(September 14, 2015) Where Were We

Magaso 22:45-34:00
Art. 1859. A limited
partner's interest is
assignable.
A substituted limited
partner is a person
admitted to all the rights of
a limited partner who has
died or has assigned his
interest in a partnership.
An assignee, who does not
become a substituted
limited partner, has no right
to require any information
or account of the
partnership transactions or
to inspect the partnership
books; he is only entitled to

An assignee has no right to inspect the partnership books. However, the substituted limited
partner has the right to inspect the partnership books.
Other rights:
The substituted limited partner has all the rights and powers, and is subject to all the restrictions
and liabilities of his assignor,
except
Art. 1863. In setting
those liabilities of which he was ignorant at the time he
accounts after dissolution
became a limited partner;
the liabilities of the

and which could not be ascertained from the certificate.

partnership shall be
entitled to payment in the
following order:

(1) Those to creditors, in

the order of priority as
provided by law, except
those to limited partners on
account of their
contributions, and to
general partners;
(2) Those to limited
partners in respect to their
share of the profits and
other compensation by way
of income on their
contributions;
(3) Those to limited
partners in respect to the
capital of their
contributions;
(4) Those to general
partners other than for
capital and profits;
(5) Those to general
partners in respect to
profits;
(6) Those to general
partners in respect to
capital.

If a substituted limited partner is admitted, there should be

amendment to the certificate and shall be recorded with SEC.
Once partnership is dissolve, there should be winding up. Winding up
is the settlement of business or partnership affairs involving the
collection and distribution of the partnership assets, payment of
debts, and determination of
each partners interest in the
partnership.
So during the winding up assets will be gathered and liabilities will be
settle, who could be interested in these assets?
Third party creditors and the partners, general or limited.
And there is a danger may not be able to get and some may get even
more than what is due them, there could be a problem so the law
establishes order on how to make the distribution fair and orderly. So
how is this done?
In General Partnership:
The liabilities of the partnership shall rank in order of payment,
as follows:
(a) Those owing to creditors other than partners,
(b) Those owing to partners other than for capital and profits,
(c) Those owing to partners in respect of capital,
(d) Those owing to partners in respect of profits.

Subject to any statement in

the certificate or to
subsequent agreement,
limited partners share in
the partnership assets in
respect to their claims for
capital, and in respect to
TEAMor
PARTNERSHIP
their claims for profits
for compensation by way of
income on their
contribution respectively, in
proportion to the respective
amounts of such claims.

2015 |Room 404

In Limited Partnership:
(1) Those to creditors, in the order of priority as provided by law, except those to limited
partners on account of their contributions, and to general partners;
(2) Those to limited partners in respect to their share of the profits and other
compensation by way of income on their contributions;
(3) Those to limited partners in respect to the capital of their contributions;
(4) Those to general partners other than for capital and profits;
(5) Those to general partners in respect to profits;
(6) Those to general partners in respect to capital.
With that we bring to a close partnership.
AGENCY
Agency is taken together with partnership because more or less they are similar in the sense that
an agent as well as the partner may be acting in behalf of another and the agent may act in
behalf of its principal.
There is representation because in partnership, if there is no agreement as to who the managing
partner is, every partner will be acting as managing partner such that they represent not just
themselves but those other partners of the partnership.
Sir: Each partner is an agent of the partnership. And therefore, being an agent of the partnership,
can bind the partnership. Thats how somehow partnership is even a type of agency.
But agency is not a type of partnership. The principles of agency can be applied in partnership
because in partnership each partner is an agent of the partnership but partnership can never be
the same with agency. Why?
In agency, the agent represents only his principal.
In partnership, a partner represents the other partners and himself. He himself can be bound
because he is a partner.
In agency, generally, the principal will be bound by the acts of the agent and the agent will not
be bound as long as he acts in the scope of his authority. He is acting in behalf of the principal.
Security Guard Situation
Everyday, we pass by the security guard, checks the bag and the ID.
As a matter of fact, when you have no ID, no entry. Everyone has his battle cry.
In the army, no retreat no surrender.
Airforce, no guts, no glory.
Salesgirl, no return, no exchange.
Everybody has a battlecry.

TEAM PARTNERSHIP 2015 |Room 404