Sponsors shall not attempt to pass on to limited partners the general liability imposed on them by law except that the partnership agreement may provide that a general partner (a) may be held harmless and be indemnified by the partnership for any liability or loss suffered by the general partner solely by virtue of his acting as general partner for the partnership in connection with its activities and (b) shall not be liable to the partnership for any loss suffered by it in connection with its activities, provided that if such loss or liability arises out of any action or inaction of the general partner, the general partner must have determined, in good faith, that such course of conduct was in the best interests of the partnership, and such course of conduct must not have constituted gross negligence or gross misconduct by the general partner; and, provided further, that such indemnification or agreement to hold harmless shall only be recoverable out of the assets of the partnership and not from the limited partners.

Note: Authority cited: Section 25610, Corporations Code. Reference: Section 25140, Corporations Code.

History

1. Editorial correction adding Note filed 11-8-82 (Register 82, No. 46).