TITLE 30

CORPORATIONS

CHAPTER 23

GENERAL PARTNERSHIPS

PART 7

PARTNER’S DISSOCIATION WHEN BUSINESS NOT WOUND UP

30-23-703.  LIABILITY OF PERSON DISSOCIATED AS PARTNER TO OTHER PERSONS. (a) Except as otherwise provided in subsection (b) of this section, a person dissociated as a partner is not liable for a partnership obligation incurred after dissociation.

(b)  A person that is dissociated as a partner is liable on a transaction entered into by the partnership after the dissociation only if:

(1)  The partner would be liable on the transaction; and

(2)  At the time the other party enters into the transaction:

(A)  Less than two (2) years has passed since the dissociation; and

(B)  The other party does not have knowledge or notice of the dissociation and reasonably believes that the person is a partner.

(c)  By agreement with a creditor of a partnership and the partnership, a person dissociated as a partner may be released from liability for a debt, obligation, or other liability of the partnership.

(d)  A person dissociated as a partner is released from liability for a debt, obligation, or other liability of the partnership if the partnership’s creditor, with knowledge or notice of the person’s dissociation but without the person’s consent, agrees to a material alteration in the nature or time of payment of the debt, obligation or other liability.

History:

[30-23-703, added 2015, ch. 243, sec. 29, p. 829.]