Finals Reviewer PARTNERSHIP 1st Sem; 2003 Helen C.

Arevalo 50 Section 3D limited partner, being empowered by the certificate, must give the assignee the right to become a limited partner; 2.) The certificate must be amended; 3.) The certificate as amended must be registered in the SEC. Liability of substituted partner and assignor Substituted limited partner is liable for all the liabilities of his assignor except only those of which he was ignorant at the time he became a limited partner and which could not be ascertained from the certificate. Art. 1860. The retirement, death, insolvency, insanity or civil interdiction of a general partner dissolves the partnership, unless the business is continued by the remaining general partners: 1.) Under a right so to do stated in the certificate, or 2.) With the consent of all members. Effect of retirement, death, etc. of a general partner Dissolution of partnership. If limited partner, does not dissolve partnership unless he is the only limited partner. If the business is continued by the remaining partners under the rights given in the certificate or with the consent of all members, no dissolution but certificate must be amended for limited partners to still avail of limited liability. Art. 1861. On the death of a limited partner his executor or administrator shall have all the rights of a limited partner for the purpose of settling his estate, and such power as the deceased had to constitute his assignee a substituted limited partner. The estate of a deceased limited partner shall liable for all his liabilities as a limited partner. Right of executor on death of a limited partner 1.) All the rights for purposes of settling the affairs of the limited partner; and 2.) The right to constitute the deceased's assignee as substituted limited partner (if deceased was empowered to so assign under certificate). Art. 1862. On due application to a court of competent jurisdiction by any creditor of a limited partner, the court may charge the interest of the indebted limited partner with payment of the unsatisfied amount of such claim, and may appoint a receiver, and make all other orders, directions, and inquiries which the circumstances of the case may require. The interest may be redeemed with the separate property of any general partner, but may not be redeemed with partnership property. The remedies conferred by the first paragraph shall not be deemed exclusive of others which may exist. Nothing in this Chapter shall be held to deprive a limited partner of his statutory exemption. Rights of creditors of limited partner Apply to court for charging order on limited partner's interest in the partnership. Art. 1863. In settling accounts after dissolution the liabilities of the partnership shall be entitled to payment in the following order: 1.) Those to creditors, in the order of priority as provided by law, except those to limited partners on account of their contributions, and to general partners; 2.) Those to limited partners in respect to their share of the profits and other compensation by way of income on their contributions; 3.) Those to limited partners in respect to the capital of their contributions; 4.) Those to general partners other than for capital and profits; 5.) Those to general partners in respect to profits; 6.) Those to general partners in respect to capital. Subject to any statement in the certificate or to subsequent agreement, limited partners share in the partnership assets in respect to their claims for capital, and in respect to their claims for profits or for

compensation by way of income on their contribution respectively, in proportion to the respective amounts of such claims. EMPHASIZE! Dissolution of a limited partnership Causes: 1.) Misconduct of a general partner; 2.) Fraud practiced on the limited partner by the general partner; 3.) Retirement, death, etc. of a general partner; 4.) When all the limited partners ceased to be such; 5.) Expiration of the term for which partnership was to exist; or 6.) Mutual consent of the partners before the expiration of the firm's original term. Suit for dissolution A limited partner may bring a suit for the dissolution of the firm, an accounting, and the appointment of a receiver when the misconduct of a general partner or the insolvency of the firm warrants it. Similarly, creditors of a limited partnership are entitled to such relief where the firm is insolvent. A limited partner may have the partnership dissolved and its affairs wound up when he rightfully but unsuccessfully demands the return of his contribution, or the other liabilities of the partnership, except liabilities to general partners and to limited partners on account of their contributions, have not been paid, or the