partnership and agency

• 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
• Partnership for exercise of a profession


  Two or more persons may form a partnership for the exercise of a profession
• Partnership has a juridical personality


  Separate and distinct from that of each of the partners, even in case of failure to comply with the requirements of article 1772, first paragraph
• Rules to determine if a partnership exists


  • Persons who are not partners as to each other are not partners as to third persons
  • Co-ownership or co-possession does not of itself establish a partnership
  • The sharing of gross returns does not of itself establish a partnership
  • The receipt by a person of a share of the profits of a business is prima facie evidence that he is a partner in the business
• Lawful object or purpose of a partnership


  Partnership must be established for the common benefit or interest of the partners
• Unlawful partnership


  When dissolved by a judicial decree, the profits shall be confiscated in favor of the State, without prejudice to the provisions of the Penal Code governing the confiscation of the instruments and effects of a crime
• Partnership constitution


  May be constituted in any form, except where immovable property or real rights are contributed thereto, in which case a public instrument shall be necessary
• Partnership capital of 3000 pesos or more


  Must appear in a public instrument, which must be recorded in the Office of the Securities and Exchange Commission
• Immovable property contributed to a partnership


  An inventory of the property must be made, signed by the parties, and attached to the public instrument
• Acquisition of immovable property in the partnership name


  Title can only be conveyed in the partnership name
• Associations and societies with secret articles


  Have no juridical personality, and shall be governed by the provisions relating to co-ownership
• Types of partnerships


  • Universal or particular (as to object)
  • General or limited (as to liability of partners)
• Universal partnership of all present property


  Partners contribute all the property which actually belongs to them to a common fund, with the intention of dividing the same among themselves, as well as all the profits which they may acquire therewith
• Universal partnership of profits


  Comprises all that the partners may acquire by their industry or work during the existence of the partnership
• Particular partnership


  Has for its object determinate things, their use or fruits, or a specific undertaking, or the exercise of a profession or vocation
• Partnership begins


  From the moment of the execution of the contract, unless it is otherwise stipulated
• Continuation of partnership after termination


  Rights and duties of the partners remain the same as they were at such termination, so far as is consistent with a partnership at will
• Partner's obligation to contribute

  Every partner is a debtor of the partnership for whatever he may have promised to contribute thereto
• Appraisal of contributed goods


  Must be made in the manner prescribed in the contract of partnership, and in the absence of stipulation, it shall be made by experts chosen by the partners, and according to current prices
• Partner's failure to contribute capital


  Becomes a debtor for the interest and damages from the time he should have complied with his obligation
• Industrial partner engaging in own business


  Cannot do so unless the partnership expressly permits him to, and if he does, the capitalist partners may either exclude him or avail themselves of the benefits with a right to damages
• Contribution of partners to capital


  Unless there is a stipulation to the contrary, the partners shall contribute equal shares
• Refusal to contribute additional capital


  Any partner who refuses to contribute an additional share to the capital, except an industrial partner, to save the venture, shall be obliged to sell his interest to the other partners
• Collection of partnership credit by a partner


  If a partner authorized to manage collects a demandable sum owed to him, it shall be applied to the two credits in proportion to their amounts
• Partner receiving share of partnership credit


  If the debtor later becomes insolvent, the partner shall be obliged to bring to the partnership capital what he received
• Partner's responsibility for damages


  Every partner is responsible to the partnership for damages suffered by it through his fault, but the courts may equitably lessen this responsibility if through the partner's extraordinary efforts in other activities of the partnership, unusual profits have been realized
• Risk of contributed things


  For specific and determinate things, the risk is borne by the partner who owns them; for fungible or deteriorating things, the risk is borne by the partnership
• Partnership's responsibility to partners


  The partnership shall be responsible to every partner for the amounts he may have disbursed on behalf of the partnership and for the corresponding interest, and for obligations he may have contracted in good faith in the interest of the partnership business
• Distribution of losses and profits


  In conformity with the agreement; if only the share of each partner in the profits has been agreed upon, the share of each in the losses shall be in the same proportion; in the absence of stipulation, the share shall be in proportion to what each partner contributed, but the industrial partner shall not be liable for the losses
• Designation of share in profits and losses by a third person


  May be impugned only when it is manifestly inequitable; a partner who has begun to execute the decision or not impugned it within 3 months cannot complain
• A stipulation which excludes one or more partners from any share in the profits or losses is void
• Powers of the managing partner


  May execute all acts of administration despite the opposition of his partners, unless he acts in bad faith; his power is irrevocable without just or lawful cause
• Management by multiple partners

  If no duties are specified, each may act separately; if consent of all is required, concurrence of all is necessary except in case of imminent danger
• Alteration of partnership's immovable property


  Requires consent of all partners, unless the refusal is manifestly prejudicial to the partnership's interest
• Associate partner


  A partner may associate another person with him in his share, but the associate shall not be admitted into the partnership without the consent of all the other partners
• Partnership books


  Shall be kept at the principal place of business, and every partner shall have access to and may inspect and copy any of them
• Partner's duty to account


  Must account for any benefit and hold as trustee for the partnership any profits derived without the consent of the other partners
• Capitalist partner engaging in competing business


  Cannot do so for their own account, unless there is a stipulation to the contrary; if they do, they must bring the profits to the common funds and bear the losses
• Partner's right to formal account


  If wrongfully excluded from the partnership business or possession, if the right exists under the agreement, as provided in article 1807, or whenever other circumstances render it just and reasonable
• Property rights of a partner


  • Rights in specific partnership property
  • Interest in the partnership
  • Right to participate in the management