Chapter 1

PARTNERSHIP When an unlawful partnership is dissolved by a
General Provisions judicial decree, the profits shall be confiscated in favor

of the State.
Art. 1767: By the contract of partnership,
(Ordinary or Business Partnership)
1) Two or more persons bind themselves to:
a) Contribute money, property, or industry to Art. 1771: Partnership may be constituted in any form,
a common fund; except where immovable property or real rights are
b) With the intention of dividing the profits contributed thereto, in which case a public instrument
among themselves. shall be necessary.
(General Professional Partnership)

2) Two or more persons may also form a Art. 1772: A partnership having a capital of P3,000.00 or
partnership for the: more, in money or property, shall:
a) Exercise of a profession. 1) Appear in a public instrument
2) Be recorded in the Office of the Securities and
Exchange Commission (SEC).
Art. 1768: Partnership has a juridical personality.
Failure to comply with the requirements shall not
affect the liability of the partnership and the members
thereof to 3rd persons.
Art. 1769: To determine the existence of a partnership,
the ff. rules shall apply:
1) Persons who are not partners as to each other
are not partners as to 3 rd persons, except as Art. 1773: A contract of partnership is void, whenever
provided by Art. 1825; immovable property is contributed thereto, if:
2) Co-ownership or co-possession does not of 1) An inventory of said property is not made;
itself establish a partnership; 2) Not signed by the parties;
3) Sharing of gross returns does not of itself 3) Not attached to the public instrument.
establish a partnership;
4) Receipt by a person of a share of the profits of
a business is prima facie evidence that he is a Art. 1774:
partner in the business, except when profits
were received in payment as:
a) Debt by installments or otherwise Art. 1775: Associations and societies shall have no
b) Wages of an employee or rent to a landlord juridical personality if:
c) Annuity to a widow or representative of a 1) Articles are kept secret among the members;
deceased partner 2) Any one of the members may contract in his
d) Interest on a loan own name with 3rd persons.
e) Consideration for the sale of a goodwill of a
business of other property by installments In any case, it shall be governed by the provisions
or otherwise. relating to co-ownership.
Art. 1770: Partnership must have a lawful object or Art. 1776: As to its object, a partnership is either:
purpose and must established for the common benefit 1) Universal
or interest of the partners. 2) Particular
As regards the liability of the partnership, it may be:

1) General
2) Limited
Art. 1777: A universal partnership may refer to: Art. 1783: A particular partnership has:
1) All the present property; or 1) For its object:
2) All the profits. a) Determinate things
b) Their use or fruits, or
2) Specific undertaking
Art. 1778: A partnership of all present property – the 3) Exercise of a profession or vocation.
partners contribute all the property which actually
belongs to them to a common fund, with the intention
of dividing the same among themselves, as well as all NOTES
the profits they may acquire therewith.
Elements of Partnership (both ordinary and general
professional partnership)
Art. 1779: In a universal partnership of all present 1) Agreement to contribute money, property, or
property, the property which belonged to each of the industry to a common fund;
partners at the time of the constitution of the 2) Intent to divide the profits among the
partnership, becomes the common property of all the contracting parties.
partners, as well as the profits which they may acquire
therewith. Requisites of Partnership
1) Lawful object or purpose
A stipulation for the common enjoyment of any 2) Common benefit or interest of the parties
other profits may also be made; but the property which 3) Constituted in any form, except:
the partners may acquire subsequently by inheritance, - Immovable Property
legacy, or donation cannot be included in such - Real Rights
stipulations, except the fruits thereof. 4) Must be in a public instrument and recorded in
SEC for every capital of P3,000.00.
Art. 1780: A universal partnership of profits comprises

all that the partners may acquire by their industry or
work during the existence of the partnership.
Movable or immovable property which each of

the partners may possess at the time of the celebration
of the contract shall continue to pertain exclusively to
each, only the usufruct passing to the partnership.
Art. 1781: If the universal partnership is entered into

without specification of its nature, the articles only
constitute a universal partnership of profits.
Art. 1782: Persons who are prohibited from giving each

other any donation or advantage cannot enter into
universal partnership.

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PARTNERSHIP When an unlawful partnership is dissolved by a

General Provisions judicial decree, the profits shall be confiscated in favor

(General Professional Partnership)

As regards the liability of the partnership, it may be:

Art. 1780: A universal partnership of profits comprises

Movable or immovable property which each of

Art. 1781: If the universal partnership is entered into

Art. 1782: Persons who are prohibited from giving each

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