Balangue Allen John C.

a. Summarize the video by stating only the facts (no comments or assessments yet at this stage) –
just narrate the facts. Answer should not be less than 50 words but not more than 100 words. (10
points)

John was in 50/50 partnership with Gary. They were best friends. They had no business
partnership documentation between the partners. John assigned on sales, Gary did the operations
it was just the two of them for over ten years they drew relatively equal salaries although they
both paid themselves the same amount, but John was taking a little bit more money out of the
company and you know with Gary’s understanding not anything sort expressed, nothing in
writing- just kind of an acknowledgement that john needed a little bit more money out . They
hadn’t had meaningful conversation about business.

b. Based on the narration, what is wrong in that partnership from the moment it was formed?
Why it did not work out? This is where you will discuss the factors like the 50-50 sharing,
partners are best friends before the creation of the partnership but no business relationship;
constant conversation, etc.) (10 points)
Theres zero documentation, and you can arue with someone youve been over 20 years you dont
need a partnership agreement, youre never going to sue each other. Its hard to know always, even
if youve known the person for 20 years or more you just really dont know what could happen
here. The biggest issue is they haven’t had a meaningful conversation about the business or the
partnership in a year. Obviously change is constant therefore you need to have a back up plan or
contingency plan to continue earning profits. They both paid themselves the same amount
through payroll, but john was taking a little bit more money out of the company

c. What are the suggestions of the narrator to prevent these problems, or similar ones, in forming
a partnership? (10 points)
The suggestion of the attorney in the video that he think having a document, having something to
enforce one day is helpful. You need to be sure you have a really good clear understanding of
what the other party's expectation and tensions are like how things ought to work to avoid
misremembering disagreement over that sort of stuff. So they dont have any documentation.
They were siloed in the division of labor.So John doing sales and garys doing operation youve
probably heard me talk about merger of equals where uouve got two ceos and people are running
thing stogether and it just like thats not great situation where people are kind of stepping on each
other toes. And if there are employees they do not know to report thats not great. Talk
everything through. So the discipline of putting a partnership agreement on paper, in that process
you do that through a corporate lawyer like any attorneys. The attorney suggest that he have
three choices but john didn’t know it that’s why it is the suggestion for John on what he can do
for him. The first one is walk away from the partnership. Second they should talk about whats
going on their business. Third is it is already gone south but he is not willing to walk away and to
bring someone like him and to make thing more formal and more sort of step things up ahead
down the dispute track.
d. Assessing this video in the Philippine context or situation, what are the articles/provisions in
the Civil Code on partnership that were not followed or observed by the partners? Explain. (10
points)

The articles/ provisions in the Civil Code on partnerhisp that were not followed or observerd by
the partners is article 1797 base on the partners did They both paid themselves the same amount
through payroll, but john was taking a little bit more money out of the company. They should
received the same amount of profit since they are 50/50 partnetship. The Article. 1797 can prove
that they not follow or observed. The losses and profits shall be distributed in conformity with
the agreement. If only the share of each partner in the profits has been agreed upon, the share of
each in the losses shall be in the same proportion. In the absence of stipulation, the share of each
partner in the profits and losses shall be in proportion to what he may have contributed, but the
industrial partner shall not be liable for the losses. As for the profits, the industrial partner shall
receive such share as may be just and equitable under the circumstances. If, besides his services
he has contributed capital, he shall also receive a share in the profits in proportion to his capital.