TITLE IX

Partnership
CHAPTER 1
General Provisions
ARTICLE 1767. By the contract of partnership two or more persons bind themseles to
contrib!te money" property" or ind!stry to a common f!nd" with the intention of diidin# the
profits amon# themseles.
Two or more persons may also form a partnership for the e$ercise of a profession. %166&a'
ARTICLE 176(. The partnership has a )!ridical personality separate and distinct from that of
each of the partners" een in case of fail!re to comply with the re*!irements of article 177+"
first para#raph. %n'
ARTICLE 176,. In determinin# whether a partnership e$ists" these r!les shall apply-
%1' E$cept as proided by article 1(+&" persons who are not partners as to each other are
not partners as to third persons.
%+' Co/ownership or co/possession does not of itself establish a partnership" whether s!ch/
co/owners or co/possessors do or do not share any profits made by the !se of the property.
%0' The sharin# of #ross ret!rns does not of itself establish a partnership" whether or not
the persons sharin# them hae a )oint or common ri#ht or interest in any property from
which the ret!rns are deried.
%1' The receipt by a person of a share of the profits of a b!siness is prima facie eidence
that he is a partner in the b!siness" b!t no s!ch inference shall be drawn if s!ch profits
were receied in payment-
%a' As a debt by installments or otherwise.
%b' As wa#es of an employee or rent to a landlord.
%c' As an ann!ity to a widow or representatie of a deceased partner.
%d' As interest on a loan" tho!#h the amo!nt of payment ary with the profits of the
b!siness.
%e' As the consideration for the sale of a #oodwill of a b!siness or other property by
installments or otherwise. %n'
ARTICLE 1772. A partnership m!st hae a lawf!l ob)ect or p!rpose" and m!st be
established for the common benefit or interest of the partners.
3hen an !nlawf!l partnership is dissoled by a )!dicial decree" the profits shall be
confiscated in faor of the 4tate" witho!t pre)!dice to the proisions of the 5enal Code
#oernin# the confiscation of the instr!ments and effects of a crime. %1666a'
ARTICLE 1771. A partnership may be constit!ted in any form" e$cept where immoable
property or real ri#hts are contrib!ted thereto" in which case a p!blic instr!ment shall be
necessary. %1667a'
ARTICLE 177+. Eery contract of partnership hain# a capital of three tho!sand pesos or
more" in money or property" shall appear in a p!blic instr!ment" which m!st be recorded in
the 6ffice of the 4ec!rities and E$chan#e Commission.
7ail!re to comply with the re*!irements of the precedin# para#raph shall not affect the
liability of the partnership and the members thereof to third persons. %n'
ARTICLE 1770. A contract of partnership is oid" wheneer immoable property is
contrib!ted thereto" if an inentory of said property is not made" si#ned by the parties" and
attached to the p!blic instr!ment. %166(a'
ARTICLE 1771. Any immoable property or an interest therein may be ac*!ired in the
partnership name. Title so ac*!ired can be coneyed only in the partnership name. %n'
ARTICLE 177&. Associations and societies" whose articles are 8ept secret amon# the
members" and wherein any one of the members may contract in his own name with third
persons" shall hae no )!ridical personality" and shall be #oerned by the proisions relatin#
to co/ownership. %166,'
ARTICLE 1776. As to its ob)ect" a partnership is either !niersal or partic!lar.
As re#ards the liability of the partners" a partnership may be #eneral or limited. %1671a'
ARTICLE 1777. A !niersal partnership may refer to all the present property or to all the
profits. %167+'
ARTICLE 177(. A partnership of all present property is that in which the partners contrib!te
all the property which act!ally belon#s to them to a common f!nd" with the intention of
diidin# the same amon# themseles" as well as all the profits which they may ac*!ire
therewith. %1670'
ARTICLE 177,. In a !niersal partnership of all present property" the property which
belon#ed to each of the partners at the time of the constit!tion of the partnership" becomes
the common property of all the partners" as well as all the profits which they may ac*!ire
therewith.
A stip!lation for the common en)oyment of any other profits may also be made. b!t the
property which the partners may ac*!ire s!bse*!ently by inheritance" le#acy" or donation
cannot be incl!ded in s!ch stip!lation" e$cept the fr!its thereof. %1671a'
ARTICLE 17(2. A !niersal partnership of profits comprises all that the partners may
ac*!ire by their ind!stry or wor8 d!rin# the e$istence of the partnership.
9oable or immoable property which each of the partners may possess at the time of the
celebration of the contract shall contin!e to pertain e$cl!siely to each" only the !s!fr!ct
passin# to the partnership. %167&'
ARTICLE 17(1. Articles of !niersal partnership" entered into witho!t specification of its
nat!re" only constit!te a !niersal partnership of profits. %1676'
ARTICLE 17(+. 5ersons who are prohibited from #iin# each other any donation or
adanta#e cannot enter into !niersal partnership. %1677'
ARTICLE 17(0. A partic!lar partnership has for its ob)ect determinate thin#s" their !se or
fr!its" or a specific !nderta8in#" or the e$ercise of a profession or ocation. %167('
CHAPTER 2
Obligations of the Partners
SECTIO 1
Obligations of the Partners A!ong The!selves
ARTICLE 17(1. A partnership be#ins from the moment of the e$ec!tion of the contract"
!nless it is otherwise stip!lated. %167,'
ARTICLE 17(&. 3hen a partnership for a fi$ed term or partic!lar !nderta8in# is contin!ed
after the termination of s!ch term or partic!lar !nderta8in# witho!t any e$press a#reement"
the ri#hts and d!ties of the partners remain the same as they were at s!ch termination" so
far as is consistent with a partnership at will.
A contin!ation of the b!siness by the partners or s!ch of them as habit!ally acted therein
d!rin# the term" witho!t any settlement or li*!idation of the partnership affairs" is prima
facie eidence of a contin!ation of the partnership. %n'
ARTICLE 17(6. Eery partner is a debtor of the partnership for whateer he may hae
promised to contrib!te thereto.
:e shall also be bo!nd for warranty in case of eiction with re#ard to specific and
determinate thin#s which he may hae contrib!ted to the partnership" in the same cases
and in the same manner as the endor is bo!nd with respect to the endee. :e shall also be
liable for the fr!its thereof from the time they sho!ld hae been deliered" witho!t the need
of any demand. %16(1a'
ARTICLE 17(7. 3hen the capital or a part thereof which a partner is bo!nd to contrib!te
consists of #oods" their appraisal m!st be made in the manner prescribed in the contract of
partnership" and in the absence of stip!lation" it shall be made by e$perts chosen by the
partners" and accordin# to c!rrent prices" the s!bse*!ent chan#es thereof bein# for acco!nt
of the partnership. %n'
ARTICLE 17((. A partner who has !nderta8en to contrib!te a s!m of money and fails to do
so becomes a debtor for the interest and dama#es from the time he sho!ld hae complied
with his obli#ation.
