Professional Documents
Culture Documents
LA SALLE UNIVERSITY
COLLEGE OF BUSINESS AND ACCOUNTANCY
Summer of A.Y. 2019-2020
Learning Module Week 1 on the Law on Partnership
Business Laws and Regulations by Dr. Daryl F. Quinco, CPA, MBA, Llb
Notes
2. CO-OWNERSHIP of a property does not itself one of the causes for the dissolution of a
establish a partnership, even though the co- partnership is “any event which makes it unlawful for
owners share in the profits derived from the the business of the partnership to be carried on”
incident of joint ownership
RULE:
3. SHARING OF GROSS RETURNS ALONE does not when an UNLAWFUL PARTNERSHIP is dissolved by a
indicate a partnership whether or not the judicial decree, the PROFITS shall be CONFISCATED in
persons sharing them have a joint or common FAVOR of the STATE
right or interest in any property from which the
returns are derived G. R.
a partnership may be constituted in any form
4. the receipt of the share in the profits is a strong EXCEPTION: PUBLIC INSTRUMENT
presumptive evidence of partnership 1. IMMOVABLE PROPERTY is contributed
HOWEVER, no such inference will be drawn if 2. REAL RIGHTS are contributed
such profits were received in payment
A) as a DEBT by installments or otherwise * need for INVENTORY of IMMOVABLES
B) as WAGES of an employee
C) as RENT to a landlord ** for EFFECTIVITY of the partnership
D) as an ANNUITY to a widow or contract insofar as innocent third persons
representative of a deceased partner are concerned the same must be
E) as INTEREST on a LOAN, though the REGISTERED if REAL PROPERTIES are
amount of payment vary with the INVOLVED
profits of the business
F) as the CONSIDERATION for the sale of a a partnership contract is NOT CONVERED by
GOOD WILL of a business or other the STATUTE of FRAUDS
property or otherwise
creditors are not partners, for their only an AGREEMENT TO FORM a partnership does
interest in the sharing of profits is the not itself create a partnership
receipt or payment of their credits
when there are conditions to be fulfilled or
in a partnership, the partners are when a certain period is to lapse, the partnership is not
supposed to trust and have confidence in all created till after the fulfillment of the conditions or the
the partners arrival of the term and this is true even if one of the
Page 3 of 15
parties has already advanced his agreed share of the 5. as between themselves or insofar as third
capital persons are prejudiced
only the rules of co-ownership must apply
RULE: if CAPITAL is P3,000 or more
REQUIRED: EFFECT OF CERTAIN TRANSACTIONS
1. PUBLIC INSTRUMENT 1. contracts entered into by a “partner” in his own
2. RECORDED – S.E.C. name may be sued upon still by him in his
individual capacity, not withstanding the
* FAILURE TO COMPLY – shall not effect the liability of absence of a partnership
the partnership and its members to third persons 2. when two or more individuals, having a
common interests in a business bring a court
** IF REAL PROPERTIES have been contributed, action, it should be presumed that they
REGARDLESS of the VALUE, a public instrument is prosecute the same in their individual capacity
needed for the attainment of legal personality as co-owners and not in behalf of a partnership
which does not exist in legal contemplation
REQUIREMENTS WHERE IMMOVABLE / REAL
PROPERTY IS CONTRIBUTED CLASSIFICATION OF PARTNERSHIPS
1. PUBLIC INSTRUMENT A) ACCORDING TO MANNER OF CREATION
2. INVENTORY – signed and attached to the P.I. 1. ORALLY constituted
* applies regardless of the value of the real 2. constituted in a PRIVATE INSTRUMENT
property 3. constituted in a PUBLIC INSTRUMENT
* applies even if only real rights over the real 4. REGISTERED – S.E.C.
