Code of Virginia - Title 50 Partnerships - Section 50-73.114 Dissociated partner's liability to other persons

§ 50-73.114. Dissociated partner's liability to other persons

A. A partner's dissociation does not of itself discharge the partner's liability for a partnership obligation incurred before dissociation. A dissociated partner is not liable for a partnership obligation incurred after dissociation, except as otherwise provided in subsection B.

B. A partner who dissociates without resulting in a dissolution and winding up of the partnership business is liable as a partner to the other party in a transaction entered into by the partnership, or a surviving partnership under Article 9, within one year after the partner's dissociation, only if the obligation is one for which he would be liable under § 50-73.96 if he were a partner and at the time of entering into the transaction the other party:

1. Reasonably believed that the dissociated partner was then a partner;

2. Did not have notice of the partner's dissociation; and

3. Is not deemed to have had knowledge under subsection E of § 50-73.93 or notice under subsection C of § 50-73.115.

C. By agreement with the partnership creditor and the partners continuing the business, a dissociated partner may be released from liability for a partnership obligation.

D. A dissociated partner is released from liability for a partnership obligation if a partnership creditor, with notice of the partner's dissociation but without the partner's consent, agrees to a material alteration in the nature or time of payment of a partnership obligation.

(1996, c. 292.)

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Last modified: April 16, 2009