LAW 3

TThS, 4:30-5:30
12 July 2012 (Thursday)

CHAPTER 3: OBLIGATIONS OF PARTNERS WITH REGARD TO THIRD PERSONS

A. 1815, first paragraph

Every partnership shall operate under a firm name, which may or may not include the name or
one or more of the partners.

FIRM NAME

A. Definition of 'firm'
 name/title/style under which a company transacts its business
 indicates a partnership of 2/more persons
 synonymous with “company/house/concern”

B. Purpose
 to distinguish the partnership which has a distinct and separate juridical personality
(A.1768) from:
a. the individuals composing the partnership; and
b. other partnerships and entities
 right to use of name is a property right which may be asserted and protected against
the whole world in the same manner as it may protect its tangible property; it cannot
be impaired or defeated by subsequent appropriation by another partnership in the
same field
 if any partnership could adopt at pleasure the name of another partnership, the
practice would cause confusion and unfair and fraudulent competitions, open the door
to frauds and result in difficulties of administration and supervision

C. Right of Partners in choosing the firm name

 utmost freedom in selection
 GR: any firm name desired; may be:
a. the name of an individual partner;
b. surnames of ALL partners;
c. surname of one or several of the partners + “and Company”
d. individual names wholly distinct from the names of any of the members
e. purely fanciful or fictitious names
***Whatever the firm name may be, the signature of the firm name is the signature of the several
partners' name.
 EXC:
a. use of misleading names
 name that is IDENTICAL, deceptively or confusingly SIMILAR to that of
any other name already protected by law;
 name that is patently DECEPTIVE, CONFUSING or CONTRARY to
existing laws:
1. Sec. 1, RA 226: emblem, official seal, name of United Nations (full or
abbreviation), “Olympic”, “Bureau”
2. Sec. 3, RA 247: “bonded” for warehouses not licensed under the
General Bonded Warehouse Act
3. Sec. 64, RA 8791: “bank, banking, banker, quasi-bank, savings and loan
association”
4. SEC Opinion, 11 March 1982: “National”
5. SEC Bulletin, October 1982: “State”, “National”, “Maharlika”, “Barangay”
b. use of names of deceased partners
- SC Ruling: No continued use.
> public relations value of the use of an old firm name can tend to create undue advantages and
disadvantages in the practice of the profession
(an able lawyer without connections will have to make a name for himself starting from scratch;
another able who can join an old firm can initially ride on that old firm's reputation established
by deceases partners)
- Rule 3.02 of the Code of Professional Responsibility
> permissible PROVIDED that the firm indicates in all its communications that said partner is
deceased

A. 1815, second paragraph

Those who, not being members of the partnership, include their names in the firm name, shall be
subject to the liability of the partner.

Persons who are not partners:

X - rights of a partner (A.1767)
/ - liabilities of a partner, insofar as third persons without notice are concerned

*** “Partners by estoppel”

Exc:
1. Limited partner who allows his name to be included in the firm name (A.1846)
2. Person continuing the business of a partnership after dissolution, who uses the
name of the dissolved partnership or the name of a deceased partner as part
thereof (A.1840, last par.)