North Dakota Code 45-21-07.1 – Liability of general partner after conversion or merger
1. A conversion or merger under this chapter does not discharge any liability under sections 45-15-06, 45-15-07, and 45-15-08 of a person that was a general partner in or dissociated as a general partner from a converting or constituent partnership, but:
Terms Used In North Dakota Code 45-21-07.1
- 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: includes a foreign or domestic association, business trust, corporation, enterprise, estate, joint venture, limited liability company, limited liability partnership, limited partnership, partnership, trust, or any legal or commercial entity. See North Dakota Code 1-01-49
- 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
- Person: means an individual, organization, government, political subdivision, or government agency or instrumentality. See North Dakota Code 1-01-49
a. The provisions of this chapter pertaining to the collection or discharge of the liability continue to apply to the liability; b. For the purposes of applying those provisions, the converted or surviving organization is deemed to be the converting or constituent partnership; and c. If a person is required to pay any amount under this subsection, then:
(1) The person has a right of contribution from each other person that was liable as a general partner under section 45-15-06 when the obligation was incurred and has not been released from the obligation under section 45-20-06; and
(2) The contribution due from each of those persons is in proportion to the right to receive distributions in the capacity of general partner in effect for each of those persons when the obligations were incurred as provided in section 45-20-07.
2. In addition to any other liability provided by law:
a. A person that immediately before a conversion or merger became effective was a general partner in a converting or constituent partnership is personally liable for each obligation of the converted or surviving organization arising from a transaction with a third party after the conversion or merger becomes effective, if, at the time the third party enters into the transaction, the third party:
(1) Does not have notice of the conversion or merger; and
(2) Reasonably believes that:
(a) The converted or surviving organization or business is the converting or constituent partnership; and
(b) The person is a general partner in the converting or constituent partnership; and
b. A person that was dissociated as a general partner from a converting or constituent partnership before the conversion or merger became effective is personally liable for each obligation of the converted or surviving organization arising from a transaction with a third party after the conversion or merger becomes effective, if at the time the third party enters into the transaction less than two years have passed since the person dissociated as a general partner and the third party:
(1) Does not have notice of the dissociation; (2) Does not have notice of the conversion or merger; and
(3) Reasonably believes that:
(a) The converted or surviving organization or business is the converting or constituent partnership; and
(b) The person is a general partner in the converting or constituent partnership.