Nature and formation of a partnership

• Mutual agency- Any partner may act as agent of the partnership in conducting its affairs.
• Unlimited liability- The person assets (assets not contributed to the partnership) of any partner may be used to satisfy the partnership creditors' claim upon liquidation, if partnership assets are not enough to settle the liabilities to outsiders.
• Limited life- A partnership may be dissolved at any time by action of the partners or by operation of law
• Mutual participation in profits- A partner has the right to share in partnership profits
• Legal entity- A partnership has legal personality separate and distinct from that of each of the partners
• Co- ownership of contributed assets- Property contributed to the partnership are owned by the partnership by virtue of its separate legal personality
• Income tax- Partnerships, except general professional partnership are subjected to the 30% income tax
• Trading partnership- one whose main activity is the manufacture and sale or the purchase and sale of goods
• Non-trading partnership- one which is organized for the purpose of rendering service
• As to object partnership- Universal partnership and particular partnership
• Limited partnership- 2 or more persons having as members one or more general partners and one or more limited partners. LTD are added
• as to duration- partnership at will and partnership with a fixed terms
• partnership at will- No term is specified and is not formed for a particular undertaking, can terminate anytime
• partnership with fixed terms- Term or period for which the partnership is to exist is agreed upon
• As to representation to others- Ordinary partnership and partnership by estoppel
• ordinary partnership- Which actually exist among the partners and also as to third persons
• Partnership by estoppel- Reality is not a partnership but is considered as one only in relation to those who
• As to legality of existence- De jure partnership and De facto partnership
• De jure partnership- Complied all the requirements for its establishments
• De facto partnership- One which failed to comply one ore more of the legal requirements for its establishment
• As to publicity- Secret partnership and open partnership
• Secret partnership- Existence of certain persons as partners is not made known to the public
• Open partnership- one wherein the existence of certain persons as partners is made known to public
• Capitalist partner- one who contributes capital in cash or property
• Industrial partner- One who contribute industry, labor, skill or service
• Capitalist-industrial partner- who contribute cash, property, and industry
• General partner- One whose liability to third persons extends to his private property
• Limited partner- Whose liability to third persons is limited only to the extent of his capital contribution
• Managing partner- Manage actively the business of the partnership
• Silent partner- Who does not participate in the management of the partnership
• Liquidating partner- One who take charges of the winding up of partnership affairs upon dissolution
• Nominal partner- who is not really a partner
• Ostensible partner- who takes active part in management of the firm and is known to the public
• Secret partner- Who takes active part in the management of the business but whose connection with the partnership is concealed
• Dormant partner- Both silent and secret partner
• General co-partnership- one consisting of general partners who are liable prorata and sometimes solidarity with their separate property