The same r!le applies to any amo!nt he may hae ta8en from the partnership coffers" and
his liability shall be#in from the time he conerted the amo!nt to his own !se. %16(+'
ARTICLE 17(,. An ind!strial partner cannot en#a#e in b!siness for himself" !nless the
partnership e$pressly permits him to do so. and if he sho!ld do so" the capitalist partners
may either e$cl!de him from the firm or aail themseles of the benefits which he may hae
obtained in iolation of this proision" with a ri#ht to dama#es in either case. %n'
ARTICLE 17,2. ;nless there is a stip!lation to the contrary" the partners shall contrib!te
e*!al shares to the capital of the partnership. %n'
ARTICLE 17,1. If there is no a#reement to the contrary" in case of an imminent loss of the
b!siness of the partnership" any partner who ref!ses to contrib!te an additional share to the
capital" e$cept an ind!strial partner" to sae the ent!re" shall he obli#ed to sell his interest
to the other partners. %n'
ARTICLE 17,+. If a partner a!thori<ed to mana#e collects a demandable s!m which was
owed to him in his own name" from a person who owed the partnership another s!m also
demandable" the s!m th!s collected shall be applied to the two credits in proportion to their
amo!nts" een tho!#h he may hae #ien a receipt for his own credit only. b!t sho!ld he
hae #ien it for the acco!nt of the partnership credit" the amo!nt shall be f!lly applied to
the latter.
The proisions of this article are !nderstood to be witho!t pre)!dice to the ri#ht #ranted to
the other debtor by article 1+&+" b!t only if the personal credit of the partner sho!ld be
more onero!s to him. %16(1'
ARTICLE 17,0. A partner who has receied" in whole or in part" his share of a partnership
credit" when the other partners hae not collected theirs" shall be obli#ed" if the debtor
sho!ld thereafter become insolent" to brin# to the partnership capital what he receied
een tho!#h he may hae #ien receipt for his share only. %16(&a'
ARTICLE 17,1. Eery partner is responsible to the partnership for dama#es s!ffered by it
thro!#h his fa!lt" and he cannot compensate them with the profits and benefits which he
may hae earned for the partnership by his ind!stry. :oweer" the co!rts may e*!itably
lessen this responsibility if thro!#h the partner=s e$traordinary efforts in other actiities of
the partnership" !n!s!al profits hae been reali<ed. %16(6a'
ARTICLE 17,&. The ris8 of specific and determinate thin#s" which are not f!n#ible"
contrib!ted to the partnership so that only their !se and fr!its may be for the common
benefit" shall be borne by the partner who owns them.
If the thin#s contrib!te are f!n#ible" or cannot be 8ept witho!t deterioratin#" or if they were
contrib!ted to be sold" the ris8 shall be borne by the partnership. In the absence of
stip!lation" the ris8 of the thin#s bro!#ht and appraised in the inentory" shall also be borne
by the partnership" and in s!ch case the claim shall be limited to the al!e at which they
were appraised. %16(7'
ARTICLE 17,6. The partnership shall be responsible to eery partner for the amo!nts he
may hae disb!rsed on behalf of the partnership and for the correspondin# interest" from
the time the e$pense are made. it shall also answer to each partner for the obli#ations he
may hae contracted in #ood faith in the interest of the partnership b!siness" and for ris8s
in conse*!ence of its mana#ement. %16((a'
ARTICLE 17,7. The losses and profits shall be distrib!ted in conformity with the a#reement.
If only the share of each partner in the profits has been a#reed !pon" the share of each in
the losses shall be in the same proportion.
In the absence of stip!lation" the share of each partner in the profits and losses shall be in
proportion to what he may hae contrib!ted" b!t the ind!strial partner shall not be liable for
the losses. As for the profits" the ind!strial partner shall receie s!ch share as may be )!st
and e*!itable !nder the circ!mstances. If besides his serices he has contrib!ted capital" he
shall also receie a share in the profits in proportion to his capital. %16(,a'
ARTICLE 17,(. If the partners hae a#reed to intr!st to a third person the desi#nation of
the share of each one in the profits and losses" s!ch desi#nation may be imp!#ned only
when it is manifestly ine*!itable. In no case may a partner who has be#!n to e$ec!te the
decision of the third person" or who has not imp!#ned the same within a period of three
months from the time he had 8nowled#e thereof" complain of s!ch decision.
The desi#nation of losses and profits cannot be intr!sted to one of the partners. %16,2'
ARTICLE 17,,. A stip!lation which e$cl!des one or more partners from any share in the
profits or losses is oid. %16,1'
ARTICLE 1(22. The partner who has been appointed mana#er in the articles of partnership
may e$ec!te all acts of administration despite the opposition of his partners" !nless he
sho!ld act in bad faith. and his power is irreocable witho!t )!st or lawf!l ca!se. The ote of
the partners representin# the controllin# interest shall be necessary for s!ch reocation of
power.
A power #ranted after the partnership has been constit!ted may be reo8ed at any time.
%16,+a'
ARTICLE 1(21. If two or more partners hae been intr!sted with the mana#ement of the
partnership witho!t specification of their respectie d!ties" or witho!t a stip!lation that one
of them shall not act witho!t the consent of all the others" each one may separately e$ec!te
all acts of administration" b!t if any of them sho!ld oppose the acts of the others" the
decision of the ma)ority shall preail. In case of a tie" the matter shall be decided by the
partners ownin# the controllin# interest. %16,0a'
ARTICLE 1(2+. In case it sho!ld hae been stip!lated that none of the mana#in# partners
shall act witho!t the consent of the others" the conc!rrence of all shall be necessary for the
alidity of the acts" and the absence or disability of any one of them cannot be alle#ed"
!nless there is imminent dan#er of #rae or irreparable in)!ry to the partnership. %16,1'
ARTICLE 1(20. 3hen the manner of mana#ement has not been a#reed !pon" the followin#
r!les shall be obsered-
%1' All the partners shall be considered a#ents and whateer any one of them may do alone
shall bind the partnership" witho!t pre)!dice to the proisions of article 1(21.
%+' >one of the partners may" witho!t the consent of the others" ma8e any important
alteration in the immoable property of the partnership" een if it may be !sef!l to the
partnership. B!t if the ref!sal of consent by the other partners is manifestly pre)!dicial to
the interest of the partnership" the co!rt=s interention may be so!#ht. %16,&a'
ARTICLE 1(21. Eery partner may associate another person with him in his share" b!t the
associate shall not be admitted into the partnership witho!t the consent of all the other
partners" een if the partner hain# an associate sho!ld be a mana#er. %16,6'
ARTICLE 1(2&. The partnership boo8s shall be 8ept" s!b)ect to any a#reement between the
partners" at the principal place of b!siness of the partnership" and eery partner shall at any
reasonable ho!r hae access to and may inspect and copy any of them. %n'
ARTICLE 1(26. 5artners shall render on demand tr!e and f!ll information of all thin#s
affectin# the partnership to any partner or the le#al representatie of any deceased partner
or of any partner !nder le#al disability. %n'
ARTICLE 1(27. Eery partner m!st acco!nt to the partnership for any benefit" and hold as
tr!stee for it any profits deried by him witho!t the consent of the other partners from any
transaction connected with the formation" cond!ct" or li*!idation of the partnership or from
any !se by him of its property. %n'
ARTICLE 1(2(. The capitalist partners cannot en#a#e for their own acco!nt in any operation
which is of the 8ind of b!siness in which the partnership is en#a#ed" !nless there is a
stip!lation to the contrary.
Any capitalist partner iolatin# this prohibition shall brin# to the common f!nds any profits
accr!in# to him from his transactions" and shall personally bear all the losses. %n'
ARTICLE 1(2,. Any partner shall hae the ri#ht to a formal acco!nt as to partnership
affairs-
%1' If he is wron#f!lly e$cl!ded from the partnership b!siness or possession of its property
by his co/partners.
%+' If the ri#ht e$ists !nder the terms of any a#reement.
%0' As proided by article 1(27.
