WINDING UP PARTNERSHIP BUSINESS

M.R.S. tit. 31, ch. 17, subch. 8

in effect

31 M.R.S. §1081 Events causing dissolution and winding up of partnership business

1081. Events causing dissolution and winding up of partnership business A partnership is dissolved, and its business must be wound up, only upon the occurrence of any of the following events: 1. Notice of express will to withdraw. In a partnership at will, the partnership's having notice from a partner, other than a partner who is dissociated under section 1061, subsections 2 to 10, of that partner's express will to withdraw as a partner, or on a later date specified by the partner; 2. Dissolution before expiration of term. In a partnership for a definite term or particular undertaking: A. Within 90 days after a partner's dissociation by death or otherwise under, section 1061, subsections 6 to 10 or wrongful dissociation under section 1062, subsection 2, the express will of at least 1/2 of the remaining partners to wind up the partnership business, for which purpose a partner's rightful dissociation pursuant to section 1062, subsection 2, paragraph B, subparagraph (1) 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; or C. The expiration of the term or the completion of the undertaking; 3. Event in partnership agreement. An event agreed to in the partnership agreement resulting in the winding up of the partnership business; 4. Unlawful continuation; cure. 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 90 days after notice to the partnership of the event is effective retroactively to the date of the event for purposes of this section; 5. Judicial determination; application by partner. On application by a partner, a judicial determination that: 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; or C. It is not otherwise reasonably practicable to carry on the partnership business in conformity with the partnership agreement; or 6. Judicial determination; application by transferee. On application by a transferee of a partner's transferable interest, a judicial determination that it is equitable to wind up the partnership business: 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; or 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. PL 2005, c. 543, §A2 (NEW).

31 M.R.S. §1082 Partnership continues after dissolution

1082. Partnership continues after dissolution 1. Continuation for purpose of winding up. Subject to subsection 2, 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. 2. Waiver of right to wind up business; terminate partnership. At any time after the dissolution of a partnership and before the winding up of its business is completed, all of the partners, including any dissociating partner other than a wrongfully dissociating partner, may waive the right to have the partnership's business wound up and the partnership terminated. In that event: A. The partnership resumes carrying on its business as if dissolution had never occurred, and any liability incurred by the partnership or a partner after the dissolution and before the waiver is determined as if dissolution had never occurred; and B. The rights of a 3rd party accruing under section 1084, subsection 1 or arising out of conduct in reliance on the dissolution before the 3rd party knew or received a notification of the waiver may not be adversely affected. PL 2005, c. 543, §A2 (NEW).

31 M.R.S. §1083 Right to wind up partnership business

1083. Right to wind up partnership business 1. Participation of partner; judicial supervision. After dissolution, a partner who has not wrongfully dissociated may participate in winding up the partnership's business, but on application of any partner, partner's legal representative or transferee, the Superior Court, for good cause shown, may order judicial supervision of the winding up. 2. Legal representative of last surviving partner. The legal representative of the last surviving partner may wind up a partnership's business. 3. Powers of person winding up business. A person winding up a partnership's business may preserve the partnership business or property as a going concern for a reasonable time, prosecute and defend actions and proceedings, whether civil, criminal or administrative, settle and close the partnership's business, dispose of and transfer the partnership's property, discharge the partnership's liabilities, distribute the assets of the partnership pursuant to section 1087, settle disputes by mediation or arbitration and perform other necessary acts. PL 2005, c. 543, §A2 (NEW).

31 M.R.S. §1084 Partner's power to bind partnership after dissolution

1084. Partner's power to bind partnership after dissolution Subject to section 1085, a partnership is bound by a partner's act after dissolution that: 1. Appropriate act. Is appropriate for winding up the partnership business; or 2. Act would have bound partnership. Would have bound the partnership under section 1031 before dissolution, if the other party to the transaction did not have notice of the dissolution. PL 2005, c. 543, §A2 (NEW).

31 M.R.S. §1085 Statement of dissolution

1085. Statement of dissolution 1. Filing of statement. After dissolution, a partner who has not wrongfully dissociated may file a statement of dissolution stating the name of the partnership and that the partnership has dissolved and is winding up its business. 2. Deemed to have notice. For the purposes of sections 1031 and 1084, a person not a partner is deemed to have notice of the dissolution and the limitation on the partners' authority as a result of the statement of dissolution 30 days after it is filed. PL 2005, c. 543, §A2 (NEW).

31 M.R.S. §1086 Partner's liability to other partners after dissolution

1086. Partner's liability to other partners after dissolution 1. Liable for partner's share. Except as otherwise provided in subsection 2 and section 1034, after dissolution a partner is liable to the other partners for the partner's share of any partnership liability incurred under section 1084. 2. Liability for inappropriate act. A partner who, with knowledge of the dissolution, incurs a partnership liability under section 1084, subsection 2 by an act that is not appropriate for winding up the partnership business is liable to the partnership for any damage caused to the partnership arising from the liability. PL 2005, c. 543, §A2 (NEW).

31 M.R.S. §1087 Settlement of accounts and contributions among partners

1087. Settlement of accounts and contributions among partners 1. Application of assets. In winding up a partnership's business, the assets of the partnership, including the contributions of the partners required by this section, must be applied to discharge the partnership's obligations to creditors, including, to the extent permitted by law, partners who are creditors. Any surplus must be applied to pay in cash the net amount distributable to partners in accordance with their right to distributions under subsection 2. 2. Settlement of partnership accounts; distributions; contribution. Each partner is entitled to a settlement of all partnership accounts upon winding up the partnership business. In settling accounts among the partners, profits and losses that result from the liquidation of the partnership assets must be credited and charged to the partners' accounts. The partnership shall make a distribution to a partner in an amount equal to any excess of the credits over the charges in the partner's account. A partner shall contribute to the partnership an amount equal to any excess of the charges over the credits in the partner's account, but excluding from the calculation charges attributable to an obligation for which the partner is not personally liable under section 1034. 3. Contribution by other partners; recovery. If a partner fails to contribute the full amount required under subsection 2, all of the other partners shall contribute, in the proportions in which those partners share partnership losses, the additional amount necessary to satisfy the partnership obligations for which they are personally liable under section 1034. A partner or partner's legal representative may recover from the other partners any contributions the partner makes to the extent the amount contributed exceeds that partner's share of the partnership obligations for which the partner is personally liable under section 1034. 4. Contribution for losses after settlement. After the settlement of accounts, each partner shall contribute, in the proportion in which the partner shares partnership losses, the amount necessary to satisfy partnership obligations that were not known at the time of the settlement and for which the partner is personally liable under section 1034. 5. Deceased partner's estate liable. The estate of a deceased partner is liable for the partner's obligation to contribute to the partnership. 6. Enforcement for creditors. An assignee for the benefit of creditors of a partnership or a partner, or a person appointed by a court to represent creditors of a partnership or a partner, may enforce a partner's obligation to contribute to the partnership. PL 2005, c. 543, §A2 (NEW).

Source: Maine Legislature, Office of the Revisor of Statutes (legislature.maine.gov)URL: https://legislature.maine.gov/statutes/31/title31ch17sec0.htmlFetched: 10/20/2026