2005 California Corporations Code Sections 16601-16603 Article 6. Partner\'s Dissociation

16601.  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 any of the following apply:
   (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, or a court order charging the partner'
s interest, that has not been foreclosed.
   (C) Within 90 days after the partnership notifies a corporate
partner that it will be expelled because it has filed a certificate
of dissolution or the equivalent, its charter has been revoked, or
its right to conduct business has been suspended by the jurisdiction
of its incorporation, there is no revocation of the certificate of
dissolution or no reinstatement of its charter or its right to
conduct business.
   (D) A partnership, limited partnership, or limited liability
company 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 of any of the
following:
   (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 Section 16404.
   (C) The partner engaged in conduct relating to the partnership
business that makes it not reasonably practicable to carry on the
business in partnership with the partner.
   (6) The partner's act or failure to act in any of the following
instances:
   (A) By becoming a debtor in bankruptcy.
   (B) By executing an assignment for the benefit of creditors.
   (C) By 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.
   (D) By 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, by any of the
following:
   (A) The partner's death.
   (B) The appointment of a guardian or general conservator for the
partner.
   (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.
   (10) Termination of a partner who is not an individual,
partnership, corporation, trust, or estate.
16602.  (a) A partner has the power to dissociate at any time,
rightfully or wrongfully, by express will pursuant to paragraph (1)
of Section 16601.
   (b) A partner's dissociation is wrongful only if any of the
following apply:
   (1) It is in breach of an express provision of the partnership
agreement.
   (2) 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 if any of the following apply:
   (A) The partner withdraws by express will, unless the withdrawal
follows within 90 days after another partner's dissociation by death
or otherwise under paragraphs (6) to (10), inclusive, of Section
16601 or wrongful dissociation under this subdivision.
   (B) The partner is expelled by judicial determination under
paragraph (5) of Section 16601.
   (C) The partner is dissociated by becoming a debtor in bankruptcy.
   (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.
   (c) 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.
16603.  Upon a partner's dissociation, all of the following apply:
   (1) The partner's right to participate in the management and
conduct of the partnership business terminates.
   (2) The partner's duty of loyalty under paragraph (3) of
subdivision (b) of Section 16404 terminates.
   (3) The partner's duty of loyalty under paragraphs (1) and (2) of
subdivision (b) of Section 16404 and duty of care under subdivision
(c) of Section 16404 continue only with regard to matters arising and
events occurring before the partner's dissociation.