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Chapter Law Content

Title: Civil Code CH
Category: Ministry of Justice(法務部)
Part Ⅱ Obligations
Chapter II Particular Kinds Of Obligations
Section 19 - Sleeping Partnership
Article 700
A contract of sleeping partnership is a contract whereby one of the parties agrees to furnish a contribution to an enterprise managed by the other party, on the understanding that the former will share in the profits and losses of the enterprise.
Article 701
In addition to the provisions of this Section, the provisions concerning Partnership shall apply mutatis mutandis to Sleeping Partnership.
Article 702
On the contribution of the sleeping partner being handed over, the right over the same transfers to the active partner.
Article 703
In respect to losses, the sleeping partner is liable only to the extent of his contribution.
Article 704
The affairs of the sleeping partnership shall be exclusively managed by the active partner.
No rights or obligations towards third parties shall accrue to the sleeping partner on account of transactions entered into by the active partner.
Article 705
If a sleeping partner takes part in the management of the affairs of a sleeping partnership or declares that he takes part in it, does not deny of others' expression of his participation of the management, he becomes liable to third parties as an active partner, notwithstanding any agreement to the contrary.
Article 706
Notwithstanding any agreement to the contrary, a sleeping partner may at the expiration of each business year, inspect the books of the partnership and make investigations as to its business and financial state.
For vital reasons, the court may, on the application of a sleeping partner, authorize such sleeping partner to make, at any time inspections or investigations as specified in the preceding paragraph.
Article 707
Unless otherwise provided for by contract, the active partner shall, at the expiration of each business year, take stock and find out the profits and losses made, and pay immediately to the sleeping partner the profits accrued to him.
Unless otherwise agreed upon, profits which are accrued to the sleeping partner but have not yet been paid out shall not be considered as increases of his contribution.
Article 708
In addition to the provisions of Article 686 by which a sleeping partner is entitled to declare his withdrawal, a sleeping partnership is terminated in any of the following cases;
(1) Expiration of the agreed time;
(2) Consent of the parties;
(3) Accomplishment of the enterprise or impossibility of accomplishing;
(4) Death or subject to the order of the commencement of guardianship of the active partner;
(5) Bankruptcy of the sleeping or active partner;
(6) Cessation or transfer of enterprise.
Article 709
In case of the termination of a sleeping partnership, the contribution of the sleeping partner shall be returned by the active partner together with the profit accruing to him.
However, if the contribution is decreased by losses, only the balance shall be returned.