Also known as: dissociations · dissociate · dissociates · dissociated · dissociating
Written by attorneys · grounded in primary & secondary sources — see below
An event terminating a person's status as a partner or member in a partnership or limited liability company. The event occurs upon the person's express will to withdraw, expulsion, bankruptcy, death, or other statutory triggers. Dissociation ends the person's management rights but does not automatically discharge pre-existing liabilities.
Denise Donovan sent written notice to the other members of Dynamic Solutions LLC stating her intent to withdraw immediately. The operating agreement contained no restriction on withdrawal. Her dissociation took effect upon notice, ending her management participation while preserving any accrued obligations to the company.
Dolores Diaz served as general partner of Dover Bank LP. After her dissociation, the limited partnership remained liable on a prior equipment lease she had signed. Her exit did not release her from that pre-dissociation obligation to the partnership or the other partners.
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Damian Decker dissociated from Diamond Manufacturing partnership. Three months later the partnership entered a new supply contract. Decker is liable on that transaction only if the other party lacked notice of the dissociation and reasonably believed he remained a partner.
Duffy Construction, a corporate general partner, voted to dissolve itself. The vote caused its dissociation from the limited partnership because the entity willfully terminated its existence. The dissociation was therefore wrongful under the statute.
Diane Dawson dissociated as general partner of a limited partnership. Eighteen months later a supplier dealt with her believing she still held that role. The partnership is bound by the transaction because less than two years had passed and the supplier lacked notice of the dissociation.
Dustin Donovan dissociated as general partner of a limited partnership that had an outstanding bank loan. The dissociation did not discharge his personal liability for that pre-existing debt. He remains responsible to the same extent as before the dissociation.
Dissociation is wrongful if it breaches an express term of the partnership agreement or occurs before the end of a definite term without qualifying exceptions. Wrongful dissociation exposes the partner to liability for damages caused to the partnership and remaining partners.
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No. Dissociation does not discharge a partner from debts or liabilities incurred while serving as a partner. The dissociated partner remains liable on those obligations to the same extent as before dissociation.
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A dissociated partner can bind the partnership for up to two years if the act would have bound the partnership before dissociation, the third party lacks notice of the dissociation, and the third party reasonably believes the person remains a partner.
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Dissociation removes an individual partner or member without necessarily ending the business. Dissolution triggers winding up of the entity's affairs. Modern statutes treat dissociation as a distinct event that often leads only to a buyout rather than liquidation.
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