Limited Partnerships Flashcards
Definition
Consists of:
One or more general partners who have the powers, rights, and obligations of partners, and
One or more partners in commendam, or limited partners, whose powers, rights, and obligations are defined in this Chapter.
Formation
Must file with SOS.
- Name
- Pship address
- P’s name & add
- Writ agg req for p’ship to own immov prop
Must state contribution
Name
Must have and must indicate “in commendam” or “limited partnership”.
Can’t imply limited is general
Decision Making / Voting
Limited partner CANNOT PARTICIPATE in management;
Limited voting rights CC 2844.
Contribution/Participation
Limited partner contribution essential;
- Cannot be managerial services;
Must state when due, if not, it’s on-demand.
Immovables
Need writing to own.
Each partner owns in indivision until written agreement.;
Retroactive ownership Ok, but cannot affect 3P rights in the interim.
Limitation of Liability
General partners have unlimited secondary liability;
Limited partners have NO PERSONAL LIABILITY,
- Amount capped at level of contribution.
Fiduciary Status
Each partner owes fiduciary duties to pship & partners.
No prejudicial activity;
Can be a creditor
Representation & Mandate
Limited partner has no mandatary authority to bind pship dealings w/3Ps.
Cessation
A partner ceases to be a member of the partnership upon:
- Death
- Interdiction
- Bankruptcy
- Seizure of his interest
- Expulsion from the pship
- Withdrawal
Withdrawal
For a term = a partner may withdraw w/out consent of his partners:
- prior to the exp of term
- w/ just cause
- arising out of the failure of another partner
- to perform an obligation.
W/out term = a partner may withdraw from the pship w/the consent of his partners at any time, provided he
- gives reasonable notice
- in GF
- at a time that is not unfavorable to the pship
Expulsion
A partnership may expel a partner for just cause
Unless otherwise provided in the PA, a majority of the partners must agree on the expulsion
Termination
A pship terminates by:
- Unanimous consent
- Judgment of termination
- Reduction of membership to one
- Expiration of its term
- Attaining or impossibility of attaining the object of the pship
- According to the pship agreement
Dissolution
The creditors of the pship must be paid in preference to the creditors of the partners. The creditors of a pship shall be paid in the following order of priority:
- Secured creditors in accordance with their security rights
- Unsecured creditors who are not partners
- Unsecured creditors who are partners
If any assets remain after the payment of all secured and unsecured creditors, the capital contributions shall be restored to the partners
Finally, any surplus shall be divided among the partners proportionally based on their respective interests in the partnership.
