After fixed term partnership continues as partnership at will. 178.20(1)(1)
When a partnership for a fixed term or particular undertaking is continued after the termination of such term or particular undertaking without any express agreement, the rights and duties of the partners remain the same as they were at such termination, so far as is consistent with a partnership at will.
A continuation of the business by the partners or such of them as habitually acted therein during the term, without any settlement or liquidation of the partnership affairs, is prima facie evidence of a continuation of the partnership.
Property rights of partner. 178.21(1)
The property rights of a partner are that partner's rights in specific partnership property, that partner's interest in the partnership, and his or her right to participate in the management.
A partner is co-owner with the other partners of specific partnership property holding as a tenant in partnership.
The incidents of this tenancy are such that:
A partner, subject to the provisions of this chapter and to any agreement between the partners, has an equal right with the other partners to possess specific partnership property for partnership purposes; but a partner has no right to possess such property for any other purpose without the consent of the other partners.
A partner's right in specific partnership property is not assignable except in connection with the assignment of the rights of all the partners in the same property.
A partner's right in specific partnership property is not subject to attachment or execution, except on a claim against the partnership. When partnership property is attached for a partnership debt the partners, or any of them, or the representatives of a deceased partner, cannot claim any right under the homestead or exemption laws.
On the death of a partner the partner's right in specific partnership property vests in the surviving partner or partners, except where the deceased was the last surviving partner, when the partner's right in such property vests in the partner's legal representative. Such surviving partner or partners, or the legal representative of the last surviving partner, has no right to possess the partnership property for any but a partnership purpose.
A partner's right in specific partnership property is not subject to elective rights under s. 861.02 (1)
of a surviving spouse or to allowances to a surviving spouse, heirs, or next of kin.
As to sub. (3) (e), see notes in 1985 Wis. Act 37
, marital property trailer bill.
Partner's interest in partnership.
A partner's interest in the partnership is the partner's share of the profits and surplus, and the same is personal property.
History: 1993 a. 482
Assignment of partner's interest. 178.23(1)
A conveyance by a partner of the partner's interest in the partnership does not of itself dissolve the partnership, nor, as against the other partners in the absence of agreement, entitle the assignee, during the continuance of the partnership, to interfere in the management or administration of the partnership business or affairs, or to require any information or account of partnership transactions, or to inspect the partnership books; but it merely entitles the assignee to receive in accordance with the assignee's contract the profits to which the assigning partner would otherwise be entitled.
In case of a dissolution of the partnership, the assignee is entitled to receive the assignor's interest and may require an account from the date only of the last account agreed to by all the partners.
History: 1993 a. 482
A partner's interest in partnership property is assignable by inter vivos gift, provided the elements of such a gift are established. Estate of Schreiber, 68 Wis. 2d 135
, 227 N.W.2d 917
Partner's interest chargeable as such with judgment lien. 178.24(1)(1)
On due application to a competent court by any judgment creditor of a partner, the court which entered the judgment, order or decree, or any other court, may charge the interest of the debtor partner with payment of the unsatisfied amount of such judgment debt with interest thereon; and may then or later appoint a receiver of the debtor partner's share of the profits, and of any other money due or to fall due to the debtor partner in respect to the partnership, and make all other orders, directions, accounts and inquiries which the debtor partner might have made, or which the circumstances of the case may require.
The interest charged may be redeemed at any time before foreclosure, or in case of a sale being directed by the court may be purchased without thereby causing a dissolution:
With separate property, by any one or more of the partners; or
With partnership property, by any one or more of the partners with the consent of all the partners whose interests are not so charged or sold.
Nothing in this chapter shall be held to deprive a partner of the partner's right, if any, under the exemption laws, as regards the partner's interest in the partnership.
History: 1993 a. 482
; 1999 a. 83
Dissolution of partnership defined. 178.25(1)
The dissolution of a partnership is the change in the relation of the partners caused by any partner ceasing to be associated in the carrying on as distinguished from the winding up of the business.
