A.R.S. tit. 29 ch. 5 — Arizona Revised Statutes Title 29 Chapter 5 — Revised Uniform Partnership Act

A.R.S. § 29-1001 29-1001 - Definitions 29-1001. Definitions In this chapter, unless the context otherwise requires: 1. "Business" includes every trade, occupation and profession. 2. "Chief executive office" means the place from which the main part of the partnership's business is managed. 3. "Debtor in bankruptcy" means a person who is the subject of either: (a) An order for relief under title 11 of the United States Code or a comparable order under a successor statute of general application. (b) A comparable order under federal, state or foreign law governing insolvency. 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 or limited partnership that is formed or created under laws other than the laws of this state and that is qualified as a limited liability partnership under those laws. 6. "General partner" means a partner in a partnership and a general partner in a limited partnership. 7. "Limited liability partnership" means a partnership or limited partnership that has filed a statement of qualification under section 29-1101. 8. "Limited partner" means a limited partner in a limited partnership. 9. "Limited partnership" means a limited partnership created under chapter 3 of this title, predecessor law or comparable law of another jurisdiction. 10. "Partner" means a general partner and, for purposes of article 9 of this chapter, both a general partner and a limited partner. 11. "Partnership" means an association or entity formed under section 29-1012, a predecessor law or a comparable law of another jurisdiction. 12. "Partnership agreement" means the agreement, whether written, oral or implied, among the partners concerning the partnership, including amendments to the partnership agreement. 13. "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. 14. "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. 15. "Person" means an individual, corporation, business trust, estate, trust, partnership, association, joint venture, government, governmental subdivision, agency or instrumentality or any other legal or commercial entity. 16. "Property" means all property, real, personal or mixed, tangible or intangible, or any interest in such property. 17. "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. 18. "Statement" means a statement of partnership authority under section 29-1023, a statement of denial under section 29-1024, a statement of dissociation under section 29-1064, a statement of dissolution under section 29-1075, a statement of merger under section 29-2205, a statement of qualification as a limited liability partnership under section 29-1101, a statement of foreign qualification under section 29-1106 or an amendment or cancellation of any of the foregoing. 19. "Transfer" includes an assignment, conveyance, lease, mortgage, deed and encumbrance. A.R.S. § 29-1002 29-1002 - Knowledge and notice 29-1002. Knowledge and notice A. A person knows a fact if the person has actual knowledge of it. B. A person has notice of a fact if the person either: 1. Knows of it. 2. Has received a notification of it. 3. Has reason to know it exists from all of the facts known to the person at the time in question. C. A person notifies or gives a notification of a fact to another by taking steps reasonably required to inform the other person in ordinary course, whether or not the other person knows of it. D. A person receives a notification when the notification either: 1. Comes to the person's attention. 2. 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. E. 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 acting for the person and 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. The person exercises reasonable diligence if the person maintains reasonable routines for communicating significant information to the individual conducting the transaction and there is reasonable compliance with the routines. Reasonable diligence does not require an individual acting for the person to communicate information unless the communication is part of the individual's regular duties or the individual has reason to know of the transaction and that the transaction would be materially affected by the information. A.R.S. § 29-1003 29-1003 - Effect of partnership agreement; nonwaivable provisions 29-1003. Effect of partnership agreement; nonwaivable provisions A. Except as otherwise provided in subsection B 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. B. The partnership agreement shall not: 1. Vary the rights and duties under section 29-1005 except to eliminate the duty to provide copies of statements to all of the partners. 2. Unreasonably restrict the right of access to books and records under section 29-1033, subsection B. 3. Eliminate the duty of loyalty under section 29-1034, subsection B or section 29-1053, subsection B, paragraph 3, except that the partnership agreement may identify types or categories of activities that do not violate the duty of loyalty. 4. Eliminate the duty of care under section 29-1034, subsection C or section 29-1053, subsection B, paragraph 3, except that the partnership agreement may prescribe the standard by which the performance of the duty is to be measured. 5. Eliminate the obligation of good faith and fair dealing under section 29-1034, subsection D, except that the partnership agreement may prescribe the standards by which the performance of the obligation is to be measured. 6. Vary the power to dissociate as a partner under section 29-1052, subsection A, except to require the notice under section 29-1051, paragraph 1 to be in writing. 7. Restrict rights of persons other than a partner, the partner's transferee, the legal representative of a partner, the transferee of the legal representative of a partner or the partnership under this chapter. 