§ 50-73.25 Person erroneously believing himself limited partner
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, on ascertaining the mistake, he:
1. Causes an appropriate certificate of limited partnership or a certificate of amendment to be executed and filed; or
2. Withdraws from future equity participation in the partnership by executing and filing with the Commission a certificate declaring his withdrawal under the provisions of this section.
B. 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 partnership prior to the occurrence of either of the events referred to in subsection A of this section if: (i) such person knew or should have known either that no certificate has been filed or that the certificate inaccurately refers to him as a general partner and (ii) the other person actually believed in good faith that the person was a general partner at the time of the transaction and acted in reliance on such belief.
History
This law was first created in 1985. The record of its establishment is cataloged in chapter 607 of that year’s edition of “Acts of Assembly,” the annual state publication listing all changes made to the Code of Virginia in that year. Unfortunately, the 1985 “Acts” aren’t available online. It has been modified 1 time. Those modifications are cataloged by “The Acts of Assembly,” a state publication, by year and chapter. Those modifications that can be read on the General Assembly’s website will be linked accordingly. That modification is as follows: in 1987, chapter 702.
1985, c. 607; 1987, c. 702.