121-304 - Person erroneously believing himself a limited partner. - New York Statutes

§ 121-304. Person erroneously believing himself a limited partner. (a) Except as provided in subdivision (b) of this section, a person who makes a contribution to a limited partnership and erroneously but in good faith believes that he has become a limited partner in the limited partnership is not a general partner in the limited partnership and is not bound by its obligations by reason of making the contribution, receiving distributions from the limited partnership or exercising any rights of a limited partner, if, on ascertaining the mistake, he: (1) causes an accurate certificate of limited partnership or a certificate of amendment to be executed and filed; or (2) withdraws from the partnership by executing and delivering to the limited partnership a written notice declaring withdrawal under this section. (b) A person who makes a contribution of the kind described in subdivision (a) of this section is liable as a general partner to any third party who transacts business with the limited partnership (i) before the person withdraws and an appropriate certificate is filed to show withdrawal, or (ii) before an appropriate certificate is filed to show that he is not a general partner, but in either case only if the third party reasonably believed, based upon the limited partner's conduct, that the limited partner was a general partner and extended credit to the partnership in reasonable reliance on the credit of such person.