US Laws, Codes, Statutes & Cases

Chapter 67 — Partnerships; Limited Liability Partnerships

 

2005 EDITION

 

 

PARTNERSHIPS; LIMITED LIABILITY PARTNERSHIPS

 

CORPORATIONS AND PARTNERSHIPS

 

GENERAL PROVISIONS

 

67.005       Definitions

 

PARTNERSHIPS

 

67.010       Knowledge and notice

 

67.015       Effect of partnership agreement; non- waivable provisions

 

67.020       Supplemental principles of law

 

67.025       Governing law

 

(Nature of Partnership)

 

67.050       Partnership as entity

 

67.055       Creation of partnership

 

67.060       Partnership property

 

67.065       When property is partnership property

 

67.070       General powers of a partnership

 

(Relations of Partners to Persons Dealing With Partnership)

 

67.090       Partner agent of partnership

 

67.095       Transfer of partnership property

 

67.100       Partnership liable for partner's actionable conduct

 

67.105       Partner's liability

 

67.110       Actions by and against partnership and partners

 

67.115       Liability of purported partner

 

(Relations of Partners to Each Other and to Partnership)

 

67.140       Partner's rights and duties

 

67.145       Distributions in kind

 

67.150       Partner's rights and duties with respect to information

 

67.155       General standards of partner's conduct

 

67.160       Actions by partnership and partners

 

67.165       Continuation of partnership beyond definite term or particular undertaking

 

(Transferees and Creditors of Partner)

 

67.190       Partner not co-owner of partnership property

 

67.195       Partner's transferable interest in partnership

 

67.200       Transfer of whole or part of partner's transferable interest

 

67.205       Partner's transferable interest subject to charging order

 

(Partner's Dissociation)

 

67.220       Events causing partner's dissociation

 

67.225       Partner's power to dissociate; wrongful dissociation

 

67.230       Effect of partner's dissociation

 

(Partner's Dissociation When Business Not Wound Up)

 

67.250       Purchase of dissociated partner's interest

 

67.255       Dissociated partner's power to bind and liability to partnership

 

67.260       Dissociated partner's liability to other persons

 

67.265       Continued use of partnership name

 

(Winding Up Partnership Business)

 

67.290       Events causing dissolution and winding up of partnership business

 

67.295       Partnership continues after dissolution

 

67.300       Right to wind up partnership business

 

67.305       Partner's power to bind partnership after dissolution

 

67.310       Partner's liability to other partners after dissolution

 

67.315       Settlement of accounts and contributions among partners

 

(Conversions and Mergers)

 

67.340       Definitions for ORS 67.340 to 67.365

 

67.342       Conversion

 

67.344       Action on plan of conversion

 

67.346       Articles of conversion

 

67.348       Effect of conversion; entity existence continues; assumed business name

 

67.360       Merger

 

67.362       Action on plan of merger

 

67.364       Articles of merger

 

67.365       Effect of merger

 

LIMITED LIABILITY PARTNERSHIPS

 

(General Provisions)

 

67.500       Eligibility for registration as a limited liability partnership; required vote

 

(Filing Documents)

 

67.520       Filing requirements

 

67.525       Filing, service, copying and certification fees

 

67.530       Effective time and date of document

 

67.535       Filing duty of Secretary of State

 

67.540       Appeal from actions of Secretary of State

 

67.545       Evidentiary effect of copy of filed document

 

67.550       Certificate of existence or authorization

 

(Secretary of State)

 

67.570       Powers

 

(Registration)

 

67.590       Application for registration; effective date; duration of status as limited liability partnership

 

67.595       Cancellation of registration; effect

 

(Partnership Powers)

 

67.610       Effect of changes in partnership on limited liability partnership status and liability of partners; amendment of application for registration

 

67.615       Distributions to partners

 

(Name)

 

67.625       Limited liability partnership name

 

(Service of Process)

 

67.635       Service of process on limited liability partnership

 

(Annual Report)

 

67.645       Annual report

 

(Administrative Revocation)

 

67.655       Grounds for administrative revocation

 

67.660       Procedure for and effect of administrative revocation

 

67.665       Reinstatement following administrative revocation

 

67.670       Appeal from denial of reinstatement

 

(Interstate Application)

 

67.680       Interstate application

 

FOREIGN LIMITED LIABILITY PARTNERSHIPS

 

(Authority to Transact Business)

 

67.700       Authority to transact business

 

67.705       Consequences of transacting business without authority

 

67.710       Application for authority to transact business; effective date of authorization

 

67.715       Amendment to application for authority

 

67.720       Limitations applicable to foreign limited liability partnerships

 

(Name)

 

67.730       Name of foreign limited liability partnership

 

(Withdrawal)

 

67.740       Withdrawal of foreign limited liability partnership

 

(Revocation)

 

67.750       Grounds for revocation

 

67.755       Procedure for and effect of revocation

 

67.760       Appeal from revocation

 

67.765       Reinstatement of authority

 

67.770       Action by Attorney General

 

MISCELLANEOUS

 

67.800       Uniformity of application and construction

 

67.805       Severability

 

67.810       Partnership subject to amendment or repeal of chapter

 

67.815       Short title

 

GENERAL PROVISIONS

 

      67.005 Definitions. As used in this chapter:

      (1) "Business" includes every trade, occupation, profession and commercial activity.

