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2023 New Jersey Revised Statutes › Title 42 - Partnerships and Partnership Associations › Section 42:1A-4 - Agreement governing partners, partnership; prohibited terms

42:1A-4. Agreement governing partners, partnership; prohibited terms
4. a. Except as otherwise provided in subsection b. of this section, relations among the partners and between the partners and the partnership are governed by the partnership agreement. To the extent the partnership agreement does not otherwise provide, this act governs relations among the partners and between the partners and the partnership.
b. The partnership agreement shall not:
(1) unreasonably restrict the right of access to books and records under subsection b. of section 23 of this act;
(2) reduce the duty of loyalty under subsection b. of section 24 or subsection b. of section 33 of this act so as to permit a partner to engage in conduct which is intentionally injurious to the partnership;
(3) unreasonably reduce the duty of care under subsection c. of section 24 or paragraph (3) of subsection b. of section 33 of this act;
(4) vary the right of a court to expel a partner in the events specified in subsection e. of section 31 of this act;
(5) vary the requirement to wind up the partnership business in cases specified in subsection d., e. or f. of section 39 of this act;
(6) vary the law applicable to a limited liability partnership under subsection b. of section 7 of this act; or
(7) restrict rights of third parties under this act.
L.2000,c.161,s.4.
2023 New Jersey Revised Statutes › Title 42 - Partnerships and Partnership Associations › Section 42:1A-5 - Principles of law and equity applicable; rate of interest determined

42:1A-5. Principles of law and equity applicable; rate of interest determined
5. a. Unless displaced by particular provisions of this act, the principles of law and equity supplement this act.
b. If an obligation to pay interest arises under this act and the rate is not specified, the rate of interest shall be at the rates provided by the Rules Governing the Courts of the State of New Jersey for the applicable period of time.
L.2000,c.161,s.5.
2023 New Jersey Revised Statutes › Title 42 - Partnerships and Partnership Associations › Section 42:1A-6 - Statements filed in the Division of Commercial Recording; effects, fees

42:1A-6. Statements filed in the Division of Commercial Recording; effects, fees
6. a. A statement may be filed in the office of the Division of Commercial Recording in the Department of the Treasury. A certified copy of a statement that is filed in an office in another state may be filed in the office of the Division of Commercial Recording in the Department of the Treasury. This statement may indicate the authority of one or more particular partners with respect to any matter or class of matters. In addition, either filing has the effect provided in this act with respect to partnership property located in or transactions that occur in this State.
b. A certified copy of a statement that has been filed in the office of the Division of Commercial Recording in the Department of the Treasury and recorded in the office of the county recording officer has the effect provided for recorded statements in this act. A recorded statement that is not a certified copy of a statement filed in the office of the Division of Commercial Recording in the Department of the Treasury does not have the effect provided for recorded statements in this act.
c. A statement filed by a partnership shall be executed by at least two partners. Other statements shall be executed by a partner or other person authorized by this act. An individual who executes a statement as, or on behalf of, a partner or other person named as a partner in a statement shall personally declare under penalty of perjury that the contents of the statement are accurate.
d. A person authorized by this act to file a statement may amend or cancel the statement by filing an amendment or cancellation that names the partnership, identifies the statement, and states the substance of the amendment or cancellation.
e. A person who files a statement pursuant to this section shall promptly send a copy of the statement to every nonfiling partner and to any other person named as a partner in the statement. Failure to send a copy of a statement to a partner or other person does not limit the effectiveness of the statement as to a person not a partner.
f. The Division of Commercial Recording in the Department of the Treasury may collect a fee for filing or providing a certified copy of a statement. The county recording officer may collect a fee for recording a statement.
L.2000,c.161,s.6.
2023 New Jersey Revised Statutes › Title 42 - Partnerships and Partnership Associations › Section 42:1A-7 - Law governing relations among partners, between partners and partnership

42:1A-7. Law governing relations among partners, between partners and partnership
7. a. Except as otherwise provided in subsection b. of this section, the law of the jurisdiction in which a partnership has its chief executive office governs relations among the partners and between the partners and the partnership.
b. The law of this State governs relations among the partners and between the partners and the partnership and the liability of partners for an obligation of a limited liability partnership.
L.2000,c.161,s.7.
2023 New Jersey Revised Statutes › Title 42 - Partnerships and Partnership Associations › Section 42:1A-9 - Entity as partnership; limited partnership

