Text consolidated by Valsts valodas centrs (State Language Centre) with amending laws of

Section 87. Taking of Decisions

(1) To take a decision, the consent of all the members of the partnership who have the right to take the relevant decision shall be necessary.

(2) If a partnership agreement specifies that a decision shall be taken by a majority of votes, then, in case of doubt, a majority shall be determined according to the number of members in the partnership.

[14 February 2002]

Section 88. Profits and Losses

(1) The profits and losses of a partnership shall be specified at the end of every accounting year, based upon the annual accounts of the partnership, which has been approved by the members of the partnership.

(2) The profits and losses of a partnership shall be divided between members in proportion to their contribution (capital shares) in the partnership. The calculated profit for each member of the partnership shall be added to his or her contribution (capital shares), on the other hand, in the case of losses, his or her contributions (capital shares) shall be reduced by the amount of calculated loss.

(3) If a member of a partnership, up to the division of profits, has not paid in his or her contribution, which he or she should have paid in accordance with the partnership agreement, the contribution together with interest shall be withheld from the share of the profit, which would be due to the member.

(4) A member of a partnership may request the payment of his or her share of the profit if it does not harm the partnership and his or her contribution (capital share) have not reduced.

[14 February 2002]
Chapter 3

Relations of Members of a Partnership with Third Parties

Section 89. Existence of a Partnership in Relation to Third Parties

(1) A partnership has an on-going relationship with third parties from the time it is entered in the Commercial Register.

(2) If a partnership has concluded its transactions already prior to its being entered in the Commercial Register, the partnership shall be deemed to have existed from the time of the conclusion of the transaction.

(3) An agreement regarding the fact that a partnership shall be deemed to exist at a later time shall be void as to third parties.

Section 90. Legal Status of a Partnership

(1) A partnership, utilising its firm name, may acquire rights and assume obligations, acquire property and other rights pertaining to property, as well as be a plaintiff and defendant in a court.

(2) Collection on the property of a partnership may be commenced only after a court adjudication in a matter in which the defendant is the partnership.
Section 91. Representation of a Partnership
(1) All members of a partnership have the right to represent the partnership in relations with third parties, unless they have been excluded from representation by the partnership agreement.

(2) A partnership agreement may specify that all or several members of the partnership are entitled to represent the partnership only jointly (joint representation). These members may authorise one member or several members from among themselves to conclude specific transactions or specific types of transactions. The intent of a third party shall be deemed to be a relation expressed as to the partnership if it is expressed to at least one of its members who is entitled to represent the partnership.

(3) [22 April 2004]

(4) Application for entering in the Commercial Register of the exclusion of a member of a partnership from representation, the specification of joint representation in accordance with the provisions of Paragraphs two and three of this Section, as well as any other changes in the representation authorisations of the members of the partnership shall be notified for entering in the Commercial Register. It is the duty of all members of the partnership to sign these applications.

Section 92. Scope of Representations

(1) The representation by members of a partnership shall apply to all transactions and other lawful activities, including the alienation and encumbering of immovable property with rights pertaining to property, as well as the issuing and revocation of a procuration.

(2) Restrictions on the scope of representations shall not be binding on third parties.

(3) The provisions of Paragraph two of this Section shall specially apply to such restrictions on the scope of representation as in conformity with representation shall be conducted:

1) in relation to specific transactions or specific types of transactions;

2) the existence of certain circumstances; or

3) for a specific period or in a specific geographical territory.

(4) Joint representation, if it is registered with the Commercial Register, shall not be deemed to be a restriction of the scope of representation.

(5) Restrictions on the scope of representation in relation to one of several branches of a partnership undertaking (branch representation) shall be in effect in relation to third parties only if these branches have a different firm name entered in the Commercial Register.
Section 93. Revocation of Representation
(1) The representation of a member of a partnership, on the basis of a relevant action by the rest of the members, may be revoked by a court adjudication, if there is good cause for it.

(2) A gross violation in the performance of duties as well as an inability to properly perform representation of the partnership shall be especially considered to be good cause.

(2) Agreements, which are in contradiction to Paragraph one of this Section, shall be void as to third parties.

(2) A member of a partnership may refuse to satisfy a claim by a creditor, while:

1) the partnership has a right to contest the transaction which is the basis of the obligation of the partnership; or

2) the creditor may satisfy their claim by an offset in respect of the fulfilment of the obligation of the partnership.

(3) On the basis of an adjudication which has come into legal effect in a matter, in which the defendant is only the partnership, collection may not be made against the property of a member of the partnership.