8. Vary the law applicable to a limited liability partnership under section 29-1006. A.R.S. § 29-1004 29-1004 - Supplemental principles of law 29-1004. Supplemental principles of law A. Unless displaced by particular provisions of this chapter, the principles of law and equity supplement this chapter. B. If an obligation to pay interest arises under this chapter and the rate is not specified, the rate is that specified in section 44-1201. A.R.S. § 29-1005 29-1005 - Execution, filing and recording of statements 29-1005. Execution, filing and recording of statements A. A statement may be filed in the office of the secretary of state. A certified copy of a statement that is filed in an office in another state may be filed in the office of the secretary of state. Either filing has the effect provided in this chapter with respect to partnership property located in or transactions that occur in this state. B. A certified copy of a statement that has been filed in the office of the secretary of state and recorded in the office for recording transfers of real property has the effect provided for recorded statements in this chapter. A recorded statement that is not a certified copy of a statement filed in the office of the secretary of state does not have the effect provided for recorded statements in this chapter. C. Other than a statement of qualification under section 29-1101, a statement filed by a partnership shall be executed by at least two partners. Other statements shall be executed by a partner or any other person authorized by this chapter. Whether or not a statement contains an acknowledgment, verification or proof, the signature of each person signing a statement constitutes the affirmation or acknowledgment of that person, under penalty of perjury, that the statement is that person's act and deed or the act and deed of the partnership and that the facts stated in the statement are true. D. A person authorized by this chapter to file a statement may amend or cancel the statement by filing an amendment or cancellation that names the partnership, identifies the statement and states the substance of the amendment or cancellation. E. A person who files a statement pursuant to this section shall promptly send a copy of the statement to every nonfiling partner and to any other person named as a partner in the statement. Failure to send a copy of a statement to a partner or any other person does not limit the effectiveness of the statement as to a person who is not a partner. F. The secretary of state may collect a fee for filing or providing a certified copy of a statement. The officer responsible for recording transfers of real property may collect a fee for recording a statement. A.R.S. § 29-1006 29-1006 - Law governing internal relations 29-1006. Law governing internal relations A. Except as provided in subsection B, the law of the jurisdiction in which a partnership has its chief executive office governs relations among the partners and between the partners and the partnership. B. In the case of a limited liability partnership, the laws of this state govern relations among the partners and between the partners and the partnership, and the liability of the partners for obligations of the limited liability partnership. A.R.S. § 29-1007 29-1007 - Partnership subject to amendment or repeal 29-1007. Partnership subject to amendment or repeal A partnership governed by this chapter is subject to any amendment to or repeal of this chapter. A.R.S. § 29-1011 29-1011 - Partnership as entity 29-1011. Partnership as entity A. A partnership is an entity distinct from its partners. B. A limited liability partnership is the same entity that existed before the filing of a statement of qualification under section 29-1101. A.R.S. § 29-1012 29-1012 - Formation of partnership 29-1012. Formation of partnership A. Except as otherwise provided in subsections B and C, the association of two or more persons to carry on as co-owners a business for profit forms a partnership, whether or not the persons intend to form a partnership. B. An association formed under a statute other than this chapter, a predecessor statute or a comparable statute of another jurisdiction is not a partnership under this chapter. C. In determining whether a partnership is formed, the following rules apply: 1. Joint tenancy, tenancy in common, tenancy by the entireties, joint property, common property or part ownership does not by itself establish a partnership, even if the co-owners share profits made by the use of the property, except that the ownership establishes a partnership if the persons have declared in a written partnership agreement that the property is partnership property subject to the provisions of the partnership agreement and this chapter. 2. The sharing of gross returns does not by itself establish a partnership, even if the persons sharing them have a joint or common right or interest in property from which the returns are derived. 3. A person who receives a share of the profits of a business is presumed to be a partner in the business, unless the profits were received in payment either: (a) Of a debt by installments or otherwise. (b) For services as an independent contractor or of wages or other compensation to an employee. (c) Of rent. (d) Of an annuity or any other retirement benefit to a beneficiary, representative or designee of a deceased or retired partner. (e) Of interest or other charge on a loan, even if the amount of payment varies with the profits of the business, including a direct or indirect present or future ownership of the collateral, or rights to income, proceeds or increase in value derived from the collateral. (f) For the sale of the goodwill of any business or other property by installments or otherwise. A.R.S. § 29-1013 29-1013 - Partnership property 29-1013. Partnership property Property acquired by a partnership is property of the partnership and not of the partners individually. A.R.S. § 29-1014 29-1014 - When property is partnership property 29-1014. When property is partnership property A. Property is partnership property if acquired in the name of either: 1. The partnership. 