PARTNERSHIP 3. The object must be a lawful one.

GENERAL PROVISIONS 4. There must be an intention of dividing

the profit among the partners.
Art. 1767: By the contract of * The object must be for profit and not
partnership two or more persons bind merely for common enjoyment.
themselves to contribute money,
property, or industry to a common 5. There must be the affection societatis
fund, with the intention of dividing the – the desire to formulate an active union
profits among themselves. with people among whom there exist
mutual confidence and trust.
Two or more persons may also form a
partnership for the exercise of a PARTNERSHIP vs CORPORATION
profession.
DISTINGUI PARTNER CORPORA
Partnership – it is a contract whereby two SHING SHIP TIONS
or more persons bind themselves to FACTOR
contribute money, property, or industry to HOW Voluntary Created by
a common fund, with the intention of CREATED agreement the State in
dividing the profits among themselves, or of parties the form of a
in order to exercise a profession. special
charter or by
CHARACTERISTICS OF THE a general
CONTRACT: enabling law
HOW No time Not more
1. LONG IT limit except than 50
a. Consensual – it is perfected by EXISTS agreement years
mere consent. of the
b. Bilateral or multi-lateral – it parties
entered into between two or more LIABILITY May be Liable only
persons TO liable with for payment
c. Nominate – it is designated by a STRANGE their private of their
specific name RS property subscribed
d. Principal – its existence does not beyond capital stock
depend on the life of another their
contract contribution
e. Onerous – certain contributions to the firm
have to be made TRANSFE Even if a A transfer of
f. Preparatory – after it has been RABILITY partner interest
entered into, other contracts OF transfers makes the
essential in the carrying out of its INTEREST his interest transferee a
purposes can be entered into to another, stockholder,
the even without
2. There must be a contribution of money, transferee the consent
property or industry to a common fund. does not of others
become a
 partner natural
unless all resources
other and the
partners operation of
consent public
ABILITY Generally, Generally, utilities in
TO BIND partners the the
THE FIRM acting on stockholders Philippines,
behalf of cannot bind in which
the corporation case the veil
partnership since they of corporate
are agents are not identity is
thereof; agents pierced and
consequent thereof we go to the
ly they can nationality of
bind both the
the firm controlling
and the stockholders
partners ATTAINME The firm The firm
MISMANA A partner A NT OF becomes a becomes a
GEMENT can sue a stockholder LEGAL juridical juridical
partnership cannot sue PERSONA person person from
who a member of LITY from the the time it is
mismanage the BOD’s time the registered in
s who contracts the
mismanages begins Securities
: the action and
must be in Exchange
the name of Commission
the , and all
corporation requisites
NATIONALI A A have been
TY partnership corporation complied
is a is a national with
national of of the DISSOLUTI Death, Such
the country country ON retirement, causes do
it was under insolvency, not dissolve
created whose laws civil a
it was interdiction, corporation
incorporated or insanity
, except for of a partner
wartime dissolves
purposes or the fi rm
for the
acquisition
of land,
ORDINARY PARTNERSHIP vs Civil distinct
CONJUGAL PARTNERSHIP OF Code from
GAINS that of
the
FACTOR ORDINA CONJU husban
S RY GAL d or
PARTN PARTN wife;
ERSHIP ERSHI hence,
P it
HOW By will or Create cannot
CREATE consent d by sue or
D of the operati be
parties on of sued as
law such
upon COMMEN Begins Com
the CEMENT from the m e n c
celebra OF THE moment es
tion of PARTNE of the precisel
the RSHIP executio y on
marriag n of the the
e contract date of
LAW In In but a the
THAT general, general contrary celebra
GOVERN it is the , it is stipulatio tion of
S will of the law n is the
the that allowed marriag
partners govern (Art. e — no
that s 1784, contrar
governs Civil y
matters Code) stipulati
like on is
object, allowed
length of PURPOS Formed Not
existenc E for profit formed
e, etc.; particul
the law arly for
is only profit
subsidiar DIVISION As a as a
y OF rule, rule,
LEGAL Possess Does PROFITS profits profits
PERSON es a not are are
ALITY legal posses divided divided
personali s any accordin equally
ty (Art. legal g to (but
1768, person previous settlem
ality agreeme ent can
 nt; and if provide of profits liquidati
there is otherwi even on or
no se) without giving
agreeme (Art. dissoluti of
nt, in 106, on profits
proportio Family till after
n to the Code) dissolut
amount ion
contribut
ed (Art. PARTNERSHIP vs CO-
1797, OWNERSHIP
Civil
Code) FACTORS PARTN CO-
MANAGE As a As a ERSHIP OWNE
MENT rule, rule, RSHIP
manage the CREATIO Created Create
ment is adminis N by d by
conferre tration contract contrac
d upon and only t, law
the enjoym (express and
partners ent of or other
so the implied) things
appointe conjuga JURIDICA Has Has no
d by the l L legal or juridical
others; partner juridical person
otherwis ship personal ality
e, all are propert ity (hence,
equally y it
consider belong cannot
ed to both sue or
agents spouse be
of the s jointly sued
firm (Art. (Art. as
1803, 124, such)
Civil Family PURPOSE For Collecti
Code) Code) profit ve
DISSOLU There There enjoym
TION are are few ent
many ground (hence,
grounds s for not
for dissolut necess
dissoluti ion arily for
on profi t)
LIQUIDAT There There (Red
ION OF may be will be Men v.
PROFITS division no Vetera
 n Army, BY years
7 Phil. CONTRAC (althou
685) T gh
AGENCY As a As a agreem
OR rule, rule, ent
REPRESE there is there is after
NTATION no no termina
mutual mutual tion
represe represe PROFITS May be Profits
ntation ntation stipulate must
(althou d upon always
gh it is depend
enough on
for one proporti
co- onate
owner shares
to bring (any
an stipulati
action on to
for the
ejectm contrar
ent y is
against VOID)
a (Art.
strange 485)
r) (Art. DISSOLU Dissolve Not
487, TION d by dissolv
Civil death or ed by
Code) incapaci the
TRANSFE Cannot Can ty of a death
R OF substitut dispose partner or
INTEREST e of his incapac
another share ity of
as without co-
partner the owner
in his consen FORM May be No
place, t of the made in public
without others any instrum
unanimo form ent
us except needed
consent when even if
LENGTH No term Must real real
OF limit is not be property propert
EXISTEN set by for is y is the
CE IF the law more contribut object
CREATED than 10 ed of the
(Here, a co-
public owners
instrume hip
nt is
required
.)
Art. 1768: The 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, fi
rst paragraph.