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JGM
JGM, Solicitor
Category: Scots Law
Satisfied Customers: 11452
Experience:  30 years as a practising solicitor.
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Why am I being held responsible for a business from which I

Customer Question

Why am I being held responsible for a business from which I retired through ill health in the year 1995 .my two sons continued to run the business as partners under the original business name . My sons got into financial difficulties 4years ago .they owe a merchant the sum of 23,000pounds and I their aged father 75 years old and in poor health a being held responsible .when the business was taken over by my sons ,it was all done legally bank inland revenue accountant all notified .i am being charged with 1890act of not notifying the Edinburgh gazette that I was no longer part of the business.should I be legally responsible .
Submitted: 3 years ago.
Category: Scots Law
Expert:  JGM replied 3 years ago.
Thank you for your question.

The Partnership Act 1890 says that if the partnership dealt with this merchant before you retired, notice of your retiral should have been given and the normal way of doing this is either to write directly to the person or to advertise the retiral in the Edinburgh Gazette.

The Act says as follows:

"36. Rights of persons dealing with firm against apparent members of firm.

(1) Where a person deals with a firm after a change in its constitution he is entitled to treat all
apparent members of the old firm as still being members of the firm until he has notice of the
change.

(2) An advertisement in the London Gazette as to a firm whose principal place of business is in
England or Wales, in the Edinburgh Gazette as to a firm whose principal place of business is in
Scotland, and in the [Belfast Gazette]10 as to a firm whose principal place of business is in Ireland,
shall be notice as to persons who had not dealings with the firm before the date of the dissolution
or change so advertised.

(3) The estate of a partner who dies, or who becomes bankrupt, or of a partner who, not having
been known to the person dealing with the firm to be a partner, retires from the firm, is not liable
for partnership debts contracted after the date of the death, bankruptcy, or retirement respectively."

As this was presumably not done the creditor is arguing that he can assume you at still a partner.

Was notice of the change given in any other way, such as removing you from letterheads they may have got or even verbally. In other words did the merchant know you had retired? That is what is crucial. The Edinburgh Gazette is one way of giving notice of the change but it is only one way.

I hope this helps. Please leave a positive response so that I am credited for my time.