<html xmlns="http://www.w3.org/1999/xhtml"><head><meta charset="UTF-8" /><meta http-equiv='content-language' content='en-us'/><title>SDLRC - Codified Law 48-7-303 - Liability to third persons. </title><meta name="Generator" content="PowerTools for Open XML" /><style>span { white-space: pre-wrap; } p.s2069756Normal { text-align: justify; font-family: 'Times New Roman', 'serif'; font-size: 12pt; line-height: 108%; margin-top: 0; margin-left: 0; margin-right: 0; margin-bottom: .001pt; } span.s2069756SENU { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: bold; margin: 0; padding: 0; } span.s2069756CL { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: bold; margin: 0; padding: 0; } p.s2069756Normal-000000 { text-indent: 0.50in; text-align: justify; font-family: 'Times New Roman', 'serif'; font-size: 12pt; line-height: 108%; margin-top: 0; margin-left: 0; margin-right: 0; margin-bottom: .001pt; } span.s2069756DefaultParagraphFont { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: normal; margin: 0; padding: 0; } p.s2069756Normal-000001 { text-indent: 0.25in; text-align: justify; font-family: 'Times New Roman', 'serif'; font-size: 12pt; line-height: 108%; margin-top: 0; margin-left: 0; margin-right: 0; margin-bottom: .001pt; } p.s2069756Normal-000002 { margin-left: 0.70in; text-indent: -0.45in; text-align: justify; font-family: 'Times New Roman', 'serif'; font-size: 12pt; line-height: 108%; margin-top: 0; margin-right: 0; margin-bottom: .001pt; } p.s2069756Normal-000003 { margin-left: 1.14in; text-indent: -0.44in; text-align: justify; font-family: 'Times New Roman', 'serif'; font-size: 12pt; line-height: 108%; margin-top: 0; margin-right: 0; margin-bottom: .001pt; } span.s2069756000004 { font-size: 12pt; font-style: normal; font-weight: normal; margin: 0; padding: 0; } span.s2069756SCL { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: bold; margin: 0; padding: 0; } span.s2069756SCL-000005 { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: normal; margin: 0; padding: 0; } body { text-decoration-skip-ink: none; } </style></head><body><div><p dir="ltr" class="s2069756Normal"><a href="https://sdlegislature.gov/Statutes/Codified_Laws/DisplayStatute.aspx?Type=Statute&amp;Statute=48-7-303"><span class="s2069756SENU">48-7-303</span></a><span xml:space="preserve" class="s2069756SENU">. </span><span class="s2069756CL">Liability to third persons.</span></p><p dir="ltr" class="s2069756Normal-000000"><span class="s2069756DefaultParagraphFont">(a) Except as provided in subdivision (d), a limited partner is not liable for the obligations 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 participates 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.</span></p><p dir="ltr" class="s2069756Normal-000001"><span class="s2069756DefaultParagraphFont">(b) A limited partner does not participate in the control of the business within the meaning of subdivision (a) solely by doing one or more of the following:</span></p><p dir="ltr" class="s2069756Normal-000002"><span class="s2069756DefaultParagraphFont">(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;</span></p><p dir="ltr" class="s2069756Normal-000002"><span class="s2069756DefaultParagraphFont">(2)    Consulting with and advising a general partner with respect to the business of the limited partnership;</span></p><p dir="ltr" class="s2069756Normal-000002"><span class="s2069756DefaultParagraphFont">(3)    Acting as surety for the limited partnership or guaranteeing or assuming one or more specific obligations of the limited partnership;</span></p><p dir="ltr" class="s2069756Normal-000002"><span class="s2069756DefaultParagraphFont">(4)    Taking any action required or permitted by law to bring or pursue a derivative action in the right of the limited partnership;</span></p><p dir="ltr" class="s2069756Normal-000002"><span class="s2069756DefaultParagraphFont">(5)    Requesting or