1. (a) Except as provided in subsection (b), a person who makes a contribution to a partnership and erroneously but in good faith believes that the person has become a limited partner in the partnership is not a general partner in the partnership, and is not bound by its obligations by reason of making the contribution, receiving distributions from the partnership, or exercising any rights of a limited partner, if, within sixty (60) days after ascertaining the mistake, that person:

   1. (1) in the case of a person who wishes to be a limited partner, causes an appropriate certificate of limited partnership or a certificate of amendment to be executed and filed; or
   2. (2) in the case of a person who wishes to withdraw from the partnership, takes such action as may be necessary to withdraw.

2. (b) A person who makes a contribution under the circumstances described in subsection (a) is liable as a general partner to any third party who transacts business with the partnership before the occurrence of either of the events referred to in subsection (a) if the third party:

   1. (1) actually believed in good faith that the person was a general partner at the time of the transaction;
   2. (2) acted in reasonable reliance on that belief; and
   3. (3) extended credit to the partnership in reasonable reliance on the credit of that person.

As added by P.L.147-1988, SEC.1.