Partnership: Basic Considerations and Formation

Topics: Corporation, Partnership, Business law Pages: 4 (1021 words) Published: July 23, 2014
BASIC CONSIDERATIONS AND FORMATION
Partnership
-In the contract: Two or more persons bind themselves to contribute money, property, or industry to a common fund, with the intention of dividing the profit among themselves. -Two or more persons may also form a partnership for the exercise of a profession. (Civil Code of the Philippines, Article 1767) -The partnership has a juridical personality separate and distinct from that of each of the partners (Civil Code of the Philippines, Article 1768) -An Association of two or more persons to carry on, as co-owners, a business for profit. (Uniform Partnership Act, Section 6) -Partnerships resemble sole proprietorships, except that there are two or more owners of the business. Each owner is called a PARTNER. -Partnerships are generally associated with the practice of law, public accounting, medicine and other professions. Partnerships of this nature are called general professional partnerships. CHARACTERISTICS OF PARTNERSHIP

Mutual Contribution
Division of Profits or Losses
Co-Ownership of Contributed Assets
Mutual Agency
Limited Life
Unlimited Liability
Income Taxes
Mutual Contribution There cannot be partnership without contribution of money, property or industry to a common fund. Division of Profits or Losses Each partner must share in the profits or losses of the venture Co-Ownership of Contributed Assets All assets contributed into the partnership are owned by the partnership by virtue of its separate and distinct juridical personality. If one partner contributes an asset to the business, all partners jointly own it in a special sense. Mutual Agency Any partner can bind the other partners to a contract if he is acting within his express or implied authority. Limited Life It may be dissolved by the admission, death, insolvency, incapacity, withdrawal of a partner or expiration of the term specified in the partnership agreement. Unlimited Liability All partners (Except Limited Partners), including industrial...
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