Source: https://www.scribd.com/document/156696600/Art-1848-1852
Timestamp: 2019-11-14 09:08:57
Document Index: 440834422

Matched Legal Cases: ['Art 1848', 'Art 1848', 'Art. 1849', 'Art. 1850', 'Art. 1851', 'Art. 1852', 'Art 1848', 'ART. 1815']

Art 1848-1852 | Limited Partnership | General Partnership
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Stipulation to Vacate Prior Order Re Court Deposit Following Dismissal of Action- Proposed Order
A limited partner shall not become liable as a general partner unless, in addition to the exercise of his rights and powers as a limited partner, he takes part in the control of the business. EMPHASIZE! Liability of limited partner for participating in management of partnership A limited partner is liable as a general partner for the firms obligations if he takes part or interfere in the management of the firms business. Bare grant of apparent control does not make him liable where he has not actually participated in the control of the partnership. Whether the limited partner has participated in the management is to be determined by whether he has exercised a controlling power in the firms transactions. Active management of partnership business contemplated Such control contemplates active participation in the management of the partnership business and does not comprehend the mere giving of advice to general partners. The limited partner takes part in the management of the business and is liable generally for the firms obligations where: 1.) The business of the partnership is in fact carried on by a board of directors chosen by the limited partners; 2.) By the terms of the contract between the parties, an appointee of the limited partner becomes the directing manager of the firm; 3.) The limited partner purchases the entire property of the partnership, taking title in himself and then carries on the business in his own name and for his own exclusive benefit; or 4.) He makes or is a party to a contract with creditors of an insolvent firm with respect to the disposal of the firms assets in payment of the firms debts. The interference contemplated is with respect to an existing limited partnership. A limited partner is not subject to general liability for taking part in the management of the firm because he settles its affairs after dissolution. Art. 1849. After the formation of a limited partnership, additional limited partners may be admitted upon filing an amendment to the original certificate in accordance with the requirements of Article 1865. Admission of additional limited partners After a limited partnership has been formed, additional limited partners may be admitted, provided there is proper amendment to the certificate which must be signed and sworn to by all the partners, including the new limited partners, and filed with the SEC.
Art. 1850. A general partner shall have the rights and powers and be subject to all the restrictions and liabilities of a partnership without limited partners. However, without the written consent or ratification of the specific act by all the limited partners, a general partner or all of the general partners have no authority to: 1.) Do any act in contravention of the certificate; 2.) Do any act which would make it impossible to carry on the ordinary business of the partnership; 3.) Confess a judgment against the partnership; 4.) Possess partnership property, or assign their rights in specific partnership property, for other than a partnership purpose; 5.) Admit a person as a general partner; 6.) Admit a person as a limited partner, unless the right so to do is given in the certificate; 7.) Continue the business with partnership property on the death, retirement, insanity, civil interdiction or insolvency of a general partner, unless the right so to do is given in the certificate. EMPHASIZE! Rights, powers, and liabilities of a general partner The essential feature of a limited partnership is the union of 2 classes of members limited and general partners. The law expressly requires there to be at least one general partner with unlimited liability. Right of control/unlimited personal liability A general partner in a limited partnership is vested with the entire control of the firms business and has all the rights and powers and is subject to all the liabilities and restrictions of a partner in a partnership without limited partners, i.e., in a general partnership. It is in consideration of his unlimited personal liability for the obligation of the partnership that he is granted the general authority to manage the firms business. Acts of administration/acts of strict dominion As a rule, he may bind the partnership by any act of administration, but he has no power to do the specific acts enumerated in Article 1850 (even if agreed to by all the general partners) without the written consent or at least ratification of all the limited partners. The said acts are acts of strict dominion or ownership and are, therefore, beyond the scope of the authority of a general partner. The general partner who violates the requirement imposed by Article 1850 is liable for damages to the limited partners. Other limitations The general partners, of course, have no power to bind the limited partners beyond the latters investment. Neither do they have the power to act for the firm beyond the purpose and scope of the partnership, and they have no authority to change the nature of the business w/o the consent of the limited partners.
Art. 1851. A limited partner shall have the same rights as a general partner to: 1.) Have the partnership books kept at the principal place of business of the partnership, and at a reasonable hour to inspect and copy any of them; 2.) Have on demand true and full information of all things affecting the partnership, and a formal account of partnership affairs whenever circumstances render it just and reasonable; and 3.) Have dissolution and winding up by decree of court. A limited partner shall have the right to receive a share of the profits or other compensation by way of income, and to the return of his contribution as provided in articles 1856 and 1857. EMPHASIZE! Rights, in general, of a limited partner The limited partner is viewed as a partner only to a certain extent. His powers, actual or implied, are much more limited than those of a general partner. As between the members of the firm, the limited partner, in order to protect his interest in the firm, has the same right to compel the partners to account as a general partner has. Wrongdoing or improper acts on the part of general partners may not give a limited partner greater rights than the law and what his contract grants him. Specific rights of a limited partner 1.) To require that the partnership books be kept at the principal place of business of the partnership; 2.) To inspect and copy at a reasonable hour partnership books or any of them; 3.) To demand true and full information of all things affecting the partnership; 4.) To demand a formal account of partnership affairs whenever circumstances render it just and reasonable; 5.) To ask for dissolution and winding up by decree of court; 6.) To receive a share of the profits or other compensation by way of income; and 7.) To receive the return of his contribution provided the partnership assets are in excess of all its liabilities. Art. 1852. Without prejudice to the provisions of article 1848, a person who has contributed to the capital of the business conducted by a person or partnership erroneously believing that he has become a limited partner in a limited partnership, is not, by reason of his exercise of the rights of a limited partner, a general partner with the person or in the partnership carrying on the business, or bound by
the obligations of such person or partnership; provided that on ascertaining the mistake he promptly renounces his interest in the profits of the business or other compensation by way of income. Status of partner where there is failure to create limited partnership A limited partnership is formed when there is substantial compliance in good faith with the requirements of the law. If not complied with, the limited rd partner will have the liability of a general partner as to 3 persons. Article 1852 provides for an exemption. Status of person erroneously believing himself to be a limited partner Conditions for exemption from liability as general partner: 1.) On ascertaining the mistake, he promptly renounces his interest in the profits of the business or other compensation by way of income; 2.) His surname does not appear in the partnership name; and 3.) He does not participate in the management of the business. Necessity of renouncing his interest The person must promptly rd renounce his interest before the partnership has become liable to 3 persons who cannot be blamed for considering him a general partner. Where no partnership creditors are prejudiced, it would seem that renunciation of his interest is not necessary. Obligation to pay back profits and compensation already received There are two opinions as to whether the limited partner should also return profits and compensation already received. Some say yes, some say no. Both views have merit. (Ill just have to explain this)
Status of heirs of a deceased general partner admitted as partners An heir of a deceased general partner admitted as a partner ordinarily becomes a limited partner. He may, however, choose to become a general partner if he so wishes. The right of an heir of a deceased partner to be admitted as a partner, when provided in the articles of partnership, can be waived by the heir. He cannot be compelled to become a partner. It is his choice.
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