Tenn. Code Ann. § 61-2-607
This is the official text of Tenn. Code Ann. § 61-2-607, part of Tennessee’s Code Ann — part of the compiled statutory law of Tennessee, published by the state as "Code Ann." Browse the sections below, each linked to its official government source.
Not legal advice. This page reproduces the official text of a government statute for reference only. Laws change, and how a statute applies depends on your specific facts. For advice about your situation, consult a licensed attorney in your state.
Limitations on distribution
Official statutory text
(a) A limited partnership shall not make a distribution to a partner to the extent that at the time of the distribution, after giving effect to the distribution, all liabilities of the limited partnership, other than liabilities to partners on account of their partnership interests and liabilities for which the recourse of creditors is limited to specified property of the limited partnership, exceed the fair value of the assets of the limited partnership, except that the fair value of property that is subject to a liability for which the recourse of creditors is limited shall be included in the assets of the limited partnership only to the extent that the fair value of that property exceeds that liability. (b) A limited partner who receives a distribution in violation of subsection (a), and who knew at the time of the distribution that the distribution violated subsection (a), shall be liable to the limited partnership for the amount of the distribution. A limited partner who receives a distribution in violation of subsection (a), and who did not know at the time of the distribution that the distribution violated subsection (a), shall not be liable for the amount of the distribution. Subject to subsection (c), this subsection (b) shall not affect any obligation or liability of a limited partner under a partnership agreement or other applicable law for the amount of a distribution. (c) Unless otherwise agreed, a limited partner who receives a distribution from a limited partnership shall have no liability under this chapter or other applicable law for the amount of the distribution after the expiration of three (3) years from the date of the distribution. Acts 1988, ch. 922, § 1; 1989, ch. 270, § 55.
(a) A limited partnership shall not make a distribution to a partner to the extent that at the time of the distribution, after giving effect to the distribution, all liabilities of the limited partnership, other than liabilities to partners on account of their partnership interests and liabilities for which the recourse of creditors is limited to specified property of the limited partnership, exceed the fair value of the assets of the limited partnership, except that the fair value of property that is subject to a liability for which the recourse of creditors is limited shall be included in the assets of the limited partnership only to the extent that the fair value of that property exceeds that liability.
(b) A limited partner who receives a distribution in violation of subsection (a), and who knew at the time of the distribution that the distribution violated subsection (a), shall be liable to the limited partnership for the amount of the distribution. A limited partner who receives a distribution in violation of subsection (a), and who did not know at the time of the distribution that the distribution violated subsection (a), shall not be liable for the amount of the distribution. Subject to subsection (c), this subsection (b) shall not affect any obligation or liability of a limited partner under a partnership agreement or other applicable law for the amount of a distribution.
(c) Unless otherwise agreed, a limited partner who receives a distribution from a limited partnership shall have no liability under this chapter or other applicable law for the amount of the distribution after the expiration of three (3) years from the date of the distribution.
Acts 1988, ch. 922, § 1; 1989, ch. 270, § 55.
(a) A limited partnership shall not make a distribution to a partner to the extent that at the time of the distribution, after giving effect to the distribution, all liabilities of the limited partnership, other than liabilities to partners on account of their partnership interests and liabilities for which the recourse of creditors is limited to specified property of the limited partnership, exceed the fair value of the assets of the limited partnership, except that the fair value of property that is subject to a liability for which the recourse of creditors is limited shall be included in the assets of the limited partnership only to the extent that the fair value of that property exceeds that liability.
(b) A limited partner who receives a distribution in violation of subsection (a), and who knew at the time of the distribution that the distribution violated subsection (a), shall be liable to the limited partnership for the amount of the distribution. A limited partner who receives a distribution in violation of subsection (a), and who did not know at the time of the distribution that the distribution violated subsection (a), shall not be liable for the amount of the distribution. Subject to subsection (c), this subsection (b) shall not affect any obligation or liability of a limited partner under a partnership agreement or other applicable law for the amount of a distribution.
(c) Unless otherwise agreed, a limited partner who receives a distribution from a limited partnership shall have no liability under this chapter or other applicable law for the amount of the distribution after the expiration of three (3) years from the date of the distribution.
Acts 1988, ch. 922, § 1; 1989, ch. 270, § 55.
Status: in_force
Need a lawyer in Tennessee?
Find a Tennessee lawyer
About this page: Statute text is reproduced from official government publishers via the
Open US Law dataset
(Vaquill AI, snapshot v2026.08, CC BY 4.0). Primary legislative text like this is public domain under the government-edicts doctrine
(Georgia v. Public.Resource.Org, 2020). We link every section back to its official source so you can verify it independently.