JURIDICAL PERSON b) Other Corporations, institutions and

entities for public interest or

 They are created and governed by law purpose, created by law; their
o A. Not living things but given life by personality begins as soon as they
law have been constituted according to
o B. Not human but formed by/ law (e. g Universities, BSP, MPCCC)
composed of human
o C. Can engaged human activities c) Corporations (different from
o D. Have Juridical Capacity stockholders and staffs) Partnerships
‘’Fitness to be subject of and Associations are private interest
legal relations, is inherent or purpose to which law grants
in every natural person juridical personality, separate and
and is lost only through distinct from that of each
deaths’’ shareholder, partner or member.
Art. 37, Civil Code
-can sue you “Private Corporation formed
-can be sued and organized under this code
-can buy property (Corporation Code) commences to
have corporate existence and
Principles of Juridical Capacity juridical personality is deemed
 Laws can apply to them incorporated from the date the SEC
 They must comply with Law issues a certificate of incorporation”
 They can be penalized -Sec. 18, R.A 11232-

o E. Defined and Classified by Law

 Public Corporation (Political 2. They have Rights and Obligations
Subdivision)
 Public Interest Corporation “Juridical person may acquire and
 Private Corporation and possess property of all kinds, as well
Partnership incur Obligation and bring civil or
criminal actions, in conformity with the
laws and regulation”
TRAITS OF JURIDICAL PERSON -Art. 46 Civil Code-

1. They are created by Law Note: Property Rights- Right to

Art. 44 Civil Code: “the following are Practice Profession
juridical person:  Only to human being
 Only for natural person and
a)The states and its political subdivision not given to juridical person
(e.g. provinces, cities, municipalities,
barangays)
 SOME RIGHTS OF CORPORATIONS
A. To Sue and be Sued
SOLE PARTNERSHIP AND
PROPRIETORSHIP CORPORATION
“Libel is defined as a public and
1. Does not have 1. Has Juridical
malicious imputation of a crime, or of a Juridical personality personality
vice versa or defect, real or imaginary, or separate from
any act commission, condition, status or proprietor
circumstances, tending to cause dishonor, -With one
discredit or contempt of a natural or register owner
2. Registered with DTI 2.Registered with SEC
juridical person, or to blacken the memory
3. Taxable as an 3.Taxable with
of one who is dead.”
individual Corporation rate
-Art. 353, revised penal code- (except GPP)

B. To sell Shares ( For stock Corporations)

C. To admit members (For non-stock
corporation)
D. To make reasonable donations

Note: The state cannot interfere with PARTNERSHIP CORPORATION

Ecclesiastical matter. 1. Atleast 2 1. Atleast 5
partners incorporate
(except OPC)
Natural SIMILARITIE Juridical
Person S person 2. Commence
(Individual) 2. Commence upon
1. Has a  Can own 1. Has a upon Registration
birthday property register/
Contracts
2. Could Die  Can sue or be contract date
3. Can marry sued 2. Can merge 3. Should always
4. Can  Can enter into 3. Have a 3. Usually Registered
inherent Contracts succession registered
rights 4.
Shares( for
Note: Some Partnerships does not need to 4. Dividend stock Corp)
registered with SEC distribution:
e.g. 2 farmers with small capital Contribution/
stipulation 5. Except if Non-
stock
5. Taxable with
corp. rate
except GPP
PART II: PARTNERSHIP
“By the contract of partnership two or “ A partnership may be constituted in any form,
more persons bind themselves to contribute except where immovable property or real rights
money, property, or industry to a common are contributed thereto, in which case a public
fund, with the intention of dividing the instrument shall be necessary.” (1667a)
profits among themselves.
Art. 1771, Civil code
(Commercial)

Two or more persons may also form a

partnership for the exercise of a Note: Partnership contact
profession.” (1665a)
- be in writing and notarized if
(Professional) property/rights are contributed.
Art. 1767, Civil Code (real estate)
- VIOD if an inventory of real
property/rights contributed was
not attached in public instrument.
“Any immovable property or an interest
therein may be acquired in the partnership
Object of contracts
name. Title so acquired can be conveyed
only in the partnership name. (n)” “All things which are not outside the
commerce of men, including future things,
Art. 1774, Civil code
may be the object of a contract. All rights
which are not intransmissible may also be
the object of contracts.
CONTRACT
No contract may be entered into upon
Nature: 1. Meeting of minds (agreement) future inheritance except in cases expressly
 Legal Capacity authorized by law.
 Consent freely given
All services which are not
 May be entered into by more
contrary to law, morals, good customs,
than 2
public order or public policy may likewise
“A contract is a meeting of minds be the object of a contract. (1271a)”
between two persons whereby one binds
himself, with respect to the other, to give Art. 1347, Civil code
something or to render some service. “1254a)

Art. 1305, Civil code

NOTE: OBJECT must be Service NOT Contrary to Law, 3. It’s Partners or employees may be sued
morals, public order criminally.

