Rhode Island General Laws 7-12.1-805. Liability after dissolution of partner and person dissociated as partner
(a) If a partner having knowledge of the dissolution causes a partnership to incur an obligation under § 7-12.1-804(a) by an act that is not appropriate for winding up the partnership business, the partner is liable:
(1) To the partnership for any damage caused to the partnership arising from the obligation; and
(2) If another partner or person dissociated as a partner is liable for the obligation, to that other partner or person for any damage caused to that other partner or person arising from the liability.
Terms Used In Rhode Island General Laws 7-12.1-805
- Business: includes every trade, occupation, and profession. See Rhode Island General Laws 7-12.1-102
- 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.
- 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) Except as otherwise provided in subsection (c) of this section, if a person dissociated as a partner causes a partnership to incur an obligation under § 7-12.1-804(b), the person is liable:
(1) To the partnership for any damage caused to the partnership arising from the obligation; and
(2) If a partner or another person dissociated as a partner is liable for the obligation, to the partner or other person for any damage caused to the partner or other person arising from the obligation.
(c) A person dissociated as a partner is not liable under subsection (b) of this section if:
(1) Section 7-12.1-802(c) permits the person to participate in winding up; and
(2) The act that causes the partnership to be bound under § 7-12.1-804(b) is appropriate for winding up the partnership’s business.
History of Section.
P.L. 2022, ch. 123, § 2, effective January 1, 2023; P.L. 2022, ch. 124, § 2, effective January 1, 2023.