Section 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.

Comment

In this respect a limited partner is analogous to a shareholder in a corporation; status as owner provides neither the right to manage nor a reasonable appearance of that right.

The phrase “as a limited partner” is intended to recognize that: (i) this section does not disable a general partner that also owns a limited partner interest, (ii) the partnership agreement may as a matter of contract allocate managerial rights to one or more limited partners; and (iii) a separate agreement can empower and entitle a person that is a limited partner to act for the limited partnership in another capacity; e.g., as an agent. See Comment to Section 305

The fact that a limited partner qua limited partner has no power to bind the limited partnership means that, subject to Section 113 (Dual Capacity), information possessed by a limited partner is not attributed to the limited partnership. See Section 103(h).

This Act specifies various circumstances in which limited partners have consent rights, including:

• admission of a limited partner, Section 301(3)

• admission of a general partner, Section 401(4)

• amendment of the partnership agreement, Section 406(b)(1)

• the decision to amend the certificate of limited partnership so as to obtain or relinquish LLLP status, Section 406(b)(2)

• the disposition of all or substantially all of the limited partnership’s property, outside the ordinary course, Section 406(b)(3)

• the compromise of a partner’s obligation to make a contribution or return an improper distribution, Section 502(c)

• expulsion of a limited partner by consent of the other partners, Section 601(b)(4)

• expulsion of a general partner by consent of the other partners, Section 603(4)

• redemption of a transferable interest subject to charging order, using limited partnership property, Section 703(c)(3)

• causing dissolution by consent, Section 801(2)

• causing dissolution by consent following the dissociation of a general partner, when at least one general partner remains, Section 801(3)(A)

• avoiding dissolution and appointing a successor general partner, following the dissociation of the sole general partner, Section 801(3)(B)

• appointing a person to wind up the limited partnership when there is no general partner, Section 803(C)

• approving, amending or abandoning a plan of conversion,
  Section 1103(a) and (b)(2)

• approving, amending or abandoning a plan of merger, Section 1107(a) and (b)(2).