate of dissolution or the equivalent; (II) the person has been administratively dissolved; (III) the person's charter or the equivalent has been revoked; or (IV) the person's right to conduct business has been suspended by the person's jurisdiction of formation; and (B) within 90 days after the notification: (I) the certificate of dissolution or the equivalent has not been withdrawn, rescinded or revoked; (II) the person has not been reinstated; (III) the person's charter or the equivalent has not been reinstated; or (IV) the person's right to conduct business has not been reinstated; or (iv) the person is an unincorporated association that has been dissolved and whose activities and affairs are being wound up. (5) On application by the partnership or another partner, the person is expelled as a partner by judicial order because the person: (i) has engaged or is engaging in wrongful conduct that has affected adversely and materially, or will affect adversely and materially, the partnership's business; (ii) has committed willfully or persistently, or is committing willfully or persistently, a material breach of the partnership agreement or a duty or obligation under section 8447 (relating to standards of conduct for partners); or (iii) has engaged or is engaging in conduct relating to the partnership's business which makes it not reasonably practicable to carry on the business with the person as a partner. (6) The person: (i) becomes a debtor in bankruptcy; (ii) makes an assignment for the benefit of creditors; or (iii) seeks, consents to or acquiesces in the appointment of a trustee, receiver or liquidator of the person or of all or substantially all the person's property. (7) In the case of an individual: (i) the individual dies; (ii) a guardian for the individual is appointed; or (iii) a court orders that the individual has otherwise become incapable of performing the individual's duties as a partner under this title or the partnership agreement. (8) In the case of a person that is a testamentary or inter vivos trust or is acting as a partner by virtue of being a trustee of such a trust, the trust's entire transferable interest in the partnership is distributed. (9) In the case of a person that is an estate or is acting as a partner by virtue of being a personal representative of an estate, the estate's entire transferable interest in the partnership is distributed. (10) In the case of a person that is not an individual, the existence of the person terminates. (11) The partnership participates in a merger under Chapter 3 (relating to entity transactions) and: (i) the partnership is not the surviving entity; or (ii) otherwise as a result of the merger, the person ceases to be a partner. (12) The partnership participates in an interest exchange under Chapter 3 and, as a result of the interest exchange, the person ceases to be a partner. (13) The partnership participates in a conversion under Chapter 3. (14) The partnership participates in a division under Chapter 3 and: (i) the partnership is not a resulting association; or (ii) as a result of the division, the person ceases to be a partner. (15) The partnership participates in a domestication under Chapter 3 and, as a result of the domestication, the person ceases to be a partner. (16) The partnership dissolves and completes winding up. Cross References. Section 8461 is referred to in sections 8412, 8415, 8453, 8462, 8481 of this title.

15 Pa.C.S. § 8462 Power to dissociate as partner and wrongful dissociation.

(a) Power to dissociate.--A person has the power to dissociate as a partner at any time, rightfully or wrongfully, by withdrawing as a partner by express will under section 8461(1) (relating to events causing dissociation). (b) Wrongful dissociation.--A person's dissociation as a partner is wrongful only if the dissociation: (1) is in breach of an express provision of the partnership agreement; or (2) in the case of a partnership for a definite term or particular undertaking, occurs before the expiration of the term or the completion of the undertaking and: (i) the person withdraws as a partner by express will, unless the withdrawal follows within 90 days after another person's dissociation by death or otherwise under section 8461(6), (7), (8), (9) or (10) or wrongful dissociation under this subsection; (ii) the person is expelled as a partner by judicial order under section 8461(5); (iii) the person is dissociated under section 8461(6); or (iv) in the case of a person that is not a trust other than a business or statutory trust, an estate or an individual, the person is expelled or otherwise dissociated because it willfully dissolved or terminated. (c) Damages for wrongful dissociation.--A person that wrongfully dissociates as a partner is liable to the partnership and to the other partners for damages caused by the dissociation. The liability is in addition to any debt, obligation or other liability of the partner to the partnership or the other partners. (d) Cross reference.--See section 8415(c)(14) (relating to contents of partnership agreement). Cross References. Section 8462 is referred to in sections 8415, 8471, 8481 of this title.

