Law on Partnership Reviewer | Article 1810 to1814
I.
LAW ON PARTNERSHIP | ART 1810-1814
PROPERTY RIGHTS OF A PARTNER
·
Principal rights - Article 1810 are as follows:
a) His rights in specific partnership property (1811.);
b) His interest in the partnership (1812.); and
c) His right to participate in the management. (1803.)
·
Related rights. — other rights which are:
a) The right to reimbursement for amounts advanced to the
partnership and to indemnification for risks in consequence of management
(1796.);
b) The right of access and inspection of partnership books
(1805.);
c) The right to true and full information of all things affecting
the partnership (1806.);
d) the right to a formal account of partnership affairs under
certain circumstances (1809.); and
e) The right to have the partnership dissolved also under certain
conditions. (1830-1831.)
a.
RIGHT TO
SPECIFIC PARTNERSHIP PROPERTY
(1) AN EQUAL RIGHT TO
POSSESS SPECIFIC PARTNERSHIP PROPERTY FOR PARTNERSHIP PURPOSES.
¾ By agreement, the right to possess specific partnership
property may be surrendered
¾ On the death of a partner, his right in specific partnership
property vests in the surviving partners, not in the legal representative of
the deceased partner
(2) RIGHT NOT ASSIGNABLE.
¾ A partner cannot separately assign his right to specific
partnership property but all of them can assign their rights in the same
property.
(3) RIGHT LIMITED TO SHARE OF WHAT
REMAINS AFTER PARTNERSHIP DEBTS HAVE BEEN PAID
¾ The whole of partnership property belongs to the partnership
considered as a juridical person and a partner has no interest in it but his
share of what remains after all partnership debts are paid.
¾ specific partnership property is not subject to attachment,
execution, garnishment, or injunction, without the consent of all partners
except on a claim against the partnership.
(4) NOT SUBJECT TO LEGAL SUPPORT UNDER ARTICLE 291
¾ Art. 291. The following are obliged to support each
other to the whole extent set forth in the preceding article:
(1) The
spouses;
(2) Legitimate
ascendants and descendants;
(3) Parents
and acknowledged natural children and the legitimate or illegitimate
descendants of the latter;
(4) Parents
and natural children by legal fiction and the legitimate and illegitimate
descendants of the latter;
(5) Parents and illegitimate children who are not
natural.
b. INTEREST IN THE PARTNERHIP
SHARE OF THE PROFITS AND SURPLUS. — The partner’s interest in the partnership consists of his
proportionale share in the undistributed profits during the life of the
partnership as a going concern and his share in the undistributed surplus after
its dissolution.
¾ PROFIT - the excess of returns over expenditure in
a transaction or series of transactions; or the net income of the partnership
for a given period of time.
¾ SURPLUS - the assets
of the partnership after partnership debts and liabilities are paid and settled
and the rights of the partners among themselves are adjusted.
- It is the excess of assets over liabilities. If the
liabilities are more than the assets, the difference represents the extent of
the loss.
PARTNER’S INTEREST NOT A DEBT DUE FROM PARTNERSHIP. — A partner is not a creditor of the partnership for the amount
of his share.
c.
CONVEYANCE OR
ASSIGNMENT OF A PARTNER’S INTEREST
d.
RIGHT TO
PARTICIPATE IN THE MANAGEMENT
¾ specific partnership property is not assignable but he may
ASSIGN HIS INTEREST In the partnership to any of his CO-PARTNERS or to a THIRD
PERSON without the consent of the other partners, in the absence of agreement
to the contrary.
¾ does NOT grant the assignee the right:
(1) To interfere in the management;
(2) To require any information or account; or
(3) To inspect any of the partnership books
¾ LEGAL EFFECT of conveyance is the same as that of a partner
associating another in his share or interest.
¾ RIGHTS OF THE TRANSFEREE OR ASSIGNEE ARE:
(1) To receive in accordance with his contract the profits accruing
to the assigning partner;
(2) To avail himself of the usual remedies provided by law in the
event of fraud in the management;
(3) To receive the assignor’s interest in case of dissolution; and
4) To require an account of partnership affairs, but only in case the
partnership is dissolved, and such account shall cover the period from the date
only of the last account agreed to by all the partners.
