Test Your Understanding of Liability in Partnership Agreements

Article 35 = Defines the General Partnership and its liability Article 36 = Specifies the details to be included in the Memorandum of Association Article 37 = States the powers of the General Partnership's management Article 38 = Not mentioned in the given text

Partners' names and particulars = MOA detail to be included The company’s name = MOA detail to be included The company’s headquarters = MOA detail to be included The termination of the company = MOA detail to be included

The company's capital and method of dividing the same among partners = MOA detail to be included The company’s term, if any = MOA detail to be included The management of the company = Partners are responsible for it The method of distributing the profits and losses among the partners = MOA detail to be included

<p>General Partnership = A business venture established by two or more natural or legal persons Memorandum of Association = A document containing key details of the General Partnership Partner = Acquires the capacity of a trader in a General Partnership Management = The partners are responsible for it in a General Partnership</p> Signup and view all the answers

<p>Partners’ resolutions and the quorum required for their issuance = MOA detail to be included Details of commencement and end dates of the fiscal year = MOA detail to be included Any other provisions, conditions or data, which the partners agree to include in MOA = MOA detail to be included The termination of the company = MOA detail to be included</p> Signup and view all the answers

<p>MOA = A document that includes key details of the General Partnership Management = The partners are responsible for it in a General Partnership General Partnership = A business venture established by two or more natural or legal persons Partner = Acquires the capacity of a trader in a General Partnership</p> Signup and view all the answers

<p>The General Partnership = Managed by the partners thereof The legal person = Designates its representative in the management One or more managers = Parties may agree on their appointment from the partners or others The company's capital = MOA detail to be included</p> Signup and view all the answers

<p>Withdrawal or removal from the company = Not liable for debts and obligations arising after Assignment of equity stake = Assignee is liable for company's debts both preceding and subsequent to his joining Relief of liability by unanimous agreement = Not liable for former debts Company's debt payment by partner = Partner may have a recourse against the remaining partners pro rata the debt amount paid by him against the share of each of them</p> Signup and view all the answers

<p>Article 46 = Withdrawal and removal procedures Article 47 = Partner’s profit and loss share determination Article 48 = Enforcement against the partner’s funds Article 49 = Valuation of partner’s equity stake</p> Signup and view all the answers

<p>Company's continuation becomes impossible = Competent Judicial Body may order the company be dissolved Reduction in the company’s capital due to losses = Partner shall not be required to replenish the reduction without his consent Company's debt cannot be collected from it = Partner may be required to pay off the debt from his own property Death of a partner = Company may continue to exist among the wishing heirs of the dead partner</p> Signup and view all the answers

<p>Vis-à-vis = In relation to Equity stake = A partner's ownership interest in a company MOA = Memorandum of Association Liquidation proceedings = Process of winding up a company's affairs and distributing its assets</p> Signup and view all the answers

<p>Recording an agreement with the commercial register = Agreement becomes effective vis-à-vis the creditors Withdrawal or removal from the company = Becomes effective vis-à-vis the third parties following the date of its registration and publication Assigning an equity stake = Assignee becomes liable vis-à-vis the company's creditors Objecting to the assignor's relief of liability = Assignor becomes jointly liable for the debts arising prior to his assignment</p> Signup and view all the answers

<p>Partner's profit and loss share = Determined at the end of the company’s fiscal year Enforcement against the partner’s funds = Partner may be required to pay off any debt of the company from his own property Valuation of partner’s equity stake = Occurs in specific events such as partner's withdrawal or when the partner dies Termination of the General Partnership = Occurs in specific cases such as death or removal of a partner</p> Signup and view all the answers

<p>Withdrawal from the company = Partner must notify the other partners at least 60 days prior to the scheduled date Removing one or more partners from the company = Numerical majority of partners may resort to the Competent Judicial Body Assigning equity stake = Assignor shall not be liable for the debts unless they object to his relief of liability within 30 days Paying off the company’s debt = Partner can have a recourse against the remaining partners pro rata the debt amount paid by him</p> Signup and view all the answers

