Utah Code 48-2e-607. Liability to other persons of person dissociated as general partner
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(1) A person‘s dissociation as a general partner does not of itself discharge the person’s liability as a general partner for a debt, obligation, or other liability of the limited partnership incurred before dissociation. Except as otherwise provided in Subsections (2) and (3), the person is not liable for a limited partnership obligation incurred after dissociation.
Terms Used In Utah Code 48-2e-607
- General partner: means a person that:(8)(a) has become a general partner under Section 48-2e-401 or was a general partner in a limited partnership when the limited partnership became subject to this chapter under Section 48-2e-1205; and(8)(b) has not dissociated as a general partner under Section 48-2e-603. See Utah Code 48-2e-102
- Limited partnership: means an entity formed under this chapter or which becomes subject to this chapter under Part 11, Merger, Interest Exchange, Conversion, and Domestication, or Section 48-2e-1205. See Utah Code 48-2e-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 limited partner or general partner. See Utah Code 48-2e-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, 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 Utah Code 48-2e-102
(2) A person whose dissociation as a general partner resulted in a dissolution and winding up of the limited partnership’s activities and affairs is liable to the same extent as a general partner under Section 48-2e-404 on an obligation incurred by the limited partnership under Section 48-2e-804.(3) A person that has dissociated as a general partner but whose dissociation did not result in a dissolution and winding up of the limited partnership’s activities and affairs is liable on a transaction entered into by the limited partnership after the dissociation only if:(3)(a) a general partner would be liable on the transaction; and(3)(b) at the time the other party enters into the transaction:(3)(b)(i) less than two years has passed since the dissociation; and(3)(b)(ii) the other party does not have knowledge or notice of the dissociation and reasonably believes that the person is a general partner.(4) By agreement with a creditor of a limited partnership and the limited partnership, a person dissociated as a general partner may be released from liability for an obligation of the limited partnership.(5) A person dissociated as a general partner is released from liability for an obligation of the limited partnership if the limited partnership’s creditor, with knowledge or notice of the person’s dissociation as a general partner but without the person’s consent, agrees to a material alteration in the nature or time of payment of the obligation.