Art.

1859-61 ~ Karez Martin Article 1859 states that a limited partner's interest is assignable, and explains the difference between a mere "assignee" and an official "substituted limited partner". So what is a substituted limited partner? A substituted limited partner is a person who is admitted to all the rights of a limited partner who has died or has assigned his interest in a partnership. Note that the substitution of a person as a limited partner in place of an existing limited partner does not necessarily dissolve the partnership. The difference between a substituted limited partner and an assignee lies in their rights and obligations to the partnership. An assignee is entitled to receive the share of the profits or other compensation by way of income or return of the contribution to which the assignor would otherwise be entitled (his rights are similar to those of a person to whom a partner conveyed his whole interest in the partnership as stated in Article 1813). Assignee has no right to require any information or account of parnership transactions or to inspect the partnership books. The assignee acquires all the rights of the limited partner only when he becomes a substituted limited partner. So how does an assignee become a substituted limited partner? First, all members must consent or the limited partner, being empowered by the certificate, must give the assignee the right to become a limited partner. Then, The certificate must be amended in accordanced with Article 1865 and lastly, the certificate as amended must be registered in SEC. As for the liabilities of a substituted limited partner, he/she bears all liabilites of his assignor except only those of which he was ignorant at the time he became a limited partner and which could not be ascertained from the certificate. Furthermore, an assignor is not released from liability to persons who suffered damage by reliance on a false statement in the certifcate as per Article 1847 and is not released from liability to creditors who extended credit or whose claims arose before the substitution. Moving on to the next article, Article 1860 states that: "The retirement, death, insolvency, insanity, or civil interdiction of a general partner dissolves the partnership, unless the business is continued by the remaining general partners: (1) Under a right so to do stated in the certificate, or (2) With the consent of all the members." The retirement, death, insolvency, insanity, or civil interdiction of a general partner dissolves partnership as stated in Art. 1830 but the retirement, death, insolvency, insanity, or civil interdiction of a limited partner does not dissolve partnership unless there is only one limited partner as per Article 1843. *If business is continued by the remaining partners under the conditions stated in the article, the certificate must be amended as requried by Article 1864, paragraph 2, No. (5). What happens when a limited partner dies? Article 1861 explains the rights of the deceased limited partner's executor or administrator, which includes all rights for purposes of settling the affairs of the limited partner and the right to constitute deceased's assignee as substituted limited partner (only if the deceased was empowered to do so in the certificate - Art. 1859, par. 4)

*The estate of the deceased limited partner is liable as such limited partner for all his liabilites contracted by the partnership while he was a limited partner.