Massachusetts General Laws
Chapter 108a - Partnerships
Section 40 - Rules for Settling Accounts Between Partners

Section 40. In settling accounts between the partners after dissolution, the following rules shall be observed, subject to any agreement to the contrary:
(a) The assets of the partnership are—
I. The partnership property.
II. The contributions of the partners specified in clause (d) of this section.
(b) The liabilities of the partnership shall rank in order of payment, as follows:
I. Those owing to creditors other than partners.
II. Those owing to partners other than for capital and profits.
III. Those owing to partners in respect of capital.
IV. Those owing to partners in respect of profits.
(c) The assets shall be applied in the order of their declaration in clause (a) of this section to the satisfaction of the liabilities.
(d) The partners shall contribute, as provided by section eighteen (a), except as provided in section fifteen: (i) the amount necessary to satisfy the liabilities and (ii) if any, but not all, of the partners are insolvent, or, not being subject to process, refuse to contribute, the other partners shall contribute their share of the liabilities, and, in the relative proportions in which they share the profits, the additional amount necessary to pay the liabilities.
(e) An assignee for the benefit of creditors or any person appointed by the court shall have the right to enforce the contributions specified in clause (d) of this section.
(f) Any partner or his legal representative shall have the right to enforce the contributions specified in clause (d) of this section, to the extent of the amount which he has paid in excess of his share of the liability.
(g) The individual property of a deceased partner shall be liable for the contributions specified in clause (d) of this section.
(h) When partnership property and the individual properties of the partners are in the possession of a court for distribution, partnership creditors shall have priority on partnership property and separate creditors on individual property, saving the rights of lien or secured creditors as heretofore.
(i) Where a partner has become bankrupt or his estate is insolvent, the claims against his separate property shall rank in the following order:
I. Those owing to separate creditors.
II. Those owing to partnership creditors.
III. Those owing to partners by way of contribution.

Structure Massachusetts General Laws

Massachusetts General Laws

Part I - Administration of the Government

Title XV - Regulation of Trade

Chapter 108a - Partnerships

Section 1 - Citation of Chapter

Section 2 - Definitions

Section 3 - Knowledge and Notice; Definition

Section 4 - Interpretation and Construction

Section 5 - Application of Rules of Law and Equity

Section 6 - Partnership, Defined; Application to Prior Associations; Limited Partnerships

Section 7 - Rules for Determining Existence of Partnership

Section 8 - Partnership Property; Acquisition and Conveyance

Section 9 - Partner as Agent of Partnership; Authority

Section 10 - Conveyance to Title to Realty

Section 11 - Admissions and Representations

Section 12 - Notice to and Knowledge of Partner; Imputation to Partnership

Section 13 - Liability of Partnership for Wrongful Acts of Partners

Section 14 - Liability of Partnership for Partner's Misapplication of Money or Property

Section 15 - Joint and Several Liability of Partners

Section 16 - Misrepresentation of Self as Partner; Liability

Section 17 - Liability of New Partner for Partnership Obligations

Section 18 - Rights and Duties of Partners

Section 19 - Partnership Books; Right of Inspection

Section 20 - Disclosure of Information on Demand

Section 21 - Accounting of Partner to Partnership; Profits; Personal Representative of Deceased Partner

Section 22 - Partner's Right to Formal Accounting

Section 23 - Continuation of Partnership Beyond Time Fixed for Termination

Section 24 - Property Rights

Section 25 - Ownership of Specific Partnership Property; Tenancy in Partnership; Incidents of Tenancy

Section 26 - Interest in Partnership; Profits

Section 27 - Conveyance of Interest in Partnership; Rights of Assignee

Section 28 - Creditor's Remedy to Reach Partner's Interest in Partnership

Section 29 - Dissolution and Winding Up; Definition

Section 30 - Effect of Dissolution

Section 31 - Causes of Dissolution

Section 32 - Decree of Dissolution

Section 33 - Effect of Dissolution on Partner's Authority

Section 34 - Dissolution by Act, Death or Bankruptcy; Liability to Co-Partners

Section 35 - Authority and Liability After Dissolution

Section 36 - Discharge of Partner's Liability; Assumption of Partnership Obligations; Deceased Partner

Section 37 - Right to Wind Up Partnership Affairs

Section 38 - Rights of Partners Upon Dissolution

Section 39 - Rights of Partner Entitled to Rescind Partnership

Section 40 - Rules for Settling Accounts Between Partners

Section 41 - Creditors' Rights; Continuing Business of Dissolved Partnership

Section 42 - Rights of Retiring or Deceased Partner Against Person or Partnership Continuing Business

Section 43 - Right to an Account

Section 44 - Actions to Reach and Apply Corporate Shares and Interests

Section 45 - Registration as Limited Liability Partnership; Annual Report; Withdrawal; Revocation

Section 46 - Name of Registered Limited Liability Partnership

Section 47 - Recognition Outside Commonwealth

Section 48 - Recordable Instruments Binding on Partnership

Section 49 - Certificate of Good Standing