Dissolution and Winding Up

R.I. Gen. Laws tit. 7, ch. 7-12.1, art. 8

in effect

R.I. Gen. Laws § 7-12.1-801 Events causing dissolution.

7-12.1-801. Events causing dissolution. A partnership is dissolved, and its business must be wound up, upon the occurrence of any of the following: (1) In a partnership at will, the partnership knows or has notice of a person’s express will to withdraw as a partner, other than a partner that has dissociated under § 7-12.1-601(2) through (10), but, if the person has specified a withdrawal date later than the date the partnership knew or had notice, on the later date; (2) In a partnership for a definite term or particular undertaking: (i) Within ninety (90) days after a person’s dissociation by death or otherwise under § 7-12.1-601(6) through (10) or wrongful dissociation under § 7-12.1-602(b), the affirmative vote or consent of at least half of the remaining partners to wind up the partnership business, for which purpose a person’s rightful dissociation pursuant to § 7-12.1-602(b)(2)(i) constitutes that partner’s consent to wind up the partnership business; (ii) The affirmative vote or consent of all the partners to wind up the partnership business; or (iii) The expiration of the term or the completion of the undertaking; (3) An event or circumstance that the partnership agreement states causes dissolution; (4) On application by a partner, the entry by the superior court of an order dissolving the partnership on the grounds that: (i) The conduct of all or substantially all the partnership’s business is unlawful; (ii) The economic purpose of the partnership is likely to be unreasonably frustrated; (iii) Another partner has engaged in conduct relating to the partnership business which makes it not reasonably practicable to carry on the business in partnership with that partner; or (iv) It is otherwise not reasonably practicable to carry on the partnership business in conformity with the partnership agreement; (5) On application by a transferee, the entry by the superior court of an order dissolving the partnership on the ground that it is equitable to wind up the partnership business: (i) 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 (ii) 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; or (6) The passage of ninety (90) consecutive days during which the partnership does not have at least two (2) 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 § 7-12.1-802 Winding up.

7-12.1-802. Winding up. (a) A dissolved partnership shall wind up its business and, except as otherwise provided in § 7-12.1-803, the partnership continues after dissolution only for the purpose of winding up. (b) In winding up its business, the partnership: (1) Shall discharge the partnership’s debts, obligations, and other liabilities, settle and close the partnership’s business, and marshal and distribute the assets of the partnership; and (2) May: (i) Deliver to the secretary of state for filing a statement of dissolution stating the name of the partnership and that the partnership is dissolved; (ii) Preserve the partnership business and property as a going concern for a reasonable time; (iii) Prosecute and defend actions and proceedings, whether civil, criminal, or administrative; (iv) Transfer the partnership’s property; (v) Settle disputes by mediation or arbitration; (vi) Deliver to the secretary of state for filing a statement of termination stating the name of the partnership and that the partnership is terminated; and (vii) Perform other acts necessary or appropriate to the winding up. (c) A person whose dissociation as a partner resulted in dissolution may participate in winding up as if still a partner, unless the dissociation was wrongful. (d) If a dissolved partnership does not have a partner and no person has the right to participate in winding up under subsection (c) of this section, the personal or legal representative of the last person to have been a partner may wind up the partnership’s business. If the representative does not exercise that right, a person to wind up the partnership’s business may be appointed by the affirmative vote or consent of transferees owning a majority of the rights to receive distributions at the time the consent is to be effective. A person appointed under this subsection has the powers of a partner under § 7-12.1-804 but is not liable for the debts, obligations, and other liabilities of the partnership solely by reason of having or exercising those powers or otherwise acting to wind up the partnership’s business. (e) On the application of any partner or person entitled under subsection (c) of this section to participate in winding up, the superior court may order judicial supervision of the winding up of a dissolved partnership, including the appointment of a person to wind up the partnership’s business, if: (1) The partnership does not have a partner and within a reasonable time following the dissolution no person has been appointed under subsection (d) of this section; or (2) The applicant establishes other good cause. P.L. 2022, ch. 123, § 2, effective January 1, 2023; P.L. 2022, ch. 124, § 2, effective January 1, 2023.

