A: GR : No. XPN : Said liability is discharged when there is an agreement between: 1. Partner himself; 2. Person/s continuing the business; and 3. Partnership creditors Q: What is the order of priority in the distribution of assets during the dissolution of a limited partnership? A: In setting accounts after dissolution, the liabilities of the partnership shall be entitled to payment in the following order: 1. Those to creditors, in the order of priority as provided by law, except those to limited partners on account of their contributions, and to general partners 2. Those to limited partners in respect to their share of the profits and other compensation by way of income on their contributions 3. Those to limited partners in respect to the capital of their contributions 4. Those to general partners other than for capital and profits 5. Those to general partners in respect to profits 6. Those to general partners in respect to capital (Art. 1863, NCC) Note: Subject to any statement in the certificate or to subsequent agreement, limited partners share in the partnership assets in respect to their claims for capital, and in respect to their claims for profits or for compensation by way of income on their contribution respectively, in proportion to the respective amounts of such claims. WINDING UP Q: What takes place during the winding up of the partnership? A: It is during this time after dissolution that partnership business or affairs are being settled. ( De Leon, Comments and Cases on Partnership, Agency, and Trust, p. 229, 2005 ed) Note: Examples of winding up: 1. Paying previous obligations 2. Collecting assets previously demandable Engaging in new business necessary for winding up such as contracting with a demolition company for the demolition of the garage used in a used car partnership (Paras, Civil Code of the Philippines Annotated, Volume 5, p. 485, 1969 6 th ed) Q: Who are the persons authorized to wind up? A: 1. Partners designated by the agreement 2. In the absence of such, all partners who have not wrongfully dissolved the partnership 3. Legal representative of last surviving partner who is not insolvent Q: What are partnership assets? A: 1. Partnership property 2. Contributions of the partners necessary for the payment of all liabilities [Art. 1839 (2), NCC] Q: What is the order of payment in winding up? A: 1. Those owing to creditors other than partners 2. Those owing to partners other than for capital or profits 3. Those owing to partners in respect of capital 4. Those owing to partners in respect to profits [Art. 1839 (2), NCC] Q: What is the doctrine of marshalling of assets? A: 1. Partnership creditors have preference in partnership assets 2. Separate or individual creditors have preference in separate or individual properties 3. Anything left from either goes to the other.
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- Fall '16
- james reyes