North Dakota Code 45-19-03 – (703) Dissociated partner’s liability to other persons
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.
Terms Used In North Dakota Code 45-19-03
- 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: includes a limited liability partnership registered under chapter 45-22. See North Dakota Code 1-01-49
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 chapter 45-21, within two years after the partner’s dissociation, only if 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 had knowledge under subsection 4 of section 45-15-03 or notice under subsection 3 of section 45-19-04.
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.