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Partnership Reviewer
Partnership Reviewer
NO need for JUDICIAL DECREE to * FAILURE TO COMPLY shall not effect the
dissolve an unlawful partnership liability of the partnership and its members to
VOID AB INITIO third persons
one of the causes for the dissolution ** IF REAL PROPERTIES have been
of a partnership is any event which makes it contributed, REGARDLESS of the VALUE, a
unlawful for the business of the partnership to public instrument is needed for the
be carried on attainment of legal personality
RULE:
when an UNLAWFUL PARTNERSHIP is REQUIREMENTS WHERE IMMOVABLE /
dissolved by a judicial decree, the PROFITS REAL PROPERTY IS CONTRIBUTED
shall be CONFISCATED in FAVOR of the 1. PUBLIC INSTRUMENT
STATE 2. INVENTORY signed and attached to
the P.I.
G. R. * applies regardless of the value of the
a partnership may be constituted in any real property
form * applies even if only real rights over
EXCEPTION: PUBLIC INSTRUMENT the real property are
1. IMMOVABLE PROPERTY is contributed contributed
2. REAL RIGHTS are contributed * applies if aside from real property,
cash or personal property is
* need for INVENTORY of contributed
IMMOVABLES
TRANSFER of land to the partnership must
** for EFFECTIVITY of the be duly recorded in the ROD to make the
partnership contract insofar as transfer effective insofar as third persons are
innocent third persons are concerned
concerned the same must be
REGISTERED if REAL PROPERTIES RULE:
are INVOLVED any immovable property or an interest
therein maybe acquired in the partnership
a partnership contract is NOT name
CONVERED by the STATUTE of FRAUDS title so acquired can be conveyed only in the
partnership name
an AGREEMENT TO FORM a
partnership does not itself create a IF the partnership has ALIENS, it CANNOT
partnership OWN LANDS, whether public or private or
whether agricultural or commercial EXCEPT
through HEREDITARY SUCCESSION
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2. PARTICULAR
C) ACCORDING TO LIABILITY
1. LIMITED PARTNERSHIP
LIMITATIONS ON ACQUISITION 2. GENERAL PARTNERSHIP
1. AGRICULTURAL LANDS 1024 D) ACCORDING TO LEGALITY
HECTARES 1. LAWFUL OR LEGAL
2. lease of public lands (GRAZING) 2000 2. UNLAWFUL OR ILLEGAL
HAS. E) ACCORDING TO DURATION
1. for a SPECIFIC PEIOD or FIXED
RULES IF A) articles are kept secret PERIOD
among the members 2. PARTNERSHIP AT WILL
B) any one of the members may F) ACCORDING TO REPRESENTATION TO
contract in his own name OTHERS
with third persons 1. ORDINARY PARTNERSHIP
1. NOT a partnership NOT a LEGAL 2. PARTNERSHIP BY ETOPPEL
PERSON G) AS TO LEGALITY OF EXISTENCE
2. it may be sued by third person under 1. DE JURE PARTNERSHIP
the common name it uses 2. DE FACTO PARTNERSHIP
3. it cannot sue as such and cannot be H) AS TO PUBLICITY
ordinarily be a party to a civil action 1. SECRET PARTNERSHIP
4. insofar as innocent third parties are 2. NOTORIOUS / OPEN PARTNERSHIP
concerned I) AS TO PURPSE
the parities can be considered as 1. COMMERCIAL / TRADING
members of a partnership 2. PROFESSIONAL / NON-TRADING
5. as between themselves or insofar as
third persons are prejudiced
only the rules of co-ownership must GENERAL PARTNERSHIP
apply one where all the partners are general
partners
EFFECT OF CERTAIN TRANSACTIONS they are LIABLE even with respect to their
1. contracts entered into by a partner in individual properties, after the assets of the
his own name may be sued upon still partnership has been exhausted
by him in his individual capacity, not
withstanding the absence of a LIMITED PATNERSHIP
partnership one where at least one partner is a general
2. when two or more individuals, having a partner and the others are limited partners
common interests in a business bring one whose liability is limited only up to the
a court action, it should be presumed extent of his contribution
that they prosecute the same in their
individual capacity as co-owners and a partnership where all the partners are
not in behalf of a partnership which limited partners cannot exist as a limited
does not exist in legal contemplation partnership
REFUSED REGISTRATION
CLASSIFICATION OF PARTNERSHIPS IF it continuous as such, it will be
A) ACCORDING TO MANNER OF CREATION considered as a general partnership and all
1. ORALLY constituted the partners will be general partners
