Professional Documents
Culture Documents
Schedule: N/A
Lesson No: 1
Key Concepts:
Partnership Defined
Lawful Object- a partnership with unlawful object is void. In case of a crime due
to the illegality of the object, the parners will be criminally liable and the profits
and effects will be confiscated in favor of the Government. (Art. 1770, Art 45
RPC)
Earn Profit and Divide among Themselves- The partnership must be established
for the common benefit or interest of the partners which is to obtain profits and
to divide the profit among the partners (Art. 1768). However, if the partnership
is formed for the practice of profession, the purpose must not be for profit but
to serve the public.
*If the above formalities are not met, the partnership is void and will not
have juridical personality.
2) Where the capital of the partnership is P3, 000.00 or more in money or
property.
a) The partnership must be in public instrument.
b) The partnership must be registered with Securities and Exchange
Comission.
*If the above formalities are not met, the partnership is still valid and the
partnership will still have juridical personality.
3) Where the partnership is a limited partnership, a certificate under oath
signed by the partners and recorded with the SEC is required.
* If the above formality is not met, the partnership will be considered as a
general partnership.
Who May Become Partners
Persons who are not partners as to each other are not partners as to third
persons.
Co-ownership or co-possession does not of itself establish a partnership,
whether such-co-owners or co-possessors do or do not share any profits made
by the use of the property.
The sharing of gross returns does not of itself establish a partnership, whether or
not the persons sharing them have a joint or common right or interest in any
property from which the returns are derived
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,
Exception: No such inference shall be drawn if such profits were received in
payment:
a) As a debt by installments or otherwise;
b) As wages of an employee or rent to a landlord;
c) As an annuity to a widow or representative of a deceased partner;
d) As interest on a loan, though the amount of payment vary with the profits of
the business;
References:
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