(1) (a) A limited partner is not liable for the obligations of a limited partnership incurred while it is not a limited liability limited partnership unless the limited partner is also a general partner or, in addition to the exercise of the limited partner's rights and powers as a limited partner, the limited partner participates in the control of the business. However, if the limited partner participates in the control of the business at the time such liability is incurred, the limited partner is liable only to persons who transact business or conduct activities with the limited partnership reasonably believing, notwithstanding the fact that the limited partner is not designated as a general partner in the certificate of limited partnership, based upon the limited partner's conduct, that the limited partner is a general partner at the time such liability is incurred.
(b) A limited partner of a limited liability limited partnership is not liable for the obligations of the partnership incurred while it is a limited liability limited partnership.
(2) A limited partner does not participate in the control of the business within the meaning of subsection (1) of this section solely by doing one or more of the following:
(a) Being a contractor for or an agent or employee of the limited partnership or of a general partner;
(b) Being an officer, director, or shareholder of a corporate general partner;
(c) Consulting with and advising a general partner with respect to the business of the limited partnership;
(d) Acting as surety for the limited partnership or guaranteeing or assuming one or more specific obligations of the limited partnership or providing collateral for an obligation of the limited partnership;
(e) Bringing an action in the right of a limited partnership to recover a judgment in its favor pursuant to part 10 of this article;
(f) Calling, requesting, or participating in a meeting of the partners;
(g) Proposing or approving or disapproving, by voting or otherwise, one or more of the following matters:
(I) The dissolution and winding up or continuation of the limited partnership;
(II) The sale, exchange, lease, mortgage, pledge, or other transfer of any assets of the limited partnership;
(III) The incurrence of indebtedness by the limited partnership;
(IV) A change in the nature of the business;
(V) The admission or removal of a partner;
(VI) A transaction or other matter involving an actual or potential conflict of interest;
(VII) An amendment to the partnership agreement or certificate of limited partnership; or
(VIII) Such other matters as are stated in writing in the partnership agreement;
(h) Winding up the limited partnership pursuant to section 7-62-803; or
(i) Exercising any right or power permitted to limited partners under this article and not specifically enumerated in this subsection (2).
(3) The enumeration in subsection (2) of this section does not mean that the possession or exercise of any other powers by a limited partner constitutes participation by the limited partner in the business of the limited partnership.
(4) Repealed.
Source: L. 81: Entire article added, p. 440, § 1, November 1. L. 86: (1) amended and (2) R&RE, p. 453, §§ 15, 16, effective July 1. L. 97: (1) amended and (4) repealed, pp. 1499, 1500, §§ 4, 5, effective June 3. L. 2003: (1)(a) amended, p. 2245, § 134, effective July 1, 2004. L. 2004: (1)(a), (1)(b), and (3) amended, p. 1442, § 130, effective July 1.
ANNOTATION
Law reviews. For article, "Limited Partnership Act Update", see 11 Colo. Law. 688 (1982). For article, "The Tax Status of Limited Partnerships Formed Under CULPA", see 11 Colo. Law. 1193 (1982). For comment, "The Colorado Changes to the Revised Uniform Limited Partnership Act", see 53 U. Colo. L. Rev. 823 (1982). For article, "The Convertible, Participating Mortgage: Planning Opportunities and Legal Pitfalls in Structuring the Transaction", see 54 U. Colo. L. Rev. 295 (1983). For article, "Significant Improvements to Colorado's Limited Partnership Act Adopted", see 15 Colo. Law. 1635 (1986).
Where a limited partner can not maintain its position as a limited partner and protect itself from participation in an ultra vires contract, the limited partner's participation in the limited partnership is void and the limited partner is not liable for the debts and obligations incurred by the limited partnership. Black v. First Federal Savings and Loan, 830 P.2d 1103 (Colo. App. 1992).
While a limited partnership protects the partners from liability for partnership debt and obligations, it does not necessarily protect the partners from liability to the partnership. With respect to capital contribution, liability to the partnership is defined by the partnership agreement itself. Fox v. I-10, Ltd., 957 P.2d 1018 (Colo. 1998).