(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 Section 801(6) [54-1A-801(6) NMSA 1978] 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.
History: Laws 1996, ch. 53, § 503.
ANNOTATIONSWithdrawal by assignment leads to termination of partnership. — While the assignment itself would not cause a dissolution of the partnership, it is a basic tenet of partnership law that a general partnership requires two or more partners to be considered a partnership. Thus, the withdrawal of one of the partners, without the substitution of a new partner, would lead to a dissolution of the partnership. Resolution Trust Corp. v. Ocotillo W. Joint Venture, 840 F. Supp. 1463 (D.N.M. 1993).
Am. Jur. 2d, A.L.R. and C.J.S. references. — 59A Am. Jur. 2d Partnership § 833 et seq.
Rights of creditors where partnership is continued without liquidation upon retirement or death of partners, under provision of Uniform Partnership Act, 111 A.L.R. 1093.
Provision of partnership agreement giving one partner option to buy out the other, 160 A.L.R. 523.
Construction, application and effect of Uniform Partnership Act, § 25 (2) (b) (54-1-1 NMSA 1978 et seq.), relating to nonassignability of partner's right in specific partnership property. 39 A.L.R.2d 1365.
Sale or transfer of interest by partner as dissolving partnership, 75 A.L.R.2d 1036.
Partner's breach of fiduciary duty to copartner on sale of partnership interest to another partner, 4 A.L.R.4th 1122.
68 C.J.S. Partnership §§ 103, 245.