      (2) "Debtor in bankruptcy" means a person who is the subject of:

      (a) An order for relief under Title 11 of the United States Code or a comparable order under a successor statute of general application; or

      (b) A comparable order under federal, state or foreign law governing insolvency.

      (3) "Dissociated partner" means a partner with respect to whom an event specified in ORS 67.220 has occurred.

      (4) "Distribution" means a transfer of money or other property from a partnership to a partner in the partner's capacity as a partner or to the partner's transferee.

      (5) "Foreign limited liability partnership" means a partnership that:

      (a) Is formed under laws other than the law of this state; and

      (b) Has the status of a limited liability partnership under those laws.

      (6) "Limited liability partnership" means a partnership that has registered under ORS 67.590, and has not registered or qualified in any other jurisdiction other than as a foreign limited liability partnership.

      (7) "Partnership" means an association of two or more persons to carry on as co-owners a business for profit created under ORS 67.055, predecessor law, or comparable law of another jurisdiction. A partnership includes a limited liability partnership.

      (8) "Partnership agreement" means the agreement, whether written, oral or implied, among the partners concerning the partnership, including amendments to the partnership agreement.

      (9) "Partnership at will" means a partnership in which the partners have not agreed to remain partners until the expiration of a definite term or the completion of a particular undertaking.

      (10) "Partnership interest" or "partner's interest in the partnership" means all of a partner's interests in the partnership, including the partner's transferable interest and all management and other rights.

      (11) "Person" means an individual, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture, government, governmental subdivision, agency, instrumentality or any other legal or commercial entity.

      (12) "Professional" means:

      (a) Accountants licensed under ORS 673.010 to 673.457 or the laws of another state;

      (b) Architects licensed under ORS 671.010 to 671.220 or the laws of another state;

      (c) Attorneys licensed under ORS 9.005 to 9.755 or the laws of another state;

      (d) Chiropractors licensed under ORS chapter 684 or the laws of another state;

      (e) Dentists licensed under ORS chapter 679 or the laws of another state;

      (f) Landscape architects licensed under ORS 671.310 to 671.459 or the laws of another state;

      (g) Naturopaths licensed under ORS chapter 685 or the laws of another state;

      (h) Nurse practitioners licensed under ORS 678.010 to 678.410 or the laws of another state;

      (i) Psychologists licensed under ORS 675.010 to 675.150 or the laws of another state;

      (j) Physicians licensed under ORS chapter 677 or the laws of another state;

      (k) Podiatrists licensed under ORS chapter 677 or the laws of another state;

      (L) Radiologic technologists licensed under ORS 688.405 to 688.605 or the laws of another state;

      (m) Real estate appraisers licensed under ORS chapter 674 or the laws of another state; and

      (n) Other persons providing to the public types of personal service or services substantially similar to those listed in paragraphs (a) to (m) of this subsection that may be lawfully rendered only pursuant to a license.

      (13) "Professional service" means the service rendered by a professional.

      (14) "Property" means all property, real, personal or mixed, tangible or intangible, or any interest therein.

      (15) "State" means a state of the United States, the District of Columbia, the Commonwealth of Puerto Rico or any territory or insular possession subject to the jurisdiction of the United States.

      (16) "Transfer" includes an assignment, conveyance, lease, mortgage, deed, encumbrance, creation of a security interest and any other disposition.

      (17) "Transferable interest of a partner in the partnership" means the partner's share of the profits and losses of the partnership and the partner's right to receive distributions. [1997 c.775 §1; 2003 c.14 §25]

 

PARTNERSHIPS

 

      67.010 Knowledge and notice. (1) A person knows a fact if the person has actual knowledge of it.

      (2) A person has notice of a fact if the person:

      (a) Knows of it;

      (b) Has received a notification of it; or

      (c) Has reason to know it exists from all the facts known to the person at the time in question.

      (3) A person notifies or gives notification to another by taking steps reasonably required to inform the other person in the ordinary course, whether or not the other person learns of it.

      (4) A person receives a notification when the notification:

      (a) Comes to the person's attention; or

      (b) Is addressed to the person and is duly delivered at the person's place of business or at any other place held out by the person as a place for receiving communications.

      (5) Except as provided in subsection (6) of this section, a person other than an individual knows, has notice or receives a notification of a fact for purposes of a particular transaction when the individual conducting the transaction knows, has notice or receives a notification of the fact, or in any event when the fact would have been brought to the individual's attention if the person had exercised reasonable diligence.

      (6) A partner's knowledge, notice or receipt of a notification of a fact relating to the partnership is effective immediately as knowledge by, notice to or receipt of a notification by the partnership, except in the case of a fraud on the partnership committed by or with the consent of that partner. [1997 c.775 §2]

 

      67.015 Effect of partnership agreement; nonwaivable provisions. (1) Except as otherwise provided in subsection (2) of this section, relations among the partners and between the partners and the partnership are governed by the partnership agreement. To the extent the partnership agreement does not otherwise provide, this chapter governs relations among the partners and between the partners and the partnership.

