50-73.24 - Liability to third parties. - Virginia Statutes

§ 50-73.24. Liability to third parties.

A. Except as provided in subsection D of this section, a limited partner isnot liable for the obligations of a limited partnership unless he is also ageneral partner or, in addition to the exercise of his rights and powers as alimited partner, he participates in the control of the business. However, ifthe limited partner participates in the control of the business, he is liableonly to persons who transact business with the limited partnership reasonablybelieving, based upon the limited partner's conduct, that the limited partneris a general partner.

B. A limited partner does not participate in the control of the businesswithin the meaning of subsection A of this section solely by doing one ormore of the following:

1. Being a contractor for or an agent or employee of the limited partnershipor of a general partner, or being an officer, director or shareholder of ageneral partner that is a corporation or being a partner of a partnershipthat is a general partner of the limited partnership;

2. Consulting with and advising a general partner with respect to thebusiness of the limited partnership;

3. Acting as surety for the limited partnership or guaranteeing or assumingone or more specific obligations of the limited partnership;

4. Taking any action required or permitted by law to bring or pursue aderivative action in the right of the limited partnership;

5. Requesting or attending a meeting of partners;

6. Proposing, approving or disapproving, by voting or otherwise, one or moreof the following matters:

a. The dissolution and winding up of the limited partnership;

b. The sale, exchange, lease, mortgage, pledge, or other transfer of all orsubstantially all of the assets of the limited partnership;

c. The incurrence of indebtedness by the limited partnership other than inthe ordinary course of its business;

d. A change in the nature of the business;

e. The admission or removal of a general partner;

f. The admission or removal of a limited partner;

g. A transaction involving an actual or potential conflict of interestbetween a general partner and the limited partnership or the limited partners;

h. An amendment to the partnership agreement or certificate of limitedpartnership; or

i. Matters related to the business of the limited partnership not otherwiseenumerated in subsection B of this section, which the partnership agreementstates may be subject to the approval or disapproval of limited partners;

7. Winding up the limited partnership pursuant to § 50-73.51; or

8. Exercising any right or power permitted to limited partners under thischapter and not specifically enumerated in subsection B of this section.

C. The enumeration in subsection B of this section does not mean that thepossession or exercise of any other powers by a limited partner constitutesparticipation by him in the business of the limited partnership.

D. A limited partner who knowingly permits his name to be used in the name ofthe limited partnership, except under circumstances permitted by subdivision2 of § 50-73.2, is liable to creditors who extend credit to the limitedpartnership without actual knowledge that the limited partner is not ageneral partner.

(1985, c. 607; 1987, c. 702; 1990, c. 343.)