%1' 3heneer other circ!mstances render it )!st and reasonable. %n'
SECTIO 2
Propert" Rights of a Partner
ARTICLE 1#1$% The property ri#hts of a partner are-
%1' :is ri#hts in specific partnership property.
%+' :is interest in the partnership. and
%0' :is ri#ht to participate in the mana#ement %n'
ARTICLE 1#11% A partner is co/owner with his partners of specific partnership property.
The incidents of this co/ownership are s!ch that-
%1' A partner" s!b)ect to the proisions of this Title and to any a#reement between the
partners" has an e*!al ri#ht with his partners to possess specific partnership property for
partnership p!rposes. b!t he has no ri#ht to possess s!ch property for any other p!rpose
witho!t the consent of his partners.
%+' A partner=s ri#ht in specific partnership property is not assi#nable e$cept in connection
with the assi#nment of ri#hts of all the partners in the same property.
%0' A partner=s ri#ht in specific partnership property is not s!b)ect to attachment or
e$ec!tion" e$cept on a claim a#ainst the partnership. 3hen partnership property is attached
for a partnership debt the partners" or any of them" or the representaties of a deceased
partner" cannot claim any ri#ht !nder the homestead or e$emption laws.
%1' A partner=s ri#ht in specific partnership property is not s!b)ect to le#al s!pport !nder
article +,1. %n'
ARTICLE 1#12% A partner=s interest in the partnership is his share of the profits and
s!rpl!s. %n'
ARTICLE 1#1&% A coneyance by a partner of his whole interest in the partnership does not
of itself dissole the partnership" or" as a#ainst the other partners in the absence of
a#reement" entitle the assi#nee" d!rin# the contin!ance of the partnership" to interfere in
the mana#ement or administration of the partnership b!siness or affairs" or to re*!ire any
information or acco!nt of partnership transactions" or to inspect the partnership boo8s. b!t
it merely entitles the assi#nee to receie in accordance with his contract the profits to which
the assi#nin# partner wo!ld otherwise be entitled. :oweer" in case of fra!d in the
mana#ement of the partnership" the assi#nee may aail himself of the !s!al remedies.
In case of a dissol!tion of the partnership" the assi#nee is entitled to receie his assi#nor=s
interest and may re*!ire an acco!nt from the date only of the last acco!nt a#reed to by all
the partners. %n'
ARTICLE 1#1'% 3itho!t pre)!dice to the preferred ri#hts of partnership creditors !nder
article 1(+7" on d!e application to a competent co!rt by any )!d#ment creditor of a partner"
the co!rt which entered the )!d#ment" or any other co!rt" may char#e the interest of the
debtor partner with payment of the !nsatisfied amo!nt of s!ch )!d#ment debt with interest
thereon. and may then or later appoint a receier of his share of the profits" and of any
other money d!e or to fall d!e to him in respect of the partnership" and ma8e all other
orders" directions" acco!nts and in*!iries which the debtor partner mi#ht hae made" or
which the circ!mstances of the case may re*!ire.
The interest char#ed may be redeemed at any time before foreclos!re" or in case of a sale
bein# directed by the co!rt" may be p!rchased witho!t thereby ca!sin# a dissol!tion-
%1' 3ith separate property" by any one or more of the partners. or
%+' 3ith partnership property" by any one or more of the partners with the consent of all
the partners whose interests are not so char#ed or sold.
>othin# in this Title shall be held to deprie a partner of his ri#ht" if any" !nder the
e$emption laws" as re#ards his interest in the partnership. %n'
SECTIO &
Obligations of the Partners (ith Regar) to Thir) Persons
ARTICLE 1(1&. Eery partnership shall operate !nder a firm name" which may or may not
incl!de the name of one or more of the partners.
Those who" not bein# members of the partnership" incl!de their names in the firm name"
shall be s!b)ect to the liability of a partner. %n'
ARTICLE 1(16. All partners" incl!din# ind!strial ones" shall be liable pro rata with all their
property and after all the partnership assets hae been e$ha!sted" for the contracts which
may be entered into in the name and for the acco!nt of the partnership" !nder its si#nat!re
and by a person a!thori<ed to act for the partnership. :oweer" any partner may enter into
a separate obli#ation to perform a partnership contract. %n'
ARTICLE 1(17. Any stip!lation a#ainst the liability laid down in the precedin# article shall be
oid" e$cept as amon# the partners. %n'
ARTICLE 1(1(. Eery partner is an a#ent of the partnership for the p!rpose of its b!siness"
and the act of eery partner" incl!din# the e$ec!tion in the partnership name of any
instr!ment" for apparently carryin# on in the !s!al way the b!siness of the partnership of
which he is a member binds the partnership" !nless the partner so actin# has in fact no
a!thority to act for the partnership in the partic!lar matter" and the person with whom he is
dealin# has 8nowled#e of the fact that he has no s!ch a!thority.
An act of a partner which is not apparently for the carryin# on of b!siness of the partnership
in the !s!al way does not bind the partnership !nless a!thori<ed by the other partners.
E$cept when a!thori<ed by the other partners or !nless they hae abandoned the b!siness"
one or more b!t less than all the partners hae no a!thority to-
%1' Assi#n the partnership property in tr!st for creditors or on the assi#nee=s promise to pay
the debts of the partnership.
%+' ?ispose of the #ood/will of the b!siness.
%0' ?o any other act which wo!ld ma8e it impossible to carry on the ordinary b!siness of a
partnership.
%1' Confess a )!d#ment.
%&' Enter into a compromise concernin# a partnership claim or liability.
%6' 4!bmit a partnership claim or liability to arbitration.
%7' Reno!nce a claim of the partnership.
>o act of a partner in contraention of a restriction on a!thority shall bind the partnership to
persons hain# 8nowled#e of the restriction. %n'
ARTICLE 1(1,. 3here title to real property is in the partnership name" any partner may
coney title to s!ch property by a coneyance e$ec!ted in the partnership name. b!t the
partnership may recoer s!ch property !nless the partner=s act binds the partnership !nder
the proisions of the first para#raph of article 1(1(" or !nless s!ch property has been
coneyed by the #rantee or a person claimin# thro!#h s!ch #rantee to a holder for al!e
witho!t 8nowled#e that the partner" in ma8in# the coneyance" has e$ceeded his a!thority.
3here title to real property is in the name of the partnership" a coneyance e$ec!ted by a
partner" in his own name" passes the e*!itable interest of the partnership" proided the act
is one within the a!thority of the partner !nder the proisions of the first para#raph of
article 1(1(.
3here title to real property is in the name of one or more b!t not all the partners" and the
record does not disclose the ri#ht of the partnership" the partners in whose name the title
stands may coney title to s!ch property" b!t the partnership may recoer s!ch property if
the partners= act does not bind the partnership !nder the proisions of the first para#raph of
article 1(1(" !nless the p!rchaser or his assi#nee" is a holder for al!e" witho!t 8nowled#e.
3here the title to real property is in the name of one or more or all the partners" or in a
third person in tr!st for the partnership" a coneyance e$ec!ted by a partner in the
partnership name" or in his own name" passes the e*!itable interest of the partnership"
proided the act is one within the a!thority of the partner !nder the proisions of the first
para#raph of article 1(1(.
