The retirement, death, insolvency, insanity, Nothing in this Chapter shall be held to deprive a
or civil interdiction of a general partner dissolves the limited partner of his statutory exemption.
partnership, unless the business is continued by the
remaining general partners: Rights of creditors of limited partner.
(1) Under the right so to do stated in the The creditor of a limited partner may apply to the proper
certificate, or court for an order charging the limited partner’s interest
(2) With the consent of all the members. in the partnership for the payment of any unsatisfied
amount of his claim.
Effect of retirement, death, insolvency, insanity or civil The interest so charged may be redeemed with
interdiction of a general partner. the separate property of any general partner but
dissolves the partnership not with partnership property.
while any of such causes affecting a limited Under Article 1814, paragraph 2, No. (1), the
partner (see Art. 1861.) does not result in its interest of the debtor partner charged with the
dissolution unless, of course, there is only one payment of the unsatisfied amount of the
limited partner. (see Art. 1843.) judgment debt may be redeemed with
If the business is continued by the remaining partnership property with the consent of all the
partners under the rights given in the certificate partners whose interests are not so charged.
or with the consent of all the members, the The limited partner’s right under the exemption
limited partnership is not dissolved but the laws is also preserved under this article since his
certificate must be amended as required by interest in the partnership is actually his property.
Article 1864, paragraph 2, No. (5) to reflect the
change in order that the limited partners may ART. 1863. In settling accounts after dissolution, the
avail of the protection granted by law. liabilities of the partnership shall be entitled to
payment in the following order:
ART. 1861. On the death of a limited partner, his (1) Those to creditors, in the order of priority as
executor or administrator shall have all the rights of a provided by law, except those to limited
limited partner for the purpose of settling his estate, partners on account of their contributions,
and such power as the deceased had to constitute and to general partners;
his assignee as substituted limited partner. (2) Those to limited partners in respect to their
share of the profits and other
The estate of a deceased limited partner shall be compensation by way of income on their
liable for all his liabilities as a limited partner. contributions;
(3) Those to limited partners in respect to the
Right of executor on death of a limited partner. capital of their contributions;
On the death of a limited partner, his executor or (4) Those to general partners other than for
administrator shall acquire all the rights for capital and profits;
purposes of settling the affairs of the limited (5) Those to general partners in respect to
partner and the right to constitute the deceased’s profits;
assignee as substituted limited partner. (6) Those to general partners in respect to
NB: The executor or administrator may constitute the capital.
assignee as a substituted limited partner only if the
deceased partner was empowered to do so in the Subject to any statement in the certificate or to
certificate. subsequent agreement, limited partners share in the
partnership assets in respect to their claims for
Under the second paragraph, the estate of the capital, and in respect to their claims for profits or for
deceased limited partner is liable for all his compensation by way of income on their contribution
liabilities contracted while he was a limited respectively, in proportion to the respective amounts
partner. (see Art. 1858.) of such claims.
Winding up. — The consequences of the dissolution of a Partnership creditors are entitled to first distribution,
general partnership apply to limited partnership. followed by limited partners who take priority over
Therefore, the partnership continues in operation general partners.
while winding up. When a limited partnership has
been duly dissolved, the general partners have NB: In a general partnership, the claims of the general
the right and power to wind up its affairs, as in a partners in respect of capital enjoy preference over
general partnership. It is not the duty of the limited those in respect of profits.
partner or of the representative of a deceased
limited partner to care for or collect the assets of Share of limited partners in partnership assets.
the firm. The representatives of the general In the absence of any statement in the certificate
partners, not the limited partners, succeed the as to the share of the profits which each partner
general partners. shall receive by reason of his contribution and
subject to any subsequent agreement, limited
Priority in the distribution of partnership assets. partners share in the partnership assets in respect
This article expressly provides for priority in the distribution to their claims for capital and profits in proportion
of the assets after dissolution. The partnership liabilities to the respective amounts of such claims.
shall be settled in the following order: This proportional sharing by the limited partners
takes place where the partnership assets are
insufficient to pay such claims.