      (2) The partnership agreement may not:

      (a) Unreasonably restrict the right of access to books and records under ORS 67.150 (2);

      (b) Eliminate the duty of loyalty under ORS 67.155 (2) or 67.230 (2)(c), but:

      (A) The partnership agreement may identify specific types or categories of activities that do not violate the duty of loyalty, if not unconscionable; or

      (B) All the partners or a number or percentage specified in the partnership agreement may authorize or ratify, after full disclosure of all material facts, a specific act or transaction that otherwise would violate the duty of loyalty;

      (c) Unreasonably reduce the duty of care under ORS 67.155 (3) or 67.230 (2)(c);

      (d) Eliminate the obligation of good faith and fair dealing under ORS 67.155 (4), but the partnership agreement may prescribe the standards by which the performance of the obligation is to be measured, if the standards are not unconscionable;

      (e) Vary the power to dissociate as a partner under ORS 67.225 (1), except to require the notice under ORS 67.220 (1) of this Act to be in writing;

      (f) Vary the right of a court to expel a partner in the events specified in ORS 67.220 (5);

      (g) Vary the requirement to wind up the partnership business in cases specified in ORS 67.290 (4), (5), (6) or (7);

      (h) Choose a governing law not permitted under ORS 67.025 (1) or vary the application of this state's law with respect to a limited liability partnership or a foreign limited liability partnership pursuant to ORS 67.025 (2) or (3); or

      (i) Restrict rights of third parties under this chapter. [1997 c.775 §3]

 

      67.020 Supplemental principles of law. (1) Unless displaced by particular provisions of this chapter, the principles of law and equity supplement this chapter.

      (2) If an obligation to pay interest arises under this chapter and the rate is not specified, the rate is that specified in ORS 82.010. [1997 c.775 §4]

 

      67.025 Governing law. (1) Except as otherwise provided in subsections (2) and (3) of this section, the relations among the partners and between the partners and the partnership and the liability of the partners for obligations of the partnership are governed by:

      (a) The law of the state chosen by the partners to govern if that state bears a reasonable relation to the partners or to the partnership business and affairs; or

      (b) If the partners do not choose a governing law under paragraph (a) of this subsection, the law of the state in which the partnership has its principal office from which the partnership conducts its business.

      (2) With respect to a limited liability partnership, the law of this state governs the relations among the partners and between the partners and the partnership, and the liability of the partners for obligations of the limited liability partnership.

      (3) With respect to a foreign limited liability partnership:

      (a) The laws of the state or other jurisdiction under which a foreign limited liability partnership is formed governs the internal affairs of the partnership and the relations among the partners and between the partners and the partnership;

      (b) Except as provided in paragraph (c) of this subsection, the liability of a partner of a foreign limited liability partnership for the obligations of the foreign limited liability partnership arising in this state shall be the same as the liability of a partner of a limited liability partnership under ORS 67.105 for the obligations of the limited liability partnership; and

      (c) The partners of a foreign limited liability partnership who are professionals who hold licenses to render professional service in this state and who practice more than incidentally in this state shall be personally liable in their capacity as partners to the same extent and in the same manner as provided for shareholders of a foreign professional corporation under ORS 58.185 and 58.187 and as otherwise provided in this chapter. [1997 c.775 §5]

 

(Nature of Partnership)

     

      67.050 Partnership as entity. (1) A partnership is an entity distinct from its partners.

      (2) A limited liability partnership continues to be the same entity that existed before the filing of a registration under ORS 67.590 and remains the same entity if its registration ceases. [1997 c.775 §6]

 

      67.055 Creation of partnership. (1) Except as otherwise provided in subsection (3) of this section, the association of two or more persons to carry on as co-owners a business for profit creates a partnership, whether or not the persons intend to create a partnership.

      (2) A partnership may be created under this chapter, a predecessor statute or a comparable law of another jurisdiction.

      (3) An association or entity created under a law other than the laws described in subsection (2) of this section is not a partnership.

      (4) In determining whether a partnership is created, the following rules apply:

      (a) Factors indicating that persons have created a partnership include:

      (A) Their receipt of or right to receive a share of profits of the business;

      (B) Their expression of an intent to be partners in the business;

      (C) Their participation or right to participate in control of the business;

      (D) Their sharing or agreeing to share losses of the business or liability for claims by third parties against the business; and

      (E) Their contributing or agreeing to contribute money or property to the business.

      (b) Joint tenancy, tenancy in common, tenancy by the entireties, joint property, common property or part ownership does not by itself create a partnership, even if the co-owners share profits made by the use of the property.

      (c) The sharing of gross returns does not by itself create a partnership, even if the persons sharing them have a joint or common right or interest in property from which the returns are derived.

      (d) It is a rebuttable presumption that a person who receives a share of the profits of a business is a partner in the business, unless the profits were received in payment of:

      (A) A debt by installments or otherwise;

      (B) Wages or other compensation to an employee or independent contractor;

      (C) Rent;

      (D) Amounts owing to a former partner, a beneficiary, representative or designee of a deceased or disabled partner, or a transferee of a partnership interest;

      (E) Interest or other charge on a loan, whether or not the amount of payment varies with the profits of the business, and whether or not the loan agreement or instrument includes a direct or indirect present or future ownership interest in collateral or rights to income, proceeds or increase in value derived from collateral; or

      (F) Consideration for the sale of a business, including goodwill, or other property by installments or otherwise.

