§ 3423. Liability to third parties
(a) Except as provided in subsection (d) of this section, a limited partner is not liable
for the obligations of a limited partnership unless he or she is also a general partner
or, in addition to the exercise of his or her rights and powers as a limited partner,
he or she participates in the control of the business. However, if the limited partner
participates in the control of the business, he or she 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) of this section solely by doing one 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 and advising a general partner with respect to the business of the
limited partnership;
(3) acting as surety for the limited partnership or guaranteeing or assuming one or more
specific obligations of 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) requesting or attending a meeting of partners;
(6) proposing, approving, or disapproving, by voting or otherwise, one 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 incurrence 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 or removal of a general partner;
(F) the admission or removal of a limited partner;
(G) a transaction 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; or
(I) matters related to the business of the limited partnership not otherwise enumerated
in this subsection, which the partnership agreement states in writing may be subject
to the approval or disapproval of limited partners;
(7) winding up the limited partnership pursuant to section 3473 of this title; or
(8) exercising any right or power permitted to limited partners under this chapter and
not specifically enumerated in this subsection.
(c) The enumeration in subsection (b) of this section does not mean that the possession
or exercise of any other powers by a limited partner constitutes participation by
him or her in the business of the limited partnership.
(d) A limited partner who knowingly permits his or her name to be used in the name of
the limited partnership, except under circumstances permitted by subdivision 3402(a)(2) of this title, is liable to creditors who extend credit to the limited partnership without actual
knowledge that the limited partner is not a general partner. (Added 1997, No. 149 (Adj. Sess.), § 4, eff. Jan. 1, 1999.)