15 Pa.C.S. § 8463 Effects of dissociation.

(a) Effects on partnership.--If a person's dissociation results in a dissolution and winding up of the partnership business, Subchapter H (relating to dissolution and winding up) applies; otherwise, Subchapter G (relating to dissociation as partner if business not wound up) applies. (b) Effects on person dissociated as partner.--If a person is dissociated as a partner: (1) The person's right to participate in the management and conduct of the partnership's business terminates, except as provided under section 8482(c) (relating to winding up and filing of certificates). (2) The person's duties and obligations under section 8447 (relating to standards of conduct for partners) end with regard to matters arising and events occurring after the person's dissociation, except to the extent the partner participates in winding up the partnership's business under section 8482. (3) Any transferable interest owned by the person in the person's capacity as a general partner immediately before dissociation that is not subsequently purchased from the person or canceled or exchanged in a transaction under Chapter 3 (relating to entity transactions) is owned by the person solely as a transferee. (c) Existing obligations not discharged.--A person's dissociation does not of itself discharge the person from any debt, obligation or other liability to the partnership or the other partners which the person incurred while a partner.

15 Pa.C.S. § 8471 Purchase of interest of person dissociated as partner.

(a) Right to buyout.--If a person is dissociated as a partner without the dissociation resulting in a dissolution and winding up of the partnership business under section 8481 (relating to events causing dissolution), the partnership shall cause the person's interest in the partnership to be purchased for a buyout price determined under subsection (b). (b) Buyout price.--The buyout price of the interest of a person dissociated as a partner is the amount that would have been distributable to the person under section 8486(b) (relating to disposition of assets in winding up and required contributions) if, on the date of dissociation, the assets of the partnership were sold and the partnership was wound up, with the sale price equal to the greater of: (1) the liquidation value; or (2) the value based on a sale of the entire business as a going concern without the person. (c) Interest and offsets.--Interest accrues on the buyout price from the date of dissociation to the date of payment, except that damages for wrongful dissociation under section 8462(b) (relating to power to dissociate as partner and wrongful dissociation) and all other amounts owing, whether or not presently due, from the person dissociated as a partner to the partnership must be offset against the buyout price. (d) Indemnification.--A partnership shall defend, indemnify and hold harmless a person dissociated as a partner whose interest is being purchased against all partnership liabilities, whether incurred before or after the dissociation, except liabilities incurred by an act of the person under section 8472 (relating to power to bind and liability of person dissociated as partner). (e) Payment of partnership's estimate.--If an agreement for the purchase of the interest of a person dissociated as a partner is not reached within 120 days after a demand in record form for payment, the partnership shall pay, or cause to be paid, in money to the person the amount the partnership estimates to be the buyout price and accrued interest, reduced by any offsets and accrued interest under subsection (c). (f) Buyout of deferred payment.--If a deferred payment is authorized under subsection (h), the partnership may tender an offer in record form to pay the amount it estimates to be the buyout price and accrued interest, reduced by any offsets under subsection (c), stating the time of payment, the amount and type of security for payment and the other terms and conditions of the obligation. (g) Information accompanying payment.--The payment or tender required by subsection (e) or (f) must be accompanied by the following: (1) a statement of partnership assets and liabilities as of the date of dissociation; (2) the latest available partnership balance sheet and income statement, if any; (3) an explanation of how the estimated amount of the payment was calculated; and (4) notice in record form that the payment is in full satisfaction of the obligation to purchase unless, within 120 days after the notice, the person dissociated as a partner commences an action to determine the buyout price, any offsets under subsection (c) or other terms of the obligation to purchase. (h) Deferred payment on wrongful dissociation.--A person that wrongfully dissociates as a partner before the expiration of a definite term or the completion of a particular undertaking is not entitled to payment of any part of the buyout price until the expiration of the term or completion of the undertaking, unless the person establishes to the satisfaction of the court that earlier payment will not cause undue hardship to the business of the partnership. A deferred payment must be adequately secured and bear interest. (i) Right to bring action.--A person dissociated as a partner may maintain an action against the partnership, under section 8448(b) (relating to actions by partnership and partners), to determine the buyout price of that person's interest, any offsets under subsection (c) or other terms of the obligation to purchase. The action must be commenced within 120 days after the partnership has tendered payment or an offer to pay or within one year after demand in record form for payment if no payment or offer to pay is tendered. The court shall determine the buyout price of the person's interest, any offset due under subsection (c), and accrued interest, and enter judgment for any additional payment or refund. If deferred payment is authorized under subsection (h), the court shall also determine the security for payment and other terms of the obligation to purchase. The court may assess reasonable attorney fees and the fees and expenses of appraisers or other experts for a party to the action, in amounts the court finds equitable, against a party that the court finds acted arbitrarily, vexatiously or not in good faith. The finding may be based on the partnership's failure to tender payment or an offer to pay or to comply with subsection (g). Cross References. Section 8471 is referred to in sections 8417, 8445 of this title.

