1828 - 1835 Flashcards
It is the change in the relation of partners caused by any partner ceasing to be associated in the carrying on as distinguished from the winding up of business.
Dissolution
The process of settling business affairs after dissolution.
Winding Up
The point in time after all the partnership affairs have been wound up.
Termination
Remains liable to a third party creditor to the old Partnership.
Withdrawing Partner
Are liable to the debts of the preceding Partnership.
New Partner
Dissolution is caused:
- Without violation of the agreement between the partners
- In contravention of the agreement between the partners, where the circumstances do not permit a dissolution, by the express will of any partner at any time;
- By any event which makes it unlawful for the business of the partnership to be carried on or the members to carry it on in partnership
- When a specific thing, which a partner had promised to contribute to the partnership, perishes before the delivery; in any case by the loss of the thing, when the partner who contributed it having reserved the ownership thereof, has only transferred to the partnership the use or enjoyment of the same; but the partnership shall not be dissolved by the loss of the thing when it occurs after the partnership has acquire the ownership thereof
- By the death of any partner
- By the insolvency of any partner or of the partnership
- By the civil interdiction of any partner
- By degree of court (Art. 1831)
Dissolution is caused WITHOUT violation of the agreement between the partners:
- By the termination of the definite term or particular undertaking specified in the agreement
- By the express will of any partner, who must act in good faith, when no definite term orparticular is specified
- By the express will of all the partners who have not assigned their interests or suffered them to be charged for their separate debts, either before or after the termination of any specified term or particular undertaking
- By the expulsion of any partner from the business bona fide in accordance with such a power conferred by the agreement between the partners
Without court involvement.
Extrajudicial Dissolution
With court involvement.
Juridicial Dissolution
Liabilities are greater than assets.
Insolvency
Deprives the offender during the time of his sentence of the right to manage the property and dispose of such property.
Civil Interdiction
On application by or for a partner the court shall decree a dissolution whenever:
- A partner has been declared insane.
- A partner becomes incapable of performing.
- Guilty of such conduct as tends to affect prejudicially.
- A partner persistently commits a breach of contract.
- The business of the partnership can onlybe carried on at loss.
- Other circumstances render a dissolution equitable.
On application of the purchaser of a partner’s interest:
- After the termination of the specified term or particular undertaking
- At any time if the partnership was a partnership at will
What is the General Rule of Art. 1832?
When the Partnership dissolved, any if the partner cannot bind the Partnership.
What is the Exception of Article 1832?
- With respect to the partners:
a. When the dissolution is NOT by act, insolvency, or death of the partner.
b. When the dissolution is by act, insolvency, or death of the partner. - With respect to persons not partners.
When the dissolution is by the act, death, or insolvency of he partner each is ???
Each Partner is liable for his co-partners for their share of any liabilities.
What is the exception of Art. 1833?
- The dissolution is by act of any partner, the partner acting in the partnership had knowledge of the dissolution.
- The dissolution is by death, or insolvency of a partner, the partner acting in the partnership had knowledge or notice of the death or insolvency.
Art. 1834 | Partnership is Liable:
- Any act appropriate of winding up partnership affairs
- Act of completing unfinished transactions at dissolution
- Any act which would bind the partnership if the dissolution had not take place
a. Had extended credit = no knowledge or notice of dissolution
b. No credit extended = had knowledge of partnership’s existence but no knowledge or notice of dissolution
Art. 1834 | Partnership is NOT Liable
The partnership us in no case bound by any act of a partner after dissolution:
- Partnership dissolved because it was UNLAWFUL
- Partner has become insolvent
- Unauthorized winding up
a. Had extended credit = no knowledge or notice of lack of authority
b. No credit extended = no knowledge or notice of lack of authority, and not been advertised
The liability of a partner shall be satisfied out of partnership assets alone when such partner had been prior to dissolution:
- Unknown as a partner to the person with whom the contract is made
- Unknown and inactive in partnership affairs that the business reputation of the partnership could not be said to have been in any degree due to his connection with it
What is the General Rule in Art. 1835?
The dissolution of the partnership does not of itself discharge the existing liability of any partner.
Partner’s liability is discharged, the ff must agree:
- The partner
- The other partners
- The creditors
Property of a deceased partner
Can still be used to pay the partnership’s debts that were incurred while they were still alive.
However, this is subject to the payment of the deceased partner’s personal debts FIRST.
