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Partnerships Law > CHAPTER 4: LIMITED PARTNERSHIPS > Flashcards

CHAPTER 4: LIMITED PARTNERSHIPS Flashcards

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1
Q

What is a limited partnership? (1843)

A

one formed by 2 or more persons having as members 1 or more GENERAL partners and 1 or more LIMITED partners. The limited partners shall not be bound by the obligations of the partnership.

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2
Q

1844: the signed and sworn certificate for a limited PSHIP shall state.

A
  1. name + LTD
  2. character
  3. location
  4. name and place of residence of each member, Gen and LTD respectively designated.
  5. term of existence
  6. Contribution: cash amount, description of and the agreed value of the other property contibuted by LTD P.
  7. Add’l contributions, if any, by the limited partner and its date.
  8. the time, if agreed, when the contrib of the limited partners is to be returned.
  9. profit share/ compensation income for each limited partner.
    10-14: RIGHT IF GIVEN:
    10 to a limited partner SUBSTITUTION
  10. ADMISSION of LTD Ps.
  11. Prioritization
  12. Bus continuation of gen partners upon DIRICI of a gen P.
  13. to demand and recieve return of contribution other than cash.
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3
Q

1845: Contribution of a limited partner may be:

A

cash or other property but not services. (he must be a capitalist partner)

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4
Q

1846: The surname of a LTD P shall not appear in the PSHIP name unless: (& sanction)

A
  1. also a surname of a general pship
  2. prior to the time when the LTD P. became such, the business had been carried on under na name in which his surname appeared.
    Sanction: he will be liable as a general partner.
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5
Q

1847: if the certificate as a false statement, whom may the victim hold liable?

A

anyone party to the cert who knew the statement to be false:

  1. at the time he SIGNED it
  2. subsequently, BEFORE the statement was RELIED UPON to enable him to cancel or amend the certificate.
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6
Q

1848: A limited partner shall not become liable as a general partner unless, in addition to the exercise of his rights and power as a limited partner,__

A

he takes part in the CONTROL of the business.

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7
Q

1849: After the formation of the limited partnership, additional limited partners may be admitted. what are the requisites?

A
  1. original cert must be amended.

2. the amended cert must be signed by all the partners including the newly-admitted limited partners.

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8
Q

1850- Restrictions for a general partner:

A
  1. Do any act in contravention of the cert.
  2. Acts which would make it impossible for the bus. to continue
  3. Confess a judgment against the PSHIP.
  4. Possess PSHIP property or assign their rights in specific PSHIP property for other a PSHIP purpose
  5. Admit a person as a general partner
  6. Admit as a person a limited partner, unless the right to do so is given in the cert.
  7. Continue te business on the DIRICI of a general partner, unless right to do is in the cert.
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9
Q

1851: Rights of a limited partner

A
  1. Have the PSHIP BOOKS kept at the principal place of the bus. of the PSHIP.
  2. To INSPECT AND COPY the PSHIP books or any of them at a reasonable hour.
  3. To have on demand on FULL AND TRUE INFORMATION of all things affecting the partnership.
  4. To have on demand a FORMAL ACCOUNT of the partnership affairs whenever circumstances render it just and equitable.
  5. To have DISSOLUTION AND WINDING up by decree of court.
  6. To receive share of the PROFITS OR OTHER COMPENSATION by way of income as stipulated in the certificate.
  7. To receive the RETURN OF HIS CONTRIBUTION provided partnership assests exceed liabilities. .
  8. To loan money to the partnership
  9. To transact business with the partnership.
  10. To receive, unless he is also a general partner, on account of resulting claims against the partnership, with general creditors, A PRO RATA share of the partnership assets.
  11. To agree with other limited partners on the PRIORITY as to the return of their contributions, compensation by way of income, and any other matter.
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10
Q

Complete Obligations/restrictions of a limited partner

A
  1. To be LIABLE AS GP if:
    a. he allows the inclusion of his surname in the partnership name (1846)
    b. he takes part in the control of the bus. (1848)
    c. he contributes service (1845)
    d. he is also a general partner at the same time as stated in the certificate (1853)
  2. NOT TO:
    a. receive or hold as collateral security any partnership property in account of his claims for loan granted to or other business transaction with the PSHIP.
    b. receive from a general partner or the PSHIP on account of such claims any payment, conveyance, or release from liability, if at the time the assets of the partnership are not sufficuent to discharge th partnership liabilities to persons not claiming as general or limited partners (1854)
  3. TO BE LIABLE TO THE PSHIP for
    1. difference between his actual contribution and that stated in the cert.
    2. unpaid contribution which he agreed to make in the future at the time and on the conditions stated in the cert.
  4. TO BE AS HELD AS TRUSTEE.
    a. specific property stated in the cert as contributed by him, but which was not contributed or which has been wrongfully returned.
    b. Money or property wrongfully paid or conveyed on account of his contribution (1858)
  5. 1858: liabille after he has rightfully received the return of his capital contribution.. which is necessary to discharge liabilities to all creditors who extended credit or whose claims arose before such return.
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11
Q

