Академический Документы
Профессиональный Документы
Культура Документы
PARTNERSHIP REVIEWER
University of The Philippines
PARTNERSHIP
it is a CONTRACT whereby two or more persons (1) bind
themselves to CONTRIBUTE money, property, or industry to a COMMON
FUND (2) with the intention of dividing the PROFITS among themselves
or in order to EXERCISE a PROFESSION
a STATUS and a FIDUCIARY RELATION subsisting between
persons carrying on a business in common with a view on profit
CHARACTERISTICS OF THE CONTRACT OF PARTNERSHIP
[C, C, L, I, AS, NP]
1. CONSENSUAL
perfected by mere consent
2. CONTRIBUTION of money, property or industry to a COMMON FUND
3. object must be a LAWFUL one
4. INTENTION of DIVIDING the PROFIT among the PARTNERS
5. AFFECTIO SOCIETATIS
the desire to formulate an ACTIVE UNION, with people among
whom there
exist a mutual CONFIDENCE and TRUSTS
6. NEW PERSONALITY
the object must be for profit and not merely for the common
enjoyment otherwise only a co-ownership has been formed.
HOWEVER, pecuniary profit need not be the only aim, it is
enough that it is the principal purpose
BUSINESS TRUSTS
when certain persons entrust their property or money to others
who will manage the same for the former
RULES ON CAPACITY TO BECOME A PARTNER
1. a person capacitated to enter into contractual relations may
become a partner
2. an UNEMANCIPATED MINOR CANNOT
UNLESS his parent or guardian consents
become
partner
2
the firm cannot acquire by purchase or otherwise
AGRICULTURAL Philippine lands
2) foreign partnership may lease lands provided the period does not
exceed 99 years
3) foreign partnership may be MORTGAGEES of land
period of 5 years, renewable for another 5 years
they cannot purchase it in a foreclosure sale
RULES IN CASE OF ASSOCIATIONS NOT LAWFULLY ORGANIZED AS
PARTNERSHIP
1. it possesses NO LEGAL PERSONALITY
it cannot sue as such HOWEVER, the partners in their
individual capacity CAN
2. one who enters into a contract with a partnership as such cannot
when sued later on for recovery of the debt, allege the lack of
legal personality on the part of the firm, even if indeed it had no
personality
ESTOPPEL
whether a partnership has a juridical personality or not
depends on its PERSONAL LAW of the partnership or the law of the place
where the partnership was organized
REQUISITES FOR EXISTENCE OF PARTNERSHIP [I, CF, JI]
1. INTENTION to create a partnership
2. COMMON FUND obtained from contributions
3. JOINT INTERESTS in the PROFITS
WHAT DO NOT ESTABLISH A PARTNERSHIP
1. mere co-ownership or co-possession
even with profit sharing
2. mere sharing of GROSS returns
even with joint ownership of the properties involved
RULES TO DETERMINE THE EXISTENCE OF A PARTNERSHIP
1.
persons who are not partners to each other are not partners as to
third persons
EXCEPTION:
PARTNERSHIP BY ESTOPPEL
2.
3.
4.
PARTNERSHIP BY ESTOPPEL
IF 2 persons not partners represent themselves as partners to
strangers, a partnership by estoppel results
WHEN 2 persons, who are partners, in connivance with a
friend who is not a partner inform a stranger that said friend is their
partner, a partnership by estoppel also result to the end that the stranger
should not be prejudiced
RULE: LAWFUL OBJECT or PURPOSE
3
a partnership must have LAWFUL OBJECT or PURPOSE, and
must be established for the common benefit or interest of the partners
it must be within the commence of man, possible and not
contrary to law, morals, good customs, public order or public policy
IF a partnership has SEVERAL PURPOSES, one of which is
UNLAWFUL, the partnership can still validly exist so long as the illegal
purpose can be separated from the legal purposes
NO need for JUDICIAL DECREE to dissolve an unlawful
partnership
VOID AB INITIO
RULE:
when an UNLAWFUL PARTNERSHIP is dissolved by a judicial decree,
the PROFITS shall be CONFISCATED in FAVOR of the STATE
G. R.
a partnership may be constituted in any form
EXCEPTION: PUBLIC INSTRUMENT
1. IMMOVABLE PROPERTY is contributed
2. REAL RIGHTS are contributed
*
4
IF the partnership has ALIENS, it CANNOT OWN LANDS, whether
public or private or whether agricultural or commercial EXCEPT through
HEREDITARY SUCCESSION
LIMITATIONS ON ACQUISITION
1. AGRICULTURAL LANDS 1024 HECTARES
2. lease of public lands (GRAZING) 2000 HAS.
