AS TO:
PARTNER
PROFITS
RIGHT TO THE INSPECTION AND
ACCOUNTING OF BOOKS
RIGHT TO TRANSACT BUSINESS IN
PARTNERSHIP
RIGHT TO INTRODUCE NEW PARTNER
RIGHT TO INDEMNITY AGAINST BUSINESS
LIABILITY
RIGHT TO COMPENSATION
RIGHTS ON SPECIFIC PROPERTY Article
1811-1812
FONACIER/GAGAJENA/GAISER
GENERAL LIMITED PARTNER ASSIGNEE
A general partner is entitled to an equal share of Entitled to the profit proportion to his Entitled to the profits of the partner who gave
the partnership's profits, unless otherwise contribution. him the assignment.
specified by your partnership agreement.
Having investments on the general partnership They cannot directly form their own opinion
business, each partner has the right to inspect about the company’s affairs, nor can they
and have a copy of the books and records. If inspect the company’s business books and
there are anomalies found in the books of records. Instead, they are only entitled to a copy
accounts and even in the records involving the of the company’s annual financial statements,
partnership, each one has the right to raise the accuracy of which they may check against
concerns or confront any partner involved in the the business books.
anomalous activities.
General partners has so-called “agency Another legal right of limited partners is the
powers,” which means any partner can bind the capacity to transact business with the limited
entire business to a contract or business deal. liability partnership. This transaction varies. An
example of such is lending money to the LLP
business whether as a secured or unsecured
creditor.
The partnership shall indemnify or protect every
partner for whatever expenses incurred on
behalf of the partnership. If a partner pays more
than his or proportionate share of the debts of
the partnership, he or she has the right to
reimbursement from other partners.
Often, general partners are paid for their Profits or losses are shared as agreed in the
management work on a sliding scale, receiving a certificate or, if there is no agreement, in
greater share of each dollar of cash flow as the accordance with the percentages of capital
limited partners’ cash distributions rise, thus contributions made.
giving the general partner an incentive to
increase limited-partner distributions.
Whatever properties contributed to the
partnership by the general partners, or
whatever the partnership has acquired
throughout the operation of the business
partnership, belong to the general partnership
as a whole. The general partners have no right
to individually own or use any specific asset of
the partnership property. These are for the sole

