PocketLaw | Illinois Compiled Statutes | Transferees And Creditors Of

Transferees And Creditors Of Partner

Checkout our iOS App for a better way to browser and research.

(805 ILCS 206/Art. 5 heading)

ARTICLE 5 TRANSFEREES AND CREDITORS OF PARTNER

(805 ILCS 206/501)

Sec. 501. 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.

(Source: P.A. 92-740, eff. 1-1-03.)

(805 ILCS 206/502)

Sec. 502. Partner's transferable interest in partnership. 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.

(Source: P.A. 92-740, eff. 1-1-03.)

(805 ILCS 206/503)

Sec. 503. Transfer of partner's transferable interest.

(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 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.

(Source: P.A. 92-740, eff. 1-1-03.)

(805 ILCS 206/504)

Sec. 504. Partner's transferable interest subject to charging order.

(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 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 lien on the judgment debtor's transferable interest in the partnership. The court may order a foreclosure of the interest subject to the charging order at any time. The purchaser at the foreclosure sale has the rights of a transferee.

(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.

(Source: P.A. 92-740, eff. 1-1-03.)

Download our app to see the most-to-date content.