TITLE 7
Corporations, Associations, and Partnerships
CHAPTER 7-13
Limited Partnerships
SECTION 7-13-20
§ 7-13-20 Person erroneously believing him
or herself a limited partner.
(a) Except as provided in subsection (b), a person who makes a contribution to
a business enterprise and erroneously but in good faith believes that he or she
has become a limited partner in the enterprise is not a general partner in the
enterprise and is not bound by its obligations by reason of making the
contribution, receiving distributions from the enterprise, or exercising any
rights of a limited partner, if, on ascertaining the mistake, he or she:
(1) Causes an appropriate certificate of limited partnership
or a certificate of amendment to be executed and filed; or
(2) Withdraws from future equity participation in the
enterprise by executing and filing in the office of the secretary of state a
certificate declaring withdrawal under this section.
(b) A person who makes a contribution of the kind described
in subsection (a) is liable as a general partner to any third party who
transacts business with the enterprise
(i) before the person withdraws and an appropriate
certificate is filed to show withdrawal, or
(ii) before an appropriate certificate is filed to show his
or her status as a limited partner and, in the case of an amendment, after
expiration of the thirty (30) day period for filing an amendment relating to
the person as a limited partner under §§ 7-13-9, but in either case
only if the third party actually believed in good faith that the person was a
general partner at the time of the transaction.
History of Section.
(P.L. 1985, ch. 390, § 2.)