<p>General Partnership of a Legator's death with a minor or prohibited heir = Converted into a Limited Partnership with the heir as a silent partner Any partner passes away or undergoes interdiction = Single surviving partner granted 90 days to adjust company's affairs or get converted into another legal form Initiation of any liquidation proceedings = Single surviving partner granted 90 days to adjust company's affairs or get converted into another legal form Partner withdraws or is removed from the General Partnership = Single surviving partner granted 90 days to adjust company's affairs or get converted into another legal form</p> Signup and view all the answers

<p>One year following the date of death of a Legator = Conversion of General Partnership into Limited Partnership with minor or prohibited heir Ninety days = Surviving partner to adjust company's affairs or get converted into another legal form Lapse of such a time limit = General Partnership deemed terminated by operation of law</p> Signup and view all the answers

<p>When any partner passes away or undergoes interdiction = Engage a new partner or get the General Partnership converted into any other legal form Initiation of any liquidation proceedings = Engage a new partner or get the General Partnership converted into any other legal form Partner withdraws or is removed from the General Partnership = Engage a new partner or get the General Partnership converted into any other legal form</p> Signup and view all the answers

<p>General Partnership of a Legator's death with a minor or prohibited heir = Convert into a Limited Partnership Any partner passes away or undergoes interdiction = Adjust company's affairs or get converted into another legal form Initiation of any liquidation proceedings = Adjust company's affairs or get converted into another legal form Partner withdraws or is removed from the General Partnership = Adjust company's affairs or get converted into another legal form</p> Signup and view all the answers

<p>General Partnership = When any partner passes away or undergoes interdiction, initiation of any liquidation proceedings, or partner withdraws or is removed from the General Partnership Limited Partnership = General Partnership of a Legator's death with a minor or prohibited heir</p> Signup and view all the answers

<p>Conversion of General Partnership into Limited Partnership = One year following the date of death of a Legator General Partnership deemed terminated by operation of law = Lapse of such a time limit</p> Signup and view all the answers

<p>Heir who is either minor or prohibited from engaging in business activities = Silent partner in the Limited Partnership Surviving partner when any partner passes away or undergoes interdiction, initiation of any liquidation proceedings, or partner withdraws or is removed from the General Partnership = Given a time limit to adjust the company's affairs or get the General Partnership converted into any other legal form</p> Signup and view all the answers

<p>Death of a Legator with a minor or prohibited heir = Conversion into a Limited Partnership Any partner passes away or undergoes interdiction = Engage a new partner or get the General Partnership converted into any other legal form Initiation of any liquidation proceedings = Engage a new partner or get the General Partnership converted into any other legal form Partner withdraws or is removed from the General Partnership = Engage a new partner or get the General Partnership converted into any other legal form</p> Signup and view all the answers

<p>General Partnership = Active partner, except when there is a single surviving partner under specific conditions Limited Partnership = Silent partner, when the General Partnership is converted due to the death of a Legator with a minor or prohibited heir</p> Signup and view all the answers

<p>Article 38 = Resolutions of partners shall be adopted with the numerical majority of their opinions, unless the resolution in question is relating to the amendment of the General Partnership’s MOA in the latter case, it shall be adopted with the unanimous consent of all partners. Article 39 = Prohibited acts of the manager, such as handling business activities that go beyond the Company’s objects, establishment or closing down of the Company’s branches, donations, etc. Article 40 = Prohibition for a partner to get involved in activities similar to that of the company, be a partner or manager of a competing company, or own shares in another company that engages in the same business activity. Article 41 = Powers of a non-managing partner, including the right to review the progress of the company's business, examine its records and documents, and obtain a brief statement on the company's financial position.</p> Signup and view all the answers

<p>Manager is a partner appointed under MOA = Can only be removed by a decision to be unanimously issued by the other partners. Manager is appointed under an independent contract = Can be removed by a numerical majority. Manager is not a partner = Can be removed by a decision of the numerical majority. Manager wants to retire from the management = All partners must be informed of such retirement in writing at least 60 days prior to the effective date of retirement.</p> Signup and view all the answers

