Liabilities of General Partners to Third parties

Question 1

What rules apply to liability of general partners to third parties?

Answer 1

Agency rules.

partners are agents of the partnership for apparently carrying on usual partnership business.

The general partnership is liable for each partner’s torts in the scope of partnership business and for each partner’s authorized contracts.

Question 2

Each GP is personally liable for:

Answer 2

all debts of the partnership and for each co-partner’s torts.

Question 3

What about incoming partners and preexisting debts?

Answer 3

An incoming partner is generally not liable for prior debts but any capital pay in to a partnership can be used by the partnership to satisfy those prior debts.

Question 4

What about a dissociating partner’s liability for subsequent debts?

Answer 4

Dissociating partners retain liability for future debts until actual notice of their dissociation is given to creditors or until 90 days after filing notice of dissociation with the state.

Question 5

What is general partnership liability by estoppel?

Answer 5

one who represents to a third party that a general partnership exists will be liable as if a GP exists.