Ark. Code Ann. » Title 4 Chapter 46
Arkansas Code Annotated

Ark. Code Ann. § 4-46-306 (2020)

Partner's liability

✓ Arkansas Code release r76: Acts through about 2020 (2021-2025 sessions missing)
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  1. Except as otherwise provided in subsections (b) and (c) of this section, all partners are liable jointly and severally for all obligations of the partnership unless otherwise agreed by the claimant or provided by law.
  2. A person admitted as a partner into an existing partnership is not personally liable for any partnership obligation incurred before the person's admission as a partner.
  3. An obligation of a partnership incurred while the partnership is a limited liability partnership, whether arising in contract, tort, or otherwise, is solely the obligation of the partnership. A partner is not personally liable, directly or indirectly, by way of contribution or otherwise, for such a partnership obligation solely by reason of being or so acting as a partner. This subsection applies notwithstanding anything inconsistent in the partnership agreement that existed immediately before the vote required to become a limited liability partnership under § 4-46-1001(b).

History. Acts 1999, No. 1518, § 306.

Research References

Ark. L. Notes.

Flaccus, Joint and Several Liability and Partnership Law, 2003 Arkansas L. Notes 79.

Case Notes

Joint and Several Liability.

Alter ego theory was rejected as a basis for a finding of personal liability on the part of a Chapter 7 debtor who allegedly controlled certain entities organized as partnerships under Arkansas law because state law already provided that the partners, pursuant to subsection (a) of this section, were individually liable for partnership debts in any case. Southern Bancorp South v. Richmond (In re Richmond), 430 B.R. 846 (Bankr. E.D. Ark. 2010).

Notes of Decisions
Cited in 3 cases, 2010–2016 · leading case: S. Bancorp South v. Richmond (In Re Richmond), 430 B.R. 846 (Bankr. E.D. Ark. 2010).
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S. Bancorp South v. Richmond (In Re Richmond), 430 B.R. 846 (Bankr. E.D. Ark. 2010). · cites it 2× “Ark.Code Ann. § 4-46-306(a)(Michie 2001); Curlee Clothing Co.”
In re Comm. on Civ. Practice, 2016 Ark. 29. · cites it 2× “§ 4-46-306. They are also agents of the partnership for purposes of its business.”
Nutt v. Kees, 53 F. Supp. 3d 1118 (E.D. Ark. 2014). · cites it 2× “Ark.Code Ann. § 4-46-306(c). As the Court previously held, because under Arkansas law a limited liability partner is not personally liable, directly or indirectly, by way of contribution or otherwise, for such a partnership obligation solely by reason of being or so acting as a…”
Ark. Code Ann. § 4-46-306(a): 1 case
S. Bancorp South v. Richmond (In Re Richmond), 430 B.R. 846 (Bankr. E.D. Ark. 2010). “Ark.Code Ann. § 4-46-306(a)(Michie 2001); Curlee Clothing Co.”
Ark. Code Ann. § 4-46-306(c): 2 cases
Nutt v. Kees, 53 F. Supp. 3d 1118 (E.D. Ark. 2014). “Ark.Code Ann. § 4-46-306(c). As the Court previously held, because under Arkansas law a limited liability partner is not personally liable, directly or indirectly, by way of contribution or otherwise, for such a partnership obligation solely by reason of being or so acting as a…”
In re Comm. on Civ. Practice, 2016 Ark. 29. “§ 4-46-306. They are also agents of the partnership for purposes of its business.”
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