| Front | In 2005, L, M, N, 0 and P formed a partnership. L, M and N were capitalist partners who contributed P500,000 each, while 0, a limited partner, contributed P1 ,000,000. P joined as an industrial partner, contributing only his services. The Articles of Partnership, registered with the Securities and Exchange Commission, designated L and 0 as managing partners; L was liable only to the extent of his capital contribution; and P was not liable for losses. In 2006, the partnership earned a net profit of P800,000. In the same year, P engaged in a different business with the consent of all the partners. However, in 2007, the partnership incurred a net loss of PSOO,OOO. In 2008, the partners dissolved the partnership. The proceeds of the sale of partnership assets were insufficient to settle its obligation. After liquidation, the partnership had an unpaid liability ofP300,000. V.(3) Can the partnership creditors hold L, 0 and Pliable after all the assets of the partnership are exhausted? (1%) (A) Yes. The stipulation exempting P from losses is valid only among the partners. L is liable because the agreement limiting his liability to his capital contribution is not valid insofar as the creditors are concerned. Having taken part in the management of the partnership, 0 is liable as capitalist partner. (B) No. P is not liable because there is a valid stipulation exempting him from losses. Since the other partners allowed him to engage in an outside business activity, the stipulation absolving P from liability is valid. For 0, it is basic that a limited partner is liable only up to the extent of his capital contribution. (C) Yes. The stipulations exempting P and L from losses are not binding upon the creditors. 0 is likewise liable because the partnership was not formed in accordance with the requirements of a limited partnership. (D) No. The Civil Code allows the partners to stipulate that a partner shall not be liable for losses. The registration of the Articles of Partnership embodying such stipulations serves as constructive notice to the partnership creditors. (E) None of the above is completely accurate. |
|---|---|
| Back | SUGGESTED ANSWER: (E) None of the above is completely accurate. |
Tags: 2013, bar
Learn with these flashcards. Click next, previous, or up to navigate to more flashcards for this subject.
Next card: Homer delivery tobacco accept gary justified refusing leaves
Previous card: P limited partner partnership contributed liable net l
Up to card list: CIVIL LAW