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21(9) In the case of a person that is an estate or is acting as a partner by virtue
22of being a personal representative of an estate, the estate's entire transferable
23interest in the partnership is distributed.
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24(10) In the case of a person that is not an individual, the existence of the person
25terminates.
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1(15) The partnership dissolves and completes winding up.
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2178.0602 Power to dissociate as partner; wrongful dissociation. (1) A
3person has the power to dissociate as a partner at any time, rightfully or wrongfully,
4by withdrawing as a partner by express will under s. 178.0601 (1).
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5(2) A person's dissociation as a partner is wrongful only if any of the following
6applies:
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(a) The dissociation is in breach of an express provision of the partnership
8agreement.
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(b) In the case of a partnership for a definite term or particular undertaking,
10the dissociation occurs before the expiration of the term or the completion of the
11undertaking and any of the following applies:
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1. The person withdraws as a partner by express will, unless the withdrawal
13follows not later than 90 days after another person's dissociation by death or
14otherwise under s. 178.0601 (6) to (10) or wrongful dissociation under this
15subsection.
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2. The person is expelled as a partner by judicial order under s. 178.0601 (5).
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3. The person is dissociated under s. 178.0601 (6).
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4. In the case of a person that is not a trust other than a business trust, an
19estate, or an individual, the person is expelled or otherwise dissociated because it
20willfully dissolved or terminated.
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21(3) A person that wrongfully dissociates as a partner is liable to the partnership
22and to the other partners for damages caused by the dissociation. The liability is in
23addition to any debt, obligation, or other liability of the partner to the partnership
24or the other partners.
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1178.0603 Effect of dissociation. (1) If a person's dissociation results in a
2dissolution and winding up of the partnership business, subch. VIII applies;
3otherwise, subch. VII applies.
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4(2) If a person is dissociated as a partner, all of the following apply:
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(a) The person's right to participate in the management and conduct of the
6partnership's business terminates, except as otherwise provided in s. 178.0802 (3).
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(b) The person's duties and obligations under s. 178.0409 end with regard to
8matters arising and events occurring after the person's dissociation, except to the
9extent the partner participates in winding up the partnership's business pursuant
10to s. 178.0802.
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11(3) A person's dissociation does not of itself discharge the person from any debt,
12obligation, or other liability to the partnership or the other partners which the person
13incurred while a partner.
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subchapter vii
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PERSON'S dissociation AS
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A PARTNER when business
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not wound up
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18178.0701 Purchase of interest of person dissociated as partner. (1) If
19a person is dissociated as a partner without the dissociation resulting in a dissolution
20and winding up of the partnership business under s. 178.0801, the partnership shall
21cause the person's interest in the partnership to be purchased for a buyout price
22determined pursuant to sub. (2).
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23(2) The buyout price of the interest of a person dissociated as a partner is the
24amount that would have been distributable to the person under s. 178.0806 (2) if, on
25the date of dissociation, the assets of the partnership were sold and the partnership
1were wound up, with the sale price equal to the greater of the liquidation value or
2the value based on a sale of the entire business as a going concern without the person.
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3(3) Interest accrues on the buyout price from the date of dissociation to the date
4of payment, but damages for wrongful dissociation under s. 178.0602 (2), and, at the
5option of the partnership, some or all other amounts owing, whether or not presently
6due, from the person dissociated as a partner to the partnership, must be offset
7against the buyout price.
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8(4) A partnership shall defend, indemnify, and hold harmless a person
9dissociated as a partner whose interest is being purchased against all partnership
10liabilities, whether incurred before or after the dissociation, except liabilities
11incurred by an act of the person under s. 178.0702.
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12(5) If no agreement for the purchase of the interest of a person dissociated as
13a partner is reached within 120 days after a written demand for payment, the
14partnership shall pay, or cause to be paid, in money to the person the amount the
15partnership estimates to be the buyout price and accrued interest, reduced by any
16offsets and accrued interest under sub. (3).
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17(6) If a deferred payment is authorized under sub. (8), the partnership may
18tender a written offer to pay the amount it estimates to be the buyout price and
19accrued interest, reduced by any offsets under sub. (3), stating the time of payment,
20the amount and type of security for payment, and the other terms and conditions of
21the obligation.
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22(7) The payment or tender required by sub. (5) or (6) must be accompanied by
23the following:
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(a) A statement of partnership assets and liabilities as of the date of
25dissociation.
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1(b) The latest available partnership balance sheet and income statement, if
2any.
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(c) An explanation of how the estimated amount of the payment was calculated.