On dissolution the partnership is not terminated, but continues until the winding up of partnership affairs is completed.
Causes of dissolution.
Dissolution is caused:
Without violation of the agreement between the partners (a) by the termination of the definite term or particular undertaking specified in the agreement, (b) by the express will of any partner when no definite term or particular undertaking is specified, (c) by the express will of all the partners who have not assigned their interests or suffered them to be charged for their separate debts, either before or after the termination of any specified term or particular undertaking, (d) by the expulsion of any partner from the business bona fide in accordance with such a power conferred by the agreement between the partners;
In contravention of the agreement between the partners, where the circumstances do not permit a dissolution under any other provision of this section, by the express will of any partner at any time;
By any event which makes it unlawful for the business of the partnership to be carried on or for the members to carry it on in partnership;
By the bankruptcy of any partner or the partnership;
Dissolution by decree of court. 178.27(1)
On application by or for a partner the court shall decree a dissolution whenever any of the following applies:
A partner has been declared a lunatic in any judicial proceeding or is shown to be of unsound mind.
A partner becomes in any other way incapable of performing the partner's part of the partnership contract.
A partner has been guilty of such conduct as tends to affect prejudicially the carrying on of the business.
A partner willfully or persistently commits a breach of the partnership agreement, or otherwise so conducts himself or herself in matters relating to the partnership business that it is not reasonably practicable to carry on the business in partnership with him or her.
The business of the partnership can only be carried on at a loss.
Other circumstances render a dissolution equitable.
After the termination of the specified term or particular undertaking;
At any time if the partnership was a partnership at will when the interest was assigned or when the charging order was issued.
Upon application by a district attorney or the attorney general, the court shall decree a dissolution if the partnership has violated s. 940.302 (2)
or 948.051 (2)
History: 1993 a. 482
; 2007 a. 116
Dissolution terminates agency of partner.
Except so far as may be necessary to wind up partnership affairs or to complete transactions begun but not then finished, dissolution terminates all authority of any partner to act for the partnership, with respect to the partners, when the dissolution is not by the act, bankruptcy or death of a partner; or when the dissolution is by such act, bankruptcy or death of a partner, in cases where s. 178.29
so requires, and with respect to persons not partners, as declared in s. 178.30
Liability of dissolving partner to partners continues until knowledge of dissolution.
If a dissolution is caused by the act, death or bankruptcy of a partner, each partner is liable to the other copartners for the partner's share of any liability created by any partner acting for the partnership as if the partnership had not been dissolved unless any of the following applies:
The dissolution being by act of any partner, the partner acting for the partnership had knowledge of the dissolution.
The dissolution being by the death or bankruptcy of a partner, the partner acting for the partnership had knowledge or notice of the death or bankruptcy.
The liability is for a debt, obligation or liability for which the partner is not liable as provided in s. 178.12 (2)
History: 1993 a. 482
; 1995 a. 97
Partner's agency after dissolution. 178.30(1)
After dissolution a partner can bind the partnership except as provided in sub. (3)
By any act appropriate for winding up partnership affairs or completing transactions unfinished at dissolution.
By any transaction that would bind the partnership if dissolution had not taken place, provided the other party to the transaction:
Had extended credit to the partnership prior to dissolution and had no knowledge or notice of the dissolution; or
Though he had not so extended credit, had nevertheless known of the partnership prior to dissolution and, having no knowledge or notice of dissolution, the fact of dissolution had not been advertised in a newspaper of general circulation in the place (or in each place if more than one) at which the partnership business was regularly carried on.
The liability of a partner under sub. (1) (b)
shall be satisfied out of partnership assets alone when such partner had been prior to dissolution:
Unknown as a partner to the persons with whom the contract is made; and
So far unknown and inactive in partnership affairs that the business reputation of the partnership could not be said to have been in any degree due to the partner's connection with it.
The partnership is in no case bound by any act of a partner after dissolution if any of the following applies:
The partnership is dissolved because it is unlawful to carry on the business, unless the act is appropriate for winding up partnership affairs.