2. 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. B. Property is acquired in the name of the partnership by a transfer to either: 1. The partnership in its name. 2. 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. C. Property is presumed to be partnership property if it is purchased with partnership assets, even if it is 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. D. 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 presumed to be separate property, even if used for partnership purposes. A.R.S. § 29-1021 29-1021 - Partner agent of partnership 29-1021. Partner agent of partnership Subject to the effect of a statement of partnership authority under section 29-1023: 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 partnership name, 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 apparently for 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. A.R.S. § 29-1022 29-1022 - Transfer of partnership property 29-1022. Transfer of partnership property A. Partnership property may be transferred as follows: 1. Subject to the effect of a statement of partnership authority under section 29-1023, partnership property held in the name of the partnership may be transferred by an instrument of transfer executed by a partner in the partnership name. 2. 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. 3. 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. B. 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 section 29-1021 and either: 1. As to a subsequent transferee who gave value for property transferred under subsection A, paragraph 1 or 2 of this section, proves that 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. 2. As to a transferee who gave value for property transferred under subsection A, paragraph 3 of this section, proves that 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. C. A partnership shall not recover partnership property from a subsequent transferee if the partnership would not have been entitled to recover the property, under subsection B of this section, from any earlier transferee of the property. D. If a person holds all of the partners' interests in the partnership, all of 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. A.R.S. § 29-1023 29-1023 - Statement of partnership authority 29-1023. Statement of partnership authority A. A partnership may file a statement of partnership authority that: 1. Shall include: (a) The name of the partnership. (b) The street address of its chief executive office and of one office in this state, if there is one. (c) The names and mailing addresses of all of the partners or of an agent appointed and maintained by the partnership for the purpose of subsection B of this section. (d) The names of the partners authorized to execute an instrument transferring real property held in the name of the partnership. 2. May state the authority, or limitations on the authority, of some or all of the partners to enter into other transactions on behalf of the partnership and any other matter. B. If a statement of partnership authority names an agent, the agent shall maintain a list of the names and mailing addresses of all of the partners and shall make it available to any person on request for good cause shown. C. If a filed statement of partnership authority is executed pursuant to section 29-1005, subsection C and states the name of the partnership but does not contain all of the other information required by subsection A of this section, the statement nevertheless operates with respect to a person who is not a partner as provided in subsections D and E of this section. D. Except as otherwise provided in subsection G of this section, a filed statement of partnership authority supplements the authority of a partner to enter into transactions on behalf of the partnership as follows: 1. Except for transfers of real property, a grant of authority contained in a filed statement of partnership authority is conclusive in favor of a person who gives value without knowledge to the contrary, as long as and to the extent that a limitation on that authority is not then contained in another filed statement. A filed cancellation of a limitation on authority revives the previous grant of authority. 2. A grant of authority to transfer real property held in the name of the partnership contained in a certified copy of a filed statement of partnership authority recorded in the office for recording transfers of that real property is conclusive in favor of a person who gives value without knowledge to the contrary, as long as and to the extent that a certified copy of a filed statement containing a limitation on that authority is not then of record in the office for recording transfers of that real property. The recording in the office for recording transfers of that real property of a certified copy of a filed cancellation of a limitation on authority revives the previous grant of authority. E. A person who is not a partner is deemed to know of a limitation on the authority of a partner to transfer real property held in the name of the partnership if a certified copy of the filed statement containing the limitation on authority is of record in the office for recording transfers of that real property. F. Except as otherwise provided in subsections D and E of this section and sections 29-1064 and 29-1075, a person who is not a partner is not deemed to know of a limitation on the authority of a partner merely because the limitation is contained in a filed statement. G. Unless earlier canceled, a filed statement of partnership authority is