§ 23-16-4-4 — Person erroneously believing to be limited partner

Indiana § 23-16-4-4

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

Text

(a) Except as provided in subsection (b), a
person who makes a contribution to a partnership and erroneously but
in good faith believes that the person has become a limited partner in
the partnership is not a general partner in the partnership, and is not
bound by its obligations by reason of making the contribution,
receiving distributions from the partnership, or exercising any rights of
a limited partner, if, within sixty (60) days after ascertaining the
mistake, that person:
(1) in the case of a person who wishes to be a limited partner,
causes an appropriate certificate of limited partnership or a
certificate of amendment to be executed and filed; or
(2) in the case of a person who wishes to withdraw from the
partnership, takes such action as may be necessary to withdraw.
(b) A person who makes a contribution under the circumstances
described in subsection (a) is liable as a general partner to any third
party who transacts business with the partnership before the occurrence
of either of the events referred to in subsection (a) if the third party:
(1) actually believed in good faith that the person was a general
partner at the time of the transaction;
(2) acted in reasonable reliance on that belief; and
(3) extended credit to the partnership in reasonable reliance on
the credit of that person.

Legislative History

As added by P.L.147-1988, SEC.1.