RULES
1.
2.
3.
4.
5.
IF
1. UNIVERSAL
2. PARTICULAR
C) ACCORDING TO LIABILITY
1. LIMITED PARTNERSHIP
2. GENERAL PARTNERSHIP
D) ACCORDING TO LEGALITY
1. LAWFUL OR LEGAL
2. UNLAWFUL OR ILLEGAL
E) ACCORDING TO DURATION
1. for a SPECIFIC PEIOD or FIXED PERIOD
2. PARTNERSHIP AT WILL
F) ACCORDING TO REPRESENTATION TO OTHERS
1. ORDINARY PARTNERSHIP
2. PARTNERSHIP BY ETOPPEL
G) AS TO LEGALITY OF EXISTENCE
1. DE JURE PARTNERSHIP
2. DE FACTO PARTNERSHIP
H) AS TO PUBLICITY
1. SECRET PARTNERSHIP
2. NOTORIOUS / OPEN PARTNERSHIP
I) AS TO PURPSE
1. COMMERCIAL / TRADING
2. PROFESSIONAL / NON-TRADING
GENERAL PARTNERSHIP
one where all the partners are general partners
they are LIABLE even with respect to their individual properties, after
the assets of the partnership has been exhausted
LIMITED PATNERSHIP
one where at least one partner is a general partner and the others are
limited partners
one whose liability is limited only up to the extent of his contribution
a partnership where all the partners are limited partners cannot exist as
a limited partnership
REFUSED REGISTRATION
5
IF it continuous as such, it will be considered as a general
partnership and all the
partners will be general partners
KINDS OF UNIVERSAL PARTNERSHIP
1. PARTNERSHIP OF ALL PRESENT PROPERTY
2. PARTNERSHIP OF ALL PROFITS
PARTICULAR PARTNERSHIP
a particular partnership has for its OBJECT:
1. DETERNMINATE THINGS their use or fruits
2. SPECIFIC UNDERTAKING
3. EXERCISE of a PROFESSION or VOCATION
IF
6
RIULES ON THE DUTY TO CONTRIBUTE
1. the contribution must be made at the time the partnership is
entered into UNLESS a different period is stipulated
2. no demand is needed to put the partner in default
3. the partner must exercise due diligence in preserving the
property to be contributed before he actually contributes the
same
4. a partner who promises to contribute to the partnership becomes
a promissory debtor of the partnership
RULES ON THE DUTY TO DELIVER THE FRUITS
1. IF property has been promised, the fruits thereof should also be
given
2. the fruits referred to are those arising from the time they should
have been delivered, without a need of any demand
RULE:
a partner who has undertaken to contribute a sum of money and
fails to do so becomes a debtor for the interest and damages from the
time he should have complied with his obligation
3. IF the partner is in BAD FAITH, he is liable not only for the fruits
actually produced, BUT also for those that could have been
produced
4. IF MONEY HAS BEEN PROMISED, INTEREST and DAMAGES
from the time he should have complied with his obligation should
be given
CAPITALIST PARTNER
one who FURNISHES CAPITAL
* NOT EXEMPTED from LOSSES
* he can engage in other business PROVIDED there is no
competition between the partnership and his business
* share in the profits according to agreements
INDUSTRIAL PARTNER
one who FURNISHES INDUSTRY or LABOR
* he is EXEMPTED from LOSSES as between the partner BUT
liable to strangers without prejudice to reimbursement from the
capitalist partner
* he CANNOT engage in any other BUSINESS WITHOUT the
express CONSENT of the other partners, OTHERWISE
1. he can be EXCLUDED from the firm
- plus damages
OR
2. the BENEFITS he obtains from the other businesses CAN BE
AVAILED of by the other partners
plus damages
6. it is DELIVERY,
OWNERSHIP
actual
or
constructive
that
TRANSFERS
7
whether or not there is COMPETITION
* in computing always look for ----- NET PROFITS
----- NET LOSSES
CAPITALIST INDUSTRIALIST PARTNER
one who contributes BOTH CAPITAL and INDUSTRY
GENERAL PARTNER
one who is liable beyond the extent of his contribution
LIMITED PARTNER
one who is liable only to the extent of his contribution
*** an industrial partner can only be a general partner, never a limited
partner
