Short answer. No, not unless the remaining partners agree. Under the Civil Code the buyer of a partner's interest is entitled only to the profits the selling partner would have received. He cannot interfere in management, demand an accounting, or inspect the partnership books while the partnership continues.
What the law says
entitle the assignee, during the continuance of the partnership, to interfere in the management or administration of the partnership business or affairs, or to require any information or account of partnership transactions, or to inspect the partnership books; but it merely entitles the assignee to receive in accordance with his contract the profits to which the assigning partner would otherwise be entitled
Civil Code, Article 1813 — Conveyance of a Partner's Interest. Read the full provision →
Buying an interest is not buying a seat at the table
A partnership is built on the personal trust of the people who formed it, so the law refuses to let a partner hand that relationship to a stranger by contract. Article 1813 of the Civil Code says the buyer — the assignee — gets the economic side and nothing else. He may receive the profits the assigning partner would otherwise have been entitled to, in accordance with his own contract with that partner. He may not interfere in the management or administration of the business, require information or an account of partnership transactions, or inspect the books. Your position as a remaining partner is therefore unchanged by a sale you never agreed to.
The partnership is not dissolved either
The article opens by stating that a conveyance by a partner of his whole interest does not of itself dissolve the partnership. That cuts both ways. The remaining partners cannot treat the sale as automatically ending the firm and walking away from its obligations, and the buyer cannot force a wind-up in order to cash out. The business carries on with the same partners as before. Note also what the selling partner keeps: he has parted with his interest in the profits, but the article does not by itself strip him of his status, so his own duties to the partnership and to you do not simply evaporate on the day he signed.
The two situations where the buyer does get rights
Article 1813 provides two openings. First, in case of fraud in the management of the partnership, the assignee may avail himself of the usual remedies. A buyer who is being cheated of profits by manipulated accounts is not left without a remedy simply because he cannot inspect the books. Second, on dissolution the assignee is entitled to receive his assignor's interest, and may require an account — but only from the date of the last account agreed to by all the partners. That cut-off matters: he cannot reopen years of settled accounts, only the period since the last one everyone accepted.
Practical points for the remaining partners
The phrase in the absence of agreement is the one to watch. These restrictions protect the other partners and can be waived by them, so if you want the buyer admitted as a full partner, that is done by the partners' agreement, not by the deed of sale. Conversely, do not start treating him as a partner by habit — letting him sign for the firm, attend management meetings or hold himself out as a partner can create obligations to third parties that are hard to disown. Review the partnership agreement, which may regulate transfers, and record clearly what profits are now payable to whom.
Cases citing this provision
These Supreme Court decisions cite the provision above. We list them so you can read them yourself; the summaries of what each decided are not ours to give.
- Josefina P. Realubit vs. Prosencio D. Jaso and Eden G. Jaso, G.R. No. 178782, September 21, 2011 — read the decision on LawPhil →