ATP Last Discussion
surname appeared
Obligations to the 3rd persons
A. Firm Name
 Not just identity
 For purposes of entering into
juridical relations ( can be sued
and be sued)
1815 and 1819
Art. 1815 – Every partnership shall operate
under a firm name, which may or may not
include the name of one or more of the
partners.
Those who, not being members of the
partnership, include their names in the firm
name, shall be subject to the liability of a
partner.
Rules:
1. General Rule – Choose any name
 Restrictions: - should not be
confusingly or deceptively
similar – not just the name but
if engaged in the same business
 Cannot include the name of one
not a partner.
Rules in firm name in GP and LP are the same
except two special rules:
1. Indicated in your partnership name the
word Limited Liability Partnership (LLP),
Ltd., Limited
2. The surname of a limited partner shall
not appear in the partnership name
unless:
a. It is also the surname of a
general partner
b. Prior to the time when the
limited became such, the
business had been carried on
under a name in which his
A limited partner whose
surname appears in a
partnership name contrary to
the provisions of the first
paragraph is liable as a general
partner to partnership creditors
who extend credit to the
partnership without actual
knowledge that he is not a
general partner
Art. 1816 – All partners, including industrial
ones, shall be liable pro rata, with all their
property and after all the partnership assets
have been exhausted, for the contracts which
may be entered into the name and for the
account of the partnership, under its signature
and by a person authorized to act for the
partnership. However, any partner may enter
into a separate obligation to perform a
partnership contract.
- Joint liability
- Pro rata – Jurisprudence: means joint
Pro rate – proportionate
Joint – equal
A – 50%
B – 30%
C – 20%
D – Industrial
When D asks for reimbursement, pro rata will
apply (losses)
1797 (industrial partner) v. 1816
Liability
Losses
Joint – subsidiary – contractual
1816
You will find the two requirements of agency in
carrying out the agency
COA – authority ; in the name of the principal
Art. 1818 – 1878 (agency to needs SPA)
Correlate with 1800 – 1803
- Rules on management
Provisions of the Civil Code that partnership
really is one of mutual agency - 1803 and 1818
Vs. Acts of Administration/ Acts of Management
– same regardless of industry
1) Acts which are in the usual way of
business of the partnership
- Common
- Usual
- Peculiar
 To your line of business
Agents bind the principal unless not authorized
or 3td persons in bad faith
2) Acts not UWBP – must be authorized
3) Acts of strict dominion
o All partners must authorize
ADD CARE
1. Assign the partnership property in trust
for creditors or on the assignee’s
promise to pay the debts of the
partnership;
2. Dispose of the goodwill of the business;
3. Do any other act which would make it
impossible to carry on the business of a
partnership;
4. Confess a judgment;
5. Submit a partnership claim or liability to
Arbitration;
6. Renounce a claim of the partnership;
and
7. Enter into a compromise concerning a
partnership claim or liability.
4) In contravention of the authority -
same in agency
1819 – To determine whether or not there is
transfer in the form of 1 or 2 above would
depend on your understanding of ACUWBP…
1. Title (full ownership) part 1, 3, 5
2. Equitable Title
Solidary Obligation
1. 1822 – Where, by any wrongful act or
omission of any partner acting in the
ordinary course of the business of the
partnership or with the authority of his
co-partners, loss or injury in caused to
any person, not being a partner in the
partnership, or any penalty is incurred,
the partnership is liable therefor to the
same extent as the partner so acting or
omitting to act.
- TORT/ QUASI- DELICT
2. 1823 – breach of trust and
misapplication/ misappropriation -
1824
NOT ALL WRONGFUL ACTS ARE QUASI_DELICT;
others are delict (crime)
1823
Par. 1 – authorized – as if the
partnership received
Part. 2 – any partner in the UWB – act
of receiving is under Art. 1818 par. 1 –
as if the partnership received
What is the difference? When to apply?
Par. 2 – applies to very few line of business –
pawnshop, depositary, etc. – receiving things in
trust is in the usual course of business
Par. 1 – same partner who receives will
misappropriate it
Majority – count the heads, managing partners
only
Controlling interest – partners who owns more
than 50% - all partners – interest in the profits
and surplus

What if the partner who received is not the one DISSOLUTION

who misappropriate it?
- Continue or not continue ( go to
- Do not apply Art. 1823 par. 1 – the liquidation)
partner is solely liable
WINDING UP

Art. 1825 TERMINATION

Usually the business is being continued and

Par .1 – Definition
partnerships are not liquidating the old
Par. 2 – Liability partnership
In a partnership by estoppel, is it required that 1830 – causes mentioned – partnership is
there is an existing partnership? automatically dissolved – different from 1831

Judicial Decrees – CAUSES:

1826 – Liability of a new partner BREACH
Generally, will be held liable for part obligations INSANITY
Exceptions: GUILTY OF MISCONDUCT
1. This liability shall be satisfied only our of LOSS
partnership property;
2. There is a stipulation to the contrary. INCAPACITY

OTHERS

1827 – 1814 – preference of partnership

property and partners property 1813 – opposite of 1811
Controlling interest 1814 – opposite of 1811
Agency - 1927 – coupled DEATH, INSOLVENCY, and CIVIL INTERDICTION –
1800 automatically dissolved

- A managing partner cannot be ousted

as such without just cause, if w/ just Is it required to file a separate petition to prove
cause – vote of controlling interest insanity or unsound mind and the dissolution?

- No need to file a separate dissolution

INSANITY
- Need to file a petition for dissolution
- Not the declaration of insanity
1832 – Effects of Dissolution
General Rule
- Terminate all the partnership authority
to bind the partnership
Exceptions:
o Winding up
o Complete Unfinished Business
Effect of Dissolution among:
1. 1833 – Partners
ACT , INSOVENCY, and DEATH –
distinguish if act has knowledge of the
incapacity or death
Incapacity or death – notice only
If with good faith
NOT AID – apply 1832
2. 1834 – Third Persons
Good faith of 3rd person – has he
extended credit or dealt with the
partnership
Knowledge – direct and personal
Notice – secondary
1835 – Effects of Dissolution
There are requirements
1. Agreement of the partnership, creditor,
and partner
1836 – Who winds up? / Receiver
1837 – Won’t be asked
1838 – Right of an injured partner
1. If caused by fraud
o Lien/retention
o Subrogation
o Indemnification for damages
1839 – Process of Dissolution
1. Get all the assets
2. Partnership property – initial
contribution and subsequently
acquired property during the lifetime
of the partnership
Par. 4 - not article 1797 but must be 1816 –
must be the subsidiary liablity
1840-1842 – effect if the partners decided to
continue the old partnership
1840 v. 1826 – creditors of old partnership are
also creditors of the new partnership – provided
that the liability of the new is limited to his
capital contribution
LIMITED PARTNERSHIP
General concepts in GP is also applicable to LP
Except:
1. Limited Liability – a limited partner is a
pure contributor – mere contribution of
capital (1866)
2. Firm name
3. If a limited partner dies, became
insane or become civilly interdicted –
partnership not dissolved, but there
should be amendment of the certificate
– limited partner may be substituted
4. Limited partner can withdraw anytime
provided that such is provided in the
certificate – 1836 v. 1839
5. Comply with the Form
Substantial Compliance
 - The law also looks at the protection of
third person who will deal with the
partnership
- Usually name, point out who are
limited partnership
- Mostly at the discretion of the SEC as
the regulatory body

What are the instances when you have to

cancel or mostly amend a limited partnership?

Limited partner and general partner at the

same time:

- In the eyes of 3rd person he is a general

partner

Rights and Powers of GP and LP – no difference