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Arizona Revised Statutes Title 29. Partnership § 29-320. Person erroneously believing himself limited partner

Current as of January 01, 2025 | Updated by Findlaw Staff

A. Except as provided in subsection B, 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 a 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 subsection 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.

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Cite this article: FindLaw.com - Arizona Revised Statutes Title 29. Partnership § 29-320. Person erroneously believing himself limited partner - last updated January 01, 2025 | https://codes.findlaw.com/az/title-29-partnership/az-rev-st-sect-29-320/

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