New Mexico Statutes 54-1A-703. Dissociated partner’s liability to other persons
(a) 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 (b) of this section.
Terms Used In New Mexico Statutes 54-1A-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.
- 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.
(b) 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 Article 9 of the Uniform Partnership Act (1994), within two years after the partner’s dissociation, only if the partner is liable for the obligation under Section 54-1A-306 N.M. Stat. Ann. and at the time of entering into the transaction the other party:
(1) reasonably believed that the dissociated partner was then a partner; (2) did not have notice of the partner’s dissociation; and
(3) is not deemed to have had knowledge under Section 54-1A-303(e) NMSA 1978 or notice under Section 54-1A-704(c) NMSA 1978.
(c) By agreement with the partnership creditor and the partners continuing the business, a dissociated partner may be released from liability for a partnership obligation.
(d) 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.