business law

• A Contract of Partnership is a contract of two or more persons who bind themselves to contribute money, property, or industry to a common fund, with the intention of dividing the profits among themselves.
• A Contract of Partnership may also be formed by two or more persons for the exercise of a common profession.
• A Contract of Partnership is generally perfected by mere consent except if real property is contributed wherein it becomes a formal or solemn contract that requires the contract of partnership to be notarized and inventory of real property must be attached to the said public instrument.
• A Contract of Partnership does not depend upon any other contract for its validity or existence.
• A Contract of Partnership is entered into by two or more persons whose rights and obligations are reciprocal.
• A Contract of Partnership has a special name given to it by law.
• A Contract of Partnership is a means by which other contracts will be entered into as the partnership pursues its business.
• General partners are liable pro rata and subsidiarily to limited partnership’s liabilities up to the extent of their separate assets after the exhaustion of partnership’s assets.
• General partnership is created by mere consent while a private corporation is created by operation of law.
• General partners are generally liable up to the extent of their separate properties while stockholders are generally liable only up to the extent of their capital contribution.
• Dissolution of a general partnership does not automatically result to partnership liquidation while dissolution of a private corporation generally results to corporate liquidation.
• General partnership is generally managed by the partners themselves while private corporation is managed by the Board of Directors.
• General partnership has no right of succession while private corporation has right of succession.
• Dissolution of a general partnership is a change in the relationship among the partners while dissolution of a private corporation is the end of the life of a corporation.
• A Contract of Partnership is a form of business organization where the partners contribute money, property or industry to a common fund with the intention of dividing the profits among themselves, except in case of universal partnership which is considered an indirect donation classified as gratuitous contract.
• The essential requisites of a partnership as a form of business organization are a valid partnership contract, a lawful object or purpose, a mutual contribution of money, property or industry to a common fund, and it must be established for the common benefit or interest of the partners which is to obtain profits and then to divide the profits among the partners.
• Delectus Personae means that a partner has a right to choose those whom he wants to be associated with the partnership because it is based on trust and confidence.
• Admission of a third person as a partner requires unanimous consent of all the partners because being a partner is purely personal.
• A purchaser or assignee of an interest of an existing partner does not automatically become a partner in an existing partnership without the unanimous consent of all the partners.
• As a consequence, partnership as a form of business organization has no right of succession.
• A Contract of Partnership may be in any form because it is perfected by mere consent.
• Stipulation excluding any partner from share in partnership profit is void.
• Rules on Division of partnership losses: It should be divided based on a valid loss agreement or the industrial partner shall be exempted from sharing in losses and the losses shall be distributed to the capitalist partners based on the profit agreement of capitalist partners, capital contribution ratio of capitalist partners, and equally.
• Rules on Designation of Profits or Losses of Partnership by the Partners: The agreement as to the division of profits or losses must be mutually agreed upon by all partners.
• In case of capitalist - industrial partner, he shall receive a just and equitable share in the profit for being an industrial partner and then he shall also share in the remaining profits as a capitalist partner on the basis of (1) capital contribution ratio of capitalist partners or (2) equally with the capitalist partners.
• Prescriptive period to file an action to impugn or question the manifestly inequitable sharing of partnership profits or losses designated by a third person: Within 3 months from the knowledge of such designation but it must be before the said partner executes it.
• If the designation by a third person is manifestly inequitable, it can no longer be impugned by any partner if three months had already lapsed from the time he obtained knowledge thereof.
• Rules on partnership management when a partner has been appointed manager in the articles of co-partnership or at the time of execution of articles of co-partnership: The managing partner may execute all acts of administration despite the opposition of his partners unless he acts in bad faith.
• Stipulation excluding a capitalist partner from share in partnership loss is void.
• Stipulation excluding an industrial partner from share in partnership loss is valid.
• If the designation by a third person is manifestly inequitable, it can no longer be impugned by a partner who has begun to execute it.
• If entrusted by the partners to a third person, it is binding upon the partners and may be impugned only when it is manifestly inequitable.
• With just or lawful cause, the revocation of the power of the managing partner can be made by the vote of the partners representing the controlling interest.
• Without just or lawful cause, the revocation of the power of the managing partner can be made only with the consent of all the partners including the managing partner.
• If immovable or real property is contributed, the contract of partnership must be notarized and inventory of the said real property must be attached to the notarized contract of partnership for the contract to be valid.
• If the contributed capital is at least P3,000 in money or personal property, the contract of partnership must be notarized and registered for SEC in order to prejudice and affect third persons but not for validity of the contract.
• Public officer or his wife, descendants or ascendants and another person by reason of the public officer’s position are excluded from Universal Partnership.
• General partner is one who is liable for partnership debts to the extent of his separate property after all the assets of the partnership have been exhausted.
• The knowledge of any other partner not acting on a particular matter if he acquired the same while already a partner and he could and should have reasonably communicated the same to the partner acting on a particular matter binds the partnership.
• General partnership is a partnership where all the partners are liable up to the extent of their separate property after the partnership assets have been exhausted.