2. Relationship Between Partners and Third Parties

Question 1

Nature of Liability

Answer 1

All partners are jointly and severally liable for all debts, obligations, and liabilities of the partnership, including for Ks & torts of partners within the scope of partnership.

Thus, an action may be brought against any one or more of the partners, but a partner will not be bound by a judgment unless he has been served with notice.

Question 2

What is an incoming partner’s liability?

Answer 2

An incoming partner, one admitted as a partner into an existing partnership, is liable for all the obligations of the partnership arising before his admission as though he had been a partner when such obligations were incurred.

However, his liability for obligations arising prior to his admission can be satisfied only out of partnership property, and thus is limited to his investment in the business.