Legal Question in Business Law in California
Advisors to a Limited Partnership
What advisory role can a limited partner of a California Limited Partnership take? What is the definition of an outside director and can there be such a thing as an outsside director for a partnership?
2 Answers from Attorneys
Re: Advisors to a Limited Partnership
A limited partner may do anything with respect to a partnership. However, the limited partner
risks losing the protection of limited liability (not being personally liable for the partnership debts)
if the role becomes too active. A person can even be both a limited partner and a general partner at the same
time. (Corporations Code Section 15512, prior Act).
Corporations Code Section 15632 (Revised Act) provides that a limited partner is not liable for any
obligation of the partnership, unless named as a general partner, or "the limited partner participates in the control of the business."
Subsection (b) defines some "safe harbors": behavior a limited partner can undertake without forfeiting limited liability.
You should consult with an attorney concerning the exact relationship the limited partner will have with the partnership, to get an
opinion on whether it endangers the limited partner's limited liability.
Jed Somit
Jed Somit, Attorney at Law
1440 Broadway - Suite 910
Re: Advisors to a Limited Partnership
Partnerships do not have directors
Ken Koury
Kenneth P. Koury, Esq.
5807 Topanga Cyn Blvd., Suite G-201
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