Lectures in Business Org 1

10 June 2015

Business org includes partnership, agency and trust as subject.One thing in common, they all interlock with commercial law.

Partnership – it is a contract whereby two or more persons bind themselves to contribute money, property, or industry to a common fund with the intention of dividing the profits among themselves.

2 elements of legal partnership1. CONTRIBUTION by two or more persons of money, property, or Industry (work or skills) to a common fund.2. INTENTION is to divide the profits among the parties in accordance with what is agreed upon or pro rata.

Husband and wife are not allowed to become partners in civil law. They could not comply the first element which is the contribution by two or more person because they are already one when they married.

Children with inheritance will not constitute partnership because they did not contribute money.

Partnership purpose is to operate businessProfessionals can form an organization for a specific purpose of exercising their profession.Ex.Lawyers – firmAccountants – general professional partnership

When you receive dividend it is not necessarily that you are a partner. You will only have a prima facie presumption that you have a partnership. Dividends can be a form of payment of wages that will make you an employee but not a partner.

You must determine why a person receives money from the partnership. It is not automatic that there is a partnership.

General rule: in formation of a partnership, there is no specific form required as long as the two essential elements are present you can have a partnership.

Value of partnership1. For professionals to be productive.Partnership facilitates production.2. Business activities that a single person cannot handle for lack of capital, skills etc. can be utilize. Ex. A person inherit money or property but don’t know how to invest his properties or assets can form a partnership with those who are skilled one. Formation of a partnership1. CONSENSUAL – perfected by mere consent.Exception/qualification: a. When there is a contribution of an immovable property, then you need to have a duly notarized public document and must be attached to the articles of partnership and must be registered to the Registry of Deeds. This is to protect 3rd party, so that they will be aware of the property as part of the partnership.b. When the contribution is 3,000 pesos or more, you need to have a public document and take an inventory of the contribution of the partners and register it to the Securities and Exchange Commission.

Articles of partnership – will describe the details of partnership, purpose, profit division, assets, lifetime, registration to SEC.

Kinds of partnership1. As to object –a. Universal – all profits, earnings, fruits will belong to the partnership.b. Particular – specific undertakings, things, object including the use of fruits. Not a continuing partnership.2. As to liabilitya. General – liable for all the losses of the partnership, not only the contribution but up to the extent of all his personal properties.b. Limited – limited liability only to the extent of contribution in partnership.

Purpose of the partnership must be lawful.

17 June 2015

Partnership like a corporation has a separate juridical personality. It can sue and can be sued. It can purchase properties.

General rule: general partners has no limit as to the liability. Limited partners its liability is only up to the extent of the amount contributed.

Corporation life span – 50 yearsPartnership life span – indefinite, no specific term

If there is a definite period or terms achieved the purpose and they continue to do business, it is impliedly presumed that the partnership is renewed.

Industrial partner – contribution is his labor or industry, talent or services.

General rule: he cannot engage in any business or industry while he is in a partnership. He is committing his time or talent to the partnership only. Reason: conflict of interest.Except: when the partnership permits you to do so. Even if the partnership permits you, they can still expel you or retain you to the partnership and demand the benefits that you obtained and damages while exercising it outside the partnership.

General rule: equal shares should be contributed to the partnership. Profits and losses should be equally distributed.Except: agreed upon.

If the partnership is encountering financial problems, there has to be a capital infusion of the partners. If one partner cannot contribute, he should sell his shares.

Art. 1792. If a partner authorized to manage collects a demandable sum which was owed to him in his own name, from a person who owed the partnership another sum also demandable, the sum thus collected shall be applied to the two credits in proportion to their amounts, even though he may have given a receipt for his own credit only; but should he have given it for the account of the partnership credit, the amount shall be fully applied to the latter.

The provisions of this article are understood to be without prejudice to the right granted to the other debtor by Article 1252, but only if the personal credit of the partner should be more onerous to him. (1684)

RIULES ON THE DUTY TO CONTRIBUTE1. the contribution must be made at the time the partnership is entered into UNLESS a different period is stipulated2. no demand is needed to put the partner in default3. the partner must exercise due diligence in preserving the property to be contributed before he actually contributes the same4. a partner who promises to contribute to the partnership becomes a promissory debtor of the partnership

RULES ON THE DUTY TO DELIVER THE FRUITS1. IF property has been promised, the fruits thereof should also be given2. the fruits referred to are those arising from the time they should have been delivered, without a need of any demand3. IF the partner is in BAD FAITH, he is liable not only for the fruits actually produced, BUT also for those that could have been produced

Who manages the partnership – each partner is an agent of the partnership.GR: any partner can deal with others. The partnership should designate a managing partner.