3here the title to real property is in the name of all the partners a coneyance e$ec!ted by
all the partners passes all their ri#hts in s!ch property. %n'
ARTICLE 1(+2. An admission or representation made by any partner concernin# partnership
affairs within the scope of his a!thority in accordance with this Title is eidence a#ainst the
partnership. %n'
ARTICLE 1(+1. >otice to any partner of any matter relatin# to partnership affairs" and the
8nowled#e of the partner actin# in the partic!lar matter" ac*!ired while a partner or then
present to his mind" and the 8nowled#e of any other partner who reasonably co!ld and
sho!ld hae comm!nicated it to the actin# partner" operate as notice to or 8nowled#e of the
partnership" e$cept in the case of fra!d on the partnership" committed by or with the
consent of that partner. %n'
ARTICLE 1(++. 3here" by any wron#f!l act or omission of any partner actin# in the ordinary
co!rse of the b!siness of the partnership or with the a!thority of his co/partners" loss or
in)!ry is ca!sed to any person" not bein# a partner in the partnership" or any penalty is
inc!rred" the partnership is liable therefor to the same e$tent as the partner so actin# or
omittin# to act. %n'
ARTICLE 1(+0. The partnership is bo!nd to ma8e #ood the loss-
%1' 3here one partner actin# within the scope of his apparent a!thority receies money or
property of a third person and misapplies it. and
%+' 3here the partnership in the co!rse of its b!siness receies money or property of a
third person and the money or property so receied is misapplied by any partner while it is
in the c!stody of the partnership. %n'
ARTICLE 1(+1. All partners are liable solidarily with the partnership for eerythin#
char#eable to the partnership !nder articles 1(++ and 1(+0. %n'
ARTICLE 1(+&. 3hen a person" by words spo8en or written or by cond!ct" represents
himself" or consents to another representin# him to anyone" as a partner in an e$istin#
partnership or with one or more persons not act!al partners" he is liable to any s!ch
persons to whom s!ch representation has been made" who has" on the faith of s!ch
representation" #ien credit to the act!al or apparent partnership" and if he has made s!ch
representation or consented to its bein# made in a p!blic manner he is liable to s!ch
person" whether the representation has or has not been made or comm!nicated to s!ch
person so #iin# credit by or with the 8nowled#e of the apparent partner ma8in# the
representation or consentin# to its bein# made-
%1' 3hen a partnership liability res!lts" he is liable as tho!#h he were an act!al member of
the partnership.
%+' 3hen no partnership liability res!lts" he is liable pro rata with the other persons" if any"
so consentin# to the contract or representation as to inc!r liability" otherwise separately.
3hen a person has been th!s represented to be a partner in an e$istin# partnership" or with
one or more persons not act!al partners" he is an a#ent of the persons consentin# to s!ch
representation to bind them to the same e$tent and in the same manner as tho!#h he were
a partner in fact" with respect to persons who rely !pon the representation. 3hen all the
members of the e$istin# partnership consent to the representation" a partnership act or
obli#ation res!lts. b!t in all other cases it is the )oint act or obli#ation of the person actin#
and the persons consentin# to the representation. %n'
ARTICLE 1(+6. A person admitted as a partner into an e$istin# partnership is liable for all
the obli#ations of the partnership arisin# before his admission as tho!#h he had been a
partner when s!ch obli#ations were inc!rred" e$cept that this liability shall be satisfied only
o!t of partnership property" !nless there is a stip!lation to the contrary. %n'
ARTICLE 1(+7. The creditors of the partnership shall be preferred to those of each partner
as re#ards the partnership property. 3itho!t pre)!dice to this ri#ht" the priate creditors of
each partner may as8 the attachment and p!blic sale of the share of the latter in the
partnership assets. %n'
CHAPTER &
*issol+tion an) ,in)ing -p
ARTICLE 1(+(. The dissol!tion of a partnership is the chan#e in the relation of the partners
ca!sed by any partner ceasin# to be associated in the carryin# on as distin#!ished from the
windin# !p of the b!siness. %n'
ARTICLE 1(+,. 6n dissol!tion the partnership is not terminated" b!t contin!es !ntil the
windin# !p of partnership affairs is completed. %n'
ARTICLE 1(02. ?issol!tion is ca!sed-
%1' 3itho!t iolation of the a#reement between the partners-
%a' By the termination of the definite term or partic!lar !nderta8in# specified in the
a#reement.
%b' By the e$press will of any partner" who m!st act in #ood faith" when no definite term or
partic!lar is specified.
%c' By the e$press will of all the partners who hae not assi#ned their interests or s!ffered
them to be char#ed for their separate debts" either before or after the termination of any
specified term or partic!lar !nderta8in#.
%d' By the e$p!lsion of any partner from the b!siness bona fide in accordance with s!ch a
power conferred by the a#reement between the partners.
%+' In contraention of the a#reement between the partners" where the circ!mstances do
not permit a dissol!tion !nder any other proision of this article" by the e$press will of any
partner at any time.
%0' By any eent which ma8es it !nlawf!l for the b!siness of the partnership to be carried
on or for the members to carry it on in partnership.
%1' 3hen a specific thin# which a partner had promised to contrib!te to the partnership"
perishes before the deliery. in any case by the loss of the thin#" when the partner who
contrib!ted it hain# resered the ownership thereof" has only transferred to the
partnership the !se or en)oyment of the same. b!t the partnership shall not be dissoled by
the loss of the thin# when it occ!rs after the partnership has ac*!ired the ownership
thereof.
%&' By the death of any partner.
%6' By the insolency of any partner or of the partnership.
%7' By the ciil interdiction of any partner.
%(' By decree of co!rt !nder the followin# article. %1722a and 1721a'
ARTICLE 1(01. 6n application by or for a partner the co!rt shall decree a dissol!tion
wheneer-
%1' A partner has been declared insane in any )!dicial proceedin# or is shown to be of
!nso!nd mind.
%+' A partner becomes in any other way incapable of performin# his part of the partnership
contract.
%0' A partner has been #!ilty of s!ch cond!ct as tends to affect pre)!dicially the carryin# on
of the b!siness.
%1' A partner wilf!lly or persistently commits a breach of the partnership a#reement" or
otherwise so cond!cts himself in matters relatin# to the partnership b!siness that it is not
reasonably practicable to carry on the b!siness in partnership with him.
%&' The b!siness of the partnership can only be carried on at a loss.
%6' 6ther circ!mstances render a dissol!tion e*!itable.
6n the application of the p!rchaser of a partner=s interest !nder article 1(10 or 1(11-
%1' After the termination of the specified term or partic!lar !nderta8in#.
%+' At any time if the partnership was a partnership at will when the interest was assi#ned
or when the char#in# order was iss!ed. %n'
ARTICLE 1(0+. E$cept so far as may be necessary to wind !p partnership affairs or to
complete transactions be#!n b!t not then finished" dissol!tion terminates all a!thority of
any partner to act for the partnership-
%1' 3ith respect to the partners"
%a' 3hen the dissol!tion is not by the act" insolency or death of a partner. or
%b' 3hen the dissol!tion is by s!ch act" insolency or death of a partner" in cases where
article 1(00 so re*!ires.
%+' 3ith respect to persons not partners" as declared in article 1(01. %n'
ARTICLE 1(00. 3here the dissol!tion is ca!sed by the act" death or insolency of a partner"
each partner is liable to his co/partners for his share of any liability created by any partner
actin# for the partnership as if the partnership had not been dissoled !nless-
%1' The dissol!tion bein# by act of any partner" the partner actin# for the partnership had
8nowled#e of the dissol!tion. or
%+' The dissol!tion bein# by the death or insolency of a partner" the partner actin# for the
partnership had 8nowled#e or notice of the death or insolency.
