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362.437 Liability of limited partners to third parties.
(1)
(2)
Except as provided in subsection (4) of this section, a limited partner shall not be
liable for the obligations of a limited partnership unless he is also a general partner
or, in addition to the exercise of his rights and powers as a limited partner, he
participates in the control of the business. However, if the limited partner
participates in the control of the business, he shall be 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.
A limited partner shall not participate in the control of the business within the
meaning of subsection (1) solely by doing one (1) or more of the following things:
(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 or advising a general partner with respect to the business of
the limited partnership;
(c) 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;
(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, attending or participating in a meeting of partners;
(f) Proposing, approving, or disapproving, by voting or otherwise, one (1) or
more of the following matters:
1.
The dissolution and winding up of the limited partnership;
2.
The sale, exchange, lease, mortgage, assignment, pledge, or other
transfer of, or granting of a security interest in, all, or substantially all, of
the assets of the limited partnership;
3.
The incurrence, renewal, refinancing, payment or other discharge 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; and
9.
A matter related to the business of the limited partnership not otherwise
enumerated in this subsection which the partnership agreement states in
writing is subject to the approval or disapproval of limited partners;
(g)
(h)
(3)
(4)
Winding up the limited partnership pursuant to KRS 362.491; or
Exercising any right or power permitted to limited partners under KRS
362.403 to 362.525 and not specifically enumerated in this subsection.
The enumeration in subsection (2) of this section shall not mean that the possession
or exercise by a limited partner of any power other than a power enumerated in that
subsection constitutes participation by him in the business of the limited
partnership.
A limited partner who knowingly permits his name to be used in the name of the
limited partnership, except under a circumstance permitted by KRS 362.403(2),
shall be liable to creditors who extend credit to the limited partnership without
actual knowledge that the limited partner is not a general partner.
Effective: June 26, 2007
History: Repeal the prior repeal contained in 2006 Ky. Acts ch. 149, sec. 239, which
was to have been effective January 1, 2008, 2007 Ky. Acts ch. 137, sec. 180,
effective June 26, 2007. -- Repealed 2006 Ky. Acts ch. 149, sec. 239, effective
January 1, 2008. -- Created 1988 Ky. Acts ch. 284, sec. 19, effective July 15, 1988.
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