Managing partners can be as many as the partners want. They can have equal powers unless you delegate or designate.

If they could not decide, majority wins. If they cannot decide still, convene the rest of the partners and ask the partners with the controlling interest to vote. His vote will prevail.

24 June 2015

GR: all dealings of partners with third parties are likewise dealings of the partnership and the law will treat it as such.

Art. 1804. Every partner may associate another person with him in his share, but the associate shall not be admitted into the partnership without the consent of all the other partners, even if the partner having an associate should be a manager. (1696)

It allows one partner to invite another to have a share in his partnership share. He can enter as a sub-partner but he is not part of the partnership. He needs the consent of all other partners in order to become a member of the partnership.Reason: any addition of a member to the partnership will constitute a change in the relationship of the partnership, because the relationship of the partnership is based on the maximum trust and confidence.Except: on unanimous consent: unless the articles of partnership provides.

Partnership books – books of account.- Kept by the management accountant.- It has to be in the principal place of business.- Every person shall have access to the book and may inspect it and have a copy of it.Art. 1806. Partners shall render on demand true and full information of all things affecting the partnership to any partner or the legal representative of any deceased partner or of any partner under legal disability. (n)Art. 1807. Every partner must account to the partnership for any benefit, and hold as trustee for it any profits derived by him without the consent of the other partners from any transaction connected with the formation, conduct, or liquidation of the partnership or from any use by him of its property. (n)

1806 and 1807 is all about transparency. If you have any transaction outside the partnership using the company time, resources, or any information that you derived for being a partner, you should disclose it to your partners. – full disclosure. Any earnings you derive should be remitted to the partnership even if they don’t know about it.Art. 1808. The capitalist partners cannot engage for their own account in any operation which is of the kind of business in which the partnership is engaged, unless there is a stipulation to the contrary.

Any capitalist partner violating this prohibition shall bring to the common funds any profits accruing to him from his transactions, and shall personally bear all the losses. (n)

GR: capitalist partner cannot engage in the same line of business with the partnership.Reason: there is a conflict of interest.Except: if there is an agreement to the contrary or the partners allow it.

All the earnings that came after the termination of the partnership by reason of being a partner, you are bound to remit it to the partnership.

Art. 1809. Any partner shall have the right to a formal account as to partnership affairs:

(1) If he is wrongfully excluded from the partnership business or possession of its property by his co-partners;(2) If the right exists under the terms of any agreement;

(3) As provided by article 1807;

(4) Whenever other circumstances render it just and reasonable.

Rules on demanding a formal account to the partnership affairs:a. If one of the partner is expelled illegally from the partnershipb. If it is provided for under the partnership agreement.c. As provided in 1807.1. If you feel/hear a reliable information that your partner earned from the partnership and did not remit it.d. So long as it is justifiable to the partnership itself or a specific partner.

Formal account – not normally given because there is already a partnership book.- It is an official financial report duly signed by the auditor of the company. It is a formal financial reporting, notarized under oath.

Property rights of a PartnerThe property rights of a partner are:(1) Rights in specific partnership property;(2) Interest in the partnership; and(3) Right to participate in the management [Article 1810].

Three Basic Property rights of a partner1. Rights in specific partnership property – every partner have a specific right towards the specific partnership property.2. Interest in the partnership - A partner's interest in the partnership is his share of the profits and surplus [Article 1812]. (you contributed equally to the partnership).3. Right to participate in the management – every partner is an agent for his partners. Whatever you do it binds the partnership. If there is no agreement on the management structure, every partner is a manager. Partnership should agree for a management structure for the order of the partnership and to tell 3rd persons who to negotiate with.

GR: if you have 3 managing partners there has to be a specification of duties and responsibilities. If none, each one can perform and it’s binding. If they cannot decide/agree – it should get the majority decision. If they still cannot agree, the managing partner should assemble a meeting and vote. The decision of partners with the controlling interest will prevail.

Each partner is the co-owner of specific partnership property. He cannot use it for non-partnership purposes without the consent of other partners. You are allowed to use it for as long as for partnership purposes.You have the right to posses or use the specific partnership property even without the consent of the other partners.You cannot sell your right as co-owner of the property.

