42:2A-28. Person erroneously believing himself a limited partner
Person erroneously believing himself a limited partner.
a. Except as provided in subsection b., a person who makes a contribution to a business enterprise and erroneously but in good faith believes that he 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 that no certificate of limited partnership was ever filed with the Secretary of State or a certificate of limited partnership has been filed which names the person as a general partner in the enterprise he promptly:
(1) Causes an appropriate certificate of limited partnership, certificate of correction 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. is liable as a general partner to any third party who transacted business with the enterprise if the third party actually believed in good faith that the person was a general partner at the time of the transaction and no certificate of limited partnership was ever filed or a certificate of limited partnership was filed which names the person as a general partner, and:
(1) The business is transacted before an appropriate certificate of limited partnership is filed stating that the enterprise is a limited partnership and indicating in effect that the person is not a general partner;
(2) In the case of an amendment, it is after expiration of the 30-day period for filing an amendment indicating in effect that the person is not a general partner under section 16 of P.L. 1983, c. 489 (C. 42:2A-17) and the amendment has not been filed;
(3) Before the person withdraws, and an appropriate certificate, as provided in section 27 of P.L. 1983, c. 489 (C. 42:2A-28), is filed to show the withdrawal; or
(4) The business is transacted before an appropriate certificate of correction is filed indicating in effect that the person is not a general partner and the third party actually relied in good faith upon the foregoing inaccuracy and is adversely affected by the correction.
L. 1983, c. 489, s. 27; amended 1988,c.130,s.15.
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Last modified: October 11, 2016