<p>The company shall be liable for every act carried out by the manager unless the person, with whom the manager deals, has been acting in bad faith. = Article 37 No partner may get involved, for his own benefit or for the benefit of third parties, in activities similar to that of the company. = Article 40 The partner may assign his equity stake or part thereof only in compliance with the restrictions stipulated in the MOA or based upon the approval of all partners. = Article 44 If a partner joins the General Partnership based on a new contribution, he shall be held personally and jointly liable with the remaining partners in all his own property for the General Partnership's debts both preceding and subsequent to his joining. = Article 45</p> Signup and view all the answers

<p>Manager's removal does not result in the dissolution of the company, unless the MOA stipulates the same. = Article 42 The manager may retire from the management, provided that all partners are informed of such retirement in writing at least 60 days prior to the effective date of retirement. = Article 43 The partner may assign to third parties any rights relating to his equity stake, and such assignment shall become legally effective only between the parties involved. = Article 44 If a partner joins the General Partnership based on a new contribution, he shall be held personally and jointly liable with the remaining partners in all his own property for the General Partnership's debts both preceding and subsequent to his joining. = Article 45</p> Signup and view all the answers

<p>MOA = Abbreviation for Memorandum of Association, a legal document that sets out the company's constitution and certain other information about the company. Manager = A person responsible for the day-to-day management of a company or organization. Equity Stake = The ownership interest in a company or corporation, in the form of shares of common stock or other ownership units. Non-managing Partner = A partner who does not have authority to participate in the day-to-day management of a partnership.</p> Signup and view all the answers

<p>The partner may assign his equity stake or part thereof only in compliance with the restrictions stipulated in the MOA or based upon the approval of all partners. = Article 44 If the partner fails to abide by the prohibition of getting involved in activities similar to that of the company, the company may claim compensation from him. = Article 40 If the manager is a partner who is appointed under MOA, he may only be removed by a decision to be unanimously issued by the other partners. = Article 42 The manager’s retirement shall not result in the dissolution of the company. = Article 43</p> Signup and view all the answers

<p>Manager is a partner appointed under MOA = Can only be removed by a decision to be unanimously issued by the other partners. Manager is appointed under an independent contract = Can be removed by a numerical majority. Manager wants to retire from the management = All partners must be informed of such retirement in writing at least 60 days prior to the effective date of retirement. Partner wants to assign his equity stake = Can only do so in compliance with the restrictions stipulated in the MOA or based upon the approval of all partners.</p> Signup and view all the answers

<p>When the Legator dies and the heir is either a minor or prohibited from engaging in business activities.</p> Signup and view all the answers

<p>The surviving partner is granted a time limit of ninety days to adjust the company's affairs.</p> Signup and view all the answers

<p>Engaging a new partner or converting the General Partnership into any other legal form.</p> Signup and view all the answers

<p>The company shall be deemed terminated by operation of law.</p> Signup and view all the answers

<p>If there is no surviving partner within the given time limit.</p> Signup and view all the answers

<p>Not later than one year following the date of death.</p> Signup and view all the answers

<p>The surviving partner is granted a time limit of ninety days to adjust the company's affairs.</p> Signup and view all the answers

<p>The company shall be deemed terminated by operation of law.</p> Signup and view all the answers

<p>Engaging a new partner or converting the General Partnership into any other legal form.</p> Signup and view all the answers

<p>It becomes effective vis-à-vis the creditors.</p> Signup and view all the answers

<p>Prior to his withdrawal or removal.</p> Signup and view all the answers

<p>The assignee.</p> Signup and view all the answers

<p>If the other partners are notified at least 60 days prior to the scheduled date of withdrawal.</p> Signup and view all the answers

<p>It is valuated.</p> Signup and view all the answers

<p>When any partner passes away or undergoes interdiction, when any liquidation proceedings are initiated against him, or when the partner withdraws or is removed.</p> Signup and view all the answers

