Jane, Kelly, and Lois are partners in an accounting firm in a state that has adopted the RUPA. Jane intends to retire and withdraw from the partnership at the end of the year. Jane is liable to the firm's creditors:
A) for a partnership obligation incurred within two years after dissociation if the partnership did not dissolve and if at the time of entering into the transaction the other party reasonably believed Jane was then a partner.
B) only for all debts incurred prior to her retirement.
C) until the day of her retirement when she will be absolved of all liability.
D) for an amount not to exceed her partnership interest on the day of her retirement.
E) for an amount not to exceed her initial capital contribution to the partnership.

Question

Quizplus · Accepted Answer

According to RUPA, a dissociated partner is liable to the firm's creditors for a partnership obligation incurred within two years after dissociation if the partnership did not dissolve and if at the time of entering into the transaction the other party reasonably believed the dissociated partner was then a partner. Therefore, Jane will be liable for partnership obligations incurred within two years after her retirement if the other party reasonably believed she was still a partner at the time of entering into the transaction.

Jane, Kelly, and Lois Are Partners in an Accounting Firm