179.24 Same; mistake as to status as limited partner.

(1) Except as provided in sub. (2), a person who makes a contribution to a business enterprise and erroneously but in good faith believes that he or she 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, the person:

(a) Causes an appropriate certificate of limited partnership or a certificate of amendment to be executed and filed; or

(b) Withdraws from future equity participation in the enterprise by executing and filing with the department, together with a $15 filing fee, a certificate declaring withdrawal under this paragraph, except that the department, by rule, may specify a larger fee for certificates that are filed in paper format.

(2) A person who makes a contribution of the kind described under sub. (1) is liable as a general partner to any 3rd party who satisfies all of the following conditions:

(a) Transacts business with the enterprise before any of the following occurs:

1. The person withdraws and an appropriate certificate is filed to show withdrawal.

2. An appropriate certificate is filed to show that the person is not a general partner.

(b) Actually believed in good faith that the person was a general partner at the time of the transaction.

History: 1983 a. 173; 1989 a. 56, 232, 359; 1995 a. 27; 2001 a. 44.