1852: a person who has contributed to the capital of a bus. conducted by a person or partnership erroneously believing that he has become a LTDP in a LTD PSHIP is NOT, by reason of his exercise of the rights of a liimted partner ____ **

A

a GENERAL PARTNER with the person or in the pship carrying on the bus, OR BOUND BY the obligations of such person or pship, provided that on ascertaining the mistake he PROMPTLY renounces his interest in the profits of the bus, or other compensation by way of income.

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12
Q

1853: a person may be a general partner and a limited partner in the same partnership provided that, ___
What are his rights and restrictions ?

A

this fact is stated in the cert.
RIGHTS: all the rights and powers of a general partner. (thus, mngt participation and acts of administration)
LIAB: all the restrictions of a general partner. However, in respect to his contribution, he shall have the all the rights against the other members which he would have had if he were not also a general partner.

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13
Q

1854: Rights and Restriction of LPs to deal with the PSHIP.

A

RIGHTS:
1. Granting a loan to the partnership
2. Transacting business with the partnership
3. and unless he is also a general partner, RECEIVE ON ACCOUNT of resulting claims against the partnership, with general creditors, a PRO RATA share of the assets.
RESTRICTIONS:
Limited partners are prohibited on account of their claims against the partnership from:
1. receiving or holding as a COLLATERAL SECURITY any partnership property.
2. receiving from a general partner or the pship any PAYMENT, CONVENIENCE or RELEASE FROM LIABILITY, if pship assets are not sufficient to discharge pship liabs to outside creditors.

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14
Q

1855: if the firm has several limited partners the members may agree that one or more of the LTD P shall have a priority over other LTD Ps as to____
what is the RQ and EFCT ODWS?

A
  1. return of contributions
  2. compensation by way of income
  3. any other matter (preference in payment of loan)
    RQ: must be stated in the cert.
    ODWS: limited partners shall stand upon equal footing.
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15
Q

1856: a limited partner may receive from the pship the SHARE OF THE PROFITS or the COMPENSATION by way of income stipulated for in the cert; provided that after such payment made, whether from the pship property or that of a GP, _____

A

the pships assets are in EXCESS of all liabilities of the pship (except liab to limited partrner on account of their contributions and to general partners.)

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16
Q

1857: >Limited partner shall not receive from a GP or PSHIP PROPERTY any part of his contribution until (3)
>When a LTDP may rightfully demand the return of his contribution

A
  1. all liabilities of the pship (except liabs to GP and to LP on account of their contributions) have been paid or there remains property of the pship sufficient to pay them.
  2. CONSENT of ALL members is had (Expn: He may rightfully demand)
  3. Cert is cancelled/ammended as to set forth the withdrawal or reduction.
    MAY RIGHTFULLY DEMAND:
  4. on pship DISSOLUTION
  5. date specified in the CERT has arrived
  6. if no time is specified in the cert: after he has given 6 MONTHS NOTICE in writing to all members either for the return of the capital or dissolution of the pship.
17
Q

1857: absence of any statement in the cert to the contrary or the consent of all members, a LTDP, irrespective of the nature of his contribution, has only the right to ___

A

demand and receive CASH in return for his contribution.

18
Q

1857: A limited partner may have the pship dissolved (judicial dissolution) and its affairs wound up when

A
  1. he rightfully but unsuccessfully demands the return of his contribution
  2. the other liabilities have NOT BEEN PAID or pship property is INSUFFICIENT for their payment and the LTDP would otherwise be entitled to the return of his contribution.
19
Q

1858: A limited partner is liable to the partnership: 2

A
  1. DIFFERENCE between his contribution as ACTUALLY made and THAT STATED in the cert as having been made.
  2. any UNPAID CONTRIBUTION which he AGREED in the cert to make in the future at the time and on the condtions stated in the cert.
20
Q

1858: Liabilities of the LP as trustee for the PSHIP

A
  1. SPECIFIC PROPERTY stated in the cert as contributed by him, but which was NOT contributed or which has been WRONGFULLY returned to him.
  2. MONEY OR PROPERTY wrongfully paid or conveyed to him on account of his contribution.
21
Q

1858: The liabilities of the LTDP as regards his contribution and as trustee can be waived or compromised only by

A

CONSENT of all the members & it shall NOT AFFECT the right of a creditor who extended credit or whose claim arose after the filing and before cancellation/amendment of the cetrificate, to enforce such liab.

