at should be
carefully guarded in forming a limited liability partnership is to
contribute the full amount of capital advertised. If any deception is
practiced, or mistake made, whereby a smaller amount is contributed,
should the partnership not succeed, the special partners become liable
as general partners for the full amount. Once such a partnership was
formed with three special partners who contributed each $100,000, and
at the end of two years were told that their profits individually were
$60,000. Each was asked to contribute $100,000 more, and feeling happy
over his venture, he put in $40,000 more, which, added to his profits,
made up the required amount. When the concern failed a few years
afterwards the books showed that neither special partner was ever
entitled to $60,000 as profits. Though innocent, for they had never
examined the books, they were held as general partners for the entire
indebtedness of the concern.

An illegal contract made by a partner will not bind his partnership,
for all parties are supposed to know the law, and an illegal bargain
cannot be enforced, for example, an agreement to pay usurious
interest.

How may a partnership be dissolved? Unless the time is fixed by
agreement, it may be dissolved by any member whenever he pleases to do
so, though he cannot act wantonly to the manifest injury of the others
without making himself responsible for their loss. And if a partner
should attempt to transfer his interest before the time fixed for
ending the relation without good reason, to the manifest injury of the
other partners, he can be legally restrained from taking such action.

The death of a partner causes a dissolution. Nor can executors or
administrators succeed to his place, though they often do so for a
short period to prevent the interruption of the business and to enable
all parties to fare better than they would by its sudden ending. Yet
it is awkward for these officials to thus act, and in so doing they
incur an unpleasant personal responsibility. To relieve them from this
some states have passed statutes permitting them to thus act with the
other partners under the direction and orders of the court having
charge of the estate.

A partner who retires should give notice of his retirement to relieve
himself from future liability. For, should he neglect, and persons
continued to sell on credit to the firm, supposing he was a member, he
would be liable as before. The statutes in so