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(d) Written notice that the payment is in full satisfaction of the obligation to
5purchase unless, not later than 120 days after the written notice, the person
6dissociated as a partner commences an action to determine the buyout price, any
7offsets under sub. (3), or other terms of the obligation to purchase.
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8(8) A person that wrongfully dissociates as a partner before the expiration of
9a definite term or the completion of a particular undertaking is not entitled to
10payment of any part of the buyout price until the expiration of the term or completion
11of the undertaking, unless the person establishes to the satisfaction of the court that
12earlier payment will not cause undue hardship to the business of the partnership.
13A deferred payment must be adequately secured and bear interest.
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14(9) A person dissociated as a partner may maintain an action against the
15partnership, pursuant to s. 178.0410 (2), to determine the buyout price of that
16person's interest, any offsets under sub. (3), or other terms of the obligation to
17purchase. The action must be commenced not later than 120 days after the
18partnership has tendered payment or an offer to pay in accordance with subs. (5) to
19(8) to the extent applicable or within one year after written demand for payment if
20no payment or offer to pay is tendered. The court shall determine the buyout price
21of the person's interest, any offset due under sub. (3), and accrued interest, and enter
22judgment for any additional payment or refund. If deferred payment is authorized
23under sub. (8), the court shall also determine the security for payment and other
24terms of the obligation to purchase. The court may assess reasonable attorney fees
25and the fees and expenses of appraisers or other experts for a party to the action, in
1amounts the court finds equitable, against a party that the court finds acted
2arbitrarily, vexatiously, or not in good faith. The finding may be based on the
3partnership's failure to tender payment or an offer to pay or to comply with sub. (7).
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4178.0702 Power to bind and liability of person dissociated as partner. 5(1) After a person is dissociated as a partner without the dissociation resulting in
6a dissolution and winding up of the partnership business and before the partnership
7is merged out of existence or converted under subch. XI, or dissolved, the partnership
8is bound by an act of the person with respect to a transaction with another party only
9if all of the following apply:
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(a) The act would have bound the partnership under s. 178.0301 before
11dissociation.
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(b) At the time the other party enters into the transaction, less than 2 years has
13passed since the dissociation.
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(c) At the time the other party enters into the transaction, the other party does
15not know or have notice of the dissociation and reasonably believes that the person
16is a partner.
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17(2) If a partnership is bound under sub. (1), the person dissociated as a partner
18which caused the partnership to be bound is liable to all of the following:
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(a) The partnership, for any damage caused to the partnership arising from the
20obligation incurred under sub. (1).
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(b) If a partner or another person dissociated as a partner is liable for the
22obligation, the partner or other person, for any damage caused to the partner or other
23person arising from the liability.
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1178.0703 Liability of person dissociated as partner to other persons. 2(1) Except as otherwise provided in sub. (2) or s. 178.0308 (1), a person dissociated
3as a partner is not liable for a partnership obligation incurred after dissociation.
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4(2) A person that is dissociated as a partner is liable to a party on a transaction
5entered into by the partnership after the dissociation only if all of the following apply:
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(a) The person would have been liable on the transaction had the person not
7been dissociated.
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(b) At the time the other party enters into the transaction, less than 2 years has
9passed since the dissociation.
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(c) At the time the other party enters into the transaction, the other party does
11not have knowledge or notice of the dissociation and reasonably believes that the
12person is a partner.
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13(3) By agreement with a creditor of a partnership and the partnership, a person
14dissociated as a partner may be released from liability for a debt, obligation, or other
15liability of the partnership.
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16(4) A person dissociated as a partner is released from liability for a debt,
17obligation, or other liability of the partnership if the partnership's creditor, with
18knowledge or notice of the person's dissociation but without the person's consent,
19agrees to a material alteration in the nature or time of payment of the debt,
20obligation, or other liability.
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21178.0704 Statement of dissociation.
(1) A person dissociated as a partner
22or the partnership may deliver to the department for filing a statement of
23dissociation stating the name of the partnership and that the person has dissociated
24from the partnership.
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1(2) A statement of dissociation is a limitation on the authority of a person
2dissociated as a partner for the purposes of s. 178.0303.
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3178.0705 Continued use of partnership name. Continued use of a
4partnership name, or the name of a person dissociated as a partner as part of the
5partnership name, by partners continuing the business does not of itself make the
6person dissociated as a partner liable for an obligation of the partners or the
7partnership continuing the business.
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subchapter viii
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DISSOLUTION AND winding up
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10178.0801 Events causing dissolution. A partnership is dissolved, and its
11business must be wound up, upon the occurrence of any of the following:
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12(1) In a partnership at will, any of the following:
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(a) The partnership knows or has notice of a person's express will to withdraw
14as a partner, other than a partner that has dissociated under s. 178.0601 (2) to (10),
15but, if the person has specified a withdrawal date later than the date the partnership
16knew or had notice, on the later date.