42:1A-9. Entity as partnership; limited partnership
9. a. A partnership is an entity distinct from its partners.
b. A limited liability partnership continues to be the same entity that existed before the filing of a statement of qualification under section 47 of this act.
L.2000,c.161,s.9.
2023 New Jersey Revised Statutes › Title 42 - Partnerships and Partnership Associations › Section 42:1A-10 - Formation of partnership; rules for determining formation

42:1A-10. Formation of partnership; rules for determining formation
10. a. Except as otherwise provided in subsection b. of this section, 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. An association formed under a statute other than this act, a predecessor statute, or a comparable statute of another jurisdiction is not a partnership under this act.
c. 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:
(a) of a debt by installments or otherwise;
(b) for services as an independent contractor or of wages or other compensation to an employee;
(c) of rent;
(d) of an annuity or other retirement or health benefit to a beneficiary, representative, or designee of a deceased or retired partner;
(e) 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, or rights to income, proceeds, or increase in value derived from the collateral; or
(f) for the sale of the goodwill of a business or other property by installments or otherwise.
L.2000,c.161,s.10.
2023 New Jersey Revised Statutes › Title 42 - Partnerships and Partnership Associations › Section 42:1A-12 - Acquisition of partnership property; presumptions

42:1A-12. Acquisition of partnership property; presumptions
12. a. Property is partnership property if acquired in the name of:
(1) the partnership; 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 is acquired in the name of the partnership by a transfer to:
(1) the partnership in its name; or
(2) 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.
c. 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.
d. Property acquired in the name of one or more of the partners, without 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 without use of partnership assets, is presumed to be separate property, even if used for partnership purposes.
L.2000,c.161,s.12.
2023 New Jersey Revised Statutes › Title 42 - Partnerships and Partnership Associations › Section 42:1A-13 - Partner considered agent of partnership; limitation

42:1A-13. Partner considered agent of partnership; limitation
13. Subject to the effect of a statement of partnership authority under section 15 of this act:
a. Each partner is an agent of the partnership for the purpose of its business. An act of a partner, including the execution 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 had no authority to act for the partnership in the particular matter and the person with whom the partner was dealing knew or had received a notification that the partner lacked authority.
b. An act of a partner which is not apparently for carrying on in the ordinary course the partnership business or business of the kind carried on by the partnership binds the partnership only if the act was authorized by the other partners.
L.2000,c.161,s.13.
2023 New Jersey Revised Statutes › Title 42 - Partnerships and Partnership Associations › Section 42:1A-14 - Transfer of partnership property

42:1A-14. Transfer of partnership property
14. a. Partnership property may be transferred as follows:
(1) subject to the effect of a statement of partnership authority under section 15 of this act, partnership property held in the name of the partnership may be transferred by an instrument of transfer executed 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 executed 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 executed by the persons in whose name the property is held.
b. A partnership may recover partnership property from a transferee only if it proves that execution of the instrument of initial transfer did not bind the partnership under section 13 of this act and:
(1) as to a subsequent transferee who gave value for property transferred under paragraphs (1) and (2) of subsection a. of this section, proves that the subsequent transferee knew or had received a notification that the person who executed the instrument of initial transfer lacked authority to bind the partnership; or
(2) as to a transferee who gave value for property transferred under paragraph (3) of subsection a. of this section, proves that the transferee knew or had received a notification that the property was partnership property and that the person who executed the instrument of initial transfer lacked authority to bind the partnership.
c. 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. of this section, from any earlier transferee of the property.
d. If a person holds all of the partners' interests in the partnership, all of the partnership property vests in that person. The person may execute a document in the name of the partnership to evidence vesting of the property in that person and may file or record the document.
L.2000,c.161,s.14.
2023 New Jersey Revised Statutes › Title 42 - Partnerships and Partnership Associations › Section 42:1A-16 - Statement of denial; limitation on authority