canceled by operation of law five years after the date on which the statement, or the most recent amendment, was filed with the secretary of state. A.R.S. § 29-1024 29-1024 - Statement of denial 29-1024. Statement of denial A partner or any other person named as a partner in a filed statement of partnership authority or in a list maintained by an agent pursuant to section 29-1023, subsection B may file a statement of denial stating the name of the partnership and the fact that is being denied, including denial of a person's authority or status as a partner. A statement of denial is a limitation on authority as provided in section 29-1023, subsections D and E. A.R.S. § 29-1025 29-1025 - Partnership liable for partner's actionable conduct 29-1025. Partnership liable for partner's actionable conduct A. A partnership is liable for loss or injury caused to a person, 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. B. 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 who is not a partner, and the money or property is misapplied by a partner, the partnership is liable for the loss. A.R.S. § 29-1026 29-1026 - Partner's liability 29-1026. Partner's liability A. Except as otherwise provided in subsections B, C and D of 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. B. 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. C. Obligations incurred by a partnership or a limited partnership while the partnership or limited partnership is a limited liability partnership, whether arising in contract, tort or otherwise, are solely the obligations of the limited liability partnership. A partner is not personally liable, directly or indirectly, including by way of contribution or indemnification, for such obligations of the limited liability partnership incurred during the time the partnership or limited partnership is a limited liability partnership solely by reason of being or acting as such a partner. Notwithstanding contrary provisions in a partnership agreement existing prior to the effective date of a statement of qualification, the filing of a statement pursuant to section 29-1101 creates a presumption that the partners have agreed to the applicability of this subsection. D. If a limited partnership is a limited liability partnership, this section applies to its general partners and to any of its limited partners who, under the provisions of chapter 3 of this title, are liable for the debts or obligations of the partnership. E. Failure to observe the entity formalities otherwise applicable to the conduct or management of the business of the limited liability partnership is not a ground for imposing personal liability on any partner for the acts or debts of the limited liability partnership. F. A partner may not receive a distribution from a limited liability partnership to the extent the distribution constitutes a transfer in violation of title 44, chapter 8. A.R.S. § 29-1027 29-1027 - Actions by and against partnership and partners 29-1027. Actions by and against partnership and partners A. A partnership may sue and be sued in the name of the partnership. B. Except as otherwise provided in subsection F of this section, an action may be brought against the partnership and any or all of the partners in the same action or in separate actions. C. A judgment against a partnership is not by itself a judgment against a partner. A judgment against a partnership may not be satisfied from a partner's assets unless there is also a judgment against the partner. D. A judgment creditor of a partner may not levy execution against the assets of the partner to satisfy a judgment based on a claim against the partnership unless either: 1. The claim is for a debt, obligation or liability for which the partner is liable as provided in section 29-1026 and either: (a) A judgment based on the same claim has been obtained against the partnership and a writ of execution on the judgment has been returned unsatisfied in whole or in part. (b) The partnership is a debtor in bankruptcy. (c) The partner has agreed that the creditor need not exhaust partnership assets. (d) A court grants permission to the judgment creditor to levy execution against the assets of a partner based on a finding that partnership assets subject to execution are clearly insufficient to satisfy the judgment, that exhaustion of partnership assets is excessively burdensome or that the grant of permission is an appropriate exercise of the court's equitable powers. 2. Liability is imposed on the partner by law or contract independent of the existence of the partnership. E. This section applies to any partnership liability or obligation resulting from a representation by a partner or purported partner under section 29-1028. F. A partner is not a proper party to an action against a limited liability partnership where that partner would not be personally liable for the claim under section 29-1026. A.R.S. § 29-1028 29-1028 - Liability of purported partner 29-1028. Liability of purported partner A. 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 who are not partners, the purported partner is liable to a person to whom the representation is made, if that person, relying on the representation, enters into a transaction with the actual or purported partnership. If the representation, either by the purported partner or by a person with the purported partner's consent, is made in a public manner, the purported partner is liable to a person who relies on the purported partnership 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. B. If a person pursuant to subsection A is represented to be a partner in an existing partnership, or with one or more persons who are not partners, the purported 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 on the representation. If all of the partners of the existing partnership consent to the representation, a partnership act or partnership obligation results. If fewer than all of 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. C. A person is not liable as a partner merely because the person is named by another in a statement of partnership authority. D. A person does not continue to be liable as a partner merely because of a failure to file a statement of dissociation or to amend a statement of partnership authority to indicate the partner's dissociation from the partnership. E. Except as otherwise provided in subsections A and B, persons who are not partners as to each other are not liable as partners to other persons. A.R.S. § 29-1031 29-1031 - Partner's rights and duties 29-1031. Partner's rights and duties A. Each partner is deemed to have an account that is both: 1. 