NRS 88.435 Liability of person erroneously believing self to be limited partner.

225 words·~1 min read·/nv/chapter-88-uniform-limited-partnership-act/88-435·

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

1. Except as provided in subsection 2, 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, the person:

(a)Causes an appropriate certificate of limited partnership or a certificate of amendment to be signed and filed; or

(b)Withdraws from future equity participation in the enterprise by signing and filing in the Office of the Secretary of State a certificate declaring withdrawal under this section.

2. A person who makes a contribution of the kind described in subsection 1 is liable as a general partner to any third party who transacts business with the enterprise:

(a)Before the person withdraws and an appropriate certificate is filed to show withdrawal; or

(b)Before an appropriate certificate is filed to show that the person is not a general partner,

Ê but in either case only if the third party actually believed in good faith that the person was a general partner at the time of the transaction.