ATENEO CENTRAL BAR OPERATIONS 2008 Civil Law SUMMER REVIEWER

ILAW ON PARTNERSHIP
CHAPTER 1: GENERAL PROVISIONS

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PARTNERSHIP - a contract wherein two or more persons bind themselves to contribute money, property, or industry to a common fund, with the intention of dividing the profits among themselves. (see Art. 1767, CC)

Separate juridical personality (Art. 1768) Delectus personae Mutual Agency (Art. 1803) Personal liability of partners for partnership debts FORM OF PARTNERSHIP CONTRACT

GR: No special form is required for the validity of a contract. (Art. 1356) CHAPTER 2: OBLIGATIONS OF PARTNERS Art. 1784. A partnership begins from the moment of the execution of the contract, unless it is otherwise stipulated.

General Professional Partnership (Art.1767, ¶2): Two or more persons may also form a partnership for the exercise of a profession. ELEMENTS OF A PARTNERSHIP: There shall be a partnership whenever: 1. There is a meeting of the minds; 2. To form a common fund; 3. With intention that profits (and losses) will be divided among the contracting parties. ESSENTIAL FEATURES: 1. There must be a VALID CONTRACT.

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The parties must have LEGAL CAPACITY to enter into the contract. There must be a mutual contribution of money, property, or industry to a COMMON FUND. There must be a LAWFUL OBJECT. The purpose or primary purpose must be to obtain PROFITS and DIVIDE the same among the parties.

Atty. Villareal: This is not entirely accurate. It is better to say that its legal life begins from the moment of the perfection of the contract amongst the parties, UNLESS OTHERWISE STIPULATED (e.g. the parties can agree that the partnership is deemed to commence legal existence on a later date)

It is also required that the articles of partnership must NOT be kept SECRET among the members; otherwise, the association shall have no legal personality and shall be governed by the provisions on CO-OWNERSHIP (Art. 1775).

"kept secret among the QuickTime™ and a decompressor members" = TIFF (Uncompressed) this picture. secrecy todirected not to third are needed see persons but to some of the partners • this does not mean that there could be no contractual relations amongst the parties; there is only no partnership or association with distinct legal personality CHARACTERISTICS: 1. Essentially contractual 1767, 1784)

Exceptions: 1. Where immovable property/real rights are contributed (Art. 1771) a. Public instrument is necessary b. Inventory of the property contributed must be made, signed by the parties and attached to the public instrument otherwise it is VOID 2. When the contract falls under the coverage of the Statute of Frauds (Art. 1409) 3. Where capital is P3,000 or more, in money or property (Art. 1772) a. Public instrument is necessary b. Must be registered with SEC NOTE:

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(Art.

Generally, partnerships may be CONSTITUTED IN ANY FORM (Art. 1771); thus, even if there is no compliance with Art. 1772, ¶ 1 (contracts of partnership having capital of Php3,000 or more in money or property shall appear in a public instrument registered with the SEC), the

—Adviser: Dean Cynthia Roxas-Del Castillo, Atty. Eugenio Villareal; Heads: Joy Stephanie Tajan, John Paul Lim; Understudies: Charmaine Haw, Kristi Fe Mari Lu; Subject Head: Rimo Rico; Pledgees: Kris Buenaventura, Kit Singson—

may still be considered a partnership de facto or by estoppel vis-à-vis third persons. 2. and 3. 1819) An admission or representation made by any partner concerning partnership affairs is evidence against the partnership (Art. 1866.000 is recommended.Civil Law Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2008 objective of which is notice to the public. first paragraph. John Paul Lim. 46) DELECTUS PERSONAE . 1803(1). Subject Head: Rimo Rico. are needed to see this picture. in relation to Arts. July 3. As a JURIDICAL PERSON. 1821) Wrongful act or omission of any partner acting for partnership affairs makes the partnership liable (Art.) • • Any stipulation against personal liability of partners for partnership debts is void . particularly those interested in dealing with the partnership.R. this doctrine. 1772. a partnership may: 1. 1817) All partners are liable solidarily with the partnership for everything chargeable to the —Adviser: Dean Cynthia Roxas-Del Castillo. Kristi Fe Mari Lu. Implications: (Dean Villanueva) In the absence of contractual stipulation. CA 320 SCRA 428 (1999) A “void” partnership under Article 1773. acquire and possess property of all kinds. 1768. 1823) UNLIMITED LIABILITY (According to Dean Villanueva) • • • QuickTime™ of The assignmentand a a partner of his TIFF (Uncompressed) decompressor are needed to see picture. share does not make thisassignee a partner (Art. 1804 and 1813) All partners are liable pro rata with all their properties and after partnership assets have been exhausted. in conformity with the laws and regulations of their organization. save in cases where immovables are contributed where public instrument and inventory necessary. and 1854). 1808. 109248. Plural form is delectus personarum. except as among them (Art. and may be considered by the courts as an ordinary contract (though not exactly an “Art. 1818) • • Partners can dispose of partnership property even when in partnership name (Art. No. MEANING of MUTUAL AGENCY (According to Dean Villanueva) • • SEC Opinion. Kit Singson— Page 158 of 297 . Heads: Joy Stephanie Tajan. • failure to comply with public instrument/registration requirement shall not affect liability of partnership and of partners to 3rd persons (Art. Ortega v. registration of partnership having a capital of less than Php 3. in relation to Article 1771. The right to choose with whom a person wishes to associate himself is the very foundation and essence of that partnership. there may be a validly existing partnership. (See Art. 1995 Doctrine of Delectus Personae: The birth and life of a partnership at will is predicated on the mutual desire and consent of the partners. for all partnership debts (Art. SEPARATE JURIDICAL PERSONALITY Art. 1 June 1960: For purposes of convenience in dealing with government offices and financial institutions. 1816) The existence of the partnership is closely tied-up to the particular contractual relationship of the partners (see instances of dissolution of the partnership upon change of contractual relationship. 1767” partnership) from which rights and obligations may legally stem. ¶ 2) • Torres v. however does not apply to a limited partner who merely contributes his interest and is not barred from engaging in competitive business or from transacting business with the partnership as if he were a stranger (Art. bring civil or criminal actions. Pledgees: Kris Buenaventura. incur obligations. The partnership has a juridical personality separate and distinct form that of each of the partners. even in case of failure to comply with the requirements of Article 1772.The selection or choice of QuickTime™ and a TIFF (Uncompressed) decompressor the person. 1822) Partnership bound to make good losses for acts or misapplications of partners (Art. CA G. Eugenio Villareal. all partners shall be considered agents and whatever any one of them may do alone shall bind the partnership (Arts. Understudies: Charmaine Haw. 1789. 1820) • • • Notice to any partner of any matter relating to partnership affairs is notice to the partnership (Art. Atty.

