North Dakota Code 45-10.2-106 – (1112) Power of general partners and persons dissociated as general partners to bind organization after conversion or merger
1. An act of a person that immediately before a conversion or merger became effective was a general partner in a converting or constituent limited partnership binds the converted or surviving organization after the conversion or merger becomes effective, if:
Terms Used In North Dakota Code 45-10.2-106
- 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.
- Organization: includes a foreign or domestic association, business trust, corporation, enterprise, estate, joint venture, limited liability company, limited liability partnership, limited partnership, partnership, trust, or any legal or commercial entity. See North Dakota Code 1-01-49
- 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.
- Partnership: includes a limited liability partnership registered under chapter 45-22. See North Dakota Code 1-01-49
- Person: means an individual, organization, government, political subdivision, or government agency or instrumentality. See North Dakota Code 1-01-49
a. Before the conversion or merger became effective, the act would have bound the converting or constituent limited partnership under section 45-10.2-38; and
b. At the time the third party enters into the transaction, the third party: (1) Does not have notice of the conversion or merger; and
(2) Reasonably believes that:
(a) The converted or surviving organization or business is the converting or constituent limited partnership; and
(b) The person is a general partner in the converting or constituent limited partnership.
2. An act of a person that before a conversion or merger became effective was dissociated as a general partner from a converting or constituent limited partnership binds the converted or surviving organization after the conversion or merger becomes effective, if:
a. Before the conversion or merger became effective, the act would have bound the converting or constituent limited partnership under section 45-10.2-38 if the person had been a general partner; and
b. At the time the third party enters into the transaction, less than two years have passed since the person dissociated as a general partner and the third party:
(1) Does not have notice of the dissociation; (2) Does not have notice of the conversion or merger; and
(3) Reasonably believes that:
(a) The converted or surviving organization or business is the converting or constituent limited partnership; and
(b) The person is a general partner in the converting or constituent limited partnership.
3. If a person having knowledge of the conversion or merger causes a converted or surviving organization to incur an obligation under subsection 1 or 2, then the person is liable:
a. To the converted or surviving organization for any damage caused to the organization arising from the obligation; and
b. If another person is liable for the obligation, then to that other person for any damage caused to that other person arising from the liability.