Lesson 2

Law on Partnership – These are the legal provisions that regulate all facets of partnerships, including
their formation, existence, operation, and management, as well as their dissolution and liquidation, as
well as the partners’ obligations to one another, the general public, other parties, and the
government.

Forms of Partnership: Two or more people must be partners for a firm to exist. It consists of a deed or
partnership agreement outlining the norms and obligations of the partners. A written or orall
partnership agreement is possible

Types of partnerships: Universal Partnership with all current assets or income. A particular
partnership is one that has the practice of a profession or the usage of specified things as its objects.

After the partnership’s assets have been depleted, general partnership participants are liable to the
amount of their separate property. Everyone is a general partner. Limited Partnership: One General
Partner and at least one Limited Partner; General Partners are liable up to the amount of their
separate property; Limited Partners are liable up to the amount of their investment.

Dissolution and winding up of partnerships – As opposed to the winding up of a firm, the dissolution
of a partnership is the change in the relationship of the partners brought about by any partner ceasing
to be involved in the carrying on. The partnership does not end at dissolution; rather, it continues
until all partnership business has been wound up.

A limited partnership is a legal entity that consists of at least one or more general partners and at
least one or more limited partners.

Law on corporations – A corporation is an artificial being created by operation of law that has the
right of succession as well as the abilities, qualities, and characteristics that are expressly granted by
law or are inherent to its existence.

The following are the specific powers of a corporation, also known as the Theory of Specific Capacity:
the power to lengthen or shorten the term of the corporation; the power to increase or decrease the
number of shares of the corporation; the power to incur, create, or increase bonded indebtedness;
the power to deny pre-emption right; the power to sell, dispose of, lease, or encumber all or nearly all
of the corporate assets.

In a business merger, two or more companies merge through a takeover, and only one company
survives. Contrarily, business consolidation occurs when two or more businesses come together to
form a new, single organization. And lastly the dissolution of a corporation meaning the termination
of the existence of a corporation.