Arkansas § 4-46-912 Power of partners and persons dissociated as partners to bind organization after conversion or merger

Arkansas Statutes

§ 4-46-912 — Power of partners and persons dissociated as partners to bind organization after conversion or merger

(a)An act of a person that immediately before a conversion or merger became effective was a partner in a converting or constituent partnership binds the converted or surviving organization after the conversion or merger becomes effective if:

(1)Before the conversion or merger became effective the act would have bound the converting or constituent partnership under § 4-46-301 ; and (2) At the time the third party enters into the transaction the third party:

(A)Does not have notice of the conversion or merger; and (B) Reasonably believes that the converted or surviving business is the converting or constituent partnership and that the person is a partner in the converting or constituent partnership.

(b)An act of a person that before a conversion or merger became effective was dissociated

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(a) An act of a person that immediately before a conversion or merger became effective was a partner in a converting or constituent partnership binds the converted or surviving organization after the conversion or merger becomes effective if: (1) Before the conversion or merger became effective the act would have bound the converting or constituent partnership under § 4-46-301 ; and (2) At the time the third party enters into the transaction the third party: (A) Does not have notice of the conversion or merger; and (B) Reasonably believes that the converted or surviving business is the converting or constituent partnership and that the person is a partner in the converting or constituent partnership. (b) An act of a person that before a conversion or merger became effective was dissociated as a partner from a converting or constituent partnership binds the converted or surviving organization after the conversion or merger becomes effective if: (1) Before the conversion or merger became effective the act would have bound the converting or constituent partnership under § 4-46-301 if the person had been a partner; and (2) At the time the third party enters into the transaction, less than two (2) years have passed since the person dissociated as a general partner and the third party: (A) Does not have notice of the dissociation; (B) Does not have notice of the conversion or merger; and (C) Reasonably believes that the converted or surviving organization is the converting or constituent partnership and that the person is a partner in the converting or constituent partnership. (c) If a person with knowledge of the conversion or merger causes a converted or surviving organization to incur an obligation under subsection (a) or subsection (b) of this section the person is liable: (1) To the converted or surviving organization for any damage caused to the organization arising from the obligation; and (2) If another person is liable for the obligation, to the other person for any damage caused to the other person arising from the liability.

Arkansas § 4-46-912 (Power of partners and persons dissociated as partners to bind organization after conversion or merger) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.