Texas Business Organizations Code 152.506 – Liability of Withdrawn Partner to Third Party
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Terms Used In Texas Business Organizations Code 152.506
- Business: means a trade, occupation, profession, or other commercial activity. See Texas Business Organizations Code 1.002
- Partner: means a limited partner or general partner. See Texas Business Organizations Code 1.002
- 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: means an entity governed as a partnership under Title 4. See Texas Business Organizations Code 1.002
- Person: means an individual or a corporation, partnership, limited liability company, business trust, trust, association, or other organization, estate, government or governmental subdivision or agency, or other legal entity, or a protected series or registered series of a domestic limited liability company or foreign entity. See Texas Business Organizations Code 1.002
A person who withdraws as a partner in a circumstance that is not an event requiring a winding up of partnership business under § 11.051 or 11.057 is liable to another party as a partner in a transaction entered into by the partnership or a surviving partnership under § 10.001 not later than the second anniversary of the date of the partner’s withdrawal only if the other party to the transaction:
(1) does not have notice of the partner’s withdrawal; and
(2) reasonably believed that the withdrawn partner was a partner at the time of the transaction.