Civil Code

A partnership contract becomes effective when each of the parties promises to make a contribution and engage in a joint undertaking.

The subject of the contribution may be services.

The provisions of Articles 533 and 536 do not apply to a partnership contract.

A partner may not cancel a partnership contract on the grounds that other parties do not perform the obligations based on the partnership contract.

Even if there are any grounds for the nullity or rescission of a manifestation of intention by one of the partners, the validity of the partnership contract is not impaired in relation to other partners.

The contributions of the partners and other partnership property is co-owned by all partners.

If monies are the subject of contribution and a partner fails to make the contribution, that partner must pay interest on the same and otherwise compensate for damage.

The partnership business is decided by the majority of the partners and executed by each partner.

The decision and execution of the partnership business may be delegated to one or more partners or a third party, pursuant to the provisions of the partnership contract.

The person delegated referred to in the preceding paragraph (referred to as a "person who executes business" below) decides and executes the partnership business. In such a case, if there are two or more persons who execute business, the partnership business is decided by the majority of these persons who execute business and is executed by each of them.

Notwithstanding the provisions of the preceding paragraph, the partnership business is not precluded to be decided based on the consent of all partners or executed by all partners.

Notwithstanding the provisions of the preceding paragraphs, the ordinary business of a partnership may be performed by each partner or each person who executes business independently; provided, however, that this does not apply if other partners or persons who execute business raise objections before the completion of the business.

In executing the partnership business, each partner may act as an agent of other partners with the consent of the majority of partners.

Notwithstanding the provisions of the preceding paragraph, if any person is delegated to be a person who executes business, only the person who executes business may act as an agent of partners. In such a case, if there are two or more persons who execute business, each person who executes business may act as an agent of partners only if the person obtains the consent of the majority of the persons who execute business.

Notwithstanding the provisions of the preceding two paragraphs, each partner and each person who executes business may act as an agent of partners independently when performing the ordinary business of the partnership.

The provisions of Articles 644 through 650 apply mutatis mutandis to partners who decide or execute the business of a partnership.

If one or more partners are delegated to decide and execute partnership business pursuant to the provisions of the partnership contract, those partners may not resign without a legitimate reason.

The partners referred to in the preceding paragraph may be dismissed by the unanimous agreement of the other partners, but only for just cause.

Each partner may inspect the status of the business and property of the partnership even if the partner does not have the right to decide and execute the business of the partnership.

If parties have not specified the proportions of distributions of the partnership's profits and losses, these proportions are determined in accordance with the value of each partner's contribution.

If the proportions of distributions have been specified solely with respect to either profits or losses, it is presumed that those proportions are common to profits and losses.

An obligee of a partnership may exercise their rights against the partnership property.

An obligee of a partnership may, at the choice of the obligee, exercise the rights of the obligee against each partner in proportion to their shares of loss or in equal proportions; provided, however, that if an obligee of a partnership knew the proportion of each partner's share of loss at the time of occurrence of the claim, the exercise of the obligee's rights is based on those proportions.

If a partner has disposed of the interest of the partner with respect to the partnership property, that partner may not duly assert that disposition against the partnership or third parties that had dealings with the partnership.

A partner may not independently exercise the rights with regard to a claim that is included in the partnership property based on that partner's interest in the claim.

A partner may not demand the division of the partnership property before liquidation.

A partner's obligee may not exercise the rights of that obligee against the partnership property.

Partners may admit a new partner to a partnership based on the consent of all partners or pursuant to the provisions of the partnership contract.

A partner that is admitted to a partnership pursuant to the provisions of the preceding paragraph after it is formed is not liable to perform the obligations of the partnership that arose before that partner's admission.

If a partnership contract does not specify the duration of the partnership, or specifies that the partnership is to continue for the life of a certain partner, each partner may withdraw at any time; provided, however, that unless there is a compelling reason to do so, a partner may not withdraw at a time that is detrimental to the partnership.

Even if the duration of the partnership is specified, each partner may withdraw if there is a compelling reason to do so.

Beyond the cases referred to in the preceding Article, partners withdraw on the following grounds:

the partner dies;

the partner is subject to an order commencing bankruptcy proceeding;

the partner has been expelled.

The expulsion of a partner may be effected by the unanimous agreement of the other partners, but only for just cause; provided, however, that the expulsion may not be duly asserted against a partner who is expelled unless a notice to that effect is given to that partner.

A withdrawing partner is liable to perform obligations of the partnership that have arisen before that partner's withdrawal, to the extent of that partner's previous liability. In such a case, until an obligee receives the full performance of the obligation, the withdrawing partner may demand that the partnership provide security or exempt the partner from liability in relation to the partnership.

A withdrawing partner acquires a right to reimbursement from the partnership if the partner performs an obligation of the partnership prescribed in the preceding paragraph.

Accounts as between the withdrawing partner and other partners must be settled according to the status of the partnership property as at the time of the withdrawal.

The interest of the withdrawing partner may be refunded in money, regardless of the kind of the withdrawing partner's contribution.

With respect to any matter not yet completed at the time of the withdrawal, accounts may be made up subsequent to the completion of that matter.

A partnership is dissolved on any of the following grounds:

the successful completion of the business that is the object of the partnership;

the expiration of the duration of the partnership specified by the partnership contract;

the occurrence of any cause of dissolution specified by the partnership contract; or

the consent of all partners.

Each partner may request the dissolution of the partnership if there is a compelling reason to do so.

The provisions of Article 620 apply mutatis mutandis to partnership contracts.

When a partnership is dissolved, liquidation is administered jointly by all partners or by a liquidator appointed by the partner.

A liquidator is appointed by a majority of all partners.

The provisions of Article 670, paragraphs (3) through (5), and Article 670-2, paragraphs (2) and (3) apply mutatis mutandis if there is more than one liquidator.

The provisions of Article 672 apply mutatis mutandis if the liquidator is appointed from among the partners pursuant to the provisions of the partnership contract.

The duties of a liquidator are to:

conclude current business;

collect debts and perform obligations; and

deliver residual assets.

The liquidator may perform any and all acts in order to perform the duties stated in the items of the preceding paragraph.

Residual assets are distributed in proportion to the value of the contributions of each partner.