Business Law

Second Semester 2021 – 2022

Chapter 6 – Part 2 (Companies Law)
 Limited Partnership – Types of Partners
A Limited Partnership is formed of the two following types of partners
whose names should be listed in the Partnership Agreement.
•General Partners: they shall manage the partnership and realize its
operations. They are also jointly and severally liable for all the
partnership’s debts and liabilities with their private properties.
•Limited Partners: They shall contribute to the capital of the
partnership without having the right to manage the it or to realize its
operations, and the liability of each one of them towards the
partnership debts and liabilities is limited to his share in the capital of
it.
 Partnership’s Address
The title of a LP shall only consist of the names of the general partners.
If there is only one general partner in the partnership, then the phrase
“and partners” must be added to his name.
The name of any limited partner must not appear in the limited
partnership’s title. However, should the name of a limited partner be
mentioned upon his request or with his knowledge, then he shall be
responsible as a general partner for its debts and liabilities towards
other parties, who may have depended, in good faith, in their dealing
with its name.
 Partnership’s Management
• A limited partner shall not have the right to participate in the
management of the Limited Partnership and shall have no power
to bind it, but he may have access to its books, accounts and
registers related to the decisions adopted in the course of its
management. Same may also inquire about its state and affairs
and deliberate with other partners in connection therewith.
• If the limited partner participates in the management of its affairs,
he shall then be liable as a general partner for all debts and
obligations incurred by the Partnership during his participation in
its management.
Relinquishment by a Limited Partner of his Share
A limited partner in a Limited Partnership may at his
own discretion and without acquiring the approval
of the general partners relinquish his share to
another person, who shall become a limited partner
in it unless all general partners agree that he be
admitted as a general partner in the Company.
 Admittance of a Limited Partner to the Company
A new general partner may be admitted to the
Limited Partnership with the consent of all the
general partners, or with the consent of the
majority of them should the Partnership Agreement
allow such an admission. The approval of the limited
partners is not required in such a case.
 Amendments to the Company’s Objectives
Any disagreement arising of the management of the
Limited Partnership shall be resolved by the general
partners in the Company with unanimity or agreement of
their majority provided that same own more than 50% of
the Company’s capital (if permitted to do so by the
Partnership Agreement). However, any change or
amendment in the Agreement and statement shall not be
made without the consent of all general partners.
 Instances where the Company shall not Dissolve
A Limited Partnership shall not be dissolved due to
the insolvency of the limited partner, his insolvency,
his death, his incompetence or his permanent
disability.
 Application of General Partnership Provisions to a Limited
Partnership

A Limited Partnerships shall be subject to the

provisions governing the General Partnership, which
are stipulated in this Law in all matters and events
not provide for in this part.
 Implied Trust
Founding of an Implied Trust
An Implied Trust is a commercial understanding organized between
two persons or more. The operations of the Implied Trust shall be
carried out by an apparent partner who shall deal with third parties.
The Implied Trust as such is limited to the special relationship
between the partners. The existence of such a company between the
partners may be proven by all means of proof.
An Implied Trust Company does not enjoy a corporate identity and is
not subject to the provisions and procedures of registration and
licensing.
 Implied Trust Company
A Partner Acquiring the Capacity of a Merchant
The silent partner in an Implied Trust Company
shall not be considered a merchant unless he
personally carries out commercial transactions.
 Implied Trust Agreement
Partners’ Rights and Obligations
The Implied Trust Agreement shall specify the
rights and obligations of all partners therein
towards each other and towards the company
and the manner in which profits and losses are to
be distributed among them.
Partners’ Responsibility
Third parties shall not have the right of any course of
action against any partner except over the one dealt
with in the Implied Trust. Should a partner therein
confess to the existence of such a Company or should
he notify others of its existence, the Company may
then be considered as an existing Company and the
partners therein shall become jointly responsible
towards third parties.