The Vermont Statutes Online
The Statutes below include the actions of the 2025 session of the General Assembly.
NOTE: The Vermont Statutes Online is an unofficial copy of the Vermont Statutes Annotated that is provided as a convenience.
Subchapter
003
:
LIMITED PARTNERS
(Cite as: 11 V.S.A. § 3424)
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§ 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.)