1. Except as provided in subsection 2, a person who makes a contribution to a business enterprise and erroneously but in good faith believes that the person 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 does either of the following:
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.
2. A person who makes a contribution of the kind described in subsection 1 is liable as a general partner to a third party who, believing the person to be a general partner, transacts business with the enterprise before an appropriate certificate is filed and before either of the following:
a. The person withdraws and an appropriate certificate is filed to show the withdrawal.
b. An appropriate certificate is filed to show the person's status as a limited partner and, in the case of an amendment, after expiration of the period for filing the amendment relating to the person as a limited partner under section 487.202.
[C24, 27, 31, 35, 39, § 9819; C46, 50, 54, 58, 62, 66, 71, 73, 75, 77, 79, 81, § 545.14; 82 Acts, ch 1103, § 304]
C93, § 487.304
Iowa General Assembly
Search: Iowa Code 1997
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