42:1A-16. Statement of denial; limitation on authority
16. A partner or other person named as a partner in a filed statement of partnership authority or in a list maintained by an agent pursuant to subsection b. of section 15 of this act may file a statement of denial stating the name of the partnership and the fact that is being denied, which may include denial of a person's authority or status as a partner. A statement of denial is a limitation on authority as provided in subsections d. and e. of section 15 of this act.
L.2000,c.161,s.16.
2023 New Jersey Revised Statutes › Title 42 - Partnerships and Partnership Associations › Section 42:1A-17 - Partnership liable for loss, injury

42:1A-17. Partnership liable for loss, injury
17. a. 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 omission, or other actionable conduct, of a partner acting in the ordinary course of business of the partnership or with the authority of the partnership.
b. If, in the course of the partnership's business or while acting with the 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.
L.2000,c.161,s.17.
2023 New Jersey Revised Statutes › Title 42 - Partnerships and Partnership Associations › Section 42:1A-18 - Partnership obligations; liability of partners.

42:1A-18 Partnership obligations; liability of partners.
18. a. Except as otherwise provided in subsections b. and c. of this section, all partners are liable jointly and severally for all obligations of the partnership unless otherwise agreed by the claimant or provided by law. In addition, the entity is also liable for all obligations of the partnership as provided by P.L.2019, c.320 (C.54A:12-1 et al.).
b. A person admitted as a partner into an existing partnership is not personally liable for any partnership obligation incurred before the person's admission as a partner.
c. An obligation of a partnership incurred while the partnership is a limited liability partnership, whether arising in contract, tort, or otherwise, is solely the obligation of the partnership. A partner is not personally liable, directly or indirectly, by way of contribution or otherwise, for such an obligation solely by reason of being or so acting as a partner. This subsection applies notwithstanding anything inconsistent in the partnership agreement that existed immediately before the vote required to become a limited liability partnership under subsection b. of section 47 of the "Uniform Partnership Act (1996)," P.L.2000, c.161 (C.42:1A-47).
d. In addition, the entity is also liable for all obligations of the partnership as provided by P.L.2022, c.133 (C.54:50-47 et al.).
L.2000, c.161, s.18; amended 2019, c.320, s.10; 2022, c.133, s.14.
2023 New Jersey Revised Statutes › Title 42 - Partnerships and Partnership Associations › Section 42:1A-19 - Suits, actions by or against partnership; satisfaction of judgments

42:1A-19. Suits, actions by or against partnership; satisfaction of judgments
19. a. A partnership may sue and be sued in the name of the partnership.
b. An action may be brought against the partnership and, to the extent not inconsistent with section 18 of this act, any or all of the partners in the same action or in separate actions.
c. A judgment against a partnership is not by itself a judgment against a partner. A judgment against a partnership shall not be satisfied from a partner's assets unless there is also a judgment against the partner.
d. A judgment creditor of a partner shall not levy execution against the assets of the partner to satisfy a judgment based on a claim against the partnership unless the partner is personally liable for the claim under section 18 of this act and:
(1) a judgment based on the same claim has been obtained against the partnership and a writ of execution on the judgment has been returned unsatisfied in whole or in part;
(2) the partnership is a debtor in bankruptcy;
(3) the partner has agreed that the creditor need not exhaust partnership assets;
(4) a court grants permission to the judgment creditor to levy execution against the assets of a partner based on a finding that partnership assets subject to execution are clearly insufficient to satisfy the judgment, that exhaustion of partnership assets is excessively burdensome, or that the grant of permission is an appropriate exercise of the court's equitable powers; or
(5) liability is imposed on the partner by law or contract independent of the existence of the partnership.
e. This section applies to any partnership liability or obligation resulting from a representation by a partner or purported partner under section 20 of this act.
L.2000,c.161,s.19.
2023 New Jersey Revised Statutes › Title 42 - Partnerships and Partnership Associations › Section 42:1A-20 - Partnership by representation; liability

42:1A-20. Partnership by representation; liability
20. a. 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 liable with respect to that liability jointly and severally with any other person consenting to the representation.
b. If a person is thus represented 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 of the partners of the existing partnership consent to the representation, a partnership act or obligation results. If fewer than all of 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. A person is not liable as a partner merely because the person is named by another in a statement of partnership authority.
d. A person does not continue to be liable as a partner merely because of a failure to file a statement of dissociation or to amend a statement of partnership authority to indicate the partner's dissociation from the partnership.
e. Except as otherwise provided in subsections a. and b. of this section, persons who are not partners as to each other are not liable as partners to other persons.
L.2000,c.161,s.20.
2023 New Jersey Revised Statutes › Title 42 - Partnerships and Partnership Associations › Section 42:1A-21 - Rights and duties of partners

