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4-46-911. Liability of partner after conversion or merger.
Arkansas Code — all titles (historical 2020) · legal_authorities
4-46-911. Liability of partner after conversion or merger.
(a) A conversion or merger under this chapter does not discharge any liability under § 4-46-306 or § 4-46-703 of a person that was a partner in or dissociated as a partner from a converting or constituent partnership, but:
(1) The provisions of this chapter pertaining to the collection or discharge of the liability continue to apply to the liability;
(2) The converted or surviving organization is deemed to be the converting or constituent partnership under § 4-46-306 or § 4-46-703; and
(3) If a person is required to pay any amount under this subsection:
(A) The person has a right of contribution from each other person that was liable as a partner under § 4-46-306 when the obligation was incurred and has not been released from the obligation under § 4-46-703; and
(B) The contribution due from each other person is in proportion to the right to receive distributions in the capacity of partner in effect for each other person when the obligation was incurred.
(b) In addition to any other liability provided by law:
(1) A person that immediately before a conversion or merger became effective was a partner in a converting or constituent partnership that was not a limited liability partnership is personally liable for each obligation of the converted or surviving organization arising from a transaction with a third party after the conversion or merger becomes effective if 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:
(i) The converted or surviving organization is the converting or constituent partnership;
(ii) The converting or constituent partnership is not a limited liability partn
Source: Arkansas Code — historical release 78 (November 6, 2020) · 4-46-911
Stored review status: Historical 2020-11-06 source release; later amendments not reconciled; machine-extracted, not independently legally reviewed; source heading status: text_in_historical_source. A text match is a research starting point; applicability is not established.
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Record provenance
Stable record: arkansas_code:legal_authorities:4-46-911
Source file: gov.ar.code.title.04.odt
Pages: Not recorded – Not recorded
Passage SHA-256: 04db679d677afcdbfec967350f7993363551ba0c2da5813e1c1966de603ddf10
Source location: content.xml paragraph 26885
Stored source content
4-46-911. Liability of partner after conversion or merger.
(a) A conversion or merger under this chapter does not discharge any liability under § 4-46-306 or § 4-46-703 of a person that was a partner in or dissociated as a partner from a converting or constituent partnership, but:
(1) The provisions of this chapter pertaining to the collection or discharge of the liability continue to apply to the liability;
(2) The converted or surviving organization is deemed to be the converting or constituent partnership under § 4-46-306 or § 4-46-703; and
(3) If a person is required to pay any amount under this subsection:
(A) The person has a right of contribution from each other person that was liable as a partner under § 4-46-306 when the obligation was incurred and has not been released from the obligation under § 4-46-703; and
(B) The contribution due from each other person is in proportion to the right to receive distributions in the capacity of partner in effect for each other person when the obligation was incurred.
(b) In addition to any other liability provided by law:
(1) A person that immediately before a conversion or merger became effective was a partner in a converting or constituent partnership that was not a limited liability partnership is personally liable for each obligation of the converted or surviving organization arising from a transaction with a third party after the conversion or merger becomes effective if 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:
(i) The converted or surviving organization is the converting or constituent partnership;
(ii) The converting or constituent partnership is not a limited liability partnership; and
(iii) The person is a partner in the converting or constituent partnership; and
(2) A person that was dissociated as a partner from a converting or constituent partnership before the conversion or merger became effective is personally liable for each obligation of the converted or surviving organization arising from a transaction with a third party after the conversion or merger becomes effective if:
(A) Immediately before the conversion or merger became effective the converting or surviving partnership was not a limited liability partnership; and
(B) At the time the third party enters into the transaction less than two (2) years have passed since the person dissociated as a 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:
(a) The converted or surviving organization is the converting or constituent partnership;
(b) The converting or constituent partnership is not a constituent limited liability partnership; and
(c) The person is a partner in the converting or constituent partnership.
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Arkansas Code — all titles (historical 2020) · legal_authorities
4-46-306. Partner's liability.
(a) Except as otherwise provided in subsections (b) and (c) of this section, all partners are liable jointly and severally for all obligations of the partnership unless otherwise agreed by the claimant or provided by law.
(b) A person admitted as a partner into an existing partnership is not personally liable for any partnership obligation incurred before the person's admission as a partner.
(c) An obligation of a partnership incurred while the partnership is a limited liability partnership, whether arising in contract, tort, or otherwise, is solely the obligation of the partnership. A partner is not personally liable, directly or indirectly, by way of contribution or otherwise, for such a partnership obligation solely by reason of being or so acting as a partner. This subsection applies notwithstanding anything inconsistent in the partnership agreement that existed immediately before the vote required to become a limited liability partnership under § 4-46-1001(b).
Source: Arkansas Code — historical release 78 (November 6, 2020) · 4-46-306
Stored review status: Historical 2020-11-06 source release; later amendments not reconciled; machine-extracted, not independently legally reviewed; source heading status: text_in_historical_source. The source passage cites 4-46-306. This identifies an authority to review, not proof of applicability.
Arkansas Code — all titles (historical 2020) · legal_authorities
4-46-703. Dissociated partner's liability to other persons.
(a) A partner's dissociation does not of itself 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 converted or surviving organization under § 4-46-901 et seq., within two (2) years after the partner's dissociation, only if the partner is liable for the obligation under § 4-46-306 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 § 4-46-303(e) or notice under § 4-46-704(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.
Source: Arkansas Code — historical release 78 (November 6, 2020) · 4-46-703
Stored review status: Historical 2020-11-06 source release; later amendments not reconciled; machine-extracted, not independently legally reviewed; source heading status: text_in_historical_source. The source passage cites 4-46-703. This identifies an authority to review, not proof of applicability.