Rights of a partner in specific partnership property1. He has equal rights with his partners to posses the property but only for partnership purposes.2. He cannot assign his right to the property. EXCEPT: if all the other partners assign their rights in the same property.3. Specific partnership property cannot be attached in writ of attachment since it is impossible to determine the extent of his beneficial interest in the property until after the liquidation of partnership affairs. EXCEPT: the claim is against the entire partnership.4. Specific partnership property cannot be a subject of legal support. (if you are not giving allowance to your children and wife for support, you cannot attach the SPP because it is a personal obligation and not of a partnership.

Property rights of the partnership – your shareProfits in the partnership – partner interest

What happens when a partner sell his share? Can you sell yours? Yes. You have the right to sell your interest. It is your personal asset.

Partner’s interest in the partnership is his share of the profits and surplus. It can be:a. Assignedb. Attachedc. Be subject to legal support

What happens to the buyer of the share? Can he become an automatic partner? No. but he has the right to receive the profits.

Firm name

Every partnership shall operate under a firm name, which may or may not include the name of one or more of the partners. Those who, not being members of the partnership, include their names in the firm name, shall be subject to the liability of a partner [Article 1815].

Every partner shall operate under a firm nameThe firm name may or may not include the name of one or more of the partners.It is allowed to include the name of the deceased partner as long as in the communication with 3 rd

parties, you indicate that the name is of the deceased partner.

Effect of strangers included in the name of the firmDoes not have the rights of the partners however he can be made liable with respect to

third parties for misrepresentation. EXCEPT: 3rd parties who have actual knowledge that he is not part of the partnership. If partners were part of the misrepresentation, they can be made liable. Good faith is a strong defense in most cases.

Liabilities of partners when it comes to contracts – extent of liability is proportionate to the interest of each partner.

The partnership is primarily liable for contracts entered into in its name and for its account, under its signature and by a person authorized to act for it. Upon exhaustion of its assets, all partners are liable pro rata with all their property. Any partner may enter into a separate obligation to perform a partnership contract [Article 1816].

Industrial partner is not exempt from liabilities and with respect to liabilities to 3 rd persons under a contractual obligation.

Can a partner enter into an agreement to exempt the other partner from losses under liabilities to 3rd parties? No. it is a void agreement insofar as 3 rd party is concerned but he can enforce it to his partners.It is always for the protection of 3rd party and the government.3rd party can still run after the partner who excluded himself from liabilities of contractual obligation.If there is no stipulation, each partner including the industrial partner is liable.

Every partner is an agent of the partnership for the purpose of its business and any act of a partner which is apparently for the carrying on of the usual business of the partnership binds the latter, including the execution of any instrument in the partnership name [1st par., Article 1818].

Exception: The partnership is not bound when:(1) The partner has in fact no authority to act; AND(2) The person with whom he deals has knowledge of such fact.

Actions done by a partner for:A. Apparently carrying on of the business.

GR: every actions done by each partner in the selling/buying a property will bind the entire partnership even if the other partners do not authorize it.Binding because the transaction made by the partner is an action done for apparently carrying on of the business of the partnership.EXCEPT: 1. The partner is not actually not authorized

2. The buyer or the 3rd party has personal knowledge that the partner has really no authority.

B. Not apparently carrying on of the businessGR: The partnership is not bound if the liability arises when it is not apparently carrying on of the business.EXCEPT: When it is authorized by the other partners.

Rule: When a partner or partners perform any of these acts, but not all of them consented it, it does not bind the partnership. It should unanimously acted by them.

7 prohibited acts of partners1. Assigning partnership property2. Dispose of the good will of the business3. Do any act which is impossible to carry on the partnership business4. Confess judgment5. Enter into a compromise of another act of dominion (partnership claim or liability) 6. Submitting to arbitration7. Renounce a claim of the partnership

GR: whatever the acts of a partner will bind the partnership.

EXCEPT: the acts of a partner is not in the ordinary course of business and the 3 rd party knows about it.Exception to the exception: the other partner is authorized.

