(a) Except as provided in subsection (d), a limited partner is not liable for the obligations of a limited partnership, unless he is also a general partner or, in addition to the exercise of his rights and powers as a limited partner, he participates in the control of the business. However, if the limited partner does participate in the control of the business, he 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.
Terms Used In Tennessee Code 61-2-302
Amendment: A proposal to alter the text of a pending bill or other measure by striking out some of it, by inserting new language, or both. Before an amendment becomes part of the measure, thelegislature must agree to it.
Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
General partner: means a person who has been admitted to a limited partnership as a general partner in accordance with the partnership agreement and is so named in the certificate of limited partnership or similar instrument under which the limited partnership is organized, if so required. See Tennessee Code 61-2-101
Guarantor: A party who agrees to be responsible for the payment of another party's debts should that party default. Source: OCC
Indemnification: In general, a collateral contract or assurance under which one person agrees to secure another person against either anticipated financial losses or potential adverse legal consequences. Source: FDIC
Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
Limited partner: means a person who has been admitted to a limited partnership as a limited partner as provided in §. See Tennessee Code 61-2-101
Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
Partnership: A voluntary contract between two or more persons to pool some or all of their assets into a business, with the agreement that there will be a proportional sharing of profits and losses.
Partnership agreement: means any agreement, written or oral, of the partners as to the affairs of a limited partnership and the conduct of its business. See Tennessee Code 61-2-101
Person: means a natural person, a foreign or domestic partnership (whether general or limited), trust, estate, association, corporation, custodian, nominee or any other individual or entity in its own or any representative capacity. See Tennessee Code 61-2-101
(b) A limited partner does not participate in the control of the business within the meaning of subsection (a) by virtue of his possessing or exercising one (1) or more of the following powers or having or acting in one (1) or more of the following capacities:
(1) To be an independent contractor for or to transact business with, including being a contractor for, or to be an agent or employee of, the limited partnership or a general partner, or to be an officer, director or stockholder of a corporate general partner, or to be a partner of a partnership that is a general partner of the limited partnership, or to be a fiduciary or beneficiary of an estate or trust which is a general partner;(2) To consult with or advise a general partner with respect to any matter, including the business of the limited partnership;(3) To act as surety, guarantor or endorser for the limited partnership or a general partner, to guarantee or assume one (1) or more obligations of the limited partnership or a general partner, to borrow money from the limited partnership or a general partner, to lend money to the limited partnership or a general partner, or to provide collateral for the limited partnership or a general partner;(4) To call, request or attend or participate at a meeting of the partners or the limited partners;(5) To wind up a limited partnership pursuant to § 61-2-803;(6) To take any action required or permitted by law to bring, pursue or settle or otherwise terminate a derivative action in the right of the limited partnership;(7) To serve on a committee of the limited partnership or the limited partners;(8) To act or cause the taking or refraining from the taking of any action, including by proposing, approving, consenting or disapproving, by voting or otherwise, with respect to one (1) or more of the following matters:
(A) The dissolution and winding up of the limited partnership or an election to continue the limited partnership or an election to continue the business of the limited partnership;(B) The sale, exchange, lease, mortgage, assignment, pledge or other transfer of, or granting of a security interest in, any asset or assets of the limited partnership;(C) The incurrence, renewal, refinancing or payment or other discharge of indebtedness by the limited partnership;(D) A change in the nature of the business;(E) The admission, removal or retention of a general partner;(F) The admission, removal or retention of a limited partner;(G) A transaction or other matter involving an actual or potential conflict of interest;(H) An amendment to the partnership agreement or certificate of limited partnership;(I) The merger of a limited partnership;(J) In respect of a limited partnership which is registered as an investment company under the Investment Company Act of 1940 (15 U.S.C. § 80a-1 et seq.), as amended, any matter required by the Investment Company Act of 1940, or the rules and regulations of the securities and exchange commission thereunder, to be approved by the holders of beneficial interests in an investment company, including the electing of directors or trustees of the investment company, the approving or terminating of investment advisory or underwriting contracts, and the approving of auditors;(K) The indemnification of any partner or other person; or(L) Such other matters as are stated in the partnership agreement or in any other agreement or in writing; or(9) Any right or power granted or permitted to limited partners under this chapter and not specifically enumerated in this subsection (b).(c) The enumeration in subsection (b) does not mean that the possession or exercise of any other powers or having or acting in other capacities by a limited partner constitutes participation by him in the control of the business of the limited partnership.(d) A limited partner does not participate in the control of the business within the meaning of subsection (a) by virtue of the fact that all or any part of the name of such limited partner is included in the name of the limited partnership.(e) This section does not create rights or powers of limited partners. Such rights and powers may be created only by a certificate of limited partnership, a partnership agreement or any other agreement, or other sections of this chapter.
