NCJ Number
103867
Journal
Vanderbilt Law Review Volume: 39 Issue: 5 Dated: (October 1986) Pages: 1407-1464
Date Published
1986
Length
58 pages
Annotation
This note analyzes the issues surrounding the removal of general partners from the limited partnership as a means of dispute resolution.
Abstract
The tax and liability advantages and the historical background of the limited partnership are discussed, and the content and functions of the partnership agreement are reviewed, with a focus on removal provisions. Applicable uniform legislation and the various rules promulgated by State administrators are examined. Collateral effects of removing a partner and the postremoval status of the partnership's contracts with third parties are discussed. The effects of the substitution of a new general partner and the potential legal claims a former general partner may have against the partnership also are considered. It is argued that at present, limited partners have no effective means for instituting managerial change and protecting their investment. Absent an explicit right of removal, limited partners must tolerate a general partner's mismanagement, sell the partnership interest, or dissolve the partnership. A statutory right of removal would enable limited partners to assess the quality of managerial performance and respond to reports of a general partner's gross negligence. 334 notes.