Partnership

PARTNERSHIP
Atty. Soliman Allen V. Bautista
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Outline
Obligations of the
General Provisions Partners among
Themselves
Property Rights of a Obligations of the

Partner Partners with regard
to Third Persons
Dissolution and Limited Partnership
Winding Up
General Provisions on
PARTNERSHIP
PARTNERSHIP
Art. 1767 (para. 1). By the contract of

partnership two or more persons bind
themselves to contribute money,
property, or industry to a common
fund, with the intention of dividing
the profits among themselves.
PARTNERSHIP
Art. 1767 (para. 2). Two or more

persons may also form a
partnership for the exercise of a
profession.
Elements
PARTIES
Two or more persons
bind themselves to
contribute money,
property, or industry to a
INTENTIO
common fund N
With the intention of
dividing the profits
among themselves
First Element
Two or more persons bind themselves to contribute money, property, or
industry to a common fund
Money Property Industry

Money must be in legal tender. A property may be real, personal, Industry means the active
There is no contribution of money until corporeal, or incorporeal. cooperation, the work of the party
they have been cashed. associated, which may be either
personal manual efforts or intellectual.
First Element
Two or more persons bind themselves to contribute money, property, or
industry to a common fund.
The NCC requires the

parties “bind themselves
to contribute” to a
common fund. The The form of the common
partnership may therefore fund may not even be
exist even before the cash or property; it can be
common fund is created. in the form
Common Fund of credit or industry.
Second Element
With the intention of dividing the profits among themselves
If the common fund’s work is

“indispensable, beneficial and
economically useful to the
business” of the partners and the
profit motive is the primordial
reason to establish the partnership,
Intention to Divide even if there are no actual profits,
Profits then there is partnership.
PARTNERSHIP
Object Liability
As to its object, a As regards the liability of
partnership is either the partners, a partnership
universal or particular. may be general or limited.
UNIVERSAL PARTNERSHIP
Art. 1775. A universal partnership may refer to all the present property
or to all the profits.
The 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 the profits which they may acquire therewith.
The property contributed includes all those belonging to the partners at the
time of the constitution of the partnership.
A stipulation for the common enjoyment of any other profits may also be made;
Property but the property which the partners may acquire subsequently by inheritance,
legacy, or donation cannot be included in such stipulation, except the fruits
thereof.
Art. 1775. A universal partnership may refer to all the present property
or to all the profits.
It 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
Profit pertain exclusively to each, only the usufruct
passing to the partnership.
Art. 1781. Articles of

Art. 1782. Persons who are
universal partnership,
prohibited from giving each
entered into without
other any donation or
specification of its nature,
advantage cannot enter into
only constitute a universal
universal partnership.
partnership of profits.
Those made between persons who were guilty of

adultery or concubinage at the time of the donation
Those made between persons found guilty of the same
criminal offense, in consideration thereof
Those made to a public officer or his wife, descendants
and ascendants, by reason of his office
Those made by one spouse to the other spouse during
their marriage, except moderate gifts
PARTICULAR
PARTNERSHIP
Art. 1783. A particular partnership has for its object
determinate things, their use or fruits, or a specific
undertaking, or the exercise of a profession or
vocation.
Kinds of Partnership
AS TO PERIOD
Fixed term/ At will
Particular One in which no time is
undertaking specified and is not
formed for a particular
One which the term for undertaking or venture
which the partnership is and which may be
to exist is fixed or terminated at any time
agreed upon or one by mutual agreement of
formed for a particular the partners, or by the
undertaking will of any one partner
alone
AS TO LEGALITY OF
EXISTENCE
De jure De facto
One which has One which has
complied with all failed to comply
the legal with all the legal
requirements for requirements for
its establishment its establishment
AS TO REPRESENTATION TO
Ordinary or
OTHERS Ostensible or
partnership by
real
estoppel
One which
One which in reality is not a
actually exists
partnership, but is
among the considered a partnership
partners and also only in relation to those
as to third persons who, by their conduct or
admission, are precluded to
deny or disprove its
existence
AS TO PUBLICITY
Secret Open or notorious
One wherein the One whose existence
existence of is avowed or made
certain persons as known to the public
partners is not by the members of
avowed or made the firm
known to the
public by any of
the partners
AS TO PURPOSE
Commercial Professional
One formed for One formed for
the transaction of the exercise of
business professions
Preparatory
Consensual entered into as a means to
perfected by mere consent an end
CHARACTERIS
TICS of
Bilateral
Partnership formed by two or more
persons creating
reciprocal rights and
obligations
Commutative
the undertaking of each
Nominate partner is considered as
has a special name or the equivalent of that of
designation the others
CHARACTERIS
TICS of
Onerous Principal
contributions in the form its existence or validity Partnership
of either money, property does not depend on some
and/or industry must be other contract
made
Principle of
DELECTUS
PERSONAE
A person has the (choice
One of persons)
selects his There is mutual
right to select representation among
partners on the basis
persons with whom the partners so that the
of their personal act of one is considered
he wants to be
qualifications and the act and responsibility
associated with in
qualities. of the others as well.
partnership,
PARTNERSHIP
Art. 1768. The partnership has a

juridical personality separate and
distinct from that of each of the
partners, even in case of failure to
comply with the requirements of
article 1772, first paragraph.
PARTNERSHIP
Art. 1772. Every contract of partnership

having a capital of three thousand pesos
or more, in money or property, shall
appear in a public instrument, which
must be recorded in the Office of the
Securities and Exchange Commission.
Failure to comply with the requirements
of the preceding paragraph shall not
affect the liability of the partnership and
the members thereof to third persons.
When intent does not clearly appear, the following
rules apply (Art. 1769):
PARTNERSHI Persons who are not Co-ownership or co-
P When the intent of the partners as to each

other are not
possession does not
of itself establish a
partners as to third partnership
parties is clear, such intent
persons
shall govern.
Receipt by a
person of a share of
Sharing of gross
the profits of a
returns does not of
business is prima
itself establish a
facie evidence that
partnership
he is a partner in
the business
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, but no such inference shall be drawn if such profits wer
received in payment:
1 As a debt by installments
or otherwise
As wages of an employee or 2
rent to a landlord
3 As an annuity to a widow or
representative of a deceased
partner
As interest on a loan, though 4
the amount of payment vary
with the profits of the As the consideration for the sale of a
business 5 goodwill of a business or other
property by installments or otherwise
PARTNERSHIP
Art. 1770. A partnership must have a