attending a meeting of partners;</span></p><p dir="ltr" class="s2069756Normal-000002"><span class="s2069756DefaultParagraphFont">(6)    Proposing, approving or disapproving, by voting or otherwise, one or more of the following matters:</span></p><p dir="ltr" class="s2069756Normal-000003"><span class="s2069756DefaultParagraphFont">(a)    The dissolution and winding up of the limited partnership;</span></p><p dir="ltr" class="s2069756Normal-000003"><span class="s2069756DefaultParagraphFont">(b)    The sale, exchange, lease, mortgage, pledge, or other transfer of all or substantially all of the assets of the limited partnership;</span></p><p dir="ltr" class="s2069756Normal-000003"><span class="s2069756DefaultParagraphFont">(c)    The incurrence of indebtedness by the limited partnership other than in the ordinary course of its business;</span></p><p dir="ltr" class="s2069756Normal-000003"><span class="s2069756DefaultParagraphFont">(d)    A change in the nature of the business;</span></p><p dir="ltr" class="s2069756Normal-000003"><span class="s2069756DefaultParagraphFont">(e)    The admission or removal of a general partner;</span></p><p dir="ltr" class="s2069756Normal-000003"><span class="s2069756DefaultParagraphFont">(f)    The admission or removal of a limited partner;</span></p><p dir="ltr" class="s2069756Normal-000003"><span class="s2069756DefaultParagraphFont">(g)    A transaction involving an actual or potential conflict of interest between a general partner and the limited partnership or the limited partners;</span></p><p dir="ltr" class="s2069756Normal-000003"><span class="s2069756DefaultParagraphFont">(h)    An amendment to the partnership agreement or certificate of limited partnership; or</span></p><p dir="ltr" class="s2069756Normal-000003"><span class="s2069756DefaultParagraphFont">(i)    Matters related to the business of the limited partnership not otherwise enumerated in this section, which the partnership agreement states in writing may be subject to the approval or disapproval of limited partners;</span></p><p dir="ltr" class="s2069756Normal-000002"><span xml:space="preserve" class="s2069756DefaultParagraphFont">(7)    Winding up the limited partnership pursuant to § </span><a href="https://sdlegislature.gov/Statutes/Codified_Laws/DisplayStatute.aspx?Type=Statute&amp;Statute=48-7-803"><span class="s2069756DefaultParagraphFont">48-7-803</span></a><span class="s2069756DefaultParagraphFont">; or</span></p><p dir="ltr" class="s2069756Normal-000002"><span class="s2069756DefaultParagraphFont">(8)    Exercising any right or power permitted to limited partners under this chapter and not specifically enumerated in this section.</span></p><p dir="ltr" class="s2069756Normal-000001"><span class="s2069756DefaultParagraphFont">(c) The enumeration in subdivision (b) does not mean that the possession or exercise of any other powers by a limited partner constitutes participation by him in the business of the limited partnership.</span></p><p dir="ltr" class="s2069756Normal-000001"><span xml:space="preserve" class="s2069756DefaultParagraphFont">(d) A limited partner who knowingly permits his name to be used in the name of the limited partnership, except under circumstances permitted by § </span><a href="https://sdlegislature.gov/Statutes/Codified_Laws/DisplayStatute.aspx?Type=Statute&amp;Statute=48-7-102"><span class="s2069756DefaultParagraphFont">48-7-102</span></a><span class="s2069756DefaultParagraphFont">, is liable to creditors who extend credit to the limited partnership without actual knowledge that the limited partner is not a general partner.</span></p><p dir="ltr" class="s2069756Normal"><span xml:space="preserve" class="s2069756000004"> </span></p><p dir="ltr" class="s2069756Normal"><span class="s2069756SCL">Source:</span><span xml:space="preserve" class="s2069756SCL-000005"> SL 1986, ch 391, §§ 303(a)-303(d).</span></p></div></body></html>