Limited Partnership Interest Transfer and Assignee Admission in Indiana

At a glance

Requirements one by one

Interest and assignment

Section 23-16-1-12 defines the interest as the partner's profit-and-loss share and distribution right; § 23-16-8-1 calls it personal property. Under § 23-16-8-2, an agreement may change the default, but an assignment otherwise can be whole or partial and carries the assigned profits, losses, distributions, and tax allocations. Assignment alone does not dissolve the limited partnership or give the assignee partner powers.

Admission

Sections 23-16-4-1 and 23-16-8-4 separate direct acquisition from assignment. For an assignee, including a general partner's assignee, the agreement can provide admission or all other partners must consent in writing. Section 23-16-4-6 makes admission effective at the later of formation or the agreement's stated time; absent an agreement time, the partnership records must reflect the admission.

What trips people up

Full assignment ends the assignor's partner status by default. Section 23-16-8-2(4) states the full-assignment consequence; a partial assignment does not meet that condition. Section 23-16-8-4(c) preserves specified assignor liabilities even after the assignee joins, unless specifically assumed.

Liability does not move without limits. Under § 23-16-8-4(b), an admitted assignee takes the assignor's contribution obligations, but not obligations both unknown and unascertainable from the agreement at admission. Accrued assignor liabilities require specific assumption.

Older assignments have a transition rule. Section 23-16-12-2(c) limits the assignee-admission provision to assignments after July 1, 1988.

Common questions

Can an assignee inspect partnership records before joining? Section 23-16-4-5 gives that inspection right to a limited partner; § 23-16-8-2 does not make an assignment alone an admission or grant partner powers.

Is an assignee's written consent enough to become a partner? No. Section 23-16-8-4 calls for the agreement's admission route or written consent from all other partners, followed by the timing rule in § 23-16-4-6.

Statutes and sources

• Ind. Code § 23-16-1-12: “Sec. 12. "Partnership interest" means a partner's share of the profits and losses of a limited partnership and the right to receive distributions of partnership assets.” (official 2026 chapter; accessed October 2, 2026).
• Ind. Code § 23-16-4-1: “Sec. 1. After the formation of a limited partnership, a person may be admitted as an additional limited partner: (1) in the case of a person acquiring a partnership interest directly from the limited partnership, upon compliance with the partnership agreement or, if the partnership agreement does not so provide, upon the written consent of all partners; and (2) in the case of an assignee of a partnership interest, as provided in IC 23-16-8-4.” (official 2026 chapter; accessed October 2, 2026).
• Ind. Code § 23-16-4-5: “Sec. 5. Each limited partner has the right to inspect and copy any of the partnership records required to be maintained by IC 23-16-2-6 and to obtain from the general partners, from time to time, upon reasonable demand the following: (1) True and full information regarding the state of the business and financial condition of the limited partnership. (2) Promptly after becoming available, copies of the limited partnership's federal, state, and local income tax returns for each year. (3) Other information regarding the affairs of the limited partnership as is just and reasonable.” (official 2026 chapter; accessed October 2, 2026).
• Ind. Code § 23-16-4-6: “Sec. 6. A person acquiring a partnership interest is admitted as a limited partner when the latter of the following occurs: (1) The formation of the limited partnership. (2) The time provided in the partnership agreement or, if no time is provided in the partnership agreement, when the person's admission is reflected in the records of the limited partnership.” (official 2026 chapter; accessed October 2, 2026).
• Ind. Code § 23-16-8-1: “Sec. 1. A partnership interest is personal property. A partner has no interest in specific limited partnership property.” (official 2026 chapter; accessed October 2, 2026).
• Ind. Code § 23-16-8-2: “Sec. 2. Unless otherwise provided in the partnership agreement: (1) a partnership interest is assignable in whole or in part; (2) an assignment of a partnership interest does not dissolve a limited partnership or entitle the assignee to become a partner or to exercise any rights or powers of a partner; (3) an assignment entitles the assignee to share in the profits and losses, to receive the distribution or distributions, and to receive the allocation of income, gain, loss, deduction, or credit or similar item to which the assignor was entitled, to the extent assigned; and (4) a partner ceases to be a partner and to have the power to exercise any rights or powers of a partner upon assignment of all of the partner's partnership interest.” (official 2026 chapter; accessed October 2, 2026).
• Ind. Code § 23-16-8-4: “Sec. 4. (a) An assignee of a partnership interest, including an assignee of a general partner, may become a limited partner, if and to the extent that: (1) the partnership agreement so provides; or (2) all other partners consent in writing. (b) An assignee who has become a limited partner has, to the extent assigned, the rights and powers, and is subject to the restrictions and liabilities, of a limited partner under the partnership agreement and this article. An assignee who becomes a limited partner also is liable for the obligations of the assignor to make contributions as provided in IC 23-16-6-2. However, the assignee is not obligated for liabilities that were unknown to the assignee at the time the assignee became a limited partner and that could not be ascertained from the partnership agreement. Additionally, the assignee is not liable for any accrued liabilities of the assignor at the time of such assignment unless the assignee specifically assumes such liabilities. (c) If an assignee of a partnership interest becomes a limited partner, the assignor is not released from the assignor's liabilities to the limited partnership under IC 23-16-3-8,” (official 2026 chapter; accessed October 2, 2026).
• Ind. Code § 23-16-12-2: “Sec. 2. (a) After July 1, 1988, this article applies to all domestic and foreign limited partnerships, except as provided in this section. (b) IC 23-16-6-1, IC 23-16-6-2, and IC 23-16-7-8 apply only to contributions and distributions made after July 1, 1988. (c) IC 23-16-8-4 applies only to assignments made after July 1, 1988.” (official 2026 chapter; accessed October 2, 2026).