      (e) An agreement to share losses by the owners of a business is not necessary to create a partnership. [1997 c.775 §7]

 

      67.060 Partnership property. Property acquired by a partnership is property of the partnership and not of the partners individually. [1997 c.775 §8]

 

      67.065 When property is partnership property. (1) Property is partnership property if acquired in the name of:

      (a) The partnership; or

      (b) One or more partners with an indication in the instrument transferring title to the property of the person's capacity as a partner or of the existence of a partnership but without an indication of the name of the partnership.

      (2) Property is acquired in the name of the partnership by a transfer to:

      (a) The partnership in its name; or

      (b) One or more partners in their capacity as partners in the partnership, if the name of the partnership is indicated in the instrument transferring title to the property.

      (3) It is a rebuttable presumption that property is partnership property if purchased with partnership assets, even if not acquired in the name of the partnership or of one or more partners with an indication in the instrument transferring title to the property of the person's capacity as a partner or of the existence of a partnership.

      (4) It is a rebuttable presumption that property acquired in the name of one or more of the partners, without an indication in the instrument transferring title to the property of the person's capacity as a partner or of the existence of a partnership and without use of partnership assets, is separate property, even if used for partnership purposes. [1997 c.775 §9]

 

      67.070 General powers of a partnership. Unless restricted by applicable law, a partnership has the same powers as an individual to do all things necessary or convenient to carry on its business and affairs. [1997 c.775 §10]

 

(Relations of Partners to Persons Dealing With Partnership)

 

      67.090 Partner agent of partnership. (1) Each partner is an agent of the partnership for the purpose of its business. An act of a partner, including the execution of an instrument in the name of the partnership, for apparently carrying on in the ordinary course the partnership business or business of the kind carried on by the partnership binds the partnership, unless the partner had no authority to act for the partnership in the particular matter and the person with whom the partner was dealing knew or had received a notification that the partner lacked authority.

      (2) An act of a partner that is not for apparently carrying on in the ordinary course the partnership business or business of the kind carried on by the partnership, binds the partnership only if the act was authorized by the other partners. [1997 c.775 §11]

 

      67.095 Transfer of partnership property. (1) Partnership property may be transferred as follows:

      (a) Partnership property held in the name of the partnership may be transferred by an instrument of transfer executed by a partner in the name of the partnership.

      (b) Partnership property held in the name of one or more partners with an indication in the instrument transferring the property to them of their capacity as partners or of the existence of a partnership, but without an indication of the name of the partnership, may be transferred by an instrument of transfer executed by the persons in whose name the property is held.

      (c) Partnership property held in the name of one or more persons other than the partnership, without an indication in the instrument transferring the property to them of their capacity as partners or of the existence of a partnership, may be transferred by an instrument of transfer executed by the persons in whose name the property is held.

      (2) A partnership may recover partnership property from a transferee only if it proves that execution of the instrument of initial transfer did not bind the partnership under ORS 67.090 and:

      (a) As to a subsequent transferee who gave value for property transferred under subsection (1)(a) and (b) of this section, proves that prior to the transfer to the subsequent transferee, the subsequent transferee knew or had received a notification that the person who executed the instrument of initial transfer lacked authority to bind the partnership; or

      (b) As to a transferee who gave value for property transferred under subsection (1)(c) of this section, proves that prior to the transfer to the transferee, the transferee knew or had received a notification that the property was partnership property and that the person who executed the instrument of initial transfer lacked authority to bind the partnership.

      (3) A partnership may not recover partnership property from a subsequent transferee if the partnership would not have been entitled to recover the property, under subsection (2) of this section, from any earlier transferee of the property.

      (4) If a person holds all the partners' interests in the partnership, all the partnership property vests in that person. The person may execute a document in the name of the partnership to evidence vesting of the property in that person and may file or record the document. [1997 c.775 §12]

 

      67.100 Partnership liable for partner's actionable conduct. (1) A partnership is liable for loss or injury caused to a person, including a partner, or for a penalty incurred as a result of a wrongful act or omission or other actionable conduct of a partner acting in the ordinary course of business of the partnership or with authority of the partnership.

      (2) If, in the course of the partnership's business or while acting with authority of the partnership, a partner receives or causes the partnership to receive money or property of a person not a partner, and the money or property is misapplied by a partner, the partnership is liable to such person for the loss. [1997 c.775 §13]

     

      67.105 Partner's liability. (1) Except as otherwise provided in this section, all partners are liable jointly and severally for all obligations of the partnership unless otherwise agreed by the claimant or provided by law.

      (2) A person admitted as a partner into an existing partnership is not personally liable for any partnership obligation incurred before the person's admission as a partner.

      (3)(a) An obligation of a partnership incurred while the partnership is a limited liability partnership, whether arising in contract, tort or otherwise, is solely the obligation of the partnership. A partner is not personally liable, directly or indirectly, by way of indemnification, contribution or otherwise, for such an obligation solely by reason of being or so acting as a partner.

      (b) Notwithstanding paragraph (a) of this subsection, a partner of a limited liability partnership shall continue to be liable for any obligation of the partnership for which the partner was liable before the partnership became a limited liability partnership.

      (c) Nothing in this subsection shall in any way affect or impair the ability of a partner to be released from any such obligation. This subsection applies to a partner's liability notwithstanding anything inconsistent in the partnership agreement that existed immediately before the vote required to become a limited liability partnership under ORS 67.500 (3).

