CHAPTER 5 - TERMINATION OF A PARTNERSHIP
SECTION 1 - CAUSES OF TERMINATION
Art. 2826. Unless continued as provided by law, a partnership is terminated by: the unanimous consent of its partners; a judgment of termination; the granting of an order for relief to the partnership under Chapter 7 of the Bankruptcy Code; the reduction of its membership to one person; the expiration of its term; or the attainment of, or the impossibility of attainment of the object of the partnership.
A partnership also terminates in accordance with provisions of the contract of partnership.
A partnership in commendam, however, terminates by the retirement from the partnership, or the death, interdiction, or dissolution, of the sole or any general partner unless the partnership is continued with the consent of the remaining general partners under a right to do so stated in the contract of partnership or if, within ninety days after such event, all the remaining partners agree in writing to continue the partnership and to the appointment of one or more general partners if necessary or desired. [Acts 1980, No. 150, §1, Amended by Acts 1981, No. 797, §1; Acts 1982, No. 273, §1]
Art. 2827. A partnership may be expressly or tacitly continued when its term expires or its object is attained, or when a resolutory condition of the contract of partnership is fulfilled. If the object becomes impossible, the partnership may be continued for a different object.
Unless otherwise agreed, a partnership that is expressly or tacitly continued has no term. [Acts 1980, No. 150, §1]
Art. 2828. When a partnership terminates, the business of the partnership ends except for purposes of liquidation.
If a partnership terminates because its membership is reduced to one person, that person is not bound to liquidate the partnership and may continue the business as a sole proprietor. If the person elects to continue the business, his former partners are entitled to amounts equal to the value of their shares as of time the partnership terminated, and they have the right to demand security for the payment of partnership debts. [Acts 1980, No. 150, §1]
Art. 2829. A change in the number or identity of partners does not terminate a partnership unless the number is reduced to one. [Acts 1980, No. 150, §1]
SECTION 2 - EFFECTS OF TERMINATION OF PARTNERSHIP AND RIGHTS OF FORMER PARTNERS
Art. 2830. When a partnership terminates, the authority of the partners to act for it ceases, except with regard to acts necessary to liquidate its affairs.
Anything done in what would have been the usual course of business of the partnership by a partner acting in good faith, who is unaware that the partnership has terminated, binds the partnership as if it still existed. [Acts 1980, No. 150, §1]
Art. 2831. The termination of a partnership, for any reason, does not affect the rights of a third person in good faith who transacts business with a partner or a mandatary acting on behalf of the former partnership. [Acts 1980, No. 150, §1]
CHAPTER 6 - DISSOLUTION, LIQUIDATION, AND DIVISION OF ASSETS
Art. 2832. The creditors of the partnership must be paid in preference to the creditors of the partners. [Acts 1980, No. 150, §1]
Art. 2833. The creditors of a partnership shall be paid in the following order of priority: secured creditors in accordance with their security rights; unsecured creditors who are not partners; unsecured creditors who are partners.
If any assets remain after the payment of all secured and unsecured creditors, the capital contributions shall be restored to the partners. Finally, any surplus shall be divided among the partners proportionally based on their respective interests in the partnership. [Acts 1980, No. 150, §1]
Art. 2834. In the absence of contrary agreement, a partnership is liquidated in the same manner and according to the same rules that govern the liquidation of corporations.
A partnership retains its juridical personality for the purpose of liquidation. [Acts 1980, No. 150, §1]
Art. 2835. The liquidation of a partnership is not final until all its assets have been collected and applied to its obligations and its remaining assets, if any, have been appropriately distributed to the partners. [Acts 1980, No. 150, §1]