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RFBT > Limited partnership > Flashcards

Limited partnership Flashcards

1
Q

What is limited partnership?

A

Art. 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.

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2
Q

Characteristics of Limited partnership

A
  1. statutory reqs/ formal reqs
  2. GP personally liable
  3. LP - no acts of administration
  4. LP - can ask for return of contribution [3 conditions]
  5. Partnership debts paid out of partnership props + sep props of GPs
  6. no prohibition to engage in business
  7. contribution
  8. party to a suit - LP cannot file?
  9. assignability of interest - substituted limited partner
  10. name in firm name - not included ang LP, otherwise may liability as GP
  11. Effect of DRICI - death retirement insolvency (judicial sya sa LP) civil interdiction insanity
    - GP - dissolved
    - LP - not dissolved because of substituted LP
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3
Q

1844

A

Formal requirements
1. PI / Cert must be signed/sworn to
2. Registered in SEC

If not complied - GP

Mandatory:

  • “Limited”
  • contribution
  • additional contribution
  • substituteed LP

Substantial compliance only

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4
Q

Limited partners’ contribution

A

1845.

Only money and property, no services

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5
Q

Firm name

A

GR: not allowed, otherwise ma liable as GP
XPN:

  • same surname of a GP
  • prior to his entry, existing na ang partner na ka -name
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6
Q

Liability for false statement

A

1847.

Remedy
- cancel OR amend LP
- 1852 promptly renounce his interest

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7
Q

Liability for participating in mgt

A

1848

  • acts of administration - X
  • acts of ownership - LP can participate
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8
Q

Admission of addtl LP

A

1849

Requirements

  • amendment in writing
  • certificate must be signed / sworn to
  • certificate must be filed in SEC
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9
Q

Acts of administration
and acts of alteration

A

Acts of administration - NO
acts of alteration - YES

1850 INSTANCES (no authorit if no written consent)
(1) Do any act in contravention of the certificate;
(2) Do any act which would make it impossible to carry on the ordinary business of the
partnership;
(3) Confess a judgment against the partnership;
(4) Possess partnership property, or assign their rights in specific partnership property, for
other than a partnership purpose;
(5) Admit a person as a general partner; cd i
(6) Admit a person as a limited partner, unless the right so to do is given in the certificate;
(7) Continue the business with partnership property on the death, retirement, insanity, civil
interdiction or insolvency of a general partner, unless the right so to do is given in the certificate.

LPs written consent is required

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10
Q

Rights of Limited partner

A

1851

Unique to LP- last par
6. receive share in profits or other compensation by way of income
7. receive return of contribution

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11
Q

1852

A

Specific, compared to 1847 na broad (false statement)

Remedy: Renounce

Limited partner “erroneously believing promptly renounces his interest”

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12
Q

1853 A person may be a general partner and a limited partner in the same partnership at
the same time,

A

Disadvantages

  • liable separate prop

Advantages
1. return of contribution
2. liable to pay partnership creditor out of separate prop, BUT CAN DEMAND REIMBURSEMENT

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13
Q

Allowable transactions of LP

A

1854
1. Granting loans to partnership
2. transacting business with partnership
3. receive pro-rata share
4. partnership assets w creditors

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14
Q

Prohibited transactions

A

1854
1. receiving or holding collateral security w any partnership prop
2. receiving payment or release from liability if it will prejudice the rights of TPs

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15
Q

Preferred limited partners

A

1855
GR: Equal footing ang LPs
XPn: stipulation

preference – return of contribution, income

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16
Q

Compensation of LPs

A

1856

requirement:
in excess of all liabilities of partnership

note

  • liabilities owed to GPs are not considered as part of partnership total liabilities
17
Q

Effect of DRICI

A

1860

  • GP dissolved
  • LP not dissolved
18
Q

Right of executor on death of LP

A

1861

Executor = Substituted LP

19
Q

Rights of creditors of LP v 1814 v 1811

A

1862 - interest of LP ang chinarge, because of its limited liability
- only separate property

20
Q

Requisite for return of contribution without dissolving partnership

A

1857

  1. ALL liabilities are paid
  2. Consent of all partners
  3. Cer is cancelled or amended
21
Q

Instance for return of contribution

A
  1. dissolution of partnership
  2. date specified
  3. no date specified, but after 6 months notice in writing
22
Q

If LP contributed a property, what will be returned?

A

GR: Cash
XPN: actual contributed
1. stipulation
2. no stipulation, but with consent of all

23
Q

Instances of right to demand dissolution

A
  1. rightfully but unsuccessfully demands the return of contribution
  2. other liabilities of partnership is NOT YET PAID
24
Q

Liability of LP

A

1858

if kulang
– liable sa kulang
– unpaid contribution liable

25
Q

Liability as trustee

A

1858

  1. wrongfully returned
  2. wrongfully paid
26
Q

Waiver or compromise of liabilities

A
  1. consent of all
  2. does not prejudice creditors
27
Q

liability for return of contribution lawfully received

A

STILL LIABLE, kay naa pay wala nabayaran ang tanan liabilities?

28
Q

Assignee v SLP

A
  • only SLP is a partner

how is SLP a partner?

  • all members’ consent
  • empowered by certificate of LP

assignee becomes substituted LP

  • after amendment of cert + SEC registration

liability of assignee and SLP

  • still liable
29
Q

Right of executor

A

in case of death

1861

30
Q

Priority of distribution of assets

A

Art. 1863. In setting accounts after dissolution the liabilities of the partnership shall be
entitled to payment in the following order: aisa dc
(1) Those to creditors, in the order of priority as provided by law, except those to limited
partners on account of their contributions, and to general partners;
(2) Those to limited partners in respect to their share of the profits and other compensation
by way of income on their contributions;
(3) Those to limited partners in respect to the capital of their contributions;
(4) Those to general partners other than for capital and profits;
(5) Those to general partners in respect to profits;

(6) Those to general partners in respect to capital.

Subject to any statement in the certificate or to subsequent agreement, limited partners share in
the partnership assets in respect to their claims for capital, and in respect to their claims for
profits or for compensation by way of income on their contribution respectively, in proportion to
the respective amounts of such claims.

31
Q

Instances of cancellation and amendment

A

1864
1. dissolution
2. all LPs ceased to be as such

Amendment of cert
(1) There is a charge in the name of the partnership or in the amount or character of the
contribution of any limited partner;
(2) A person is substituted as a limited partner; cdasia
(3) An additional limited partner is admitted;
(4) A person is admitted as a general partner;
(5) A general partner retires, dies, becomes insolvent or insane, or is sentenced to civil
interdiction and the business is continued under article 1860;
(6) There is a change in the character of the business of the partnership;
(7) There is a false or erroneous statement in the certificate;
(8) There is a change in the time as stated in the certificate for the dissolution of the
partnership or for the return of a contribution;
(9) A time is fixed for the dissolution of the partnership, or the return of a contribution, no
time having been specified in the certificate, or
(10) The members desire to make a change in any other statement in the certificate in order
that it shall accurately represent the agreement among them.

32
Q

Requirements for amendment and cancellation

A

1865

  1. writing
  2. signed and sworn to
  3. filed in SEC
33
Q

Can a LP sue?

A

1866

GR: NO, cannot sue and be sued
XPN: if LP enforces his rights against partnership

34
Q
A

RFBT (5 decks)

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