ARTICLE 1(01. After dissol!tion" a partner can bind the partnership" e$cept as proided in
the third para#raph of this article-
%1' By any act appropriate for windin# !p partnership affairs or completin# transactions
!nfinished at dissol!tion.
%+' By any transaction which wo!ld bind the partnership if dissol!tion had not ta8en place"
proided the other party to the transaction-
%a' :ad e$tended credit to the partnership prior to dissol!tion and had no 8nowled#e or
notice of the dissol!tion. or
%b' Tho!#h he had not so e$tended credit" had neertheless 8nown of the partnership prior
to dissol!tion" and" hain# no 8nowled#e or notice of dissol!tion" the fact of dissol!tion had
not been adertised in a newspaper of #eneral circ!lation in the place %or in each place if
more than one' at which the partnership b!siness was re#!larly carried on.
The liability of a partner !nder the first para#raph" >o. +" shall be satisfied o!t of
partnership assets alone when s!ch partner had been prior to dissol!tion-
%1' ;n8nown as a partner to the person with whom the contract is made. and
%+' 4o far !n8nown and inactie in partnership affairs that the b!siness rep!tation of the
partnership co!ld not be said to hae been in any de#ree d!e to his connection with it.
The partnership is in no case bo!nd by any act of a partner after dissol!tion-
%1' 3here the partnership is dissoled beca!se it is !nlawf!l to carry on the b!siness"
!nless the act is appropriate for windin# !p partnership affairs. or
%+' 3here the partner has become insolent. or
%0' 3here the partner has no a!thority to wind !p partnership affairs. e$cept by a
transaction with one who @
%a' :ad e$tended credit to the partnership prior to dissol!tion and had no 8nowled#e or
notice of his want of a!thority. or
%b' :ad not e$tended credit to the partnership prior to dissol!tion" and" hain# no
8nowled#e or notice of his want of a!thority" the fact of his want of a!thority has not been
adertised in the manner proided for adertisin# the fact of dissol!tion in the first
para#raph" >o. + %b'.
>othin# in this article shall affect the liability !nder article 1(+& of any person who after
dissol!tion represents himself or consents to another representin# him as a partner in a
partnership en#a#ed in carryin# on b!siness. %n'
ARTICLE 1(0&. The dissol!tion of the partnership does not of itself dischar#e the e$istin#
liability of any partner.
A partner is dischar#ed from any e$istin# liability !pon dissol!tion of the partnership by an
a#reement to that effect between himself" the partnership creditor and the person or
partnership contin!in# the b!siness. and s!ch a#reement may be inferred from the co!rse
of dealin# between the creditor hain# 8nowled#e of the dissol!tion and the person or
partnership contin!in# the b!siness.
The indiid!al property of a deceased partner shall be liable for all obli#ations of the
partnership inc!rred while he was a partner" b!t s!b)ect to the prior payment of his
separate debts. %n'
ARTICLE 1(06. ;nless otherwise a#reed" the partners who hae not wron#f!lly dissoled
the partnership or the le#al representatie of the last s!riin# partner" not insolent" has
the ri#ht to wind !p the partnership affairs" proided" howeer" that any partner" his le#al
representatie or his assi#nee" !pon ca!se shown" may obtain windin# !p by the co!rt. %n'
ARTICLE 1(07. 3hen dissol!tion is ca!sed in any way" e$cept in contraention of the
partnership a#reement" each partner" as a#ainst his co/partners and all persons claimin#
thro!#h them in respect of their interests in the partnership" !nless otherwise a#reed" may
hae the partnership property applied to dischar#e its liabilities" and the s!rpl!s applied to
pay in cash the net amo!nt owin# to the respectie partners. B!t if dissol!tion is ca!sed by
e$p!lsion of a partner" bona fide !nder the partnership a#reement and if the e$pelled
partner is dischar#ed from all partnership liabilities" either by payment or a#reement !nder
the second para#raph of article 1(0&" he shall receie in cash only the net amo!nt d!e him
from the partnership.
3hen dissol!tion is ca!sed in contraention of the partnership a#reement the ri#hts of the
partners shall be as follows-
%1' Each partner who has not ca!sed dissol!tion wron#f!lly shall hae-
%a' All the ri#hts specified in the first para#raph of this article" and
%b' The ri#ht" as a#ainst each partner who has ca!sed the dissol!tion wron#f!lly" to
dama#es breach of the a#reement.
%+' The partners who hae not ca!sed the dissol!tion wron#f!lly" if they all desire to
contin!e the b!siness in the same name either by themseles or )ointly with others" may do
so" d!rin# the a#reed term for the partnership and for that p!rpose may possess the
partnership property" proided they sec!re the payment by bond approed by the co!rt" or
pay any partner who has ca!sed the dissol!tion wron#f!lly" the al!e of his interest in the
partnership at the dissol!tion" less any dama#es recoerable !nder the second para#raph"
>o. 1 %b' of this article" and in li8e manner indemnify him a#ainst all present or f!t!re
partnership liabilities.
%0' A partner who has ca!sed the dissol!tion wron#f!lly shall hae-
%a' If the b!siness is not contin!ed !nder the proisions of the second para#raph" >o. +" all
the ri#hts of a partner !nder the first para#raph" s!b)ect to liability for dama#es in the
second para#raph" >o. 1 %b'" of this article.
%b' If the b!siness is contin!ed !nder the second para#raph" >o. +" of this article" the ri#ht
as a#ainst his co/partners and all claimin# thro!#h them in respect of their interests in the
partnership" to hae the al!e of his interest in the partnership" less any dama#e ca!sed to
his co/partners by the dissol!tion" ascertained and paid to him in cash" or the payment
sec!red by a bond approed by the co!rt" and to be released from all e$istin# liabilities of
the partnership. b!t in ascertainin# the al!e of the partner=s interest the al!e of the #ood/
will of the b!siness shall not be considered. %n'
ARTICLE 1(0(. 3here a partnership contract is rescinded on the #ro!nd of the fra!d or
misrepresentation of one of the parties thereto" the party entitled to rescind is" witho!t
pre)!dice to any other ri#ht" entitled-
%1' To a lien on" or ri#ht of retention of" the s!rpl!s of the partnership property after
satisfyin# the partnership liabilities to third persons for any s!m of money paid by him for
the p!rchase of an interest in the partnership and for any capital or adances contrib!ted by
him.
%+' To stand" after all liabilities to third persons hae been satisfied" in the place of the
creditors of the partnership for any payments made by him in respect of the partnership
liabilities. and
%0' To be indemnified by the person #!ilty of the fra!d or ma8in# the representation a#ainst
all debts and liabilities of the partnership. %n'
ARTICLE 1(0,. In settlin# acco!nts between the partners after dissol!tion" the followin#
r!les shall be obsered" s!b)ect to any a#reement to the contrary-
%1' The assets of the partnership are-
%a' The partnership property"
%b' The contrib!tions of the partners necessary for the payment of all the liabilities specified
in >o. +.
%+' The liabilities of the partnership shall ran8 in order of payment" as follows-
%a' Those owin# to creditors other than partners"
%b' Those owin# to partners other than for capital and profits"
%c' Those owin# to partners in respect of capital"
%d' Those owin# to partners in respect of profits.
%0' The assets shall be applied in the order of their declaration in >o. 1 of this article to the
satisfaction of the liabilities.
%1' The partners shall contrib!te" as proided by article 17,7" the amo!nt necessary to
satisfy the liabilities.
%&' An assi#nee for the benefit of creditors or any person appointed by the co!rt shall hae
the ri#ht to enforce the contrib!tions specified in the precedin# n!mber.
