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    LAW ON PARTNERSHIP (Part 1)

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    Rika Miyazaki
    1. A partnership is formed by the contract of two or more persons to contribute money, property, or industry to a common fund with the intention of dividing profits. 2. The essential elements of a valid partnership are a contract, legal capacity of the parties, mutual contributions to a common fund, a lawful purpose, and an intention to realize and divide profits. 3. A partnership can be created informally through the conduct and acts of the parties, but if created contractually, all requirements for a valid contract must be met.

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    LAW ON PARTNERSHIP (Part 1)

    Uploaded by

    Rika Miyazaki
    54 views1 page
    1. A partnership is formed by the contract of two or more persons to contribute money, property, or industry to a common fund with the intention of dividing profits. 2. The essential elements of a valid partnership are a contract, legal capacity of the parties, mutual contributions to a common fund, a lawful purpose, and an intention to realize and divide profits. 3. A partnership can be created informally through the conduct and acts of the parties, but if created contractually, all requirements for a valid contract must be met.

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    1. A partnership is formed by the contract of two or more persons to contribute money, property, or industry to a common fund with the intention of dividing profits. 2. The essential elements of a valid partnership are a contract, legal capacity of the parties, mutual contributions to a common fund, a lawful purpose, and an intention to realize and divide profits. 3. A partnership can be created informally through the conduct and acts of the parties, but if created contractually, all requirements for a valid contract must be met.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    54 views1 page

    LAW ON PARTNERSHIP (Part 1)

    Uploaded by

    Rika Miyazaki
    1. A partnership is formed by the contract of two or more persons to contribute money, property, or industry to a common fund with the intention of dividing profits. 2. The essential elements of a valid partnership are a contract, legal capacity of the parties, mutual contributions to a common fund, a lawful purpose, and an intention to realize and divide profits. 3. A partnership can be created informally through the conduct and acts of the parties, but if created contractually, all requirements for a valid contract must be met.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 1

    PART 1 Existence of Valid Contracts

    PARTNERSHIP 1. A form of voluntary & personal association –


    someone can be a partner by consensus
    ART. 1767
    2. Creation and proof of existence – may be informally
    By the contract of partnership two of more persons bind created, existence proved by conducts or acts of
    themselves to contribute money, property, or industry to a parties
    common fund with the intention of dividing profit among a. Customary
    themselves. b. Contractual, all requisites of valid contract
    must be present (COC)
    Two or more persons may also form a partnership for the 3. Other forms of association excluded – there is no
    exercise of a profession. such thing as partnership created by
    law/operation/implied by law/etc.
    (This is a viewpoint of a contract)
    *Limited Partnership, however, can’t be created by mere
    Concept of Partnership
    voluntary agreement alone.
    - Association
    Legal Capacity of Parties to enter into the contract
    - Legal relation
    - Joint undertaking GR: any person may be a partner who is capable under the
    - Status law, any person who cannot legally give consent to a contract
    - Organization cannot be partners:
    - Entity
    a. Unemancipated minors
    Partnership for the exercise of a profession b. Insane demented persons
    c. Deaf-mutes who do not know how to write
    Profession
    d. Persons suffering from civil interdiction (legal
    is a calling in the preparation/practice of which restraint ‘cause the person became incompetent)
    academic learning is required (its prime purpose the e. Incompetents who are under guardianship
    rendering of public service). Exceptions: those prohibited to give each other
    General Professional Partnership donation/advantage cannot enter into a universal
    partnership.
    practice of a profession is not a business/enterprise
    for profit however law allows the joint pursuit thereof by two Capacity of partnership/corporation to be a partner.
    or more persons as partners.
    - No prohibition of partnership being a partner of
    *law does not allow individuals to practice profession as a another partnership.
    corporate entity. - Unless authorized by law, a corporation has no
    capacity to enter into a contract of partnership.
    Characteristic Elements of an Entity
    Mutual Contribution to a common fund
    a contract of partnership is:
    1. Proprietary or financial interest - no mutual contri =
    1. Consensual – perfect by mere consent no partnership
    2. Nominate – has a special name 2. Form of Contribution
    3. Bilateral – 2 or more, reciprocal a. Money
    4. Onerous – benefit by giving something b. Property
    5. Commutative – undertaking is equivalent c. Industry
    6. Principal – doesn’t depend on other contracts
    7. Preparatory – entered for an “end” (profit) Legality of Object

    Partnership is fiduciary 1. Effect of Legality – purpose must be lawful,


    contrariwise, it is void ab initio.
    - Delectus personae, involves “does trust and 2. Businesses partnership not permitted to engage in
    confidence between partners” – partnership may be organized for any purpose. But
    not allowed to engage in an enterprise for which the
    Delectus personae – choose of the persons
    law requires a specific form of buss. org.
    o Right to choose co-partners (there’s
    Intention to realize and divide profits
    consensus)
    o Power to dissolve partnership 1. Very reason for existence of partnership
    (power, not right) 2. Sufficient if obtaining profit principal purpose
    Essential Features of a Partnership Sharing of Profits
    - There must be a valid contract 1. Not necessarily in equal shares
    - Parties must have legal capacity 2. Not conclusive evidence of a partnership
    - There must be mutual contributions
    - Object must be lawful Sharing of Losses
    - Primary purpose: obtain profits
    1. Necessary corollary of sharing in profits
    *articles mustn’t be kept secret to parties 2. Agreement not necessary (for a system of loss
    sharing)

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