Liability of a partner or former partner in a limited liability partnership

(1) Subject to sub-sections (2) to (4) and section 7(4), a partner or former partner in a limited liability partnership shall not be liable for any debt or loss to which section 5 (1) applies, including any debt of or loss caused by the act of another partner in the partnership. (2) Sub-section (1) shall not affect any liability of a partner or former partner in a limited liability partnership for– (a) his personal debts; and (b) any loss caused by him. (3) Where any limited liability partnership property, including a share in the partnership profits, is withdrawn by a partner at a time when the limited liability partnership is unable to pay its debts, or if the partnership becomes unable to pay its debts as a result of the withdrawal, such a partner is liable for any debt or loss to which section 5(1) applies, but his liability shall be limited to an amount equal to the value of the withdrawal, less any amount previously recovered from him by virtue of this sub-section or sub-section (4). (4) Where, during the period of six months preceding the time when a limited liability partnership becomes unable to pay its debts, any limited liability partnership property, including a share in the partnership profits, is withdrawn by a partner other than in the ordinary course of the affairs of the partnership, such a partner is liable for any debt or loss to which section 5 (1) applies, but his liability shall be limited to an amount equal to the value of the withdrawal, less any amount previously 14 recovered from him by virtue of this sub-section or sub-section (3). (5) For the purposes of this section, a limited liability partnership is unable to pay its debts at any time when it is unable to pay its debts which have fallen due, including any liability to a partner or former partner by way of loan, but excluding– (a) any liability to a partner or former partner in respect of his partnership interest; and (b) any debt to the extent that the partnership has bona fide title grounds on which to dispute it. (6) In any proceedings, the burden of proving that a limited liability partnership has bona fide grounds on which to dispute a debt to any extent shall rest with the person denying liability under sub-section (3) or (4). (7) This section shall continue to apply to a person who was a partner or former partner in a limited liability partnership after that partnership’s registration has been cancelled in accordance with section 31.