(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 the person 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: (1) Causes an appropriate certificate of limited partnership [or] certificate of amendment to be executed and filed; or (2) Withdraws from future equity participation in the enterprise. (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 in the case in which: (1) The third party actually believed in good faith that the person was a general partner at the time of the transaction; and (2) The third party transacted business with the enterprise before either: a. An appropriate certificate has been filed pursuant to subsection (a) of this section to reflect that the person is not a general partner; or b. The person has given notice to the partnership of withdrawal from future equity participation and before the withdrawal was effective.
‹ Prev All North Carolina sections Next ›
Lexace provides legal information, not legal advice, and no attorney–client relationship is created. Statute text is provided for general information and may not reflect the most recent amendments; verify against the official state code.