chapter 2

• Article 1767 states that by the contract of partnership, two or more persons bind themselves to contribute money, property, or industry to a common fund with the intention of dividing the profits among themselves
• The Article of Co-partnership includes information like the name of the partnership, names and addresses of partners, effective date of the contract, purpose of the partnership, capital contributions of partners, rights and duties of partners, profit/loss division, conditions for withdrawing money, bookkeeping methods, causes for dissolution, and provisions for arbitration
• Characteristics of a partnership include being based on a contract, a voluntary association, mutual agency, limited life, unlimited liability for general partners, co-ownership of property and profit, legal entity status, and specific income tax regulations
• Advantages of a partnership: easy and inexpensive formation and dissolution, ability to raise more capital than a sole proprietorship, relative freedom in decision-making, better management, and the unlimited liability of general partners
• Disadvantages of a partnership: lack of business continuity, limited capital, unlimited liability which deters some from joining, potential for personal liability for general partners, likelihood of dissension, disagreement, and difficulty in transferring ownership
• Kinds of partnerships can be categorized according to activities (service, merchandising, manufacturing), liability (general, limited), object (universal partnership of all present property, universal partnership of profits, particular partnership), and duration of partnership existence (partnership at will, partnership with a fixed term)
• Types of partners include capitalist (contributes capital), industrial (contributes labor or service), general (liable with private property), limited (liability limited to capital contribution), managing (actively manages), silent (provides capital but doesn't manage), nominal (liable as a partner to protect third parties), secret (active but connection is concealed), dormant (inactive and unknown as a partner), and ostensible (active and known to the public)
• Basic features of partnership accounting involve multiple capital and drawings accounts, partner's loans, partner's borrowings, partner's salaries, interest on investment, and the division of profits and losses based on agreements
• Two kinds of partnership formation: when two or more individuals form a business for the first time, or when an individual forms a business with a sole proprietor or a sole proprietorship converted into a partnership