Conveyance of real property of partnershipConveyances of real properties owned by the partnership e.g., office buildings, land etc., when the title of the property is in the partnership name, any conveyance where the seller is any of the partners of the partnership is binding.EXCEPT: Partnership can annul the sale if he can show the following:

1. If the seller has no authority and the buyer knows about it.When the buyer, even if he is in bad faith, was able to sell it to an innocent purchaser for

value, then even if the original sale was void, the sale in favor of the innocent purchaser for value is valid.

2. If the title is in the name of the partnership and the seller sold the property using his own name, GR: that sale is binding, so long as it is done in the ordinary course of business and the seller has no authority and the buyer knows about it.

3. If the TCT is in the name of one or more but not all of the partners, the partner named in the TCT can sell the property.GR: any partner can sell the property of the partnership and will be binding unless the seller has no authority and the buyer knows about it.

4. If the TCT is in the name of one or more or all of them, that sale is binding. EXCEPT: the seller has no authority and the buyer knows about it.

5. Any partner may convey the property in the name of6. Any partner may convey the property in the name of the partnership.

The partnership can recover it, except when:(1) The act of the partner binds the partnership under 1st par., Article 1818 (i.e., for the carrying on of the usual business of the partnership); or(2) If not so authorized, the property has been conveyed by the grantee, or a person claiming under him, to a holder for value and without knowledge that the partner exceeded his authority.

Rule of thumb: If the TCT is under the partnership name make the sale under the name of the partnership. Whoever is the owner should be the one who should sell it. Otherwise, you will have to apply Art. 1818. (if it is done in the ordinary course of business and the seller has authority to sell it and the buyer is in good faith.

An admission or representation by any partner concerning partnership affairs within the scope of his authority may be used as evidence against the partnership [Article 1820].Any representation, announcement, declaration of any partner as long as he is acting within the scope of his authority that admission is binding to the partnership.

Notice to the partnership and notice to the partner.When does a notice to a partner will become notice to the partnership?When a partner was notified, the partnership is deemed notified.GR: Notice to any partner will bind the partnership even if you did not notify the other partners and the partner has knowledge about it, any information he has is deemed actual knowledge of the partnership.To protect 3rd party.

Torts committed by any partnerThe partnership is solidarily liable with the partner who causes loss or injury, or incurs any penalty through any wrongful act or omission:(1) In the ordinary course of the business of the partnership; or(2) Not in such ordinary course of business, but with the authority of his co-partners [Article 1822].

Torts are quasi-delicts or wrongful acts that does not constitute crime.

Any damage committed by a partner acting in the ordinary course of business makes the partnership solidarily liable for the damage or loss.3rd party can claim from both the partnership and the partner who caused it for the full amount.

The partnership is liable for losses suffered by a third person whose money or property was:(1) Received by a partner, acting within the scope of his apparent authority, who also misapplied it; or(2) Received by the partnership, in the course of its business, but is misapplied by any partner while it is in the custody of the partnership [Article 1823].When one partner receives money and he misappropriated while he did not do the job, the money is deemed to be received by the partnership. GR: the partnership and the partner who misappropriated it is solidarily liable for the misappropriation, in conjunction with Art. 1824.

All partners are solidarily liable with the partnership for its liabilities under Articles 1822 and 1823 [Article 1824].This is without prejudice to the guilty partner being liable to the other partners. However, as far as third persons are concerned, the partnership is answerable.

Partnership by estoppel

Estoppel – when the law prohibits you from disclaiming liability based on previous representation or declarations to third party.

A person, not a partner, may become a partner by estoppel, and be liable as a partner, when, by words, spoken or written, or conduct, he:(1) Directly represents himself to anyone as a partner in an existing or non-existing partnership; or(2) Indirectly represents himself by consenting to another representing him as such partner. [Article 1825]

LIABILITY OF PARTNER BY ESTOPPELA partner by estoppel is liable:(1) To any person who extended credit to the partnership, actual or apparent, relying on his representation; and(2) In case the representation was made publicly, to any person, who extended such credit, whether or not the communication to said creditor was made with the knowledge of the partner.

Can 3rd party hold the one who is not a partner liable?Yes, he will be considered as partner by estoppels. He cannot raise the defense that he is not a partner.

The partner by estoppel cannot sue 3rd party because there was no partnership to begin with. It is to protect 3rd party but not to authorize you to sue 3rd parties.

1826 is an exception to the GR on property/personal assets of the partnership.A person admitted as a partner is liable as the other partners for obligations subsequent to his admission. He is also liable for obligations incurred before his admission, but will be satisfied only out of the partnership property, unless otherwise stipulated. (Article 1826)

Debts acquired prior to the admission of a new partner will be acquired by him but only up to the extent of his interest on the partnership property.