MANAGING PARTNER
one who manages actively the firms affairs
SILENT PARTNER
one who does not participate in the management, though he shares in
the PROFITS or LOSSES
LIQUIDATING PARTNER
one who winds up or liquidates the affairs of the firm after it has been
dissolved
OSTENSIBLE PARTNER
one whose connection with the firm is public and open
SECRET PARTNER
one whose connection with the firm is concealed or kept secret
DORMANT PARTNER
one who is both a secret (hidden) and silent (not managing) partner
NOMINAL PARTNER
one who is not really a partner BUT who may become liable as such
insofar as third persons are concerned
RULE:
partners shall CONTRIBUTE EQUAL SHARES to the capital of the
partnership
* it is permissible to contribute UNEQUAL SHARES IF there is a
stipulation to this effect
* in the absence of proof, the shares are presumed to be equal
CONDITIONS before a capitalist partner is obliged to sell his
shares / interest to the other partners [IL, RC, NA]
1. if there is IMMINENT LOSS of the BUSINESS of the partnership
2. he REFUSES to
CAPITAL
8
2.
3.
the other partners have not collected their part of the credit
the debtor subsequently becomes INSOLVENT
* DOES NOT APPLY when debt was collected after dissolution of the
partnership
RULE:
* every partner is responsible to the partnership for damages suffered
by it through his fault
FUNGIBLE or DETERIORABLE
FIRM bears the loss for it is evident ownership was transferred
3.
4.
sale
9
* the designation of shares by third persons may be IMPUGNED, IF it is
MANIFESTLY INEQUITABLE
* the designation of shares by third persons CANNOT be IMPUGNED
EVEN IF MANIFESTLY INEQUITABLE IF:
1. the aggrieved partner has already BEGUN to EXECUTE the
decision
2. the aggrieved partner has not IMPUGNED the distribution within
3 months he had knowledge
*RULE IF APPOINTMENT OTHER THAN in the ARTICLES of
PARTNERSHIP
1. power to act may be REVOKED at ANY TIME with or without just
cause
REMOVAL should be done by the controlling interest
2. EXTENT of POWER
as long as he remains manager, he can perform all acts of
administration
BUT if others oppose and he persists, he can be removed
*RULE WHEN there are 2 or MORE MANAGERS
CONDITIONS:
1. 2 or more partners are managers
2. there is no specification of respective duties
3. there is no stipulation requiring UNANIMITY
SPECIFIC RULES:
1. each may separately execute all acts of administration
UNLIMITED POWER to ADMINISTER
2. IF any of the managers OPPOSE
MAJORITY RULE
IN CASE OF A TIE
- persons owning controlling interest prevail provided they are
also managers
* right to oppose is not given to NON-MANAGERS
* OPPOSITION should be done BEFORE the acts produce legal effects
insofar as third persons are concerned
10
2. for a partner to have an associate in his share
consent of all the other partners is NOT REQUIRED
3. for the associate to become a partner
ALL MUST CONSENT
RULE:
* a PARTNERS INTEREST in the partnership is his SHARE of the
PROFITS and SURPLUS
IT CAN BE: [A, A, LS]
1. ASSIGNED
2. ATTACHED
3. be subject to LEGAL SUPPORT
*EFFECTS of CONVEYANCE by PARTNER of his INTEREST in the
PARTNERSHIP
1. IF he conveys his WHOLE INTEREST
11
A) partnership may still remain
B) partnership may be dissolved
* mere conveyance does not dissolve the partnership
2. the ASSIGNEE does not necessarily become a partner
the ASSIGNOR is still the partner, with a right to demand
accounting and settlement
3. the ASSIGNEE CANNOT interfere in the MANAGEMENT or
ADMINISTRATION of the firm
the ASSIGNEE CANNOT also DEMAND [I, A, I]
A) INFORMATION
B) ACCOUNTING
C) INSPECTION of partnership books
*** while a partners INTEREST in the firm may be CHARGED or
LEVIED upon, his INTEREST in a specific firm PROPERTY CANNOT be
attached.
