State Codes and Statutes

State Codes and Statutes

Statutes > North-carolina > Chapter_59 > GS_59-304

§59‑304.  Person erroneously believing himself limited partner.

(a)        Except as providedin subsection (b), a person who makes a contribution to a business enterpriseand erroneously but in good faith believes that the person has become a limitedpartner in the enterprise is not a general partner in the enterprise and is notbound by its obligations by reason of making the contribution, receivingdistributions from the enterprise, or exercising any rights of a limitedpartner, if, on ascertaining the mistake, he:

(1)        Causes anappropriate certificate of limited partnership [or] certificate of amendment tobe executed and filed; or

(2)        Withdraws fromfuture equity participation in the enterprise.

(b)        A person who makesa contribution of the kind described in subsection (a) of this section isliable as a general partner to any third party who transacts business with theenterprise in the case in which:

(1)        The third partyactually believed in good faith that the person was a general partner at thetime of the transaction; and

(2)        The third partytransacted business with the enterprise before either:

a.         An appropriatecertificate has been filed pursuant to subsection (a) of this section toreflect that the person is not a general partner; or

b.         The person has givennotice to the partnership of withdrawal from future equity participation andbefore the withdrawal was effective. (1985 (Reg. Sess., 1986), c.989, s. 2; 1999‑362, s. 19.)