3040                                    LAWS OF MARYLAND                                 Ch. 801

PROVIDE, PROFITS AND LOSSES SHALL BE ALLOCATED ON THE BASIS
OF THE VALUE, AS STATED IN THE CERTIFICATE, OF THE
CONTRIBUTIONS OF EACH PARTNER.

        COMMENT

This section is new. The prior uniform law did not
provide for the basis on which partners share profits and
losses in the absence of agreement, except that § 10-113 of
the previous Limited Partnership Act provided for all
limited partners to "stand upon equal footing" in the
absence of such agreement. It should be noted that the
second sentence of § 10-503 still does not solve the problem
that may arise if a portion of contributions was in the form
of past services and no stated value was placed on the past
services in the certificate.

10-504. SHARING OF DISTRIBUTIONS.

DISTRIBUTIONS OF CASH OR OTHER ASSETS OF A LIMITED
PARTNERSHIP SHALL BE ALLOCATED AMONG THE PARTNERS, AND AMONG
CLASSES OF PARTNERS, IN THE MANNER PROVIDED IN THE
PARTNERSHIP AGREEMENT. UNLESS OTHERWISE PROVIDED IN THE
PARTNERSHIP AGREEMENT, DISTRIBUTIONS SHALL BE MADE ON THE
BASIS OF THE SHARING OF PROFITS AND LOSSES.

COMMENT

This section is new. The prior uniform law did not
provide for the basis on which partners share in
distributions in the absence of agreement, except that §
10-113 of the previous Limited Partnership Act provided for
all limited partners to "stand upon equal footing" in the
absence of such agreement. This section also recognizes
that partners may choose to share in distributions on a
different basis than they share in profits and losses, but
it should be noted that such a differentiation may not have
efficacy for income tax purposes under certain
circumstances.

SUBTITLE 6. DISTRIBUTIONS AND WITHDRAWAL

10-601. INTERIM DISTRIBUTIONS.

EXCEPT AS OTHERWISE PROVIDED IN THIS SUBTITLE:

(1)  TO THE EXTENT SET FORTH IN THE PARTNERSHIP
AGREEMENT, A PARTNER IS ENTITLED TO RECEIVE DISTRIBUTIONS
FROM A LIMITED PARTNERSHIP BEFORE HIS WITHDRAWAL AND BEFORE
THE DISSOLUTION AND WINDING UP OF THE LIMITED PARTNERSHIP;
AND

(2)  TO THE EXTENT SET FORTH IN THE CERTIFICATE,
A PARTNER IS ENTITLED TO RECEIVE DISTRIBUTIONS WHICH
CONSTITUTE A RETURN OF ANY PART OF THAT PARTNER'S
CONTRIBUTION BEFORE HIS WITHDRAWAL AND BEFORE THE WINDING UP
OF THE LIMITED PARTNERSHIP.