42:1A-21. Rights and duties of partners
21. a. Each partner is deemed to have an account that is:
(1) credited with an amount equal to the money plus the value of any other property, net of the amount of any liabilities, the partner contributes to the partnership and the partner's share of the partnership profits; and
(2) charged with an amount equal to the money plus the value of any other property, net of the amount of any liabilities, distributed by the partnership to the partner and the partner's share of the partnership losses.
b. Each partner is entitled to an equal share of the partnership profits and is chargeable with a share of the partnership losses in proportion to the partner's share of the profits.
c. A partnership shall reimburse a partner for payments made and indemnify a partner for liabilities incurred by the partner in the ordinary course of the business of the partnership or for the preservation of its business or property.
d. A partnership shall reimburse a partner for an advance to the partnership beyond the amount of capital the partner agreed to contribute.
e. A payment or advance made by a partner which gives rise to a partnership obligation under subsection c. or d. of this section constitutes a loan to the partnership which accrues interest from the date of the payment or advance.
f. Each partner has equal rights in the management and conduct of the partnership business.
g. A partner shall use or possess partnership property only on behalf of the partnership.
h. 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.
i. A person shall become a partner only with the consent of all of the partners.
j. A difference arising as to a matter in the ordinary course of business of a partnership shall 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 shall be undertaken only with the consent of all of the partners.
k. This section shall not affect the obligations of a partnership to other persons under section 13 of this act.
L.2000,c.161,s.21.
2023 New Jersey Revised Statutes › Title 42 - Partnerships and Partnership Associations › Section 42:1A-23 - Books, records; rendering of information

42:1A-23. Books, records; rendering of information
23. a. A partnership shall keep its books and records, if any, at its chief executive office.
b. A partnership shall provide partners and their agents and attorneys access to its books and records. It shall provide former partners and their agents and attorneys access to books and records pertaining to the period during which they were partners. The right of access provides the opportunity to inspect and copy books and records during ordinary business hours. A partnership may impose a reasonable charge, covering the costs of labor and material, for copies of documents furnished.
c. Each partner and the partnership shall furnish to a partner, and to the legal representative of a deceased partner or partner under legal disability:
(1) without demand, any information concerning the partnership's business and affairs reasonably required for the proper exercise of the partner's rights and duties under the partnership agreement or this act; and
(2) on demand, any other information concerning the partnership's business and affairs, except to the extent the demand or the information demanded is unreasonable or otherwise improper under the circumstances.
L.2000,c.161,s.23.
2023 New Jersey Revised Statutes › Title 42 - Partnerships and Partnership Associations › Section 42:1A-24 - Fiduciary duties

42:1A-24. Fiduciary duties
24. a. The only fiduciary duties a partner owes to the partnership and the other partners are the duty of loyalty and the duty of care set forth in subsections b. and c. of this section, as those duties may be clarified or limited in the partnership agreement, subject to subsection b. of section 4 of this act.
b. A partner's duty of loyalty to the partnership and the other partners is limited to the following:
(1) to account to the partnership and hold as trustee for it any property, profit, or benefit derived by the partner in the conduct and winding up of the partnership business or derived from a use by the partner of partnership property, including the appropriation of a partnership opportunity;
(2) to refrain from knowingly dealing with the partnership in the conduct or winding up of the partnership business as or on behalf of a party having an interest materially adverse to the partnership; and
(3) to refrain from actions intended to cause material injury to the partnership in the conduct of the partnership business before the dissolution of the partnership.
c. A partner's duty of care to the partnership and the other partners in the conduct and winding up of the partnership business is limited to refraining from engaging in grossly negligent or reckless conduct, intentional misconduct, or a knowing violation of law.
d. A partner does not violate a duty or obligation under this act or under the partnership agreement merely because the partner's conduct furthers the partner's own interest.
e. A partner may lend money to and transact other business with the partnership, and as to each loan or transaction the rights and obligations of the partner are the same as those of a person who is not a partner, subject to other applicable law.
f. This section applies to a person winding up the partnership business as the personal or legal representative of the last surviving partner as if the person were a partner.
L.2000,c.161,s.24.
2023 New Jersey Revised Statutes › Title 42 - Partnerships and Partnership Associations › Section 42:1A-25 - Legal actions