The partner has no authority to wind up partnership affairs, except by a transaction with any of the following:
A person who had extended credit to the partnership prior to dissolution and had no knowledge or notice of the partner's want of authority.
A person who had not extended credit to the partnership prior to dissolution, and having no knowledge or notice of the partner's want of authority, the fact of the partner's want of authority had not been advertised in the manner provided for advertising the fact of dissolution in sub. (1) (b) 2.
Nothing in this section shall affect the liability under s. 178.13
of any person who after dissolution represents himself or herself or consents to another representing him or her as a partner in a partnership engaged in carrying on business.
History: 1993 a. 482
; 2001 a. 38
Discharge of existing liabilities on dissolution. 178.31(1)(1)
The dissolution of the partnership does not of itself discharge the existing liability of any partner.
A partner is discharged from any existing liability upon dissolution of the partnership by an agreement to that effect between the partner, the partnership creditor and the person or partnership continuing the business; and such agreement may be inferred from the course of dealing between the creditor having knowledge of the dissolution and the person or partnership continuing the business.
Where a person agrees to assume the existing obligations of a dissolved partnership, the partners whose obligations have been assumed shall be discharged from any liability to any creditor of the partnership who, knowing of the agreement, consents to a material alteration in the nature or time of payment of such obligations.
The individual property of a deceased partner shall be liable for those obligations of the partnership incurred while the deceased partner was a partner and for which the deceased partner was liable under s. 178.12
but subject to the prior payment of the deceased partner's separate debts.
History: 1993 a. 482
; 1995 a. 97
Notwithstanding an agreement between the partners, both partners were liable for a prior partnership obligation since there was no agreement under sub. (2). Fox Valley Builders Corp. v. Day, 71 Wis. 2d 785
, 238 N.W.2d 748
Right to wind up.
Unless otherwise agreed, the partners who have not wrongfully dissolved the partnership or the legal representative of the last surviving partner, not bankrupt, has the right to wind up the partnership affairs; provided, however, that any partner, the partner's legal representative, or the partner's assignee, upon cause shown, may obtain winding up by the court.
History: 1993 a. 482
Application of partnership property on dissolution. 178.33(1)(1)
When dissolution is caused in any way, except in contravention of the partnership agreement, each partner, as against the other copartners and all persons claiming through them in respect of their interests in the partnership, unless otherwise agreed, may have the partnership property applied to discharge its liabilities, and the surplus applied to pay in cash the net amount owing to the respective partners. But if dissolution is caused by expulsion of a partner, bona fide under the partnership agreement, and if the expelled partner is discharged from all partnership liabilities, either by payment or agreement under s. 178.31 (2)
the expelled partner shall receive in cash only the net amount due the expelled partner from the partnership.
When dissolution is caused in contravention of the partnership agreement the rights of the partners shall be as follows:
Each partner who has not caused dissolution wrongfully shall have all the rights specified in sub. (1)
, and the right, as against each partner who has caused the dissolution wrongfully, to damages for breach of the agreement.
The partners who have not caused the dissolution wrongfully, if they all desire to continue the business in the same name, either by themselves or jointly with others, may do so, during the agreed term for the partnership and for that purpose may possess the partnership property, provided they secure the payment by bond approved by the court, or pay to any partner who has caused the dissolution wrongfully, the value of his or her interest in the partnership at the dissolution, less any damages recoverable under par. (a)
, and in like manner indemnify him or her against all present or future partnership liabilities.
A partner who has caused the dissolution wrongfully shall have, if the business is not continued under the provisions of par. (b)
, all the rights of a partner under sub. (1)
subject to the provisions of par. (a)
, and, if the business is continued under par. (b)
, the right as against the other partners and all claiming through them in respect of their interests in the partnership, to have the value of his or her interest in the partnership, less any damages caused to the other partners by the dissolution, ascertained and paid to him or her in cash, or the payment secured by bond approved by the court, and to be released from all existing liabilities of the partnership; but in ascertaining the value of the partner's interest the value of the goodwill of the business shall not be considered.