1. Distinguish Dissolution, Winding up, and
By the death of any partner
termination.
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.
Winding up is the actual process of
settling the business or partnership
affairs after dissolution, involving the
collection and distribution of
partnership assets, payment of debts,
and determination of the value of
each partners interest in the
partnership.
Termination is that point in time
when all partnership affairs are
completely wound up and finally
settled. It signifies the end of the
partnership life.
2. Provide the causes of dissolution with
court decree.
a. A partner has been declared
insane or of unsound mind
b. A partner becomes in any other
way incapable of performing his
part of the partnership contract
c. A partner has been guilty of such
conduct as tend to affect
prejudicially the carrying on of the
business
d. The business of the partnership
can only be carried on in a loss
e. Other circumstances render a
dissolution equitable.
f. A partner willfully or persistently
commits a breach of the
partnership agreement, or
otherwise so conducts himself in
matters relating to the partnership
business that it is not reasonably
practicable to carry on the
business in partnership with him.
3. Provide the causes of dissolution
WITHOUT court decree.
a.
b. By the insolvency of any partner or
the partnership;
c. By the civil interdiction of any
partner;
d. When a specific thing, a partner
had promised to contribute,
perishes before its delivery. Or
where the partner only
contributed the use or enjoyment
of the thing and has reserved
ownership thereof, its loss, before
or after delivery dissolves the
partnership.
e. By any event which makes it
unlawful for the business of the
partnership to be carried on or
f. for the members to carry it on in
partnership.
g. In contravention of the agreement
between the partners, where the
circumstances do not permit a
dissolution under any other
provision of this article by the
express will of any partner at any
time
h. a. Without violation of the
agreement between the partners
i. By the termination of the definite
term or particular undertaking
specified in the agreement;
ii. By the express will of any partner,
who must act in good faith, when
no definite term or particular
undertaking is specified;
iii. By the express will of all the
partners who have not assigned
their interest or suffered them to
be charged for their separate
debts, either before or after the
termination of any specified term
or particular undertaking;
iv. By the expulsion of any partner
from the business bona fide in
accordance with such power
conferred by the agreement
between the partners;
4. What is the effect of dissolution?
 Dissolution terminates all
authority of any partner to act for
the partnership, except for acts
necessary to wind up partnership
affairs and acts necessary to
complete transactions begun but
not then finished
5. Who are the persons authorized to wind
up partnership?
a. partners designated by the
agreement
b. in the absence of such agreement,
all partners who have not
wrongfully dissolved the
partnership
c. legal representative of last
surviving partner not insolvent
6. what is the rank of order of payment in
the liabilities of the partnership?
(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.
1. What are the characteristics of limited
partnership?
a. Limited partnership is formed
by substantial compliance in
good faith with the statutory
requirements
b. One or more general partners
control the business and are
personally liable to creditors
c. One or more limited partners
contribute to the capital and
share in the profits but do not
participate in the management
of the business and are not
personally liable for
partnership obligations beyond
the amount of their capital
contributions
d. The limited partners may ask
for the return of their capital
contributions under the
conditions prescribed by law
e. The partnership debts are paid
out of the common fund and
the individual properties of the
general partners
2. Distinguish General and Limited
partnership.
Limited partners liability extends
only to his capital contribution,
while a General
partner is personally liable for
partnership obligations.
As a general rule, name of a
limited partner must not appear in
the firm name, while the Name of
a general partner may appear in
the firm name.
Limited partner must contribute
cash or property to the
partnership but not
Services, while General partner
may contribute money, property or
industry to the partnership.
Limited partner has no share in
the management of a limited
partnership and
renders himself liable to
partnership creditors as a general
partner if he takes part in the
control of the business, while
General partners have an equal
right
in the management of the
business (when the manner of
management has not been agreed
upon).
Firm name must be followed by
the word Limited, while in General
 partnership there is no such
requirement
3. What are the requirements for a
limited partner?
a. A certificate or articles of
limited partnership which
states the matters enumerated
in Article 1844, which must be
signed and sworn;
b. Such certificate must be filed
for record in the Office of the
Securities
and Exchange Commission.
4. Is strict compliance required?
No. A strict compliance with the
legal requirements is not
necessary. It is sufficient that
there is substantial compliance in
good faith. If there is no
substantial compliance, the
partnership becomes a general
partnership as far as
third persons are concerned, in
which all the members are liable
as general
partners.
5. Explain the liability in case of false
statement in certificate.
Any partner to the certificate
containing a false statement is
liable to one who suffers loss by
reliance on such certificate
provided the following requisites
are present:
a. He knew the statement to be
false at the time he signed the
certificate, or subsequently
having sufficient time to cancel
or amend it or file a petition for
its cancellation or amendment,
he failed to do so
b. The person seeking to enforce
liability has relied upon the
false statement in transacting
business with the partnership
c. The person suffered a loss as a
result of reliance upon such
false statement.
6. What is the effect of death, insanity,
insolvency, or civil interdiction of any
partner?
The retirement or withdrawal,
death, insolvency, insanity, or civil
interdiction of a general partner
dissolves the partnership, while
any of such causes affecting a
limited partner does not result in
its dissolution unless, of course,
there is only one limited partner.
7. What are the rights of limited
partners?
a. To have the partnership books
kept at the principal place of
business of the partnership
b. To inspect, at a reasonable
hour, partnership books and
copy any of them
c. To demand true and full
information of the things
affecting the partnership
d. To demand a formal account of
the partnership affairs
whenever circumstances
render it just and reasonable
e. To ask for dissolution and
winding up by decree of court
8. What are the restrictions/prohibitions
to a limited partner?
a. receiving or holding as
collateral security any
partnership property; or
b. receiving any payment,
conveyance, or release from
liability if it will prejudice the
partnership creditors