      (4) Notwithstanding subsection (3) of this section, the partners of a limited liability partnership who are professionals shall be personally liable in their capacity as partners to the same extent and in the same manner as provided for shareholders of a domestic professional corporation under ORS 58.185 and 58.187 and as otherwise provided in this chapter. [1997 c.775 §14]

     

      67.110 Actions by and against partnership and partners. (1) A partnership may sue and be sued in the name of the partnership.

      (2) An action may be brought against the partnership and, to the extent not inconsistent with ORS 67.105, any or all of the partners in the same action or in separate actions.

      (3) A judgment against a partnership is not by itself a judgment against a partner.

      (4) Except as provided by subsection (5) of this section, a creditor may proceed against one or more partners or their property to satisfy a judgment based on a claim that could have been successfully asserted against the partnership only if:

      (a) The partner is personally liable for the claim under ORS 67.105;

      (b) A judgment is also obtained against the partner; and

      (c) A judgment based on the same claim is obtained against the partnership that:

      (A) Has not been reversed or vacated; and

      (B) Remains unsatisfied for 90 days after:

      (i) The date of entry of the judgment; or

      (ii) The date of expiration or termination of the stay, if the judgment is contested by appropriate proceedings and execution on the judgment has been stayed.

      (5) Subsection (4) of this section does not prohibit a creditor from proceeding directly against one or more partners who are personally liable for the claim under ORS 67.105 or against their property without first seeking satisfaction from partnership property if:

      (a) The partnership is a debtor in bankruptcy;

      (b) The creditor and the partnership agreed that the creditor is not required to comply with subsection (4) of this section;

      (c) A court orders otherwise, based on a finding that partnership property subject to execution within the state is clearly insufficient to satisfy the judgment or that compliance with subsection (4) of this section is excessively burdensome; or

      (d) Liability is imposed on the partner by law or contract independently of the person's status as a partner. [1997 c.775 §15]

     

      67.115 Liability of purported partner. (1) If a person, by words or conduct, purports to be a partner or consents to being represented by another as a partner in a partnership or with one or more persons not partners, the purported partner is liable to a person to whom the representation is made if that person relying on the false representation enters into a transaction with the actual or purported partnership. If the false representation is made in a public manner, the purported partner is liable to a person who relies upon it even if the purported partner is not aware of being held out as a partner to the claimant. If partnership liability results, the purported partner is liable with respect to that liability as if the purported partner were a partner. If no partnership liability results, the purported partner is liable with respect to that liability jointly and severally with any other person consenting to the representation.

      (2) A person falsely represented to be a partner is an agent of persons consenting to the representation to bind them to the same extent and in the same manner as if the purported partner were a partner, with respect to persons who enter into transactions in reliance upon the representation. If all the partners of the existing partnership consent to the representation, a partnership act or obligation results. If fewer than all the partners of the existing partnership consent to the representation, the person acting and the partners consenting to the representation are jointly and severally liable.

      (3) Except as otherwise provided in subsections (1) and (2) of this section, persons who are not partners to each other are not liable as partners to other persons. [1997 c.775 §16]

(Relations of Partners to Each Other and to Partnership)

 

      67.140 Partner's rights and duties. (1) Each partner is deemed to have an account that is:

      (a) Credited with an amount equal to the money plus the value of any other property, net of the amount of any liabilities, the partner contributes to the partnership and the partner's share of the partnership profits; and

      (b) Charged with an amount equal to the money plus the value of any other property, net of the amount of any liabilities, distributed by the partnership to the partner and the partner's share of the partnership losses.

      (2) Each partner is entitled to an equal share of the partnership profits and is chargeable with a share of the partnership losses in proportion to the partner's share of the profits.

      (3) A partnership shall reimburse a partner for payments made and indemnify a partner for liabilities incurred by the partner in the ordinary course of the business of the partnership or for the preservation of its business or property.

      (4) A partnership shall reimburse a partner for an advance to the partnership beyond the amount of capital the partner agreed to contribute.

      (5) A payment or advance made by a partner which gives rise to a partnership obligation under subsection (3) or (4) of this section constitutes a loan to the partnership that accrues interest from the date of the payment or advance.

      (6) Except as otherwise provided in subsection (5) of this section, a partner shall not receive interest on the amount of capital contributed to the partnership.

      (7) Each partner has equal rights in the management and conduct of the partnership business.

      (8) A partner may use or possess partnership property only on behalf of the partnership.

      (9) A partner is not entitled to remuneration for services performed for the partnership except for reasonable compensation for services rendered in winding up the business of the partnership.

      (10) A person may become a partner only with the consent of all the partners.

      (11) A difference arising as to a matter in the ordinary course of business of a partnership may be decided by a majority of the partners. An act outside the ordinary course of business of a partnership and an amendment to the partnership agreement may be undertaken only with the consent of all the partners.

      (12) A written partnership agreement may establish classes or groups of one or more partners having certain relative rights, powers and duties, including voting rights, and may provide for the future creation of additional classes or groups of one or more partners having certain relative rights, powers and duties, including voting rights. The rights, powers or duties of a class or group of partners may be senior to those of one or more existing classes or groups of partners.