42:1A-25. Legal actions
25. a. A partnership may maintain an action against a partner for a breach of the partnership agreement, or for the violation of a duty to the partnership, causing harm to the partnership.
b. A partner may maintain an action against the partnership or another partner for legal or equitable relief, with or without an accounting as to partnership business, to:
(1) enforce the partner's rights under the partnership agreement;
(2) enforce the partner's rights under this act, including:
(a) the partner's rights under section 21, 23 or 24 of this act;
(b) the partner's right on dissociation to have the partner's interest in the partnership purchased pursuant to section 34 of this act or enforce any other right under Article 6 or 7 of this act; or
(c) the partner's right to compel a dissolution and winding up of the partnership business under section 39 of this act or enforce any other right under Article 8 of this act; or
(3) enforce the rights and otherwise protect the interests of the partner, including rights and interests arising independently of the partnership relationship.
c. The accrual of, and any time limitation on, a right of action for a remedy under this section is governed by other law. A right to an accounting upon a dissolution and winding up does not revive a claim barred by law.
L.2000,c.161,s.25.
2023 New Jersey Revised Statutes › Title 42 - Partnerships and Partnership Associations › Section 42:1A-26 - Continuation of partnership beyond term or undertaking

42:1A-26. Continuation of partnership beyond term or undertaking
26. a. 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. If the partners, or those of them 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.
L.2000,c.161,s.26.
2023 New Jersey Revised Statutes › Title 42 - Partnerships and Partnership Associations › Section 42:1A-28 - Transferable interest of partner

42:1A-28. Transferable interest of partner
28. The only transferable interest of a partner in the partnership is the partner's share of the profits and losses of the partnership and the partner's right to receive distributions. The interest is personal property.
L.2000,c.161,s.28.
2023 New Jersey Revised Statutes › Title 42 - Partnerships and Partnership Associations › Section 42:1A-29 - Transfer of partner's interest

42:1A-29. Transfer of partner's interest
29. a. A transfer, in whole or in part, of a partner's transferable interest in the partnership:
(1) is permissible;
(2) does not by itself cause the partner's dissociation or a dissolution and winding up of the partnership business; and
(3) does not, as against the other partners or the partnership, entitle the transferee, during the continuance of the partnership, to participate in the management or conduct of the partnership business, to require access to information concerning partnership transactions, or to inspect or copy the partnership books or records.
b. A transferee of a partner's transferable interest in the partnership has a right:
(1) to receive, in accordance with the transfer, distributions to which the transferor would otherwise be entitled;
(2) to receive upon the dissolution and winding up of the partnership business, in accordance with the transfer, the net amount otherwise distributable to the transferor; and
(3) to seek, under subsection f. of section 39 of this act, a judicial determination that it is equitable to wind up the partnership business.
c. In a dissolution and winding up, a transferee is entitled to an account of partnership transactions only from the date of the latest account agreed to by all of the partners.
d. Upon transfer, the transferor retains the rights and duties of a partner other than the interest in distributions transferred.
e. A partnership need not give effect to a transferee's rights under this section until it has notice of the transfer.
f. A transfer of a partner's transferable interest in the partnership in violation of a restriction on transfer contained in the partnership agreement is ineffective as to a person having notice of the restriction at the time of transfer.
L.2000,c.161,s.29.
2023 New Jersey Revised Statutes › Title 42 - Partnerships and Partnership Associations › Section 42:1A-30 - Orders charging transferable interests; effects