Pledgees: Kris Buenaventura. Eugenio Villareal. May be dissolved at any time by the will of any or all of the partners QuickTime™ and a Minimum of 2 persons May be dissolved anytime by the will of any or all of the co-owners Minimum of 2 persons Can only be dissolved with the consent of the state Minimum of 5 incorporators # of incor-porators —Adviser: Dean Cynthia Roxas-Del Castillo. Understudies: Charmaine Haw. Kristi Fe Mari Lu. John Paul Lim. Atty. Kit Singson— Page 159 of 297 .Civil Law Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2008 partnership when caused by the wrongful act or omission of any partner acting in the ordinary course of business of the partnership or with authority from the other partners and for partner's act or misapplication of properties (Art. Heads: Joy Stephanie Tajan. 1824) shares (Art. 1826) • • Partnership creditors are preferred to those of each of the partners as regards the partnership property (Art. the partners shall contribute the amounts necessary to satisfy the partnership liabilities (Art. by mere agreement of the parties Has a juridical personality separate and distinct from that of each partner CO-OWNERSHIP Created by law • CORP Created by law Juridical personality None Has a juridical personality separate and distinct from that of each stockholder Purpose Realization of profits Common enjoyment of a thing or right 10 years maximum Depends on AOI Duration/ Term of existence No limitation 50 years maximum. 1839(4). Subject Head: Rimo Rico. extendible to not more than 50 years in any one instance Stockholder has a right to transfer shares without prior consent of other stockholders Disposal/ Transferability of interest Partner may not dispose of his individual interest unless agreed upon by all partners Co-owner may freely do so Power to act with 3rd persons Effect of death In absence of stipulation to contrary. (7)) A newly admitted partner into an existing partnership is liable for all the obligations of the partnership arising before his admission but out of partnership property PARTNERSHIP DISTINGUISHED FROM CO-OWNERSHIP AND CORPORATION BASIS Creation PARTNERSHIP Created by a contract. a partner may bind partnership (each partner is agent of partnership) Death of partner results in dissolution of partnership Co-owner cannot represent the coownership Death of co-owner does not necessarily dissolve co-ownership Management is vested with the Board of Directors Death of stockholder does not dissolve corporation Dissolution QuickTime™ and a TIFF (Uncompressed) decompressor are needed to see this picture. 1827) Upon dissolution of the partnership. TIFF (Uncompressed) decompressor are needed to see this picture.

Civil Law Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2008 Commencement of juridical personality From the moment of execution of contract of partnership None From date of issuance of certificate of incorporation by the SEC QuickTime™ and a TIFF (Uncompressed) decompressor are needed to see this picture. Subject Head: Rimo Rico. —Adviser: Dean Cynthia Roxas-Del Castillo. Understudies: Charmaine Haw. Kit Singson— Page 160 of 297 . Atty. Kristi Fe Mari Lu. Eugenio Villareal. Heads: Joy Stephanie Tajan. John Paul Lim. QuickTime™ and a TIFF (Uncompressed) decompressor are needed to see this picture. Pledgees: Kris Buenaventura.

Kit Singson— Page 161 of 297 . Pledgees: Kris Buenaventura. and 2) usually.(6). John Paul Lim. 126881. 1811) Partners may individually dispose of real property of the partnership even when in partnership name (Art. • SEC Opinion. recognized a distinction between these two business forms and has held that although a corporation cannot enter into a partnership. are 1830(1)(d)) Dissolved by the loss of the thing promised to be contributed to the partnership (Art. engage in a joint venture with others. of a insolvency. October 3. As debt by installments or otherwise. to wit: 1) a joint venture (an American concept similar to our joint account) is a sort of informal partnership. 2000 Particular partnership distinguished from joint venture A particular partnership is distinguished from joint venture. Aurbach v. The sharing of gross returns does not of itself establish a partnership. • • • Expulsion of partner dissolves the QuickTime™ and a TIFF (Uncompressed) decompressor partnership (Art. G. 1769) 1. or partner dissolves civil the —Adviser: Dean Cynthia Roxas-Del Castillo. 5 August 1997: If the remaining partners of the dissolved partnership intended for all legal intents and purposes. but not necessarily a joint venture is limited to a single transaction. In a joint account. the partnership business can only be carried at a loss. to cease being part of to see this picture. dissolves the partnership by operation of law. 28 April 1995: The death of a partner. however.Civil Law Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2008 partnership (Art. such as whendecompressor chooses TIFF (Uncompressed) are needed the partnership (Arts. 1825 OTHER RULES TO DETERMINE WHETHER A PARTNERSHIP EXISTS: (Art. however. a partnership generally relates to a continuing business of various transactions of a certain kind. As wages or rent. to continue the partnership business even after the death of a partner. and can be individually liable therefore. a joint venture is a FORM of PARTNERSHIP. 1819) Dissolution of the partnership can come about by the change in the relationship of QuickTime™ a partner and a the partners. 1828. 3. 1831) NOTE: • SEC Opinion.(7)) Heirs of Tan Eng Kee v. Eugenio Villareal. as a general rule. GR: WEAKNESSES OF A PARTNERSHIP (Dean Villanueva) • Petition by partner will dissolve the partnership when a partner has been declared insane. with no firm name and no legal personality. Subject Head: Rimo Rico." RULES TO DETERMINE EXISTENCE OF PARTNERSHIP Persons who are NOT partners as between themselves. or the partner has become incapable of performing his part of the partnership contract. a partner has been found guilty of such conduct as tends to affect prejudicially the partnership business. CANNOT be partners as to third persons. 1830(1)(b)) Exception: Partnership by Estoppel under Art. Heads: Joy Stephanie Tajan. (Art. No. Co-ownership or co-possession does not of itself establish a partnership 2. although the business of pursuing to a successful termination may continue for a number of years. UNLESS such were received in payment: a. b. 1769(1)) • • • Partners are co-owners of the partnership properties and enjoy personal possession (Art. Kristi Fe Mari Lu. partner willfully or persistently commits a breach of partnership agreement. there is continuity of personality of the partnership as there exists a "partnership at will. needed to see this picture. specifically a particular partnership which has for its object specific undertaking. except if the articles of partnership stipulate for the continuance of the partnership relations upon the death of any of the partners. the participating merchants can transact business under their own name. Atty. other equitable reasons (Art.R. Sanitary Wares 180 SCRA 130 (1989) The Supreme Court has. It would seem that under Philippine law. The receipt by a person of a share of the profits of a business is prima facie evidence that he is a partner in the business. it may. CA. 1830(4)) interdiction Death. whether or not the persons sharing them have a joint or common right or interest in any property from which the returns are derived. 1830 (5). Understudies: Charmaine Haw.

