Section 7Part 2 — Nature of a Limited Liability Partnership
Liability of a partner or former partner in a limited liability partnership
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Subject to subsections
and
, a partner or former partner in a li mited liability partnership shall not be liable for any debt or loss of the limited liability partnership, including any debt of or loss caused by the act or omission of another partner or former partner in the limited liability partnership. ( 2 ) Subsection (1) shall not affect any liability of a partner or former partner in a limited liability partnership for any loss caused by a negligent act or omission of that partner or former partner where that partner or former partner assumed an express duty of care to a person and acted in breach of that duty. ( 3 ) If a partner receives a distribution from, or is released from an obligation owed to, the limited liability partnership and at the time that distribution is made or the release effected —
the limited li ability partnership is unable to pay the debts of the limited liability partnership in the ordinary course of business, including where such distribution or release would cause the limited liability partnership to be unable to pay the debts of the limited liability partnership as those debts fall due in the ordinary course of business; and
the partner had actual knowledge that the distribution or release violated paragraph (a), then for a period or six months commencing on the date of that distribution or release but not thereafter, the partner is liable to return to the limited liability partnership the amount of the distribution or the due performance of the released obligation to the extent the return of such distribution or performance of the release d obligation is necessary to discharge any debt or loss of the limited liability partnership, less any amount previously recovered from the partner by virtue of this subsection.
For the purposes of this section, a limited liability partnership is unabl e to pay the limited liability partnership ’ s debts at any time when the limited liability partnership is unable to pay the limited liability partnership ’ s debts which have fallen due and become payable in the ordinary course of business, including any liab ility to a partner or former partner by way of loan, but excluding —
any liability to a partner or former partner in respect of the partner or former partner ’ s partnership interest; and
any debt to the extent that the limited liability partnership has bona fide grounds on which to dispute the debt.
In any proceedings, the burden of proving that a limited liability partnership had bona fide grounds on which to dispute a debt to any extent shall rest with the person denying liability under subsection (3).
This section shall continue to apply to a person who was a partner or former partner in a limited liability partnership after that limi ted liability partnership ceases to exist in accordance with Part 5.