N.Y. Partnership Law § 121-303: Liability to third parties

§ 121-303. Liability to third parties. (a) Except as provided in

subdivision (d) of this section, a limited partner is not liable for the

contractual obligations and other liabilities 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.

(b) A limited partner does not participate in the control of the

business within the meaning of subdivision (a) of this section by virtue

of doing one or more of the following:

(1) being a contractor for or transacting business with, including

being a contractor for, or an agent or employee of the limited

partnership or of a general partner or an officer, director or

shareholder of a corporate general partner, or a member, manager or

agent of a limited liability company that is a general partner of the

limited partnership, or a partner of a partnership that is a general

partner of the limited partnership, or a trustee, administrator,

executor, custodian or other fiduciary or beneficiary of an estate or

trust which is a general partner, or a trustee, officer, advisor,

shareholder or beneficiary of a business trust which is a general

partner, or acting in such capacity;

(2) consulting with and advising or rendering professional services to

a general partner with respect to any matter, including the business of

the limited partnership;

(3) acting as surety or endorser for the limited partnership, or

guaranteeing or providing security for or lending money to or assuming

one or more debts of the limited partnership;

(4) approving or disapproving an amendment to the partnership

agreement, or calling, requesting, or participating in any meeting of

general and limited partners or limited partners;

(5) taking any action to bring, prosecute, or terminate any derivative

action brought in the right of the limited partnership;

(6) proposing, approving, disapproving, or voting on any one or more

of the following matters:

(A) the amendment of the partnership agreement or certificate of

limited partnership;

(B) the dissolution and winding up of the limited partnership;

(C) 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;

(D) the merger or consolidation of the limited partnership or election

to continue the business of the limited partnership;

(E) the incurrence, renewal, refinancing or payment or other discharge

of indebtedness by the limited partnership;

(F) a change in the nature of the business;

(G) the admission or removal of a partner;

(H) a transaction or other matter involving an actual or potential

conflict of interest;

(I) in respect of a limited partnership which is registered as an

investment company under an act of Congress entitled Investment Company

Act of 1940, any matter required by said Investment Company Act of 1940,

or the rules and regulations promulgated thereunder, to be approved by

holders of beneficial interests in an investment company;

(J) such other matters as are required for submission to limited

partners by federal or state securities laws or rules or regulations

thereunder, or rules of self-regulatory bodies governing the trading of

limited partnership interests;

(K) the indemnification of any partner or other person; or

(L) such other matters as are stated in the partnership agreement to

be subject to approval, disapproval or vote by the limited partners;

(7) consulting with or advising, or being an officer, director,

shareholder, partner, member, manager, agent or employee of, or being a

fiduciary for, any person in which the limited partnership has an

interest;

(8) winding up the limited partnership pursuant to section 121-803 of

this article; or

(9) exercising any right or power permitted to limited partners under

this article and not specifically enumerated in this subdivision.

(c) The enumeration in subdivision (b) of this section does not mean

that the possession or exercise of any other powers by a limited partner

constitutes participation by him in the control of the business of the

limited partnership.

(d) A limited partner who expressly consents in writing to his name

being used in the name of the limited partnership is liable to creditors

who extend credit to the limited partnership without actual knowledge

that the limited partner is not a general partner.

(e) A limited partner does not participate in the control of the

business within the meaning of subdivision (a) of this section

regardless of the nature, extent, scope, number or frequency of the

limited partner's possessing or, regardless of whether or not the

limited partner has the rights or powers, exercising or attempting to

exercise one or more of the rights or powers or having or, regardless of

whether or not the limited partner has the rights or powers, acting or

attempting to act in one or more of the capacities which are permitted

under this section.