Continuing authority of partners for winding-up
44 Continuing authority of partners for winding-up
After the dissolution of a partnership, the authority of each partner to bind the firm and the other rights and obligations of the partners continue, despite the dissolution, so far as necessary to wind up the affairs of the firm or to complete transactions started but unfinished at the time the partnership is dissolved, but not otherwise.
If a person (A) who was a partner in the firm becomes bankrupt, or executes a personal insolvency agreement under the Bankruptcy Act 1966 (Cwlth), subsection (1) does not make another person (B) who was a partner in the firm liable for A’s acts.
However, B is liable for A’s acts if, after A became bankrupt or executed the personal insolvency agreement, B represented, or knowingly allowed a representation to be made, that A was their partner.
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