CHAPTER 4. LIMITED PARTNERS
IC 23-16-4
Chapter 4. Limited Partners
IC 23-16-4-1
Additional limited partners
Sec. 1. After the formation of a limited partnership, a person maybe admitted as an additional limited partner:
(1) in the case of a person acquiring a partnership interestdirectly from the limited partnership, upon compliance with thepartnership agreement or, if the partnership agreement does notso provide, upon the written consent of all partners; and
(2) in the case of an assignee of a partnership interest, asprovided in IC 23-16-8-4.
As added by P.L.147-1988, SEC.1.
IC 23-16-4-2
Classes or groups of limited partners; rights, powers, and duties;voting
Sec. 2. (a) A partnership agreement may provide for classes orgroups of limited partners having such relative rights, powers, andduties as the partnership agreement may provide, and may makeprovision for the future creation, in the manner provided in thepartnership agreement, of additional classes or groups of limitedpartners having such relative rights, powers, and duties as may fromtime to time be established (including rights, powers, and dutiessenior to existing classes and groups of limited partners).
(b) Subject to section 3 of this chapter, the partnership agreementmay grant to all the limited partners, to certain identified limitedpartners, or to a specified class or group of the limited partners theright to vote (on a per capita or other basis), separately or with all orany class or group of the limited partners or the general partners, onany matter.
(c) A partnership agreement that grants a right to vote may setforth provisions relating to the following:
(1) Notice of the time, place, or purpose of any meeting atwhich any matter is to be voted on by any limited partners.
(2) Waiver of the notice described in subdivision (1).
(3) Action by written consent without a meeting.
(4) The establishment of a record date.
(5) Quorum requirements.
(6) Voting in person or by proxy.
(7) Any other matter concerning the exercise of a right to voteunder the partnership agreement.
As added by P.L.147-1988, SEC.1.
IC 23-16-4-3
Liability to third parties
Sec. 3. (a) Except as provided in subsection (d), a limited partneris 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 andpowers of a limited partner, participates in the control of thebusiness.
However, a limited partner who participates in the control of thebusiness is liable only to persons who transact business with thelimited partnership reasonably believing, based upon the limitedpartner's conduct, that the limited partner is a general partner.
(b) A limited partner does not participate in the control of thebusiness 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, thelimited partnership or of a general partner, or being an officer,director, or shareholder of a general partner that is acorporation.
(2) Consulting with or advising a general partner with respectto any matter, including the business of the limited partnership.
(3) Acting as surety, guarantor, or endorser for the limitedpartnership, guaranteeing or assuming one (1) or more specificobligations of the limited partnership, or providing collateral forthe limited partnership.
(4) Taking any action required or permitted by law to bring orpursue a derivative action in the right of the limited partnership.
(5) Calling, requesting, attending, or participating in a meetingof the partners or the limited partners.
(6) Proposing, approving, or disapproving, by voting orotherwise, one (1) or more of the following matters:
(A) The dissolution and winding up of the limitedpartnership.
(B) The sale, exchange, lease, mortgage, pledge, or othertransfer of all or substantially all of the assets of the limitedpartnership.
(C) The incurring, renewal, refinancing, or payment or otherdischarge of indebtedness by the limited partnership otherthan in the ordinary course of its business.
(D) A change in the nature of the business.
(E) The admission, retention, or removal of a generalpartner.
(F) The admission, retention, or removal of a limited partner.
(G) A transaction or other matter involving an actual orpotential conflict of interest between a general partner andthe limited partnership or the limited partners.
(H) An amendment to the partnership agreement orcertificate of limited partnership.
(I) Matters related to the business of the limited partnershipnot otherwise enumerated in this subsection which thepartnership agreement states may be subject to the approvalor 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 partnersunder this article and not specifically enumerated in thissubsection.
(c) The enumeration of certain powers in subsection (b) does notmean that the possession or exercise of any other powers by a limitedpartner constitutes participation by that limited partner in the controlof the business of the limited partnership.
(d) A limited partner who knowingly permits the partner's nameto be used in the name of the limited partnership, except undercircumstances permitted under IC 23-16-2-1(a)(2), is liable tocreditors who extend credit to the limited partnership without actualknowledge that the limited partner is not a general partner.
As added by P.L.147-1988, SEC.1.
IC 23-16-4-4
Person erroneously believing to be limited partner
Sec. 4. (a) Except as provided in subsection (b), a person whomakes a contribution to a partnership and erroneously but in goodfaith believes that the person has become a limited partner in thepartnership is not a general partner in the partnership, and is notbound by its obligations by reason of making the contribution,receiving distributions from the partnership, or exercising any rightsof a limited partner, if, within sixty (60) days after ascertaining themistake, that person:
(1) in the case of a person who wishes to be a limited partner,causes an appropriate certificate of limited partnership or acertificate of amendment to be executed and filed; or
(2) in the case of a person who wishes to withdraw from thepartnership, takes such action as may be necessary to withdraw.
(b) A person who makes a contribution under the circumstancesdescribed in subsection (a) is liable as a general partner to any thirdparty who transacts business with the partnership before theoccurrence of either of the events referred to in subsection (a) if thethird party:
(1) actually believed in good faith that the person was a generalpartner at the time of the transaction;
(2) acted in reasonable reliance on that belief; and
(3) extended credit to the partnership in reasonable reliance onthe credit of that person.
As added by P.L.147-1988, SEC.1.
IC 23-16-4-5
Access to information by limited partner
Sec. 5. Each limited partner has the right to inspect and copy anyof the partnership records required to be maintained by IC 23-16-2-6and to obtain from the general partners, from time to time, uponreasonable demand the following:
(1) True and full information regarding the state of the businessand financial condition of the limited partnership. (2) Promptly after becoming available, copies of the limitedpartnership's federal, state, and local income tax returns foreach year.
(3) Other information regarding the affairs of the limitedpartnership as is just and reasonable.
As added by P.L.147-1988, SEC.1.
IC 23-16-4-6
Admission of limited partners
Sec. 6. A person acquiring a partnership interest is admitted as alimited partner when the latter of the following occurs:
(1) The formation of the limited partnership.
(2) The time provided in the partnership agreement or, if notime is provided in the partnership agreement, when the person'sadmission is reflected in the records of the limited partnership.
As added by P.L.147-1988, SEC.1.