property are B) ACCORDING TO OBJECT
contributed 1. UNIVERSAL
* applies if aside from real property, cash or 2. PARTICULAR
personal property is C) ACCORDING TO LIABILITY
contributed 1. LIMITED PARTNERSHIP
2. GENERAL PARTNERSHIP
TRANSFER of land to the partnership must be duly D) ACCORDING TO LEGALITY
“recorded” in the ROD to make the transfer effective 1. LAWFUL OR LEGAL
insofar as third persons are concerned 2. UNLAWFUL OR ILLEGAL
E) ACCORDING TO DURATION
RULE: 1. for a SPECIFIC PEIOD or FIXED PERIOD
any immovable property or an interest therein maybe 2. PARTNERSHIP AT WILL
acquired in the partnership name F) ACCORDING TO REPRESENTATION TO OTHERS
title so acquired can be conveyed only in the 1. ORDINARY PARTNERSHIP
partnership name 2. PARTNERSHIP BY ETOPPEL
G) AS TO LEGALITY OF EXISTENCE
IF the partnership has ALIENS, it CANNOT OWN 1. DE JURE PARTNERSHIP
LANDS, whether public or private or whether 2. DE FACTO PARTNERSHIP
agricultural or commercial EXCEPT through HEREDITARY H) AS TO PUBLICITY
SUCCESSION 1. SECRET PARTNERSHIP
2. NOTORIOUS / OPEN PARTNERSHIP
I) AS TO PURPSE
1. COMMERCIAL / TRADING
LIMITATIONS ON ACQUISITION 2. PROFESSIONAL / NON-TRADING
1. AGRICULTURAL LANDS – 1024 HECTARES
2. lease of public lands (GRAZING) – 2000 HAS.
GENERAL PARTNERSHIP
RULES IF A) articles are kept secret among the one where all the partners are general partners
members they are LIABLE even with respect to their individual
B) any one of the members may properties, after the assets of the partnership has been
contract in his “own” name with exhausted
third persons
1. NOT a partnership – NOT a LEGAL PERSON LIMITED PATNERSHIP
2. it may be sued by third person under the one where at least one partner is a general partner
common name it uses and the others are limited partners
3. it cannot sue as such and cannot be ordinarily one whose liability is limited only up to the extent of
be a party to a civil action his contribution
4. insofar as innocent third parties are concerned
the parities can be considered as members of a partnership where all the partners are limited
a partnership partners cannot exist as a limited partnership
REFUSED REGISTRATION
Page 4 of 15
IF it continuous as such, it will be considered as a * even if contributions have not yet been made the
general partnership and all the partners will be firm already exists, for partnership is a consensual
general partners contract
while spouses cannot enter into a universal RULES ON THE DUTY TO DELIVER THE FRUITS
partnership, they can enter into a particular partnership 1. IF property has been promised, the fruits
or be members thereof thereof should also be given
a universal partnership is virtually a donation to each 2. the fruits referred to are those arising from the
other of the partners properties or at least their time they should have been delivered, without
usufruct a need of any demand
RULES ON THE DUTY TO WARRANT one who is liable “beyond” the extent of his
1. the warranty in case of eviction refers to contribution
specific and determinate things already
contributed LIMITED PARTNER
one who is liable “only” to the extent of his
2. there is EVICTION whenever by a final judgment contribution
based on a right prior to the sale or an act
imputable to the partner, the partnership is *** an industrial partner can only be a general
deprived of the whole or a part of the thing partner, never a limited partner
purchased
MANAGING PARTNER
RULE WHEN CONTRIBUTION CONSISTS OF GOODS one who manages actively the firms affairs
APPRAISAL of VALUE is needed to determine how
much was contributed SILENT PARTNER
one who does not participate in the management,
HOW APPRAISAL MADE though he shares in the PROFITS or LOSSES
1. as PRESCRIBED in the CONTRACT
2. in default, by EXPERTS chosen by the partners, LIQUIDATING PARTNER
and at CURRENT PRICES one who winds up or liquidates the affairs of the firm
* necessity of the INVENTORY – APPRAISAL after it has been dissolved
GENERAL PARTNER
*RULE if MANAGING PARTNER COLLECTS A CREDIT
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REQUISITES:
1. existence of at least 2 debts ---- PARTNERSHIP
---- PARTNER
2. both sums are demandable
3. the collecting partner is the managing partner RULE on RESPONSIBILITY of the FIRM