      (13) This section does not affect the obligations of a partnership to other persons under ORS 67.090. [1997 c.775 §17]

     

      67.145 Distributions in kind. A partner has no right to receive, and may not be required to accept, a distribution in kind. [1997 c.775 §18]

 

      67.150 Partner's rights and duties with respect to information. (1) A partnership shall keep its books and records, if any, at its principal office from which the partnership conducts its business.

      (2) A partnership shall provide partners and their agents and attorneys access to its books and records. It shall provide former partners and their agents and attorneys access to books and records pertaining to the period during which they were partners. The right of access provides the opportunity to inspect and copy books and records during ordinary business hours. A partnership may impose a reasonable charge covering the costs of labor and material for copies of documents furnished.

      (3) Each partner, to the extent of the partner's knowledge or possession of information, and the partnership shall furnish to a partner and to the legal representative of a deceased partner or partner under legal disability:

      (a) Without demand, any information concerning the partnership's business and affairs reasonably required for the proper exercise of the partner's rights and duties under the partnership agreement or under this chapter; and

      (b) On demand, any other information concerning the partnership's business and affairs, except to the extent the demand or the information demanded is unreasonable or otherwise improper under the circumstances. [1997 c.775 §19]

 

      67.155 General standards of partner's conduct. (1) The only fiduciary duties a partner owes to the partnership and the other partners are the duty of loyalty and the duty of care set forth in subsections (2) and (3) of this section.

      (2) A partner's duty of loyalty to the partnership and the other partners includes the following:

      (a) To account to the partnership and hold for it any property, profit or benefit derived by the partner in the conduct and winding up of the partnership business or derived from a use by the partner of partnership property, including the appropriation of a partnership opportunity;

      (b) Except as provided in subsections (5) and (6) of this section, to refrain from dealing with the partnership in a manner adverse to the partnership and to refrain from representing a person with an interest adverse to the partnership, in the conduct or winding up of the partnership business; and

      (c) To refrain from competing with the partnership in the conduct of the partnership business before the dissolution of the partnership.

      (3) A partner's duty of care to the partnership and the other partners in the conduct and winding up of the partnership business is limited to refraining from engaging in grossly negligent or reckless conduct, intentional misconduct or a knowing violation of law.

      (4) A partner shall discharge the duties to the partnership and the other partners under this chapter or under the partnership agreement and exercise any rights consistent with the obligation of good faith and fair dealing.

      (5) A partner does not violate a duty or obligation under this chapter or under the partnership agreement merely because the partner's conduct furthers the partner's own interest.

      (6) A partner may lend money to or transact other business with the partnership, provided that any loan or transaction between a partner and the partnership must be:

      (a) Fair to the partnership;

      (b) Authorized by the partnership agreement; or

      (c) Authorized or ratified by a majority of the disinterested partners or by a number or percentage of partners specified in the partnership agreement, after full disclosure of all material facts.

      (7) Loans and other transactions between the partnership and a partner are binding on the parties in the same manner as transactions between the partnership and persons who are not partners, subject to other applicable law.

      (8) This section also applies to a person winding up the partnership business as the personal or legal representative of the last surviving partner as if the person were a partner. [1997 c.775 §20]

 

      67.160 Actions by partnership and partners. (1) A partner is liable to a partnership and the other partners for a breach of the partnership agreement or for a violation of a duty to the partnership or the other partners under this chapter.

      (2) A partnership may maintain an action against a partner for a breach of the partnership agreement or for the violation of a duty to the partnership.

      (3) A partner may maintain an action against the partnership or another partner for legal or equitable relief, with or without an accounting as to partnership business, to:

      (a) Enforce the partner's rights under the partnership agreement;

      (b) Enforce the partner's rights under this chapter, including:

      (A) The partner's rights under ORS 67.140, 67.150 or 67.155;

      (B) The partner's right on dissociation to have the partner's interest in the partnership purchased pursuant to ORS 67.250 or enforce any other right under ORS 67.220 to 67.265; or

      (C) The partner's right to compel a dissolution and winding up of the partnership business under ORS 67.290 or enforce any other right under ORS 67.290 to 67.315; or

      (c) Enforce the rights and otherwise protect the interests of the partner, including rights and interests arising independently of the partnership relationship.

      (4) The accrual of and any time limitation on a right of action for a remedy under this section is governed by other law. A right to an accounting upon a dissolution and winding up does not revive a claim barred by law. [1997 c.775 §21]

 

      67.165 Continuation of partnership beyond definite term or particular undertaking. (1) If a partnership for a definite term or particular undertaking is continued without an express agreement after the expiration of the term or completion of the undertaking, the rights and duties of the partners remain the same as they were at the expiration or completion so far as is consistent with a partnership at will.

      (2) If the partners, or those of them who habitually acted in the business during the term or undertaking, continue the business without any settlement or liquidation of the partnership and all partners have notice of such continuation, there is a rebuttable presumption that the partners have agreed that the partnership will continue. [1997 c.775 §22]

 

(Transferees and Creditors of Partner)

 

      67.190 Partner not co-owner of partnership property. A partner is not a co-owner of partnership property and has no interest in partnership property that can be transferred either voluntarily or involuntarily. [1997 c.775 §23]

 

      67.195 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. [1997 c.775 §24]

 

      67.200 Transfer of whole or part of partner's transferable interest. (1) A transfer, in whole or in part, of a partner's transferable interest in the partnership:

      (a) Is permissible;

      (b) Does not by itself cause the partner's dissociation or a dissolution and winding up of the partnership business; and

      (c) 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.

