CONTRIBUTIONS AND DISTRIBUTIONS

M.R.S. tit. 31, ch. 19, subch. 5

in effect

31 M.R.S. §1361 Form of contribution

1361. Form of contribution A contribution of a partner may consist of tangible or intangible property or other benefit to the limited partnership, including money, services performed, promissory notes, other agreements to contribute cash or property and contracts for services to be performed. PL 2005, c. 543, §C2 (NEW).

31 M.R.S. §1362 Liability for contribution

1362. Liability for contribution 1. Obligation not excused by death, disability or other inability. A partner's obligation to contribute money or other property or other benefit to, or to perform services for, a limited partnership is not excused by the partner's death, disability or other inability to perform personally. 2. Obligation to contribute money equal to promised nonmonetary contribution. If a partner does not make a promised nonmonetary contribution, the partner is obligated at the option of the limited partnership to contribute money equal to that portion of the value, as stated in the required information, of the stated contribution that has not been made. 3. Obligation in violation of chapter; enforcement by creditor. The obligation of a partner to make a contribution or return money or other property paid or distributed in violation of this chapter may be compromised only by consent of all partners. A creditor of a limited partnership that extends credit or otherwise acts in reliance on an obligation described in subsection 1, without notice of any compromise under this subsection, may enforce the original obligation. PL 2005, c. 543, §C2 (NEW).

31 M.R.S. §1363 Sharing of distributions

1363. Sharing of distributions A distribution by a limited partnership must be shared among the partners on the basis of the value, as stated in the required records when the limited partnership decides to make the distribution, of the contributions the limited partnership has received from each partner. PL 2005, c. 543, §C2 (NEW).

31 M.R.S. §1364 Interim distributions

1364. Interim distributions A partner does not have a right to any distribution before the dissolution and winding up of the limited partnership unless the limited partnership decides to make an interim distribution. PL 2005, c. 543, §C2 (NEW).

31 M.R.S. §1365 No distribution on account of dissociation

1365. No distribution on account of dissociation A person does not have a right to receive a distribution on account of dissociation. PL 2005, c. 543, §C2 (NEW).

31 M.R.S. §1366 Distribution in kind

1366. Distribution in kind A partner does not have a right to demand or receive any distribution from a limited partnership in any form other than cash. Subject to section 1402, subsection 2, a limited partnership may distribute an asset in kind to the extent each partner receives a percentage of the asset equal to the partner's share of distributions. PL 2005, c. 543, §C2 (NEW).

31 M.R.S. §1367 Right to distribution

1367. Right to distribution When a partner or transferee becomes entitled to receive a distribution, the partner or transferee has the status of, and is entitled to all remedies available to, a creditor of the limited partnership with respect to the distribution. However, the limited partnership's obligation to make a distribution is subject to offset for any amount owed to the limited partnership by the partner or dissociated partner on whose account the distribution is made. PL 2005, c. 543, §C2 (NEW).

31 M.R.S. §1368 Limitations on distribution

1368. Limitations on distribution 1. In violation of partnership agreement. A limited partnership may not make a distribution in violation of the partnership agreement. 2. Unable to pay debts or satisfy superior preferential rights. A limited partnership may not make a distribution if after the distribution: A. The limited partnership would not be able to pay its debts as they become due in the ordinary course of the limited partnership's activities; or B. The limited partnership's total assets would be less than the sum of its total liabilities plus the amount that would be needed, if the limited partnership were to be dissolved, wound up and terminated at the time of the distribution, to satisfy the preferential rights upon dissolution, winding up and termination of partners whose preferential rights are superior to those of persons receiving the distribution. 3. Basis for determination that distribution not prohibited. A limited partnership may base a determination that a distribution is not prohibited under subsection 2 on financial statements prepared on the basis of accounting practices and principles that are reasonable in the circumstances or on a fair valuation or other method that is reasonable in the circumstances. 4. Measuring effect of distribution. Except as otherwise provided in subsection 7, the effect of a distribution under subsection 2 is measured: A. In the case of distribution by purchase, redemption or other acquisition of a transferable interest in the limited partnership, as of the date money or other property is transferred or debt incurred by the limited partnership; and B. In all other cases, as of the date: (1) The distribution is authorized, if the payment occurs within 120 days after that date; or (2) The payment is made, if payment occurs more than 120 days after the distribution is authorized. 5. Indebtedness to partner and general, unsecured creditors. A limited partnership's indebtedness to a partner incurred by reason of a distribution made in accordance with this section is at parity with the limited partnership's indebtedness to its general, unsecured creditors. 6. Indebtedness not considered liability. A limited partnership's indebtedness, including indebtedness issued in connection with or as part of a distribution, is not considered a liability for purposes of subsection 2 if the terms of the indebtedness provide that payment of principal and interest are made only to the extent that a distribution could then be made to partners under this section. 7. Indebtedness issued as distribution; date payment made. If indebtedness is issued as a distribution, each payment of principal or interest on the indebtedness is treated as a distribution, the effect of which is measured on the date the payment is made. PL 2005, c. 543, §C2 (NEW).

31 M.R.S. §1369 Liability for improper distributions

1369. Liability for improper distributions 1. General partner liable if consent to distribution not in compliance. A general partner that consents to a distribution made in violation of section 1368 is personally liable to the limited partnership for the amount of the distribution that exceeds the amount that could have been distributed without the violation if it is established that in consenting to the distribution the general partner failed to comply with section 1358. 2. Partner or transferee liable for excess amount received. A partner or transferee that received a distribution knowing that the distribution to that partner or transferee was made in violation of section 1368 is personally liable to the limited partnership but only to the extent that the distribution received by the partner or transferee exceeded the amount that could have been properly paid under section 1368. 3. General partner may implead, compel contribution. A general partner against which an action is commenced under subsection 1 may: A. Implead in the action any other person that is liable under subsection 1 and compel contribution from the person; and B. Implead in the action any person that received a distribution in violation of subsection 2 and compel contribution from the person in the amount the person received in violation of subsection 2. 4. Action within 2 years. An action under this section is barred if it is not commenced within 2 years after the distribution. PL 2005, c. 543, §C2 (NEW).

Source: Maine Legislature, Office of the Revisor of Statutes (legislature.maine.gov)URL: https://legislature.maine.gov/statutes/31/title31ch19sec0.htmlFetched: 10/20/2026