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Current as of January 02, 2024 | Updated by Findlaw Staff
(a)(1) If a partner's dissociation results in a dissolution and winding up of the partnership business, part 8 of this chapter applies; otherwise, part 7 of this chapter applies.
(2) Notwithstanding subdivision (a)(1) or part 6, part 7, or part 8 of this chapter to the contrary, with respect to a family partnership:
(A) If a partner dissociates or is dissociated as described in § 61-1-601(1), (6), (7), (8), (9), or (10), then the dissociation:
(i) Does not cause the winding up of the partnership business under part 8 of this chapter; and
(ii) Does not obligate or cause the partnership to purchase the dissociating partner's interest in the partnership as provided under § 61-1-701, unless a written partnership agreement provides otherwise; and
(B) The dissociating partner's interest in the partnership must for all purposes be treated as the interest of a transferee of the dissociating partner's share of the profits and losses of the partnership and the partner's right to receive distributions, as contemplated in §§ 61-1-502 and 61-1-503(b), and the dissociated partner is not deemed a partner for purposes of § 61-1-306 but may be deemed a transferee of the partnership interest.
(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 § 61-1-803;
(2) The partner's duty of loyalty under § 61-1-404(b)(3) terminates; and
(3) The partner's duty of loyalty under § 61-1-404(b)(1) and (2) and duty of care under § 61-1-404(c) 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 § 61-1-803.
Cite this article: FindLaw.com - Tennessee Code Title 61. Partnerships § 61-1-603 - last updated January 02, 2024 | https://codes.findlaw.com/tn/title-61-partnerships/tn-code-sect-61-1-603/
FindLaw Codes may not reflect the most recent version of the law in your jurisdiction. Please verify the status of the code you are researching with the state legislature before relying on it for your legal needs.
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