R.I. Gen. Laws tit. 7, ch. 7-12.1, art. 6 — Dissociation | General Laws of Rhode Island (through P.L. 2025) — Rhode Island

R.I. Gen. Laws § 7-12.1-601 Events causing dissociation.

7-12.1-601. Events causing dissociation. A person is dissociated as a partner when: (1) The partnership knows or has notice of the person’s express will to withdraw as a partner, but, if the person has specified a withdrawal date later than the date the partnership knew or had notice, on that later date; (2) An event stated in the partnership agreement as causing the person’s dissociation occurs; (3) The person is expelled as a partner pursuant to the partnership agreement; (4) The person is expelled as a partner by the affirmative vote or consent of all the other partners if: (i) It is unlawful to carry on the partnership business with the person as a partner; (ii) There has been a transfer of all of the person’s transferable interest in the partnership, other than: (A) A transfer for security purposes; or (B) A charging order in effect under § 7-12.1-504 which has not been foreclosed; (iii) The person is an entity and: (A) The partnership notifies the person that it will be expelled as a partner because the person has filed a statement of dissolution or the equivalent, the person has been administratively dissolved, the person’s charter or the equivalent has been revoked, or the person’s right to conduct business has been suspended by the person’s jurisdiction of formation; and (B) Not later than ninety (90) days after the notification, the statement of dissolution or the equivalent has not been withdrawn, rescinded, or revoked, or the person’s charter or the equivalent or right to conduct business has not been reinstated; or (iv) The person is an unincorporated entity that has been dissolved and whose activities and affairs are being wound up; (5) On application by the partnership or another partner, the person is expelled as a partner by judicial order because the person: (i) Has engaged or is engaging in wrongful conduct that has affected adversely and materially, or will affect adversely and materially, the partnership’s business; (ii) Has committed willfully or persistently, or is committing willfully or persistently, a material breach of the partnership agreement or a duty or obligation under § 7-12.1-409; or (iii) Has engaged or is engaging in conduct relating to the partnership’s business which makes it not reasonably practicable to carry on the business with the person as a partner; (6) The person: (i) Becomes a debtor in bankruptcy; (ii) Signs an assignment for the benefit of creditors; or (iii) Seeks, consents to, or acquiesces in the appointment of a trustee, receiver, or liquidator of the person or of all or substantially all the person’s property; (7) In the case of an individual: (i) The individual dies; (ii) A guardian or general conservator for the individual is appointed; or (iii) A court orders that the individual has otherwise become incapable of performing the individual’s duties as a partner under this chapter or the partnership agreement; (8) In the case of a person that is a testamentary or inter vivos trust or is acting as a partner by virtue of being a trustee of such a trust, the trust’s entire transferable interest in the partnership is distributed; (9) In the case of a person that is an estate or is acting as a partner by virtue of being a personal representative of an estate, the estate’s entire transferable interest in the partnership is distributed; (10) In the case of a person that is not an individual, the existence of the person terminates; (11) The partnership participates in a merger under Article 11 of this chapter and: (i) The partnership is not the surviving entity; or (ii) Otherwise as a result of the merger, the person ceases to be a partner; (12) The partnership participates in an interest exchange under Article 11 of this chapter and, as a result of the interest exchange, the person ceases to be a partner; (13) The partnership participates in a conversion under Article 11 of this chapter; (14) The partnership participates in a domestication under Article 11 of this chapter and, as a result of the domestication, the person ceases to be a partner; or (15) The partnership dissolves and completes winding up. P.L. 2022, ch. 123, § 2, effective January 1, 2023; P.L. 2022, ch. 124, § 2, effective January 1, 2023.

R.I. Gen. Laws § 7-12.1-602 Power to dissociate as partner — Wrongful dissociation.

7-12.1-602. Power to dissociate as partner — Wrongful dissociation. (a) A person has the power to dissociate as a partner at any time, rightfully or wrongfully, by withdrawing as a partner by express will under § 7-12.1-601(1). (b) A person’s dissociation as a partner is wrongful only if the dissociation: (1) Is in breach of an express provision of the partnership agreement; or (2) In the case of a partnership for a definite term or particular undertaking, occurs before the expiration of the term or the completion of the undertaking and: (i) The person withdraws as a partner by express will, unless the withdrawal follows not later than ninety (90) days after another person’s dissociation by death or otherwise under § 7-12.1-601(6) through (10) or wrongful dissociation under this subsection; (ii) The person is expelled as a partner by judicial order under § 7-12.1-601(5); (iii) The person is dissociated under § 7-12.1-601(6); or (iv) In the case of a person that is not a trust other than a business trust, an estate, or an individual, the person is expelled or otherwise dissociated because it willfully dissolved or terminated. (c) A person that wrongfully dissociates as a partner is liable to the partnership and to the other partners for damages caused by the dissociation. The liability is in addition to any debt, obligation, or other liability of the partner to the partnership or the other partners. P.L. 2022, ch. 123, § 2, effective January 1, 2023; P.L. 2022, ch. 124, § 2, effective January 1, 2023.

R.I. Gen. Laws § 7-12.1-603 Effect of dissociation.

7-12.1-603. Effect of dissociation. (a) If a person’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) If a person is dissociated as a partner: (1) The person’s right to participate in the management and conduct of the partnership’s business terminates, except as otherwise provided in § 7-12.1-802(c); and (2) The person’s duties and obligations under § 7-12.1-409 end with regard to matters arising and events occurring after the person’s dissociation, except to the extent the partner participates in winding up the partnership’s business pursuant to § 7-12.1-802. (c) A person’s dissociation does not of itself discharge the person from any debt, obligation, or other liability to the partnership or the other partners which the person incurred while a partner. P.L. 2022, ch. 123, § 2, effective January 1, 2023; P.L. 2022, ch. 124, § 2, effective January 1, 2023.