RIGHTS of the ASSIGNEE
1. to get whatever profits the assignor-partner would have obtained
2. to avail himself of the usual remedies in case of fraud in the
management
3. to ask for ANNULMENT of the contract of assignment IF:
A) he was induced to enter into it through any of the vices of
consent
OR
B) he himself was incapacitated to give consent
4. to demand an accounting BUT only if the partnership is dissolved
* when the CHARGING ORDER is applied for and granted, the court
may appoint a receiver of the partners share in the profits
the receiver appointed is entitled to any relief necessary to conserve
the partnership assets for partnership purposes
* interest charged may be redeemed at any time before foreclosure
* AFTER FORECLOSURE the interest may still be redeemed by (without
causing dissolution)
1. with separate property, by any one or more of the partners
OR
2. with partnership property, by any one or more partners with the
consent of all the partners whose interests are not so charged or sold
* consent of the delinquent partner not needed
RULE:
every partnership shall operate under a FIRM NAME
* the firm name may or may not include the name of one or more of
the partners
** STRANGERS who include their names in the firm are liable as
partners because of ESTOPPEL, BUT do NOT have the RIGHTS of
partners
** IF a LIMITED PARTNER includes his name in the firm name, he has
obligations BUT not the rights of a general partner
RULE on LIABILITY for CONTRACTUAL OBLIGATIONS
* all partners, including industrial ones, shall be liable pro-rata with all
their property and after all the partnership assets have been exhausted
* NOT APPLICABLE for TORTS or CRIMES ----- LOSS
----- INJURY
----- MISAPPROPRIATION
** while an INDUSTRIAL PARTNER is exempted by law from LOSSES as
between the partners, he is NOT EXEMPTED from liability insofar as
third persons are concerned
he may recover what he has paid from the CAPITALIST partners
12
* under the law the liability of the partners is subsidiary and joint NOT
principal and solidary
*RULE on LIABILITY of a PARTNER who has WITHDRAWN
1. a partner who withdraws is not liable for liabilities contracted
after he has withdrawn
2. if his interest has not yet been paid him
his right to the same is that of a mere creditor
** a stipulation exempting liability to third persons is VOID
* any partner may enter into a separate obligation to perform a
partnership contract
RULE:
* every partner is an agent of the partnership for the purpose of its
business
G.R.- the act of every partner for apparently carrying on in the USUAL
WAY the business of the partnership of which he is member binds the
partnership
EXCEPT:
1. if he has NO AUTHORITY
and
2. the person with whom he was dealing with HAS KNOWLEDGE of the
fact that he has no such authority
RULE:
an act of a partner which is not apparently for the carrying on of
business of the partnership in the usual way does not bind the
partnership UNLESS authorized by the other partners
* a partnership is a CONTARCT of MUTUAL AGENCY, each partner
acting as a principal on his own behalf and as an agent for his copartners or the firm
REQUISITES on WHEN can a partner BIND the partnership
1. expressly or impliedly AUTHORIZED
13
IF DONE IN USUAL BUSINESS
buyer does not become owner BUT ACQUIRES EQUITABLE
INTEREST
IF NOT DONE IN USUAL BUSINESS
buyer does not become owner and is not even entitled to
equitable interest
3. where title is in the name of one or more BUT not all the partners
partners in whose name the title is named MAY CONVEY BUT
the PARTNERSHIP may RECOVER such property IF done not in its
USUAL BUSINESS EXCEPT if he had transferred it to a Holder for
value
4. when property held in trust by partner
a sale only conveys EQUITABLE INTEREST
5. when title is in the name of all partners
conveyance executed by all partners possess all rights of such
property
EQUITABLE INTEREST
-BENEFICIAL INTEREST, BUT NOT NAKED OWNERSHIP
*RULE on ADMISSION or REPRESENTATION MADE by a PARTNER
an admission by a partner is an admission against the partnersip,under
the following conditions:
1. the admissions must concern partnership affairs
2. must be within the scope of his authority
RESTRICTIONS ON THE RULE:
1. admissions made BEFORE DISSOLUTION are binding only when
the partner has authority to act on the particular matter
