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Commercial Personal Companies

Essay by   •  December 11, 2018  •  Course Note  •  989 Words (4 Pages)  •  76 Views

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Business Law

Section #2 Cont:

Commercial Personal Companies

-There are two types of Commercial Companies: Simple Partnerships, and Limited Partnerships.

1-Simple Partnerships:

-Definition: A partnership of two or more people for the sake of trading; it has a name and legal identity. This is applied to all partnerships.

-Distinct feature: In simple partnerships, all partners are severally and jointly liable for all debts and commitments of the partnership. This requires the intermixture of activities of a partner with those of the company.

-Importance of the partner: a partner affects formation, existence, continuity, and termination of a company.

-Why is the personal element important?

        -The liabilities of the partners are not limited to the activities, commitment, or obligations                 of the company.

        -Every single partner is liable for the debts of the whole partnership, one single partner                 can pay off the company’s debts, and the go redeem his payments from the other                         partners; which is why confidence in your partners is crucial within a simple partnership.

-Formation of Simple Partnerships:

        -A simple partnership is a contract that covers all the mandatory bases like its objective,                 partner contribution, consent, and legal capacity; It also focuses on the multiplicity of its                 partners, their contribution, and their intention of entering a partnership.

        -This means that a simple partnership is no different from other companies when it comes                 to formation.

-Registration of Simple Partnerships:

        -Registration is a must for all commercial companies; the procedure itself is different.

        -The procedure and consequence of registration for limited and simple partnerships are                 almost the same aside for some minor differences.

        -Simple and Limited partnerships register at the specially prepared register in the court of                 competent jurisdiction.

        -Contract summaries of their establishment are published.

-Partners in a simple partnership are Personally, Severally, and Jointly Liable for its debts:

        -A company’s patrimony is independent from its partners; this allows for the settlement                 of rights of the creditors of the simple partnership without the objection of the personal                 creditors of the company.

        -The creditors of the partnership have the right to the partner’s assets; meaning the                 creditors rights can be paid from the personal funds of any partner.

        

-Why is a partner’s liability personal?

A-He is liable for the simpler partnership’s debt, as every debtor is liable for his own debts. The legal identity of the company contains the name of each partner meaning they signed off on the company’s dealings and committed themselves to it. The extent of a partner’s liability covers all his wealth. The partner will continue to be Personally, Severally, and jointly liable to the company’s debt up to his retirement.

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