Chapter 1

• contract of partnership - two or more persons bind themselves to contribute money, property, or industry to a common fund, with the intention of dividing profit among themselves.
• partnership - an association of two or more persons.
• Mutual Contribution - There cannot be a partnership without contribution of money,property or industry (i.e. work or services which may either be personal manual efforts or intellectual) to a common fund.
• Division of Profits or Losses - each partner must share in the profits or losses of the venture.
• Co-Ownership of Contributed Assets - All assets contributed Into the partnership are owned by the partnership by virtue of Its separate and distinct juridical personality.
• Co-Ownership of Contributed Assets - one partner contributes an asset to the business, all partners jointly own it in a special sense.
• Mutual Agency - Any partner can bind the other partners to a contract if he is acting within his express or implied authority.
• Limited life - It may be dissolved by the admission, death, insolvency, incapacity, withdrawal of a partner or expiration of the term specified in the partnership agreement.
• Unlimited liability - All partners (except limited partners), including industrial partners,are personally liable for all debts incurred by the partnership.
• Income taxes - Partnerships, except general professional partnerships, are subject to tax at the rate of 30% (per R.A. No. 9337) of taxable income.
• Partners' equity accounts - The difference lies in the number of partners' equity accounts.Each partner has a capital account and a withdrawal account that serves similar functions as the related accounts for sole proprietorships.
• De Jure partnership


  complied with all the legal requirements for its establishment
• De facto Partnership


  has failed comply with all the legal requirements for its establishment
• General Partner


  one who is liable to the extent of his separate property after all the assets of the partnership are exhausted
• Limited partner


  one who is liable only to the extent of his capital contribution. he is not allowed to contribute industry or services only
• capitalist partner


  one who contributes money or property to the common fund of the partnership
• industrial partner 


  one who contributes his knowledge or personal service to the partnership
• managing partner


  one whom the partners has appointed as manager of the partnership
• liquidating partner


  one who is designated to wind up or settle affairs of the partnership after dissolution
• dormant partner


  one who does not take active part in the business of the partnership and is not known as a partner
• silent partner


  one who does not take active part in the business of the partnership though may be known as a partner
• secret partner


  one who takes active part in the business but is not known to be a partner by outside parties.
• nominal partner or partner by estoppel


  one who is actually not a partner but who represents himself as one