* the sum thus collected shall be applied to the 1. to REFUND amounts disbursed on behalf of the
two credits in firm plus legal interest from the time expenses
proportion to their amounts where made
* DOES NOT APPLY when debt was collected after *HOW LOSSES are DISTRIBUTED
dissolution of the partnership 1. according to AGREEMENT as to losses
2. IF NONE, according to agreement as to PROFITS
RULE: 3. IF NONE, according to amount of
* every partner is responsible to the partnership for CONTRIBUTION
damages suffered by it through his fault
* an INDUSTRIAL PARTNER shall receive a JUST and
* he cannot compensate them with the profits EQUITABLE share in the profits
and benefits, which he may have earned for the
partnership by his industry *RULE on INDUSTRIAL PARTNERS’ LIABILITIES
- may be held liable by third persons BUT he may
* the courts may equitably lessen his recover what he has paid from the other capitalist
responsibility partners
1. if SPECIFIC and DETERMINATE THINGS NOT * the designation of shares by third persons may be
FUNGIBLE whose USUFRUCT is enjoyed by a IMPUGNED, IF it is MANIFESTLY INEQUITABLE
firm * the designation of shares by third persons CANNOT
the PARTNER who OWNS it bears the loss for be IMPUGNED EVEN IF MANIFESTLY INEQUITABLE IF:
ownership was never transferred to the firm 1. the aggrieved partner has already BEGUN to
EXECUTE the decision
2. FUNGIBLE or DETERIORABLE 2. the aggrieved partner has not IMPUGNED the
FIRM bears the loss for it is evident ownership distribution within 3 months he had knowledge
was transferred
*RULE IF APPOINTMENT OTHER THAN in the ARTICLES
3. THINGS CONTRIBUTED to be SOLD of PARTNERSHIP
FIRM bears the loss for evidently the firm was 1. power to act may be REVOKED at ANY TIME
intended to be the owner with or without just cause
REMOVAL should be done by the controlling
4. CONTRIBUTED under APPRAISAL interest
FIRM bears the loss because this has the effect
of an implied sale 2. EXTENT of POWER
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SPECIFIC RULES:
1. each may separately execute all acts of RULES on PARTNERSHIP BOOKS
administration 1. kept at the principal place of business of the
UNLIMITED POWER to ADMINISTER partnership
2. IF any of the managers OPPOSE 2. at any reasonable hour, every partner shall
MAJORITY RULE have access to and may inspect and copy any of
IN CASE OF A TIE them
- persons owning controlling interest prevail
provided they are also managers DUTY of PARTNERS TO GIVE INFORMATION
good faith not only requires that a partner should not
* right to oppose is not given to NON-MANAGERS make any FALSE CONCEALMENT, BUT he should abstain
* OPPOSITION should be done BEFORE the acts from all concealment
produce legal effects insofar as third persons are
concerned DUTY to ACCOUNT [B, P, U-P]
every partner must account to the partnership
RULE WHEN UNANIMITY is REQUIRED 1. any benefit acquired
1. the CONCURRENCE of all shall be necessary for 2. any profits received
the validity of the acts 3. any use of partnership property
he may possess such property for other 4. to demand an accounting BUT only if the
purposes PROVIDED the other partners partnership is dissolved
expressly or impliedly gives their CONSENT
2. he CANNOT ASSIGN his right to the property PREFERENTIAL RIGHTS of PARTNERSHIP CREDITORS
EXCEPT if all the other partners assign their * partnership creditors are entitled to PRIORITY over
rights in the same property partnership assets, including the partners interest in the
profits
3. his right to the property is NOT SUBJECT to
ATTACHMENT or EXECUTION, EXCEPT on a ** SEPARATE or INDIVIDUAL creditors have
claim against partnership PREFERENCE in separate or individual properties
4. his right to the property is NOT SUBJECT to * when the CHARGING ORDER is applied for and
LEGAL SUPPORT granted, the court may appoint a receiver of the
partners share in the profits
* if there is PARTNERSHIP DEBT, the specific property the receiver appointed is entitled to any relief
can be attached necessary to conserve the partnership assets for
partnership purposes
* interest charged may be redeemed at any time
RULE: before foreclosure
* a PARTNERS INTEREST in the partnership is his
