Reniva, King Joshua B.

BSA III
RegFrame

1. Provide illustrative situations or scenarios of a partnership formation where capitalist

partner and industrial partner are identified.
Answer: King and Joshua agreed to form a partnership. King and Joshua wants to
establish a restaurant. King invested cash of 500 000 pesos while Joshua will be
contributing his expertise.
Note: King is a capitalist partner since then because he contributed money or cash in
partnership. On the other hand, Joshua is an industrial partner because he contributed
his skills and provide service in the partnership
2. One of the obligations of a partner is not to engage in any business which is of the
kind in which the partnership is engaged. Explain the obligations.
Answer: Once the obligation has been stipulated, Both partners of the partnership
knows their responsibility. Each partner must not engage in other businesses or else
one of them must ask permission to dissolute the partnership. They must agreed that
partners should be loyal to their partnership and not engage in different business
enterprises.
3. 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. Explain and provide sample illustration to explain
the above statement.
Answer: In the partnership, profits and losses are passed through to the partners as
specified in the partnership agreement. If left unspecified, profits and losses are shared
equally among the partners. In case the partners agreed merely on the
share/distribution of profits, it is understood that losses shall be in the same proportion.
In addition to profit or loss sharing, the partnership agreement may stipulate if an
industrial partner receives salary in addition to his share in the partnership’s profit as
compensation service. But in terms of the designation of losses and profits, it cannot be
entrusted to one of the partners. A stipulation that excludes one or more partners from
any share in the profits or losses is void as per article 1799 indicate.
4. Every partner is an agent of the partnership for the purpose of its business. Discuss
the statement.
Answer: Partners is an agent because both them has a capacity to contribute or
produce something that is useful for partnership. We all know that the goal of the
business is to earn profit. Through their power to produce something whether it is
money, property or even an expertise, a partner may enforce legally bind to a contract
for the partnership's operation.
5. Discuss what is dissolution.
Answer: Dissolution defines as the change in the relation of the partners caused by any
partner being disassociated from the business. It can be a major consideration why
partners dissolute partners: admission of a partner, withdrawal, retirement or death of a
partner and incorporation of a partnership. These major considerations dissolves the
original partnerships agreement because it creates a mere change in the relation of
partners for example a change in the number of the partners in a partnership but
requires consent to all the existing partners.
6. Differentiate limited partnership from general partnership.
Answer: A general partnership is the most common type of partnership. When we say
General Partnership, the major consideration of these is the relationship in which all
partners contribute to the day-to-day management of the business. Each partner will have the
authority to make business decisions and even legally bind the company in contracts.
The liabilities, contributions, and responsibilities of the partners are often equal unless stated
otherwise. Typically, a partnership agreement will describe which partners have certain
authorities and responsibilities. General partners has a right to participate in management
because he is the overall committed to partnership. On the other hand, Limited Partners,
A limited partnership is a relationship where one or more partners are not involved in the day-to-
day management of the business. Often, a limited partner, sometimes known as a “silent
partner,” will serve solely as an investor in the business, with the funds that they contribute
being the extent of their liability. However, since the limited partner does not have decision-
making power in the company, withdrawing funds – even just the amount they’ve already
contributed – cannot be done without the approval of a general partner. Limited partners has no
right to participate in management because he has limited power in the authority of partnership.