§ 23-16-4-3 — Liability to third parties

Indiana § 23-16-4-3

• Jurisdiction: Indiana
• Title 23: BUSINESS AND OTHER ASSOCIATIONS
• Art. 16: LIMITED PARTNERSHIPS
• Ch. 4: Limited Partners

Text

(a) Except as provided in subsection (d), a
limited partner is not liable for the obligations of a limited partnership
unless:
(1) the limited partner is also a general partner; or
(2) the limited partner, in addition to exercising the rights and
powers of a limited partner, participates in the control of the
business.
However, a limited partner who participates in the control of the
business is liable only to persons who transact business with the limited
partnership reasonably believing, based upon the limited partner's
conduct, that the limited partner is a general partner.
(b) A limited partner does not participate in the control of the
business within the meaning of subsection (a) solely by doing one (1)
or more of the following:
(1) Being a contractor for, or an agent or employee of, the limited
partnership or of a general partner, or being an officer, director,
or shareholder of a general partner that is a corporation.
(2) Consulting with or advising a general partner with respect to
any matter, including the business of the limited partnership.
(3) Acting as surety, guarantor, or endorser for the limited
partnership, guaranteeing or assuming one (1) or more specific
obligations of the limited partnership, or providing collateral for
the limited partnership.
(4) Taking any action required or permitted by law to bring or
pursue a derivative action in the right of the limited partnership.
(5) Calling, requesting, attending, or participating in a meeting of
the partners or the limited partners.
(6) Proposing, approving, or disapproving, by voting or otherwise,
one (1) or more of the following matters:
(A) The dissolution and winding up of the limited partnership.
(B) The sale, exchange, lease, mortgage, pledge, or other
transfer of all or substantially all of the assets of the limited
partnership.
(C) The incurring, renewal, refinancing, or payment or other
discharge of indebtedness by the limited partnership other than
in the ordinary course of its business.
(D) A change in the nature of the business.
(E) The admission, retention, or removal of a general partner.
(F) The admission, retention, or removal of a limited partner.
(G) A transaction or other matter involving an actual or
potential conflict of interest between a general partner and the
limited partnership or the limited partners.
(H) An amendment to the partnership agreement or certificate
of limited partnership.
(I) Matters related to the business of the limited partnership not
otherwise enumerated in this subsection which the partnership
agreement states may be subject to the approval or disapproval
of limited partners.
(J) The merger of the limited partnership.
(7) Winding up the limited partnership under IC 23-16-9-3.
(8) Serving on a committee of the limited partnership or the
limited partners.
(9) Exercising any right or power permitted to limited partners
under this article and not specifically enumerated in this
subsection.
(c) The enumeration of certain powers in subsection (b) does not
mean that the possession or exercise of any other powers by a limited
partner constitutes participation by that limited partner in the control
of the business of the limited partnership.
(d) A limited partner who knowingly permits the partner's name to
be used in the name of the limited partnership, except under
circumstances permitted under IC 23-0.5-3-2(b), is liable to creditors
who extend credit to the limited partnership without actual knowledge
that the limited partner is not a general partner.

Legislative History

As added by P.L.147-1988, SEC.1. Amended by P.L.118-2017, SEC.74.