%6' Any partner or his le#al representatie shall hae the ri#ht to enforce the contrib!tions
specified in >o. 1" to the e$tent of the amo!nt which he has paid in e$cess of his share of
the liability.
%7' The indiid!al property of a deceased partner shall be liable for the contrib!tions
specified in >o. 1.
%(' 3hen partnership property and the indiid!al properties of the partners are in
possession of a co!rt for distrib!tion" partnership creditors shall hae priority on partnership
property and separate creditors on indiid!al property" sain# the ri#hts of lien or sec!red
creditors.
%,' 3here a partner has become insolent or his estate is insolent" the claims a#ainst his
separate property shall ran8 in the followin# order-
%a' Those owin# to separate creditors.
%b' Those owin# to partnership creditors.
%c' Those owin# to partners by way of contrib!tion. %n'
ARTICLE 1(12. In the followin# cases creditors of the dissoled partnership are also
creditors of the person or partnership contin!in# the b!siness-
%1' 3hen any new partner is admitted into an e$istin# partnership" or when any partner
retires and assi#ns %or the representatie of the deceased partner assi#ns' his ri#hts in
partnership property to two or more of the partners" or to one or more of the partners and
one or more third persons" if the b!siness is contin!ed witho!t li*!idation of the partnership
affairs.
%+' 3hen all b!t one partner retire and assi#n %or the representatie of a deceased partner
assi#ns' their ri#hts in partnership property to the remainin# partner" who contin!es the
b!siness witho!t li*!idation of partnership affairs" either alone or with others.
%0' 3hen any partner retires or dies and the b!siness of the dissoled partnership is
contin!ed as set forth in >os. 1 and + of this article" with the consent of the retired partners
or the representatie of the deceased partner" b!t witho!t any assi#nment of his ri#ht in
partnership property.
%1' 3hen all the partners or their representaties assi#n their ri#hts in partnership property
to one or more third persons who promise to pay the debts and who contin!e the b!siness
of the dissoled partnership.
%&' 3hen any partner wron#f!lly ca!ses a dissol!tion and the remainin# partners contin!e
the b!siness !nder the proisions of article 1(07" second para#raph" >o. +" either alone or
with others" and witho!t li*!idation of the partnership affairs.
%6' 3hen a partner is e$pelled and the remainin# partners contin!e the b!siness either
alone or with others witho!t li*!idation of the partnership affairs.
The liability of a third person becomin# a partner in the partnership contin!in# the b!siness"
!nder this article" to the creditors of the dissoled partnership shall be satisfied o!t of the
partnership property only" !nless there is a stip!lation to the contrary.
3hen the b!siness of a partnership after dissol!tion is contin!ed !nder any conditions set
forth in this article the creditors of the dissoled partnership" as a#ainst the separate
creditors of the retirin# or deceased partner or the representatie of the deceased partner"
hae a prior ri#ht to any claim of the retired partner or the representatie of the deceased
partner a#ainst the person or partnership contin!in# the b!siness" on acco!nt of the retired
or deceased partner=s interest in the dissoled partnership or on acco!nt of any
consideration promised for s!ch interest or for his ri#ht in partnership property.
>othin# in this article shall be held to modify any ri#ht of creditors to set aside any
assi#nment on the #ro!nd of fra!d.
The !se by the person or partnership contin!in# the b!siness of the partnership name" or
the name of a deceased partner as part thereof" shall not of itself ma8e the indiid!al
property of the deceased partner liable for any debts contracted by s!ch person or
partnership. %n'
ARTICLE 1(11. 3hen any partner retires or dies" and the b!siness is contin!ed !nder any of
the conditions set forth in the precedin# article" or in article 1(07" second para#raph" >o. +"
witho!t any settlement of acco!nts as between him or his estate and the person or
partnership contin!in# the b!siness" !nless otherwise a#reed" he or his le#al representatie
as a#ainst s!ch person or partnership may hae the al!e of his interest at the date of
dissol!tion ascertained" and shall receie as an ordinary creditor an amo!nt e*!al to the
al!e of his interest in the dissoled partnership with interest" or" at his option or at the
option of his le#al representatie" in lie! of interest" the profits attrib!table to the !se of his
ri#ht in the property of the dissoled partnership. proided that the creditors of the
dissoled partnership as a#ainst the separate creditors" or the representatie of the retired
or deceased partner" shall hae priority on any claim arisin# !nder this article" as proided
article 1(12" third para#raph. %n'
ARTICLE 1(1+. The ri#ht to an acco!nt of his interest shall accr!e to any partner" or his
le#al representatie as a#ainst the windin# !p partners or the s!riin# partners or the
person or partnership contin!in# the b!siness" at the date of dissol!tion" in the absence of
any a#reement to the contrary. %n'
CHAPTER '
Li!ite) Partnership .n/
ARTICLE 1(10. A limited partnership is one formed by two or more persons !nder the
proisions of the followin# article" hain# as members one or more #eneral partners and one
or more limited partners. The limited partners as s!ch shall not be bo!nd by the obli#ations
of the partnership.
ARTICLE 1(11. Two or more persons desirin# to form a limited partnership shall-
%1' 4i#n and swear to a certificate" which shall state @
%a' The name of the partnership" addin# thereto the word ALimitedA.
%b' The character of the b!siness.
%c' The location of the principal place of b!siness.
%d' The name and place of residence of each member" #eneral and limited partners bein#
respectiely desi#nated.
%e' The term for which the partnership is to e$ist.
% f ' The amo!nt of cash and a description of and the a#reed al!e of the other property
contrib!ted by each limited partner.
%#' The additional contrib!tions" if any" to be made by each limited partner and the times at
which or eents on the happenin# of which they shall be made.
%h' The time" if a#reed !pon" when the contrib!tion of each limited partner is to be
ret!rned.
%i' The share of the profits or the other compensation by way of income which each limited
partner shall receie by reason of his contrib!tion.
% )' The ri#ht" if #ien" of a limited partner to s!bstit!te an assi#nee as contrib!tor in his
place" and the terms and conditions of the s!bstit!tion.
%8' The ri#ht" if #ien" of the partners to admit additional limited partners.
%l' The ri#ht" if #ien" of one or more of the limited partners to priority oer other limited
partners" as to contrib!tions or as to compensation by way of income" and the nat!re of
s!ch priority.
%m' The ri#ht" if #ien" of the remainin# #eneral partner or partners to contin!e the
b!siness on the death" retirement" ciil interdiction" insanity or insolency of a #eneral
partner. and
%n' The ri#ht" if #ien" of a limited partner to demand and receie property other than cash
in ret!rn for his contrib!tion.
%+' 7ile for record the certificate in the 6ffice of the 4ec!rities and E$chan#e Commission.
A limited partnership is formed if there has been s!bstantial compliance in #ood faith with
the fore#oin# re*!irements.
ARTICLE 1(1&. The contrib!tions of a limited partner may be cash or property" b!t not
serices.
ARTICLE 1(16. The s!rname of a limited partner shall not appear in the partnership name
!nless-
%1' It is also the s!rname of a #eneral partner" or
%+' 5rior to the time when the limited partner became s!ch" the b!siness has been carried
on !nder a name in which his s!rname appeared.
A limited partner whose s!rname appears in a partnership name contrary to the proisions
of the first para#raph is liable as a #eneral partner to partnership creditors who e$tend
credit to the partnership witho!t act!al 8nowled#e that he is not a #eneral partner.
