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I walked away from a business last year. I told my partner that "I quit" and "I am retiring", verbal only, no paper work was filed. The business was structured as a verbal general partnership with one other person (no filings). At the time of my leaving there was no abnormal debt and I didn't want anything from the business nor was I asked to pay anything. The company was solvent and making money. Since leaving I haven't received or asked for any of the profit. Now it's a year later and my former partner has incurred debt (warehouse rent) from lack of payment. This all happened after my leaving. The rental agreement was renewed after my leaving by my former partner. Am I liable for any of this incurred debt? Thanks, Tony
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To terminate your partnership interest, you must properly withdraw from the general partnership and dissolve your partnership interest. Verbal notification is not enough.
Each partner in a general partnership is liable for the debts incurred by the partnership, Even if those debts were incurred by the other partner.
You may be held liable to the landlord for the rental payments owed by the partnership if you have not properly dissolved your partnership interest. However, you may be able to seek reimbursement from the other general partner for this debt.
Answered on Aug 29th, 2015 at 12:41 PM