Chapter 2: lesson 2 Flashcards
Right to Associate Another in Share (Article 1804)
Every partner has the right to associate another person with him in his share of the profits coming from the partnership even without the consent of the partners.
This person is called a sub partner - he is not a partner and shall not become such unless there is unanimous consent of all the other partners, even if the partner associating with him is a managing partner.
Right to Inspect Partnership Books
The partnership books are presumed to contain the true and correct record of the accounts of the partnership and are normally in the custody of the managing partner or partners, or in the absence of the managing partner or partners, the active partners.
Article 1805
The partnership books shall be kept at the place agreed upon by the partners and when there is no such agreement, at the principal place of business of the partnership.
Right to Formal Account
As a general rule, the right to a formal account of partnership affairs accrues only when the partnership is dissolved.
Article 1809
However, formal accounting may be demanded by any partner before dissolution in the following instances:
dami na naman shuta
(Property Rights of Partners) Article 1810
the property rights of each partner are the following: his rights in specific partnership property, his interest in the partnership, and his right to participate in the management.
Ownership of Certain Properties
The ownership of property used by the partnership depends on the intention of the parties, which may be drawn from an express agreement or their conduct - a partner may allow the property to be used by the partnership without transfer of partnership, contributing only the use or enjoyment thereof, and he may also hold title to partnership property, without acquiring its ownership.
Rights in a Specific Property
The partners have equal rights to possess partnership property for partnership purposes. If the partner is excluded, he may ask for a formal accounting or dissolution by judicial decree.
Article 1811
The partner’s right in such property is not assignable, except when all the partners assign their rights in the same property.
Article 1813
an assignment by a partner of his whole interest in the partnership does not dissolve the partnership. It also does not entitle the assignee to interfere in the management of the partnership business, require information or account of the partnership, or inspect the partnership books.
(Interest in Partnership) Article 1812
the partner’s interest in the partnership consists of his share in the profits during the existence of the partnership and his share in the surplus after its dissolution. The partner’s interest is his share of the residue or the balance after a formal account has been taken and the value of a partner’s share cannot be determined until liquidation of a business had taken place and all the obligations of the partnership has settled.
With regards to partnership property, partnership creditors are preferred over the personal creditors of the partners.
Article 1814
on due application by any judgement creditor of a partner, a competent court may charge the interest of the partner for the satisfaction of the judgement debt.
Right to Participate in Management
Management of the partnership is primarily governed by the agreement of the partners in the articles of partnership. It may be agreed that the partnership is managed all by the partners or by a number of partners appointed as managers in the articles of partnership or after the constitution of the partnership.
Article 1800
provides that if the managing partner is appointed in the articles of partnership, his powers may be revoked when there is just of lawful cause of the revocation and by the partners representing the controlling interest. If he is appointed after the constitution of the partnership, his powers may be revoked at any time and for any cause.