ARTICLE 1(17. If the certificate contains a false statement" one who s!ffers loss by reliance
on s!ch statement may hold liable any party to the certificate who 8new the statement to
be false-
%1' At the time he si#ned the certificate" or
%+' 4!bse*!ently" b!t within a s!fficient time before the statement was relied !pon to
enable him to cancel or amend the certificate" or to file a petition for its cancellation or
amendment as proided in article 1(6&.
ARTICLE 1(1(. A limited partner shall not become liable as a #eneral partner !nless" in
addition to the e$ercise of his ri#hts and powers as a limited partner" he ta8es part in the
control of the b!siness.
ARTICLE 1(1,. After the formation of a lifted partnership" additional limited partners may
be admitted !pon filin# an amendment to the ori#inal certificate in accordance with the
re*!irements of article 1(6&.
ARTICLE 1(&2. A #eneral partner shall hae all the ri#hts and powers and be s!b)ect to all
the restrictions and liabilities of a partner in a partnership witho!t limited partners.
:oweer" witho!t the written consent or ratification of the specific act by all the limited
partners" a #eneral partner or all of the #eneral partners hae no a!thority to-
%1' ?o any act in contraention of the certificate.
%+' ?o any act which wo!ld ma8e it impossible to carry on the ordinary b!siness of the
partnership.
%0' Confess a )!d#ment a#ainst the partnership.
%1' 5ossess partnership property" or assi#n their ri#hts in specific partnership property" for
other than a partnership p!rpose.
%&' Admit a person as a #eneral partner.
%6' Admit a person as a limited partner" !nless the ri#ht so to do is #ien in the certificate.
%7' Contin!e the b!siness with partnership property on the death" retirement" insanity" ciil
interdiction or insolency of a #eneral partner" !nless the ri#ht so to do is #ien in the
certificate.
ARTICLE 1(&1. A limited partner shall hae the same ri#hts as a #eneral partner to-
%1' :ae the partnership boo8s 8ept at the principal place of b!siness of the partnership"
and at a reasonable ho!r to inspect and copy any of them.
%+' :ae on demand tr!e and f!ll information of all thin#s affectin# the partnership" and a
formal acco!nt of partnership affairs wheneer circ!mstances render it )!st and reasonable.
and
%0' :ae dissol!tion and windin# !p by decree of co!rt.
A limited partner shall hae the ri#ht to receie a share of the profits or other compensation
by way of income" and to the ret!rn of his contrib!tion as proided in articles 1(&6 and
1(&7.
ARTICLE 1(&+. 3itho!t pre)!dice to the proisions of article 1(1(" a person who has
contrib!ted to the capital of a b!siness cond!cted by a person or partnership erroneo!sly
beliein# that he has become a limited partner in a limited partnership" is not" by reason of
his e$ercise of the ri#hts of a limited partner" a #eneral partner with the person or in the
partnership carryin# on the b!siness" or bo!nd by the obli#ations of s!ch person or
partnership" proided that on ascertainin# the mista8e he promptly reno!nces his interest in
the profits of the b!siness" or other compensation by way of income.
ARTICLE 1(&0. A person may be a #eneral partner and a limited partner in the same
partnership at the same time" proided that this fact shall be stated in the certificate
proided for in article 1(11.
A person who is a #eneral" and also at the same time a limited partner" shall hae all the
ri#hts and powers and be s!b)ect to all the restrictions of a #eneral partner. e$cept that" in
respect to his contrib!tion" he shall hae the ri#hts a#ainst the other members which he
wo!ld hae had if he were not also a #eneral partner.
ARTICLE 1(&1. A limited partner also may loan money to and transact other b!siness with
the partnership" and" !nless he is also a #eneral partner" receie on acco!nt of res!ltin#
claims a#ainst the partnership" with #eneral creditors" a pro rata share of the assets. >o
limited partner shall in respect to any s!ch claim-
%1' Receie or hold as collateral sec!rity any partnership property" or
%+' Receie from a #eneral partner or the partnership any payment" coneyance" or release
from liability if at the time the assets of the partnership are not s!fficient to dischar#e
partnership liabilities to persons not claimin# as #eneral or limited partners.
The receiin# of collateral sec!rity" or payment" coneyance" or release in iolation of the
fore#oin# proisions is a fra!d on the creditors of the partnership.
ARTICLE 1(&&. 3here there are seeral limited partners the members may a#ree that one
or more of the limited partners shall hae a priority oer other limited partners as to the
ret!rn of their contrib!tions" as to their compensation by way of income" or as to any other
matter. If s!ch an a#reement is made it shall be stated in the certificate" and in the absence
of s!ch a statement all the limited partners shall stand !pon e*!al footin#.
ARTICLE 1(&6. A limited partner may receie from the partnership the share of the profits
or the compensation by way of income stip!lated for in the certificate. proided" that after
s!ch payment is made" whether from property of the partnership or that of a #eneral
partner" the partnership assets are in e$cess of all liabilities of the partnership e$cept
liabilities to limited partners on acco!nt of their contrib!tions and to #eneral partners.
ARTICLE 1(&7. A limited partner shall not receie from a #eneral partner or o!t of
partnership property any part of his contrib!tions !ntil-
%1' All liabilities of the partnership" e$cept liabilities to #eneral partners and to limited
partners on acco!nt of their contrib!tions" hae been paid or there remains property of the
partnership s!fficient to pay them.
%+' The consent of all members is had" !nless the ret!rn of the contrib!tion may be
ri#htf!lly demanded !nder the proisions of the second para#raph. and
%0' The certificate is cancelled or so amended as to set forth the withdrawal or red!ction.
4!b)ect to the proisions of the first para#raph" a limited partner may ri#htf!lly demand the
ret!rn of his contrib!tion-
%1' 6n the dissol!tion of a partnership. or
%+' 3hen the date specified in the certificate for its ret!rn has arried" or
%0' After he has si$ months= notice in writin# to all other members" if no time is specified in
the certificate" either for the ret!rn of the contrib!tion or for the dissol!tion of the
partnership.
In the absence of any statement in the certificate to the contrary or the consent of all
members" a limited partner" irrespectie of the nat!re of his contrib!tion" has only the ri#ht
to demand and receie cash in ret!rn for his contrib!tion.
A limited partner may hae the partnership dissoled and its affairs wo!nd !p when-
%1' :e ri#htf!lly b!t !ns!ccessf!lly demands the ret!rn of his contrib!tion" or
%+' The other liabilities of the partnership hae not been paid" or the partnership property is
ins!fficient for their payment as re*!ired by the first para#raph" >o. 1" and the limited
partner wo!ld otherwise be entitled to the ret!rn of his contrib!tion.
ARTICLE 1(&(. A limited partner is liable to the partnership-
%1' 7or the difference between his contrib!tion as act!ally made and that stated in the
certificate as hain# been made" and
%+' 7or any !npaid contrib!tion which he a#reed in the certificate to ma8e in the f!t!re at
the time and on the conditions stated in the certificate.
A limited partner holds as tr!stee for the partnership-
%1' 4pecific property stated in the certificate as contrib!ted by him" b!t which was not
contrib!ted or which has been wron#f!lly ret!rned" and
%+' 9oney or other property wron#f!lly paid or coneyed to him on acco!nt of his
contrib!tion.
The liabilities of a limited partner as set forth in this article can be waied or compromised
only by the consent of all members. b!t a waier or compromise shall not affect the ri#ht of
a creditor of a partnership who e$tended credit or whose claim arose after the filin# and
before a cancellation or amendment of the certificate" to enforce s!ch liabilities.
