(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.

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Terms Used In Rhode Island General Laws 7-12.1-703

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

(1)  A partner would be liable on the transaction; 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 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 of Section.
P.L. 2022, ch. 123, § 2, effective January 1, 2023; P.L. 2022, ch. 124, § 2, effective January 1, 2023.