Short answer. Yes. Under Article 1840, when the business is continued without liquidation after a partner leaves, the creditors of the dissolved partnership become creditors of the person or partnership continuing the business. Old debts do not disappear just because the membership changed and the venture carried on.
What the law says
In the following cases creditors of the dissolved partnership are also creditors of the person or partnership continuing the business
Civil Code, Article 1840 — Creditors When the Business Continues. Read the full provision →
The old creditors follow the continuing business
The Code does not let a business shed its debts simply by reshuffling its partners. Article 1840 opens by declaring that in the following cases creditors of the dissolved partnership are also creditors of the person or partnership continuing the business. It then lists the common situations: a new partner is admitted, one partner retires and assigns his rights to the others, all but one retire, third persons take over and promise to pay the debts, a partner is expelled, or a partner wrongfully causes dissolution and the rest carry on. In each, the defining feature is that the business is continued without liquidation of the partnership affairs. Because the venture rolls on, its creditors roll on with it.
Why continuation, not liquidation, is the key
If the partners had wound the firm up — sold the assets, paid the debts, and split any surplus — the creditors would have been satisfied out of that process. Article 1837 gives every partner the right, on dissolution, to have the partnership property applied to discharge its liabilities. But when the remaining partners instead keep the business running with the same assets and goodwill, they are effectively taking over both the enterprise and its obligations. Article 1840 makes that fair to creditors by attaching their claims to the continuing business, so they are not stranded by a change they never agreed to and often never even knew about.
Limits and protections built into the rule
The article also draws some boundaries. A third person who becomes a partner in the continuing business is liable to the old creditors only out of the partnership property, unless he stipulates otherwise. The dissolved partnership's creditors are given a prior right, over the separate creditors of a retired or deceased partner, to what the continuing business owes that partner for his interest. Nothing in the article stops creditors from attacking a fraudulent assignment. And merely keeping the old partnership name, or a deceased partner's name, does not by itself expose that deceased partner's personal property to the new debts. So old creditors keep strong rights, but within a defined structure.
Related provisions
- Civil Code, Article 1840 — Creditors When the Business Continues
- Civil Code, Article 1837 — Rights on Winding Up