Limited Partnership Interest Transfer and Assignee Admission in Minnesota

At a glance

Requirements one by one

Scope and transferable interest

Section 321.1206(c) applies Chapter 321 to most continuing older partnerships but excludes a Chapter 322 limited partnership that has not elected in. Section 321.0102(22) defines the transferable interest as the distribution right. Section 321.0701 says it is the only transferable partner interest and is personal property. Under § 321.0702(a), whole or partial transfer does not itself dissociate the partner or start winding up.

Transferee rights and admission

Section 321.0702(b) gives the transferee assigned distributions and the winding-up amount otherwise payable to the transferor. Subsection (c) allows an accounting only from the dissolution date. Subsection (a)(3) withholds management and ordinary information rights, and § 321.0304(k) expressly excludes a mere transferee from the limited-partner inspection route. Under § 321.0301, admission follows the agreement or consent of all partners.

What trips people up

A full transfer alone does not end partner status. Section 321.0702(d) keeps the transferor's other partner rights and all duties. Section 321.0601(b)(4)(B) separately allows unanimous consent of the other partners to expel a limited partner after a full transfer, except for a security transfer or uncompleted charging order.

Notice matters both ways. Section 321.0702(e) lets the partnership wait until it has notice of the transfer before giving transferee rights effect. Subsection (f) makes an agreement-violating transfer ineffective as to a person with notice of the restriction at transfer. Section 321.0110(a) supplies the agreement's general governance role.

Some liabilities follow admission. Under § 321.0702(g), a transferee that becomes a partner takes the transferor's obligations under §§ 321.0502 and 321.0509, except liabilities unknown on admission. The former covers contributions; the latter addresses knowing receipt of an improper distribution.

Common questions

Can someone become a limited partner without acquiring the distribution right? Section 321.0301 allows admission under the agreement or unanimous partner consent; it does not make acquisition of a transferable interest a prerequisite.

Can the partnership disregard an undisclosed transfer? Section 321.0702(e) says it need not give the transferee's rights effect until it has notice.

Statutes and sources

• Minn. Stat. § 321.0102: “(21) "Transfer" includes an assignment, conveyance, deed, bill of sale, lease, mortgage, security interest, encumbrance, gift, and transfer by operation of law. (22) "Transferable interest" means a partner's right to receive distributions. (23) "Transferee" means, except in section 321.0409, a person to which all or part of a transferable interest has been transferred, whether or not the transferor is a partner.” (official section; accessed October 2, 2026).
• Minn. Stat. § 321.0110: “(a) Except as otherwise provided in subsection (b), the partnership agreement governs relations among the partners and between the partners and the partnership. To the extent the partnership agreement does not otherwise provide, this chapter governs relations among the partners and between the partners and the partnership.” (official section; accessed October 2, 2026).
• Minn. Stat. § 321.0301: “A person becomes a limited partner: (1) as provided in the partnership agreement; (2) as the result of a conversion or merger under article 11; or (3) with the consent of all the partners.” (official section; accessed October 2, 2026).
• Minn. Stat. § 321.0304: “(k) The rights stated in this section do not extend to a person as transferee, but may be exercised by the legal representative of an individual under legal disability who is a limited partner or person dissociated as a limited partner.” (official section; accessed October 2, 2026).
• Minn. Stat. § 321.0502: “(a) A partner's obligation to contribute money or other property or other benefit to, or to perform services for, a limited partnership is not excused by the partner's death, disability, or other inability to perform personally. (b) If a partner does not make a promised nonmonetary contribution, the partner is obligated at the option of the limited partnership to contribute money equal to that portion of the value, as stated in the required information, of the stated contribution which has not been made. (c) The obligation of a partner to make a contribution or return money or other property paid or distributed in violation of this chapter may be compromised only by consent of all partners. A creditor of a limited partnership which extends credit or otherwise acts in reliance on an obligation described in subsection (a), without notice of any compromise under this subsection, may enforce the original obligation.” (official section; accessed October 2, 2026).
• Minn. Stat. § 321.0509: “(b) A partner or transferee that received a distribution knowing that the distribution to that partner or transferee was made in violation of section 321.0508 is personally liable to the limited partnership but only to the extent that the distribution received by the partner or transferee exceeded the amount that could have been properly paid under section 321.0508.” (official section; accessed October 2, 2026).
• Minn. Stat. § 321.0601: “(4) the person's expulsion as a limited partner by the unanimous consent of the other partners if: (A) it is unlawful to carry on the limited partnership's activities with the person as a limited partner; (B) there has been a transfer of all of the person's transferable interest in the limited partnership, other than a transfer for security purposes, or a court order charging the person's interest, which has not been foreclosed;” (official section; accessed October 2, 2026).
• Minn. Stat. § 321.0701: “The only interest of a partner which is transferable is the partner's transferable interest. A transferable interest is personal property.” (official section; accessed October 2, 2026).
• Minn. Stat. § 321.0702: “(a) A transfer, in whole or in part, of a partner's transferable interest: (1) is permissible; (2) does not by itself cause the partner's dissociation or a dissolution and winding up of the limited partnership's activities; and (3) does not, as against the other partners or the limited partnership, entitle the transferee to participate in the management or conduct of the limited partnership's activities, to require access to information concerning the limited partnership's transactions except as otherwise provided in subsection (c), or to inspect or copy the required information or the limited partnership's other records. (b) A transferee has a right to receive, in accordance with the transfer: (1) distributions to which the transferor would otherwise be entitled; and (2) upon the dissolution and winding up of the limited partnership's activities the net amount otherwise distributable to the transferor. (c) In a dissolution and winding up, a transferee is entitled to an account of the limited partnership's transactions only from the date of dissolution. (d) Upon transfer, the transferor retains the rights of a partner other than the interest in distributions transferred and retains all duties and obligations of a partner. (e) A limited partnership need not give effect to a transferee's rights under this section until the limited partnership has notice of the transfer. (f) A transfer of a partner's transferable interest in the limited partnership in violation of a restriction on transfer contained in the partnership agreement is ineffective as to a person having notice of the restriction at the time of transfer. (g) A transferee that becomes a partner with respect to a transferable interest is liable for the transferor's obligations under sections 321.0502 and 321.0509. However, the transferee is not obligated for liabilities unknown to the transferee at the time the transferee became a partner.” (official section; accessed October 2, 2026).
• Minn. Stat. § 321.1206: “(c) Except as otherwise provided in subsection (d), on and after January 1, 2007, this chapter governs: (1) any limited partnership formed under chapter 322A which has not previously elected to be governed by this chapter and is still in existence on January 1, 2007; and (2) all limited partnerships, except for limited partnerships formed under chapter 322 that have not previously elected to become governed by this chapter or chapter 322A, including each limited partnership formed under chapter 322A which has previously elected to become governed by this chapter and each limited partnership formed under chapter 322 which has elected, previously or otherwise, to be governed by this chapter.” (official section; accessed October 2, 2026).