ART. 1860.
The retirement, death, insolvency, insanity, Nothing in this Chapter shall be held to deprive a
or civil interdiction of a general partner dissolves the
partnership, unless the business is continued by the
remaining general partners:
(1) Under the right so to do stated in the
certificate, or
(2) With the consent of all the members.
Effect of retirement, death, insolvency, insanity or civil
interdiction of a general partner.
 dissolves the partnership
 while any of such causes affecting a limited
partner (see Art. 1861.) does not result in its
dissolution unless, of course, there is only one
limited partner. (see Art. 1843.)
 If the business is continued by the remaining
partners under the rights given in the certificate
or with the consent of all the members, the
limited partnership is not dissolved but the
certificate must be amended as required by
Article 1864, paragraph 2, No. (5) to reflect the
change in order that the limited partners may
avail of the protection granted by law.
ART. 1861. On the death of a limited partner, his
executor or administrator shall have all the rights of a
limited partner for the purpose of settling his estate,
and such power as the deceased had to constitute
his assignee as substituted limited partner.
The estate of a deceased limited partner shall be
liable for all his liabilities as a limited partner.
Right of executor on death of a limited partner.
 On the death of a limited partner, his executor or
administrator shall acquire all the rights for
purposes of settling the affairs of the limited
partner and the right to constitute the deceased’s
assignee as substituted limited partner.
NB: The executor or administrator may constitute the
assignee as a substituted limited partner only if the
deceased partner was empowered to do so in the
certificate.
 Under the second paragraph, the estate of the
deceased limited partner is liable for all his
liabilities contracted while he was a limited
partner. (see Art. 1858.)
ART. 1862. On due application to a court of
competent jurisdiction by any creditor of a limited
partner, the court may charge the interest of the
indebted limited partner with payment of the
unsatisfied amount of such
claim, and may appoint a receiver, and make all
other orders, directions, and inquiries which the
circumstances of the case may require.
The interest may be redeemed with the separate
property of any general partner but may not be
redeemed with partnership property.
The remedies conferred by the first paragraph shall
not be deemed exclusive of others which may exist.
limited partner of his statutory exemption.
Rights of creditors of limited partner.
The creditor of a limited partner may apply to the proper
court for an order charging the limited partner’s interest
in the partnership for the payment of any unsatisfied
amount of his claim.
 The interest so charged may be redeemed with
the separate property of any general partner but
not with partnership property.
 Under Article 1814, paragraph 2, No. (1), the
interest of the debtor partner charged with the
payment of the unsatisfied amount of the
judgment debt may be redeemed with
partnership property with the consent of all the
partners whose interests are not so charged.
 The limited partner’s right under the exemption
laws is also preserved under this article since his
interest in the partnership is actually his property.
ART. 1863. In settling accounts after dissolution, the
liabilities of the partnership shall be entitled to
payment in the following order:
(1) Those to creditors, in the order of priority as
provided by law, except those to limited
partners on account of their contributions,
and to general partners;
(2) Those to limited partners in respect to their
share of the profits and other
compensation by way of income on their
contributions;
(3) Those to limited partners in respect to the
capital of their contributions;
(4) Those to general partners other than for
capital and profits;
(5) Those to general partners in respect to
profits;
(6) Those to general partners in respect to
capital.
Subject to any statement in the certificate or to
subsequent agreement, limited partners share in the
partnership assets in respect to their claims for
capital, and in respect to their claims for profits or for
compensation by way of income on their contribution
respectively, in proportion to the respective amounts
of such claims.
Dissolution of a limited partnership.
Causes. — A limited partnership is dissolved in much the
same way as an ordinary partnership.
a) Misconduct of a general partner;
b) Fraud practiced on the limited partner by the
general partner;
c) The retirement, death, etc. of a general
partner;
d) When all the limited partners ceased to be
such;
e) On the expiration of the term for which it was
to exist;
f) By mutual consent of the partners before the
expiration of the firm’s original term.
Suit for dissolution
 a) A limited partner may bring (1) a suit for the
dissolution of the firm, (2) an accounting, and (3)
the appointment of a receiver when the
misconduct of a general partner or the insolvency
of the firm warrants it. Similarly, creditors of a
limited partnership are entitled to such relief
where the firm is insolvent.
b) A limited partner may have the partnership
dissolved and its affairs wound up when he
rightfully but unsuccessfully demands the return of
his contribution, or the other liabilities of the
partnership, except liabilities to general partners
and to limited partners on account of their
contributions, have not been paid, or the
partnership property is insufficient for their
payment, and the limited partner would
otherwise be entitled to the return of his
contribution.
Notice of dissolution.
 When the firm is dissolved by the expiration of the
term fixed in the certificate, notice of the
dissolution need not be given since the papers fi
led and recorded in the Securities and Exchange
Commission are notice to all the world of the term
of the partnership.
 Where, however, the dissolution is by the express
will of the partners, the certificate shall be
cancelled, and a dissolution of the partnership is
not effected until there has been compliance with
the requirement in this respect.
Winding up. — The consequences of the dissolution of a
general partnership apply to limited partnership.
 Therefore, the partnership continues in operation
while winding up. When a limited partnership has
been duly dissolved, the general partners have
the right and power to wind up its affairs, as in a
general partnership. It is not the duty of the limited
partner or of the representative of a deceased
limited partner to care for or collect the assets of
the firm. The representatives of the general
partners, not the limited partners, succeed the
general partners.
Priority in the distribution of partnership assets.
This article expressly provides for priority in the distribution
of the assets after dissolution. The partnership liabilities
shall be settled in the following order:
Those due to creditors, including limited partners,
except those on account of their contributions,
in the order of priority as provided by law (Arts.
1854, 1856, 1857[1].);
Those due to limited partners in respect to their
share of the profits and other compensation by
way of income on their contributions;
Those due to limited partners for the return of the
capital contributed;
Those due to general partners other than for
capital and profits;
Those due to general partners in respect to
profits; and
Those due to general partners for the return of
the capital contributed.
Partnership creditors are entitled to first distribution,
followed by limited partners who take priority over
general partners.
NB: In a general partnership, the claims of the general
partners in respect of capital enjoy preference over
those in respect of profits.
Share of limited partners in partnership assets.
 In the absence of any statement in the certificate
as to the share of the profits which each partner
shall receive by reason of his contribution and
subject to any subsequent agreement, limited
partners share in the partnership assets in respect
to their claims for capital and profits in proportion
to the respective amounts of such claims.
 This proportional sharing by the limited partners
takes place where the partnership assets are
insufficient to pay such claims.
Priority of claims of limited partners.
 The members of a limited partnership may include
in the partnership articles an agreement for
priority of distribution on the winding up of
partnership affairs.
 In the absence of any contrary agreement, all the
limited partners stand upon equal footing.
 The claims of limited partners for profits and other
compensation by way of income and return of
capital contributions rate ahead with respect to
all claims of general partners.
 For claims arising from individual loans to, or other
business transactions with, the partnership, other
than for capital contributions, the limited partner
 is placed in the same category as a non-member
creditor. (Art. 1854, par. 1.)
 If return is made to a limited partner of his
contribution before creditors are paid, he is under
an obligation to reimburse such payments, with
interest, so far as necessary to satisfy the claims of
creditors. (see Art. 1858, last par.)
 In the event of insolvency of the partnership, its
creditors take preference over both general and
limited partners.