lawful object or purpose, and must be
established for the common benefit or
interest of the partners.
When an unlawful partnership is
dissolved by a judicial decree, the profits
shall be confiscated in favor of the State,
without prejudice to the provisions of the
Penal Code governing the confiscation of
the instruments and effects of a crime.
PARTNERSHIP
Art. 1771. A 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.
PARTNERSHIP
Art. 1773. A contract of partnership

is void, whenever immovable
property is contributed thereto, if an
inventory of said property is not
made, signed by the parties, and
attached to the public instrument.
PARTNERSHIP
Art. 1774. Any immovable property

or an interest therein may be
acquired in the partnership name.
Title so acquired can be conveyed
only in the partnership name.
PARTNERSHIP
Art. 1775. Associations and societies,
whose articles are kept secret among the
members, and wherein any one of the
members may contract in his own name
with third persons, shall have no juridical
personality, and shall be governed by the
provisions relating to co-ownership.
Kinds of
PARTNERS
Capitalist Partner Managing Partner

one who contributes one who manages
money or property to the entity
the common fund
Industrial Partner Limited Partner

one whose liability to
one who contributes General Partner
only his industry or third persons is
one whose liability to third limited to his capital
personal service
persons extends to his contribution
separate property
Kinds of
PARTNERS
Liquidating Partner Subpartner

one who takes charge
Continuing Partner one who, not being a
of the winding up of one who continues the member of the
partnership affairs Partner by Estoppel business of a partnership Surviving Partner partnership,
upon dissolution one who is not really a after it has been dissolved one who remains after a contracts with a
partner but is liable as a partnership has been partner with
partner for the protection dissolved by the death of reference to the
of innocent third persons any partner latter’s share in the
partnership.
Other Kinds of
PARTNERS
Ostensible Partner Original Partner

one who takes one who is a member
active part and of the partnership
known to the Secret Partner from the time of its
Dormant Partner organization
public as a partner one who takes active
Silent Partner one who does not
part in the business but take active part in the
is not known to be a one who does not take any business and is not
partner by outside active part in the business known or held out as
parties although he may be known to a partner
be a partner
Other Kinds of
PARTNERS
Incoming Partner Retiring Partner

a person lately, or about to be, taken one withdrawn from the
into an existing partnership as a partnership; a withdrawing
member. partner
OBLIGATIONS
of the Partners
Among Themselves
Art. 1785 (para. 1). When a partnership for
GENERAL a fixed term or particular undertaking is
continued after the termination of such term
NOTES or particular undertaking without any
express agreement, the rights and duties of
the partners remain the same as they were at
such termination, so far as is consistent with
Art. 1784. A partnership a partnership at will.
begins from the moment
of the execution of the (para. 2). A continuation of the business by the
contract, unless it is partners or such of them as habitually acted
otherwise stipulated. therein during the term, without any settlement
or liquidation of the partnership affairs, is
prima facie evidence of a continuation of the
partnership
OBLIGATIONS
of the Partners Among Themselves
Debtor of the Cannot engage in Share equal Contribute Apply collection to

Partnership business for himself contribution additional shares two credits
OBLIGATIONS
Bring collection to Pay damages to Proportionate Managing Keep partnership

the partnership the partnership profits and losses partner to books
capital execute acts of
administration
OBLIGATIONS
Render information Cannot engage in Act as fiduciary Right to formal

business of similar account
kind (for capitalist
partners)
DEBTOR of the Partnership
Art. 1786. Every

partner is a debtor of
the partnership for
whatever he may have
promised to contribute
thereto.
Contribution of MONEY or PROPERTY
Failure to contribute:
A partner is obliged to Makes the partner ipso jure a debtor
contribute, at the beginning of the partnership even in the absence
of the partnership or at the of demand
stipulated time, the money, Remedy:
property or industry which An action for specific performance
he undertook to contribute
with damages and interest (not
rescission)
Contribution of PROPERTY or GOODS
When contribution are specific and

When contribution is in
determinate things:
goods:
A partner is bound for warranty in case of
The amount thereof must
eviction, in the same cases and in the same
be determined by proper
manner as the vendor is bound with respect to
appraisal of the value
the vendee. He shall also be liable for the
thereof at the time of
fruits thereof from the time they should have
contribution (Art. 1787)
been delivered, without the need of any
demand. (Art. 1786)
Contribution of MONEY
In case a sum of money is to be contributed, or in case he took

any amount from the partnership coffers, to indemnify the
partnership for:
a. Interest; and
b. Damages, from the time he should have complied with
his obligation, or from the time he converted the amount
to his own use (Art. 1788)
NON-ENGAGEMENT in any business
An industrial partner cannot engage in business for

himself, unless the partnership expressly permits him
to do so (Art. 1789)
If he should do so, the capitalist partners may either

exclude him from the firm or avail themselves of the
benefits which he may have obtained in violation of
this provision, with a right to damages in either
case. (Art. 1789)
Partners’ SHARE
Art. 1790. Unless there is a

stipulation to the contrary, the
partners shall contribute equal
shares to the capital of the
partnership.
ADDITIONAL Contribution
Art. 1791. If there is no agreement to

the contrary, in case of an imminent
loss of the business of the partnership,
any partner who refuses to contribute
an additional share to the capital,
except an industrial partner, to save
the venture, shall he obliged to sell
his interest to the other partners.
ADDITIONAL Contribution
REQUISITES
The majority of the The capitalist

There is no
There is an capitalist partners partner refuses
agreement that
imminent are of the opinion deliberately
even in case of
that an additional (not because of
loss of the imminent loss of
contribution financial
business of the business, the
to the common inability) to
the partners
fund would save contribute an
are not obliged to
partnership the additional share
contribute
business to the capital
Application to TWO CREDITS
Art. 1792. If a partner authorized to manage
collects a demandable sum which was owed to
him in his own name, from a person who owed
the partnership another sum also demandable,
the sum thus collected shall be applied to the
two credits in proportion to their amounts,
even though he may have given a receipt for
his own credit only; but should he have given it
for the account of the partnership credit, the
amount shall be fully applied to the latter.
Collection for the Partnership CAPITAL
Art. 1793. A partner who has received,
in whole or in part, his share of a
partnership credit, when the other
partners have not collected theirs,
shall be obliged, if the debtor should
thereafter become insolvent, to bring
to the partnership capital what he
received even though he may have
given receipt for his share only.
Payment of DAMAGES
Art. 1794. Every partner is responsible to
the partnership for damages suffered by
it through his fault, and he cannot
compensate them with the profits and
benefits which he may have earned for the
partnership by his industry. However, the
courts may equitably lessen this
responsibility if through the partner's
extraordinary efforts in other activities of
the partnership, unusual profits have been
realized.
PROPORTIONATE Share
If only the share of