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. 2. 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. B. 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. C. 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. D. A partnership shall reimburse a partner for an advance to the partnership beyond the amount of capital the partner agreed to contribute. E. A payment or advance that is made by a partner and that gives rise to a partnership obligation under subsection C or D of this section constitutes a loan to the partnership that accrues interest from the date of the payment or advance. F. Each partner has equal rights in the management and conduct of the partnership business. G. A partner may use or possess partnership property only on behalf of the partnership. H. 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. I. A person may become a partner only with the consent of all of the partners. J. 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 of the partners. K. This section does not affect the obligations of a partnership to other persons under section 29-1021. A.R.S. § 29-1032 29-1032 - Distributions in kind 29-1032. Distributions in kind A partner has no right to receive, and may not be required to accept, a distribution in kind. A.R.S. § 29-1033 29-1033 - Partner's rights and duties with respect to information 29-1033. Partner's rights and duties with respect to information A. A partnership shall keep its books and records, if any, at its chief executive office. B. 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. C. Each partner and the partnership shall furnish to a partner, and to the legal representative of a deceased partner or partner under legal disability: 1. 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 this chapter. 2. 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. A.R.S. § 29-1034 29-1034 - General standards of partner's conduct 29-1034. General standards of partner's conduct A. 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 B and C. B. A partner's duty of loyalty to the partnership and the other partners is limited to the following: 1. To account to the partnership and hold as trustee 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. 2. To refrain from dealing with the partnership in the conduct or winding up of the partnership business as or on behalf of a party having an interest adverse to the partnership. 3. To refrain from competing with the partnership in the conduct of the partnership business before the dissolution of the partnership. C. 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. D. 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 consistently with the obligation of good faith and fair dealing. E. 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. F. A partner may lend money to and transact other business with the partnership if the loan or other business transaction is approved pursuant to subsection H, and as to each loan or transaction, the rights and obligations of the partner are the same as those of a person who is not a partner, subject to other applicable law. G. This section 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. H. All of the partners or a lesser number or percentage specified in the partnership agreement may authorize or ratify an act or transaction that otherwise would violate a fiduciary duty of a partner. A.R.S. § 29-1035 29-1035 - Actions by partnership and partners 29-1035. Actions by partnership and partners A. 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, causing harm to the partnership. B. 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 either: 1. Enforce the partner's rights under the partnership agreement. 2. Enforce the partner's rights under this chapter, including: (a) The partner's rights under section 29-1031, 29-1033 or 29-1034. (b) The partner's right on dissociation to have the partner's interest in the partnership purchased pursuant to section 29-1061 or enforce any other right under article 6 or 7 of this chapter. (c) The partner's right to compel a dissolution and winding up of the partnership business under section 29-1071 or enforce any other right under article 8 of this chapter. 3. Enforce the rights and otherwise protect the interests of the partner, including rights and interests arising independently of the partnership relationship. C. 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 on a dissolution and winding up does not revive a claim barred by law. A.R.S. § 29-1036 29-1036 - Continuation of partnership beyond definite term or particular undertaking 29-1036. Continuation of partnership beyond definite term or particular undertaking A. 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, as far as is consistent with a partnership at will. B. 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, they are presumed to have agreed that the partnership continue. A.R.S. § 29-1041 29-1041 - Partner not co-owner of partnership property 29-1041. 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. A.R.S. § 29-1042 29-1042 - Partner's transferable interest in partnership 29-1042. 