NOTE: Partnership required to register but not if

Against:
contribution are less than 3,000
 Law- Agreement of spouses to separate, Prostitution
 Morals- Simulation of birth “Every contract of partnership having a
 Good Customs- Force them to pay her College (18yrs capital of three thousand pesos or more, in
old) money or property, shall appear in a public
 Public Order: Orderly management of the country instrument, which must be recorded in the
Fake diploma, Artificial intelligence Office of the Securities and Exchange
 Public Policy- State -limitation on personal right for Commission.
community welfare
Against: Very high interest rates, sale of one’s
Failure to comply with the requirements of
organ
the preceding paragraph shall not affect
the liability of the partnership and the
“Beyond the commerce of man” members thereof to third persons.” (n)
1. Stolen Items (P.D 1612 “Anti-Fencing Law”)
2. The elements of crime
Art. 1772, Civil code
3. Prohibited Items
4. Public Domain

Others (e.g. R.A 8485 “As Amended Animal Welfare”) “..to contribute money,property or industry to..”

“A partnership begins from the

moment of the execution of the contract,
“A partnership must have a lawful
unless it is otherwise stipulated.’’ (1679)
object or purpose, and must be
established for the common benefit or Art. 1784, Civil Code
interest of the partners.
Q: Can an Entity still be recognized as an
When an unlawful partnership is partnership even if there is ?
dissolved by a judicial decree, the profits
 Secret Partnership
shall be confiscated in favor of the State,
-Illegal? Not necessarily
without prejudice to the provisions of the
-Legal if:
Penal Code governing the confiscation of
1. Purpose and operations are
the instruments and effects of a crime.”
lawful
(1666a)
2. Not liable for unpaid taxes
Art. 1770, Civil code 3. Not required to Register
4. Don’t assume juridical
1. It will be ordered service (Qou warranto case)
2. It’s profits shall be confiscated by the State personality
  “Partnership for the exercise of A
Associations and societies, whose profession”
articles are kept secret among the
Q: Why is not a GPP?
members, and wherein any one of the A: 1. Law and accounting Firm
members may contract in his own name -not a GPP
with third persons, shall have no juridical - a law firm may be a GPP
-An Accounting may be GPP
personality, and shall be governed by the
provisions relating to co-ownership. 2. Priest who partner with each other
(1669) to offer spiritual encouragement
service
Art. 1775, Civil code
3. Retired Soldier who partner to
operate a security agency
-retired officer is no longer a
Art.1767, Civil Code professional but can still form a
commercial partnership
Note: a Law firm is always a GPP
4. Police Officer who form a
 1st paragraph- (commercial) partnership to fight crime
-Fight crime is not a business and
-Usually for the Sale of Goods not permitted by the state
-But Criminologists (who are not a
-Taxable under the corporate tax rate police officer) can partner to
operate a detective agency
-larger tax
5. Teachers who partner to operate a
 2nd paragraph- (Professional)
HS or College
-For the Practice of Profession -DepEd and CHED require private
HS and College to be
-Taxable as an Individual income
incorporated
-Lower tax

 Professional
 Under NIR(as amended by the Train Law)
- A person engaged or qualified in a
This applies to:
calling requiring knowledge and long
1. Individuals
and intensive academic preparation
2. Partners in GPP
(Merriam Webster)
- Skilled Worker: one who has special  Sec.27A
skills, training, knowledge acquired
- Effective jan. 1, 2009 the rate of income
in work
tax shall be 30%
- Semi- Worker: one who has some -This applies to:
training and skills but not enough to 1. Corporations
do specialized work 2.Commercial partnership registered/
- Unskilled Worker: Has a limited skill unregistered
set
  Professional cannot generate GPP (General (c) As an annuity to a widow or
Professional Partnership) representative of a deceased partner;

- Police cannot form a professional (d) As interest on a loan, though the amount
partnership because their work of payment vary with the profits of the
generate by State business;
- Priest
(e) As the consideration for the sale of a
goodwill of a business or other property by
installments or otherwise. (n)
Q: How do you know that an activity is a
Partnership?
1.b Conjugal Partnership: not a
A: 1. Determining if a Partnership EXISTS
commercial partner or GPP
1.a Co- ownership: not necessarily
Partnership

“….dividing profits…”
Art. 1769, Civil code
Q: Can a partnership to be formed to operate a
In determining whether a partnership exists, non taxable
these rules shall apply:
A: A free School are non-profit then NO, if a
(1) Except as provided by Article 1825, persons who business is a nonprofit then it’s not a partnership
are not partners as to each other are not partners
as to third persons;

(2) Co-ownership or co-possession does not of itself

establish a partnership, whether such-co-owners or
co-possessors do or do not share any profits made “By the contract of partnership two or more
by the use of the property; persons bind themselves to contribute
money, property, or industry to a common
(3) The sharing of gross returns does not of itself
establish a partnership, whether or not the persons fund, with the intention of dividing the
sharing them have a joint or common right or profits among themselves.
interest in any property from which the returns are
derived; (Commercial)

(4) The receipt by a person of a share of the profits Two or more persons may also form a
of a business is prima facie evidence that he is a partnership for the exercise of a
partner in the business, but no such inference shall profession.” (1665a)
be drawn if such profits were received in payment:
(Professional)

Art. 1767, Civil Code

(a) As a debt by installments or otherwise;

(b) As wages of an employee or rent to a

landlord;
NAME
-The name of a dead person is not allowed in the
law firm (partnership) name.

PH, Law firms cannot use a trade name. They must

use the name of their partnership or practitioners.

Accounting Firm- can use the name even the person

is already dead.