      (2) A transferee of a partner's transferable interest in the partnership has a right:

      (a) To receive, in accordance with the transfer, distributions to which the transferor would otherwise be entitled;

      (b) 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

      (c) To seek under ORS 67.290 (6) a judicial determination that it is equitable to wind up the partnership business.

      (3) 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 the partners.

      (4) Upon transfer, the transferor retains the rights and duties of a partner other than the transferred interest in profits and losses of the partnership and the right to receive distributions.

      (5) A partnership need not give effect to a transferee's rights under this section until it has notice of the transfer. Upon request, a transferee must furnish to the partnership reasonable proof of the transfer.

      (6) 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. [1997 c.775 §25]

 

      67.205 Partner's transferable interest subject to charging order. (1) 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 that the circumstances of the case may require.

      (2) 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.

      (3) At any time before foreclosure, an interest charged may be redeemed:

      (a) By the judgment debtor;

      (b) With property other than partnership property, by one or more of the other partners; or

      (c) With partnership property, by one or more of the other partners with the consent of all the partners whose interests are not so charged.

      (4) This chapter does not deprive a partner of a right under exemption laws with respect to the partner's interest in the partnership.

      (5) 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. [1997 c.775 §26]

 

(Partner's Dissociation)

 

      67.220 Events causing partner's dissociation. A partner is dissociated from a partnership upon the occurrence of any of the following events:

      (1) The partnership's having notice of the partner's express will to withdraw as a partner or on a later date specified by the partner;

      (2) An event agreed to in the partnership agreement as causing the partner's dissociation;

      (3) The partner's expulsion pursuant to the partnership agreement;

      (4) The partner's expulsion by the unanimous vote of the other partners if:

      (a) It is unlawful to carry on the partnership business with that partner;

      (b) There has been a transfer of all or substantially all of that partner's transferable interest in the partnership, other than a transfer for security purposes that has not been foreclosed or a court order charging the partner's interest that has not been foreclosed;

      (c) Within 90 days after the partnership notifies a corporation that is a partner that it will be expelled because it has filed articles of dissolution or the equivalent, has been administratively dissolved or has had its right to conduct business suspended by the jurisdiction of its incorporation, there is no revocation of the articles of dissolution or the administrative dissolution or no reinstatement of its right to conduct business;

      (d) Within 90 days after the partnership notifies a limited liability company that is a partner that it will be expelled because it has filed articles of dissolution or the equivalent, has been administratively dissolved or has had its right to conduct business suspended by the jurisdiction of its organization, there is no revocation of the articles of dissolution or the administrative dissolution or no reinstatement of its right to conduct business;

      (e) Within 90 days after the partnership notifies a limited partnership that is a partner that it will be expelled because it has filed a certificate of cancellation or the equivalent, has been administratively inactivated or has had its right to conduct business suspended by the jurisdiction of its organization, there is no revocation of the certificate of cancellation or the administrative inactivation or no reinstatement of its right to conduct business; or

      (f) A partnership that is a partner has been dissolved and its business is being wound up;

      (5) On application by the partnership or another partner, the partner's expulsion by judicial determination because:

      (a) The partner engaged in wrongful conduct that adversely and materially affected the partnership business;

      (b) The partner willfully or persistently committed a material breach of the partnership agreement or of a duty owed to the partnership or the other partners under ORS 67.155; or

      (c) The partner engaged in conduct relating to the partnership business which makes it not reasonably practicable to carry on the business in partnership with the partner;

      (6) The partner is:

      (a) Becoming a debtor in bankruptcy;

      (b) Executing an assignment for the benefit of creditors;

      (c) Seeking, consenting to or acquiescing in the appointment of a trustee, receiver or liquidator of that partner or of all or substantially all of that partner's property; or

      (d) Failing, within 90 days after the appointment, to have vacated or stayed the appointment of a trustee, receiver or liquidator of the partner or of all or substantially all of the partner's property obtained without the partner's consent or acquiescence, or failing within 90 days after the expiration of a stay to have the appointment vacated;

      (7) In the case of a partner who is an individual:

      (a) The partner's death;

      (b) The appointment of a guardian or general conservator for the partner; or

      (c) A judicial determination that the partner has otherwise become incapable of performing the partner's duties under the partnership agreement;

      (8) In the case of a partner that is a trust or is acting as a partner by virtue of being a trustee of a trust, distribution of the trust's entire transferable interest in the partnership, but not merely by reason of the substitution of a successor trustee;

      (9) In the case of a partner that is an estate or is acting as a partner by virtue of being a personal representative of an estate, distribution of the estate's entire transferable interest in the partnership, but not merely by reason of the substitution of a successor personal representative; or

      (10) Termination of the existence of a partner who is not an individual, partnership, limited partnership, limited liability company, corporation, trust or estate. [1997 c.775 §27]

 

      67.225 Partner's power to dissociate; wrongful dissociation. (1) A partner has the power to dissociate at any time, rightfully or wrongfully, by express will pursuant to ORS 67.220 (1).

