Section 321.1112 Power of General Partners and Persons Dissociated As General Partners to Bind Organization after Conversion or Merger
321.1112 POWER OF GENERAL PARTNERS AND PERSONS DISSOCIATED AS GENERAL PARTNERS TO BIND ORGANIZATION AFTER CONVERSION OR MERGER.
(a) An act of a person that immediately before a conversion or merger became effective was a general partner in a converting or constituent limited partnership binds the converted or surviving organization after the conversion or merger becomes effective, if:
(1) before the conversion or merger became effective, the act would have bound the converting or constituent limited partnership under section 321.0402; and
(2) at the time the third party enters into the transaction, the third party:
(A) does not have notice of the conversion or merger; and
(B) reasonably believes that the converted or surviving business is the converting or constituent limited partnership and that the person is a general partner in the converting or constituent limited partnership.
(b) An act of a person that before a conversion or merger became effective was dissociated as a general partner from a converting or constituent limited partnership binds the converted or surviving organization after the conversion or merger becomes effective, if:
(1) before the conversion or merger became effective, the act would have bound the converting or constituent limited partnership under section 321.0402 if the person had been a general partner; and
(2) at the time the third party enters into the transaction, less than two years have passed since the person dissociated as a general partner and the third party:
(A) does not have notice of the dissociation;
(B) does not have notice of the conversion or merger; and
(C) reasonably believes that the converted or surviving organization is the converting or constituent limited partnership and that the person is a general partner in the converting or constituent limited partnership.
(c) If a person having knowledge of the conversion or merger causes a converted or surviving organization to incur an obligation under subsection (a) or (b), the person is liable:
(1) to the converted or surviving organization for any damage caused to the organization arising from the obligation; and
(2) if another person is liable for the obligation, to that other person for any damage caused to that other person arising from the liability.
History:
2004 c 199 art 11 s 98