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Texas Business Organizations Code - BUS ORG § 153.413. Closely Held Limited Partnership

Current as of January 01, 2024 | Updated by Findlaw Staff

(a) In this section, “closely held limited partnership” means a limited partnership that has:

(1) fewer than 35 limited partners;  and

(2) no partnership interests listed on a national securities exchange or regularly quoted in an over-the-counter market by one or more members of a national securities association.

(b) Sections 153.402-153.410 do not apply to a derivative proceeding by a limited partner of a closely held limited partnership against a present or former general partner, limited partner, or officer of the limited partnership.  In the event the limited partner also asserts a claim in the derivative proceeding against a person who is not a present or former general partner, limited partner, or officer, this subsection shall apply only to a claim in the derivative proceeding against a present or former general partner, limited partner, or officer.

(c) If Sections 153.402-153.410 do not apply because of Subsection (b) and if justice requires:

(1) a derivative proceeding brought by a limited partner of a closely held limited partnership may be treated by a court as a direct action brought by the limited partner for the limited partner's own benefit;  and

(2) a recovery in a direct or derivative proceeding by a limited partner may be paid directly to the plaintiff or to the limited partnership if necessary to protect the interests of creditors or other partners of the limited partnership.

(d) Other provisions of state law govern whether a limited partner has a direct cause of action or right to sue a general partner, limited partner, or officer, and this section may not be construed to create that direct cause of action or right to sue.

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Cite this article: FindLaw.com - Texas Business Organizations Code - BUS ORG § 153.413. Closely Held Limited Partnership - last updated January 01, 2024 | https://codes.findlaw.com/tx/business-organizations-code/bus-org-sect-153-413/

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