Illinois Compiled Statutes 805 ILCS 206/703 – Dissociated partner’s liability to other persons
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(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) of this Section.
(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 of this Act, within 2 years after the partner’s dissociation, only if the partner is liable for the obligation under Section 306 and at the time of entering into the transaction the other party:
(1) reasonably believed that the dissociated partner
(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 of this Act, within 2 years after the partner’s dissociation, only if the partner is liable for the obligation under Section 306 and at the time of entering into the transaction the other party:
Terms Used In Illinois Compiled Statutes 805 ILCS 206/703
- 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.
(1) reasonably believed that the dissociated partner
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was then a partner;
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(2) did not have notice of the partner’s
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dissociation; and
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(3) is not deemed to have had knowledge under Section
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303(e) or notice under Section 704(c).
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(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.
(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.