A PARTNERSHIP is a contract of two or more persons

who contribute money, property, or industry to a 6. Limited life – the creation of a partnership is
common fund, with the intention of dividing the profits basically consensual. As such, a partnership may
among themselves. Two or more persons may also form be dissolved:
a partnership for the exercise of a profession. (Article
1767) It is both: 7. Transfer of ownership – in case of dissolution,
the transfer of ownership, whether to a new or
1. A contract (1768)
existing partner, requires the approval of the
2. A business organization
remaining partners.
- A judicial entity which has a personality
separate and distinct from that of each of
the partners. (1768). It begins from the
moment of the execution of the contract,
unless it is otherwise stipulated. (1784)

CHARACTERISTICS OF PARTNERSHIP (Accdg. To Millan)

1. Ease of formation – as compared to the

corporations, the formation of partnership
requires less formality.

2. Separate legal personality – the partnership

has a judicial personality separate and distinct
from the partners. The partnership can transact
and acquire properties in its name.

3. Mutual agency – the partners are agents of the

partnership for the purpose of its business. As
such, a partner may legally bind the partnership 8. Unlimited liability – each partner, including
to a contract or agreement that is in line with industrial ones, may be held personally liable
the partnership’s operations. for partnership debt shall be assumed by the
other solvent partners.
4. Co-ownership of Property – each partner is a
co-owner of the properties invested in the
1. As to liability:
partnership and each has an equal right with his
partners to possess specific partnership a. General Partner
property for partnership purposes. However, a b. Limited Partner
partner has no right to possess a partnership c. General-Limited Partner
property for any other purpose without the
consent of his partners. 2. As to contribution:
a. Capitalist Partner
5. Co-ownership of profits – a partnership is b. Industrial Partner
created as a business (a profit-oriented entity), c. Capitalist-Industrial Partner
as such, each partner is entitled to his share in
in the partnership profit. A stipulation which 3. Other classifications:
excludes one or more partners from any share a. Managing Partner
in the profits or losses is void. b. Liquidating Partner
c. Nominal Partner
d. Ostensible Partner
e. Secret Partner
f. Silent Partner
g. Dormant Partner