MAY CORPORATIONS ENTER INTO PARTNERSHIP? Philippine Corporate Law (2001) by Dean Villanueva (p. and the nature of the business venture to be undertaken by the partnership is in line with the business authorized by the charter or AoI. 1411 and 1412) NOTE: Judicial decree is not necessary to dissolve an unlawful partnership.M. As interest on loan. (Art. 1409(1)) 2. without prejudice to the provisions of the Penal Code governing the confiscation of the instruments and effects of a crime. As annuity. Minors b.needed to see this picture. 2. 106 (1954). Where a part of the business of a partnership is legal and a part illegal. WHAT MAY BE CONTRIBUTED —Adviser: Dean Cynthia Roxas-Del Castillo. (De Leon. Subject Head: Rimo Rico. 45-RPC) 4. A partnership must have a lawful object or purpose. John Paul Lim. and must be established for the common benefit or interest of the partners. Exceptions: Without prejudice to the formation of a joint venture (J. an account of that which is legal may be had. (Art. Heads: Joy Stephanie Tajan. January 25. 3. the partners are not precluded as against the guilty partners from recovering their share QuickTime™ and a TIFF (Uncompressed) decompressor of the profits. 902) citing various SEC Opinions: • Corporations may enter into partnership agreements on the following conditions: 1. Persons who cannot give consent to a contract: a. Eugenio Villareal. Authority to enter into a partnership relation is expressly conferred by the charter or the articles of incorporation (AoI). Kit Singson— Page 162 of 297 . 112675. EFFECTS OF AN UNLAWFUL PARTNERSHIP: 1. 1999) • GR: Any person capacitated to contract may enter into a contract of partnership. (See Arts. BUT THIS IS DOUBTFUL AND IMPRACTICAL on account of Art. deaf-mutes who do not know how to write 1. Sanitary Wares Manufacturing. the firm's profits in a lawful QuickTime™ and a business have been TIFF (Uncompressed) decompressor increased by are needed to see this picture. e. CA.R. 95 Phil. The instruments or tools and proceeds of the crime shall also be forfeited in favor of the government.innocent wrongful acts. 2. Art. Understudies: Charmaine Haw. 1770. 1770. Tuazon v. Where.Civil Law Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2008 c. d. Pledgees: Kris Buenaventura. without the knowledge or participation of the partners. The profits shall be confiscated in favor of the government. 1768 (that a partnership has a juridical personality separate from that of each of the partners) and of the essential attribute called delectus personae. Kristi Fe Mari Lu. No. Persons suffering from civil interdiction. Aurbach v. NOTE: How tax law treats the matter: EFFECT OF PARTIAL ILLEGALITY: 1. 1782) 2. (Art. As consideration for sale of goodwill of business/other property by installments Persons who are prohibited from giving each other any donation or advantage cannot enter into a universal partnership. G. The contributions of the partners shall not be confiscated unless they fall under no. 65) are WHO MAY BE PARTNERS • Notion of partnership no matter how created or organized: a pool of insurance companies was considered a partnership under applicable tax law (Afisco v. Art. insane persons c. NOTE: That there is no legally constituted partnership DOES NOT mean that there are no contractual or legal relations among the parties. the profits shall be confiscated in favor of the State. (Art. • De Leon: There is no prohibition for partnerships to be partners. 180 SCRA 130 (1989)). it must obtain a license to transact business in the country in accordance with the Corporation Code of the Philippines. If it is a foreign corporation. 1770) 3. Atty. 3. When an unlawful partnership is dissolved by a judicial decree. The contract is void ab initio and the partnership never existed in the eyes of the law. p. Bolanos.

as generally. ¶ 1) (upon perfection of contract.Civil Law Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2008 • 1. Fishing Gear. NOTE: A limited partner is not allowed to contribute services.” (Beatty v. 1786. manual and/or intellectual in consideration of share in the profits. WHEN IMMOVABLES OR REAL RIGHTS CONTRIBUTED Art. stand in place of creditors of the partnership for any payments made by the injured partner in respect of partnership liabilities. signed by the parties. - BUT: a partner who has agreed to render special service to the partnership. and which is one of the inducements for the other members to enter the partnership.g. specific performance not available due to constitutional prohibition vs. Art. GR: Failure to comply with the requirement of appearance in public instrument and SEC Registration will not affect the liability of the 2. relate to Art. action for rescission may be filed and the party entitled to rescind. BUT THEN AGAIN. 30). Wray. does this bar a criminal prosecution for say. 316 SCRA 728 (1999)). also include obligation to QuickTime™ and a the preserve promised TIFF (Uncompressed) decompressor property with the are needed to see this picture. Atty. St. for services to the firm cannot. not exempted from personal liability. 1786. ¶¶ 1 and 2 applies: liable for fruits from QuickTime™ and a the time property should have TIFF (Uncompressed) decompressor are needed to see this picture. 1773. he is considered an “industrial and general partner” and thus. Kristi Fe Mari Lu. e. 1831: with or without fraud or misrepresentation. otherwise. if an inventory of said property is not made. but also for interest due and damages arising from the time the former should have complied with his or her undertaking (Art. partners are not entitled to charge each other (Marsh’s Appeal. and attached to the public instrument. Pledgees: Kris Buenaventura. John Paul Lim. 1845). 7 Harris 519). A contract of partnership is void. 1838). from their very nature. be estimated and equalized by compensation of differences. credit (Lim Tong Lim v. 1786 expressly declares him a debtor. Subject Head: Rimo Rico. Understudies: Charmaine Haw. Industry – may concur with any or both of the first two or in the absence of any one or both of them.if there is fraud or misrepresentation. whenever immovable property is contributed thereto. after all liabilities to third persons have been satisfied c. unless contrary stipulation) . and without comparison of value. injured partner may seek judicial dissolution Property – may include intangible or incorporeal. indemnity by the guilty partner against all partnership debts and liabilities (Art. non-payment of debt? Atty. was found liable civilly to account for the value of such service upon a finding that he wrongfully refused to perform such service. involuntary servitude Since Art. or right of retention over. without prejudice to any other right. —Adviser: Dean Cynthia Roxas-Del Castillo. Phil. Eugenio Villareal. for the performance of which he is qualified. Heads: Joy Stephanie Tajan. Villareal: Not if your legal theory is grounded on criminal liability. Money – failure to contribute promised money makes the promissory-partner liable not only for the amount promised. only “cash or other property” (Art. the surplus of partnership property after satisfying partnership liabilities to third persons (for any sum paid by the injured partner for the purchase of an interest in the partnership and for any capital or advances contributed by the latter) b. has the right to: a. - 3. since any civil aspect thereof is merely incidental. 1790). diligence of a good father of a family pending delivery. without regard to the services of his copartners. estafa. must be in equal shares unless otherwise stipulated (Art. been delivered without need of demand. lien on. - “Every partner is bound to work to the extent of his ability for the benefit of the whole. on account of the constitutional prohibition vs. hence. Kit Singson— Page 163 of 297 . 69 Pa.