15 Pa.C.S. § 8472 Power to bind and liability of person dissociated as partner.

(a) When partnership bound.--After a person is dissociated as a partner without the dissociation resulting in a dissolution and winding up of the partnership business and before the partnership is merged or divided out of existence, converted or domesticated under Chapter 3 (relating to entity transactions), or dissolved, the partnership is bound by an act of the person only if: (1) the act would have bound the partnership under section 8431 (relating to partner agent of partnership) before dissociation; and (2) at the time the other party enters into the transaction: (i) less than two years have passed since the dissociation; and (ii) the other party does not know or have notice of the dissociation and reasonably believes that the person is a partner. (b) Liability of person dissociated as partner.--If a partnership is bound under subsection (a), the person dissociated as a partner which caused the partnership to be bound is liable: (1) to the partnership for any damage caused to the partnership arising from the obligation incurred under subsection (a); and (2) if a partner or another person dissociated as a partner is liable for the obligation, to the partner or other person for any damage caused to the partner or other person arising from the liability. Cross References. Section 8472 is referred to in section 8471 of this title.

15 Pa.C.S. § 8473 Liability of person dissociated as partner to other persons.

(a) General rule.--Except as provided in subsection (b), a person dissociated as a partner is not liable for a partnership obligation incurred after dissociation. (b) Exception.--A person that is dissociated as a partner is liable on a transaction entered into by the partnership after the dissociation only if: (1) a partner would be liable on the transaction; and (2) at the time the other party enters into the transaction: (i) less than two years have passed since the dissociation; and (ii) the other party does not have knowledge or notice of the dissociation and reasonably believes that the person is a partner. (c) Constructive release by creditor.--A person dissociated as a partner is released from liability for a debt, obligation or other liability of the partnership if the partnership's creditor, with knowledge or notice of the person's dissociation but without the person's consent, agrees to a material alteration in the nature or time of payment of the debt, obligation or other liability. The release from liability under this subsection applies whether the liability arises directly or indirectly, by way of contribution or otherwise, but only if the liability arises solely by reason of having been a partner. Cross References. Section 8473 is referred to in sections 8242, 8244, 8486 of this title.

15 Pa.C.S. § 8474 Certificate of dissociation.

(a) Right to file certificate.--A person dissociated as a partner or the partnership may deliver to the department for filing a certificate of dissociation stating: (1) the name of the partnership; (2) if the partnership is a limited liability partnership, subject to section 109 (relating to name of commercial registered office provider in lieu of registered address), the address, including street and number, if any, of its registered office; and (3) the name of the person and that the person has dissociated from the partnership. (b) Effect of certificate.--A certificate of dissociation is a limitation on the authority of a person dissociated as a partner for the purposes of section 8433 (relating to certificate of partnership authority). (c) Cross references.--See: Section 134 (relating to docketing statement). Section 135 (relating to requirements to be met by filed documents). Section 136(c) (relating to processing of documents by Department of State). Section 8413(d)(2) (relating to knowledge and notice). Section 8418 (relating to signing of filed documents). Cross References. Section 8474 is referred to in section 8413 of this title.

15 Pa.C.S. § 8475 Continued use of partnership name.

Continued use of a partnership name, or the name of a person dissociated as a partner as part of the partnership name, by partners continuing the business does not of itself make the person dissociated as a partner liable for an obligation of the partners or the partnership continuing the business.