<p>The heirs of the dead partner within the limits of their share in the equity stake of the dead partner.</p> Signup and view all the answers

<p>The prohibited acts of the manager include: a. Establishment or closing down of the Company’s branches; b. Donations, except for the usual small donations; c. The Company’s sponsorship of third parties; d. Reaching an agreement on the Company’s rights; e. Sale or mortgage of the Company’s real property; f. Sale or mortgage of the company’s business premises [store]; and g. Borrowing funds on behalf of the Company.</p> Signup and view all the answers

<p>A non-managing partner may not get involved in the management of the company. However, they have the right to review the progress of the company's business, examine its records and documents, and obtain a brief statement on the company's financial position based on such records and documents, twice during the fiscal year.</p> Signup and view all the answers

<p>The method of removal depends on whether the manager is a partner or not: 1. If the manager is a partner appointed under the Memorandum of Association (MOA), they can only be removed by a unanimous decision of the other partners. If the manager is appointed under an independent contract, they can be removed by a numerical majority. 2. If the manager is not a partner, they can be removed by a decision of the numerical majority. 3. The manager can also be removed based on a final judgment by the Competent Judicial Body. The manager's removal does not result in the dissolution of the company, unless specified in the MOA.</p> Signup and view all the answers

<p>The manager's retirement does not result in the dissolution of the company. However, in order for the retirement to be effective, all partners must be informed in writing at least 60 days prior to the retirement. If the manager fails to provide this notice, they may be liable to compensate for any losses resulting from their retirement.</p> Signup and view all the answers

<p>The equity stakes of partners cannot be represented by negotiable Sukuk. A partner can only assign their equity stake or part thereof in compliance with the restrictions stated in the Memorandum of Association (MOA) or with the unanimous approval of all partners. Any agreement that permits the assignment of equity stakes without restrictions or approval of partners is considered null and void. The assignment must also be registered with the commercial register.</p> Signup and view all the answers

<p>If a partner joins the General Partnership based on a new contribution, they will be held personally and jointly liable with the remaining partners in all their own property for the General Partnership's debts, both preceding and subsequent to their joining.</p> Signup and view all the answers

<p>Resolutions of partners can be adopted with the unanimous consent of all partners when the resolution in question is relating to the amendment of the General Partnership's Memorandum of Association (MOA).</p> Signup and view all the answers

<p>The General Partnership is a business venture established by two or more natural or legal persons, personally and jointly liable for the company's debts and obligations.</p> Signup and view all the answers

<p>a. Partners' names and particulars; b. The company’s name; c. The company’s headquarters; d. The Company’s objects; e. The Company's capital and method of dividing the same among partners; f. The company’s term, if any. The management of the company; h. Partners’ resolutions and the quorum required for their issuance; i. The method of distributing the profits and losses among the partners; j. Details of commencement and end dates of the fiscal year; k. The termination of the company; and l. Any other provisions, conditions or data, which the partners agree to include in MOA.</p> Signup and view all the answers

<p>The General Partnership is managed by the partners, and the legal person may designate its representative in the management. The parties may also agree on the appointment of one or more managers from the partners or others.</p> Signup and view all the answers

<p>The management of the General Partnership has the power to make decisions and take actions related to the operation of the company.</p> Signup and view all the answers

<p>The partners of a General Partnership are personally and jointly liable for the company's debts and obligations.</p> Signup and view all the answers

<p>A partner of a General Partnership shall acquire the capacity of a trader.</p> Signup and view all the answers

<p>The Memorandum of Association of a General Partnership can include partners' names and particulars, the company’s name, the company’s headquarters, the company’s objects, the company's capital and method of dividing the same among partners, the company’s term, the management of the company, partners’ resolutions and the quorum required for their issuance, the method of distributing the profits and losses among the partners, details of commencement and end dates of the fiscal year, the termination of the company, and any other provisions, conditions or data agreed upon by the partners.</p> Signup and view all the answers