42:1A-30. Orders charging transferable interests; effects
30. a. On application by a judgment creditor of a partner or of a partner's transferee, a court having jurisdiction may charge the transferable interest of the judgment debtor to satisfy the judgment. The court order charging the transferable interest of a partner or of a partner's transferee shall be the sole remedy of a judgment creditor, who shall have no right under this act or any other State law to interfere with the management or to force dissolution of the partnership or to seek an order of the court requiring a foreclosure sale of the transferable interest. The court may appoint a receiver of the share of the distributions due or to become due to the judgment debtor in respect of the partnership and make all other orders, directions, accounts, and inquiries the judgment debtor might have made or which the circumstances of the case may require.
b. A charging order constitutes a right to receive distributions made with respect to the judgment debtor's transferable interest in the partnership.
c. At any time before foreclosure, an interest charged may be redeemed: (1) by the judgment debtor;
(2) with property other than partnership property, by one or more of the other partners; or
(3) with partnership property, by one or more of the other partners with the consent of all of the partners whose interests are not so charged.
d. This act does not deprive a partner of a right under exemption laws with respect to the partner's interest in the partnership.
e. This section provides the exclusive remedy by which a judgment creditor of a partner or partner's transferee may satisfy a judgment out of the judgment debtor's transferable interest in the partnership.
L.2000,c.161,s.30.
2023 New Jersey Revised Statutes › Title 42 - Partnerships and Partnership Associations › Section 42:1A-32 - Dissociation of partners; wrongful conditions

42:1A-32. Dissociation of partners; wrongful conditions
32. a. A partner has the power to dissociate at any time, rightfully or wrongfully, by express will pursuant to subsection a. of section 31 of this act.
b. A partner's dissociation is wrongful only if:
(1) it 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, before the expiration of the term or the completion of the undertaking:
(a) the partner withdraws by express will, unless the withdrawal follows within 90 days after another partner's dissociation by death or otherwise under subsections f. through j. of section 31 of this act or wrongful dissociation under this subsection;
(b) the partner is expelled by judicial determination under subsection e. of section 31 of this act;
(c) the partner is dissociated by becoming a debtor in bankruptcy; or
(d) in the case of a partner who is not an individual, trust other than a business trust, or estate, the partner is expelled or otherwise dissociated because it willfully dissolved or terminated.
c. A partner who wrongfully dissociates is liable to the partnership and to the other partners for damages caused by the dissociation. The liability is in addition to any other obligation of the partner to the partnership or to the other partners.
L.2000,c.161,s.32.
2023 New Jersey Revised Statutes › Title 42 - Partnerships and Partnership Associations › Section 42:1A-33 - Dissociation; effects on partnership, partner

42:1A-33. Dissociation; effects on partnership, partner
33. a. If a partner's dissociation results in a dissolution and winding up of the partnership business, Article 8 of this act applies; otherwise, Article 7 of this act applies.
b. Upon a partner's dissociation:
(1) the partner's right to participate in the management and conduct of the partnership business terminates, except as otherwise provided in section 41 of this act;
(2) the partner's duty of loyalty under paragraph (3) of subsection b. of section 24 of this act terminates; and
(3) the partner's duty of loyalty under paragraphs (1) and (2) of subsection b. and duty of care under subsection c. of section 24 of this act continue only with regard to matters arising and events occurring before the partner's dissociation, unless the partner participates in winding up the partnership's business pursuant to section 41 of this act.
L.2000,c.161,s.33.
2023 New Jersey Revised Statutes › Title 42 - Partnerships and Partnership Associations › Section 42:1A-35 - Partnership bound by act of dissociated partner; conditions; liability

42:1A-35. Partnership bound by act of dissociated partner; conditions; liability
35. a. For two years after a partner dissociates without resulting in a dissolution and winding up of the partnership business, the partnership, including a surviving partnership under Article 9 of this act, is bound by an act of the dissociated partner which would have bound the partnership under section 13 of this act before dissociation only if at the time of entering into the transaction the other party:
(1) reasonably believed that the dissociated partner was then a partner;
(2) did not have notice of the partner's dissociation; and
(3) is not deemed to have had knowledge under subsection e. of section 15 or notice under subsection c. of section 37 of this act.
b. A dissociated partner is liable to the partnership for any damage caused to the partnership arising from an obligation incurred by the dissociated partner after dissociation for which the partnership is liable under subsection a. of this section.
L.2000,c.161,s.35.
2023 New Jersey Revised Statutes › Title 42 - Partnerships and Partnership Associations › Section 42:1A-36 - Dissociated partner's liability