The losses and each partner in the
profits shall be profits has been
distributed in agreed upon, the
conformity with share of each in the
the agreement. losses shall be in the
same proportion.
PROPORTIONATE Share
In the absence of
stipulation, the share of
If besides his
As for the profits, the services he has
each partner in the profits
industrial partner contributed capital,
and losses shall be in
proportion to what he shall receive such he shall also receive
may have contributed, share as may be just a share in the profits
but the industrial and equitable under in proportion to his
partner shall not be the circumstances. capital.
liable for the losses.
PROPORTIONATE Share
If the partners have agreed In no case may a partner who
to intrust to a third person has begun to execute the
the designation of the decision of the third person,
share of each one in the or who has not impugned the
profits and losses, such same within a period of
designation may be three months from the time
impugned only when it is he had knowledge thereof,
manifestly inequitable. complain of such decision.
The designation of losses and profits A stipulation which excludes one or more
cannot be intrusted to one of the partners from any share in the profits or
partners. losses is void.
MANAGING PARTNER
Art. 1800. The partner who has been appointed manager

in the articles of partnership may execute all acts of
administration despite the opposition of his partners,
unless he should act in bad faith; and his power is
irrevocable without just or lawful cause. The vote of the
partners representing the controlling interest shall be
necessary for such revocation of power.
A power granted after the partnership has been

constituted may be revoked at any time.
MANAGING PARTNERS
Art. 1801. If two or more partners have been intrusted

with the management of the partnership without
specification of their respective duties, or without a
stipulation that one of them shall not act without the
consent of all the others, each one may separately
execute all acts of administration, but if any of them
should oppose the acts of the others, the decision of
the majority shall prevail. In case of a tie, the matter
shall be decided by the partners owning the
controlling interest.
MANAGING PARTNERS
Art. 1802. In case it should have been

stipulated that none of the managing partners
shall act without the consent of the others, the
concurrence of all shall be necessary for the
validity of the acts, and the absence or
disability of any one of them cannot be
alleged, unless there is imminent danger of
grave or irreparable injury to the partnership.
Manner of MANAGEMENT
1. All the partners shall be considered agents and
whatever any one of them may do alone shall bind
Art. 1803. When the the partnership, without prejudice to the provisions
of article 1801.
manner of management
has not been agreed upon,
2. None of the partners may, without the consent of
the following rules shall
the others, make any important alteration in the
be observed: immovable property of the partnership, even if it
may be useful to the partnership. But if the refusal of
consent by the other partners is manifestly
prejudicial to the interest of the partnership, the
court's intervention may be sought.
ASSOCIATION
Art. 1804. Every partner may associate another person with

him in his share, but the associate shall not be admitted into
the partnership without the consent of all the other partners,
even if the partner having an associate should be a manager.
Keeping of PARTNERSHIP BOOKS
Art. 1805. The partnership books shall be kept, subject to any

agreement between the partners, at the principal place of
business of the partnership, and every partner shall at any
reasonable hour have access to and may inspect and copy any
of them.
Rendering TRUE INFORMATION
Art. 1806. Partners shall render on demand true and full

information of all things affecting the partnership to any
partner or the legal representative of any deceased partner or
of any partner under legal disability.
Accountable as FIDUCIARY
Art. 1807. Every partner must account to the partnership for

any benefit, and hold as trustee for it any profits derived by
him without the consent of the other partners from any
transaction connected with the formation, conduct, or
liquidation of the partnership or from any use by him of its
property.
Non-engagement in business
of SIMILAR KIND
Art. 1808. The capitalist partners cannot engage for their own account in
any operation which is of the kind of business in which the partnership
is engaged, unless there is a stipulation to the contrary.
Any capitalist partner violating this prohibition shall bring to the common
funds any profits accruing to him from his transactions, and shall
personally bear all the losses.
Right to FORMAL ACCOUNT
1. If he is wrongfully excluded from the
Art. 1809. Any partnership business or possession of its property
by his co-partners;
partner shall have the
right to a formal 2. If the right exists under the terms of any
account as to agreement;
partnership affairs:
3. As provided by article 1807;
4. Whenever other circumstances render it just

and reasonable.
PROPERTY
RIGHTS
of a Partner
PROPERTY RIGHTS of a Partner
Art. 1810. The property rights

of a partner are:
1. His rights 3. His right to
in specific participate in
partnership the
2. His management
property
interest
in the
partnership
Rights in the PARTNERSHIP PROPERTY
1 Equal right to possession for partnership purposes
Right is not assignable, except in connection with

2
assignment of rights of all partners in the same property
Right is limited to his share of what remains

3
after partnership debts have been paid
Right is not subject to attachment or execution

4
except on a claim against the partnership
5 Right is not subject to legal support
INTEREST in the Partnership
Art. 1812. A partner's interest in the partnership is his

share of the profits and surplus.
ASSIGNMENT of Interest
It merely entitles the assignee
Assignment by a partner of his whole
to:
interest in the partnership
E 1. Receive the profits to which the
1. Does not dissolve the partnership F assigningpartner was entitled
F 2. In case of fraud in management, avail

2. Does not entitle the assignee to: himself of the usual remedies provided by
a. Interfere in the management or E law, such as dissolution
administration of the partnership C 3. In case of dissolution:
business or affairs
b. Require information or account of T a. Receive his assignor’s interest
partnership b. Require an accounting from the date
c. Inspect the partnership books
S only of the last account agreed to by
all the partners
OBLIGATIONS
of the Partners
with Regard to Third Persons
OBLIGATIONS
of the Partners with Regard to Third Persons
Operate Liability for Liability for

under a partnership wrongful
firm name contracts acts of a
partner
Liability for Liability for

partnership admission by a
debts partner
OBLIGATIONS
of the Partners with Regard to Third Persons
Liability
Liability in
with regard
case of
to personal
partnership
creditor of
by estoppel
partners
Liability for
Liability of
misapplication
an incoming
of money or
partner
property
PARTNERSHIP NAME
Art. 1815. Every partnership shall
operate under a firm name,
which may or may not include the
name of one or more of the
partners.
Those who, not being members of
the partnership, include their
names in the firm name, shall be
subject to the liability of a
partner.
PARTNERSHIP NAME
GENERAL RULE EXCEPTIONS
1. They cannot use a name which is identical

The partners may adopt any or deceptively or confusingly similar one
firm name desired, which already protected by SEC or a sole
may or may not include the proprietorship registered with DTI.
name of one or more of the 2. The use of names of a deceased partner in
partners. law firms is permissible provided that the
firm indicates in all its communications
that said partner is deceased.
Liability for Partnership DEBTS
The partnership is primarily liable for contracts

entered into:
1. In its name and for its account;

