Kentucky Statutes 362.1-703 – Dissociated partner’s liability to other persons
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(1) A partner’s dissociation does not of itself discharge the partner’s liability for a partnership obligation incurred before dissociation. A dissociated partner is not liable for a partnership obligation incurred after dissociation, except as otherwise provided in subsection (2) of this section.
(2) A partner who dissociates without resulting in a dissolution and winding up of the partnership business is liable as a partner to the other party in a transaction entered into by the partnership, or a surviving partnership under KRS § 362.1-901 to KRS § 362.1-
908, within two (2) years after the partner’s dissociation, only if the partner is liable for the obligation under KRS § 362.1-306 and at the time of entering into the transaction the other party:
(a) Reasonably believed that the dissociated partner was then a partner; (b) Did not have notice of the partner’s dissociation; and
(c) Is not deemed to have knowledge under KRS § 362.1-303(5) or notice under
KRS § 362.1-704(3).
(3) By agreement with the partnership creditor and the partners continuing the business, a dissociated partner may be released from liability for a partnership obligation.
(4) A dissociated partner is released from liability for a partnership obligation if a partnership creditor, with notice of the partner’s dissociation but without the partner’s consent, agrees to a material alteration in the nature or time of payment of a partnership obligation.
Effective: July 12, 2006
History: Created 2006 Ky. Acts ch. 149, sec. 51, effective July 12, 2006.
(2) A partner who dissociates without resulting in a dissolution and winding up of the partnership business is liable as a partner to the other party in a transaction entered into by the partnership, or a surviving partnership under KRS § 362.1-901 to KRS § 362.1-
Terms Used In Kentucky Statutes 362.1-703
- Business: includes every trade, occupation, and profession. See Kentucky Statutes 362.1-101
- 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.
- Partnership: means an association of two (2) or more persons to carry on as co- owners a business for profit formed under KRS §. See Kentucky Statutes 362.1-101
908, within two (2) years after the partner’s dissociation, only if the partner is liable for the obligation under KRS § 362.1-306 and at the time of entering into the transaction the other party:
(a) Reasonably believed that the dissociated partner was then a partner; (b) Did not have notice of the partner’s dissociation; and
(c) Is not deemed to have knowledge under KRS § 362.1-303(5) or notice under
KRS § 362.1-704(3).
(3) By agreement with the partnership creditor and the partners continuing the business, a dissociated partner may be released from liability for a partnership obligation.
(4) A dissociated partner is released from liability for a partnership obligation if a partnership creditor, with notice of the partner’s dissociation but without the partner’s consent, agrees to a material alteration in the nature or time of payment of a partnership obligation.
Effective: July 12, 2006
History: Created 2006 Ky. Acts ch. 149, sec. 51, effective July 12, 2006.