Legal Aspects in Tourism and Hospitality

Case:
Martha Soriano, A Baguio City-based retailer and caterer, noted the severe shortage of hotel
accommodations in the city, especially during the annual Panagbenga Flower Festival. She
invited some foreign friends, Arthur Hewitt, an American retiree, and Rose Ann Grundt, a
German hotelier, to join and invest in her new business venture- the Mayflower Hotel. Based
on the business plan prepared, the total capitalization needed for the 50-room standard
hotel is Php20 million. Martha is only capable of raising half of the total investment needed.
What advice would you give Ms. Soriano as she forms a partnership with two (2) foreign
partners?

Legal Opinion:
At least 60% of the capital should be possessed and held by the Philippine public, as per the
regulations and guidelines overseeing the license of Travel and Tour Services, organizations
comprised under Philippine Laws. The participation, nonetheless, wouldn't be feasible
because Martha can give P10 million out of the expected Php20 million. To put resources
into a lodging close to her abroad buddies, Martha would expect no less than Php12 million.
To move the association for MayflowerHotel along, Martha could welcome one more
Filipino person to contribute P2 million, bringing about two Filipino nationals claiming 60%
of the stock. Ms. Soriano's exhort is to be incredibly unequivocal about the boundaries of
the organization’s understanding all along. This includes characterizing each accomplice's
level of proprietorship, their jobs and commitments, and how profit and misfortunes will be
appropriated. It's likewise critical to have an unmistakable leave system set up if one of the
accomplices chooses to sell their stake in the organization. First and foremost, it is critical to
be explicit about the partnership agreement's parameters from the start. This involves
defining each partner's percentage of ownership, their roles and obligations, and how
earnings and losses will be distributed.

On account of the Mayflower Hotel, for instance, it's basic to explain how much each
accomplice will add to the organization's general capitalization. If one accomplice can
give half of the absolute speculation, it's basic to explain what extent possession they'll
have in the organization.

It's additionally basic to frame each accomplice's undertakings and commitments. On

account of the Mayflower Hotel, Martha Soriano will be responsible for the everyday
tasks, while Arthur Hewitt and Rose Ann Grundt will be accountable for the capital
speculation.

At long last, a reasonable leave technique is vital if one of the accomplices has any
desire to sell their stake in the organization. This could include laying out a purchase sell
understanding in which the excess accomplices have first refused to buy the leaving
accomplice's portions.

At long last, it is basic to be clear about the states of the association understanding from
the outset to stay away from future errors or conflict.