A declaration of forfeiture of authority against the managing partner in a limited partnership with only one general partner

The adjudication system of forfeiture of power of a partner of a limited partnership company under Article 205 of the Commercial Code is aimed at removing reasons for interference in the operation of the company, and it does not aim at getting the company to be dissolved. Thus, in a limited partnership company only one general partner, the report of forfeiture of power to the managing partner is returned to the state where there is no managing member and representative member of the company, so it cannot be operated because it goes against the purpose of the adjudication system of forfeiture of power.

Article 205 of the Commercial Act

Supreme Court Decision 65Da2128 Delivered on January 25, 1966

Plaintiff 1 and one other

Defendant (Attorney Hwang Jae-soo, Counsel for defendant-appellant)

Seoul High Court Decision 74Na581 delivered on June 18, 1975

The judgment below is reversed and the case is remanded to Seoul High Court.

The first ground for appeal by the defendant's attorney is examined first.

In the case of a limited partnership company under Article 269 of the Commercial Act, which applies mutatis mutandis in Article 205 of the same Act, the purpose of which is to eliminate the reasons for disability in the operation of the company by clearly depriving of the executive partner who has committed an act of violating his or her authority, and it is not the purpose of the company's failure or dissolution. According to the court below's determination in this case, the limited partnership company ○○ is merely a limited partner who constitutes a limited partner and a limited partner who is the defendant and only a limited partner who is the defendant. Thus, if the general partner is only the defendant, if the general partner is declared to lose his or her authority, the above company enters into a state where there is no managing partner and the deprivation of the general partner's right to execute its affairs entails deprivation of his or her power to exercise his or her authority. Thus, the company is not able to operate the company by reaching a state where there is no representative member, which results in violating the purport of the system of declaration of loss of authority.

In this case, the court below states that a limited partnership company may admit a general partner with the consent of all its members and that a limited partnership company's business management and power of representation are not recognized by the Commercial Act, but does not prohibit a limited partner from granting a right of business management and power of representation in accordance with the articles of incorporation or internal rules.

However, Article 285 of the Commercial Act that a new limited liability company or unlimited liability company may continue to exist by joining the limited liability company or all limited liability partners. Thus, this provision cannot be applied if this proposal does not result in such company's result, and this case refers to an amendment of the articles of incorporation that a new general partner shall join with the consent of all the members. This result in the result that the company cannot continue to exist without the consent of all the members, and as a result, it shall not be sentenced to the forfeiture of authority until the amendment of the articles of incorporation is forced. Notwithstanding Article 278 of the Commercial Act, the articles of incorporation or internal rules that recognize the management of affairs of the limited liability company or representative acts of the limited liability company, even if it is possible to grant the limited liability member the right to represent the limited liability member, so the above reasons for the judgment of the court below cannot be the grounds for declaring the loss of authority from the original members (refer to this case's reasoning. 25Da2128, Jan. 25, 1966).

In light of the above, the adjudication system of forfeiture of the executive partner's authority is based on the premise that there are two or more general partners in a limited partnership company. Therefore, in the case where only one general partner is a single person, it shall not be deemed that there is no room to apply this system.

Therefore, the judgment of the court below on the premise that the adjudication system of forfeiture of authority against the managing partner can be applied even to only one general partner limited partnership company, cannot be said to have affected the conclusion of the judgment by misunderstanding the legal principles under Article 205 of the Commercial Act applied mutatis mutandis by Article 269 of the same Act.

Therefore, the appeal on this point by the defendant's legal representative is justified, and the judgment of the court below is reversed and the case is remanded to the court below. It is so decided as per Disposition by the assent of all participating judges.

Justices Yu Tae-hun (Presiding Justice)