Iowa Code 488.606 – Power to bind — liability to limited partnership before dissolution of partnership of person dissociated as general partner
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1. After a person is dissociated as a general partner and before the limited partnership is dissolved, converted under article 11, or merged out of existence under article 11, the limited partnership is bound by an act of the person only if all of the following apply:
a. The act would have bound the limited partnership under section 488.402 before the dissociation.
b. At the time the other party enters into the transaction, all of the following apply:
(1) Less than two years have passed since the dissociation.
(2) The other party does not have notice of the dissociation and reasonably believes that the person is a general partner.
Terms Used In Iowa Code 488.606
- following: when used by way of reference to a chapter or other part of a statute mean the next preceding or next following chapter or other part. See Iowa Code 4.1
- General partner: means :a. See Iowa Code 488.102
- 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.
- Partner: means a limited partner or general partner. See Iowa Code 488.102
- 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: means an individual, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture, or government; governmental subdivision, agency, or instrumentality; public corporation; or any other legal or commercial entity. See Iowa Code 488.102
- Person dissociated as a general partner: means a person dissociated as a general partner of a limited partnership. See Iowa Code 488.102
2. If a limited partnership is bound under subsection 1, the person dissociated as a general partner which caused the limited partnership to be bound is liable to the following:a. To the limited partnership for any damage caused to the limited partnership arising from the obligation incurred under subsection 1.b. If a general partner or another person dissociated as a general partner is liable for the obligation, to the general partner or other person for any damage caused to the general partner or other person arising from the liability.