# Title 45 — Partnerships

## Chapter 45-18 — Partner's Dissociation

### § 45-18-01. (601) Events causing partner's dissociation.

A partner is dissociated from a partnership upon 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:
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, or a court
order charging the partner's interest, which 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charter has been revoked, or its right to conduct business has been suspended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; or
d. A partnership 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:
a. The partner engaged in wrongful conduct that adversely and materially affected
the partnership business;
b. The partner willfully or persistently committed a material breach of the partnership
agreement or of a duty owed to the partnership or the other partners under
section 45-16-04; or
c. The partner engaged in conduct relating to the partnership business which makes
it not reasonably practicable to carry on the business in partnership with the
partner.
6. The partner's:
a. Becoming a debtor in bankruptcy;
b. Executing an assignment for the benefit of creditors;
c. Seeking, consenting to, or acquiescing in the appointment of a trustee, receiver,
or liquidator of that partner or of all or substantially all of that partner's property; or
d. Failing, 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 failing 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:
a. The partner's death;
b. The appointment of a guardian or general conservator for the partner; or
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 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 who is not an individual, partnership, corporation, trust, or
estate.

### § 45-18-02. (602) Partner's power to dissociate - Wrongful dissociation.

1. A partner has the power to dissociate at any time, rightfully or wrongfully, by express
will pursuant to subsection 1 of section 45-18-01.
2. A partner's dissociation is wrongful only if:
a. It is in breach of an express provision of the partnership agreement; or
b. 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:
(1) The partner withdraws by express will, unless the withdrawal follows within
ninety days after another partner's dissociation by death or otherwise under
subsections 6 through 10 of section 45-18-01 or wrongful dissociation under
this subsection;
(2) The partner is expelled by judicial determination under subsection 5 of
section 45-18-01;
(3) The partner is dissociated by becoming a debtor in bankruptcy; or
(4) 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
willfully dissolved or terminated.
3. 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.
### § 45-18-03. (603) Effect of partner's dissociation.

1. If a partner's dissociation results in a dissolution and winding up of the partnership
business, chapter 45-20 applies, otherwise, chapter 45-19 applies.
2. Upon a partner's dissociation:
a. The partner's right to participate in the management and conduct of the
partnership business terminates, except as otherwise provided in section
45-20-03;
b. The partner's duty of loyalty under subdivision c of subsection 2 of section
c. The partner's duty of loyalty under subdivisions a and b of subsection 2 of section
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 45-20-03.
