What cases are considered termination of partnership membership in a partnership? If a general partner is expelled from the company, will his or her status as a general partner be terminated? The article shares detailed legal regulations on terminating the status of general partner in a partnership company according to the provisions of the Law on Enterprises 2020. 

CSPL: Articles 180, 181, 185 Law on Enterprises 2020

1. Cases of termination of the membership status of a partnership member 

– According to the provisions of Clause 1, Article 185 of the Law on Enterprises 2020, a partnership member’s status is terminated in the following cases:

•  Voluntary withdrawal of capital from the company

Partnership members have the right to withdraw capital from the company if approved by the Board of Members. In this case, the member who wants to withdraw capital from the company must notify in writing the request to withdraw capital no later than 06 months before the capital withdrawal date; Capital can only be withdrawn at the end of the fiscal year and the financial statements of that fiscal year have been approved.

Within 02 years from the date of termination of partnership membership, that person must still be jointly responsible with all of his or her assets for the company’s debts incurred before the date of termination of membership.

• Death, missing, restricted or lost. civil act capacity, difficulty in cognition and behavior control

In case of termination of membership status of a member with limited civil act capacity or loss of civil act capacity, difficulty in cognition or behavior control, that member’s capital contribution will be returned fairly and satisfactorily.

• Expelled from the company

Partnership member is expelled deducted from the company in the following cases:

+ Inability to contribute capital or not contribute capital as committed after the company has made a second request;

+ Violating regulations on restricting rights for general partners;

+ Conducting business dishonestly, carelessly, or engaging in other inappropriate behavior that causes serious damage to the interests of the company and other members;

+ Failure to properly perform the obligations of a general partner.

Within 02 years from the date of termination of general partner status, that person must still be jointly and severally liable. all of his or her assets for the company’s debts incurred before the date of termination of partnership membership.

• Serving a prison sentence or being banned by the Court from practicing certain professions or doing certain jobs according to the provisions of law

Within 02 years from the date of termination of partnership membership, that person must still be jointly responsible with all of his or her assets for the debts of the company. arising before the date of termination of membership.

• Other cases stipulated by the company’s Charter

Within 02 years from the date of termination of partnership membership, that person must still be jointly responsible with all of his or her assets for the company’s debts that arose before the date of termination of membership.

2. Restrictions on rights for general partners

General partners have restrictions on rights specified in Article 180 of the Law on Enterprises 2020

– General partners are not allowed to own private enterprises; are not allowed to be a general partner of another partnership company unless otherwise agreed by the remaining partners.

– General partners are not allowed to act on their own behalf or on behalf of others doing business in the same industry or line of business of the company for personal gain or to serve the interests of other organizations or individuals.

– General partners are not allowed to transfer part or all of their capital contribution in the company to other organizations or individuals without the approval of the remaining partnership members.

3. Rights and obligations of general partners

– General partners have the following rights:

+ Participate in meetings, discuss and vote on company issues; Each general partner has one vote or another number of votes specified in the company’s charter;

+ On behalf of the company doing business in the company’s business lines; negotiate and sign contracts, transactions or covenants with conditions that the partner considers most beneficial to the company;

+ Using company assets to conduct business in the company’s business lines; In case you advance your money to do business for the company, you have the right to request the company to return both principal and interest at the market interest rate on the principal amount advanced;

+ Require the company to compensate for damages from business activities within the scope of assigned tasks if such damages are not caused by that member’s personal mistakes;

+ Request the company and other partners to provide information about the company’s business situation; Check the company’s assets, accounting books and other documents when necessary;

+ Receive profits divided in proportion to the capital contribution ratio or according to the agreement stipulated in the company charter;

+ When the company dissolves or goes bankrupt, the remaining asset value will be divided in proportion to the capital contribution to the company if the company charter does not stipulate a different ratio;

+ In case a general partner dies, the member’s heirs will enjoy the value of the assets at the company after deducting the debts and other property obligations under that member’s responsibility. Heirs can become partners if approved by the Board of Members;

+ Other rights according to the provisions of this Law and the company’s Charter.

– Partnership members have the following obligations:

+ Conduct management and conduct business activities honestly, carefully and in the best way to ensure maximum legal benefits for the company;

+ Manage and carry out business activities in accordance with the provisions of law, the Company’s Charter and resolutions and decisions of the Board of Members; If you violate the regulations at this point and cause damage to the company, you must be responsible for compensating for the damage;

+ Do not use company assets for personal gain or to serve the interests of other organizations or individuals;

+ Return to the company the amount of money and assets received and compensate for damage caused to the company in the case of receiving money or other assets from the company’s business activities on behalf of the company, on behalf of an individual or on behalf of another person without submitting them to the company;

+ Jointly responsible for paying off the remaining debt of the company if the company’s assets are not enough to cover the debt. of the company;

+ Bear the loss corresponding to the capital contribution to the company or according to the agreement stipulated in the company’s Charter in case the company suffers a loss;

+ Regularly and monthly report truthfully and accurately in writing on the situation and results of its business with the company; provide information about its business situation and results to members who request;

+ Other obligations according to the provisions of this Law and the company’s Charter.