15 Pa.C.S. § 8481 Events causing dissolution.

(a) General rule.--A partnership is dissolved, and its business shall be wound up, upon the occurrence of any of the following: (1) In a partnership at will, the partnership knows or has notice of a person's express will to withdraw as a partner, other than a partner that has dissociated under section 8461(2), (3), (4), (5), (6), (7), (8), (9) or (10) (relating to events causing dissociation), except that, if the person has specified a withdrawal date later than the date the partnership knew or had notice, on the later date. (2) In a partnership for a definite term or particular undertaking: (i) within 90 days after a person's dissociation by death or otherwise under section 8461(6), (7), (8), (9) or (10) or wrongful dissociation under section 8462(b) (relating to power to dissociate as partner and wrongful dissociation), the affirmative vote or consent of at least half of the remaining partners to wind up the partnership business, for which purpose a person's rightful dissociation under section 8462(b)(2)(i) constitutes that partner's consent to wind up the partnership business; (ii) the affirmative vote or consent of all the partners to wind up the partnership business; or (iii) the expiration of the term or the completion of the undertaking. (3) An event or circumstance that the partnership agreement states causes dissolution. (4) On application by a partner, the entry by the court of an order dissolving the partnership on the grounds that: (i) the conduct of all or substantially all the partnership's business is unlawful; (ii) the economic purpose of the partnership is likely to be unreasonably frustrated; (iii) another partner has engaged in conduct relating to the partnership business which makes it not reasonably practicable to carry on the business in partnership with that partner; or (iv) it is otherwise not reasonably practicable to carry on the partnership business in conformity with the partnership agreement. (5) On application by a transferee, the entry by the court of an order dissolving the partnership on the grounds that it is equitable to wind up the partnership business: (i) after the expiration of the term or completion of the undertaking, if the partnership was for a definite term or particular undertaking at the time of the transfer or entry of the charging order that gave rise to the transfer; or (ii) at any time, if the partnership was a partnership at will at the time of the transfer or entry of the charging order that gave rise to the transfer. (6) The passage of 90 consecutive days during which the partnership does not have at least two partners. (b) Cross reference.--See section 8415(c)(15) (relating to contents of partnership agreement). Cross References. Section 8481 is referred to in sections 8415, 8453, 8471 of this title.

15 Pa.C.S. § 8482 Winding up and filing of certificates.

(a) General rule.--A dissolved partnership shall wind up its business and the partnership continues after dissolution only for the purpose of winding up. (b) Conduct of winding up.--In winding up its business, the partnership: (1) shall discharge the partnership's debts, obligations and other liabilities, settle and close the partnership's business, and marshal and distribute the assets of the partnership; and (2) may: (i) deliver to the department for filing a certificate of dissolution stating: (A) the name of the partnership; (B) if the partnership is a limited liability partnership, subject to section 109 (relating to name of commercial registered office provider in lieu of registered address), the address, including street and number, if any, of its registered office; and (C) that the partnership is dissolved; (ii) preserve the partnership business and property as a going concern for a reasonable time; (iii) prosecute and defend actions and proceedings, whether civil, criminal or administrative; (iv) transfer the partnership's property; (v) settle disputes by mediation or arbitration; (vi) deliver to the department for filing the certificates, if any, required by section 139 (relating to tax clearance of certain fundamental transactions) and a certificate of termination stating: (A) the name of the partnership; (B) if the partnership is a limited liability partnership, subject to section 109, the address, including street and number, if any, of its registered office; and (C) that the partnership is terminated; and (vii) perform other acts necessary or appropriate to the winding up. (c) Participation after dissociation.--A person whose dissociation as a partner resulted in dissolution may participate in winding up as if still a partner, unless the dissociation was wrongful. (d) Conduct of winding up when no partner.--If a dissolved partnership does not have a partner and no person has the right to participate in winding up under subsection (c), the personal representative or guardian of the last person to have been a partner may wind up the partnership's business. If the personal representative or guardian does not exercise that right, a person to wind up the partnership's business may be appointed by the affirmative vote or consent of transferees owning a majority of the rights to receive distributions at the time the consent is to be effective. A person appointed under this subsection has the powers of a partner under section 8484 (relating to power to bind partnership after dissolution) but is not liable for the debts, obligations and other liabilities of the partnership solely by reason of having or exercising those powers or otherwise acting to wind up the partnership's business. (e) Judicial supervision.--On the application of any partner or person entitled under subsection (c) to participate in winding up, a court may order judicial supervision of the winding up of a dissolved partnership, including the appointment of a person to wind up the partnership's business, if: (1) the partnership does not have a partner and within a reasonable time following the dissolution no person has been appointed under subsection (d); or (2) the applicant establishes other good cause. (f) Cross references.--See: Section 134 (relating to docketing statement). Section 135 (relating to requirements to be met by filed documents). Section 136(c) (relating to processing of documents by Department of State). Section 8415(c)(16) (relating to contents of partnership agreement). Section 8418 (relating to signing of filed documents). Cross References. Section 8482 is referred to in sections 139, 8413, 8415, 8418, 8433, 8463, 8485 of this title.

15 Pa.C.S. § 8484 Power to bind partnership after dissolution.

(a) Power of partner.--A partnership is bound by a partner's act after dissolution which: (1) is appropriate for winding up the partnership business; or (2) would have bound the partnership under section 8431 (relating to partner agent of partnership) before dissolution if, at the time the other party enters into the transaction, the other party does not know or have notice of the dissolution. (b) Power of person dissociated as partner.--A person dissociated as a partner binds a partnership through an act occurring after dissolution if: (1) at the time the other party enters into the transaction: (i) less than two years have passed since the dissociation; and (ii) the other party does not know or have notice of the dissociation and reasonably believes that the person is a partner; and (2) the act: (i) is appropriate for winding up the partnership's business; or (ii) would have bound the partnership under section 8431 before dissolution and the other party does not know or have notice of the dissolution at the time the other party enters into the transaction. Cross References. Section 8484 is referred to in sections 8482, 8485 of this title.