2. Under its signature; and
3. By a person authorized to act for it.
Art. 1816. All partners, including industrial ones,

shall be liable pro rata with all their property
and after all the partnership assets have been
exhausted, for the contracts which may be entered
into in the name and for the account of the
partnership, under its signature and by a person
authorized to act for the partnership. However,
any partner may enter into a separate obligation to
perform a partnership contract.
The partners are liable pro rata. This

liability is not increased even when a
partner:
1. Has left the country and the payment of
his share of the liability cannot be
enforced; or
2. His liability is condoned by the creditor.
WHAT IS PRO RATA?
In the law of obligations, the

Literally, pro rata concurrence of two or more
liability means debtors in one and the same
proportionate obligation, makes it prima facie a
distribution of joint (pro rata) obligation, and
liability. the debts are presumed to be
divided into as many equal
shares as there are debtors and
each one of them is bound to
pay only his share.
GENERAL RULE
The partners are liable subsidiarily. It only arises upon

exhaustion of partnership assets.
EXCEPTIONS
1. A third person who transacted with the 2. A person admitted as a partner into an
partnership can hold the partners solidarily existing partnership is liable for all the
(rather than subsidiarily) liable for the whole obligations of the partnership arising before
obligation if the case falls under Art. 1822 or his admission, except that his liability shall
1823. The provisions refer to wrongful acts be satisfied only out of partnership
or omission and misapplication of money property, unless there is a stipulation to the
or property by a partner in the ordinary contrary. In other words, he is not
course of business. personally liable.
Liability for Partnership CONTRACTS
GENERAL GENERAL
RULE RULE
The partnership is liable for any act of a partner Acts of a partner which is not apparently
which is apparently for the carrying on of the for carrying on of the usual business
usual business of the partnership, including does not bind the partnership.
the execution of any instrument in the
partnership name.
EXCEPTIONS EXCEPTIONS
The partnership is not bound when the The partnership is bound if the other
following concur: partners authorized him to do the act.
1. The partner has in fact no authority to act
2. The person with whom he deals has
knowledge of such fact
Liability for ADMISSION by a Partner
An admission or representation
by any partner may be used as
evidence against the partnership
when:
a. It concerns partnership
affairs; and
b. Such affairs are within the
scope of his authority.
Liability for ADMISSION by a Partner
Instances Where Knowledge of a Partner is
Considered Knowledge of the Partnership
Knowledge of the partner acting Knowledge of any other partner

in the particular matter: who reasonably could and
a. Acquired while a partner; or should have communicated it to
b. Then present to his mind the acting partner.
Liability for WRONGFUL ACTS
of a Partner
The partnership is solidarily liable with
the partner who causes loss or injury to
any person not a partner, or incurs any
penalty through any wrongful act or
omission:
a. In the ordinary course of the business of

the partnership; or
b. Not in such ordinary course of business,
but with the authority of his co-partners.
Liability for MISAPPLICATION
of Money or Property
The partnership is liable for losses suffered by a third
person whose money or property was:
Received by Received by
a Partner the Partnership
1. Acting within the scope of 1. In the course of its

his apparent authority; and business; and
2. Misapplied it. 2. Misapplied by any partner
while it is in the custody
of the partnership.
Liability in case of Partnership by ESTOPPEL
PERSONAL
PUBLIC REPRESENTATION
REPRESENTATION
A partner by estoppel is liable If he has made such representation in a

public manner:
to any such persons:
1. When partnership liability results, he is
1. To whom such liable as though he were an actual
representation has been member of the partnership.
made; and 2. When no partnership liability results, he
2. Who has, on the faith of is liable pro rata with the other persons,
such representation, given if any, so consenting to the contract or
representation.
credit to the actual or
apparent partnership. 3. When there are no such other persons, he
is separately liable.
Liability of an INCOMING Partner
Art. 1826. A person admitted as a partner
into an existing partnership is liable for
all the obligations of the partnership
arising before his admission as though
he had been a partner when such
obligations were incurred, except that this
liability shall be satisfied only out of
partnership property, unless there is a
stipulation to the contrary.
PREFERENCE of Partnership Creditors in
Partnership Property
Art. 1827. The creditors of the partnership shall be preferred to those of each partner as
regards the partnership property. Without prejudice to this right, the private creditors of
each partner may ask the attachment and public sale of the share of the latter in the
partnership assets.
PREFERENCE of Partnership Creditors in
Partnership Property
IN CASE OF INSUFFICIENCY
PROPERTY PREFERENCE OF ASSETS
Partner’s Individual
Partnership Partner’s Partnership Creditor
Creditor
Property Individual Property
After exhaustion of
Ask for attachment
partnership assets, the
and public sale of the
Partnership Partner’s creditor may come
share of
creditors are individual creditors after the private
the partner in the
preferred are preferred property of the
partnership assets.
partners.
DISSOLUTION
and
WINDING UP
CONCEPTS
Dissolution is the It is different from
change in the the winding-up of
relation of the the business. It
partners caused does not
by any partner terminate the
ceasing to be partnership,
associated in the which continues
carrying on of the until the winding
business. up of partnership
affairs is
DISSOLUTION completed.
CONCEPTS
The partnership, although

dissolved, continues to exist
until its termination, at which
time the winding up of its affairs
should have been completed and
the net partnership assets are
partitioned and distributed to the
partners.
CONCEPTS
It involves
collection and
Winding up is the distribution of
actual process of partnership
settling the assets, payment
partnership of debts, and
business or determination of
affairs after the value of the
dissolution. interest of the
partners in the
partnership.
WINDING UP
CONCEPTS
Termination is the point in time when all partnership affairs are

completely wound up and finally settled. It signifies the end of the
partnership life.
CAUSES of Dissolution
In
Without
contravention By
violation of
of the By decree Other
the agreement
agreement
operation of
between the of court causes
between the law
partners
partners
Without violation of the agreement between the partners
• By the termination of the definite term or particular undertaking

specified in the agreement
• By the express will of any partner, who must act in good faith,
when no definite term or particular is specified
• By the express will of all the partners who have not assigned
their interests or suffered them to be charged for their separate
debts, either before or after the termination of any specified term
or particular undertaking
• By the expulsion of any partner from the business bona fide in

accordance with such a power conferred by the agreement
between the partners
In contravention of the agreement between the partners
• Where circumstances do not permit dissolution under any

other provision of Art. 1830 of the Civil Code of the
Philippines, it may also be dissolved by the express will of
any partner at any time.
• Thus, even if there is a specified term, one partner can
cause its dissolution by expressly withdrawing even before
the expiration of the period, with or without justifiable
cause. If the cause is not justified or no cause was given, the
withdrawing partner is liable for damages but in no case can
he be compelled to remain in the firm.
By operation of law
By any event which makes it unlawful for the business

of the partnership to be carried on or for the members
to carry it on in partnership
When a specific thing which a partner had promised to

contribute, perishes before delivery, or by the loss of
the thing, only the use or enjoyment of which has been
contributed; the loss of a specific thing, however, does
not dissolve the corporation after its ownership has
already been transferred to the partnership
By operation of law
By the death of any partner
By the insolvency of any partner or of the

partnership
By the civil interdiction of any partner
By decree of court
A partner has been A partner has been guilty