Creditors of partnership vs personal creditors, the creditors of the partnership will be preferred.

Partnership creditors are preferred over personal creditors of the partners with respect to partnership property. However, personal creditors may ask the attachment and public sale of the share of the partner debtor in the partnership assets. [Article 1827]

Ratio: The partnership, as a legal entity distinct from its members, should apply its property to the payment of its debts in preference to the claim of any partner or his individual creditors.

Dissolution and winding up3 stages of ending the partnership

1. Process – dissolution2. Winding up3. Termination of partnership

However, if there is pending legal action against the partnership, the partnership will continue with respect to the pending litigation.

Dissolution happens when there is a change in the relationship of the partners caused by any partner to be associated in the carrying on of the course of business.Ex. When one partner ceased to become a partner but existence of the partnership continues.Dissolution is the change in the relation of the partners caused by any partner ceasing to be associated in the carrying on of the business. It is different from the winding-up of the business [Article 1828].Winding up is the actual process of settling the partnership business or affairs after dissolution. It involves collection and distribution of partnership assets, payment of debts, and determination of the value of the interest of the partners in the partnership.Termination is the point in time when all partnership affairs are completely wound up and finally settled. It signifies the end of the partnership life.

Causes of dissolution1. Does not violate partnership agreement.

a. Something happens but the event does not violate partnership agreement.Ex. Partners agreed on specific term or life span for 10 years and that time arrives. This will produce the automatic dissolution of the partnership; accomplishment of an obligation or fulfillment of it.b. When one partner resigns that has no definition of particular term or particular

undertaking specified. (must act in good faith)c. Or express will of any partnerd. Or expulsion of a partner from the business

2. If there is violation of partnership agreement. Ex. There is a term and one partner withdrew before the term.

3. Any event that will make unlawful for business to carry on.4. When a specific thing which a partner had promised to contribute to the partnership,

perishes before the delivery; in any case by the loss of the thing, when the partner who contributed it having reserved the ownership thereof, has only transferred to the partnership the use or enjoyment of the same; but the partnership shall not be dissolved by the loss of the thing when it occurs after the partnership has acquired the ownership thereof.-specific thing promised by a partner to the partnership perishes, got lost, went out of commerce before ownership is transferred to the partnership.

5. By the death of one partner6. Insolvency of any partner7. Civil interdiction of any partner8. By decree of court

When dissolution happensGR: terminates the authority of a partner to act for the partnership.

EXCEPT: if it is necessary to wind up partnership affairs to complete past affairs.

Identify first the asset of the partnership1. Partnership property – contributions of the partners2. Those acquired by partnership

How do we pay creditors?Hierarchy of creditorsLiabilities of the partnership will be payed in the following order:

1. Third party creditors2. Partner creditors – creditors who happened to be partners3. Partners with respect to their capital contributions. – industrial partners are not payed

because they contributed industry.4. Distribution of final dividend – profit sharing. Industrial partner gets something. Other

partners get with respect to their contributions or pro rata.

Where a partner has become insolvent or his estate is insolvent, the claims against his separate property shall rank in the following order:

1. Personal creditors of the partner concerned2. Partnership creditors3. Partners by way of contribution

Creditors of the dissolved partnership are also creditors of the partnership who continued the business.If there are unpaid creditors when the partnership dissolves, the partners who continued the business will be liable for that.New partner is liable for past obligations up to the extent of his contributions.

When all partners retires and one remains, he will be held liable for the obligations incurred by the original partnership.Liabilities incurred by new partnership will not be held against the property of the old partner.

When a partner dies, is he still entitled for receivables? Yes.1. As long as the partnership continues; and2. Partnership debts have been settled.

A limited partnership is one formed by two or more persons under the provisions of the following article, having as members one or more general partners and one or more limited partners. The limited partners as such shall not be bound by the obligations of the partnership. [Article 1843]

Limited partnership – also the same as general partnership

There is an agreement to contributeThe difference is an addition of one partner to the partnership which is called limited.There should be at least one limited partnerIs that significant? Yes, because the whole relationship is affected.

1. General partners contribute money, property or industry while the limited partner is allowed to contribute money or property only.

2. Limited partner does not meddle into the management affairs of the partnership. The moment he meddles he becomes a general partner.

