Section 26: Provisions on limited partners

26. Provisions on limited partners (1) Subject to subsection (2), a limited partner— (a) shall not participate in the conduct or management of the business of the limited partnership; (b) shall not transact the business of, sign or execute documents for, or otherwise bind, the limited partnership. (2) A limited partner may, subject to the partnership agreement— (a) inspect the books of the limited partnership; (b) with such assistance as may reasonably be required of the general partners, examine and inquire into the state and prospects of the business of the limited partnership and advise the general partners thereon; (c) assign, either absolutely or by way of mortgage, pledge or otherwise, the whole or any part of his partnership interest, and an assignee shall, to the extent of such assignment, become a limited partner with the rights and subject to the obligations of the assignor in accordance with the partnership agreement and this Act in respect of the partnership interest or part thereof assigned; (d) mortgage, pledge or otherwise burden, either absolutely or partially, the whole or any part of his partnership interest, and the mortgagee shall serve written notice at the address of the registered office of the limited partnership of the mortgage, together with a copy thereof signed by the mortgagor and the mortgagee and such fee, if any, as may be provided in the partnership agreement, and the general partner shall register the particulars of the mortgage in a register of mortgages maintained at the registered office. [Issue 4] L15A – 18 Revised Laws of Mauritius (3) Where a limited partner contravenes subsection (1), he shall be liable as if he were a general partner in respect of all debts of the limited partnership. (4) A limited partner shall be liable under subsection (3) only to a person who transacted with the limited partnership with actual knowledge of the participation of the limited partner in the management of the limited partnership and who reasonably believed the limited partner to be a general partner, whether or not such debts have since been assigned or otherwise transferred to another person. (5) A limited partner shall not be deemed to have participated in the conduct or management of the business of a limited partnership within the meaning of this section by reason only of any one or more of the following circumstances— (a) he is a contractor for or an agent or employee of the limited partnership or of a general partner; (b) he acts as an officer or shareholder of a general partner which is a body corporate or an unincorporated body; (c) he consults with and advises a general partner on the business of the limited partnership; (d) he investigates, reviews, approves or is advised on the accounts or affairs of the limited partnership; (e) he exercises any right or power conferred on limited partners under this Act; (f) he acts as surety or guarantor or provides any other form of security for the limited partnership, generally or in respect of specific obligations; (g) he approves or disapproves an amendment to the partnership agreement; (h) he files a declaration under section 19 (2) (d); (i) he brings an action on behalf of the limited partnership under section 74 (6); (j) he serves on a committee of the limited partnership, or appoints, elects or otherwise participates in the choice of a representative or another person to serve on any such committee, or acts as a member of any such committee, directly or thro ally or in respect of specific obligations; (g) he approves or disapproves an amendment to the partnership agreement; (h) he files a declaration under section 19 (2) (d); (i) he brings an action on behalf of the limited partnership under section 74 (6); (j) he serves on a committee of the limited partnership, or appoints, elects or otherwise participates in the choice of a representative or another person to serve on any such committee, or acts as a member of any such committee, directly or through a representative; (k) he votes, consents, approves, withholds or authorises any vote, consent or approval as a limited partner on any of the following matters— (i) the dissolution and winding up of the limited partnership; (ii) the acquisition, sale, transfer, exchange, lease or pledge, mortgage, creation of a security interest, charging of or other dealing with any property or assets by, or of, the limited partnership; L15A – 19 [Issue 4] Limited Partnerships Act (iii) the incurrence, renewal, repayment or discharge of any debt by the limited partnership; (iv) any change in the nature of the business, objectives or policies of the limited partnership or a variation of the partnership agreement; (v) the admission, removal, retirement or resignation of a general partner or limited partner and the continuation of the limited partnership thereafter; (vi) any transaction in which a general partner has an actual or potential conflict of interest with one or more of the limited partners. (6) Where a limited partner exercises any right, power or function which is not set out in subsection (5), he shall not necessarily, by reason of that fact alone, be deemed to have participated in the conduct or management of the business of the limited partnership within the meaning of this section. (7) A limited partnership registered outside Mauritius shall not be considered solely by reason of being a limited partner in a limited partnership, as having established a place of business or as carrying on business in Mauritius within the meaning of Part XXII of the Companies Act.