3hen a contrib!tor has ri#htf!lly receied the ret!rn in whole or in part of the capital of his
contrib!tion" he is neertheless liable to the partnership for any s!m" not in e$cess of s!ch
ret!rn with interest" necessary to dischar#e its liabilities to all creditors who e$tended credit
or whose claims arose before s!ch ret!rn.
ARTICLE 1(&,. A limited partner=s interest is assi#nable.
A s!bstit!ted limited partner is a person admitted to all the ri#hts of a limited partner who
has died or has assi#ned his interest in a partnership.
An assi#nee" who does not become a s!bstit!ted limited partner" has no ri#ht to re*!ire any
information or acco!nt of the partnership transactions or to inspect the partnership boo8s.
he is only entitled to receie the share of the profits or other compensation by way of
income" or the ret!rn of his contrib!tion" to which his assi#nor wo!ld otherwise be entitled.
An assi#nee shall hae the ri#ht to become a s!bstit!ted limited partner if all the members
consent thereto or if the assi#nor" bein# there!nto empowered by the certificate" #ies the
assi#nee that ri#ht.
An assi#nee becomes a s!bstit!ted limited partner when the certificate is appropriately
amended in accordance with article 1(6&.
The s!bstit!ted limited partner has all the ri#hts and powers" and is s!b)ect to all the
restrictions and liabilities of his assi#nor" e$cept those liabilities of which he was i#norant at
the time he became a limited partner and which co!ld not be ascertained from the
certificate.
The s!bstit!tion of the assi#nee as a limited partner does not release the assi#nor from
liability to the partnership !nder articles 1(17 and 1(&(.
ARTICLE 1(62. The retirement" death" insolency" insanity or ciil interdiction of a #eneral
partner dissoles the partnership" !nless the b!siness is contin!ed by the remainin# #eneral
partners-
%1' ;nder a ri#ht so to do stated in the certificate" or
%+' 3ith the consent of all members.
ARTICLE 1(61. 6n the death of a limited partner his e$ec!tor or administrator shall hae all
the ri#hts of a limited partner for the p!rpose of settin# his estate" and s!ch power as the
deceased had to constit!te his assi#nee a s!bstit!ted limited partner.
The estate of a deceased limited partner shall be liable for all his liabilities as a limited
partner.
ARTICLE 1(6+. 6n d!e application to a co!rt of competent )!risdiction by any creditor of a
limited partner" the co!rt may char#e the interest of the indebted limited partner with
payment of the !nsatisfied amo!nt of s!ch claim" and may appoint a receier" and ma8e all
other orders" directions and in*!iries which the circ!mstances of the case may re*!ire.
The interest may be redeemed with the separate property of any #eneral partner" b!t may
not be redeemed with partnership property.
The remedies conferred by the first para#raph shall not be deemed e$cl!sie of others
which may e$ist.
>othin# in this Chapter shall be held to deprie a limited partner of his stat!tory e$emption.
ARTICLE 1(60. In settlin# acco!nts after dissol!tion the liabilities of the partnership shall be
entitled to payment in the followin# order-
%1' Those to creditors" in the order of priority as proided by law" e$cept those to limited
partners on acco!nt of their contrib!tions" and to #eneral partners.
%+' Those to limited partners in respect to their share of the profits and other compensation
by way of income on their contrib!tions.
%0' Those to limited partners in respect to the capital of their contrib!tions.
%1' Those to #eneral partners other than for capital and profits.
%&' Those to #eneral partners in respect to profits.
%6' Those to #eneral partners in respect to capital.
4!b)ect to any statement in the certificate or to s!bse*!ent a#reement" limited partners
share in the partnership assets in respect to their claims for capital" and in respect to their
claims for profits or for compensation by way of income on their contrib!tion respectiely" in
proportion to the respectie amo!nts of s!ch claims.
ARTICLE 1(61. The certificate shall be cancelled when the partnership is dissoled or all
limited partners cease to be s!ch.
A certificate shall be amended when-
%1' There is a chan#e in the name of the partnership or in the amo!nt or character of the
contrib!tion of any limited partner.
%+' A person is s!bstit!ted as a limited partner.
%0' An additional limited partner is admitted.
%1' A person is admitted as a #eneral partner.
%&' A #eneral partner retires" dies" becomes insolent or insane" or is sentenced to ciil
interdiction and the b!siness is contin!ed !nder article 1(62.
%6' There is a chan#e in the character of the b!siness of the partnership.
%7' There is a false or erroneo!s statement in the certificate.
%(' There is a chan#e in the time as stated in the certificate for the dissol!tion of the
partnership or for the ret!rn of a contrib!tion.
%,' A time is fi$ed for the dissol!tion of the partnership" or the ret!rn of a contrib!tion" no
time hain# been specified in the certificate" or
%12' The members desire to ma8e a chan#e in any other statement in the certificate in
order that it shall acc!rately represent the a#reement amon# them.
ARTICLE 1(6&. The writin# to amend a certificate shall-
%1' Conform to the re*!irements of article 1(11 as far as necessary to set forth clearly the
chan#e in the certificate which it is desired to ma8e. and
%+' Be si#ned and sworn to by all members" and an amendment s!bstit!tin# a limited
partner or addin# a limited or #eneral partner shall be si#ned also by the member to be
s!bstit!ted or added" and when a limited partner is to be s!bstit!ted" the amendment shall
also be si#ned by the assi#nin# limited partner.
The writin# to cancel a certificate shall be si#ned by all members.
A person desirin# the cancellation or amendment of a certificate" if any person desi#nated in
the first and second para#raphs as a person who m!st e$ec!te the writin# ref!ses to do so"
may petition the co!rt to order a cancellation or amendment thereof.
If the co!rt finds that the petitioner has a ri#ht to hae the writin# e$ec!ted by a person
who ref!ses to do so" it shall order the 6ffice of the 4ec!rities and E$chan#e Commission
where the certificate is recorded" to record the cancellation or amendment of the certificate.
and when the certificate is to be amended" the co!rt shall also ca!se to be filed for record in
said office a certified copy of its decree settin# forth the amendment.
A certificate is amended or cancelled when there is filed for record in the 6ffice of the
4ec!rities and E$chan#e Commission" where the certificate is recorded-
%1' A writin# in accordance with the proisions of the first or second para#raph" or
%+' A certified copy of the order of the co!rt in accordance with the proisions of the fo!rth
para#raph.
%0' After the certificate is d!ly amended in accordance with this article" the amended
certified shall thereafter be for all p!rposes the certificate proided for in this Chapter.
ARTICLE 1(66. A contrib!tor" !nless he is a #eneral partner" is not a proper party to
proceedin#s by or a#ainst a partnership" e$cept where the ob)ect is to enforce a limited
partner=s ri#ht a#ainst or liability to the partnership.
ARTICLE 1(67. A limited partnership formed !nder the law prior to the effectiity of this
Code" may become a limited partnership !nder this Chapter by complyin# with the
proisions of article 1(11" proided the certificate sets forth-
%1' The amo!nt of the ori#inal contrib!tion of each limited partner" and the time when the
contrib!tion was made. and
%+' That the property of the partnership e$ceeds the amo!nt s!fficient to dischar#e its
liabilities to persons not claimin# as #eneral or limited partners by an amo!nt #reater than
the s!m of the contrib!tions of its limited partners.
A limited partnership formed !nder the law prior to the effectiity of this Code" !ntil or
!nless it becomes a limited partnership !nder this Chapter" shall contin!e to be #oerned by
the proisions of the old law.