R.I. Gen. Laws § 7-12.1-803 Rescinding dissolution.

7-12.1-803. Rescinding dissolution. (a) A partnership may rescind its dissolution, unless a statement of termination applicable to the partnership has become effective or the superior court has entered an order under § 7-12.1-801(4) or (5) dissolving the partnership. (b) Rescinding dissolution under this section requires: (1) The affirmative vote or consent of each partner; and (2) If the partnership has filed with the secretary of state a statement of dissolution and: (i) The statement has not become effective, delivery to the secretary of state for filing of a statement of withdrawal under § 7-12.1-115 applicable to the statement of dissolution; or (ii) The statement of dissolution has become effective, delivery to the secretary of state for filing of a statement of rescission stating the name of the partnership and that dissolution has been rescinded under this section. (c) If a partnership rescinds its dissolution: (1) The partnership resumes carrying on its business as if dissolution had never occurred; (2) Subject to subsection (c)(3) of this section, any liability incurred by the partnership after the dissolution and before the rescission has become effective is determined as if dissolution had never occurred; and (3) The rights of a third party arising out of conduct in reliance on the dissolution before the third party knew or had notice of the rescission may not be adversely affected. P.L. 2022, ch. 123, § 2, effective January 1, 2023; P.L. 2022, ch. 124, § 2, effective January 1, 2023.

R.I. Gen. Laws § 7-12.1-804 Power to bind partnership after dissolution.

7-12.1-804. Power to bind partnership after dissolution. (a) A partnership is bound by a partner’s act after dissolution which: (1) Is appropriate for winding up the partnership business; or (2) Would have bound the partnership under § 7-12.1-301 before dissolution if, at the time the other party enters into the transaction, the other party does not know or have notice of the dissolution. (b) A person dissociated as a partner binds a partnership through an act occurring after dissolution if: (1) At the time the other party enters into the transaction: (i) Less than two (2) years has passed since the dissociation; and (ii) The other party does not know or have notice of the dissociation and reasonably believes that the person is a partner; and (2) The act: (i) Is appropriate for winding up the partnership’s business; or (ii) Would have bound the partnership under § 7-12.1-301 before dissolution and at the time the other party enters into the transaction the other party does not know or have notice of the dissolution. P.L. 2022, ch. 123, § 2, effective January 1, 2023; P.L. 2022, ch. 124, § 2, effective January 1, 2023.

R.I. Gen. Laws § 7-12.1-805 Liability after dissolution of partner and person dissociated as partner.

7-12.1-805. Liability after dissolution of partner and person dissociated as partner. (a) If a partner having knowledge of the dissolution causes a partnership to incur an obligation under § 7-12.1-804(a) by an act that is not appropriate for winding up the partnership business, the partner is liable: (1) To the partnership for any damage caused to the partnership arising from the obligation; and (2) If another partner or person dissociated as a partner is liable for the obligation, to that other partner or person for any damage caused to that other partner or person arising from the liability. (b) Except as otherwise provided in subsection (c) of this section, if a person dissociated as a partner causes a partnership to incur an obligation under § 7-12.1-804(b), the person is liable: (1) To the partnership for any damage caused to the partnership arising from the obligation; and (2) If a partner or another person dissociated as a partner is liable for the obligation, to the partner or other person for any damage caused to the partner or other person arising from the obligation. (c) A person dissociated as a partner is not liable under subsection (b) of this section if: (1) Section 7-12.1-802(c) permits the person to participate in winding up; and (2) The act that causes the partnership to be bound under § 7-12.1-804(b) is appropriate for winding up the partnership’s business. P.L. 2022, ch. 123, § 2, effective January 1, 2023; P.L. 2022, ch. 124, § 2, effective January 1, 2023.

R.I. Gen. Laws § 7-12.1-806 Disposition of assets in winding up — When contributions required.

