In Some Cases, A Dissociated Partner May Remain Liable As A Partner
The anomalously named California Uniform Partnership Act of 1994 specifies when a partner in a general partnership "dissociates". Cal. Corp. Code § 16601. Upon dissociation, a general partner loses the right to participate in the management and conduct of the partnership business. Cal. Corp. Code § 16603(1). One would expect that the dissociated partner would also cease to be liable for a partnership obligation incurred after dissociation and that is what the act indeed provides in Subdivision (a) of Section 16703. There is a significant exception, however,
Section 16703(b) provides that except for registered limited liability partnerships and foreign limited liability partnerships, a dissociated partner is liable as a partner to the other party in a transaction entered into by the partnership within two years after the partner's dissociation if at the time the transaction is entered into all of the following apply:
The other party reasonably believed that the dissociated partner was then a partner;
The other party did not have notice of the partner’s dissociation; and
The other party is not deemed to have had knowledge under subdivision (e) of Section 16303 or notice under subdivision (c) of Section 16704.
Section 16303(e) deems a person who is not a partner to know of a limitation on the authority of a partner to transfer real property held in the partnership's name if a certified copy of a Statement of Denial containing the limitation is of record. See this post regarding Statements of Denial. Section 16704(c) provides that a person who is not a partner is deemed to have notice of the dissociation 90 days after a Statement of Dissociation is filed.