5 Final Three Stages of Partnership

Monday, February 13, 2023 1:44 PM

- Introduction to the Final Stages of Partnership ○ Judicial Dissolution - B2I2GO

○ Dissolution ▪ Court Decree is required
▪ Happens when at least one general partner leaves the organization □ SEC will ask for the court decree, without it, no BIR clearance
□ Partner will get his share in the profit □ BIR Clearance is needed for tax clearance
□ Partner will get back his investment ▪ Business can only be continued at a loss
 This is his capital contribution □ Loss is sure already, not imminent loss
◊ Before he gets this, all creditors must be paid already □ The judge will call on the accountant as a witness to say that the only way
 He can get the CC's present value to continue the business is at a loss
◊ His 1M from 10 years ago is no longer 1M now, especially if ▪ Breach of Partnership Agreement
the business has been very successful □ There are rules and regulations that were violated
 If the partnership does not know the true value of the organization,  Persistent or Willful Violated
they will be compelled to liquidate = winding up partnership  Ex. The partners have a review center and the rules were that max of
affairs 2 absences lang tas yung isang partner nakaka-5 to 10 absences na
▪ Not all dissolutions leads to liquidation □ There is a very serious offense
□ They can enter into a Compromise Agreement ▪ Insanity of a Partner
▪ Not yet the end because the organization is still alive □ This is the General Partner
□ It only marks the end  Pag nabaliw ang isang GP, may mga pwedeng pumalit, need muna
□ The organization can still enter the contract ng court decree para i-dissolve
 Contracts relating to continuity or liquidation purposes □ In Limited Partner, it can be an automatic mode
▪ Compromise Agreement  Kung nabaliw ang GP, who will be the managing partner?
□ The partner will receive a fixed amount in lieu of his capital contribution ◊ Wala. So automatically, dissolved na
□ This may include the profits ▪ Incapacity to Perform His Duties
□ SGV Co. does this kind of agreement □ Ex. Due to illness
 Marami na umalis sa SGV Co. na partners ▪ Guilty of Conduct Prejudicial to the Company
○ Liquidation □ Ex. Crime committed by a partner
▪ Winding Up of partnership affairs ▪ Other Analogous or Similar Modes
▪ You have to: □ Other stipulated ways or modes
□ Know how much are all the assets □ Ex. When an MP refuses to render accounting of his transactions
□ Collect all receivables □ Ex. When the partnership is illegally operating
□ Pay all the liabilities  Nagsimulang legal tas naging illegal
□ Determine the net of the partners' equities ◊ Pwedeng by court decree, i-dissolve siya
□ Note that hindi pwedeng galawin yung partners' equities without first
paying the liabilities - Liquidation Rules
▪ Liquidation leads to Termination ○ Under the Civil Code is more on the order of payment of the liabilities
□ Always ○ Assess the Available Assets
○ Termination ○ Deduct / Pay Obligation to 3rd person or creditors
○ Pay obligation to Limited Partners
- Grounds for Dissolution ▪ NOTE: Pay first all claims of a Limited Partner before GP
○ Automatic Modes - WISEDIC ○ Pay the Capital Contribution of General Partners
▪ Go to the Security and Exchange Commission directly ○ Pay the Profits of General Partners
▪ Without Violating Partnership Agreement - ATE2 ○ Any partner can be the winding up partner except for the partner that caused the
□ Expected na nila dissolution
□ Also known as Voluntary Dissolution ▪ Normally a General Partner, pwede rin naman si LP if wala na
□ Accomplishment of the Purpose of the Partnership ○ Ex. ABC Company has 525K Assets, 300K Liabs, 225K Partners' Equity, and 50K
 Plan is to create a 20 story building and then sell it Capital Contribution for Each, and Profits amount to 75K
◊ Pag natapos na at nabenta na, edi tapos na yung partnership kasi Assets 525
nafulfill na yung plan
Obligation to 3rd Person (300)
□ Termination of Period
 Partnership with a fixed term 225
□ Express Will by a Partner in Good Faith Additional CC 0
 Happens to Partnership at will ▪
CC of GP (50x3) (150)
□ Expulsion of a Partner in Good Faith
 In case of imminent loss Profits 75
◊ Remember that those capitalist partner who refuse to contribute Equal Share of 3 Partners ÷3
may be compelled to share his rights
Share of Each Partner 25
▪ In Violation of Partnership Agreement
□ Also known as Involuntary Dissolution ▪ The partnership is now fully liquidated
□ Sudden Resignation of a Partner in Good Faith ○ Ex. Following the illustration above: There is a 4th partner who is Industrial. Mr. D has
 Bawal in bad faith na sasadyain pag nag-away 20% profits are his share
 If done in Bad Faith, can be liable to damages Assets 525
▪ Specific property promised by a partner is lost before delivery Obligation to 3rd Person (300)
□ The partner contributing will bear the loss
□ If very important yung property na nawala, it could be as if the partner 225
nerver contributed Additional CC 0
□ This loss could be ground for dissolution if very material yung property na CC of GP (50x3) (150)
yun ▪
 Can the partnership withstand the loss? Profits 75
▪ Events that will make the partnership / business unlawful to continue Share of D's Share (20%) (15)
□ Ex. New laws from Congress like partnership to plant marijuana to sell to
pharmaceutical companies Profits for Capitalist P. 60
 Nung pinagbawal ito, syempre wala na rin yung purpose kasi bawal Equal Share of 3 Partners ÷3
na eh Share of Each Partner 20
▪ Death
▪ Insolvency
▪ Civil Interdiction of a Partner
□ General Partner

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