E. EFFECT OF ABSENCE OF REQUIREMENTS UNDER ARTICLES 1771 AND 1773 CONDITION OF PARTNERSHIP WHERE REAL PROPERTY IS CONTRIBUTED No public Instrument. partnership agreement may be enforced (cf. LIMITED PARTNERSHIP—one formed by 2 or more persons having as members —Adviser: Dean Cynthia Roxas-Del Castillo. Kit Singson— Page 164 of 297 . *public instrument + inventory* made and signed by the parties and attached to the public instrument (Arts. DE LEON VOID VALID but either party may compel execution of public instrument so it may be registered in the registry of property. Partnerships void under Art.Civil Law Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2008 partnership and the members thereof to third persons. 1782) 2. No Inventory BAUTISTA. in relation Art.1773. although not exactly a partnership under the Civil Code. Eugenio Villareal. in spite of article 1773 declaring the partnership void would not render the partnership void when: a. b. Villareal) (Uncompressed) decompressor are needed to see this picture. Atty. UNIVERSAL PARTNERSHIP OF ALL PRESENT PROPERTY . Pledgees: Kris Buenaventura. NO THIRD PARTY INVOLVED (since Art. Property which belonged to each of the partners at the time of the constitution of the partnership ii. Exercise of profession or vocation 1. Subject Head: Rimo Rico. 1773 was intended for the protection of 3rd parties. Kristi Fe Mari Lu. Arts. VALID AS TO LIABILITY OF PARTNERS (Source: Bar Review Notes for Partnership Law QuickTime™ and a TIFF by Atty. No Inventory With Public Instrument.comprises the following: i. 1. With Inventory QuickTime™ and a TIFF (Uncompressed) decompressor are needed to see this picture. nonetheless. 1356 to 1358) VALID VOID No Public Instrument.comprises all that the partners may acquire by their industry or work during the existence of the partnership NOTE: Persons who are prohibited from giving donations or advantage to each other cannot enter into a universal partnership. CLASSIFICATIONS OF PARTNERSHIP AS TO EXTENT OF ITS SUBJECT MATTER VOID VOID UNIVERSAL PARTNERSHIP a. Understudies: Charmaine Haw. Their use or fruits c. (Art. ¶ 2) Exception: When IMMOVABLE PROPERTY/ REAL RIGHTS are contributed. Heads: Joy Stephanie Tajan. UNIVERSAL PARTNERSHIP OF PROFITS . Partners have MADE A CLAIM ON THE PARTNERSHIP AGREEMENT. 1771 may still be considered either de facto or estoppel partnerships vis-à-vis third persons. GENERAL PARTNERSHIP—consists of general partners who are liable pro rata and subsidiarily and sometimes solidarily with their separate property for partnership debts. Profits which they may acquire from all property contributed b. With Inventory VOID With Public Instrument. PARTICULAR PARTNERSHIP—has for its objects: a. Failure to prepare an inventory of the immovable property contributed. • Atty. John Paul Lim. Specific undertaking d. Villareal: The safer view is De Leon’s due to his simplified view of statute. NOTE: Torres v. 1772. (Art. may even be treated as an ordinary contract from which rights and obligations may validly arise. CA 320 SCRA 428 (1999) 2. Determinate things b. 1771 and 1773) is required for the benefit of third persons.

Understudies: Charmaine Haw. MANAGING—one who manages the affairs or business of the partnership QuickTime™ and a TIFF (Uncompressed) decompressor 6. LIQUIDATING—one picture. LIMITED—one whose liability to 3rd persons is QuickTime™ and a his capital limited to TIFF (Uncompressed) decompressor contribution are needed to see this picture. John Paul Lim. Atty. To preserve said property with the diligence of a good father of a family pending delivery to partnership (Art. CAPITALIST—one who contributes money or property to the common fund 2. death or expulsion of one of the partners SURVIVING PARTNER—one who remains after a partnership has been dissolved by death of any partner SUBPARTNER—one who is not a member of the partnership who contracts with a partner with reference to the latter's share in the partnership OSTENSIBLE—one who takes active part and known to the public as partner in the business SECRET—one who takes active part in the business but is not known to be a partner by outside parties SILENT—one who does not take any active part in the business although he may be known to be a partner DORMANT—one who does not take active part in the business and is not known or held out as a partner 1. Heads: Joy Stephanie Tajan. takes charge are needed to see this who of the winding up of partnership affairs upon dissolution 7. Kit Singson— Page 165 of 297 . Kristi Fe Mari Lu. DE JURE PARTNERSHIP—one which has complied with all the legal requirements for its establishment DE FACTO—one which has failed to comply with all the legal requirements for its establishment AS TO PURPOSE CONTINUING PARTNER—one who continues the business of a partnership after it has been dissolved by reason of the admission of a new partner. Pledgees: Kris Buenaventura. 1163) KINDS OF PARTNERS: 1. the latter not being personally liable for the obligations of the partnership AS TO DURATION 8. PARTNERSHIP AT WILL—one in which no fixed term is specified and is not formed for a particular undertaking or venture which may be terminated anytime by mutual agreement PARTNERSHIP WITH A FIXED TERM— the term for which the partnership is to exist is fixed or agreed upon or one formed for a particular undertaking 9. INDUSTRIAL—one who contributes only his industry or personal service 3. GENERAL—one whose liability to 3rd persons extends to his separate property 4. 5. COMMERCIAL OR TRADING PARTNERSHIP—one formed for the transaction of business PROFESSIONAL OR NON TRADING PARTNERSHIP—one formed for the exercise of a profession OBLIGATIONS OF THE PARTNERS TO ONE ANOTHER A) OBLIGATIONS OF THE PARTNERS AMONG THEMSELVES 1. 11. To answer for eviction in case the partnership is deprived of the determinate property contributed (Art. to contribute at the beginning of the partnership or at the stipulated time the money. 13. PROMISED CONTRIBUTION Obligations with respect to contribution of property: a. 2.Civil Law Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2008 one or more general partners and one or more limited partners. retirement. 1786) d. 14. property or industry which he may have promised to contribute (Art. 2. from the date they should have been contributed up to the time of actual delivery (Art. 12. 1786) c. Eugenio Villareal. Subject Head: Rimo Rico. 1. PARTNERS BY ESTOPPEL—one who is not really a partner but is liable as a partner for the protection of innocent 3rd persons —Adviser: Dean Cynthia Roxas-Del Castillo. To answer to the partnership for the fruits of the property the contribution of which he delayed. 1786) b. AS TO LEGALITY OF EXISTENCE 1. 2. 10.

cannot engage in business (with same kind of business with the partnership) for his own account. he may be ousted form the partnership. Obligations with respect to contribution to partnership capital: a. 1808) 2. or 3. John Paul Lim.g. b. (Art. PROHIBITION AGAINST COMPETITIVE BUSINESS INDUSTRIAL PARTNER . he cannot directly or indirectly use QuickTime™ and a partnership assets for his own TIFF (Uncompressed) decompressor are needed benefit. —Adviser: Dean Cynthia Roxas-Del Castillo. To reimburse any amount he may have taken from the partnership coffers and converted to his own use c.Civil Law Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2008 e. Partners must contribute equal shares to the capital of the partnership unless there is c. f. Kit Singson— Page 166 of 297 . ( Art. especially if there was a warning. a partner must QuickTime™ and a TIFF decompressor observe the utmost(Uncompressed) this picture. 1788) Obligations with respect to contribution of money and money converted to personal use: a. Remedy of the other partner is not rescission but specific performance with damages from defaulting partner (Art. he may be required to bring to the common fund the profits he derived from the other business.cannot engage in business (w/n same line of business with the partnership) unless partnership expressly permits him to do so. Atty. 1788) 2. the capitalist partners have the right to file an action for damages against the industrial partner. Eugenio Villareal. to see this picture. 1808) 3. in conducting the e. he cannot. he can be excluded from the partnership. Partners becomes ipso jure a debtor of the partnership even in the absence of any demand (See Art. he shall personally bear the losses. 1169[1]) 2. Understudies: Charmaine Haw. FIDUCIARY DUTY A partnership is a fiduciary relation—one entered into and to be maintained on the basis of trust and confidence. 1789) CAPITALIST PARTNER . Pledgees: Kris Buenaventura. 1170) business of the partnership. (Art. 1789) 1. Kristi Fe Mari Lu. the capitalist partners can avail of the benefit he obtained from the business. if he fails to pay his contribution on time or in case he takes any amount from the common fund and converts it to his own use d. To contribute on the date fixed the amount he has undertaken to contribute to the partnership b. unless there is a stipulation to the contrary. To pay for the agreed or legal interest. d. business opportunity) he cannot carry on another business in competition with the partnership. 1808) CONSEQUENCES IF AN INDUSTRIAL PARTNER ENGAGES IN ANY BUSINESS: (Art. in either case. or 2. CONSEQUENCES IF THE CAPITALIST PARTNER ENGAGES IN A BUSINESS (which competes with the business of the partnership): 1. good faith. take any profit clandestinely. To indemnify partnership for any damage caused to it by the retention of the same or by the delay in its contribution (Arts. 1788. With that. To indemnify the partnership for the damages caused to it by delay in the contribution or conversion of any sum for his personal benefits (See Art. fairness. ENGAGING IN EFFECT OF FAILURE TO CONTRIBUTE PROPERTY PROMISED: 1. (Art. Heads: Joy Stephanie Tajan. he cannot obtain for himself that he should have obtained for the partnership (e. he cannot carry on a business of the partnership for his private advantage. and are needed to see integrity in his dealings with the others: a. he cannot avail himself of knowledge or information which may be properly regarded as the property of the partnership. Subject Head: Rimo Rico.

