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Modification of general law and liability of limited partner for debts of investment limited partnership.
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6.—(1) A limited partner shall not take part in the conduct of the business of the investment limited partnership and in particular shall not have power to contract on behalf of the investment limited partnership and all letters, contracts, deeds, instruments and documents whatsoever shall be entered into by the general partner on behalf of the investment limited partnership.
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(2) If a limited partner takes part in the conduct of the business of the investment limited partnership in its dealings with persons who are not partners, that limited partner shall be liable in the event of the insolvency of the investment limited partnership for debts of the investment limited partnership incurred during the period that he so participates in the conduct of the business as though he were for such period a general partner.
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(3) A limited partner shall be liable by virtue of subsection (2) only in respect of debts or obligations incurred by the investment limited partnership in favour of a person who at the time the debt or obligation was so incurred reasonably believed, based upon the conduct of the limited partner, that the limited partner was a general partner and whether or not such debts or obligations have since been assigned or otherwise transferred to another person.
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(4) A limited partner does not take part in the conduct of the business of an investment limited partnership within the meaning of this Act solely by doing any one or more of the following, irrespective of the frequency of such acts:
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(a) being a contractor for, or being an agent or employee of, the investment limited partnership or a general partner or acting as a director, officer or shareholder of a general partner which is a body corporate;
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(b) consulting with and advising a general partner with respect to the business of the investment limited partnership;
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(c) investigating, reviewing, or being advised as to the accounts or business affairs of the investment limited partnership or exercising any right conferred by this Act;
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(d) acting as surety or guarantor or providing any other form of security for the investment limited partnership either generally or in respect of specific obligations;
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(e) voting as a limited partner on one or more of the following matters:
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(i) the dissolution and winding up of the investment limited partnership;
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(ii) the purchase, sale, exchange, lease, mortgage, pledge, or other acquisition or transfer of any asset or assets by or on behalf of the investment limited partnership;
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(iii) the incurring or renewal of any indebtedness of the investment limited partnership;
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(iv) a change in the objectives or policies of the investment limited partnership;
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(v) the admission, removal or withdrawal of a general or limited partner or custodian and the continuation of the business of the investment limited partnership thereafter;
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(vi) transactions in which one or more of the general partners have an actual or potential conflict of interest with one or more of the limited partners.
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(5) Subsection (4) shall not import any implication that the possession or exercise of any other power by a limited partner will necessarily constitute the taking part by such limited partner in the business of the investment limited partnership.
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