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New York Partnership Law Section 72 - Liability Of Persons Continuing The Business In Certain Cases.Legal Research Home > New York Lawyer > Partnership > New York Partnership Law Section 72 - Liability Of Persons Continuing The Business In Certain Cases. Sponsored Links
§ 72. Liability of persons continuing the business in certain cases.
1. When any new partner is admitted into an existing partnership, or
when any partner retires and assigns (or the representative of the
deceased partner assigns) his rights in partnership property to two or
more of the partners, or to one or more of the partners and one or more
third persons, if the business is continued without liquidation of the
partnership affairs, creditors of the first or dissolved partnership are
also creditors of the partnership so continuing the business.
2. When all but one partner retire and assign (or the representative
of a deceased partner assigns) their rights in partnership property to
the remaining partner, who continues the business without liquidation of
partnership affairs, either alone or with others, creditors of the
dissolved partnership are also creditors of the person or partnership so
continuing the business.
3. When any partner retires or dies and the business of the dissolved
partnership is continued as set forth in subdivisions one and two of
this section, with the consent of the retired partners or the
representative of the deceased partner, but without any assignment of
his right in partnership property, rights of creditors of the dissolved
partnership and of the creditors of the person or partnership continuing
the business shall be as if such assignment had been made.
4. When all the partners or their representatives assign their rights
in partnership property to one or more third persons who promise to pay
the debts and who continue the business of the dissolved partnership,
creditors of the dissolved partnership are also creditors of the person
or partnership continuing the business.
5. When any partner wrongfully causes a dissolution and the remaining
partners continue the business under the provisions of section
sixty-nine, paragraph (b) of subdivision two, either alone or with
others, and without liquidation of the partnership affairs, creditors of
the dissolved partnership are also creditors of the person or
partnership continuing the business.
6. When a partner is expelled and the remaining partners continue the
business either alone or with others, without liquidation of the
partnership affairs, creditors of the dissolved partnership are also
creditors of the person or partnership continuing the business.
7. The liability of a third person becoming a partner in the
partnership continuing the business under this section to the creditors
of the dissolved partnership shall be satisfied out of partnership
property only.
8. When the business of a partnership after dissolution is continued
under any conditions set forth in this section the creditors of the
dissolved partnership, as against the separate creditors of the retiring
or deceased partner or the representative of the deceased partner, have
a prior right to any claim of the retired partner or the representative
of the deceased partner against the person or partnership continuing the
business, on account of the retired or deceased partner's interest in
the dissolved partnership or on account of any consideration promised
for such interest or for his right in partnership property.
9. Nothing in this section shall be held to modify any right of
creditors to set aside any assignment on the ground of fraud.
10. The use by the person or partnership continuing the business of
the partnership name, or the name of a deceased partner as part thereof,
shall not of itself make the individual property of the deceased partner
liable for any debts contracted by such person or partnership.
Last modified: August 10, 2006 |