1. A person‘s dissociation as a general partner does not of itself discharge the person’s liability as a general partner for an obligation of the limited partnership incurred before dissociation. Except as otherwise provided in subsections 2 and 3, the person is not liable for a limited partnership’s obligation incurred after dissociation.

Terms Used In Iowa Code 488.607

  • 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 :
  • 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. A person whose dissociation as a general partner resulted in a dissolution and winding up of the limited partnership’s activities is liable to the same extent as a general partner under section 488.404 on an obligation incurred by the limited partnership under section 488.804.
 3. A person that has dissociated as a general partner but whose dissociation did not result in a dissolution and winding up of the limited partnership’s activities is liable on a transaction entered into by the limited partnership after the dissociation only if all of the following apply:

 a. A general partner would be liable on the transaction.
 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.
 4. By agreement with a creditor of a limited partnership and the limited partnership, a person dissociated as a general partner may be released from liability for an obligation of the limited partnership.
 5. A person dissociated as a general partner is released from liability for an obligation of the limited partnership if the limited partnership’s creditor, with notice of the person’s dissociation as a general partner but without the person’s consent, agrees to a material alteration in the nature or time of payment of the obligation.