A Legal Analysis to the Binding or Non-binding Nature of General, Proportional and Limited Partnerships

The general, proportional, and limited partnerships are deemed as revocable and death or incapacity of their shareholders each would hamper their persistence. So presumption of revocability of these partnerships as a contract emerges, but many reasons suppress this presumption. That contract is principally deemed as binding; so the shareholders’ withdrawal or expulsion from the partnership would not be possible. However, possibility of revoking the partnership’s contract as well situation of the partnership contract at the exposure of dissolution with the death or incapacity of the shareholders each brings about various questions and ambiguities on consequences of these happenings particularly on the creditors’ rights. This analytical research shows that despite analyzed special regulations, these partnerships are still deemed as binding. Revocability does not make them non-binding. Besides, death or incapacity of one of the shareholders (general partners at the limited partnerships) although puts them at the exposure of dissolution but does not inevitably lead to their dissolution. However, in some situations, on decision to dissolve the partnership or to keep it persisting, creditors lose the demised shareholder’s responsibility in respect to what the partnership owes them in case of its dissolution and its insolvency for payment of its debts to creditors.