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Limited Liability For Limited Partners: An Argument For The Abolition Of The Control Rule, Joseph J. Basile, Jr.
Limited Liability For Limited Partners: An Argument For The Abolition Of The Control Rule, Joseph J. Basile, Jr.
Vanderbilt Law Review
One of the important features of the limited partnership' that makes investment in this form of business organization attractive is the general immunity afforded to limited partners from liability for the obligations of the partnership. This immunity, however,can be forfeited. Under both the Uniform Limited Partnership Act (ULPA) and the Revised Uniform Limited Partnership Act (RULPA), a limited partner becomes liable for the obligations of the partnership if, in addition to the exercise of the rights and powers of a limited partner, the limited partner "takes part in the control of the business.''
Not surprisingly, when sophisticated investors are offered …