Montana Code 35-12-1022. Liability to other persons of person dissociated as general partner
35-12-1022. Liability to other persons of person dissociated as general partner. (1) A person’s dissociation as a general partner does not of itself discharge the person’s liability as a general partner for an obligation of the limited partnership incurred before dissociation. Except as otherwise provided in subsections (2) and (3), the person is not liable for a limited partnership’s obligation incurred after dissociation.
Terms Used In Montana Code 35-12-1022
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Partnership: A voluntary contract between two or more persons to pool some or all of their assets into a business, with the agreement that there will be a proportional sharing of profits and losses.
- Person: includes a corporation or other entity as well as a natural person. See Montana Code 1-1-201
(2)A person whose dissociation as a general partner resulted in a dissolution and winding up of the limited partnership’s activities is liable to the same extent as a general partner under 35-12-803 on an obligation incurred by the limited partnership under 35-12-1211.
(3)A person that has dissociated as a general partner but whose dissociation did not result in a dissolution and winding up of the limited partnership’s activities is liable on a transaction entered into by the limited partnership after the dissociation only if:
(a)a general partner would be liable on the transaction; and
(b)at the time the other party enters into the transaction:
(i)less than 2 years has passed since the dissociation; and
(ii)the other party does not have notice of the dissociation and reasonably believes that the person is a general partner.
(4)By agreement with a creditor of a limited partnership and the limited partnership, a person dissociated as a general partner may be released from liability for an obligation of the limited partnership.
(5)A person dissociated as a general partner is released from liability for an obligation of the limited partnership if the limited partnership’s creditor, with notice of the person’s dissociation as a general partner but without the person’s consent, agrees to a material alteration in the nature or time of payment of the obligation.