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. A.R.S. § 29-1043 29-1043 - Transfer of partner's transferable interest 29-1043. Transfer of partner's transferable interest A. A transfer, in whole or in part, of a partner's transferable interest in the partnership: 1. Is permissible. 2. Does not by itself cause the partner's dissociation or a dissolution and winding up of the partnership business. 3. Does not, as against the other partners or the partnership, entitle the transferee, during the continuance of the partnership, to participate in the management or conduct of the partnership business, to require access to information concerning partnership transactions or to inspect or copy the partnership books or records. B. A transferee of a partner's transferable interest in the partnership has a right to: 1. Receive, in accordance with the transfer, distributions to which the transferor would otherwise be entitled. 2. Receive on the dissolution and winding up of the partnership business, in accordance with the transfer, the net amount otherwise distributable to the transferor. 3. Seek under section 29-1071, paragraph 6 a judicial determination that it is equitable to wind up the partnership business. 4. Exercise the rights under section 29-1071, paragraph 7. C. In a dissolution and winding up, a transferee is entitled to an account of partnership transactions only from the date of the latest account agreed to by all of the partners. D. On transfer, the transferor retains the rights and duties of a partner other than the interest in distributions transferred. E. A partnership need not give effect to a transferee's rights under this section until it has notice of the transfer. F. A transfer of a partner's transferable interest in the partnership in violation of a restriction on transfer contained in the partnership agreement is ineffective as to a person having notice of the restriction at the time of transfer. A.R.S. § 29-1044 29-1044 - Partner's transferable interest subject to charging order 29-1044. Partner's transferable interest subject to charging order A. 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 may make all other orders, directions, accounts and inquiries the judgment debtor might have made or that the circumstances of the case may require. B. 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. C. At any time before foreclosure, an interest charged may be redeemed either: 1. By the judgment debtor. 2. With property other than partnership property, by one or more of the other partners. 3. With partnership property, by one or more of the other partners with the consent of all of the partners whose interests are not so charged. D. This chapter does not deprive a partner of a right under exemption laws with respect to the partner's interest in the partnership. E. 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. A.R.S. § 29-1051 29-1051 - Events causing partner's dissociation 29-1051. Events causing partner's dissociation A partner is dissociated from a partnership on 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 either: (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 ninety 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 either: (a) The partner engaged in wrongful conduct that adversely and materially affected the partnership business. (b) The partner wilfully or persistently committed a material breach of the partnership agreement or of a duty owed to the partnership or the other partners under section 29-1034. (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 either: (a) Becomes a debtor in bankruptcy. (b) Executes an assignment for the benefit of creditors. (c) Seeks, consents to or acquiesces in the appointment of a trustee, receiver or liquidator of that partner or of all or substantially all of that partner's property. (d) Fails, within ninety 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 fails within ninety days after the expiration of a stay to have the appointment vacated. 7. In the case of a partner who is an individual either: (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 that 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's existence. A.R.S. § 29-1052 29-1052 - Partner's power to dissociate; wrongful dissociation 29-1052. Partner's power to dissociate; wrongful dissociation A. A partner has the power to dissociate at any time, rightfully or wrongfully, by express will pursuant to section 29-1051, paragraph 1. B. A partner's dissociation is wrongful only if either: 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 either: (a) The partner withdraws by express will, unless the withdrawal follows within ninety days after another partner's dissociation by death or otherwise under section 29-1051, paragraphs 6 through 10 or wrongful dissociation under this subsection. (b) The partner is expelled by judicial determination under section 29-1051, paragraph 5. (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 wilfully 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. A.R.S. § 29-1053 29-1053 - Effect of partner's dissociation 29-1053. Effect of partner's dissociation A. If a partner's dissociation results in a dissolution and winding up of the partnership business, article 8 of this chapter applies. Otherwise, article 7 of this chapter applies. B. On a partner's dissociation: 1. The partner's right to participate in the management and conduct of the partnership business terminates, except as otherwise provided in section 29-1073. 2. The partner's duty of loyalty under section 29-1034, subsection B, paragraph 3 terminates. 