North Carolina § 59-304 - Person erroneously believing himself limited partner.

§ 59-304. Person erroneously believing himself limited partner.

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: Causes an appropriate certificate of limited partnership [or] certificate of amendment to be executed and filed; or Withdraws from future equity participation in the enterprise. 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: The third party actually believed in good faith that the person was a general partner at the time of the transaction; and The third party transacted business with the enterprise before either: An appropriate certificate has been filed pursuant to subsection (a) of this section to reflect that the person is not a general partner; or The person has given notice to the partnership of withdrawal from future equity participation and before the withdrawal was effective. History (1985 (Reg. Sess., 1986), c. 989, s. 2; 1999-362, s. 19.) Editor's Note. - The bracketed "[or]" was inserted in subdivision (a)(1) at the direction of the Revisor of Statutes to reflect the apparent intention of the Legislature.