Partnership Formation Flashcards
One Legal Owner
Sole Proprietorship
Two or More Legal Owner - ARTICLES OF PARTNERSHIP
Partnership
Two or More Legal Owner - ARTICLES OF INCORPORATION
Corporation
Legal Reference: Civil Code of the Philippines
a. TWO OR MORE PERSONS bind themselves
b. Contribute MONEY, PROPERT, OR INDUSTRY
Article 1767
TWO OR MORE PERSONS bind themselves:
- Natural Person
- Juridical Person
Can partnership form another partnership?
Yes
Can corporation enter into a partnership?
Yes
Persons who contribute MONEY, PROPERTY, OR INDUSTRY.
Partners
Contribute MONEY, AND/OR PROPERTY
Capitalist Partner
Contribute INDUSTRY (EXPERTISE/PROFESSIONAL PRACTICE)
Industrial Partner
Contribute MONEY, PROPERTY, AND INDUSTRY
Capitalist-Industrial Partner
Partnership can be classified according to the liability of the partners:
- General Partner
- Limited Partner
The liability of the partner extends up to PERSONAL ASSETS
General Partner
The liability of the partner extends up to THE CONTRIBUTION
Limited Partner
(MEASUREMENT) Money/Cash
Face Value
(MEASUREMENT) Property/Non-Cash Assets
Agreed Value, Fair Value
(MEASUREMENT) Service/Industry
Not Measurable
*Not measurable because of the bias.
Fair Value - PFRS?
PFRS 13 - Fair Value Measurements
It is the accounting process to recognize the contribution of the industrial partner as well the recognition of the agreement among of the partners.
Bonus Method
“Unless there is a stipulation to the contrary, the partners shall contribute equal shares to the capital of the partnership.”
Article 1790
Who settle the liability if the mortgage liability is not assumed by the Partnership?
The partner is the Sole Person to settle, not the partnership
What if the problem is silent, what you will do with mortgage liability?
The Mortgage Liability is assumed by the Partnership
It is the amount of PPE or any other assets presented in the financial report.
Recoverable Amount / Carrying Amount / Book Value
- Increase Asset = _______ Capital
- Decrease Asset = ________ Capital
- Increase Liability = ________ Capital
- Decrease Liability = _______ Capital
Increase
Decrease
Decrease
Increase
Kulang ang naibawas sa asset so dadagdagan ang naibawas.
Under-depreciation
Sobra ang naibawas sa asset so babawasan ito…
Over-depreciation