Atty. If sharing of profits is stipulated apply to sharing of losses 2. Share of capitalist partner is in proportion to his capital contribution 2. 1790) c. Obligedneeded to see this picture. stipulation to contrary (Art. There is an imminent loss of the business of the partnership b. John Paul Lim. 1795) Specific and determinate things which are not fungible where only the use is contributed Specific and determinate things the ownership of which is transferred to the partnership Fungible things (consumable) Things contributed to be sold Things brought and appraised in the inventory Specific and determinate things which are not fungible where only the use is contributed Risk is borne by partner Risk is borne by partnership Risk is borne partnership Risk is borne partnership Risk is borne partnership Risk is borne partner by by by by Requisites: a. c. Heads: Joy Stephanie Tajan.as may be just and equitable under the circumstances LOSSES According to agreement 1. refusal to do so shall create an obligation on his part to sell his interest to the other partners (Art. The other partners have not Art. The majority of the capitalist partners are of the opinion that an additional contribution to the common fund would save the business c. There is no agreement to the contrary Obligation of managing partners who collects debt from person who also owed the partnership (Art. NOTE: Stipulation exempting a partner from losses should be allowed. A stipulation which excludes one or more partners from any share in the profits and losses is void. where the partnership is the creditor b. Kristi Fe Mari Lu. The capitalist partner refuses deliberately to contribute (not due to financial inability) d. Apply sum collected to 2 credits in proportion to their amounts b. Share of industrial partner is not fixed . the whole sum shall be applied to partnership credit Requisites: a. partnership capital what he has received even though QuickTime™ and a he may have given receipt TIFF (Uncompressed) decompressor for are needed to see this picture. Understudies: Charmaine Haw. Purely industrial partner not liable for losses Obligation of partner who receives share QuickTime™ and a of partnership credit TIFF (Uncompressed) decompressor are to bring to the a. Kit Singson— Page 167 of 297 . one where the collecting partner is creditor and the other. If a person can make a gift to another. collected their shares The partnership debtor has become insolvent BEARING THE RISK OF LOSS OF THINGS CONTRIBUTED (Art. 1797) PROFITS With Without agreement According to agreement 1. there is no sound reason why —Adviser: Dean Cynthia Roxas-Del Castillo. A partner has received in whole or in part. If he received it for the account of partnership. his share of the partnership credit b. 1793) his share only (Art. Eugenio Villareal. Requisites: a. Both debts are demandable The partner who collects is authorized to manage and actually manages the partnership RULES FOR DISTRIBUTION OF PROFITS AND LOSSES (See Art. 1799. 1790) Partners (capitalist) must contribute additional capital in case of imminent loss to the business of the partnership and there is no stipulation otherwise. 1792) a. There exists at least 2 debts. Pledgees: Kris Buenaventura.Civil Law Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2008 b. If no profit sharing stipulated losses shall be borne according to capital contribution 3. Subject Head: Rimo Rico.

Right to inspect and copy partnership books at any reasonable hour 3. As provided by art. All partners shall be liable for contractual —Adviser: Dean Cynthia Roxas-Del Castillo. His interest in the partnership Partner is appointed manager after constitution of partnership 2 or more persons entrusted with management of partnership without specification of duties/stipulation that each shall not act w/o the other's consent In case of opposition. Subject Head: Rimo Rico.Civil Law Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2008 a person cannot also agree to bear all the losses. All partners If refusal of QuickTime™ and a management notTIFF (Uncompressed) decompressor are agents partner is are needed to see this picture. required for court's alteration intervention of may be 3. Pledgees: Kris Buenaventura. Right to a formal account as to partnership affairs (even during existence of partnership): a. Atty. Of course. Eugenio Villareal. pp. If right exists under the terms of any agreement c. Persons who include their names in the partnership name even if they are not members shall be liable as a partner 2. Unanimous interest of consent partnership. Duty to account to the partnership as fiduciary B) PROPERTY RIGHTS OF A PARTNER 1. His rights in specific partnership property 2. John Paul Lim. In case of tie. Kit Singson— Page 168 of 297 . 124-125. Every partnership shall operate under a firm name. Right to associate another person with him in his share without consent of other partners (subpartnership) 2. Duty to render on demand true and full information affecting partnership to any partner or legal representative of any deceased partner or of any partner under legal disability 5. citing Espiritu and Sibal) RIGHTS AND OBLIGATIONS WITH RESPECT TO MANAGEMENT Partner is appointed manager in the articles of partnership Power of managing partner is irrevocable without just/lawful cause. manifestly agreed upon of the partnership prejudicial to 2. (De Leon. Kristi Fe Mari Lu. 1807 d. If he is wrongfully excluded from partnership business or possession of its property by his copartners b. Revocable only when in bad faith Power is revocable any time for any cause Each may execute all acts of administration Vote of partners representing controlling interest necessary to revoke power immovable property sought Other rights and obligations of partners: 1. Heads: Joy Stephanie Tajan. Understudies: Charmaine Haw. as far as THIRD PERSONS are concerned. decision of partners owning controlling interest shall prevail Stipulated that Concurrence of Absence or none of the all necessary disability of managing for the validity any one partners shall act of acts cannot be w/o the consent alleged of others unless there is imminent danger of grave or irreparable QuickTime™ and a TIFF (Uncompressed) decompressor injury to are needed to see this picture. Whenever other circumstances render it just and reasonable 4. 1810) participate in the NATURE OF PARTNER'S RIGHT IN SPECIFIC PARTNERSHIP PROPERTY— a partner has an equal right to possession which is not assignable and such right is limited to the share of what remains after partnership debts have been paid NATURE OF PARTNER'S RIGHT IN THE PARTNERSHIP—a share in the profits and surplus C) OBLIGATION OF PARTNERS WITH REGARD TO THIRD PERSONS 1. His right to management (Art. any such stipulation may be properly declared void. partnership Manner of 1. decision of majority shall prevail.

