Indiana Code 23-16-4-3. Liability to third parties
(1) the limited partner is also a general partner; or
Terms Used In Indiana Code 23-16-4-3
- Amendment: A proposal to alter the text of a pending bill or other measure by striking out some of it, by inserting new language, or both. Before an amendment becomes part of the measure, thelegislature must agree to it.
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Guarantor: A party who agrees to be responsible for the payment of another party's debts should that party default. Source: OCC
- Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
- Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
- Partnership: A voluntary contract between two or more persons to pool some or all of their assets into a business, with the agreement that there will be a proportional sharing of profits and losses.
However, a limited partner who participates in the control of the business is liable only to persons who transact business with the limited partnership reasonably believing, based upon the limited partner’s conduct, that the limited partner is a general partner.
(b) A limited partner does not participate in the control of the business within the meaning of subsection (a) solely by doing one (1) or more of the following:
(1) Being a contractor for, or an agent or employee of, the limited partnership or of a general partner, or being an officer, director, or shareholder of a general partner that is a corporation.
(2) Consulting with or advising a general partner with respect to any matter, including the business of the limited partnership.
(3) Acting as surety, guarantor, or endorser for the limited partnership, guaranteeing or assuming one (1) or more specific obligations of the limited partnership, or providing collateral for the limited partnership.
(4) Taking any action required or permitted by law to bring or pursue a derivative action in the right of the limited partnership.
(5) Calling, requesting, attending, or participating in a meeting of the partners or the limited partners.
(6) Proposing, approving, or disapproving, by voting or otherwise, one (1) or more of the following matters:
(A) The dissolution and winding up of the limited partnership.
(B) The sale, exchange, lease, mortgage, pledge, or other transfer of all or substantially all of the assets of the limited partnership.
(C) The incurring, renewal, refinancing, or payment or other discharge of indebtedness by the limited partnership other than in the ordinary course of its business.
(D) A change in the nature of the business.
(E) The admission, retention, or removal of a general partner.
(F) The admission, retention, or removal of a limited partner.
(G) A transaction or other matter involving an actual or potential conflict of interest between a general partner and the limited partnership or the limited partners.
(H) An amendment to the partnership agreement or certificate of limited partnership.
(I) Matters related to the business of the limited partnership not otherwise enumerated in this subsection which the partnership agreement states may be subject to the approval or disapproval of limited partners.
(J) The merger of the limited partnership.
(7) Winding up the limited partnership under IC 23-16-9-3.
(8) Serving on a committee of the limited partnership or the limited partners.
(9) Exercising any right or power permitted to limited partners under this article and not specifically enumerated in this subsection.
(c) The enumeration of certain powers in subsection (b) does not mean that the possession or exercise of any other powers by a limited partner constitutes participation by that limited partner in the control of the business of the limited partnership.
(d) A limited partner who knowingly permits the partner’s name to be used in the name of the limited partnership, except under circumstances permitted under IC 23-0.5-3-2(b), is liable to creditors who extend credit to the limited partnership without actual knowledge that the limited partner is not a general partner.
As added by P.L.147-1988, SEC.1. Amended by P.L.118-2017, SEC.74.