7-12.1-806. Disposition of assets in winding up — When contributions required. (a) In winding up its business, a partnership shall apply its assets, including the contributions required by this section, to discharge the partnership’s obligations to creditors, including partners that are creditors. (b) After a partnership complies with subsection (a) of this section, any surplus must be distributed in the following order, subject to any charging order in effect under § 7-12.1-504: (1) To each person owning a transferable interest that reflects contributions made and not previously returned, an amount equal to the value of the unreturned contributions; and (2) Among persons owning transferable interests in proportion to their respective rights to share in distributions immediately before the dissolution of the partnership. (c) If a partnership’s assets are insufficient to satisfy all its obligations under subsection (a) of this section, with respect to each unsatisfied obligation incurred when the partnership was not a limited liability partnership, the following rules apply: (1) Each person that was a partner when the obligation was incurred and that has not been released from the obligation under § 7-12.1-703(c) and (d) shall contribute to the partnership for the purpose of enabling the partnership to satisfy the obligation. The contribution due from each of those persons is in proportion to the right to receive distributions in the capacity of a partner in effect for each of those persons when the obligation was incurred. (2) If a person does not contribute the full amount required under subsection (c)(1) of this section with respect to an unsatisfied obligation of the partnership, the other persons required to contribute by subsection (c)(1) of this section on account of the obligation shall contribute the additional amount necessary to discharge the obligation. The additional contribution due from each of those other persons is in proportion to the right to receive distributions in the capacity of a partner in effect for each of those other persons when the obligation was incurred. (3) If a person does not make the additional contribution required by subsection (c)(2) of this section, further additional contributions are determined and due in the same manner as provided in that subsection. (d) A person that makes an additional contribution under subsection (c)(2) or (c)(3) of this section may recover from any person whose failure to contribute under subsection (c)(1) or (c)(2) of this section necessitated the additional contribution. A person may not recover under this subsection more than the amount additionally contributed. A person’s liability under this subsection may not exceed the amount the person failed to contribute. (e) If a partnership does not have sufficient surplus to comply with subsection (b)(1) of this section, any surplus must be distributed among the owners of transferable interests in proportion to the value of the respective unreturned contributions. (f) All distributions made under subsections (b) and (c) of this section must be paid in money. P.L. 2022, ch. 123, § 2, effective January 1, 2023; P.L. 2022, ch. 124, § 2, effective January 1, 2023.

R.I. Gen. Laws § 7-12.1-807 Known claims against dissolved limited liability partnership.

7-12.1-807. Known claims against dissolved limited liability partnership. (a) Except as otherwise provided in subsection (d) of this section, a dissolved limited liability partnership may give notice of a known claim under subsection (b) of this section, which has the effect provided in subsection (c) of this section. (b) A dissolved limited liability partnership may in a record notify its known claimants of the dissolution. The notice must: (1) Specify the information required to be included in a claim; (2) State that a claim must be in writing and provide a mailing address to which the claim is to be sent; (3) State the deadline for receipt of a claim, which may not be less than one hundred twenty (120) days after the date the notice is received by the claimant; (4) State that the claim will be barred if not received by the deadline; and (5) Unless the partnership has been throughout its existence a limited liability partnership, state that the barring of a claim against the partnership will also bar any corresponding claim against any partner or person dissociated as a partner which is based on § 7-12.1-306. (c) A claim against a dissolved limited liability partnership is barred if the requirements of subsection (b) of this section are met and: (1) The claim is not received by the specified deadline; or (2) If the claim is timely received but rejected by the limited liability partnership: (i) The partnership causes the claimant to receive a notice in a record stating that the claim is rejected and will be barred unless the claimant commences an action against the partnership to enforce the claim not later than ninety (90) days after the claimant receives the notice; and (ii) The claimant does not commence the required action not later than ninety (90) days after the claimant receives the notice. (d) This section does not apply to a claim based on an event occurring after the date of dissolution or a liability that on that date is contingent. P.L. 2022, ch. 123, § 2, effective January 1, 2023; P.L. 2022, ch. 124, § 2, effective January 1, 2023.

R.I. Gen. Laws § 7-12.1-808 Other claims against dissolved limited liability partnership.

