Chapter 7-2_

Business Law Chapter 7 - Part 2 (Companies Law)

Page 2: Limited Partnership – Types of Partners

• A Limited Partnership (LP) consists of two types of partners:

  • General Partners:

    • Manage the partnership and are involved in its operations.

    • Jointly and severally liable for all partnership debts with personal assets at risk.

  • Limited Partners:

    • Contribute capital but cannot manage or operate the partnership.

    • Liability limited to their capital contribution.

Page 3: Partnership’s Address

• LP titles only include names of general partners.

• If one general partner exists, the phrase "and partners" is added.

• Names of limited partners must not appear in the title:

  • If a limited partner's name is included with consent, they may be liable as a general partner for debts.

Page 4: Partnership’s Management

• Limited partners do not participate in management or bind the partnership:

  • They have rights to access books and inquire about management decisions.

• Participation in management results in liability equivalent to that of a general partner.

Page 5: Relinquishment by a Limited Partner of his Share

• Limited partners can relinquish shares without general partner approval.

• The new partner will become a limited partner unless agreed otherwise by general partners.

Page 6: Admittance of a Limited Partner to the Company

• New general partners can be admitted with unanimous consent or majority agreement of the existing general partners.

• Limited partners do not need to approve this admission.

Page 7: Amendments to the Company’s Objectives

• Disagreements in management are resolved by general partners:

  • Requires unanimity or majority concurrence when owning over 50% of capital.

• Amendments to the Partnership Agreement need all general partners' consent.

Page 8: Instances where the Company shall not Dissolve

• A Limited Partnership remains intact despite:

  • Insolvency or death of a limited partner.

  • Permanent disability or incompetence of a limited partner.

Page 9: Application of General Partnership Provisions to a Limited Partnership

• Limited Partnerships are governed by General Partnership provisions in situations not specifically addressed within the chapter.

Page 10: Implied Trust Founding of an Implied Trust

• An Implied Trust is formed through a commercial understanding among partners.

• It operates under the apparent partner dealing with third parties.

• No corporate identity or registration requirements apply.

Page 11: Implied Trust Company – A Partner Acquiring the Capacity of a Merchant

• A silent partner in an Implied Trust is not deemed a merchant unless they conduct personal commercial transactions.

Page 12: Implied Trust Agreement – Partners’ Rights and Obligations

• The Agreement outlines:

  • Rights and obligations of partners.

  • Distribution method of profits and losses among partners.

Page 13: Partners’ Responsibility

• Third parties can only pursue action against the partner they dealt with in the Implied Trust.

• A partner’s acknowledgment of the company can establish its existence, making them jointly responsible to third parties.