Partnership Law Act 2019

Relationship of partners to third persons and to each other - Relationship of partners to third persons

32: Liability of partner who leaves firm

You could also call this:

"You might still owe money after leaving a partnership"

If you leave a partnership, you are still responsible for any debts or obligations that the partnership took on before you left. However, you can be released from these responsibilities if you, the new members of the partnership, and the person or company the partnership owes money to all agree to it. This agreement can be made in writing or can be understood from how the creditor and the new partnership work together after you leave.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS206027.


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"New partners don't have to pay for old problems"


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"Protecting people who do business with a company when its members change"

Part 3Relationship of partners to third persons and to each other
Relationship of partners to third persons

32Liability of partner who leaves firm

  1. A partner (A) who leaves a firm does not by leaving cease to be liable for partnership debts or obligations incurred before leaving.

  2. A may be discharged from an existing liability by an agreement to that effect between—

  3. A; and
    1. the members of the firm as newly composed; and
      1. the creditor.
        1. The agreement may—

        2. be an express agreement; or
          1. be inferred as a fact from the course of dealing between the creditor and the firm as newly composed.
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