15 Pa.C.S. § 8485 Liability after dissolution.

(a) Liability of partner.--If a partner having knowledge of the dissolution causes a partnership to incur an obligation under section 8484(a)(2) (relating to power to bind partnership after dissolution) by an act that is not appropriate for winding up the partnership business, the partner is liable: (1) to the partnership for any damage caused to the partnership arising from the obligation; and (2) if another partner or person dissociated as a partner is liable for the obligation, to that other partner or person for any damage caused to that other partner or person arising from the liability. (b) Liability of person dissociated as partner.--Except as provided under subsection (c), if a person dissociated as a partner causes a partnership to incur an obligation under section 8484(b), the person is liable: (1) to the partnership for any damage caused to the partnership arising from the obligation; and (2) if a partner or another person dissociated as a partner is liable for the obligation, to the partner or other person for any damage caused to the partner or other person arising from the obligation. (c) Exception in winding up.--A person dissociated as a partner is not liable under subsection (b) if: (1) section 8482(c) (relating to winding up and filing of certificates) permits the person to participate in winding up; and (2) the act that causes the partnership to be bound under section 8484(b) is appropriate for winding up the partnership's business. Cross References. Section 8485 is referred to in sections 8242, 8244 of this title.

15 Pa.C.S. § 8486 Disposition of assets in winding up and required contributions.

(a) Creditors.--In winding up its business, a partnership shall apply its assets, including the contributions required by this section, to discharge the partnership's obligations to creditors, including partners that are creditors. (b) Surplus.--After a partnership complies with subsection (a), any surplus shall be distributed in the following order, subject to any charging order in effect under section 8454 (relating to charging order): (1) to each owner of a transferable interest that reflects contributions made and not previously returned, an amount equal to the value of the unreturned contributions; and (2) among owners of transferable interests in proportion to their respective rights to share in distributions immediately before the dissolution of the partnership. (c) Insufficient assets.--If a partnership's assets are insufficient to satisfy all its obligations under subsection (a), with respect to each unsatisfied obligation incurred when the partnership was not a limited liability partnership, the following rules apply: (1) Each person that was a partner when the obligation was incurred and that has not been released from the obligation under section 8473(c) (relating to liability of person dissociated as partner to other persons) shall contribute to the partnership for the purpose of enabling the partnership to satisfy the obligation. The contribution due from each of those persons is in proportion to the right to receive distributions when the obligation was incurred. (2) If a person does not contribute the full amount required under paragraph (1) with respect to an unsatisfied obligation of the partnership, the other persons required to contribute under paragraph (1) on account of the obligation shall contribute the additional amount necessary to discharge the obligation. The additional contribution due from each of those other persons is in proportion to the right to receive distributions when the obligation was incurred. (3) If a person does not make the additional contribution required under paragraph (2), further additional contributions are determined and due in the same manner as provided in that paragraph. (d) Recovery of additional contributions.--A person that makes an additional contribution under subsection (c)(2) or (3) may recover from any person whose failure to contribute under subsection (c)(1) or (2) necessitated the additional contribution. A person may not recover under this subsection more than the amount additionally contributed. A person's liability under this subsection shall not exceed the amount the person failed to contribute. (e) Distributions when surplus insufficient.--If a partnership does not have sufficient surplus to comply with subsection (b)(1), the following shall apply: (1) If the partnership has been a limited liability partnership at any time during its existence, any surplus must be distributed among the owners of transferable interests in proportion to the value of the respective unreturned contributions. (2) If the partnership has never been a limited liability partnership, the partners and any person whose dissociation resulted in dissolution shall contribute to the partnership funds sufficient to cause the insufficiency under subsection (b)(1) to be allocated consistently with section 8441(a) (relating to partner's rights and duties). (f) Form of payment.--All distributions made under subsections (b) and (c) must be paid in money. Cross References. Section 8486 is referred to in sections 8231, 8445, 8471 of this title.

Source: Open US Law by Vaquill AI (CC BY 4.0)URL: https://www.palegis.us/statutes/consolidated/view-statute?txtType=HTM&ttl=15Fetched: 10/16/2026