3. 3rd party creditors of limited partner cannot run after his personal assets. His liability is up to the extent of his contributions.

GR: you cannot see them in meetings.

What is he therefore? LP join the business because he believes the business will earn and that he has capital to contribute.His objective is to get profit from the business. He does not involve himself in the management of the business.Significance: as a warning to general public.Definition: (1843) at least one LP and at least one GP.Formalities: (1844) 2 requirements:

1. There must be a sworn certificate of limited partnership (articles of partnership) all the partners should sign and contains 14 items.a. Name of the partnership with “limited”b. Character of the businessc. Locationd. Name and place of residence of partners (limited and general)e. Termf. Amountg. Additional contributionsh. Time of return of contributionsi. Share of profitsj. Rights of partners

2. The certificate must be duly registered to SEC.

Must substantially comply art. 1844.If there is no compliance, SEC may revoke the licenseIf SEC revoke it the partnership will become general partnershipSurname of the LP must not appear in the firm nameEXCEPT: 1. When the GP has the same surname with the LP; or

2. It has been carried out prior his admission to the partnership

LP does not become liable unless he takes part in the management affairs.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 [Article 1848].

In limited partnership, the general partners have the same rights and powers as if it is an ordinary partnership. However, if the partner has done the following 7 acts, he needs the consent of the limited partner:

1. Breach of contract – acts in contravention of certificate.2. Act impossible to carry on the business3. Confess judgment against partnership4. Possess partnership properties other than for partnership purpose5. Admit a new partner as general partner6. Admit a new partner as limited partner, unless stated otherwise in the certificate7. Continue the business despite death, death, retirement, insanity, civil interdiction or

insolvency of a general partner, unless the right so to do is given in the certificate.

RIGHTS OF LIMITED PARTNER, IN GENERALA limited partner shall have the same rights as a general partner to:(1) Require that the partnership books be kept at the principal place of business of the partnership;(2) To inspect and copy any of them at a reasonable hour;(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; and(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.

LP can be creditor and enjoy the rights of third party creditor.Except: he cannot receive collateral or security covering partnership property.He cannot receive conveyance or payment if the asset of the partnership is not enough.Who will be preferred on LP and creditors? If there is a provision, LP, if no provision they will be deemed standing on equal footing and will receive pro rataIs the right of LP assignable? Right of GP is not assignable to 3 rd party. In LP, he can assign his right to 3rd party because he is only an investor and not involved in the management of the business. Assignee is entitled to rights of LP especially when it comes to profits.Does he become an LP? Not automatically. If the assignee wants to become a substitute LP, have the articles amended.If LP dies his estate will be acquired by the limited partnership. Automatically upon the moment of death, the estate of LP will be liable up to the extent of his share in the partnership.Can personal creditor attach the share of LP? Yes and use it as payment of debt in accordance provided by law. However, the other partners may redeem it.Hierarchy of settling accounts after the dissolution of LP.

1. 3rd party creditors2. Payment of LP as creditors – share of LP to the profits, income and other payments.3. Return to LP of its capital contribution4. General partners as creditors (other than for capital and profits)5. Share of GP with respect to profits6. GP with respect to capital contribution - Return of capital contribution of GP

When does a certificate of LP cancelled? Upon dissolution of LP or all LP withdrew from partnership.Amendment: grounds:(1) There is a change in the name of the partnership or in the amount or character of the contribution of any limited partner;(2) A person is substituted as a limited partner(3) An additional limited partner is admitted;(4) A person is admitted as a general partner;(5) A general partner retires, dies, becomes insolvent or insane, or is sentenced to civil interdiction and the business is continued;(6) There is a change in the character of the business of the partnership;(7) There is a false or erroneous statement in the certificate;(8) There is a change in the time as stated in the certificate for the dissolution of the partnership or for the return of a contribution;(9) A time is fixed for the dissolution of the partnership, or the return of a contribution, no time having been specified in the certificate; or(10) The members desire to make a change in any other statement in the certificate in order that it shall accurately represent the agreement among them.

If any of these happens, you have to amend the certificate

If 3rd party creditors sue the partnership, sue the partnership entity; never implead the LP because he is not the proper party. To enforce the right of the partnership do not put the name of LP except when he is the one enforcing his right.

Requirements on partners under the old civil code: register it with SEC to be governed by the new civil code.