Knowledge. Pledgees: Kris Buenaventura. unless authorized by other apparently partners for the QuickTime™ and a carrying TIFF (Uncompressed) decompressor of are needed to see this picture. Atty. Submit partnership claim or liability to arbitration 9. His share in the partnership property for existing obligations b.Civil Law Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2008 obligations of the partnership with their property. Conveyance in partner's name —Adviser: Dean Cynthia Roxas-Del Castillo. Act w/c Does not and a bind partnership QuickTime™ TIFF (Uncompressed) decompressor is not are needed to see this picture. Kristi Fe Mari Lu. Subject Head: Rimo Rico. Partners and the partnership are solidary liable to 3rd persons for the partner's tort or breach of trust 6. after all partnership assets have been exhausted: a. business in the usual way 2. Every partner is an agent of the partnership POWER OF PARTNERSHIP Acts for carrying on in the usual way the business of the partnership PARTNER AS AGENT OF 3. Heads: Joy Stephanie Tajan. Dispose of good-will of business 5. Knowledge of any other partner who reasonably could and should have communicated it to the acting partner 5. except in case of fraud: a. Assign partnership property in trust for creditors 4. Understudies: Charmaine Haw. Eugenio Villareal. Kit Singson— Page 169 of 297 . Enter into compromise concerning a partnership claim or liability 8. Confess a judgement 7. Creditors of partnership preferred in partnership property & may attach partner's share in partnership assets 8. John Paul Lim. Conveyance in partnership name Conveyance passes title but partnership can recover if: 1. or 2. Knowledge of the partner acting in the particular matter then present to his mind c. of partner acting in the particular matter. acquired while a partner b. Acts of strict dominion or ownership: Partnership not liable to 3rd persons having actual or presumptive knowledge of the restrictions EFFECTS OF CONVEYANCE OF REAL PROPERTY BELONGING TO PARTNERSHIP Title in partnership name. Do an act w/c would make it impossible to carry on ordinary business of partnership 6. Liability of incoming partner is limited to: a. His separate property for subsequent obligations 7. Buyer had knowledge of lack of authority Conveyance does not pass title but only equitable Title in partnership name. Renounc e claim of partnership Acts in contravention of a restriction on authority Every partner is an agent and may execute acts with binding effect even if he has no authority Except: when 3rd person has knowledge of lack of authority 1. Pro rata b. Conveyance was not in the usual way of business. Notice to partner of any matter relating to partnership affairs operates as notice to partnership. Admission or representation made by any partner concerning partnership affairs within scope of his authority is evidence against the partnership 4. Subsidiary 3.

Eugenio Villareal. Demand an accounting (only in case of dissolution) D) RESPONSIBILITY OF PARTNERSHIP TO PARTNERS 1. To answer for obligations partner may have contracted in good faith in the interest of the partnership business 3. None of partners in existing partnership consented Person who represented himself liable & those who made/consented to representation separately liable Title in name of 1/ more partners. for fair consideration 3. pro-rata/jointly Not all partners of —Adviser: Dean Cynthia Roxas-Del Castillo. Get whatever assignor-partner would have obtained 2. Avail usual remedies in case of fraud in the management 3. consented to representation No existing Person who represented partnership & all himself & all those who those represented made representation liable consented. Atty. To answer for risks in consequence of its management Title in name of 1/more/all partners or 3rd person in trust for partnership. Indirectly represents himself by consenting to another representing him as a partner in an existing partnership or in a non existing partnership ELEMENTS TO ESTABLISH LIABILITY AS A PARTNER ON GROUND OF ESTOPPEL: 1. Conveyance was not in the usual way of business. Buyer had knowledge of lack of authority Conveyance will only pass equitable interest existing partnership consents to representation No existing partnership & not all represented consented. Conveyance was not in the usual way of business. Pledgees: Kris Buenaventura. CHAPTER 3: DISSOLUTION AND WINDING UP DISSOLUTION—change in the relation of the partners caused by any partner ceasing to be associated in the carrying on of the business. Conveyance executed in partnership name if in name of partners Title in name of all partners. Buyer had knowledge of lack of authority Conveyance passes title but partnership can recover if: 1. he does any of the ff.Civil Law Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2008 interest. Ask for annulment of contract of assignment if he was induced to join through any of the vices of consent 4. Understudies: Charmaine Haw. Heads: Joy Stephanie Tajan. Conveyance in name of all partners Conveyance pass title will PARTNER BY ESTOPPEL—by words or conduct. partnership is not terminated but continues until the winding up of partnership affairs is completed WINDING UP—process of settling the business or partnership affairs after dissolution TERMINATION—that point when all partnership LIABILITIES IN ESTOPPEL QuickTime™ and a is liable All partners Partnership TIFF (Uncompressed) decompressor are needed to see this picture. Kit Singson— Page 170 of 297 . Subject Head: Rimo Rico. Plaintiff relied on such representation 3. Kristi Fe Mari Lu. Conveyance in name if partner/partners in whose name title stands ASSIGNMENT OF INTEREST IN PARTNERSHIP Assignment is subject to three (3) conditions: 1. or 2. Defendant represented himself as partner/represented by others as such and not denied/refuted by defendant 2. To refund the amounts disbursed by partner in behalf of the partnership + corresponding interest from the time the expenses are made (loans and advances made by a partner to the partnership aside from capital contribution) 2. after a fair and complete disclosure of all important information as to its value RIGHTS OF AN ASSIGNEE: 1. Directly represents himself to anyone as a partner in an existing partnership or in a non-existing partnership 2. made in good faith 2. unless: 1. John Paul Lim. or 2.: 1. Statement of defendant not refuted QuickTime™ and a TIFF (Uncompressed) decompressor are needed to see this picture.

when the ff. when the other party/obligee: (a) Situation 1 i. 1834)— a. With respect to partners— a. By the express will of any partner. By any event which makes it unlawful for business to be carried on/for the members to carry it on for the partnership 4. Understudies: Charmaine Haw. Authority of partners to bind partnership by new contract is immediately terminated when dissolution is not due to ACT. DEATH or INSOLVENCY (ADI) of a partner (art 1833). Did not extend credit to partnership —Adviser: Dean Cynthia Roxas-Del Castillo. In contravention of the agreement between the partners. Decree of court under art. either before or after the termination of any specified term or particular undertaking d. Heads: Joy Stephanie Tajan. If due to ADI. Other circumstances dissolution equitable which render Upon application by purchaser of partner's interest: • After termination of specified term/particular undertaking • Anytime if partnership at will when interest was assigned/charging order issued EFFECTS OF DISSOLUTION AUTHORITY OF PARTNERSHIP PARTNER TO BIND GR: Authority of partners to bind partnership is terminated Exception: 1. Death of any partner 6. By the bona fide expulsion of any partner from the business in accordance with power conferred by the agreement 2.Civil Law Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2008 affairs are completely wound up and finally settled. Insolvency of a partner/partnership 7. or (b) Situation 2 i. acting partner must have knowledge/ notice 2. proceeding or shown to be of unsound mind 2. By termination of the definite term/ particular undertaking specified in the agreement b. Kristi Fe Mari Lu. Subject Head: Rimo Rico. 1831 GROUNDS FOR DISSOLUTION BY DECREE OF COURT (Art. when no definite term or particular undertaking is specified c.prejudicial to guilty ofto see decompressor conduct are needed business of partnership 4. CAUSES OF DISSOLUTION: 1. cases: (1) Transactions in connection to winding up partnership affairs/completing transactions unfinished (2) Transactions which would bind partnership if not dissolved. Partner TIFF (Uncompressed) this picture. Had extended credit to partnership prior to dissolution & ii. partners are liable as if partnership not dissolved. Incapacity of partner to perform his part of the partnership QuickTime™ and a contract 3. If cause is ACT of partner. Eugenio Villareal. Willful or persistent breach of partnership agreement or conduct which makes it reasonably impracticable to carry on partnership with him 5. who must act in good faith. Atty. Loss of specific thing promised by partner before its delivery 5. b. Pledgees: Kris Buenaventura. Without violation of the agreement between the partners a. where the circumstances do not permit a dissolution under any other provision of this article. To wind up partnership affairs 2. concur: i. Business can only be carried on at a loss 6. 1831) 1. If cause is DEATH or INSOLVENCY. acting partner must have knowledge of such dissolution ii. It signifies the end of the partnership life. Civil interdiction of any partner 8. Partner declaredQuickTime™ andin any judicial insane a TIFF (Uncompressed) decompressor are needed to see this picture. Kit Singson— Page 171 of 297 . Complete transactions not finished QUALIFICATIONS: 1. John Paul Lim. By the express will of all the partners who have not assigned their interest/ charged them for their separate debts. Had no knowledge/notice of dissolution. With respect to persons not partners (Art. by the express will of any partner at any time 3. Partner continues to bind partnership even after dissolution in ff.