SHARE of the PROFITS and SURPLUS * AFTER FORECLOSURE the interest may still be
IT CAN BE: [A, A, LS] redeemed by (without causing dissolution)
1. ASSIGNED 1. with separate property, by any one or more of the
2. ATTACHED partners OR
3. be subject to LEGAL SUPPORT
2. with partnership property, by any one or more
*EFFECTS of CONVEYANCE by PARTNER of his partners with the consent of all the partners whose
INTEREST in the PARTNERSHIP interests are not so charged or sold
1. IF he conveys his WHOLE INTEREST * consent of the delinquent partner not needed
A) partnership may still remain
B) partnership may be dissolved RULE:
* mere conveyance does not dissolve the every partnership shall operate under a FIRM NAME
partnership * the firm name may or may not include the name of
one or more of the partners
2. the ASSIGNEE does not necessarily become a
partner ** STRANGERS who include their names in the firm are
the ASSIGNOR is still the partner, with a right liable as partners because of ESTOPPEL, BUT do NOT
to demand accounting and settlement have the RIGHTS of partners
3. the ASSIGNEE CANNOT interfere in the ** IF a LIMITED PARTNER includes his name in the firm
MANAGEMENT or ADMINISTRATION of the firm name, he has obligations BUT not the rights of a general
the ASSIGNEE CANNOT also DEMAND [I, A, I] partner
A) INFORMATION
B) ACCOUNTING RULE on LIABILITY for CONTRACTUAL OBLIGATIONS
C) INSPECTION of partnership books * all partners, including industrial ones, shall be liable
pro-rata with all their property and after all the
*** while a partners INTEREST in the firm may be partnership assets have been exhausted
CHARGED or LEVIED upon, his INTEREST in a specific
firm PROPERTY CANNOT be attached. * NOT APPLICABLE for TORTS or CRIMES ----- LOSS
----- INJURY
RIGHTS of the ASSIGNEE -----
1. to get whatever profits the assignor-partner MISAPPROPRIATION
would have obtained
** while an INDUSTRIAL PARTNER is exempted by law
2. to avail himself of the usual remedies in case of from LOSSES as between the partners, he is NOT
fraud in the management EXEMPTED from liability insofar as third persons are
concerned
3. to ask for ANNULMENT of the contract of he may recover what he has paid from the
assignment IF: CAPITALIST partners
A) he was induced to enter into it through any
of the vices of consent OR * under the law the liability of the partners is
B) he himself was incapacitated to give consent subsidiary and joint NOT principal and solidary
Page 9 of 15
7. RENOUNCE to CLAIM
*RULE on LIABILITY of a PARTNER who has
WITHDRAWN *RULES on CONVEYANCE of REAL PROPERTY
1. a partner who withdraws is not liable for
liabilities contracted after he has withdrawn 1. where title to real property is in the partnership
name
2. if his interest has not yet been paid him any partner may convey title to such property
his right to the same is that of a mere creditor by a conveyance executed in the partnership
name
** a stipulation exempting liability to third persons is
VOID * PARTNERSHIP MAY RECOVER SUCH PROPERTY
EXCEPT:
* any partner may enter into a separate obligation to 1. if the firm is engaged in the buying and
perform a partnership contract selling of land (USUAL BUSINESS)
2. if property was conveyed to a HOLDER
RULE: for VALUE and who had NO
* every partner is an “agent” of the partnership for the KNOWLEDGE of the partners LACK of
purpose of its business AUTHORITY
G.R.- the act of every partner for apparently carrying on 2. where title is in the name of the partnership and
in the USUAL WAY the business of the partnership of partner sold in his OWN NAME
which he is member binds the partnership
EXCEPT: IF DONE IN USUAL BUSINESS
1. if he has NO AUTHORITY and buyer does not become owner BUT
2. the person with whom he was dealing with HAS ACQUIRES EQUITABLE INTEREST
KNOWLEDGE of the fact that he has no such authority
IF NOT DONE IN USUAL BUSINESS
RULE: buyer does not become owner and is not
an act of a partner which is not apparently for the even entitled to equitable interest
carrying on of business of the partnership in the usual
way does not bind the partnership UNLESS authorized
by the other partners 3. where title is in the name of one or more BUT not
all the partners
* a partnership is a CONTARCT of MUTUAL AGENCY,