LOSS OR INJURY
RULE on WRONGFUL ACT or OMISSION of a PARTNER (SOLIDARY
LIABILITY)
* the partnership is solidarily liable with the partner if the wrongful act
or omission
1. the partner is acting in the ordinary course of business of the
partnership
OR
2. with authority of his co-partners
14
partnership liability results
because
of
such
15
**IF a partner sells his share to a third party, BUT the firm itself still
remains SOLVENT, partnership creditors CANNOT assail the validity of
the sale by alleging that it is made in fraud of them, since they have not
really been prejudiced
DISSOLUTION AND WINDING UP
the change in the relation of the partners caused by any partner
causing to be associated in the carrying on of the business
it is the point of time the partners cease to carry on the business
together
WINDING UP
the process settling business affairs after dissolution
TERMINATION
the point in time after all the partnership affairs have been wound up
RULE ON DISSOLUTION
* on dissolution the partnership is not terminated BUT continues until
the winding up of partnership affairs is completed
*EFFECT on OBLIGATIONS
1. just because a partnership is dissolved this does not necessarily
mean that a partner can evade previous obligations entered into
by the partnership
2. dissolution saves the former partners from new obligations to
which they have not expressly or impliedly consented UNLESS
the same be essential for winding up
*CAUSES OF DISSOLUTION
1. without VIOLATION of the AGREEMENT between the partners
A) TERMINATION of the DEFINITE TERM or PARTICULAR
UNDERTAKING
B) EXPRESS WILL or ANY PARTY in GOOD FAITH
(PARTNERSHIP by WILL)
2.
3.
4.
5.
6.
7.
8.
*** if the cause is not justified or no cause was given, the withdrawing
partner is liable for DAMAGES BUT in no case can he be compelled to
remain in the firm
* the insolvency need not be judicially declared, it is enough that the
assets be less than the liabilities
DISSOLUTION by JUDICIAL DECREE WHEN ALOWED:
(I, UM, I-PP, C, PB, BL, OC)
1. partner declared insane in any judicial proceeding or is shown
to be of UNSOUND MIND
2. partner becomes INCAPABLE of performing his part of the
partnership contract
3. partner has been guilty of such CONDUCT as tends to affect
prejudicially the business
4. partners PERSISTENT BREACH of agreement
5. the business of the partnership can only be denied on at a loss
6. other circumstances which render dissolution equitable
IN CASE OF PURCHASER of PARTNERS INTEREST
1. after the termination of the specified term or particular
undertaking
16
2. AT ANY TIME, if the partnership was a partnership at will when
the interest was assigned or when the charging ordered was
issued
* proof as to the existence of the firm must first be given
* even if a partner has not yet been previously declared insane by the
court, dissolution may be asked, as long as the insanity is duly proved in
court
* in a suit for dissolution, the court may appoint a RECEIVER at its
discretion
EFFECTS OF DISSOLUTION
RULE:
* when the firm is dissolved, a partner can no longer bind the
partnership
* a dissolved partnership still has the personality for the winding up of
its affairs
the firm is still allowed to collect previously acquired credits
the firm is still bound to pay of its debts
DISSOLUTION CAUSED by A-I-D
RULE: (STILL BOUND) as to each partners
G.R. where the dissolution is caused by the ACT, INSOLVENCY or
DEATH of a partner, each partner is liable to his co-partners for his
share of any liability created by any partner acting for the partnership
EXCEPTION: - individual liabilities
1. if dissolution by ACT
the partner acting for the partnership HAD KNOWLEDGE of the
dissolution
OR
2. if dissolution by DEATH or INSOLVENCY
the partner acting for the partnership HAD knowledge or notice
of the death or insolvency
IF
or
or
he
RULE:
17
* the INDIVIDUAL PROPERTY of a DECEASED PARTNER shall be
liable for all obligations of the partnership incurred while he was a
partner BUT subject to prior payments of his separate debts
* IF there be a NOVATION of the OLD PARTNERSHIP DEBTS and such
novation is done after one of the partners has retired and without the
consent of such partner
said partner cannot be held liable by creditors who made the
novation with knowledge of the firms dissolution
EXTRAJUDUCIAL AND JUDICIAL WINDING-UP
