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HomeCorporations CodeGENERAL PROVISIONSCh. 5Art. 3§ 16306 Partner Liability For Partnership Obligations

§ 16306 Partner Liability For Partnership Obligations

Corporations Code·California
AI Summary·Official Text·Key Terms·Related Statutes·References
AI SummaryVerified

§ 16306 Partner Liability For Partnership Obligations

This law says that partners in a partnership usually share responsibility for everything the partnership owes, but it gives special rules that can protect partners in a limited‑liability partnership (LLP) from being personally on the hook, unless they agree to be or they do something wrong themselves.

Key Takeaways

  • •Partners normally share all partnership debts together.
  • •A person who becomes a partner later isn’t on the hook for debts that happened before they joined.
  • •In a registered LLP, partners are usually protected from personal liability for partnership debts, unless they agree in writing to take on that liability or they personally cause harm.

Example

Jane joins an existing accounting LLP that already owes money to a supplier. The LLP is a registered limited‑liability partnership and has a proper state bar certificate for its legal services.

Because Jane became a partner after the debt was created, she isn’t personally responsible for that old debt (the law says new partners aren’t liable for obligations that existed before they joined). Also, since the firm is an LLP, Jane isn’t personally liable for the partnership’s new debts unless she and the other partners sign an agreement saying she will be, or she personally does something wrong like a malpractice mistake.

AI-generated — May contain errors. Not legal advice. Always verify source.

Official Source
View on CA.gov

§ 16306 Partner Liability For Partnership Obligations

(a) Except as otherwise provided in subdivisions (b) and (c), all partners are liable jointly and severally for all obligations of the partnership unless otherwise agreed by the claimant or provided by law. (b) A person admitted as a partner into an existing partnership is not personally liable for any partnership obligation incurred before the person’s admission as a partner. (c) Notwithstanding any other section of this chapter, and subject to subdivisions (d), (e), (f), and (h), a partner in a registered limited liability partnership is not liable or accountable, directly or indirectly, including by way of indemnification, contribution, assessment, or otherwise, for debts, obligations, or liabilities of or chargeable to the partnership or another partner in the partnership, whether arising in tort, contract, or otherwise, that are incurred, created, or assumed by the partnership while the partnership is a registered limited liability partnership, by reason of being a partner or acting in the conduct of the business or activities of the partnership. (d) Notwithstanding subdivision (c), all or certain specified partners of a registered limited liability partnership, if the specified partners agree, may be liable in their capacity as partners for all or specified debts, obligations, or liabilities of the registered limited liability partnership if the partners possessing a majority of the interests of the partners in the current profits of the partnership, or a different vote as may be required in the partnership agreement, specifically agreed to the specified debts, obligations, or liabilities in writing, prior to the debt, obligation, or liability being incurred. That specific agreement may be modified or revoked if the partners possessing a majority of the interests of the partners in the current profits of the partnership, or a different vote as may be required in the partnership agreement, agree to the modification or revocation in writing; provided, however, that a modification or revocation shall not affect the liability of a partner for any debts, obligations, or liabilities of a registered limited liability partnership incurred, created, or assumed by the registered limited liability partnership prior to the modification or revocation. (e) Nothing in subdivision (c) shall be construed to affect the liability of a partner of a registered limited liability partnership to third parties for that partner’s tortious conduct. (f) The limitation of liability in subdivision (c) shall not apply to claims based upon acts, errors, or omissions arising out of the rendering of professional limited liability partnership services of a registered limited liability partnership providing legal services unless that partnership has a currently effective certificate of registration issued by the State Bar. (g) A partner in a registered limited liability partnership is not a proper party to a proceeding by or against a registered limited liability partnership in which personal liability for partnership debts, obligations, or liabilities is asserted against the partner, unless that partner is personally liable under subdivision (d) or (e). (h) Nothing in this section shall affect or impair the ability of a partner to act as a guarantor or surety for, provide collateral for or otherwise be liable for, the debts, obligations, or liabilities of a registered limited liability partnership. (Added by Stats. 1996, Ch. 1003, Sec. 2. Effective January 1, 1997.)

Last verified: January 10, 2026

Key Terms

jointly and severally liableregistered limited liability partnershiptortious conductprofessional limited liability partnership services

Related Statutes

  • § 16308 Liability For Holding Out
  • § 16951 Limited Liability Partnership Recognition
  • § 16106 Partnership Governing Law Rules
  • § 16301 Partner Authority Binding Partnership
  • § 16302 Transferring Partnership Property

References

  • Official text at leginfo.legislature.ca.gov
  • California Legislature. Corporations Code. Section 16306.
View Official Source