N.Y. Partnership Law § 121-304: Person erroneously believing himself a limited partner

§ 121-304. Person erroneously believing himself a limited partner. (a)

Except as provided in subdivision (b) of this section, a person who

makes a contribution to a limited partnership and erroneously but in

good faith believes that he has become a limited partner in the limited

partnership is not a general partner in the limited partnership and is

not bound by its obligations by reason of making the contribution,

receiving distributions from the limited partnership or exercising any

rights of a limited partner, if, on ascertaining the mistake, he:

(1) causes an accurate certificate of limited partnership or a

certificate of amendment to be executed and filed; or

(2) withdraws from the partnership by executing and delivering to the

limited partnership a written notice declaring withdrawal under this

section.

(b) A person who makes a contribution of the kind described in

subdivision (a) of this section is liable as a general partner to any

third party who transacts business with the limited partnership (i)

before the person withdraws and an appropriate certificate is filed to

show withdrawal, or (ii) before an appropriate certificate is filed to

show that he is not a general partner, but in either case only if the

third party reasonably believed, based upon the limited partner's

conduct, that the limited partner was a general partner and extended

credit to the partnership in reasonable reliance on the credit of such

person.