Nevada Revised Statutes 88.430 – Liability to other persons; exceptions
1. Except as provided in subsection 4, a limited partner is not liable for the obligations of a limited partnership unless the limited partner is also a general partner or, in addition to the exercise of his or her rights and powers as a limited partner, the limited partner participates in the control of the business. However, if the limited partner participates in the control of the business, the limited partner 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.
Terms Used In Nevada Revised Statutes 88.430
- 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.
- Certificate of limited partnership: means the certificate referred to in Nevada Revised Statutes 88.315
- 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.
- General partner: means a person who has been admitted to a limited partnership as a general partner in accordance with the partnership agreement and named in the certificate of limited partnership as a general partner. See Nevada Revised Statutes 88.315
- 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
- Limited partner: means a person who has been admitted to a limited partnership as a limited partner in accordance with the partnership agreement. See Nevada Revised Statutes 88.315
- Partner: means a limited or general partner. See Nevada Revised Statutes 88.315
- 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.
- Partnership agreement: means any valid agreement, written or oral, of the partners as to the affairs of a limited partnership and the conduct of its business. See Nevada Revised Statutes 88.315
2. A limited partner does not participate in the control of the business within the meaning of subsection 1 solely by doing one or more of the following:
(a) 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;
(b) Consulting with and advising a general partner with respect to the business of the limited partnership;
(c) Acting as surety for the limited partnership guaranteeing or assuming one or more specific obligations of the limited partnership;
(d) Taking any action required or permitted by law to bring or pursue a derivative action in the right of the limited partnership;
(e) Requesting or attending a meeting of partners;
(f) Proposing, approving or disapproving, by voting or otherwise, one or more of the following matters:
(1) The dissolution and winding up of the limited partnership;
(2) The sale, exchange, lease, mortgage, pledge or other transfer of all or substantially all of the assets of the limited partnership;
(3) The incurrence of indebtedness by the limited partnership other than in the ordinary course of its business;
(4) A change in the nature of the business;
(5) The admission or removal of a general partner;
(6) The admission or removal of a limited partner;
(7) A transaction involving an actual or potential conflict of interest between a general partner and the limited partnership or the limited partners;
(8) An amendment to the partnership agreement or certificate of limited partnership; or
(9) Matters related to the business of the limited partnership not otherwise enumerated in this subsection, which the partnership agreement states in writing may be subject to the approval or disapproval of limited partners;
(g) Winding up the limited partnership pursuant to NRS 88.560; or
(h) Exercising any right or power permitted to limited partners under this chapter and not specifically enumerated in this subsection.
3. The enumeration in subsection 2 does not mean that the possession or exercise of any other powers by a limited partner constitutes participation by the limited partner in the business of the limited partnership.
4. A limited partner who knowingly permits his or her name to be used in the name of the limited partnership, except under circumstances permitted by paragraph (b) of subsection 1 of NRS 88.320, is liable to creditors who extend credit to the limited partnership without actual knowledge that the limited partner is not a general partner.