A partner may declared insane in any of such conduct as tends
The business of the
partnership can
apply for judicial proceeding or is to affect prejudicially the
only be carried on
shown to be of unsound carrying on of the
dissolution in mind business
at a loss
court when:
A partner becomes in Other

A partner willfully or
any other way circumstances
persistently commits a
incapable of render a
breach of the partnership
performing his part of dissolution
agreement
the partnership contract equitable
Other causes
1. When a new partner is admitted into an

existing partnership
2. When any partner retires
3. When the other partners assign their rights to
the sole remaining partner
4. When all the partners assign their rights in the
partnership property to third persons
EFFECTS of Dissolution
ON AUTHORITY OF THE
PARTNERS
In general, upon dissolution, the authority of the partners
to represent the partnership is confined only to acts
necessary to:
1. Wind up partnership affairs; or
2. Complete transactions begun but not then finished.
ON AUTHORITY OF THE
PARTNERS
The authority of partners to act for the partnership is
terminated, with respect to partners:
1. When the dissolution is not by the act, insolvency or
death of a partner; or
2. When the dissolution is by such act, insolvency or
death, when the partner acting for the partnership has
knowledge or notice of the cause.
ON AUTHORITY OF THE
PARTNERS
With respect to persons not partners:
1. After dissolution, a partner can bind the partnership
by any act appropriate for:
a. Winding up partnership affairs; or
b. Completing transactions unfinished at dissolution.
ON AUTHORITY OF THE
PARTNERS
2. He can also bind it by any transaction which would bind the
partnership as if dissolution had not taken place, provided the other
party to the transaction:
a. Had extended credit to the partnership prior to dissolution and had
no knowledge or notice thereof; or
b. Had not so extended credit but had known of the partnership prior
to dissolution, and having no knowledge or notice of dissolution,
the fact had not been advertised in a newspaper of general
circulation in the place (or in each place if more than one) at which
the partnership business was regularly carried on.
ON LIABILITY FOR TRANSACTION AFTER
DISSOLUTION
The liability of a partner, in general, is the same as in ordinary
contracts (pro rata and subsidiary).
In the following cases, however, the liability shall be satisfied out of the
partnership assets alone (i.e., there is no subsidiary liability):
1. When the partner had been, prior to the dissolution, unknown as a
partner to the person with whom the contract is made;
2. When the partner had been, prior to the dissolution, so far unknown
or inactive in partnership affairs that the business reputation of the
partnership could not be said to have been in any degree due to his
connection with it.
ON LIABILITY FOR CONTRACTS AFTER
DISSOLUTION BY SPECIFIC CAUSES
GENERAL RULE: A contract (1) entered into by a partner acting
for the partnership; and (2) after dissolution by: (a) act, (b) death,
or (c) insolvency of a partner, binds the other partners.
EXCEPTIONS:
1. The dissolution being by act of any partner, the partner acting for
the partnership had knowledge of the dissolution; or
2. The dissolution being by death or insolvency of a partner, the
partner acting for the partnership had knowledge or notice of the
death or insolvency.
ON EXISTING LIABILITY OF PARTNERS
GENERAL RULE: Dissolution does not of itself
discharge the existing liability of any partner.
EXCEPTION: A partner may be relieved when there is an
agreement to that effect between:
1. Himself;
2. The partnership creditor; and
3. The person or partnership continuing the business.
WINDING UP
The following partners have the right to wind
up the partnership affairs:
Those designated in Those who have not The legal

an agreement wrongfully dissolved representative of the
the partnership last surviving
partner, who was not
insolvent
WINDING UP
The winding up of the dissolved
partnership may be done either:
JUDICIALLY
under the control and direction
of the proper court upon cause EXTRAJUDICIALLY
shown by any partner, his legal by the partners themselves
representative, or his assignee; without intervention of the
court
SETTLING OF ACCOUNTS
Between Partners
Subject to any agreement to the contrary, the following rules shall be
observed in settling accounts between partners after dissolution:
COMPOSITION OF PARTNERSHIP ASSETS
In accordance with the

1. The partnership property subsidiary liability of the
2. The contributions of the partners, the partnership
partners necessary for the property shall be applied first to
payment of all the liabilities satisfy any liability of the
partnership.
Between Partners
Subject to any agreement to the contrary, the following rules shall be observed in
settling accounts between partners after dissolution:
AMOUNT OF CONTRIBUTION FOR LIABILITY
The rules for distribution of losses shall 3. In the absence of any
determine the contributions of the partners. stipulation, the contribution
As such: shall be in proportion to the
1. The contribution shall be in conformity capital contribution.
with the agreement.
2. If only the share in profits has been
stipulated, the contribution shall be in
the same proportion.
Between Partners
ENFORCEMENT CONTRIBUTION
The following persons have 3. To the extent of the amount which he has
the right to enforce the paid in excess of his share of the
contributions: partnership liability, any partner or his legal
1. An assignee for the benefit representative
of creditors
2. Any person appointed by The individual property of a deceased partner
the court shall be liable for the contributions.
Between Partners
ORDER OF APPLICATION OF ASSETS
The partnership liabilities shall rank, 3. Those owing to partners in
in order of payment, as follows: respect of capital
1. Those owing to creditors other 4. Those owing to partners in
than partners respect of profits
2. Those owing to partners other
than for capital and profits
Between Partners
DOCTRINE OF MARSHALLING OF ASSETS
The doctrine of marshalling of assets 2. Separate or individual creditors

provides that: have preference in separate or
1. Partnership creditors have individual property
preference in partnership assets 3. Anything left from either shall be
applied to satisfy the other
Between Partners
DISTRIBUTION OF PROPERTY OF AN INSOLVENT
PARTNER
Where: The claims against his separate property shall
1. A partner has become rank in the following order:
insolvent; or 1. Those owing to separate creditors;
2. His estate is insolvent, 2. Those owing to partnership creditors;
3. Those owing to partners by way of
contribution
LIMITED
PARTNERSHIP
LIMITED PARTNERSHIP
A limited partnership is:
1. A partnership;
2. Formed by two or more persons; and
3. Having as members:
a. One or more general partners; and
b. One or more limited partners.
The limited partners as such shall not be bound
by the obligations of the partnership, except to
the extent of their capital contributions.
LIMITED PARTNERSHIP
CHARACTERISTICS
Obligations or debts are

