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TITLE 14 CORPORATIONS, PARTNERSHIPS, AND ASSOCIATIONS

9A. Limited Partnerships, 14-9A-1 through 14-9A-130.

ARTICLE 1 LIMITED PARTNERSHIPS FORMED SINCE FEBRUARY 15, 1952

14-9A-47. Withdrawal or reduction of contribution.

  1. A limited partner shall not receive from a general partner or out of partnership property any part of his contribution until:
    1. All liabilities of the partnership, except liabilities to general partners and to limited partners on account of their contributions, have been paid or there remains property of the partnership sufficient to pay them;
    2. The consent of all members is had, unless the return of the contribution may be rightfully demanded under subsection (b) of this Code section; and
    3. The certificate required under Code Section 14-9A-20 is canceled or so amended as to set forth the withdrawal or reduction.
  2. Subject to subsection (a) of this Code section a limited partner may rightfully demand the return of his contribution:
    1. On the dissolution of a partnership; or
    2. When the date specified in the certificate for its return has arrived; or
    3. After he has given six months' notice in writing to all other members, if no time is specified in the certificate, either for the return of the contribution or for the dissolution of the partnership.
  3. In the absence of any statement in the certificate to the contrary or of the consent of all members, a limited partner, irrespective of the nature of his contribution, has only the right to demand and receive cash in return for his contribution.
  4. A limited partner may have the partnership dissolved and its affairs wound up when:
    1. He rightfully but unsuccessfully demands the return of his contribution; or
    2. The other liabilities of the partnership have not been paid, or the partnership property is insufficient for their payment as required by paragraph (1) of subsection (a) of this Code section and the limited partner would otherwise be entitled to the return of his contribution.

(Ga. L. 1952, p. 375, § 16; Code 1981, §14-9-47; Code 1981, §14-9A-47, as redesignated by Ga. L. 1988, p. 1016, § 1.)

JUDICIAL DECISIONS

Condition precedent to personal indemnification by general partner.

- Ga. L. 1952, p. 375, § 16 (now O.C.G.A. § 14-9A-47) makes the payments of all debts and liabilities of a partnership a condition precedent to personal indemnification by a general partner to a limited partner of the limited partner's contribution to the partnership. Mills v. Kochis, 132 Ga. App. 492, 208 S.E.2d 352 (1974), aff'd, 233 Ga. 652, 212 S.E.2d 823 (1975).

A promise by a general partner to repurchase a limited partner's interests out of partnership assets or out of the general partner's individual assets cannot be enforced in the absence of allegations that all liabilities of the partnership, other than those owed to general and limited partners on account of their contributions, have been paid, or that there shall remain sufficient property of the partnership to pay them. Kochis v. Mills, 233 Ga. 652, 212 S.E.2d 823 (1975).

Put option agreement as a defense.

- A defendant may not rely on a put option agreement as defense to contributions owed upon the dissolution of a partnership absent a showing that all obligations to the partnership's third party creditors have been satisfied. Ameritrust Co. v. White, 73 F.3d 1553 (11th Cir. 1996).

Priority between creditors and limited partners to general partner's assets.

- After assets of partnership are exhausted, creditors take precedence over limited partners as to assets of general partners which may be available for payment of claims, other than transactions in which limited partner may be considered as an ordinary business creditor in other than partnership contribution situations, regardless of whether or not such a restriction appears in articles of partnership. Mills v. Kochis, 132 Ga. App. 492, 208 S.E.2d 352 (1974), aff'd, 233 Ga. 652, 212 S.E.2d 823 (1975).

Cited in Bumgarner v. Green, 227 Ga. App. 156, 489 S.E.2d 43 (1997).

RESEARCH REFERENCES

Am. Jur. 2d.

- 59A Am. Jur. 2d, Partnership, § 852 et seq.

C.J.S.

- 68 C.J.S., Partnership, § 563, 585 et seq.

U.L.A.

- Uniform Limited Partnership Act (U.L.A.) § 16.

ALR.

- Liability of special partner who has withdrawn his capital, to creditors of the firm, 67 A.L.R. 1096.