§ 7-12-46 - Power of partner to bind partnership to third persons after dissolution.
SECTION 7-12-46
§ 7-12-46 Power of partner to bindpartnership to third persons after dissolution. – (a) After dissolution a partner can bind the partnership except as provided insubsection (c), by:
(1) Any act appropriate for winding up partnership affairs orcompleting transactions unfinished at dissolution;
(2) Any transaction which would bind the partnership ifdissolution had not taken place, provided the other party to the transaction,
(i) Had extended credit to the partnership prior todissolution and had no knowledge or notice of the dissolution; or
(ii) Though he or she had not so extended credit, hadnevertheless known of the partnership prior to dissolution, and, having noknowledge or notice of dissolution, the fact of dissolution had not beenadvertised in a newspaper of general circulation in the place (or in each placeif more than one) at which the partnership business was regularly carried on.
(b) The liability of a partner under subsection (a)(2) shallbe satisfied out of partnership assets alone, when the partner had been, priorto dissolution,
(1) Unknown as a partner to the person with whom the contractis made; and
(2) So far unknown and inactive in partnership affairs thatthe business reputation of the partnership could not be said to have been inany degree due to his or her connection with it.
(c) The partnership is in no case bound by any act of apartner after dissolution where:
(1) The partnership is dissolved because it is unlawful tocarry on the business, unless the act is appropriate for winding up partnershipaffairs;
(2) The partner has become bankrupt; or
(3) The partner has no authority to wind up partnershipaffairs; except by a transaction with one who:
(i) Had extended credit to the partnership prior todissolution and had no knowledge or notice of his or her want of authority; or
(ii) Had not extended credit to the partnership prior todissolution, and, having no knowledge or notice of his or her want ofauthority, the fact of his or her want of authority has not been advertised inthe manner provided for advertising the fact of dissolution in subsection(a)(2)(ii).
(d) Nothing in this section affects the liability under§ 7-12-27 of any person who after dissolution represents him or herself orconsents to another representing him or her as a partner in a partnershipengaged in carrying on business.