§ 7-13-20 - Person erroneously believing him or herself a limited partner.
SECTION 7-13-20
§ 7-13-20 Person erroneously believing himor herself a limited partner. – (a) Except as provided in subsection (b), a person who makes a contribution toa business enterprise and erroneously but in good faith believes that he or shehas become a limited partner in the enterprise is not a general partner in theenterprise and is not bound by its obligations by reason of making thecontribution, receiving distributions from the enterprise, or exercising anyrights of a limited partner, if, on ascertaining the mistake, he or she:
(1) Causes an appropriate certificate of limited partnershipor a certificate of amendment to be executed and filed; or
(2) Withdraws from future equity participation in theenterprise by executing and filing in the office of the secretary of state acertificate declaring withdrawal under this section.
(b) A person who makes a contribution of the kind describedin subsection (a) is liable as a general partner to any third party whotransacts business with the enterprise
(i) before the person withdraws and an appropriatecertificate is filed to show withdrawal, or
(ii) before an appropriate certificate is filed to show hisor her status as a limited partner and, in the case of an amendment, afterexpiration of the thirty (30) day period for filing an amendment relating tothe person as a limited partner under §§ 7-13-9, but in either caseonly if the third party actually believed in good faith that the person was ageneral partner at the time of the transaction.