2. constituted in a PRIVATE
INSTRUMENT KINDS OF UNIVERSAL PARTNERSHIP
3. constituted in a PUBLIC 1. PARTNERSHIP OF ALL PRESENT
INSTRUMENT PROPERTY
4. REGISTERED S.E.C. 2. PARTNERSHIP OF ALL PROFITS
B) ACCORDING TO OBJECT
1. UNIVERSAL
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*UNIVERSAL PARTNERSHIP OF ALL 2. SPECIFIC UNDERTAKING
PRESENT PROPERTY 3. EXERCISE of a PROFESSION or
CONTRIBUTION of VOCATION
1. ALL the properties actually
belonging to the partners OBLIGATIONS OF THE PARTNERS
2. the PROFITS acquired with said RULE:
property a PARTNERSHIP BEGINS from the moment
BECOMES COMMON PROPERTY of the EXECUTION of the CONTRACT
EXCEPT all FUTURE PROPERTY
FRUITS of FUTURE PROPERTY * even if contributions have not yet been
INCLUDED IF STIPULATED UPON made the firm already exists, for partnership
is a consensual contract
MANAGING PARTNER
one who manages actively the firms affairs *RULE if MANAGING PARTNER COLLECTS
A CREDIT
SILENT PARTNER
one who does not participate in the REQUISITES:
management, though he shares in the 1. existence of at least 2 debts ----
PROFITS or LOSSES PARTNERSHIP
----
LIQUIDATING PARTNER PARTNER
one who winds up or liquidates the affairs of 2. both sums are demandable
the firm after it has been dissolved 3. the collecting partner is the managing
partner
OSTENSIBLE PARTNER
one whose connection with the firm is public * the sum thus collected shall be applied
and open to the two credits in
proportion to their amounts
SECRET PARTNER
one whose connection with the firm is RULE:
concealed or kept secret * where a partner receives his share in the
partnership credit
DORMANT PARTNER CONDITIONS:
one who is both a secret (hidden) and silent 1. a partner has received his share in the
(not managing) partner partnership credit in whole or in part
2. the other partners have not collected
NOMINAL PARTNER their part of the credit
one who is not really a partner BUT who 3. the debtor subsequently becomes
may become liable as such insofar as third INSOLVENT
persons are concerned
RULE: - the partner shall be obliged to
RULE: bring to the partnership
partners shall CONTRIBUTE EQUAL capital what he received even though he
SHARES to the capital of the partnership may have given receipt for
his share only
* it is permissible to contribute UNEQUAL
SHARES IF there is a stipulation to this effect * DOES NOT APPLY when debt was collected
after dissolution of the partnership
* in the absence of proof, the shares are
presumed to be equal RULE:
* every partner is responsible to the
CONDITIONS before a capitalist partner is partnership for damages suffered by it
obliged to sell his shares / interest to the through his fault
other partners [IL, RC, NA]
* he cannot compensate them with the
1. if there is IMMINENT LOSS of the profits and benefits, which he may have
BUSINESS of the partnership earned for the partnership by his industry
3. when a partner acts in his OWN NAME, RIGHT TO DEMAND a FORMAL ACCOUNT
he does not bind the partnership any partner shall have the right to a formal
account as to partnership affairs
4. authority to bind the firm does not 1. if wrongfully excluded from partnership
apply if somebody else has been given BUSINESS
authority to manage in the articles of 2. if wrongfully excluded from partnership
PROPERTY by his co-partners
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3. if the right exists under the terms of RULE:
agreement * a PARTNERS INTEREST in the partnership
4. if the other partner receives other is his SHARE of the PROFITS and SURPLUS
benefits, profits or uses partnership IT CAN BE: [A, A, LS]
property 1. ASSIGNED
5. whenever other circumstances render it 2. ATTACHED
just and reasonable 3. be subject to LEGAL SUPPORT
3. his right to the property is NOT 2. to avail himself of the usual remedies in
SUBJECT to ATTACHMENT or case of fraud in the management
EXECUTION, EXCEPT on a claim
against partnership 3. to ask for ANNULMENT of the contract
of assignment IF:
4. his right to the property is NOT A) he was induced to enter into it
SUBJECT to LEGAL SUPPORT through any of the vices of consent
OR
* if there is PARTNERSHIP DEBT, the specific B) he himself was incapacitated to give
property can be attached consent
* AFTER FORECLOSURE the interest may still *RULE on LIABILITY of a PARTNER who has
