N.D. Cent. Code § 45-10.2-106

Current through 2023 Legislative Sessions

Section 45-10.2-106 - (1112) Power of general partners and persons dissociated as general partners to bind organization after conversion or merger

1. An act of a person that immediately before a conversion or merger became effective was a general partner in a converting or constituent limited partnership binds the converted or surviving organization after the conversion or merger becomes effective, if:

a. Before the conversion or merger became effective, the act would have bound the converting or constituent limited partnership under section 45-10.2-38; and

b. At the time the third party enters into the transaction, the third party:

(1) Does not have notice of the conversion or merger; and

(2) Reasonably believes that:

(a) The converted or surviving organization or business is the converting or constituent limited partnership; and

(b) The person is a general partner in the converting or constituent limited partnership.

2. An act of a person that before a conversion or merger became effective was dissociated as a general partner from a converting or constituent limited partnership binds the converted or surviving organization after the conversion or merger becomes effective, if:

a. Before the conversion or merger became effective, the act would have bound the converting or constituent limited partnership under section 45-10.2-38 if the person had been a general partner; and

b. At the time the third party enters into the transaction, less than two years have passed since the person dissociated as a general partner and the third party:

(1) Does not have notice of the dissociation;

(2) Does not have notice of the conversion or merger; and

(3) Reasonably believes that:

(a) The converted or surviving organization or business is the converting or constituent limited partnership; and

(b) The person is a general partner in the converting or constituent limited partnership.

3. If a person having knowledge of the conversion or merger causes a converted or surviving organization to incur an obligation under subsection 1 or 2, then the person is liable:

a. To the converted or surviving organization for any damage caused to the organization arising from the obligation; and

b. If another person is liable for the obligation, then to that other person for any damage caused to that other person arising from the liability.

N.D.C.C. § 45-10.2-106