Mich. Comp. Laws » Michigan Compiled Laws / Chapter 449 / Act 72 of 1917
Michigan Compiled Laws

Mich. Comp. Laws § 449.38 (2026)

Dissolution; rights of partner to application of partnership property.

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UNIFORM PARTNERSHIP ACT


Act 72 of 1917


449.38 Dissolution; rights of partner to application of partnership property.

Sec. 38.

    (Rights of partners to application of partnership property).

    (1) When dissolution is caused in any way, except in contravention of the partnership agreement, each partner, as against his copartners and all persons claiming through them in respect of their interests in the partnership, unless otherwise agreed, may have the partnership property applied to discharge its liabilities, and the surplus applied to pay in cash the net amount owing to the respective partners. But if dissolution is caused by expulsion of a partner, bona fide under the partnership agreement, and if the expelled partner is discharged from all partnership liabilities, either by payment or agreement under section 36(2), he shall receive in cash only the net amount due him from the partnership;

    (2) When dissolution is caused in contravention of the partnership agreement the rights of the partners shall be as follows:

    (a) Each partner who has not caused dissolution wrongfully shall have:

    (I) All the rights specified in paragraph 1 of this section, and

    (II) The right, as against each partner who has caused the dissolution wrongfully, to damages for breach of the agreement,

    (b) The partners who have not caused the dissolution wrongfully, if they all desire to continue the business in the same name, either by themselves or jointly with others, may do so, during the agreed term for the partnership and for that purpose may possess the partnership property, provided they secure the payment by bond approved by the court, or pay to any partner who has caused the dissolution wrongfully, the value of his interest in the partnership at the dissolution, less any damages recoverable under clause (2aII) of this section, and in like manner indemnify him against all present or future partnership liabilities,

    (c) A partner who has caused the dissolution wrongfully shall have:

    (I) If the business is not continued under the provisions of paragraph (2b) all the rights of a partner under paragraph 1, subject to clause (2aII) of this section,

    (II) If the business is continued under paragraph (2b) of this section the right as against his copartners and all claiming through them in respect of their interests in the partnership, to have the value of his interest in the partnership, less any damages caused to his copartners by the dissolution, ascertained and paid to him in cash, or the payment secured by bond approved by the court, and to be released from all existing liabilities of the partnership; but in ascertaining the value of the partner's interest the value of the good will of the business shall not be considered.

History: 1917, Act 72, Eff. Aug. 10, 1917 ;-- CL 1929, 9878 ;-- CL 1948, 449.38

Notes of Decisions
Cited in 3 cases, 1951–1991 · leading case: Gorman v. Soble, 328 N.W.2d 119 (Mich. Ct. App. 1982).
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Gorman v. Soble, 328 N.W.2d 119 (Mich. Ct. App. 1982). “The effect of the trial court’s actions was to order a forced sale of the plaintiffs’ partnership interests to the defendant. Plaintiffs did not request such relief.”
Brooks v. Rose, 478 N.W.2d 731 (Mich. Ct. App. 1991). “MCL 449.38(2) (a)(II); MSA 20.38(2)(a)(II), explicitly provides that when dissolution is caused in contravention of the partnership agreement, each partner who has not *571 wrongfully caused dissolution has a right to damages for breach of the agreement against each partner who…”
Rinke v. Rinke, 48 N.W.2d 201 (Mich. 1951). “Attention is directed to section 38 of said act (CL 1948, § 449.38 [Stat Ann § 20.38]). Construing together pertinent provisions of the statute leads to the conclusion that it was not the intention of the legislature in the enactment of the uniform partnership act to impose a…”
Mich. Comp. Laws § 449.38(2): 1 case
Brooks v. Rose, 478 N.W.2d 731 (Mich. Ct. App. 1991). “MCL 449.38(2) (a)(II); MSA 20.38(2)(a)(II), explicitly provides that when dissolution is caused in contravention of the partnership agreement, each partner who has not *571 wrongfully caused dissolution has a right to damages for breach of the agreement against each partner who…”
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