(a) A partner’s dissociation does not of itself discharge the partner’s liability for a partnershipobligation incurred before dissociation. A dissociated partner is not liable for a partnership obligation incurred after dissociation, except as otherwise provided in subsection (b).
Terms Used In Tennessee Code 61-1-703
Business: means every trade, occupation, and profession and any other activity, including the holding or ownership of property, entered into for profit. See Tennessee Code 61-1-101
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: means an association of two (2) or more persons to carry on as co-owners of a business or other undertaking for profit formed under §. See Tennessee Code 61-1-101
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.
(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 part 9 of this chapter, within one year after the partner’s dissociation, only if the obligation is one for which such dissociated partner would be liable under § 61-1-306 if such dissociated partner had not dissociated and at the time of entering into the transaction the other party:
(1) Reasonably believed that the dissociated partner was then a partner;(2) Did not have notice of the partner’s dissociation; and(3) Is not deemed to have had knowledge under § 61-1-303(d) or notice under § 61-1-704(c).(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.