Indemnity for damages caused by partner guilty of wrongful dissolution d. Right of indemnification by guilty partner against all partnership debts & liabilities C. Partners as investors—return of capital contribution 4. John Paul Lim. business • partnership creditors are needed WHERE DISSOLUTION RIGHTS OF PARTNER to see this picture. Partner who did not cause dissolution wrongfully: a. Atty. Kristi Fe Mari Lu. Had no knowledge/notice of dissolution/fact of dissolution not advertised in a newspaper of general circulation in the place where partnership is regularly carried on Partner cannot bind the partnership anymore after dissolution: (1) Where dissolution is due to unlawfulness to carry on with business (except: winding up of partnership affairs) (2) Where partner has become insolvent (3) Where partner unauthorized to wind up partnership affairs. Apply surplus. Heads: Joy Stephanie Tajan. except by agreement between: • Partner and himself QuickTime™ and a • person/partnership continuing the TIFF (Uncompressed) decompressor are needed to see this picture. Partnership creditors 2. except by transaction with one who: (a) Situation 1 i. Partnership property (including goodwill) 2. Partner who wrongly caused dissolution: a. Partners as creditors 3. SETTLEMENT OF ACCOUNTS BETWEEN PARTNERS ASSETS OF THE PARTNERSHIP: 1.apply partnership property to discharge liabilities of partnership & receive in cash his share of surplus less damages caused by his wrongful dissolution b. Posses partnership property if business is continued 2. Subject Head: Rimo Rico. Eugenio Villareal. DISCHARGE OF LIABILITY Dissolution does not discharge existing liability of partner. Kit Singson— Page 172 of 297 . Continue business in same name during agreed term e. B. Had no knowledge/notice of dissolution/fact of dissolution not advertised in a newspaper of general circulation in the place where partnership is regularly carried on ii. Contributions of the partners ORDER OF APPLICATION OF ASSETS: 1. if any to pay in cash the net amount owed to partners QuickTime™ and a TIFF (Uncompressed) decompressor —Adviser: Dean Cynthia Roxas-Del Castillo. If business not continued by others . Apply partnership property to discharge liabilities of partnership 2. NOT IN CONTRAVENTION OF AGREEMENT: 1. Had no knowledge/notice of dissolution. Partners as investors—share of b. Right to subrogation in place of creditors after payment of partnership liabilities 3.Civil Law Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2008 Had known partnership prior to dissolution iii. Pledgees: Kris Buenaventura. Right to lien on surplus of partnership property after satisfying partnership liabilities 2. Understudies: Charmaine Haw. or (b) Situation 2 i. Apply partnership property to discharge liabilities of partnership b. Did not extend credit to partnership prior to dissolution ii. If business continued by others have the value of his interest at time of dissolution ascertained and paid in cash/secured by bond & be released from all existing/future partnership liabilities RIGHTS OF INJURED PARTNER WHERE PARTNERSHIP CONTRACT IS RESCINDED ON GROUND OF FRAUD/MISREPRESENTATION BY 1 PARTY: 1. if any to pay in cash the net amount owed to partners c. Apply surplus. Had extended credit to partnership prior to dissolution & ii. RIGHTS OF PARTNER WHERE DISSOLUTION IN CONTRAVENTION OF AGREEMENT: 1. Had known partnership prior to dissolution iii.

Partnership debts are paid out of common fund and the individual properties of general partners DIFFERENCES BETWEEN GENERAL LIMITED PARTNER/PARTNERSHIP GENERAL Personally liable for partnership obligations When manner of mgt. all partners who have not wrongfully dissolved the partnership 3. Itare needed to see this out what it has for can only pay picture. insolvency. Such duty does not pertain to QuickTime™ and a TIFF (Uncompressed) decompressor partners who managed the business. Kristi Fe Mari Lu. it is thus the partnership – having been the recipient of the capital contributions – which must refund the equity of retiring partners. Albaran 115 Phil. Kit Singson— Page 173 of 297 . all general partners have an equal right in the mgt. property or industry Proper party to proceedings by/against partnership Interest not assignable w/o consent of other partners Name may appear in firm name Prohibition against engaging in business Retirement. Legal representative of last surviving partner NOTE: Magdusa v. But this is subject to the priority enjoyed by outside creditors. WHEN BUSINESS OF DISSOLVED PARTNERSHIP IS CONTINUED: 1. consistent with the partnership being a separate and distinct entity. Formed by compliance with statutory requirements 2. are needed to see this picture. insanity of general partner dissolves partnership AND LIMITED Liability extends only to his capital contributions No participation in management Contribute cash or property only. Subject Head: Rimo Rico. Understudies: Charmaine Haw. supra. not industry Not proper party to proceedings by/against partnership Interest is freely assignable Name must appear in firm name No prohibition against engaging in business Does not have same effect. One or more general partners contribute to the capital and share in the profits but do not participate in the management of the business and are not personally liable for partnership obligations beyond their capital contributions 4. To have the value of his interest ascertained as of the date of dissolution b. Villareal v. of the business Contribute cash. 511 (1962) A partner’s share cannot be returned without first dissolving and liquidating the business for the partnership’s outside creditors have preference over the enterprise’s assets.Civil Law Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2008 profits if any D. The amount to be refunded. One or more general partners control the business 3. CHAPTER 4: LIMITED PARTNERSHIP CHARACTERISTICS: 1. rights transferred to legal representative REQUIREMENTS FOR FORMATION OF LIMITED PARTNERSHIP: 1. Creditors of old partnership are also creditors of the new partnership which continues the business of the old one w/o liquidation of the partnership affairs 2. Partners designated by the agreement 2. —Adviser: Dean Cynthia Roxas-Del Castillo. John Paul Lim. at his option PERSONS AUTHORIZED TO WIND UP 1. May ask for the return of their capital contributions under conditions prescribed by law 5. The firm’s property cannot be diminished to their prejudice. To receive as ordinary creditor the value of his share in the dissolved partnership with interest or profits attributable to use of his right. whatever is left of the partnership assets becomes available for the payment of partners’ shares. Eugenio Villareal. Certificate of articles of the limited partnership must state the ff. “After all the (said) creditors have been paid. not agreed upon. Pledgees: Kris Buenaventura. Rights if retiring/estate of deceased partner: a. death. In absence of agreement. QuickTime™ what to must necessarilyTIFF (Uncompressed) decompressor the firm’s be limited to and a total resources. Ramirez 406 SCRA 145 Due to its separate juridical personality from the individual partners. its total assets. Heads: Joy Stephanie Tajan. Creditors have an equitable lien on the consideration paid to the retiring /deceased partner by the purchaser when retiring/deceased partner sold his interest w/o final settlement with creditors 3. Atty.

