LAW

• 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. Two or more persons may also form a partnership for the exercise of a profession.

  Art. 1767
• A partnership exists when two or more persons agree to place their money, effects, labor, and skill in lawful commerce or business, with the understanding that there shall be a ____ sharing of the profits and losses among them.

  proportionate
• "a group of men pursuing a learned art as a common calling in the spirit of public service” , -- no less a public service because it may incidentally be a means of livelihood.

  Profession
• Essential requisites of a contract of partnership

  * Valid contract

  * Contribution of MPI to a common fund

  * Organized for gain and profit

  * Lawful object or purpose; common benefit or interest of the partners
• Two tests to determine the existence of a partnership

  First test- agreement to contribute MPI to a common fund

  Second test- intent to divide profits among themselves
• To be considered a juridical personality, a partnership must fulfill these requisites:

  * Two or more person bind themselves to contribute MPI to a common fund

  * Intention of parties to divide profit among themselves
• • It is a contract that is perfected by mere consent because all of the partners had a meeting of minds to enter into a contract of partnership.

  Consensual
• • The contribution of each partner, whether money, property or industry, is considered as the equivalent of the contribution of the other partners.

  Commutative
• • It is a contract that does not depend on other contracts for its existence.

  Principal
• • It is a contract entered into by two or more persons.

  Bilateral
• • Each partner must contribute money, property, or industry. course, a partner can contribute one, some or all of these.

  Onerous
• • It is a contract which has a name in law.

  Nominate
• • It is a contract in preparation for another contract or contracts.

  Preparatory
• • The medium of exchange authorized or adopted by a government as part of its currency.

  Money
• • Any external thing over which the rights of possession, use, and enjoyment are exercised.

  Property
• • Diligence in the performance of a task. A particular form or branch of productive labor.

  Industry
• DOCTRINE OF DELECTUS PERSONAE


  The right to choose with whom a person wishes to associate himself is the very foundation and essence of partnership.
• Its continued existence is, in turn, dependent on the constancy of that ____, along with each partner's capability to give it, and the absence of cause for dissolution provided by the law itself.

  mutual resolve
• a partnership "has a juridical personality separate and distinct from that of each of the partners

  Art. 1768
• The partners ____ be held liable for the obligations of the partnership unless it is shown that the legal fiction of a different juridical personality is being used for fraudulent, unfair, or illegal purposes. Hence, it is the partnership, not its officers or agents, which should be impleaded in any litigation involving property registered in its name.

  cannot
• An entity, such as a corporation, created by law and given certain legal rights and duties of a human being; a being, real or imaginary, who for the purpose of legal reasoning is treated more or less as a human being.

  ARTIFICIAL PERSON / JURIDICAL PERSON
• Rules in determining whether a partnership exists

  Article 1769
• Persons who are ___ partners as to each other are ___ partners as to third persons;

  not
• Co-ownership or co-possession ___ of itself establish a partnership;

  does not
• The sharing of gross returns does ___ of itself establish a partnership

  not
• The receipt by a person of a share of the profits of a business is ____ evidence that he is a partner in the business.

  prima facie
• Lawful object or purpose- A partnership must have a lawful object or purpose, and must be established for the common benefit or interest of the partners

  Art. 1770
• • The object or purpose of a partnership must be within the commerce of man, not impossible, and it must not be contrary to law, morals, good customs, public order or public policy.

  Lawful object or purpose
• FORM OF CONTRACT OF PARTNERSHIP

  Art. 1771
• Art. 1771 General Rule:

  No form is required, contract may be oral or in writing.
• Art. 1771 Exception: If real properties or real rights in real properties are contributed regardless of the value. A public instrument is needed; otherwise, the contract of partnership is ____.


  void
• • A right that is connected with a thing rather than a person. Real rights include ownership, use, habitation, usufruct, predial servitude, pledge, and real mortgage.

  Real Rights
• • A document prepared by a notary public in the presence of the parties who sign it before witnesses.

  Public Instrument
• Partnership having capital of 3, 000 or more (Personal Property ONLY)

  Art. 1772
• Non-compliance with the requirement of execution in a public instrument will not make the contract ___. Hence, it is still ___.

  void, valid
• No form is required in a partnership having a capital of below ___ (personal property only). Thus, it may be verbal.

  P3,000
• set "a condition for the issuance of licenses to engage in business or trade. In this way, the tax liabilities of big partnerships cannot be evaded, and the public can also determine more accurately their membership and capital before dealing with them

  registration
• Requisite of Inventory

  Art. 1773
• A contract of partnership is ___, whenever immovable property is contributed thereto, if an inventory of said property is not made, signed by the parties, and attached to the public instrument.

  void
• Intention of this provision (Art. 1773) is to

  protect the third persons