law on partnership

Topics: Partnership, Types of business entity, Corporation Pages: 39 (8284 words) Published: September 24, 2013


PARTNERSHIP

 It is a CONTRACT whereby two or more persons (1) bind themselves to CONTRIBUTE money, property, or industry to a COMMON FUND (2) with the intention of dividing the PROFITS among themselves or in order to EXERCISE a PROFESSION

 a STATUS and a FIDUCIARY RELATION subsisting between persons carrying on a business in common with a view on profit

CHARACTERISTICS OF THE CONTRACT OF PARTNERSHIP
[C, C, L, I, AS, NP]
1. CONSENSUAL
 perfected by mere consent
2. CONTRIBUTION of money, property or industry to a COMMON FUND 3. object must be a LAWFUL one
4. INTENTION of DIVIDING the PROFIT among the PARTNERS
5. “AFFECTIO SOCIETATIS”
 the desire to formulate an ACTIVE UNION, with people among whom there exist a mutual CONFIDENCE and TRUSTS 6. NEW PERSONALITY
 the object must be for profit and not merely for the common enjoyment otherwise only a co-ownership has been formed. HOWEVER, pecuniary profit need not be the only aim, it is enough that it is the principal purpose

BUSINESS TRUSTS
 when certain persons entrust their property or money to others who will manage the same for the former

RULES ON CAPACITY TO BECOME A PARTNER
1. a person capacitated to enter into contractual relations may become a partner

2. an UNEMANCIPATED MINOR CANNOT become a partner UNLESS his parent or guardian consents

3. a MARRIED WOMAN, cannot contribute conjugal funds as her contribution to the partnership UNLESS she is permitted to do so by her husband OR UNLESS she is the administrator of the conjugal partnership, in which the COURT must give its consent authority

4. a PARTNERSHIP being a juridical person by itself can form another partnership

5. a CORPORATION cannot become a partner on grounds of public policy

 a partner shares not only in profits but also in the losses of the firm

RULE:
 the partnership has a PERSONALITY SEPARATE and DISTINCT from that of each partner

CONSEQUENCES OF THE PARTNERSHIP BEING A JURIDICAL ENTITY
1. its juridical personality is SEPARATE and DISTINCT from that of each partner

2. the partnership CAN in GENERAL:
A) acquire and possess property of all kinds
B) incur obligations
C) bring civil and criminal actions
D) can be adjudged insolvent even if the individual members be each financially solvent

3. unless he is generally sued, a partner has no right to make a separate appearance in court, if the partnership being sued is already represented

LIMITATIONS ON ALIEN PARTNERSHIP
1) if 60% capital is not owned by Filipinos
 the firm cannot acquire by purchase or otherwise AGRICULTURAL Philippine lands 2) foreign partnership may “lease” lands provided the period does not exceed 99 years 3) foreign partnership may be “MORTGAGEES” of land

 period of 5 years, renewable for another 5 years
 they cannot purchase it in a foreclosure sale

RULES IN CASE OF ASSOCIATIONS NOT LAWFULLY ORGANIZED AS PARTNERSHIP 1. it possesses NO LEGAL PERSONALITY
 it cannot sue as such HOWEVER, the partners in their individual capacity CAN 2. one who enters into a contract with a partnership as such cannot when sued later on for recovery of the debt, allege the lack of legal personality on the part of the firm, even if indeed it had no personality  ESTOPPEL

 whether a partnership has a juridical personality or not depends on its PERSONAL LAW of the partnership or the law of the place where the partnership was organized

REQUISITES FOR EXISTENCE OF PARTNERSHIP [I, CF, JI]
1. INTENTION to create a partnership
2. COMMON FUND obtained from contributions
3. JOINT INTERESTS in the PROFITS

WHAT DO NOT ESTABLISH A PARTNERSHIP
1. mere co-ownership or co-possession
 even with profit sharing
2. mere sharing of GROSS returns
 even with joint ownership of the properties involved

RULES TO DETERMINE THE EXISTENCE OF A PARTNERSHIP

1. persons who are not partners to each other are not partners as to third persons...
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Law on Partnership in the Philippines Essay
  • Partnership Law Essay
  • Law of associations partnerships Essay
  • Corporation and Partnership Law Essay
  • Limited Liability Partnership Essay
  • Partnership Essay
  • Partnership Research Paper
  • Essay on Partnership Law

Become a StudyMode Member

Sign Up - It's Free