22
Q

1858: when a contributor has rightfully received the return in whole or in part of his capital contribution, he is nevertheless LIABLE to the partnership for___

A

any SUM, not in excess of such return with interest, which is NECESSARY to DISCHARGE LIABILITIES to all creditors who extended credit or whose claim arose before such return.

23
Q

1859: what is a substituted limited partner?

A

a person ADMITTED TO all the RIGHTS of a limited partner who has DIED or who HAS ASSIGNED his interest in the partnership

24
Q

1859: RQs in order that assignee may become a substituted limited partner

A

1 if all the members CONSENT thereto or if the ASSIGNOR, being thereunto empowered by the certificate, gives the assignee that right.
2. when the certificate is APPROPRIATELY AMENDED in accordance with article 1865.

25
Q

1859: Rights and Liab of the substituted LP:

A
  1. all the RIGHTS and POWERS of the assignor.
  2. all RESTRICTIONS and LIAB of the assignor except those liab of which he was ignorant at the time he became a LP and which could NOT BE ascertained from the certificate
26
Q

1859: Rights and restrictions of assignee who does not become a substituted limited partner

A

RIGHTS: entitled to receive what the assignor partner would otherwise be entitled.

  1. share of profit
  2. Other compensation by way of income
  3. Return of contribution

RESTRICTIONS
1. require any information or accountof
partnerhship transactions
2. inspect pship books.

27
Q

1860: Rule: Death, insanity, retirement, insolvency, civil interdiction of a general partner _____.
EXPNS
What if partner is a Limited partner?

A

DISSOLVES the partnership
EXPN: The bus is continued by the REMAINING GP (1) under a right stated in the cert. (2) with the consent of all members
LP: not dissolved except when there are no more limited partners.

28
Q

1861: On the death of a limited partner his executor or administrator shall _______(2)

A

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 as a SUBSTITUTED LIMITED PARTNER.

29
Q

1862: Charging of a limited partner’s interest on petition by any creditor of a LP, the court may____
Redemption of interest charged- HOW?

A
  1. CHARGE (subject to attachment and execution) the interest of the indebted LP
  2. appoint a receiver
  3. make all other orders
    REDEMPTION:
  4. may be redeemed only with the separate property of a General Partner BUT NOT WITH THE PSHIP PROPERTY.
  5. LP may also avail exemption laws.
30
Q

1863: HEIRARCHY of payment of liab in LTD PSHIP

A
  1. Creditors, in the order of priority as provided for by law.
  2. Limited partners (share of profits other compensation by way of income)
  3. LImited partners (capital contributions)
  4. General Partners other than to capital and profits.
  5. General Ps (profits)
  6. General Ps (capital)
31
Q

1864: A Certificate shall be amended when:

A

CHANGE in:
(1) pship name
(2) amount or character of the contrib of any LP
(7) character of the bus
(9) time as stated in the cert for the dissolution or for the return of contrib.
A PERSON IS:
(3) substituted as LP
(4) admitted as a GP
(5) admitted as additional LP.
> (6) A GP DIRICI and bus is continued
>(8) False or erroneous statement in the cert.
>(10) a time is fixed for the dissolution of the pship / return of contrib
>11. members desire to make a change to accurately represent the agreement among them.

32
Q

1865: the writing to amend a certificate shall:

A
  1. CONFORM to the requirement of article 1844 as far as necessary to set forth clearly the change in the certificate which it is desired to make.
  2. be SIGNED AND SWORN by all members, and an amendment substituting a LP or adding a limited or general partner shall be signed also by the member to be substituted, or added, and when a LP is to be substitued, the amendment shall also be signed by the assining LP.
33
Q

1866; a contributot, unless he is a general partner (=limited partner) is NOT A PROPER PART to proceeding by or against a partnership, except where______

A

the object is to enforce a limited partner’s right against or liability to the partnership.

34
Q

1867- limited PSHIP formed prior to the effectivity of the code, may become a LTD PSHIP under this chapter by complying with the ______.

otherwise it shall _____

A

provisions of article 1844 + 2 RQs

continue to be governed by the provisions of the old law.

35
Q

1864: The certificate shall be cancelled when the partnership is _____.

A

dissolved or all limited partners cease to be such.

36
Q

1861: The estate of a deceased limited partner shall be liable for _____

A

all his liabilities as a limited partner.

37
Q

1859: The substitution of the assignee as a limited partner does not _____

A

release the assignor from liability to the partnership (under articles 1847 and 1858)

38
Q

1854: The receiving of collateral security, or of payment, conveyance, or release in violation of the foreoing provisions is ______.

A

fraud on the creditors of the partnership.

Partnerships Law (6 decks)

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