Part Ⅱ Obligations
Chapter II Particular Kinds Of Obligations
Section 18 - Partnership
Partnership is a contract whereby two or more persons agree to put contributions in common for a collective enterprise.
The contribution may consist of money or other rights over property or of services, credit or other interests.
A contribution other than money shall be assessed at the value of the contribution. If it is not assessed, the average value of the contribution of the other partners is deemed to be the value of the contribution.
The contributions of the partners and all other properties of the partnership are held in common by all the partners.
Unless otherwise agreed upon by the partners, a partner is not bound to provide an increase of the contribution which has been agreed upon, nor, if his contribution has been reduced by losses, to make good such losses.
The resolutions of the partnership ought to be made by the unanimous consent of all the partners.
The resolutions of the preceding paragraph when are agreed upon by all the partners or some of the members, should be followed by the agreement, except the affairs of partnership contract or the change of business entity shall be agreed by the numbers more than two thirds of the partners.
Unless otherwise provided for by contract or by resolutions, the affairs of the partnership shall be managed by all the partners in common.
When it is agreed upon or by resolutions that the affairs of the partnership shall be managed by some of the members only, the affairs of the partnership shall be managed in common by the said members of the partnership.
The ordinary affairs of the partnership may be managed individually by each partner who has the right of management, but, in such a case, every partner who has the right of management may oppose the action of any other partner. In a case of opposition, the dealing of the affair shall be stopped.
A Partner who deals the affairs of the partnership shall exercise such care as he would deal with his own affairs, who gets the remuneration should do so with a care of a good administrator...
Concerning resolutions of partnership, each partner entitled to vote is presumed to have one vote only, irrespective of the amount of his contribution.
When one or several partners in the partnership, by agreement or by resolutions manage the affairs of the partnership, they shall not resign or be removed by the other partners except for a good cause.
Removal of a managing partner, as specified in the preceding paragraph, may take place only by the unanimous consent of all the other partners.
Notwithstanding any stipulation to the contrary, a partner who has no right of management, is entitled to enquire at any time into the affairs of the partnership and its financial situation, and to examine its books.
Unless otherwise provided for by contract, the accounts of a partnership shall be settled and its profits be distributed at the end of each business year.
If the shares of the partners in the profits and losses are not specified, they are fixed in proportion to the value of the contribution of each partner.
If only the share in profits or the share in losses is specified, the proportion is deemed to be applicable to both profits and losses.
Unless otherwise provided for by contract, a member who contributed only his services does not share in the losses.
A partner is entitled to the reimbursement of the expenses which he has made for dealing the affairs of the partnership.
Unless otherwise provided for by contract, he is not entitled to remuneration for dealing the affairs of the partnership.
A partner, who by agreements or by resolutions deals the affairs of the partnership, represents the other partners towards third parties, in so far as he deals such affairs within his authority of tenor of Mandate.
The provisions of Articles 537 to 546 concerning Mandate shall apply mutatis mutandis to the dealing of the affairs of the partnership by its partners.
If the assets of the partnership are not sufficient to cover the liabilities, the partners are jointly liable for the deficit.
A partner is not entitled to demand the partition of the assets, until the liquidation of the partnership takes place.
A debtor of the partnership who has a claim against one of the partners shall not offset it against a claim of the partnership against him.
A partner shall not transfer his share in the partnership to a third party, except it be to another partner.
So long as the partnership continues, a personal creditor of a partner shall not be subrogated in any of the rights of such partner against the partnership, except claims for dividends.
A creditor of a partner may apply for attachment against the share of such partner.
Within two months of the attachment under the preceding paragraph, if the partner could not perform or furnish proper security, the attachment functions to the effect for withdrawal of the partnership for that partner.
If no period has been fixed for the duration of the partnership, or if the partnership has been formed for the lifetime of any of its partners, each partner may withdraw from it, provided that the other partners have been notified two months beforehand.
The withdrawal as specified in the preceding paragraph shall not take place at a time when withdrawal would be prejudicial to the affairs of the partnership.
Even if a period has been fixed for the duration of the partnership, a member may give notice of withdrawal for vital reasons due to circumstances for which he is not responsible, notwithstanding the preceding two paragraphs.
In addition to the cases provided for in the preceding two articles, withdrawal of a partner takes place in any of the following:
(1) A partner’s death. Except that when stated in a contract that the partner’s heirs may inherent his/her rights;
(2) A partner is declared bankrupt or is subject to the order of the commencement of guardianship;
(3) A partner is dismissed from his duty.
Exclusion of a partner may only take place for a good cause.
The exclusion as specified in the preceding paragraph may be made only by the unanimous consent of the other members, and a notice of the fact shall be served on the excluded partner.
The settlement of the accounts between the withdrawing partner and the other partners shall be made on the basis of the financial situation of the partnership at the time of withdrawal.
The share of the withdrawing member may be repaid in money, irrespective of the nature of his contribution.
In regard to those affairs of the partnership not yet concluded at the time of withdrawal, accounts may be settled and profits and losses be distributed after the conclusion of such affairs.
A person who has withdrawn from a partnership continues to be liable in respect of the obligations incurred before his withdrawal.
No person may be introduced as a partner in a partnership that already exists, except by the unanimous consent of all the partners.
A person who becomes a partner of such a partnership is liable in the same way as the other partners for all the obligations incurred prior to his entering it.
A partnership is dissolved in any of the following cases:
(1) When the duration of the partnership agreed upon has expired;
(2) When the partners unanimously decide to dissolve it;
(3) When the undertaking which forms its object is accomplished, or when it is impossible to accomplish it.
If, after the ending of the duration of the partnership, the partners continue its affairs, the partnership contract is deemed to continue for an indefinite period of time.
After dissolution of a partnership, the liquidation of its affairs is carried out either by all the partners jointly, or by liquidators appointed by them for that purpose.
The decision appointing the aforesaid liquidators shall be made by a majority vote of all the partners.
When there are several persons acting as liquidators, the decisions concerning the liquidation shall be made by a majority vote.
In case one or more liquidators are appointed by the partnership contract from the partners, the provisions of Article 674 shall be applied.
The assets of the partnership shall be first used for the payment of its debts. If a debt has not yet matured or is the subject of litigation, the amount necessary for the performance of such debt shall be taken out from the assets of the partnership, and be reserved.
After all the debts have been paid or the necessary amounts for the same have been taken out in accordance with the preceding paragraph, the contributions of the partners shall be returned in money or the other property from the remaining assets.
The reimbursement of contributions of non-money shall return in the same value of property like the moment of contributions.
For the performance of the debts and the return of the contributions, the property of the partnership shall, as far as necessary, be converted into money.
If the assets of the partnership are not sufficient for reimbursing the contributions, the reimbursement shall be made pro rata, in proportion to the respective value of each contribution.
If there is a balance of assets remaining, after the payment of the debts and the return of contributions, it shall be divided among the partners, in the proportion in which they are entitled to the profits.