RIGHTS ON INTEREST IN PARTNERSHIP
RIGHT TO PARTICIPATE IN MANAGEMENT
RIGHT TO BRING LEGAL ACTION AGAINST
PARTNERSHIP
RIGHT TO BRING DERIVATIVE ACTION FOR
THE PARTNERSHIP
FONACIER/GAGAJENA/GAISER
use of the partnership business only and not by
individual partners.
His or her interest in profits and surplus is
transferable or assignable. Upon assignment of
interest in the partnership by an individual
partner, the assignee acquires the rights to the
profit and surplus originally owned by the
assignor.
In the absence of an agreement to the contrary,
the partners have equal rights and authority to
participate in managing the business.
Partners may bring legal actions against their
partnerships if ever there are any anomalies
committed by any partner or the partnership as
a whole.
A general partner can bring legal action or
lawsuit brought by a partner on behalf of the
business against a third party.
Just like in general partnership in which the
general partners have the right to assign their
interests in the partnership, limited partners
can also assign their interest to profits.
However, this assignment does not and will not
result in the dissolution of the partnership.
In as much as a limited partner do not have Assignee has no management rights because the
managerial authority and cannot participate in transfer of interest in general partnership does
the day-to-day activities of the limited liability not confer managerial rights and duties owned
partnership, he or she cannot participate in the by the individual partner or assignor.
control of the said business. Otherwise, if he or
she did so, he or she will lose his or her limited
liability. Although a limited partner may be hired
as an employee of the partnership, and even as
he or she acts as a manager-employee, still it
does not constitute control of the partnership
business.
A limited liability partnership may sue, in its own
capacity, individual partners. This could include
actions for breaching the partnership
agreement, or causing harm to the partnership.
An individual partner may also sue the
partnership in order to enforce the partnership
agreement, or to enforce his or her right to
relevant information about the partnership, and
his or her rights to an equal share of profits
generated by the business.
A particular limited partner can bring derivative
action especially if the general partners
improperly refuse to take necessary legal action
against circumstances that are harming the LLP
business.
Limited and General Partnership Distinguished
AS TO: LIMITED PARTNERSHIP
 Composed of one or more general partners and one or
CREATION more limited partners
 Limited partner may only contribute cash or property to
CONTRIBUTION the partnership but not services
 A limited partnership must be executed in a certificate of
limited partnership, duly signed and sworn to by all the
ORGANIZATIONAL REQUIREMENT partners and recorded in the SEC
 Governed by Article 1863
RULES GOVERNING DISSOLUTION AND WINDING UP
 Insanity of a general partner automatically dissolves the
partnership (Civil Code article1860)
 Limited partner has no share in the management of a limited
partnership and renders himself liable to partnership creditors
as a general partner if he takes part in the control of the
RIGHT TO PARTICIPATE IN THE MANAGEMENT OF PARTNERSHIP business
 Freely assignable with assignee acquiring all the rights of the
Assignability of Interest limited partner subject to certain qualifications
FONACIER/GAGAJENA/GAISER
GENERAL PARTNERSHIP
 Composed only of general partners
 General partner may contribute money property or
industry to the partnership
 General partnership as a general rule may be constituted
in any form by the contract or conduct of the partnership,
unless immovable property is contributed
 Governed by Article 1839
 Insanity of a general partner being judicial ground for
dissolution under Art. 1831 of the Civil code, it will not
automatically dissolve the partnership
 General partners have an equal right in the management of the
business (when the manner of management has not agreed
upon)
 Not assignable without the consent of the other partners,
although he may associate a third person with him in his share

PROPER PARTY TO PROCEEDINGS BY OR AGAINST THE
PARTNERSHIP
Limited Partners and General Partners Distinguished
 Limited partner is not a proper party to proceedings by or  General partner is the proper party to proceedings by or
against a partnership unless: against partnership
1. He is also a general partner (his liability is to the partners not to the
creditors); or
2. Where the object of the proceeding is to enforce a Limited partners
rights against or liability to the partnership

AS TO: GENERAL PARTNER LIMITED PARTNER

EXTENT OF LIABILITY General partner is personally liable for partnership obligations Limited partner’s liability extends only to his capital contribution

RIGHT TO PARTICIPATE IN THE MANAGEMENT OF General partners have an equal right in the management of the Limited partner has no share in the management of a limited
PARTNERSHIP business (when the manner of management has not been agreed partnership and renders himself liable to partnership creditors as
upon) a general partner if he takes part in the control of the business

CONTRIBUTION General partner may contribute money property or industry to Limited partner must contribute cash or property to the
the partnership partnership but not services

TRANSFER OF INTEREST General partner’s interest in the partnership may not be assigned Limited partner’s interest is freely assignable, with assignee
as to make the assignee a new partner without the consent of the acquiring all the rights of the limited partner subject to certain
other partners, although he may associate a third person with him qualifications
in his share

INCLUSION OF PARTNER’S NAME IN THE FIRM NAME Name of a general partner may appear in the firm name As a general rule, name of a limited partner must not appear in
the firm name

PROHITIBITION TO ENGAGE IN OTHER BUSINESS
EFFECT OF RETIREMENT, DEATH, INSANITY, OR
INSOLVENCY
General partner is prohibited from engaging in a business which is
of the SAME kind of business in which the partnership is engaged,
if he is a capitalist partner or in ANY of business for himself if he
is an industrial partner
Retirement, death, insanity or insolvency of a general partner
dissolves the partnership
No such prohibition in the case of a limited partner who is
considered a mere contributor to the partnership
Retirement, death, insanity or insolvency of a limited partner does
not dissolve the partnership for his executor or administrator
shall have the rights of a limited partner for the purpose of selling
his estate

FONACIER/GAGAJENA/GAISER