each partner acting as a principal on his own behalf and partners in whose name the title is named MAY
as an agent for his co-partners or the firm CONVEY BUT the PARTNERSHIP may RECOVER such
property IF done not in its USUAL BUSINESS
REQUISITES on WHEN can a partner BIND the EXCEPT if he had transferred it to a Holder for value
partnership
1. expressly or impliedly AUTHORIZED 4. when property “held in trust” by partner
2. when he acts in BEHALF AND IN THE NAME of
the partnership a sale only conveys EQUITABLE INTEREST
* the creditors of the partnership shall be preferred A) SPECIFIC THING – PERISHES before
to those of such partner as regards the partnership delivery
property B) USUFRUCT is lost EXCEPT if ownership
had been transferred to the partnership
without prejudice to this right 5. DEATH of ANY partner
the private creditors of each partner may ask the 6. INSOLVENCY of any partner or of the
attachment and public sale of the share of the latter in partnership
the partnership assets 7. CIVIL INTERDICTION of any partner
8. DECREE of COURT
**IF a partner sells his share to a third party, BUT the
firm itself still remains SOLVENT, partnership creditors *** if the cause is not justified or no cause was given,
CANNOT assail the validity of the sale by alleging that it the withdrawing partner is liable for DAMAGES BUT in
is made in fraud of them, since they have not really no case can he be compelled to remain in the firm
been prejudiced
* the insolvency need not be judicially declared, it is
DISSOLUTION AND WINDING UP enough that the assets be less than the liabilities
the change in the relation of the partners caused by
any partner causing to be associated in the carrying on DISSOLUTION by JUDICIAL DECREE WHEN ALOWED:
of the business (I, UM, I-PP, C, PB, BL, OC)
it is the point of time the partners cease to carry on 1. partner declared “insane” in any judicial
the business together proceeding or is shown to be of UNSOUND
MIND
WINDING UP 2. partner becomes INCAPABLE of performing his
the process settling business affairs after dissolution part of the partnership contract
3. partner has been guilty of such CONDUCT as
TERMINATION tends to affect prejudicially the business
the point in time after all the partnership affairs have 4. partners PERSISTENT BREACH of agreement
been wound up 5. the business of the partnership can only be
denied on at a loss
RULE ON DISSOLUTION 6. other circumstances which render dissolution
* on dissolution the partnership is not terminated equitable
BUT continues until the winding up of partnership
affairs is completed IN CASE OF PURCHASER of PARTNERS INTEREST
1. after the termination of the specified term or
*EFFECT on OBLIGATIONS particular undertaking
1. just because a partnership is dissolved this does 2. AT ANY TIME, if the partnership was a
not necessarily mean that a partner can evade “partnership at will” when the interest was
previous obligations entered into by the assigned or when the charging ordered was
partnership issued
2. dissolution saves the former partners from new * proof as to the existence of the firm must first be
obligations to which they have not expressly or given
impliedly consented UNLESS the same be
essential for winding up * even if a partner has not yet been previously
declared insane by the court, dissolution may be asked,
*CAUSES OF DISSOLUTION as long as the insanity is duly proved in court
1. without VIOLATION of the AGREEMENT
between the partners * in a suit for dissolution, the court may appoint a
A) TERMINATION of the DEFINITE TERM or RECEIVER at its discretion
PARTICULAR UNDERTAKING
B) EXPRESS WILL or ANY PARTY in GOOD
FAITH (PARTNERSHIP by WILL)
C) EXPRESS WILL of ALL of the PARTNERS EFFECTS OF DISSOLUTION
except those who have (interests) RULE:
ASSIGNED or whose interests have been * when the firm is dissolved, a partner can no longer
(separate debts) CHARGED bind the partnership
D) EXPULSION in good faith of a member
2. in CONTRAVENTION of the agreement between * a dissolved partnership still has the personality for
the partners the winding up of its affairs
by the EXPRESS WILL of ANY PARTNER at any the firm is still allowed to collect previously
time acquired credits
3. UNLAWFULNESS of the BUSINESS the firm is still bound to pay of its debts