Heads: Joy Stephanie Tajan. Character of business c. Right to receive return of contributions provided the partnership assets are in excess of all its liabilities REQUISITES FOR RETURN OF CONTRIBUTION OF LIMITED PARTNER: 1. Do (Uncompressed) decompressor TIFF any act which would make it impossible are needed toon this picture. 1.Civil Law Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2008 matters: a. retirement. Name of partnership + word "ltd. Sharing of profits/other compensation j. Right to admit additional partners l. for the specific property of the partnership which had been wrongfully returned to him. Possess partnership property/assign rights in specific partnership property other than for partnership purposes 5. civil interdiction. civil interdiction.e. Right of limited partners (if given) to priority for contributions m. Time agreed upon to return contribution of limited partner i. affixing the word “Limited” to the partnership name. then the firm becomes a general partnership to third persons (but as amongst the partners. Term for partnership is to exist f. Confess judgment against partnership 4. Location of principal place of business d. retirement. Additional contributions h. for the difference between his contribution as actually made and that stated in the certificate as having been made. Right to ask for dissolution and winding up by decree of court 6. all that is required is SUBSTANTIAL COMPLIANCE IN GOOD FAITH with all the requirements under Art. Do any act in contravention of the certificate QuickTime™ and a 2.). Right of limited partner (if given) to demand/receive property/cash in return for contribution 2. Right to have formal account of partnership affairs whenever circumstances render it just and reasonable 5. at least sufficient to cover them 2. still limited). Subject Head: Rimo Rico. Admit person as general partner 6. and —Adviser: Dean Cynthia Roxas-Del Castillo. and 2. Certificate is cancelled/amended as to set forth withdrawal /reduction of contribution LIABILITIES OF A LIMITED PARTNER To the partnership 1. insanity or insolvency of gen partner unless authorized in certificate SPECIFIC RIGHTS OF LIMITED PARTNERS: 1. etc. Kit Singson— Page 174 of 297 . for any unpaid contribution which he agreed in the certificate to make in the future time As a trustee for the partnership 1. Eugenio Villareal. Consent of all members has been obtained 3. Certificate must be filed with the SEC NOTE: To validly form a limited partnership. Right to inspect/copy books at reasonable hour 3. Right of limited partner (if given) to substitute an assignee k. for the specific property stated in the certificate as contributed by him but which he had not contributed. All liabilities of partnership have been paid/if not yet paid. Atty. Name/place of residence of members e. 1844 (i. Right to have partnership books kept at principal place of business 2. 2. Right to receive share of profits/other compensation by way of income 7. Kristi Fe Mari Lu. signing and swearing to a certificate." b. Understudies: Charmaine Haw. insanity. Right to have on demand true and full info of all things affecting partnership 4. to carry see the ordinary business of the partnership 3. Right of remaining gen partners (if given) or continue business in case of death. John Paul Lim. Pledgees: Kris Buenaventura. If no substantial compliance. WHEN GENERAL PARTNER NEEDS CONSENT/RATIFICATION OF ALLa LIMITED QuickTime™ and TIFF (Uncompressed) decompressor PARTNERS: are needed to see this picture. Admit person as limited partner unless authorized in certificate 7. Amount of cash/value of property contributed g. Continue business with partnership property on death. insolvency n.

Otherwise. the assigning limited partner must also sign. The remedy of a general partner who suffers from or faces interference from his limited partners is dissolution (Weil v. • A limited partner shall not become liable as a general partner. or (2) receive from a general partner or from the firm any payment. d. - - A limited partner may also loan money to and transact other business with the firm. 3. • Any person who suffers loss by reliance on false statement in certificate may hold liable for damages any party to the certificate who knew the statement to be false at the time the latter signed the certificate or came to know such falsity subsequently but within sufficient time before reliance to enable such party to cancel or amend the certificate or file the proper petition for such purpose (under Art. 55 N. d. 1847. 833). 1864 and 1865 (cf. 1853). he takes part in the control (and management) of the business (Art. 427 P. including limited partners 2. Bautista). par. rights. 319 F. It must be signed and sworn to by all the members including the new members if some are added. The cancellation or amendment must be recorded in the SEC. but with respect to his capital contribution. Supp 778). The partnership will be considered general (Lowe v. continued by the surviving general partners under a right stated in the certificate or with their common (i. BUT. a person may be general and limited at the same time provided this is stated in the certificate. Eugenio Villareal. 1864.QuickTime™ and a all) consent (Art. insanity. release if at that time assets of the firm are not sufficient to discharge liabilities to outside creditors. or civil interdiction) QuickTime™ and a TIFF (Uncompressed) decompressor dissolves the partnership unless the business is are needed to see this picture. insolvency. 366).. Heads: Joy Stephanie Tajan. in case of substitution. Kit Singson— Page 175 of 297 . Those due to general partner in respect to profits 6. - Actually. DISSOLUTION OF LIMITED PARTNERSHIP (Priority in Distribution of Assets): 1. even if allowed tounder picture. 1854: any violation would be fraud on such creditors. Subject Head: Rimo Rico. Those due to limited partners in respect of their share in profits/compensation 3. 2. John Paul Lim. In case any of the ten enumerated changes and circumstances in Art. his right against the other members of the firm would be that of a limited partner (Art. certificate or consented to by all.Civil Law Summer Reviewer ATENEO CENTRAL BAR OPERATIONS 2008 3. TIFF (Uncompressed) decompressor are needed see this the Still. Those due to general partner for return of capital contributed AMENDMENT OF CERTIFICATE OF PARTNERSHIP 1. 1848. Holzman v.e. • A general partner’s DIIC (death. (Art. Ramsay. 195 P. 1860). Those due to general partner other than capital & profits 5. Understudies: Charmaine Haw. NOTE: & Light Co. 1865). 2 are present. conveyance. and restrictions of a general partner.W. Money or other property wrongfully paid or conveyed to him on account of his contribution. he cannot: (1) receive or hold as collateral any partnership property. Walraven v. Arizona Power —Adviser: Dean Cynthia Roxas-Del Castillo. Those due to limited partners of return of capital contributed 4. Kristi Fe Mari Lu.d 853). limited partners will not be able to avail of the protection of the law as regards liability. Pledgees: Kris Buenaventura. Those due to creditors. unless in addition to the exercise of his rights and powers as a limited one. there must be an amendment further to Arts. Atty. He shall have all the powers. Art. Diversified Properties. Escamilla.

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