A limited partnership is
paid out of the
formed by compliance with
One or more limited partners partnership assets and the
the statutory requirements.
contribute to the capital and individual property of the
share in the profits but do not general partners.
manage the business and are
not personally liable for
The business is controlled
partnership obligations beyond The limited partners may
or managed by one or more
their capital contributions. have their contributions
general partners, who are
back subject to
personally liable to
conditions prescribed by
creditors.
law.
GENERAL vs. LIMITED
PARTNERSHIP
GENERAL
LIMITED PARTNERSHIP
PARTNERSHIP
Partners must: (1) sign and swear to a certificate in
May be constituted in any form,
CREATION compliance with Art. 1844, NCC; and (2) file the
subject to exceptions
certificate for record in the SEC.
COMPOSITION Only general partners One or more general, and one or more limited partners
Must include the word “Limited”

Must contain the word “Company,”
Must not include name of limited
except for professional partnerships.
partners, unless: (1) it is also the surname of a general
FIRM NAME
partner, or
May or may not include the name of
(2) prior to the time when the limited partner became
one or more of the partners
such, the business has been carried on under a name in
which his surname appeared
GENERAL vs. LIMITED PARTNERS
GENERAL PARTNER LIMITED PARTNER
Personally, but subsidiarily liable Liable only to the extent of his capital
EXTENT OF LIABILITY
for obligations of the partnership contributions (subject to exceptions)
Unless otherwise agreed upon, all
RIGHT TO PARTICIPATE
general partners have an equal No right to participate in management
IN MANAGEMENT
right to manage the partnership
NATURE OF
Cash, property or industry Cash or property only, not industry
CONTRIBUTION
Name must not appear in the firm
FIRM NAME Name may appear in the firm name
name (subject to exceptions)
PROHIBITION TO
ENGAGE IN OTHER Prohibited (subject to qualifications) Not prohibited
BUSINESS
EFFECT OF
Does not dissolve partnership; rights
RETIREMENT, DEATH,
Dissolves partnership transferred to executor or administrator
INSANITY, OR
for selling his estate
INSOLVENCY
LIMITED PARTNERSHIP
FORMATION
GENERAL REQUIREMENTS
Two or more persons desiring to

form a limited partnership shall:
1. Sign and swear to a certificate
stating the items in Art. 1844,
NCC; and
2. File for record the certificate in
the SEC.
LIMITED PARTNERSHIP
FORMATION
GENERAL REQUIREMENTS
A limited partnership is formed if there is substantial compliance in good

faith with the requirements. When there is failure to substantially comply
with the requirements:
1. In relation to third persons, the partnership is general, unless they
recognized that the firm is a limited partnership; and
2. As between the partners, the partnership remains limited, since they are
bound by their agreement.
LIMITED PARTNERSHIP
FORMATION
PURPOSE OF FILING
1. To give actual or constructive notice to

potential creditors or persons dealing with
the partnership; and
2. To acquaint them with its essential
features, including the limited liability of
limited partners.
LIMITED PARTNERSHIP
FORMATION
FIRM NAME
GENERAL RULE: The surname of a limited
partner shall not appear in the partnership name.
EXCEPTIONS:
1. It is also the surname of a general partner; or
2. Prior to the time when the limited partner became
such, the business had been carried on under a name
in which his surname appeared.
LIMITED PARTNERSHIP
FORMATION
FALSE STATEMENT IN THE CERTIFICATE
If the certificate contains a false statement, one who suffers
loss by reliance thereon may hold liable any party to the
certificate who knew the statement to be false:
1. At the time he signed the certificate; or
2. Subsequently, but within a sufficient time before the
statement was relied upon to enable him to cancel or
amend the certificate, or to file a petition for its
cancellation or amendment
LIMITED PARTNERSHIP
FORMATION
FALSE STATEMENT IN THE
CERTIFICATE
R EQUISITES
1. The partner knew the statement to

2. The person
be false:
seeking to enforce 3. The person
a. At the time he signed the
liability has relied suffered loss
certificate; or
upon the false as a result of
b. Subsequently, but having
statement in reliance upon
sufficient time to cancel or
transacting such false
amend it, or file a petition for its
business with the statement.
cancellation or amendment, and
partnership; and
he failed to do so;
LIMITED PARTNERSHIP
FORMATION
GENERAL AND LIMITED PARTNER AT THE SAME TIME
This fact must be stated in

A person may be: the certificate.
Except that, in respect to
1. A general; and his contribution as a
2. A limited partner, Such person shall have:
limited partner, he shall
in the same 1. All the rights and
have the rights against the
powers of a general
partnership at the partner; and
other members which he
same time. 2. Be subject to all the
would have had if he were
restrictions of a general not also a general partner.
partner.
LIMITED PARTNERSHIP
MANAGEMENT
GENERAL RULE: Only general partners have
the right to manage the partnership.
A general partner shall have the rights and powers
and be subject to all restrictions and liabilities of a
partner in a partnership without limited partners.
Thus, he has general authority over the business.
If a limited partner takes part in the control of the

business, he becomes liable as a general partner.
LIMITED PARTNERSHIP
MANAGEMENT
However, written consent or ratification by all limited partners is necessary to

authorize the general partners to:
Confess a
Do any act in Admit a person
judgment Admit a Continue the business
contravention of the as a general
against the person as a with partnership
certificate partner
partnership limited property on the death,
partner, unless retirement, insanity,
Possess partnership the right to do civil interdiction or
Do any act which would
property, or assign their so is given in insolvency of a
make it impossible to carry
rights in specific property, the certificate general partner, unless
on the ordinary business of
for other than a partnership the right so to do is
the partnership
purpose given in the certificate
LIMITED PARTNERSHIP
OBLIGATIONS OF A LIMITED PARTNER
Obligations related to Liability to partnership Liability to separate

contribution creditors creditors
LIMITED PARTNERSHIP
OBLIGATIONS OF A LIMITED
PARTNER
A limited partner is liable to the partnership:

1. For the difference between his actual
contribution and that stated in the certificate
as having been made; and
2. For any unpaid contribution which he
agreed in the certificate to make in the
Obligations related to future, at the time and on the conditions
contribution stated in the certificate.
LIMITED PARTNERSHIP
He holds as trustee for the partnership:

