{"data":{"id":"us-ky/krs-362.437","jurisdiction":"us-ky","citation":"KRS 362.437","heading":"Liability of limited partners to third parties.","body":"(1) Except as provided in subsection (4) of this section, a limited partner shall not be\nliable for the obligations of a limited partnership unless he is also a general partner\nor, in addition to the exercise of his rights and powers as a limited partner, he\nparticipates in the control of the business. However, if the limited partner\nparticipates in the control of the business, he shall be liable only to persons who\ntransact business with the limited partnership reasonably believing, based upon the\nlimited partner's conduct, that the limited partner is a general partner.\n(2) A limited partner shall not participate in the control of the business within the\nmeaning of subsection (1) solely by doing one (1) or more of the following things:\n(a) Being a contractor fo r, or an agent or employee of, the limited partnership or\nof a general partner or being an officer, director, or shareholder of a general\npartner that is a corporation;\n(b) Consulting with or advising a general partner with respect to the business of\nthe limited partnership;\n(c) Acting as surety, guarantor or endorser for the limited partnership,\nguaranteeing or assuming one (1) or more specific obligations of the limited\npartnership or providing collateral for the limited partnership;\n(d) Taking any action required or permitted by law to bring or pursue a derivative\naction in the right of the limited partnership;\n(e) Requesting, attending or participating in a meeting of partners;\n(f) Proposing, approving, or disapproving, by voting or otherwise, one (1) or\nmore of the following matters:\n1. The dissolution and winding up of the limited partnership;\n2. The sale, exchange, lease, mortgage, assignment, pledge, or other\ntransfer of, or granting of a security interest in, all, or substantially all, of\nthe assets of the limited partnership;\n3. The incurrence, renewal, refinancing, payment or other discharge of\nindebtedness by the limited partnership other than in the ordinary course\nof its business;\n4. A change in the nature of the business;\n5. The admission or removal of a general partner;\n6. The admission or removal of a limited partner;\n7. A transaction involving an actual or potential conflict of interest\nbetween a general partner and the limited partnership or the limited\npartners;\n8. An ame ndment to the partnership agreement or certificate of limited\npartnership; and\n9. A matter related to the business of the limited partnership not otherwise\nenumerated in this subsection which the partnership agreement states in\nwriting is subject to the approval or disapproval of limited partners;\n(g) Winding up the limited partnership pursuant to KRS 362.491; or\n(h) Exercising any right or power permitted to limited partners under KRS\n362.403 to 362.525 and not specifically enumerated in this subsection.\n(3) The enumeration in subsection (2) of this section shall not mean that the possession\nor exercise by a limited partner of any power other than a power enumerated in that\nsubsection constitutes participation by him in the business of the limited\npartnership.\n(4) A limited partner who knowingly permits his name to be used in the name of the\nlimited partnership, except under a circumstance permitted by KRS 362.403(2),\nshall be liable to creditors who extend credit to the limited partnership without\nactual knowledge that the limited partner is not a general partner.","path":["KRS Chapter 362"],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=34352","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:58:55Z","sha256":"ec65784b47c8cb3ce1be8bebabbe5db00a4abe0f67cf581530ebfc8a52c08046","source_id":"us-ky","stale":false,"prev":"us-ky/krs-362.435","next":"us-ky/krs-362.439"},"notice":"GroundRules: Original legal text. Not legal advice."}