56-1a203. Liability of limited partners to third parties. (a) Except as provided in K.S.A. 56-1a157 and amendments thereto and in subsection (d), a limited partner is not liable for the obligations of a limited partnership unless the limited partner is also a general partner or, in addition to the exercise of the rights and powers of a limited partner, the limited partner participates in the control of the business. However, if the limited partner does participate in the control of the business, the limited partner is liable only to persons who transact business with the limited partnership reasonably believing, based upon the limited partner's conduct, that the limited partner is a general partner.
(b) A limited partner does not participate in the control of the business within the meaning of subsection (a) by virtue of the limited partner's possessing or exercising one or more of the following powers:
(1) To be a contractor for or an agent or employee of the limited partnership or of a general partner, or to be an officer, director or shareholder of a general partner that is a corporation;
(2) to consult with or advise a general partner with respect to the business of the limited partnership;
(3) to act as surety for the limited partnership or to guarantee or assume one or more specific obligations of the limited partnership or to provide collateral for the limited partnership;
(4) to take any action required or permitted by law to bring or pursue a derivative action in the right of the limited partnership;
(5) to vote on one or more of the following matters:
(A) The dissolution and winding up of the affairs of the limited partnership;
(B) the sale, exchange, lease, mortgage, pledge or other transfer of a material portion of the assets of the limited partnership;
(C) the incurrence, renewal, refinancing or payment or other discharge of material indebtedness by the limited partnership;
(D) a change in the nature of the business;
(E) the admission, removal or retention of a general partner; or
(F) the admission, removal or retention of a limited partner;
(6) to request or attend a meeting of partners; or
(7) to approve or disapprove, by voting or otherwise, any material matters which are related to the business of the partnership and which are stated in the partnership agreement.
(c) The enumeration in subsection (b) does not mean that the possession or exercise of any other powers by a limited partner constitutes participation by the limited partner in the control of the business of the limited partnership.
(d) A limited partner who knowingly permits the limited partner's name to be used in the name of the limited partnership, except under circumstances permitted by K.S.A. 56-1a102 and amendments thereto, is liable to creditors who extend credit to the limited partnership without actual knowledge that the limited partner is not a general partner.
History: L. 1983, ch. 88, § 20; L. 1987, ch. 208, § 9; L. 1988, ch. 195, § 8; July 1.
Structure Kansas Statutes
Article 1a - Revised Uniform Limited Partnership Act
56-1a,107 Business transactions of partner with the partnership. [See Revisor's Note]
56-1a,151 Certificate of limited partnership.
56-1a,153 Cancellation of certificate.
56-1a,157 Liability for false statement in certificate.
56-1a,158 Notice of limited partnership.
56-1a,159 Delivery of certificate to limited partners.
56-1a,160 Restated or amended and restated certificate of limited partnership.
56-1a,201 Admission of additional limited partners.
56-1a,203 Liability of limited partners to third parties.
56-1a,204 Person erroneously believing self to be limited partner.
56-1a,205 Limited partner's right to information.
56-1a,251 Admission of additional general partners.
56-1a,252 Cessation of person as general partner, when.
56-1a,253 General partners' powers and liabilities.
56-1a,254 Contributions by general partners.
56-1a,301 Form of contribution.
56-1a,302 Liability for contributions.
56-1a,303 Allocation of profits and losses.
56-1a,304 Allocation of distributions of cash or other assets.
56-1a,351 Interim distributions.
56-1a,352 Withdrawal of general partner.
56-1a,353 Withdrawal of limited partner.
56-1a,354 Distribution upon withdrawal.
56-1a,355 Distribution in kind.
56-1a,356 Right to distribution.
56-1a,357 Limitations on distributions.
56-1a,358 Liability upon return of contribution.
56-1a,401 Nature of partnership interest.
56-1a,402 Assignment of partnership interest.
56-1a,403 Rights of creditors.
56-1a,404 Right of assignee to become limited partner.
56-1a,405 Power of estate of deceased or incompetent partner.
56-1a,452 Judicial dissolution.
56-1a,454 Distribution of assets.
56-1a,507 Doing business without registration.
56-1a,509 Execution and liability.
56-1a,601 Construction and application.
56-1a,604 Rules for cases not provided for in this act.
56-1a,606 Domestic limited partnerships; annual report; annual report fee. [See Revisor's Note]
56-1a,607 Foreign limited partnerships; annual report; annual report fee. [See Revisor's Note]
56-1a,608 Limited partnerships; first annual report and annual report fee.