48-7-304. Person erroneously believing himself limited partner. (a) Except as provided in this section, a person who makes a contribution to a business enterprise and erroneously but in good faith believes that he 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:
(1) Causes an appropriate certificate of limited partnership or certificate of amendment to be executed and filed; or
(2) Withdraws from future equity participation in the enterprise by executing and filing in the office of the secretary of state a certificate declaring withdrawal under this section.
(b) A person who makes a contribution of the kind described in subdivision (a) is liable as a general partner to any third party who transacts business with the enterprise:
(1) Before the person withdraws and an appropriate certificate is filed to show withdrawal; or
(2) Before an appropriate certificate is filed to show that he is not a general partner, but in either case only if the third party actually believed in good faith that the person was a general partner at the time of the transaction.Source: SL 1986, ch 391, §§ 304(a), 304(b).
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