N.Y. Partnership Law § 66: Power of partner to bind partnership to third persons after dissolution

§ 66. Power of partner to bind partnership to third persons after

dissolution. (1) After dissolution a partner can bind the partnership

except as provided in subdivision three

(a) By any act appropriate for winding up partnership affairs or

completing transactions unfinished at dissolution;

(b) By any transaction which would bind the partnership if dissolution

had not taken place, provided the other party to the transaction

(I) Had extended credit to the partnership prior to dissolution and

had no knowledge or notice of the dissolution; or

(II) Though he had not so extended credit, had nevertheless known of

the partnership prior to the dissolution, and, having no knowledge or

notice of dissolution, the fact of dissolution had not been advertised

in a newspaper of general circulation in the place (or in each place if

more than one) at which the partnership business was regularly carried

on.

2. The liability of a partner under subdivision one, paragraph (b),

shall be satisfied out of partnership assets alone when such partner had

been prior to dissolution

(a) Unknown as a partner to the person with whom the contract is made;

and

(b) So far unknown and inactive in partnership affairs that the

business reputation of the partnership could not be said to have been in

any degree due to his connection with it.

3. The partnership is in no case bound by any act of a partner after

dissolution

(a) Where the partnership is dissolved because it is unlawful to carry

on the business, unless the act is appropriate for winding up partnerhip

affairs; or

(b) Where the partner has become bankrupt; or

(c) Where the partner has no authority to wind up partnership affairs,

except by a transaction with one who

(I) Had extended credit to the partnership prior to dissolution and

had no knowledge or notice of his want of authority; or

(II) Had not extended credit to the partnership prior to dissolution,

and, having no knowledge or notice of his want of authority, the fact of

his want of authority has not been advertised in the manner provided for

advertising the fact of dissolution in subdivision one, paragraph (b),

clause (II).

4. Nothing in this section shall affect the liability under section

twenty-seven of any person who after dissolution represents himself or

consents to another representing him as a partner in a partnership

engaged in carrying on business.