Originally uploaded on 2017.05.15 My take-down-note on a lecture on the Articles of Partnership

1. PARTNERSHIP (BUSINESS LAW)
CHARACTERISTIC ELEMENTS OF PARTNERSHIP
1. Consensual
2. Nominate
3. Bilateral
4. Onerous
5. Commutative
6. Principal
7. Preparatory
8. Fiduciary
ESSENTIAL FEATURES OF PARTNERSHIP
1. There must be a valid contact (delectus personae – “choice of the person”)
2. Legal capacity of the parties (Art 1327-1329)
3. Mutual contribution of money, property and industry
Money – currency (medium of exchange) which is legal tender in the Philippines
Property – tangible/intangible, real/personal ________
Industry – physical or mental
4. Lawful purpose/object – subject to the “Freedom of contract” clause
Art 1770 par 2 – Effects of an unlawful partnership
 contract is void ab initio
 profits will be confiscated in favor of the government
 instruments/proceeds/tools of the crime shall be forfeited in favor of the
government unless belonging to a 3
rd
person who did not participate but
those not within the commerce of man will be destroyed
5. Primary purpose is to divide profits, carries with it the obligation to share in loss
except for industrial partners but NOT in liabilities (Art 1769 Art 1816)
FORMAT OF PARTNERSHIP CONTRACT
o GEN RULE Art 1771: Partnership contracts are valid in whatever form.
o Art 1768: Partnership has juridical personality even if there is no compliance with
Art 1772 (de facto) which requires that a partnership with capital of more than
P3K must be in a public instrument and recorded with the SEC.
o Art 1773: If immovable is contributed, an inventory signed by the parties should
be attached to the public instrument.
WHEN DOES A PARTNERSHIP EXIST?
o GEN RULE: Intention of the parties prevail.
o Art 1769 – Rules to determine whether a partnership exists or not.
1. Persons who are not partners to each other are not partners as to third
persons except those in estoppel (Art 1825)
2. Co-ownership/co-possession does not by itself establish partnership.
3. Sharing of gross returns does not by itself establish partnership.
4. Receipt of a person of share in the profits is PRIMA FACIE evidence of
partnership, except if such share is for:
a. payment of debt
b.wages
c. annuity
d.interest of loan
e. consideration for sale of goodwill or property
KINDS OF PARTNERSHIP
o Universal Partnership Of All Present Property – all properties of the partners
before, during and after constitution of partnership belong to the partnership
o Universal Partnership Of Profits – only those acquired after the constitution of
the partnership belong to the partnership
Note: Husband and wife cannot enter into universal partnerships
o Particular Partnership – object is determinate: for a specific undertaking or for
the exercise of a profession
o General Partnership – all partners are general partners who are liable even with
their own properties
o Limited Partnership – at least has one general partner with other limited
partners who are only liable to the extent of their contributions
o Partnership At Will – has no specified term for its existence
o De Jure Partnership – one which exists in fact and in law
o De Facto Partnership – one which has no complete documents
o Ordinary/Real Partnership – one which exists among themselves and as to
third persons
o Secret Partnership – one where the partners are not publicly known
o Ostensible/Apparent/Evident In Estoppel
o Open/Notorious Partnership
o Commercial/Trading
o Professional/Non-Trading
KINDS OF PARTNERS
o Capitalist – one who contributes money and/or property answerable for loss and
liabilities, prohibited from engaging in similar kind of business (Art 1808)
o Industrialist – one who contributes services, mental or physical, not liable for
partnership loss (Art 1769) but will answer for partnership liabilities or contractual
obligations to third persons subject to reimbursement from capitalists (Art 1816),
prohibited from engaging in any kind of business (Art 1769)
QUERY – Are the businesses of selling banana que and selling banana only
classified the same?