Montana Code 35-12-1521. Power of general partners and persons dissociated as general partners to bind organization after conversion or merger
35-12-1521. Power of general partners and persons dissociated as general partners to bind organization after conversion or merger. (1) An act of a person that immediately before a conversion or merger became effective was a general partner in a converting limited partnership or constituent limited partnership binds the converted organization or surviving organization after the conversion or merger becomes effective if:
Terms Used In Montana Code 35-12-1521
- Constituent limited partnership: means a constituent organization that is a limited partnership. See Montana Code 35-12-1501
- Converted organization: means the organization into which a converting organization converts pursuant to 35-12-1502 through 35-12-1505. See Montana Code 35-12-1501
- Converting limited partnership: means a converting organization that is a limited partnership. See Montana Code 35-12-1501
- General partner: means a general partner of a limited partnership. See Montana Code 35-12-1501
- 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.
- Organization: means a general partnership, including a limited liability partnership; a limited partnership, including a limited liability limited partnership; a limited liability company; a business trust; a corporation; or any other person having a governing statute. See Montana Code 35-12-1501
- 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
- Surviving organization: means an organization into which one or more other organizations are merged. See Montana Code 35-12-1501
(a)before the conversion or merger became effective, the act would have bound the converting limited partnership or constituent limited partnership under 35-12-806; and
(b)at the time the third party enters into the transaction, the third party:
(i)does not have notice of the conversion or merger; and
(ii)reasonably believes that the converted or surviving business is the converting limited partnership or constituent limited partnership and that the person is a general partner in the converting limited partnership or constituent limited partnership.
(2)An act of a person that before a conversion or merger became effective was dissociated as a general partner from a converting limited partnership or constituent limited partnership binds the converted organization or surviving organization after the conversion or merger becomes effective if:
(a)before the conversion or merger became effective, the act would have bound the converting limited partnership or constituent limited partnership under 35-12-806 if the person had been a general partner; and
(b)at the time the third party enters into the transaction, less than 2 years have passed since the person dissociated as a general partner and the third party:
(i)does not have notice of the dissociation;
(ii)does not have notice of the conversion or merger; and
(iii)reasonably believes that the converted organization or surviving organization is the converting limited partnership or constituent limited partnership and that the person is a general partner in the converting limited partnership or constituent limited partnership.
(3)If a person having knowledge of the conversion or merger causes a converted organization or surviving organization to incur an obligation under subsection (1) or (2), the person is liable:
(a)to the converted organization or surviving organization for any damage caused to the organization arising from the obligation; and
(b)if another person is liable for the obligation, to that other person for any damage caused to that other person arising from the liability.