3. The partner's duty of loyalty under section 29-1034, subsection B, paragraphs 1 and 2 and duty of care under section 29-1034, subsection C 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 section 29-1073 in which event those duties continue as to all matters arising and events occurring during the winding up. A.R.S. § 29-1061 29-1061 - Purchase of dissociated partner's interest 29-1061. Purchase of dissociated partner's interest A. If a partner is dissociated from a partnership without resulting in a dissolution and winding up of the partnership business under section 29-1071, the partnership shall cause the dissociated partner's interest, if any, in the partnership to be purchased for a buyout price determined pursuant to subsection B of this section. B. The buyout price of a dissociated partner's interest is the amount that would have been distributable to the dissociating partner under section 29-1077, subsection B if, on the date of dissociation, the assets of the partnership were sold at a price equal to the greater of the liquidation value or the value based on a sale of the entire business as a going concern without the continuing services of any of the partners and the partnership were wound up as of that date. Interest shall be paid from the date of dissociation to the date of payment. C. Damages for wrongful dissociation under section 29-1052, subsection B, and all other amounts owing, whether or not presently due, from the dissociated partner to the partnership, shall be offset against the buyout price. Interest shall be paid from the date the amount owed becomes due to the date of payment. D. 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 section 29-1062. E. If no agreement for the purchase of a dissociated partner's interest is reached within one hundred twenty days after a written demand for payment, the partnership shall pay, or cause to be paid, in cash to the dissociated partner the amount, if any, the partnership estimates to be the buyout price and accrued interest, reduced by any offsets and accrued interest under subsection C of this section. F. If a deferred payment is authorized under subsection H of this section, the partnership may tender a written offer to pay the amount it estimates to be the buyout price and accrued interest, reduced by any offsets under subsection C of this section, stating the time of payment, the amount and type of security for payment and the other terms and conditions of the obligation. G. The payment or tender required by subsection E or F of this section shall be accompanied by the following: 1. A written statement of partnership assets and liabilities as of the date of dissociation. 2. The latest available partnership balance sheet and income statement, if any. 3. A written explanation of how the estimated amount of the payment was calculated. 4. Written notice that the payment is in full satisfaction of the obligation to purchase unless, within one hundred twenty days after the written notice, the dissociated partner commences an action to determine the buyout price, any offsets under subsection C of this section or other terms of the obligation to purchase. H. 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 material hardship to the business of the partnership. A deferred payment shall bear interest and shall be adequately secured by partnership assets if and to the extent reasonably practicable. I. A dissociated partner may maintain an action against the partnership, pursuant to section 29-1035, subsection B, paragraph 2, subdivision (b), to determine the buyout price of that partner's interest, any offsets under subsection C of this section or other terms of the obligation to purchase. The action shall be commenced within one hundred twenty days after the partnership tenders 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, any offset due under subsection C of this section and accrued interest and shall enter judgment for any additional payment or refund. If deferred payment is authorized under subsection H of this section, the court shall also determine the security for payment and other terms of the obligation to purchase. The court may assess reasonable attorney fees and the fees and expenses of appraisers or other experts for a party to the action, in amounts the court finds equitable, against a party that the court finds acted arbitrarily, vexatiously or not in good faith. The finding may be based on the partnership's failure to tender payment or an offer to pay or to comply with subsection G of this section. A.R.S. § 29-1062 29-1062 - Dissociated partner's power to bind and liability to partnership 29-1062. Dissociated partner's power to bind and liability to partnership A. For two years after a partner dissociates without resulting in a dissolution and winding up of the partnership business, the partnership, including a surviving partnership under article 9 of this chapter, is bound by an act of the dissociated partner that would have bound the partnership under section 29-1021 before dissociation only if at the time of entering into the transaction the other party: 1. Reasonably believed that the dissociated partner was then a partner. 2. Did not have notice of the partner's dissociation. 3. Is not deemed to have had knowledge under section 29-1023, subsection E or notice under section 29-1064, subsection C. B. A dissociated partner is liable to the partnership for any damage caused to the partnership arising from an obligation incurred by the dissociated partner after dissociation for which the partnership is liable under subsection A of this section. A.R.S. § 29-1063 29-1063 - Dissociated partner's liability to other persons 29-1063. Dissociated partner's liability to other persons A. A partner's dissociation does not of itself discharge the partner's liability for a partnership obligation incurred before dissociation. A dissociated partner is not liable for a partnership obligation incurred after dissociation, except as otherwise provided in subsection B of this section. B. A partner who dissociates without resulting in a dissolution and winding up of the partnership business is liable as a partner to the other party in a transaction entered into by the partnership, or a surviving partnership pursuant to any merger permitted by law, within two years after the partner's dissociation, only if the partner is liable for the obligation under section 29-1026 and at the time of entering into the transaction the other party: 1. Relied on a reasonable belief that the dissociated partner was then a partner. 