be redeemed by (without causing dissolution) WITHDRAWN
1. with separate property, by any one or more 1. a partner who withdraws is not liable
of the partners OR for liabilities contracted after he has
withdrawn
2. with partnership property, by any one or
more partners with the consent of all the 2. if his interest has not yet been paid him
partners whose interests are not so charged or his right to the same is that of a mere
sold creditor
* consent of the delinquent partner not
needed ** a stipulation exempting liability to third
persons is VOID
RULE:
every partnership shall operate under a * any partner may enter into a separate
FIRM NAME obligation to perform a partnership contract
* the firm name may or may not include
the name of one or more of the partners RULE:
* every partner is an agent of the
** STRANGERS who include their names in partnership for the purpose of its business
the firm are liable as partners because of
ESTOPPEL, BUT do NOT have the RIGHTS of G.R.- the act of every partner for apparently
partners carrying on in the USUAL WAY the business of
the partnership of which he is member binds
** IF a LIMITED PARTNER includes his name the partnership
in the firm name, he has obligations BUT not EXCEPT:
the rights of a general partner 1. if he has NO AUTHORITY and
2. the person with whom he was dealing with
RULE on LIABILITY for CONTRACTUAL HAS KNOWLEDGE of the fact that he has no
OBLIGATIONS such authority
PARTNERSHIP BY ESTOPPEL
LOSS OR INJURY
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when all the members of the existing PREFERENCE of PARTNERSHIP
partnership consent to such representation of CREDITORS
a partner by estoppel RULE:
* the creditors of the partnership shall be
RULES AND SITUATIONS: preferred to those of such partner as regards
1. if a third person is misled and acts the partnership property
because of such misrepresentation
the deceiver is a partner by estoppel without prejudice to this right
the private creditors of each partner may
2. if the partnership consented to such ask the attachment and public sale of the
misrepresentation share of the latter in the partnership assets
partnership liability results
**IF a partner sells his share to a third
3. if the firm had not consented party, BUT the firm itself still remains
no partnership liability results BUT SOLVENT, partnership creditors CANNOT
the deceiver is considered still as a assail the validity of the sale by alleging that it
partner by estoppel with all the is made in fraud of them, since they have not
obligations but not the rights of a really been prejudiced
partner
DISSOLUTION AND WINDING UP
4. when a person represents himself as a the change in the relation of the partners
partner of a NON-EXISTENT partnership caused by any partner causing to be
NO partnership liability results BUT associated in the carrying on of the business
the deceiver and all persons who may it is the point of time the partners cease to
have aided him in the carry on the business together
misrepresentation are still liable
liability would be JOINT or PRO- WINDING UP
RATA the process settling business affairs after
dissolution
* when although there is misrepresentation,
if the third party is not deceived, the doctrine TERMINATION
of estoppel does not apply the point in time after all the partnership
affairs have been wound up
BURDEN of PROOF
the creditor or whoever alleges the existence RULE ON DISSOLUTION
of a partner or partnership by estoppel has * on dissolution the partnership is not
the burden of proving the existence of the terminated BUT continues until the winding
MISREPRESENTATION AND INNOCENT up of partnership affairs is completed
RELIANCE on it
*EFFECT on OBLIGATIONS
ENTRY OF A NEW PARTNER into an 1. just because a partnership is dissolved
EXISTING PARTNERSHIP this does not necessarily mean that a
RULE: partner can evade previous obligations
* he shall be liable for all the obligations of entered into by the partnership
the partnership BUT his liability will extend
only to his share in the partnership property 2. dissolution saves the former partners
from new obligations to which they
* his own individual property shall be have not expressly or impliedly
excluded consented UNLESS the same be
essential for winding up
* same liability of a limited partner
*CAUSES OF DISSOLUTION