CHAPTER 117

An Act to amend and reenact §§ 50-18 and 50-35 of the Code of Virginia,
relating, respectively, to the rights and duties of partners and to the
power of a partner to bind partnership to third persons after dis-

solution.
{H 320}
Approved March 8, 1966

Be it enacted by the General Assembly of Virginia:

1. That §§ 50-18 and 50-35 of the Code of Virginia be amended and
reenacted as follows:

§ 50-18. The rights and duties of the partners in relation to the
partnership shall be determined, subject to any agreement between them,
by the following rules:

(a) Each partner shall be repaid his contributions, whether by way
of capita] or advances to the partnership property, and share equally in
the profits and surplus remaining after all liabilities, including those to
partners, are satisfied; and he must contribute towards the losses, whether
of capital or otherwise, sustained by the partnership according to his
share in the profits.

(b) The partnership must indemnify every partner in respect of pay-
ments made and personal liabilities reasonably incurred by him in the
ordinary and proper conduct of its business, or for the preservation of its
business or property.

(c) A partner, who in aid of the partnership makes any payment or
advance beyond the amount of capital which he agreed to contribute, shall
be paid interest from the date of the payment or advance.

A partner * shall receive interest on the capital contributed by
him only from the date when repayment should be made.

(e) All partners have equal rights in the management and conduct
of the partnership business.

(f) No partner is entitled to remuneration for acting in the partner-
ship business, except that a surviving partner is entitled to reasonable
compensation for his services in winding up the partnership affairs.

No person can become a member of a partnership without the
consent of all of the partners.

(h) Any difference arising as to ordinary matters connected with the
partnership business may be decided by a majority of the partners;
but no act in contravention of any agreement between the partners may
be done rightfully without the consent of all the partners.

§ 50-35. (1) After dissolution a partner can bind the partnership
except as provided in paragraph (8) :

(a) By an act appropriate for winding up partnership affairs or
completing transactions unfinished at dissolution ;

By any transaction which would bind the partnership if dissolu-
tion had not taken place, provided the other party to the transaction

(1) Had extended credit to the partnership prior to dissolution and
had no knowledge or notice of the dissolution; or

(II) Though he had not so extended credit, had nevertheless known
of the partnership prior to dissolution, and, having no knowledge or notice
of dissolution, the fact of dissolution had not been advertised in a news-
paper of general circulation in the place (or in each place if more than
one) at which the partnership business was regularly carried on.

(2) The liability of a partner * under paragraph (1b) of this section
shall be satisfied out of partnership assets alone when such partner had
been prior to dissolution :

(a) Unknown as a partner to the person with whom the contract is

e; an

(b) So far unknown and inactive in partnership affairs that the
business reputation of the partnership could not be said to have been in
any degree due to his connection with it.
diet ) The partnership is in no case bound by any act of a partner after

issolution :

(a) Where the partnership is dissolved because it is unlawful to carry

" the business, unless the act is appropriate for winding up partnership
airs: or

(b) Where the partner has become bankrupt; or _

(c) Where the partner has no authority to wind up partnership
affairs, except by a transaction with one who

(I) Had extended credit to the partnership prior to dissolution and
had no knowledge or notice of his want of authority; or

(II) Had not extended credit to the partnership prior to dissolution,
and, having no knowledge or notice of his want of authority, the fact of
his want of authority has not been advertised in the manner provided for
advertising the fact of dissolution in paragraph (1b II) of this section.

(4) Nothing in this section shall affect the liability under § 50-16 of
any person who after dissolution represents himself or consents to another
representing him as a partner in a partnership engaged in carrying on