Limited Partnership Interest Transfer and Assignee Admission in Hawaii

At a glance

Requirements one by one

Transfer and admission

Hawaii defines the transferable interest as the distribution right (§ 425E-102); only that interest transfers, and it is personal property (§ 425E-701). A whole or partial transfer does not itself dissociate the partner or dissolve the LP. It gives the transferee distributions and the net winding-up amount otherwise payable to the transferor, while withholding ordinary management and record access; dissolution accounting begins only on the dissolution date (§ 425E-702(a)-(c)). Admission as a limited partner follows the partnership agreement or all partners' consent (§ 425E-301).

Agreement and recognition

The agreement governs partner relations and the statute fills gaps (§ 425E-110(a)). A transferee with notice of an agreement restriction cannot rely on a transfer that violates it. The LP need not give effect to transferee rights until it has notice of the transfer (§ 425E-702(d)-(g)).

What trips people up

A full transfer does not itself end partner status. The transferor retains other partner rights and duties. A transfer of the entire interest, except one for security, permits expulsion of a limited partner by unanimous consent of the other partners (§ 425E-601(b)(4)(B)). Dissociation does not itself discharge earlier obligations (§ 425E-602(b)).

Known obligations can follow admission. A transferee who becomes a partner takes the transferor's obligations under the contribution and improper-distribution sections, but is exempt from obligations unknown at admission (§ 425E-702(d)-(g)).

Older partnerships have a different dissociation rule. Chapter 425E generally governs all LPs (§ 425E-1204(b)-(c)), but a partnership formed before July 1, 2004 keeps the earlier limited-partner dissociation consequences unless its partners elect otherwise (§ 425E-1204(c)(2)).

Statutes and sources

• § 425E-702(a)-(g): A transfer “Shall not by itself cause the partner's dissociation”; the transferee receives “Distributions to which the transferor would otherwise be entitled,” while the transferor keeps other partner rights and duties. (official text; accessed October 2, 2026).
• § 425E-301: A person becomes a limited partner “As provided in the partnership agreement” or “With the consent of all the partners.” (official text; accessed October 2, 2026).
• § 425E-601(b)(4)(B): Full transfer can support expulsion by “the unanimous consent of the other partners,” excluding a security transfer. (official text; accessed October 2, 2026).