§ 35-12-1521 — Power Of General Partners And Persons Dissociated As General Partners To Bind Organization After Conversion Or Merger

35-12-1521 . 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 limited partnership or constituent limited partnership binds the converted organization 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 limited partnership or constituent limited partnership under 35-12-806 ; and
(b) at the time the third party enters into the transaction, the third party:
(i) does not have notice of the conversion or merger; and
(ii) reasonably believes that the converted or surviving business is the converting limited partnership or constituent limited partnership and that the person is a general partner in the converting limited partnership 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 limited partnership or constituent limited partnership binds the converted organization 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 limited partnership or constituent limited partnership under 35-12-806 if the person had been a general partner; and
(b) at the time the third party enters into the transaction, less than 2 years have passed since the person dissociated as a general partner and the third party:
(i) does not have notice of the dissociation;
(ii) does not have notice of the conversion or merger; and
(iii) reasonably believes that the converted organization or surviving organization is the converting limited partnership or constituent limited partnership and that the person is a general partner in the converting limited partnership or constituent limited partnership.
(3) If a person having knowledge of the conversion or merger causes a converted organization or surviving organization to incur an obligation under subsection (1) or (2), the person is liable:
(a) to the converted organization or surviving organization for any damage caused to the organization arising from the obligation; and
(b) if another person is liable for the obligation, to that other person for any damage caused to that other person arising from the liability.

Legislative History

En. Sec. 93, Ch. 216, L. 2011.