Advanced Search

§7-13-20  Person erroneously believing him or herself a limited partner. –

Published: 2015

Subscribe to a Global-Regulation Premium Membership Today!

Key Benefits:

Subscribe Now for only USD$40 per month.

Corporations, Associations, and Partnerships


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.)