Law on Partnership Reviewer | Article 1810 to1814

Law on Partnership Reviewer | Article 1810 to1814

   October 17, 2018       FJ

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       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.