Professional Documents
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1843 – A limited partnership Is one formed by two or more persons under the provisions of the
following article, having as members one or more general partners and one or more limited partners.
The limited partners as such shall not be bound by the obligations of the partnership.
Concept
Limited partnership – used to designate joint ventures and partnerships limited only in respect
of the nature and scope of the business to be carried on.
o Confines it to form of business association composed of one or more general partners
and one more special partners, the latter not being personally liable for the partnership
debt.
A limited partner is composed of two classes of partners - general and limited
It is called limited partnership because the liability to third persons of one or more of its
members referred to as limited or special partner is limited to the a fixed amount, their capital
contributions or the amount they have invested in the partnership.
Limited liability is the key characteristic of the limited partnership
Limited Partners – usually those who put money for the business
Mere investors
Their limited liability is an exception to rule that all partners, including industrial partners, are
liable pro rata with all their property for partnership debts (1816)
A limited partner has the same type of liability as the stoke holder in a corporation
1
1851 – a limited partner shall have the same rights as a general partner to:
1. Have the partnership books kept at the principal place of business of the partnership, and at a
reasonable hour to inspect and copy any of them
2. Have on demand true and full information of all things affecting the partnership, and a formal
account of partnership affairs whenever circumstances render it just and reasonable
3. Have dissolution and winding up by decree of court
A limited partner shall have the right to receive a share of the profits or other compensation by way of
income, and to the return of his contribution as provided in 1856 and 1857
General partner is prohibited from engaging in There is no such prohibition in case of limited
business which is of the kind of business in which partner who is considered as a mere contributor
the partnership is engaged, if he is a capitalist to the partnership (see 1866)2
partner (1808) or in any business for himself if he
is an industrial partner (1789)
Retirement, death, insanity, or insolvency of a It does not have the same effect, for executor or
general partner dissolves the partnership (1860 administrator shall have the rights of a limited
1830 1831) partner for the purpose of selling his estate
(1861)
General partnership, general rule, may be Limited partnership is created by the members
constituted in any form by contract or conduct of after compliance with the requirements set for by
the parties the law
Must operate under a firms name Followed by the word “limited”
Dissolution and winding up are governed by
different rules
a limited partnership, unless prohibited by law, may carry on any business which could be
carried on by general partnership
Article 1844. Two or more persons desiring to form a limited partnership shall:
(1) Sign and swear to a certificate, which shall state -
(a) The name of the partnership, adding thereto the word "Limited";
(b) The character of the business;
(c) The location of the principal place of business;
(d) The name and place of residence of each member, general and limited partners
being respectively designated;
(e) The term for which the partnership is to exist;
( f ) The amount of cash and a description of and the agreed value of the other
property contributed by each limited partner;
(g) The additional contributions, if any, to be made by each limited partner and the
times at which or events on the happening of which they shall be made;
(h) The time, if agreed upon, when the contribution of each limited partner is to be
returned;
(i) The share of the profits or the other compensation by way of income which each
limited partner shall receive by reason of his contribution;
( j) The right, if given, of a limited partner to substitute an assignee as contributor in
his place, and the terms and conditions of the substitution;
(k) The right, if given, of the partners to admit additional limited partners;
(l) The right, if given, of one or more of the limited partners to priority over other
limited partners, as to contributions or as to compensation by way of income, and the
nature of such priority;
(m) The right, if given, of the remaining general partner or partners to continue the
business on the death, retirement, civil interdiction, insanity or insolvency of a general
partner; and
(n) The right, if given, of a limited partner to demand and receive property other than
cash in return for his contribution.
2
1866 – A contributor, unless he is a general partner, is not a proper party to proceedings by or against a
partnership, except where the object is to enforce a limited partner’s right against or liability to the partnership
(2) File for record the certificate in the Office of the Securities and Exchange Commission.
A limited partnership is formed if there has been substantial compliance in good faith with the
foregoing requirements.
AMENDMENT/CANCELLATION OF CERTIFICATE
Cancelled:
1. Partnership is dissolved other than by reason of expiry of term
2. All limited partners cease to be such
Amended:
1. Change in name of partnership, amount/character of contribution of ltd. partner
2. Substitution of ltd. partner
3. Admission of additional ltd. partner
4. Admission of gen. partner
5. Death, insolvency, insanity, civil interdiction of gen. partner & business is continued
6. Change in character of business
7. False/erroneous statement in certificate
8. Change in time as stated in the certificate for dissolution of partnership/return of contribution
9. Time is fixed for dissolution of partnership. Return of contribution if no orig. time specified
10. Change in other statement in certificate