LIMITED PARTNERS

Iowa Code tit. XII, ch. 488, art. 3

in effect

Iowa Code § 488.301 Becoming limited partner.

488.301. Becoming limited partner. A person becomes a limited partner according to any of the following: 1. As provided in the partnership agreement. 2. As the result of a conversion or merger under article 11. 3. With the consent of all the partners. 2004 Acts, ch 1021, §29, 118

Iowa Code § 488.302 No right or power as limited partner to bind limited partnership.

488.302. No right or power as limited partner to bind limited partnership. A limited partner does not have the right or the power as a limited partner to act for or bind the limited partnership. 2004 Acts, ch 1021, §30, 118

Iowa Code § 488.303 No liability as limited partner for limited partnership obligations.

488.303. No liability as limited partner for limited partnership obligations. An obligation of a limited partnership, whether arising in contract, tort, or otherwise, is not the obligation of a limited partner. A limited partner is not personally liable, directly or indirectly, by way of contribution or otherwise, for an obligation of the limited partnership solely by reason of being a limited partner, even if the limited partner participates in the management and control of the limited partnership. 2004 Acts, ch 1021, §31, 118

Iowa Code § 488.304 Right of limited partner and former limited partner to information.

488.304. Right of limited partner and former limited partner to information. 1. On ten days’ demand, made in a record received by the limited partnership, a limited partner may inspect and copy required information during regular business hours in the limited partnership’s registered office. The limited partner need not have any particular purpose for seeking the information. 2. During regular business hours and at a reasonable location specified by the limited partnership, a limited partner may obtain from the limited partnership and inspect and copy true and full information regarding the state of the activities and financial condition of the limited partnership and other information regarding the activities of the limited partnership as is just and reasonable if the limited partner complies with all of the following: a. The limited partner seeks the information for a purpose reasonably related to the partner’s interest as a limited partner. b. The limited partner makes a demand in a record received by the limited partnership, describing with reasonable particularity the information sought and the purpose for seeking the information. c. The information sought is directly connected to the limited partner’s purpose. 3. Within ten days after receiving a demand pursuant to subsection 2, the limited partnership in a record shall inform the limited partner that made the demand of all of the following: a. What information the limited partnership will provide in response to the demand. b. When and where the limited partnership will provide the information. c. If the limited partnership declines to provide any demanded information, the limited partnership’s reasons for declining. 4. Subject to subsection 6, a person dissociated as a limited partner may inspect and copy required information during regular business hours in the limited partnership’s registered office if the person complies with all of the following: a. The information pertains to the period during which the person was a limited partner. b. The person seeks the information in good faith. c. The person meets the requirements of subsection 2. 5. The limited partnership shall respond to a demand made pursuant to subsection 4 in the same manner as provided in subsection 3. 6. If a limited partner dies, section 488.704 applies. 7. The limited partnership may impose reasonable restrictions on the use of information obtained under this section. In a dispute concerning the reasonableness of a restriction under this subsection, the limited partnership has the burden of proving reasonableness. 8. A limited partnership may charge a person that makes a demand under this section reasonable costs of copying, limited to the costs of labor and material. 9. Whenever this chapter or a partnership agreement provides for a limited partner to give or withhold consent to a matter, before the consent is given or withheld, the limited partnership shall, without demand, provide the limited partner with all information material to the limited partner’s decision that the limited partnership knows. 10. A limited partner or person dissociated as a limited partner may exercise the rights under this section through an attorney or other agent. Any restriction imposed under subsection 7 or by the partnership agreement applies both to the attorney or other agent and to the limited partner or person dissociated as a limited partner. 11. The rights stated in this section do not extend to a person as transferee, but may be exercised by the legal representative of an individual under legal disability who is a limited partner or person dissociated as a limited partner. 2004 Acts, ch 1021, §32, 118; 2016 Acts, ch 1097, §11, 12

Iowa Code § 488.305 Limited duties of limited partners.

488.305. Limited duties of limited partners. 1. A limited partner does not have any fiduciary duty to the limited partnership or to any other partner solely by reason of being a limited partner. 2. A limited partner shall discharge the duties to the partnership and the other partners under this chapter or under the partnership agreement and exercise any rights consistently with the obligation of good faith and fair dealing. 3. A limited partner does not violate a duty or obligation under this chapter or under the partnership agreement merely because the limited partner’s conduct furthers the limited partner’s own interest. 2004 Acts, ch 1021, §33, 118

Iowa Code § 488.306 Person erroneously believing self to be limited partner.

488.306. Person erroneously believing self to be limited partner. 1. Except as otherwise provided in subsection 2, a person that makes an investment in a business enterprise and erroneously but in good faith believes that the person has become a limited partner in the enterprise is not liable for the enterprise’s obligations by reason of making the investment, receiving distributions from the enterprise, or exercising any rights of or appropriate to a limited partner, if, on ascertaining the mistake, the person does either of the following: a. Causes an appropriate certificate of limited partnership, amendment, or statement of correction to be signed and delivered to the secretary of state for filing. b. Withdraws from future participation as an owner in the enterprise by signing and delivering to the secretary of state for filing a statement of withdrawal under this section. 2. A person that makes an investment described in subsection 1 is liable to the same extent as a general partner to any third party that enters into a transaction with the enterprise, believing in good faith that the person is a general partner, before the secretary of state files a statement of withdrawal, certificate of limited partnership, amendment, or statement of correction to show that the person is not a general partner. 3. If a person makes a diligent effort in good faith to comply with subsection 1, paragraph “a”, and is unable to cause the appropriate certificate of limited partnership, amendment, or statement of correction to be signed and delivered to the secretary of state for filing, the person has the right to withdraw from the enterprise pursuant to subsection 1, paragraph “b”, even if the withdrawal would otherwise breach an agreement with others that are or have agreed to become co-owners of the enterprise. 2004 Acts, ch 1021, §34, 118