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HRS §425E-306

What happens if you wrongly think you are a limited partner

If you invest in a business and honestly but mistakenly believe you became a limited partner, you are not responsible for the business's debts just because you invested or got paid, as long as you fix the mistake. You must either file the correct paperwork or withdraw from the business. If you do not fix it, you may be treated like a general partner.

businesses

The statute, as written — Person erroneously believing self to be a limited partner

(a) Except as otherwise provided in subsection (b), a person that makes an investment in a business enterprise and erroneously but in good faith believes that the person has become a limited partner in the enterprise shall not be liable for the enterprise's obligations by reason of making the investment, receiving distributions from the enterprise, or exercising any rights of or appropriate to a limited partner, if, on ascertaining the mistake, the person: (1) Causes an appropriate certificate of limited partnership, amendment, or certificate of correction to be signed and delivered to the director for filing; or (2) Withdraws from future participation as an owner in the enterprise by signing and delivering to the director for filing a statement of withdrawal under this section. (b) A person that makes an investment described in subsection (a) shall be liable to the same extent as a general partner to any third party that enters into a transaction with the enterprise, believing in good faith that the person is a general partner, before a statement of withdrawal, certificate of limited partnership, amendment, or certificate of correction is filed with the director to show that the person is not a general partner. (c) If a person makes a diligent effort in good faith to comply with subsection (a)(1) and is unable to cause the appropriate certificate of limited partnership, amendment, or certificate of correction to be signed and delivered to the director for filing, the person has the right to withdraw from the enterprise pursuant to subsection (a)(2) even if the withdrawal would otherwise breach an agreement with others that are or have agreed to become co-owners of the enterprise.
Read the official text at capitol.hawaii.gov ↗as published Jan 6, 2026our copy taken Aug 20, 2026

LawTrove is not legal advice. The summary above is a computer-generated restatement — the authoritative text is the official version linked above.