EXTRAJUDICIAL:
1. by the partners who have not wrongfully dissolved
partnership
2. by the legal representative of the last surviving partners
the
JUDICIAL:
under the control and direction of the court, upon proper cause that is
shown to the court
* profits that will actually enter the firm after dissolution as a
consequence of transactions already made before dissolution are
included because they are considered as profits existing at the time of
dissolution
* any other income earned after the time, like interest or dividends on
stock owned by the partners or partnership at the time of dissolution
should not be distributed as profits BUT as merely additional income to
the capital
BETTER RIGHTS of INNOCENT PARTNERS
innocent partners have better rights than guilty partners and that the
guilty partners are required to indemnify for the damages caused
18
partnership creditors have preference
2. regarding individual properties of partners
individual creditors are preferred
JURISPRUDENCE
BASTIDA vs. MENZI
19
means of which any business, financial operation, or venture is carried
on
* a joint venture need not be undertaken in any of the standard forms,
or in conformity with the usual requirements of the law on partnerships,
in order that one could be deemed constituted for purposes of the TAX on
corporations
PASCUAL vs. C.I.R.
* co-ownership or co-possession does not itself establish a partnership,
whether such co-owners or co-possessors do or do not share any profits
made by the use of the property
* the sharing of gross returns does not itself establish a partnership,
within the persons sharing them have a joint or common right or interest
in any property from which the returns are derived
* aside from the circumstances of profit, the presence of other elements
constituting partnership is necessary, such as:
1. the clear intent to form a partnership
2. the existence of a juridical personality different from that of the
individual partners
AND
3. the freedom to transfer or assign any interest in the property by
one with the consent of the others
* an isolated transaction whereby 2 or more persons contribute funds
to buy certain real estate for profit in the absence of other circumstances
showing a contrary intention cannot be considered a partnership
* persons who contribute property or funds for a common enterprise
and agree to share the gross returns of that enterprise in proportion to
their contribution, BUT who severally retain the title to their respective
contribution, are not thereby rendered partners
they have no common stock or capital and no community of
interest as principal proprietors in the business itself which the proceeds
derived
* a joint purchase of land, by two does not constitute a co-partnership
in respect thereto, NOR does an agreement to share the profits and
losses on the sale of land create a partnership
20
* one of the causes of dissolution is any event which make it unlawful
for the business of the partnership to be carried on or for the members to
carry it on in partnership
C.I.R. vs. SUTER
* a UNIVERSAL PARTNERSHIP requires either that the object of the
association be:
1. all the present property of the partners as contributed by them to
the common fund
OR
2. all that the partners may acquire by their industry or work
during the existence of the partnership
* the subsequent marriage of the partners could not operate to dissolve
the partnership because it is not one of the causes provided for
dissolution by law with regards to limited partnerships
* partnership has distinct and separate personality from that of its
partners
* a husband and wife may not enter into a contract of general copartnership/ UNIVERSAL partnership
ACOAD vs. MABATO
* a partnership 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
* A CONTRACT of PARTNERSHIP is VOID
whenever immovable property is contributed thereto, if
inventory of said property is not made, signed by the parties and
attached to the public instrument
EVANGELISTA vs. ABAD SANTOS
* an INDUSTRIAL PARTNER cannot engage in BUSINESS FOR
HIMSELF, UNLESS the partnership expressly permits him to do so
IF HE SHOULD DO SO, the capitalist partners may either:
1. EXCLUDE him from the firm
OR
2. AVAIL themselves of the benefits which he may have obtained in
violation of this provision