§ 10-304
239 words·~1 min read·
/md/corporations-and-associations/10-304·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
§10–304.
(a)Except as provided in subsection
(b)of this section, a person who makes a contribution to a partnership and erroneously but in good faith believes that he has become a limited partner in the partnership is not a general partner in the partnership and is not bound by its obligations by reason of making the contribution, receiving distributions from the partnership, or exercising any rights of a limited partner, if, within 30 days after he knew or should have known of the mistake:
(1)In the case of a person who wishes to be a limited partner, the person causes an appropriate certificate to be executed and filed; or
(2)In the case of a person who wishes to withdraw as a partner from the partnership, the partner takes the necessary action to withdraw.
(b)A person who makes a contribution under the circumstances described in subsection
(a)of this section is liable as a general partner to any third party who transacts business with the partnership prior to the occurrence of either of the events referred to in subsection
(a)of this section:
(1)If that person knew or reasonably should have known either that no certificate has been filed or that the certificate inaccurately refers to him as a general partner; and
(2)If the third party reasonably relied upon the fact that the person was a general partner at the time of the transaction.