§ 7-12-52 - Liability of persons continuing the business in certain cases.
SECTION 7-12-52
§ 7-12-52 Liability of persons continuingthe business in certain cases. – (a) When any new partner is admitted into an existing partnership, or when anypartner retires and assigns (or the representative of the deceased partnerassigns) his or her rights in partnership property to two (2) or more of thepartners, or to one or more of the partners, and one or more third persons, ifthe business is continued without liquidation of the partnership affairs,creditors of the first or dissolved partnership are also creditors of thepartnership continuing the business.
(b) When all but one partner retire and assign (or therepresentative of the deceased partner assigns) their rights in partnershipproperty to the remaining partner, who continues the business withoutliquidation of partnership affairs, either alone or with others, creditors ofthe dissolved partnership are also creditors of the person or partnershipcontinuing the business.
(c) When any partner retires or dies and the business of thedissolved partnership is continued as described in subsections (a) and (b),with the consent of the retired partners or the representative of the deceasedpartner, but without any assignment of his or her right in partnershipproperty, rights of creditors of the dissolved partnership and of the creditorsof the person or partnership continuing the business are as if the assignmenthad been made.
(d) When all the partners or their representatives assigntheir rights in partnership property to one or more third persons who promiseto pay the debts and who continue the business of the dissolved partnerships,creditors of the dissolved partnerships are also creditors of the person orpartnership continuing the business.
(e) When any partner wrongfully causes a dissolution and theremaining partners continue the business under the provision of §7-12-49(b)(2), either alone or with others, and without liquidation of thepartnership affairs, creditors of the dissolved partnership are also creditorsof the person or partnership continuing the business.
(f) When a partner is expelled and the remaining partnerscontinue the business either alone or with others, without liquidation of thepartnership affairs, creditors of the dissolved partnership are also creditorsof the person or partnership continuing the business.
(g) The liability of a third person becoming a partner in thepartnership continuing the business, under this section, to the creditors ofthe dissolved partnership is satisfied out of partnership property only.
(h) When the business of a partnership after dissolution iscontinued under any conditions described in this section, the creditors of thedissolved partnership, as against the separate creditors of the retiring ordeceased partner or the representative of the deceased partner, have a priorright to any claim of the retired partner or the representative of the deceasedpartner against the person or partnership continuing the business, on accountof the retired or deceased partner's interest in the dissolved partnership oron account of any consideration promised for the interest or for his or herright in partnership property.
(i) Nothing in this section can be held to modify any rightof creditors to set aside any assignment on the ground of fraud.
(j) The use by the person or partnership continuing thebusiness of the partnership name, or the name of a deceased partner as part ofit, does not of itself make the individual property of the deceased partnerliable for any debts contracted by the person or partnership.