{"data":{"id":"us-mi/mich.-comp.-laws-449.40","jurisdiction":"us-mi","citation":"Mich. Comp. Laws § 449.40","heading":"Dissolution; rules for distribution of assets and liabilities.","body":"Sec. 40.\n\n(Rules for distribution). In settling accounts between the partners after dissolution, the following rules shall be observed, subject to any agreement to the contrary:\n\nThe assets of the partnership are as follows:\n\nThe partnership property.\n\nThe contributions of the partners specified in subdivision (d).\n\nThe liabilities of the partnership shall rank in order of payment, as follows:\n\nThose owing to creditors other than partners.\n\nThose owing to partners other than for capital and profits.\n\nThose owing to partners in respect of capital.\n\nThose owing to partners in respect of profits.\n\nThe assets shall be applied in the order of their declaration in subdivision (a) to the satisfaction of the liabilities.\n\nExcept 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.\n\nAn 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).\n\nAny 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.\n\nThe individual property of a deceased partner shall be liable for the contributions specified in subdivision (d).\n\nWhen 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.\n\nIf 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:\n\nThose owing to separate creditors.\n\nThose owing to partnership creditors.\n\nThose owing to partners by way of contribution.","path":["MI Code","Chapter 449","Act Act-72-of-1917"],"source_url":"https://www.legislature.mi.gov/Laws/MCL?objectName=mcl-449-40","current_through":"2026-08-14","vintage":"open-us-law v2026.08, retrieved 2026-09-14","retrieved_at":"2026-09-14T18:32:31Z","sha256":"2d79692f7f3bfefa975ce1f13b2acc1a6e9fa244fd3ec872259d6bacfd474249","source_id":"us-mi","stale":false,"prev":"us-mi/mich.-comp.-laws-449.4","next":"us-mi/mich.-comp.-laws-449.41"},"notice":"GroundRules: Original legal text. Not legal advice."}