2. Did not have notice of the partner's dissociation. 3. Is not deemed to have had knowledge under section 29-1023, subsection E or notice under section 29-1064, subsection C. C. By agreement with the partnership creditor and the partners continuing the business, a dissociated partner may be released from liability for a partnership obligation. D. A dissociated partner is released from liability for a partnership obligation if a partnership creditor, with notice of the partner's dissociation but without the partner's consent, agrees to a material alteration in the nature or time of payment of a partnership obligation. A.R.S. § 29-1064 29-1064 - Statement of dissociation 29-1064. Statement of dissociation A. A dissociated partner or the partnership may file a statement of dissociation stating the name of the partnership and that the partner is dissociated from the partnership. B. A statement of dissociation is a limitation on the authority of a dissociated partner for the purposes of section 29-1023, subsections D and E. C. For the purposes of section 29-1062, subsection A, paragraph 3 and section 29-1063, subsection B, paragraph 3, a person who is not a partner is deemed to have notice of the dissociation ninety days after the statement of dissociation is filed. A.R.S. § 29-1065 29-1065 - Continued use of partnership name 29-1065. Continued use of partnership name Continued use of a partnership name, or a dissociated partner's name as part of a partnership name, by partners continuing the business does not of itself make the dissociated partner liable for an obligation of the partners or the partnership continuing the business. A.R.S. § 29-1071 29-1071 - Events causing dissolution and winding up of partnership business 29-1071. Events causing dissolution and winding up of partnership business A partnership is dissolved, and its business shall be wound up, only on the occurrence of any of the following events: 1. In a partnership at will, the partnership having notice from a partner, other than a partner who is dissociated under section 29-1051, paragraphs 2 through 10, of that partner's express will to withdraw as a partner, or on a later date specified by the partner. 2. In a partnership for a definite term or particular undertaking either: (a) Within ninety days after a partner's dissociation by death or otherwise under section 29-1051, paragraphs 6 through 10 or wrongful dissociation under section 29-1052, subsection B, the express will of at least half of the remaining partners to wind up the partnership business. A partner's rightful dissociation pursuant to section 29-1052, subsection B, paragraph 2, subdivision (a) constitutes the expression of that partner's will to wind up the partnership business. (b) The express will of all of the partners to wind up the partnership business. (c) After the expiration of the term, at the election of any partner by written notice to the partnership, or on the completion of the undertaking. 3. An event agreed to in the partnership agreement resulting in the winding up of the partnership business. 4. An event that makes it unlawful for all or substantially all of the business of the partnership to be continued, but a cure of illegality within ninety days after notice to the partnership of the event is effective retroactively to the date of the event for purposes of this section. 5. On application by a partner, a judicial determination that either: (a) The economic purpose of the partnership is likely to be unreasonably frustrated. (b) Another partner has engaged in conduct relating to the partnership business that makes it not reasonably practicable to carry on the business in partnership with that partner. (c) It is not otherwise reasonably practicable to carry on the partnership business in conformity with the partnership agreement. 6. On application by a transferee of a partner's transferable interest, a judicial determination that it is equitable to wind up the partnership business either: (a) After the expiration of the term or completion of the undertaking, if the partnership was for a definite term or particular undertaking at the time of the transfer or entry of the charging order that gave rise to the transfer. (b) At any time, if the partnership was a partnership at will at the time of the transfer or entry of the charging order that gave rise to the transfer. 7. The expiration of ninety days after a partner's dissociation that results in one or no remaining partner, unless the dissociation was pursuant to section 29-1051, paragraph 6 or 7 and before the expiration, all of the transferees, including transferees of the dissociated partner, and the remaining partner, if any, agree by written consent to continue the business of the partnership and admit that number of partners sufficient to cause the partnership to have at least two partners. A.R.S. § 29-1072 29-1072 - Partnership continues after dissolution 29-1072. Partnership continues after dissolution A. Subject to subsection B of this section, a partnership continues after dissolution only for the purpose of winding up its business. The partnership is terminated when the winding up of its business is completed. If the partnership is a limited liability partnership, its status as a limited liability partnership continues until termination. B. At any time after the dissolution of a partnership and before the winding up of its