Rhode Island General Laws 7-12.1-804. Power to bind partnership after dissolution
(a) A partnership is bound by a partner‘s act after dissolution which:
(1) Is appropriate for winding up the partnership business; or
(2) Would have bound the partnership under § 7-12.1-301 before dissolution if, at the time the other party enters into the transaction, the other party does not know or have notice of the dissolution.
Terms Used In Rhode Island General Laws 7-12.1-804
- Business: includes every trade, occupation, and profession. See Rhode Island General Laws 7-12.1-102
- Partner: means a person that:
(i) Has become a partner in a partnership under Rhode Island General Laws 7-12.1-102
- 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: means an individual, business corporation, nonprofit corporation, partnership, limited partnership, limited liability company, general cooperative association, limited cooperative association, unincorporated nonprofit association, statutory trust, business trust, common-law business trust, estate, trust, association, joint venture, public corporation, government or governmental subdivision, agency, or instrumentality, or any other legal or commercial entity. See Rhode Island General Laws 7-12.1-102
(b) A person dissociated as a partner binds a partnership through an act occurring after dissolution if:
(1) At the time the other party enters into the transaction:
(i) Less than two (2) years has passed since the dissociation; and
(ii) The other party does not know or have notice of the dissociation and reasonably believes that the person is a partner; and
(2) The act:
(i) Is appropriate for winding up the partnership’s business; or
(ii) Would have bound the partnership under § 7-12.1-301 before dissolution and at the time the other party enters into the transaction the other party does not know or have notice of the dissolution.
History of Section.
P.L. 2022, ch. 123, § 2, effective January 1, 2023; P.L. 2022, ch. 124, § 2, effective January 1, 2023.