(a) A person‘s dissociation as a partner does not of itself discharge that person’s liability for a partnershipobligation incurred before dissociation. A person dissociated as a partner is not liable for a partnership obligation incurred after dissociation, except as provided in subsection (b).
Terms Used In Alabama Code 10A-8A-7.03
Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
Partnership: A voluntary contract between two or more persons to pool some or all of their assets into a business, with the agreement that there will be a proportional sharing of profits and losses.
person: includes a corporation as well as a natural person. See Alabama Code 1-1-1
year: means a calendar year; but, whenever the word "year" is used in reference to any appropriations for the payment of money out of the treasury, it shall mean fiscal year. See Alabama Code 1-1-1
(b) A person that dissociates as a partner without resulting in a dissolution and winding up of the partnership business or not for profit activity is liable as a partner to the other party in a transaction entered into by the partnership, or a surviving partnership or other surviving entity under Article 9 of this chapter or Article 8 of Chapter 1, within one year after the partner’s dissociation, only if the partner is liable for the obligation under Section 10A-8A-3.06 and at the time of entering into the transaction the other party:
(1) reasonably believed that the person dissociated as a partner was then a partner and reasonably relied on such belief in entering into the transaction;(2) did not have notice of the person’s dissociation; and(3) is not deemed to have had knowledge or notice under Section 10A-8A-1.03 of the person’s dissociation.(c) By agreement with the partnership creditor and the partners continuing the business or not for profit activity, a person dissociated as a partner may be released from liability for a partnership obligation.(d) A person dissociated as a partner is released from liability for a partnership obligation if a partnership creditor, with notice of the person’s dissociation but without the person’s consent, agrees to a material alteration in the nature or time of payment of a partnership obligation.