      (2) A partner's dissociation is wrongful only if:

      (a) The dissociation is in breach of an express provision of the partnership agreement; or

      (b) In the case of a partnership for a definite term or particular undertaking, before the expiration of the term or the completion of the undertaking:

      (A) The partner withdraws by express will, unless the withdrawal follows within 90 days after another partner's dissociation under ORS 67.220 (3) to (10) or wrongful dissociation under this subsection;

      (B) The partner is expelled by judicial determination under ORS 67.220 (5);

      (C) The partner is dissociated by becoming a debtor in bankruptcy; or

      (D) In the case of a partner who is not an individual, trust other than a business trust, or estate, the partner is expelled or otherwise dissociated because it willfully dissolved or terminated.

      (3) A partner who wrongfully dissociates is liable to the partnership and to the other partners for damages caused by the dissociation. The liability is in addition to any other obligation of the partner to the partnership or to the other partners. [1997 c.775 §28]

 

      67.230 Effect of partner's dissociation. (1) If a partner's dissociation results in a dissolution and winding up of the partnership business, ORS 67.290 to 67.315 apply. If a partner's dissociation does not result in dissolution and winding up of the partnership business, ORS 67.250 to 67.265 apply.

      (2) Upon a partner's dissociation:

      (a) The partner's right to participate in the management and conduct of the partnership business terminates, except as otherwise provided in ORS 67.300;

      (b) The partner's duty of loyalty under ORS 67.155 (2)(c) terminates; and

      (c) The partner's duty of loyalty under ORS 67.155 (2)(a) and (b) and duty of care under ORS 67.155 (3) 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 ORS 67.300. [1997 c.775 §29]

 

(Partner's Dissociation When Business Not Wound Up)

 

      67.250 Purchase of dissociated partner's interest. (1) If a partner is dissociated from a partnership without resulting in a dissolution and winding up of the partnership business under ORS 67.290, the partnership shall cause the dissociated partner's interest in the partnership to be purchased for a buyout price determined pursuant to subsection (2) of this section.

      (2) The buyout price of a dissociated partner's interest is an amount equal to the fair value of the dissociated partner's interest in the partnership on the date of the dissociation. If the dissociated partner has a minority interest in the partnership, the buyout price of the dissociated partner's interest shall not be discounted as a result of such minority interest. Interest must be paid from the date of dissociation to the date of payment.

      (3) Damages for wrongful dissociation under ORS 67.225 (2) and all other amounts owing, whether or not presently due, from the dissociated partner to the partnership, must be offset against the buyout price. Interest must be paid from the date the amount owed becomes due to the date of payment.

      (4) A partnership shall indemnify a dissociated partner whose interest is being purchased against all partnership liabilities, whether incurred before or after the dissociation, except liabilities incurred by an act of the dissociated partner under ORS 67.255. On application by the partnership or a partner made within 120 days after the date of dissociation, a court may determine that indemnification of the dissociated partner against all partnership liabilities incurred before the dissociation is not equitable based on either:

      (a) The financial condition of the partnership on the date of dissociation; or

      (b) The dissolution of the partnership within 60 days after the date of dissociation.

      (5) If no agreement for the purchase of a dissociated partner's interest is reached within 120 days after a written demand for payment, the partnership shall pay, or cause to be paid, in cash to the dissociated partner the amount the partnership estimates to be the buyout price and accrued interest, reduced by any offsets and accrued interest under subsection (3) of this section.

      (6) If a deferred payment is authorized under subsection (8) of this section, the partnership shall tender a written offer to pay the amount it estimates to be the buyout price and accrued interest, reduced by any offsets under subsection (3) of this section, stating the time of payment and the other terms and conditions of the obligation.

      (7) The payment or tender required by subsection (5) or (6) of this section must be accompanied by the following:

      (a) A statement of partnership assets and liabilities as of the date of dissociation;

      (b) The latest available partnership balance sheet and income statement, if any;

      (c) An explanation of how the estimated amount of the payment was calculated; and

      (d) Written notice that the payment is in full satisfaction of the obligation to purchase unless, within 120 days after the written notice, the dissociated partner commences an action to determine the buyout price, any offsets under subsection (3) of this section or other terms of the obligation to purchase.

      (8) A partner who wrongfully dissociates before the expiration of a definite term or the completion of a particular undertaking is not entitled to payment of any portion of the buyout price until the expiration of the term or completion of the undertaking, unless the partner establishes to the satisfaction of the court that earlier payment will not cause undue hardship to the business of the partnership. A deferred payment bears interest but need not be secured unless the dissociated partner demonstrates to the satisfaction of the court that security for the deferred payment is appropriate.

      (9) A dissociated partner may maintain an action against the partnership, pursuant to ORS 67.160 (3)(b)(B), to determine the buyout price of that partner's interest, any offsets under subsection (3) of this section or other terms of the obligation to purchase. The action must be commenced within 120 days after the partnership has tendered payment or an offer to pay, or within one year after written demand for payment if no payment or offer to pay is tendered. The court shall determine the buyout price of the dissociated partner's interest and any offset due under subsection (3) of this section and accrued interest, and enter judgment for any additional payment or refund. If deferred payment is authorized under subsection (8) of this section, the court shall also determine whether security for deferred payment is appropriate and