PARTNERSHIP When an unlawful partnership is dissolved by a
General Provisions judicial decree, the profits shall be confiscated in favor
Art. 1767: By the contract of partnership,
(Ordinary or Business Partnership)
1) Two or more persons bind themselves to:
a) Contribute money, property, or industry to
a common fund;
b) With the intention of dividing the profits
among themselves.
(General Professional Partnership)
2) Two or more persons may also form a
partnership for the:
a) Exercise of a profession.
Art. 1768: Partnership has a juridical personality.
Art. 1769: To determine the existence of a partnership,
the ff. rules shall apply:
1) Persons who are not partners as to each other
are not partners as to 3 rd persons, except as
provided by Art. 1825;
2) Co-ownership or co-possession does not of
itself establish a partnership;
3) Sharing of gross returns does not of itself
establish a partnership;
4) 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, except when profits
were received in payment as:
a) Debt by installments or otherwise
b) Wages of an employee or rent to a landlord
c) Annuity to a widow or representative of a
deceased partner
d) Interest on a loan
e) Consideration for the sale of a goodwill of a
business of other property by installments
or otherwise.
Art. 1770: Partnership must have a lawful object or
purpose and must established for the common benefit
or interest of the partners.
of the State.
Art. 1771: Partnership may be constituted in any form,
except where immovable property or real rights are
contributed thereto, in which case a public instrument
shall be necessary.
Art. 1772: A partnership having a capital of P3,000.00 or
more, in money or property, shall:
1) Appear in a public instrument
2) Be recorded in the Office of the Securities and
Exchange Commission (SEC).
Failure to comply with the requirements shall not
affect the liability of the partnership and the members
thereof to 3rd persons.
Art. 1773: A contract of partnership is void, whenever
immovable property is contributed thereto, if:
1) An inventory of said property is not made;
2) Not signed by the parties;
3) Not attached to the public instrument.
Art. 1774:
Art. 1775: Associations and societies shall have no
juridical personality if:
1) Articles are kept secret among the members;
2) Any one of the members may contract in his
own name with 3rd persons.
In any case, it shall be governed by the provisions
relating to co-ownership.
Art. 1776: As to its object, a partnership is either:
1) Universal
2) Particular
As regards the liability of the partnership, it may be:
1) General
2) Limited
Art. 1777: A universal partnership may refer to: Art. 1783: A particular partnership has:
1) All the present property; or 1) For its object:
2) All the profits. a) Determinate things
b) Their use or fruits, or
2) Specific undertaking
Art. 1778: A partnership of all present property – the 3) Exercise of a profession or vocation.
partners contribute all the property which actually
belongs to them to a common fund, with the intention
of dividing the same among themselves, as well as all NOTES
the profits they may acquire therewith.
Elements of Partnership (both ordinary and general
professional partnership)
Art. 1779: In a universal partnership of all present 1) Agreement to contribute money, property, or
property, the property which belonged to each of the industry to a common fund;
partners at the time of the constitution of the 2) Intent to divide the profits among the
partnership, becomes the common property of all the contracting parties.
partners, as well as the profits which they may acquire
therewith. Requisites of Partnership
1) Lawful object or purpose
A stipulation for the common enjoyment of any 2) Common benefit or interest of the parties
other profits may also be made; but the property which 3) Constituted in any form, except:
the partners may acquire subsequently by inheritance, - Immovable Property
legacy, or donation cannot be included in such - Real Rights
stipulations, except the fruits thereof. 4) Must be in a public instrument and recorded in
SEC for every capital of P3,000.00.

Art. 1780: A universal partnership of profits comprises

all that the partners may acquire by their industry or
work during the existence of the partnership.

Movable or immovable property which each of

the partners may possess at the time of the celebration
of the contract shall continue to pertain exclusively to
each, only the usufruct passing to the partnership.

Art. 1781: If the universal partnership is entered into

without specification of its nature, the articles only
constitute a universal partnership of profits.

Art. 1782: Persons who are prohibited from giving each

other any donation or advantage cannot enter into
universal partnership.