42:1A-36. Dissociated partner's liability
36. a. A partner's dissociation does not of itself discharge the partner's liability for a partnership obligation incurred before dissociation. A dissociated partner is not liable for a partnership obligation incurred after dissociation, except as otherwise provided in subsection b. of this section.
b. A partner who dissociates without resulting in a dissolution and winding up of the partnership business is liable as a partner to the other party in a transaction entered into by the partnership, or a surviving partnership under Article 9 of this act, within two years after the partner's dissociation, only if the partner is liable for the obligation under section 18 of this act and at the time of entering into the transaction the other party:
(1) reasonably believed that the dissociated partner was then a partner;
(2) did not have notice of the partner's dissociation; and
(3) is not deemed to have had knowledge under subsection e. of section 15 or notice under section subsection c. of section 37 of this act.
c. By agreement with the partnership creditor and the partners continuing the business, a dissociated partner may be released from liability for a partnership obligation.
d. A dissociated partner is released from liability for a partnership obligation if a partnership creditor, with notice of the partner's dissociation but without the partner's consent, agrees to a material alteration in the nature or time of payment of a partnership obligation.
L.2000,c.161,s.36.
2023 New Jersey Revised Statutes › Title 42 - Partnerships and Partnership Associations › Section 42:1A-37 - Statement of dissociation

42:1A-37. Statement of dissociation
37. a. A dissociated partner or the partnership may file a statement of dissociation stating the name of the partnership and that the partner is dissociated from the partnership.
b. A statement of dissociation is a limitation on the authority of a dissociated partner for the purposes of subsections d. and e. of section 15 of this act.
c. For the purposes of paragraph (3) of subsection a. of section 35 and paragraph (3) of subsection b. of section 36 of this act, a person not a partner is deemed to have notice of the dissociation 90 days after the statement of dissociation is filed.
L.2000,c.161,s.37.
2023 New Jersey Revised Statutes › Title 42 - Partnerships and Partnership Associations › Section 42:1A-38 - Continued use of name relative to liability

42:1A-38. Continued use of name relative to liability
38. Continued use of a partnership name, or a dissociated partner's name as part thereof, by partners continuing the business does not of itself make the dissociated partner liable for an obligation of the partners or the partnership continuing the business.
L.2000,c.161,s.38.
2023 New Jersey Revised Statutes › Title 42 - Partnerships and Partnership Associations › Section 42:1A-39 - Dissolution of partnership; winding up, event causing

42:1A-39. Dissolution of partnership; winding up, event causing
39. A partnership is dissolved, and its business shall be wound up, only upon the occurrence of any of the following events:
a. In a partnership at will, the partnership's having notice from a partner, other than a partner who is dissociated under subsections b. through j. of section 31 of this act, of that partner's express will to withdraw as a partner, or on a later date specified by the partner, unless the partnership agreement provides that no dissolution occurs until 90 days after the partnership having received notice of a partner's express will to withdraw as a partner, a majority in interest of the remaining parties, including partners who have rightfully dissociated pursuant to subparagraph (a) of paragraph (2) of subsection b. of section 32 of this act, agree to continue the partnership;
b. In a partnership for a definite term or particular undertaking:
(1) the expiration of 90 days after a partner's dissociation by death or otherwise under subsections f. through j. of section 31 of this act or wrongful dissociation under subsection b. of section 32 of this act, unless before that time a majority in interest of the remaining partners, including partners who have rightfully dissociated pursuant to subparagraph (a) of paragraph (2) of subsection b. of section 32 of this act, agree to continue the partnership;
(2) the express will of all of the partners to wind up the partnership business; or
(3) the expiration of the term or the completion of the undertaking;
c. An event agreed to in the partnership agreement resulting in the winding up of the partnership business;
d. An event that makes it unlawful for all or substantially all of the business of the partnership to be continued, but a cure of illegality within 90 days after notice to the partnership of the event is effective retroactively to the date of the event for purposes of this section;
e. On application by a partner, a judicial determination that:
(1) the economic purpose of the partnership is likely to be unreasonably frustrated;
(2) 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
(3) it is not otherwise reasonably practicable to carry on the partnership business in conformity with the partnership agreement; or
f. On application by a transferee of a partner's transferable interest, a judicial determination that it is equitable to wind up the partnership business:
(1) 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
(2) 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.
L.2000,c.161,s.39.
2023 New Jersey Revised Statutes › Title 42 - Partnerships and Partnership Associations › Section 42:1A-40 - Dissolution, continuation for purpose of winding up

