Michigan § 449.40 - Dissolution; rules for distribution of assets and liabilities.
Full text of Michigan Michigan Compiled Laws § 449.40 — Dissolution; rules for distribution of assets and liabilities., with citation guidance and answers to common questions.
§ 449.40. Dissolution; rules for distribution of assets and liabilities.
(Rules for distribution). In settling accounts between the partners after dissolution, the following rules shall be observed, subject to any agreement to the contrary:
The assets of the partnership are as follows:
The partnership property.
The contributions of the partners specified in subdivision (d).
The liabilities of the partnership shall rank in order of payment, as follows:
Those owing to creditors other than partners.
Those owing to partners other than for capital and profits.
Those owing to partners in respect of capital.
Those owing to partners in respect of profits.
The assets shall be applied in the order of their declaration in subdivision (a) to the satisfaction of the liabilities.
Except as provided in section 46, the partners shall contribute, as provided by section 18(a), the amount necessary to satisfy the liabilities. If any of the partners are insolvent, not subject to process, or otherwise refuse to contribute, the other partners shall contribute their share of the liabilities in the relative proportions in which they share the profits.
An assignee for the benefit of creditors or any person appointed by the court shall have the right to enforce the contributions specified in subdivision (d).
Any partner or his or her legal representative shall have the right to enforce the contributions specified in subdivision (d) to the extent of the amount which he or she has paid in excess of his or her share of the liability.
The individual property of a deceased partner shall be liable for the contributions specified in subdivision (d).
When partnership property and the individual properties of the partners are in the possession of a court for distribution, except for lienholders and secured creditors, partnership creditors shall have priority on partnership property and separate creditors on individual property.
If a partner has become bankrupt or his or her estate is insolvent, the claims against his or her separate property shall rank in the following order:
Those owing to separate creditors.
Those owing to partnership creditors.
Those owing to partners by way of contribution.
Source: official Michigan text · Last verified 2026-08-27
Frequently Asked Questions About Michigan § 449.40
What does Michigan Compiled Laws § 449.40 cover?
Section 449.40 ("Dissolution; rules for distribution of assets and liabilities.") is part of the Michigan Compiled Laws, the codified statutory law of Michigan. It sets out the legal rule or procedure described in the text above. Statutes are amended regularly, so always verify against the official source.
How do I cite Michigan § 449.40?
A common citation format is "Michigan Compiled Laws § 449.40" (Michigan). Legal writing may require the code abbreviation, section number, and year or edition. Match the style required by your court, professor, or publisher.
Is this the official text of Michigan law?
No. This page is for research and education and may not include the most recent amendments. For official current law, check the Michigan official source linked on this page or consult a licensed Michigan attorney.
How does Michigan § 449.40 apply to my situation?
Statutes are interpreted in context, and application depends on your specific facts. Only a licensed attorney in Michigan can advise on how this section applies to you. Contact your state or local bar association for a referral.
Sources & Verification
Not legal advice. Verify against the official source and consult a licensed attorney in Michigan.