7-12.1-808. Other claims against dissolved limited liability partnership. (a) A dissolved limited liability partnership may publish notice of its dissolution and request persons having claims against the partnership to present them in accordance with the notice. (b) A notice under subsection (a) of this section must: (1) Be published at least once in a newspaper of general circulation; (2) Describe the information required to be contained in a claim, state that the claim must be in writing, and provide a mailing address to which the claim is to be sent; (3) State that a claim against the partnership is barred unless an action to enforce the claim is commenced not later than three (3) years after publication of the notice; and (4) Unless the partnership has been throughout its existence a limited liability partnership, state that the barring of a claim against the partnership will also bar any corresponding claim against any partner or person dissociated as a partner which is based on § 7-12.1-306. (c) If a dissolved limited liability partnership publishes a notice in accordance with subsection (b) of this section, the claim of each of the following claimants is barred unless the claimant commences an action to enforce the claim against the partnership not later than three (3) years after the publication date of the notice: (1) A claimant that did not receive notice in a record under § 7-12.1-807; (2) A claimant whose claim was timely sent to the partnership but not acted on; and (3) A claimant whose claim is contingent at, or based on an event occurring after, the date of dissolution. (d) A claim not barred under this section or § 7-12.1-807 may be enforced: (1) Against a dissolved limited liability partnership, to the extent of its undistributed assets; (2) Except as otherwise provided in § 7-12.1-809, if assets of the partnership have been distributed after dissolution, against a partner or transferee to the extent of that person’s proportionate share of the claim or of the partnership’s assets distributed to the partner or transferee after dissolution, whichever is less, but a person’s total liability for all claims under this subsection may not exceed the total amount of assets distributed to the person after dissolution; and (3) Against any person liable on the claim under §§ 7-12.1-306, 7-12.1-703, and 7-12.1-805. P.L. 2022, ch. 123, § 2, effective January 1, 2023; P.L. 2022, ch. 124, § 2, effective January 1, 2023.

R.I. Gen. Laws § 7-12.1-809 Court proceedings.

7-12.1-809. Court proceedings. (a) A dissolved limited liability partnership that has published a notice under § 7-12.1-808 may file an application with the Providence County superior court for a determination of the amount and form of security to be provided for payment of claims that are reasonably expected to arise after the date of dissolution based on facts known to the partnership and: (1) At the time of the application: (i) Are contingent; or (ii) Have not been made known to the partnership; or (2) Are based on an event occurring after the date of dissolution. (b) Security is not required for any claim that is or is reasonably anticipated to be barred under § 7-12.1-807. (c) Not later than ten (10) days after the filing of an application under subsection (a) of this section, the dissolved limited liability partnership shall give notice of the proceeding to each claimant holding a contingent claim known to the partnership. (d) In any proceeding under this section, the court may appoint a guardian ad litem to represent all claimants whose identities are unknown. The reasonable fees and expenses of the guardian, including all reasonable expert witness fees, must be paid by the dissolved limited liability partnership. (e) A dissolved limited liability partnership that provides security in the amount and form ordered by the court under subsection (a) of this section satisfies the partnership’s obligations with respect to claims that are contingent, have not been made known to the partnership, or are based on an event occurring after the date of dissolution, and such claims may not be enforced against a partner or transferee on account of assets received in liquidation. P.L. 2022, ch. 123, § 2, effective January 1, 2023; P.L. 2022, ch. 124, § 2, effective January 1, 2023.

R.I. Gen. Laws § 7-12.1-810 Liability of partner and person dissociated as partner when claim against partnership barred.

7-12.1-810. Liability of partner and person dissociated as partner when claim against partnership barred. If a claim against a dissolved partnership is barred under § 7-12.1-807, 7-12.1-808, or 7-12.1-809, any corresponding claim under § 7-12.1-306, 7-12.1-703, or 7-12.1-805 is also barred. P.L. 2022, ch. 123, § 2, effective January 1, 2023; P.L. 2022, ch. 124, § 2, effective January 1, 2023.

Source: State of Rhode Island General Assembly (rilegislature.gov)URL: https://webserver.rilegislature.gov/Statutes/TITLE7/7-12.1/7-8/INDEX.htmFetched: 10/20/2026