42:1A-40. Dissolution, continuation for purpose of winding up
40. a. Subject to subsection b. of this section, a partnership continues after dissolution only for the purpose of winding up its business. The partnership is terminated when the winding up of its business is completed.
b. At any time after the dissolution of a partnership and before the winding up of its business is completed, all of the partners, including any dissociating partner other than a wrongfully dissociating partner, may waive the right to have the partnership's business wound up and the partnership terminated. In that event:
(1) the partnership resumes carrying on its business as if dissolution had never occurred, and any liability incurred by the partnership or a partner after the dissolution and before the waiver is determined as if dissolution had never occurred; and
(2) the rights of a third party accruing under subsection a. of section 42 of this act or arising out of conduct in reliance on the dissolution before the third party knew or received a notification of the waiver shall not be adversely affected.
L.2000,c.161,s.40.
2023 New Jersey Revised Statutes › Title 42 - Partnerships and Partnership Associations › Section 42:1A-41 - Postdissolution, rights, duties on winding up

42:1A-41. Postdissolution, rights, duties on winding up
41. a. After dissolution, a partner who has not wrongfully dissociated may participate in winding up the partnership's business, but on application of any partner, partner's legal representative, or transferee, a court of competent jurisdiction, for good cause shown, may order judicial supervision of the winding up.
b. The legal representative of the last surviving partner may wind up a partnership's business.
c. A person winding up a partnership's business shall preserve the partnership business or property as a going concern for a reasonable time, prosecute and defend actions and proceedings, whether civil, criminal, or administrative, settle and close the partnership's business, dispose of and transfer the partnership's property, discharge the partnership's liabilities, distribute the assets of the partnership pursuant to section 45 of this act, settle disputes by mediation or arbitration, and perform other necessary acts.
L.2000,c.161,s.41.
2023 New Jersey Revised Statutes › Title 42 - Partnerships and Partnership Associations › Section 42:1A-42 - Partner's act after dissolution

42:1A-42. Partner's act after dissolution
42. Subject to section 43 of this act, a partnership is bound by a partner's act after dissolution that:
a. Is appropriate for winding up the partnership business; or
b. Would have bound the partnership under section 13 of this act before dissolution, if the other party to the transaction did not have notice of the dissolution.
L.2000,c.161,s.42.
2023 New Jersey Revised Statutes › Title 42 - Partnerships and Partnership Associations › Section 42:1A-43 - Statement of dissolution, effects of filing

42:1A-43. Statement of dissolution, effects of filing
43. a. After dissolution, a partner who has not wrongfully dissociated may file a statement of dissolution stating the name of the partnership and that the partnership has dissolved and is winding up its business.
b. A statement of dissolution cancels a filed statement of partnership authority for the purposes of subsection d. of section 15 of this act and is a limitation on authority for the purposes of subsection e. of section 15 of this act.
c. For the purposes of sections 13 and 42 of this act, a person not a partner is deemed to have notice of the dissolution and the limitation on the partners' authority as a result of the statement of dissolution 90 days after it is filed.
d. After filing and, if appropriate, recording a statement of dissolution, a dissolved partnership may file and, if appropriate, record a statement of partnership authority which will operate with respect to a person not a partner as provided in subsections e. and f. of section 15 of this act in any transaction, whether or not the transaction is appropriate for winding up the partnership business.
L.2000,c.161,s.43.
2023 New Jersey Revised Statutes › Title 42 - Partnerships and Partnership Associations › Section 42:1A-44 - Liability after dissolution

42:1A-44. Liability after dissolution
44. a. Except as otherwise provided in subsection b. of this section and section 18 of this act, after dissolution a partner is liable to the other partners for the partner's share of any partnership liability incurred under section 42 of this act.
b. A partner who, with knowledge of the dissolution, incurs a partnership liability under subsection b. of section 42 of this act by an act that is not appropriate for winding up the partnership business is liable to the partnership for any damage caused to the partnership arising from the liability.
L.2000,c.161,s.44.