4. LOSS – thing promised
DISSOLUTION CAUSED by A-I-D
Page 12 of 15
RULE: (STILL BOUND) – as to each partners incurred while he was a partner BUT subject to prior
payments of his separate debts
G.R. where the dissolution is caused by the ACT,
INSOLVENCY or DEATH of a partner, each partner is * IF there be a NOVATION of the OLD PARTNERSHIP
liable to his co-partners for his share of any liability DEBTS and such novation is done after one of the
created by any partner acting for the partnership partners has “retired” and without the consent of such
EXCEPTION: - individual liabilities partner
1. if dissolution by ACT said partner cannot be held liable by creditors
the partner acting for the partnership HAD who made the novation with knowledge of the firms
KNOWLEDGE of the dissolution OR dissolution
2. if dissolution by DEATH or INSOLVENCY
the partner acting for the partnership HAD EXTRAJUDUCIAL AND JUDICIAL WINDING-UP
“knowledge or notice” of the death or insolvency
EXTRAJUDICIAL:
* only the partner acting assumes liability 1. by the partners who have not wrongfully
dissolved the partnership
*AFTER DISSOLUTION, a partner can still “bind” the 2. by the legal representative of the last surviving
PARTNERSHIP partners
(WU, UT, TB)
1. By any ACT appropriate for WINDING UP JUDICIAL:
partnership affairs under the control and direction of the court, upon
proper cause that is shown to the court
2. By COMPLETING transactions UNFINISHED at
dissolution * profits that will actually enter the firm after
dissolution as a consequence of transactions already
3. By any TRANSACTION which could bind the made before dissolution are included because they are
partnership IF dissolution had not taken place considered as profits existing at the time of dissolution
PROVIDED the other party is:
A) PREVIOUS CREDITOR and had NO * any other income earned after the time, like
KNOWLEDGE or NOTICE of the interest or dividends on stock owned by the partners or
dissolution OR partnership at the time of dissolution should not be
B) NOT a PREVIOUS CREDITOR, had NO distributed as profits BUT as merely additional income
KNOWLEDGE or NOTICE and dissolution to the capital
was NOT PUBLISHED
* if there was publication of the dissolution it is BETTER RIGHTS of INNOCENT PARTNERS
presumed he already knows, regardless of actual innocent partners have better rights than guilty
knowledge on non knowledge partners and that the guilty partners are required to
indemnify for the damages caused
WHEN is the PARTNERSHIP NOT BOUND
1. new business with third parties who are in bad
faith * RIGHT of INOCENT PARTNERS TO CONTINUE the
2. firm dissolved because UNLAWFUL except for BUSINESS
acts of winding up in essence this is a new partnership
3. partner who acted became INSOLVENT can use the same firm name
4. partner not authorized to wind up EXCEPT if can ask new members to join
customer in good faith BUT shall: for protection of guilty partners
1. give a BOND approved by the court
* if after dissolution, if a stranger will represent 2. to PAY guilty partners his interests at the time
himself as a partner although he is not one he will be a of dissolution MINUS DAMAGES
partner by estoppel
* a guilty partner who is EXCLUDED will be
RULE: indemnified against all present or future partnership
* the dissolution of the partnership does not itself liabilities
discharge the “existing liability” of any partner
NEED for an AGREEMENT BETWEEN RIGHT TO GET CASH
1. partner concerned in case on non-continuance of the business, the
2. other partners interest of the partner should if he desires be given in
3. creditors cash
assets may be sold
JURISPRUDENCE
* IF the partnership assets are insufficient, the other KIEL vs. SABERT
partners must contribute more money or property * the declarations of one partner, not made in the
presence of his co-partner, are not competent to prove
PREFERENCE with RESPECT to the ASSETS the existence of a partnership between them as against
1. regarding partnership property such partner
partnership creditors have preference
* the existence of a partnership cannot be
2. regarding individual properties of partners established by general reputation, rumor or hearsay
individual creditors are preferred
EVENGELISTA vs. C.I.R.