1. Specific property stated in the certificate as
contributed by him, but which was not
contributed or which has been wrongfully
returned; and
2. Money or other property wrongfully paid
Obligations related to
contribution or conveyed to him on account of his
contribution.
LIMITED PARTNERSHIP
These liabilities can be waived or compromised

only by the consent of all members. Such waiver
or compromise, however, shall not affect the right
to enforce said liabilities of a creditor:
1. Who extended credit; or
2. Whose claim arose, after the filing or before a
Obligations related to cancellation or amendment of the certificate,
contribution to enforce such liabilities.
LIMITED PARTNERSHIP
A person: a. On ascertaining the

1. Who has contributed mistake, he promptly
capital to a partnership; renounces his interest in
2. Who erroneously believed the profits of the business
Obligations related to
that he has become a or other compensation by
contribution way of income;
limited partner; and
3. Whose name appears in the b. He does not participate in
is not personally liable the management of the
certificate as a general
as a general partner by business; and
partner, or who is not
reason of his exercise of c. His surname does not
designated as a limited
the rights of a limited appear in the partnership
partner,
partner, provided: name.
LIMITED PARTNERSHIP
PARTNER
GENERAL RULE: A limited partner is not liable as

a general partner. His liability is limited to the extent
of his contributions.
EXCEPTIONS: The limited partner is liable as a
general partner when:
1. His surname appears in the partnership name, with
certain exceptions.
Liability to partnership
creditors 2. He takes part in the control of the business.
3. The certificate contains a false statement of which
he knows and which was relied upon, resulting in
loss.
LIMITED PARTNERSHIP
PARTNER
On due application to a court of competent
jurisdiction by any separate creditor of a limited
partner, the court may:
1. Charge his interest with payment of the
unsatisfied amount of such claim;
2. Appoint a receiver; and
Liability to separate 3. Make all other orders, directions and
creditors inquiries which the circumstances of the case
may require.
LIMITED PARTNERSHIP
PARTNER
The interest so charged may be redeemed with

the separate property of any general partner,
but may not be redeemed with partnership
property.
Liability to separate
creditors
LIMITED PARTNERSHIP
RIGHTS OF A LIMITED PARTNER
Right to
transact Right to
Right to return
In general business with share in
the
of contribution
profits
partnership
Preference of Right to Right to ask

limited assign for
partners interest dissolution
LIMITED PARTNERSHIP
IN GENERAL
A limited partner To require that the To demand true To demand a formal

To inspect and
partnership books be and full account of partnership
shall have the kept at the principal
copy any of them
information of all affairs whenever
at a reasonable
same rights as place of business of
hour
things affecting circumstances render it
a general partner: the partnership the partnership just and reasonable
To receive a share To receive the return of

To ask for
of the profits or his contribution provided
dissolution and
other the partnership assets are
winding up by
compensation by in excess of all its
decree of court
way of income liabilities
LIMITED PARTNERSHIP
RIGHT TO TRANSACT BUSINESS WITH THE

PARTNERSHIP
A limited partner may: LIMITATIONS: A limited partner, with
1. Loan money to the partnership; respect to his transactions with the
2. Transact other business with the partnership, cannot:
partnership; and 1. Receive or hold as collateral security
3. Receive a pro rata share of the any partnership property; or
partnership assets with general 2. Receive any payment, conveyance, or
creditors if he is not also a release from liability if it will
general partner. prejudice the right of third persons.
LIMITED PARTNERSHIP
RIGHT TO SHARE IN PROFITS
A limited partner may

This right is subject to the condition that
receive from the
partnership assets will still be in excess of
partnership the share of
partnership liabilities after such payment.
the profits or the
The partnership liabilities being
compensation by way of
referred to exclude the liabilities to the
income stipulated for in
limited and general partners.
the certificate.
LIMITED PARTNERSHIP
RIGHT TO RETURN OF CONTRIBUTION
A limited partner may have his contributions

The return of his contributions may be
withdrawn or reduced when:
demanded, as a matter of right:
1. All the liabilities of the partnership, except
1. On the dissolution of the partnership;
liabilities to general partners and to limited
2. Upon the arrival of the date specified in the
partners on account of their contributions, have
certificate for the return; or
been paid or there remains property of the
3. After the expiration of a 6-month notice in
partnership sufficient to pay them;
writing given by him to the other partners,
2. The consent of all members is had, unless the
if no time is fixed in the certificate for:
return may be demanded as a matter of right; and
a. The return of the contribution; or
3. The certificate is cancelled or so amended as to set
b. The dissolution of the partnership
forth the withdrawal or reduction.
LIMITED PARTNERSHIP
RIGHT TO RETURN OF CONTRIBUTION
EXCEPTIONS: He may receive his

GENERAL RULE: A limited
contribution in a form other than cash
partner, irrespective of the
when:
nature of his contribution has
1. There is a statement in the certificate
only the right to demand and
to the contrary; or
receive cash in return for his
2. All the members of the partnership
contribution.
consent.
LIMITED PARTNERSHIP
PREFERENCE OF LIMITED PARTNER
EXCEPTIONS: By an agreement of all the partners

GENERAL RULE: (general and limited) stated in the certificate, priority
or preference may be given to some limited partners
The limited partners
over others with respect to:
stand on equal
1. The return of contributions;
footing. 2. Their compensation by way of income; or
3. Any other matter.
LIMITED PARTNERSHIP
RIGHT TO ASSIGN INTEREST
A substituted limited partner is a person admitted to

The interest of a limited all the rights of a limited partner who has died or has
partner is assignable. The assigned his interest in a partnership. He has all the
assignee may become: rights and powers, and is subject to all the restrictions
1. A substituted limited and liabilities of his assignor, except those liabilities
partner; or which:
2. A mere assignee 1. The assignee was ignorant of; and
2. Cannot be ascertained from the certificate.
LIMITED PARTNERSHIP
RIGHT TO ASSIGN INTEREST
An assignee is only entitled to receive the

share of the profits or other compensation by An assignee has the right to become a
way of income, or the return of contribution, substituted limited partner if:
to which the assignor would otherwise be 1. All the partners consent thereto; or
entitled. He has no right: 2. The assignor, being empowered to
1. To require any information or account of do so by the certificate, gives him
the partnership transactions; that right,
2. To inspect the partnership books.
LIMITED PARTNERSHIP
RIGHT TO ASK FOR DISSOLUTION
A limited partner may have the partnership dissolved and

its affairs wound up when:
1. He rightfully but unsuccessfully demands the return of
his contribution; or
2. He has a right to contribution but his contribution is not
paid because the partnership property is insufficient to
pay its liabilities.
LIMITED PARTNERSHIP
DISSOLUTION
GENERAL RULE: The retirement, death,

