Legal Question in Business Law in Texas

Re: Partnership

I assume that this is a Texas partnership. Below is an excerpt from the Texas Revised Partnership Act which should answer your question. You can continue the partnership until someone elects to force a dissolution. In the meanwhile, the "new" partner is not really a "real" partner, except as to an ownership interest, and rights to share in pro-rata distributions (which might create a problem because the active partners are not entitled to a salary unless the agreement provides otherwise). See part (a)(4) in particular). In the meanwhile the soon-to-be ex wife will continue as the active partner and the soon-to-be husband will have no "say-so" as a partner.

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Art. 6132b-5.03. Transfer of Partner's Partnership Interest

(a) Act of Transfer. A transfer of a partner's partnership interest:

(1) is permissible, in whole or in part;

(2) is not an event of withdrawal;

(3) does not by itself cause a winding up of the partnership business; and

(4) does not, as against the other partners or the partnership, entitle the transferee, during the continuance of the partnership, to participate in the management or conduct of the partnership business.

(b) Basic Rights of Transferee. A transferee of a partner's partnership interest is entitled to receive, to the extent transferred, distributions to which the transferor otherwise would be entitled. After transfer, the transferor continues to have the rights and duties of a partner other than the interest transferred. Until a transferee becomes a partner, the transferee does not have liability as a partner solely as a result of the transfer. For a proper purpose the transferee may require reasonable information or an account of partnership transactions and make reasonable inspection of the partnership books.

(c) Rights of Transferee on Winding Up. If an event requires a winding up of partnership business under Section 8.01, a transferee is entitled to receive, to the extent transferred, the net amount otherwise distributable to the transferor. In a winding up a transferee may require an accounting only from the date of the latest account agreed to by all of the partners.

(d) Notice to Partnership. Until receipt of notice of a transfer, a partnership does not have a duty to give effect to a transferee's rights under this section.

(e) No Effect if Prohibited. A partnership does not have a duty to give effect to a transfer, assignment, or grant of a security interest prohibited by a partnership agreement.

This can be a complicated matter, and you are urged to visit with your accountant and lawyer to determine how you should proceed.

Re: Partnership

Charles White gave you a good excerpt from the Texas Revised Partnership Act. Art. 6132b-5.04(a) says that "On the divorce of a partner, the partner's spouse, to the extent of the spouse's partnership interest, shall be regarded for purposes of this Act as a transferee of the partnership interest from the partner."

Unfortunately, he will become a full partner with all the rights and duties of a partner unless you can buy him out or dissolve the partnership.