* By the contract of partnership 2 or more persons
RULE if PARTNER is INSOLVENT bind themselves to contribute money, property, or
- How INDIVIDUAL PROPERTY is DISTRIBUTED industry to a common fund, with the intention of
dividing the profits among themselves
ORDER OF PREFERENCE:
1. INDIVIDUAL or SEPARATE CREDITORS ESSENTIAL ELEMENTS of a PARTNERSHIP
2. PARTNERSHIP CREDITORS 1. an agreement to CONTRIBUTE money,
3. those owing to other partners by way of property, or industry to a COMMON FUND
contribution 2. intent to divide the profits among the
contracting parties
*When creditors of the dissolved partnership are also
creditors of the partnership continuing business: * when our internal Revenue Code includes
1. new partner is admitted without liquidation “partnerships” among the entities subject to the tax on
2. a partner retires and assigns his rights IF the “corporations”, said code which are not necessarily
business is continued without liquidation of the “partnerships” in the technical sense of the term
partnership affairs
3. all but one partner retire without liquidation * PARTNERSHIPS – includes a SYNDICATE, GROUP,
4. when all partner assign their right to a person POOL, JOINT VENTURE, or other unincorporated
who will assume their debt organization, through or by the means of which any
5. after wrongful dissolution, remaining partners business, financial operation, or venture is carried on
continue the business without liquidation
6. when partner expelled and remaining partners * a joint venture need not be undertaken in any of
continue the business without liquidation the standard forms,
or in conformity with the usual requirements of the law
* liability of third person becoming a partner in the on partnerships, in order that one could be deemed
partnership continuing the business to the creditors of constituted for purposes of the TAX on corporations
the dissolved partnership shall be satisfied out of the
partnership property ONLY PASCUAL vs. C.I.R.
* co-ownership or co-possession does not itself
G.R. – when a partner retires, he is entitled what is due establish a partnership, whether such co-owners or co-
him after liquidation BUT no liquidation is needed if possessors do or do not share any profits made by the
there is already a settlement at the date of dissolution use of the property
Page 14 of 15
* the common ownership of property does not itself * A CONTRACT of PARTNERSHIP is VOID
create a partnership between the owners, though they whenever immovable property is
may use it for the purpose of making gains AND they contributed thereto, if “inventory” of said property is
may without becoming partners, agree among not made, signed by the parties and attached to the
themselves as to the management and use of such public instrument
property and the application of the proceeds therefrom
EVANGELISTA vs. ABAD SANTOS
* the sharing of returns does not in itself establish a * an INDUSTRIAL PARTNER cannot engage in
partnership within the persons sharing therein have a BUSINESS FOR HIMSELF, UNLESS the partnership
joint or common right or interest in the property expressly permits him to do so
there must be: IF HE SHOULD DO SO, the capitalist partners may
1. clear intent to form a partnership either:
2. the existence of a juridical personality different 1. EXCLUDE him from the firm OR
from the individual partners AND 2. AVAIL themselves of the benefits which he may
3. the freedom of each party to transfer or assign have obtained in violation of this provision
the whole property with a right to DAMAGES in either case
Page 15 of 15
* the prohibition against an industrial partner the partnership and to ensure faithful compliance by
engaging in business for himself seeks to prevent any said partner with his prostation
conflict of interest between the industrial partner and