The Vermont Statutes Online

Title 11 : Corporations, Partnerships and Associations

Chapter 022 : Partnerships

Subchapter 007 : PARTNER'S DISSOCIATION WHEN BUSINESS NOT WOUND UP

• § 3263. Dissociated partner’s liability to other persons

  (a) A partner’s dissociation does not discharge the partner’s liability for a partnership obligation incurred before dissociation. A dissociated partner is not liable for a partnership obligation incurred after dissociation, except as otherwise provided in subsection (b) of this section.

  (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 subchapter 9 of this chapter, within two years after the partner’s dissociation, only if the partner is liable for the obligation under section 3226 of this title, 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 subsection 3223(e) of this title or notice under subsection 3264(c) of this title.

  (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. (Added 1997, No. 149 (Adj. Sess.), § 1, eff. Jan. 1, 1999.)