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BUSLAW-Limited Partnership Part 1
BUSLAW-Limited Partnership Part 1
BUSLAW-Limited Partnership Part 1
Characteristics:
a. formed by compliance with the statutory requirements;
b. one or more general partners control the business and are personally liable to creditors
c. one or more limited partners contribute to the capital and share in the profits but do not
participate in the management of the business and are not personally liable for
partnership obligations beyond the amount of their capital contributions;
d. the ;limited partners may ask for the return of their capital contributions under the
conditions prescribed by law; and
e. the partnership debts are paid out of common fund and the individual properties of the
general partners
Limited Partnership
- one formed by two or more persons under the provisions of Art. 1844, having as members one
ore more general partners and one or more limited partners. The limited partners as such shall
not be bound by the obligations of the partnership
Requisites:
a. signing under oath of the required certificate;
b. filing for record of the certificate in the SEC
Rule:
a. a limited partner is not allowed to contribute industry or services alone
b. an industrial partner can become a general partner in a limited partnership
Art. 1846 – Effect where surname of limited partner appears in partnership name
- the limited partner violating this article is liable, as a general rule, to partnership creditors
without, however, the rights of a general partner. Of course, such limited partner shall not be
liable as a general partner with respect to third persons with actual knowledge that he is only
a limited partner.
The following do not constitute taking part in the control of the business:
a. mere dealing with a customer;
b. mere consultation on one occasion with the general partners
note: participation in the control of the business makes the limited partners liable as a general
partner without getting the latter’s rights
- even after a limited partnership has already been formed, the firm may still admit new limited
partners, provided there is a proper amendment to the certificate
- failure to amend the certificate does not necessarily mean the dissolution of the limited
partnership Art. 1850 – Rights, powers and liabilities of a general partner
a. right of control/unlimited personal liability
b. acts of administration/acts of strict dominion
c. other limitations:
- no power to bind the limited partners beyond the latter’s investment
- no power to act for the firm beyond the purpose and scope of the partnership - no
authority to change the nature of the business without the consent of the limited
partners
· Under the acts enumerated (under Art. 1850), the general partners (even if unanimous) must
still get the written consent of all the limited partners.
· If a general partner in a limited partnership goes abroad, his capacity to bind the firm is
governed by the law of the place where the limited partnership was formed.