Limited Partners

V.S.A. tit. 11, ch. 23, subch. 3

in effect

11 V.S.A. § 3421 Admission of limited partners

3421. Admission of limited partners (a) A person becomes a limited partner: (1) at the time the limited partnership is formed; or (2) at any later time specified in the records of the limited partnership for becoming a limited partner. (b) After the filing of a limited partnership’s original certificate of limited partnership, a person may be admitted as an additional limited partner: (1) in the case of a person acquiring a partnership interest directly from the limited partnership, upon compliance with the partnership agreement or, if the partnership agreement does not so provide, upon the written consent of all partners; and (2) in the case of an assignee of a partnership interest of a partner who has the power, as provided in section 3464 of this title, to grant the assignee the right to become a limited partner, upon the exercise of that power and compliance with any conditions limiting the grant or exercise of the power. Added 1997, No. 149 (Adj. Sess.), § 4, eff. Jan. 1, 1999.

11 V.S.A. § 3422 Voting

3422. Voting Subject to section 3423 of this title, the partnership agreement may grant to all or a specified group of the limited partners the right to vote (on a per capita or other basis) upon any matter. Added 1997, No. 149 (Adj. Sess.), § 4, eff. Jan. 1, 1999.

11 V.S.A. § 3423 Liability to third parties

3423. Liability to third parties (a) Except as provided in subsection (d) of this section, a limited partner is not liable for the obligations of a limited partnership unless he or she is also a general partner or, in addition to the exercise of his or her rights and powers as a limited partner, he or she participates in the control of the business. However, if the limited partner participates in the control of the business, he or she 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 subsection (a) of this section solely by doing one or more of the following: (1) being a contractor for or an agent or employee of the limited partnership or of a general partner or being an officer, director, or shareholder of a general partner that is a corporation; (2) consulting with and advising a general partner with respect to the business of the limited partnership; (3) acting as surety for the limited partnership or guaranteeing or assuming one or more specific obligations of the limited partnership; (4) taking any action required or permitted by law to bring or pursue a derivative action in the right of the limited partnership; (5) requesting or attending a meeting of partners; (6) proposing, approving, or disapproving, by voting or otherwise, one or more of the following matters: (A) the dissolution and winding up of the limited partnership; (B) the sale, exchange, lease, mortgage, pledge, or other transfer of all or substantially all of the assets of the limited partnership; (C) the incurrence of indebtedness by the limited partnership other than in the ordinary course of its business; (D) a change in the nature of the business; (E) the admission or removal of a general partner; (F) the admission or removal of a limited partner; (G) a transaction involving an actual or potential conflict of interest between a general partner and the limited partnership or the limited partners; (H) an amendment to the partnership agreement or certificate of limited partnership; or (I) matters related to the business of the limited partnership not otherwise enumerated in this subsection, which the partnership agreement states in writing may be subject to the approval or disapproval of limited partners; (7) winding up the limited partnership pursuant to section 3473 of this title; or (8) exercising any right or power permitted to limited partners under this chapter and not specifically enumerated in this subsection. (c) The enumeration in subsection (b) of this section does not mean that the possession or exercise of any other powers by a limited partner constitutes participation by him or her in the business of the limited partnership. (d) A limited partner who knowingly permits his or her name to be used in the name of the limited partnership, except under circumstances permitted by subdivision 3402(a)(2) of this title, is liable to creditors who extend credit to the limited partnership without actual knowledge that the limited partner is not a general partner. Added 1997, No. 149 (Adj. Sess.), § 4, eff. Jan. 1, 1999.

11 V.S.A. § 3424 Person erroneously believing himself or herself limited partner

3424. Person erroneously believing himself or herself limited partner (a) Except as provided in subsection (b) of this section, a person who makes a contribution to a business enterprise and erroneously but in good faith believes that he or she has become a limited partner in the enterprise is not a general partner in the enterprise and is not bound by its obligations by reason of making the contribution, receiving distributions from the enterprise, or exercising any rights of a limited partner, if, on ascertaining the mistake, he or she: (1) causes an appropriate certificate of limited partnership or a certificate of amendment to be executed and filed; or (2) withdraws from future equity participation in the enterprise by executing and filing in the Office of the Secretary of State a certificate declaring withdrawal under this section. (b) A person who makes a contribution of the kind described in subsection (a) of this section is liable as a general partner to any third party who transacts business with the enterprise before the person withdraws and an appropriate certificate is filed to show withdrawal, or before an appropriate certificate is filed to show that he or she is not a general partner, but in either case only if the third party actually believed in good faith that the person was a general partner at the time of the transaction. Added 1997, No. 149 (Adj. Sess.), § 4, eff. Jan. 1, 1999.

11 V.S.A. § 3425 Information

3425. Information Each limited partner has the right to: (1) inspect and copy any of the partnership records required to be maintained by section 3405 of this title; and (2) obtain from the general partners from time to time upon reasonable demand true and full information regarding the state of the business and financial condition of the limited partnership; promptly after becoming available, a copy of the limited partnership’s federal, state, and local income tax returns for each year; and other information regarding the affairs of the limited partnership as is just and reasonable. Added 1997, No. 149 (Adj. Sess.), § 4, eff. Jan. 1, 1999.

Source: Vermont General Assembly (legislature.vermont.gov)URL: https://legislature.vermont.gov/statutes/chapter/11/023Fetched: 10/21/2026