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The Vermont Statutes Online
Title
11
:
Corporations, Partnerships and Associations
Chapter
023
:
LIMITED PARTNERSHIPS
Subchapter
003
:
LIMITED PARTNERS
§
3424. Person erroneously believing himself or herself limited partner
(a) Except as
provided in subsection (b) of this section, 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) of this section is
liable as a general partner to any third party who transacts business with the
enterprise before the person withdraws and an appropriate certificate is filed
to show withdrawal, or before an appropriate certificate is filed to show that
he or she is not a general partner, 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. (Added 1997, No. 149 (Adj. Sess.), § 4, eff. Jan. 1,
1999.)