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(b) The affirmative vote or consent of all the partners to wind up the
18partnership business.
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19(2) In a partnership for a definite term or particular undertaking, any of the
20following:
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(a) Within 90 days after a person's dissociation by death or otherwise under s.
22178.0601 (6) to (10) or wrongful dissociation under s. 178.0602 (2), the affirmative
23vote or consent of at least half of the remaining partners to wind up the partnership
24business, for which purpose a person's rightful dissociation pursuant to s. 178.0602
25(2) (b) 1. constitutes that partner's consent to wind up the partnership business.
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1(b) The affirmative vote or consent of all the partners to wind up the
2partnership business.
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(c) The expiration of the term or the completion of the undertaking.
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4(3) An event or circumstance that the partnership agreement states causes
5dissolution.
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6(4) On application by a partner, the entry by the circuit court of an order
7dissolving the partnership on any of the following grounds:
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(a) That the conduct of all or substantially all the partnership's business is
9unlawful.
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(b) That the economic purpose of the partnership is likely to be unreasonably
11frustrated.
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(c) That another partner has engaged in conduct relating to the partnership
13business which makes it not reasonably practicable to carry on the business in
14partnership with that partner.
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(d) That it is otherwise not reasonably practicable to carry on the partnership
16business in conformity with the partnership agreement.
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17(5) On application by a transferee, the entry by the circuit court of an order
18dissolving the partnership on the ground that it is equitable to wind up the
19partnership business under any of the following circumstances:
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(a) After the expiration of the term or completion of the undertaking, if the
21partnership was for a definite term or particular undertaking at the time of the
22transfer or entry of the charging order that gave rise to the transfer.
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(b) At any time, if the partnership was a partnership at will at the time of the
24transfer or entry of the charging order that gave rise to the transfer.
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1(6) The passage of 90 consecutive days during which the partnership does not
2have at least 2 partners.
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3178.0802 Winding up. (1) A dissolved partnership shall wind up its business
4and, except as otherwise provided in s. 178.0803, the partnership continues after
5dissolution only for the purpose of winding up.
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6(2) (a) In winding up its business, the partnership shall discharge the
7partnership's debts, obligations, and other liabilities, settle and close the
8partnership's business, and marshal and distribute the assets of the partnership.
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(b) In winding up its business, the partnership may do any of the following:
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1. Deliver to the department for filing a statement of dissolution stating the
11name of the partnership and that the partnership is dissolved.
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2. Preserve the partnership business and property as a going concern for a
13reasonable time.
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3. Prosecute and defend actions and proceedings, whether civil, criminal, or
15administrative.
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4. Transfer the partnership's property.
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5. Settle disputes by mediation or arbitration.
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6. Deliver to the department for filing a statement of termination stating the
19name of the partnership and that the partnership is terminated.
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7. Perform other acts necessary or appropriate to the winding up.
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21(3) A person whose dissociation as a partner resulted in dissolution may
22participate in winding up as if still a partner, unless the dissociation was wrongful.
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23(4) If a dissolved partnership does not have a partner and no person has the
24right to participate in winding up under sub. (3), the personal or legal representative
25of the last person to have been a partner may wind up the partnership's business.
1If no person has or exercises the right to participate in winding up, a person to wind
2up the partnership's business may be appointed by the affirmative vote or consent
3of transferees owning a majority of the rights to receive distributions at the time the
4consent is to be effective. A person appointed under this subsection has the powers
5of a partner under s. 178.0804 but is not liable for the debts, obligations, and other
6liabilities of the partnership solely by reason of having or exercising those powers or
7otherwise acting to wind up the partnership's business.
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8(5) On the application of any partner or person entitled under sub. (3) to
9participate in winding up, the circuit court may order judicial supervision of the
10winding up of a dissolved partnership, including the appointment of a person to wind
11up the partnership's business, if any of the following applies:
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(a) The partnership does not have a partner and within a reasonable time
13following the dissolution no person has been appointed under sub. (4).
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(b) The applicant establishes other good cause.
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15178.0803 Rescinding dissolution. (1) A partnership may rescind its
16dissolution, unless a statement of termination applicable to the partnership has
17become effective or the circuit court has entered an order under s. 178.0801 (4) or (5)
18dissolving the partnership.
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19(2) Rescinding dissolution under this section requires all of the following:
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(a) The affirmative vote or consent of each partner.