(a)  After a person is dissociated as a partner without the dissociation resulting in a dissolution and winding up of the partnership business and before the partnership is merged out of existence, converted, or domesticated under Article 11, or dissolved, the partnership is bound by an act of the person only if:

(1)  The act would have bound the partnership under § 7-12.1-301 before dissociation; and

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

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

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

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Terms Used In Rhode Island General Laws 7-12.1-702

  • Business: includes every trade, occupation, and profession. See Rhode Island General Laws 7-12.1-102
  • 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.
  • Partner: means a person that:

    (i)  Has become a partner in a partnership under Rhode Island General Laws 7-12.1-102

  • 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: means an individual, business corporation, nonprofit corporation, partnership, limited partnership, limited liability company, general cooperative association, limited cooperative association, unincorporated nonprofit association, statutory trust, business trust, common-law business trust, estate, trust, association, joint venture, public corporation, government or governmental subdivision, agency, or instrumentality, or any other legal or commercial entity. See Rhode Island General Laws 7-12.1-102

(b)  If a partnership is bound under subsection (a) of this section, the person dissociated as a partner which caused the partnership to be bound is liable:

(1)  To the partnership for any damage caused to the partnership arising from the obligation incurred under subsection (a) of this section; and

(2)  If a partner or another person dissociated as a partner is liable for the obligation, to the partner or other person for any damage caused to the partner or other person arising from the liability.

History of Section.
P.L. 2022, ch. 123, § 2, effective January 1, 2023; P.L. 2022, ch. 124, § 2, effective January 1, 2023.