A limited partnership is
insolvency, insanity or civil interdiction of a general
dissolved in much the
partner dissolves the partnership.
same way and causes as an
ordinary partnership.
EXCEPTION: It is not so dissolved when the
business is continued by the remaining general
partners:
1. Under a right to do so stated in the certificate; or
2. With the consent of all members.
LIMITED PARTNERSHIP
DISSOLUTION
Upon the death of a limited partner, his The estate of a deceased limited
executor or administrator shall have: partner shall be liable for all his
1. All the rights of a limited partner for the liabilities as a limited partner.
purpose of settling his estate; and
2. The power to constitute an assignee as a
substituted limited partner, if the
deceased was so empowered in the
certificate.
LIMITED PARTNERSHIP
SETTLEMENT OF ACCOUNT
ORDER OF PAYMENT
In settling accounts after dissolution, the liabilities of the partnership shall
be entitled to payment in the following order:
1. Those to creditors, including limited 3. Those to limited partners in respect to

partners except those on account of their the capital of their contributions;
contributions, in the order of priority as 4. Those to general partners other than
provided by law; for capital and profits;
2. Those to limited partners in respect to 5. Those to general partners in respect to
their share of the profits and other profits;
compensation by way of income in their 6. Those to general partners in respect to
contributions; capital.
LIMITED PARTNERSHIP
SETTLEMENT OF ACCOUNT
SHARE IN THE PARTNERSHIP ASSETS
The share of limited partners in respect to their

claims for capital, profits, or for compensation by
way of income, is in proportion of their
contribution, unless:
1. There is a statement in the certificate as to their
share in the profits; or
2. There is a subsequent agreement fixing their
share.
LIMITED PARTNERSHIP
AMENDMENT OR CANCELLATION OF CERTIFICATE
CANCELLATION OF CERTIFICATE
The certificate shall be cancelled

when:
1. The partnership is dissolved; or
2. All limited partners cease to be
such limited partners.
LIMITED PARTNERSHIP
AMENDMENT OR CANCELLATION OF
CERTIFICATE
AMENDMENT OF CERTIFICATE
A certificate shall be amended when:
1. There is a change in the

5. A general partner retires, dies, 8. There is a change in the time
name of the partnership or in
becomes insolvent or insane, as stated in the certificate for
the amount or character of
or is sentenced to civil the dissolution of the
the contribution of any
interdiction and the business is partnership or for the return of
limited partner;
continued; a contribution;
2. A person is substituted as a
6. There is a change in the 9. A time is fixed for the
limited partner;
character of the business of the dissolution of the partnership,
3. An additional limited partner
partnership; or the return of a contribution,
is admitted;
7. There is a false or erroneous no time having been specified
4. A person is admitted as a
statement in the certificate; in the certificate; or
general partner
LIMITED PARTNERSHIP
AMENDMENT OR CANCELLATION OF CERTIFICATE
AMENDMENT OF CERTIFICATE
A certificate shall be amended when:
10. The members desire to make a change

in any other statement in the certificate
in order that it shall accurately
represent the agreement among them.
LIMITED PARTNERSHIP
CERTIFICATE
REQUIREMENT FOR AMENDMENT OR CANCELLATION
To amend or cancel the certificate:
It must be signed and sworn to

by all the members including
The writing to amend (with
The amendment or the new members, and the
the certificate, as amended)
cancellation must be assigning limited partner in
or to cancel must be filed
in writing; case of substitution or addition
for recorded in the SEC.
of a limited or general partner;
and
LIMITED PARTNERSHIP
CERTIFICATE
REQUIREMENT FOR AMENDMENT OR CANCELLATION
When a person required to sign the writing, From the moment the amended
a person desiring the cancellation or certificate/writing or a certified
amendment may petition the court to order copy of a court order granting the
cancellation or amendment. The court shall petition for amendment has been
order the SEC to record the cancellation or filed, such amended certificate
amendment if it finds that the petitioner has shall thereafter be the certificate
a right to have the writing executed. of partnership.
THANK
YOU!

Partnership

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PARTNERSHIP

Atty. Soliman Allen V. Bautista

Property Rights of a Obligations of the

Art. 1767 (para. 1). By the contract of

Art. 1767 (para. 2). Two or more

Money Property Industry

The NCC requires the

If the common fund’s work is

It comprises all that the partners may acquire by

Art. 1781. Articles of

Those made between persons who were guilty of

Art. 1768. The partnership has a

Art. 1772. Every contract of partnership

PARTNERSHI Persons who are not Co-ownership or co-

P When the intent of the partners as to each

Art. 1770. A partnership must have a

Art. 1771. A partnership may be

Art. 1773. A contract of partnership

Art. 1774. Any immovable property

Capitalist Partner Managing Partner

Industrial Partner Limited Partner

Liquidating Partner Subpartner

Ostensible Partner Original Partner

Incoming Partner Retiring Partner

Debtor of the Cannot engage in Share equal Contribute Apply collection to

Bring collection to Pay damages to Proportionate Managing Keep partnership

Render information Cannot engage in Act as fiduciary Right to formal

Art. 1786. Every

When contribution are specific and

In case a sum of money is to be contributed, or in case he took

An industrial partner cannot engage in business for

If he should do so, the capitalist partners may either

Art. 1790. Unless there is a

Art. 1791. If there is no agreement to

The majority of the The capitalist

If only the share of

Art. 1800. The partner who has been appointed manager

A power granted after the partnership has been

Art. 1801. If two or more partners have been intrusted

Art. 1802. In case it should have been

Art. 1804. Every partner may associate another person with

Art. 1805. The partnership books shall be kept, subject to any

Art. 1806. Partners shall render on demand true and full

Art. 1807. Every partner must account to the partnership for

4. Whenever other circumstances render it just

Art. 1810. The property rights

Right is not assignable, except in connection with

Right is limited to his share of what remains

Right is not subject to attachment or execution

5 Right is not subject to legal support

Art. 1812. A partner's interest in the partnership is his

F 2. In case of fraud in management, avail

Operate Liability for Liability for

Liability for Liability for

1. They cannot use a name which is identical

The partnership is primarily liable for contracts

1. In its name and for its account;

Art. 1816. All partners, including industrial ones,

The partners are liable pro rata. This

In the law of obligations, the

The partners are liable subsidiarily. It only arises upon

Knowledge of the partner acting Knowledge of any other partner

a. In the ordinary course of the business of