Partnership Flashcards
(22 cards)
Partnership is a contract wherein two or more persons agreed
- to contribute MPI
- to divide profits
- to exercise profession (GPP = Particular Partnership)
As a contract, it must have a lawful object / purpose. What will happen if it is unlawful?
Yes
dissolve → profits will be in favor of government
Characteristics (BCCNOPP)
- same as contract
- Bilateral, Consensual, Commutative
- Nominate, Onerous, Principal
- + Preparatory
Yes
Partnership is a juridical person → separate juridical personality
What if the partners are insolvent? What will happen to the partnership?
dissolve
Cases when There is No Partnership
- Between persons who are not partners as to each other
- Co-ownership or co-possession (!!!)
- Sharing of gross returns
Yes
Receipt of share of profits of the business → prima facie evidence that he is a partner
EXCEPTIONS
- As a debt by installment or otherwise
- As wages of employee
- As rent to a landlord
- As annuity to a widow or representative of a deceased partner
Yes
WHO MAY BECOME A PARTNER?
- Natural Person ✓
- Partnership ✓
- Corporation ✓
Yes
Form - can be oral or written
What is the form required
- if capital is 3K or more? if not complied, what is the effect?
- if immoveable property is contributed? if not complied, what is the effect?
Capital is 3K or More
- partnership contract in public instrument
- registered in SEC
- not complied → still valid
Immoveable Property
- partnership contract in public instrument (PISA)
- inventory signed and attached to public instrument
- not complied → void
Kinds of Partnership
- General → all must be general partners
- Limited → at least 1 general, at least 1 limited
Yes
Kinds of Partnership
- Fixed Term → term expired = dissolved
- Particular Undertaking → accomplished = dissolved
- At Will
What if for fixed term and particular undertaking, they still continue even after the term expired or purpose is accomplished?
Constituted a Partnership at Will
Kinds of Partnership
- Universal Partnership of all Present Property
- Universal Partnership of all Profits
What are automatically included as contributions?
If ambiguous → only a universal partnership of all profits
Universal Partnership of all Present Property
- present property
- profits of present property
Universal Partnership of all Profits
- present property → usufruct only
- profits acquired by work or industry
Kinds of Partnership
- Universal Partnership of all Present Property
- Universal Partnership of all Profits
What are stipulated to be listed as contributions?
If ambiguous → only a universal partnership of all profits
Universal Partnership of all Present Property
- future property (XPN : inheritance)
- profits of future property (even if from inheritance)
- other profits
Universal Partnership of all Profits
- profits acquired by chance
- profits of future property (even if from inheritance)
Persons not allowed to donate to each other
- Husband and wife
- Guilty of adultery and concubinage
- Guilty of the same criminal offense
- Public officer by reason of his office
Since they cannot donate to each other, they are not allowed to form a partnership. True or False?
False (they are not allowed to form a UNIVERSAL partnership)
contracts entered into name of partnership
- liable = partnership
if partnership assets are exhausted
- liable = partners
Industrial partners are not liable for losses (based on rules as to profit or loss). This is true in case the partnership assets are exhausted. True or False?
Stipulation Exempting a Partner from Losses
as to 3rd Party → Void
- 3P may collect from industrial since void nga
as to Partners → Valid
- however industrial may ask for reimbursement from other partners since industrial partners are not liable to losses
NOTE : partners are liable equally (not P/L)
Kinds of Partners
Capitalist
- Contribution → Money or Property
- Probition → cannot engage in same business (XPN : stipulated)
Industrial
- Contribution → Industry
- Probition → cannot engage in any business (XPN : expressly permitted)
What is the effect if prohibition is violated by capitalist? by industrial?
Capitalist
- Profit → bring to partnership fund
- Loss → personally liable
Industrial (either)
- excluded from partnership + damage
- profits to partnership fund + damage
A stipulation excluding capitalist partner to profits is void. True or False?
A stipulation excluding industrial partner to loss is void. True or False?
True, False
Capitalist
- excludes profit → void
- excludes loss → void
Industrial
- excludes profit → void
- excludes loss → valid
At perfection of contract, all partners must contribute equally. True or False?
- XPN : stipulated
- delay → no demand needed
True
In case of loss, all partners must contribute. True or False?
- XPN : stipulated
False
- Capitalist Partner only (X industrial)
- debtor = indebted to both partnership and managing partner
- both debts = demandable
- collector = managing partner
What if receipt is in name of partnership? in name of partner?
Receipt in Name of Partnership
- applied solely to partnership credit
Receipt in Name of Partner
- applied proportionately to the debts
- debtor may exercise application of payment if MP’s debt is more onerous
- partner = receives partnership credit
- debtor = become insolvent after
The partner who receives must bring it to partnership fund then divided by all partners.
Yes
New partner is liable to debts of partnership whether before or after his admission.
- The reason is presence of goodwill = new partner benefit → new partner must also suffer
What is the limit of liability from debts before admission? after admission?
Debts before Admission
- liable up to capital contribution only
Debts after Admission
- liable up to personal assets
Industrial Partner
- not required to be in partnership name
What is the effect if included in partnership name
- stranger
- limited partner
Stranger
- liable as a partner (but doesn’t have right of partners)
Limited Partner
- liable as a general partner
Partnership by Estoppel
As a Partner in Existing Partnership
- all partners consented → partnership liability
- some partners consented → ?
As a Partner in Non Existing Partnership
- those who consented → ?
As a Partner in Existing Partnership
- some partners consented → liable equally
As a Partner in Non Existing Partnership
- those who consented → liable equally
Not P/L
