68Limited partner not to take part in incorporated limited

68 Limited partner not to take part in incorporated limited partnership’s management (1) A limited partner in an incorporated limited partnership must not take part in the management of the incorporated limited partnership’s business. (2) Subsection (3) applies if— (a) as a direct result of any wrongful act or omission of a limited partner in an incorporated limited partnership in taking part in the management of the partnership’s business, the limited partner causes any loss or injury to someone who is not a partner in the partnership (a third party); and (b) at the time of the act or omission the third party had reasonable grounds to believe that the limited partner was a general partner in the partnership.

(3) The limited partner is liable for the loss or injury to the same extent that the limited partner would have been liable if the limited partner were a general partner in the partnership. Note A limited partner is not an agent of the incorporated limited partnership, and the acts of a limited partner do not bind a general partner, another limited partner or the partnership itself (see s 66 (1)). (4) A limited partner in an incorporated limited partnership is not to be regarded as taking part in the management of the partnership’s business only because the limited partner or a person acting on behalf of the limited partner— (a) is an employee of, or an independent contractor engaged by, the partnership, a general partner in the partnership or an associate of the general partner, or is an officer of a general partner that is a corporation or of an associate of a general partner that is a corporation; or (b) gives advice to, or on behalf of, the partnership, a general partner in the partnership or an associate of a general partner in the proper exercise of functions arising from the engagement of the limited partner, or a person acting on behalf of the limited partner, in a professional capacity or arising from business dealings between the limited partner, or a person acting on behalf of the limited partner, and the partnership or a general partner or an associate of the general partner; or (c) gives a guarantee or indemnity in relation to any liability of the partnership, a general partner in the partnership or an associate of the general partner; or

(d) takes any action, or participates in any action taken by any other limited partner in the partnership, for the purpose of enforcing the rights, or safeguarding the interests, of the limited partner as a limited partner; or (e) if permitted by the partnership agreement— (i) calls, requisitions, convenes, chairs, participates in, postpones, adjourns or makes a record of a meeting of the partners, the limited partners or any of them; or (ii) requisitions, signs, or otherwise passes, approves, disapproves or amends any resolution (whether or not at a meeting or in writing) of the partners, the limited partners or any of them, including by formulating, moving, proposing, supporting, opposing, speaking to or voting on the resolution; or (f) exercises a power of the limited partner under subsection (5) or has, or exercises, a right to— (i) have access to and inspect the books or records of the partnership or copy any of them; or (ii) examine the state or prospects of the business of the partnership or advise, or consult with, other partners in relation to them; or (g) gives advice to, consults with, or is or acts as an officer, director, security holder, partner, agent, representative, employee of, or independent contractor engaged by, an associate of the (h) is or acts as a lender to, or fiduciary for, an associate of the