RIVERO,MILCA M. III BFIN 1.What is the Legal definition of a partnership?

? Partnership is a contract between two or more persons who bind themselves to contribute money,property or industry to a common fund,with the intention of dividing the profits among themselves. An association of two or more persons engaged ina business enterprise in which the profits and losses are shared proportionally. An association of two or more persons to carry on as co-owners a business for profits. 2.What is the Nature of a Partnership? A partnership is treated as an artificial being created by operation of law with a legal personality separate and distinct from the partners thereof.It proceeds from the concept that persons may be allowed to pool their resources and funds to engage in the pursuit of a common business objective without necessarily organizing themselves into a corporation,upon which the law imposes a much higher form of regulation,limitation and standards.Philippine partnerships operate under the concept of unlimited liability and unless otherwise agreed upon by the partners,each one of them acts as Manager and agent of the partnership and consequently,their acts bind the partnership. 3.What are the characteristics of a partnership?Briefly explain each. A.Essentially a contract A partnership is a contract,which may be entered into by any competent person upon an oral or written agreement. B.Voluntary Associaton Since partnership is a contract,the contracting parties should voluntarily enter into it. C.Mutual Agency Each partner is an agent of the partnership,therefore,a partner,acting within the scope of the operations of the business,may bind the partnership and make it liable to third parties. D.Limited Life A partnership contract is dependent upon the willingness of the parties to continue the partnership.Consequently,if any partner withdraws from the partnership or a new partner is admitted,the partnership is dissolved and a new one formed. E.Unlimited liability. Each partner,except for the limited partner,is individually liable for all the debts of the business.This means that if the assets of the business are not enough to pay for its liabilities,then the assets of the partners,other than those alredy contributed to the partnership,may be used to satisfy such liabilities after paying his personal liabilities. F.Co-ownership of contributed assets All assets invested in the business become the assets of the business entity jointly owned by the partners.A partner gives up his right as the sole owner of the assets he contributed to the partnership. G.Separate legal personality A partnership is considered a juridical person,separate and distinct from its owners. H.Participation in profits and losses All partners are entitled to share in the profits of the partnership.Losses should also be borne by all partners with the exception of the industrial partner.

4.What is the difference between a Partnership and Association? Partnership is a legal relation based upon the expressed or implied agreement of two or more competent persons whereby they unite their property,labor or skill in carrying on some lawful business as principals for their joint profit.While Association is not a legally established corporation or a partnership to make this distinction the term unincorporated association is often used,although technically redundant. 5.Distinguish Partnership and Corporation as to A.Creation A partnership is created by mere agreement of the parties,while a corporation is created by law or by operation of law. B.Lenght of existence A partnership may be established for any period of time stipulated by the partners,while a corporation may not be formed for a term in excess of 50 years extendible to not more than 50 years in any one instance. C.Liability to strangers In a partnership,the partners(except limited partner)are liable personally and subsidiarily(sometimes solidarily)for partnership debts to third person,while in a corporation,the stockholders are liable only to the extent of their investment as represented by the shares subscribed by them. D.Transferability of interest In a partnership,a partner cannot transfer his interest in the partnership so as to make the transferee a partner without the consent of all the other existing partners because the partnership is based on the principle of delectus personarum,while in a stock corporation,a stockholder has the right to transfer his shares without the prior consent of the other stockholder because a corporation is not based on this principle. E.Ability bind the firm

F.Mismanagement In a partnership,a partner as such can sue a co-partner who mismanages,while in a acorporation,the suit against a member of the Board of Directors of Trustees who mismanages must be in the name of the corporation. G.Nationality H.Attainment of legal personality I.Dissolution a partnership may be dissolved at any time by the will of any or all of the partners,while a corporation can only be dissolved with the consent of the state. 6.What is a Juridical person? - Entity(such as a firm)other than a natural person(human being)created by law and recognized as a legal entity having distinct identity, legal personality and duties and rights. Also called artificial person, juridical entity, juristic person, or legal person. - an entity (as a partnership or corporation) that is given rights and responsibilities. - an entity,constituted either by a collection or succession of natural or physical persons,that can take part in legal actions.

7.Can a minor become a partner?Why or Why not? - Partnership is based on legal contract between two persons who agree to share the profits or losses of a business carried on by them.As such a minor is incompetent,to enter into a valid contract with others he cannot become a partner in any firm.However,a minor can be admitted to the benefits of a partnership firm with the mutual consent of all other partners.In such cases,his liability will be limited to the extent of the capital contributed by him abd in the firm.He will not be eligible to take an active part in the management of the firm. 8.Can a married woman contribute conjugal funds to a apartnership?Why or Why not? - A married woman cannot contribute conjugal funds as her contribution to the partnership,UNLESS,she is permitted to do so by her husband or unless she is the administrator of the conjugal partnership,in which the COURT must give its consent authority. 9.Can a corporation become a partner in a partnership?why or Why not? - A corporation cannot become a partner on grounds of public policy > a partners shares not only in profits but also in the losses of the firm. 10.Suppose the requirement in Art.1772 of the New Civil Code of the Phils.(NCCP) has not been met,is the partnership still considered a juridical person. The law recognizes that in the Philippines,most partnerships are created with very small capital to engage in small business and it would be impractical and inconvenient to require the parties to comply w

11.What are the elements or requisites for the existence of a apartnership? 1.Consensual because it is perfected by mere consent,that is,upon the express or implied agreement of two or more persons. 2.Nominate because it has a special name or designation in our law. 3.Bilateral because it is entered into by two or more persons and the right and obligations arising therefrom are always reciprocal. 4.Onerous because each of the parties aspires to procure for himself a benefit through the giving of something. 5.Commutative because the undertaking of each of the partner is considered as the equivalent of that of the others. 6.Principal because it does not depend for its existence or validity upon some other contract. 7.Preparatory because it is entered into as a means to an end. 12.What are the rules in determining whether a partnership exists or not? 1.Except as provided by article 1825,persons who are not partners as to each other are not partners as to third persons. 2.Co-ownership or co-possession does not of itself establish a partnership,whether such co-owners or co-possessors do or do not share any profits made by the use of the property.

3.The sharing of gross returns does not of itself establish a partnership,whether or not the persons sharing them have a joint or common right or interest in any property from which the returns are derived. 4.The receipt by a person of a share of the profits of a business is prima facei evidence that he is a partner in the business,but no such inference shall be drawn if such profits were received in payment: a.As a debt by installments or otherwise; b.As wages of an employee or rent to a landlord; c.As an annuity to a widow or representative of a deceased partner; d.As interest on a loan,through the amounts of payment vary with the profits of the business; e.As the consideration for the sale of a goodwill of a business or other property by installments or otherwise. 13.What is Partnership by estoppel? - one which in reality is not a partnership,but is considered a partnership only in relation to those who,by their conduct or admission,are precluded to deny or disprove its existence. 14.What is Delectus Personarum/Personae? - The latin phrase,which is the plural of the phrase,may be literally translated choice of the person or choice of the persons. - The right to choose with whom a person wishes to associate or continue to associate himself is the very foundation and essence of partnership.Thus, a person who buys anothers interest in a partnership cannot become a partner without the consent of the other partners. 15.Give instances when a partnership is considered unlawful? - A partnership to create illegal monopolies or combinations in restraint of trade or to carry on gambling,or for smuggling purposes,or for leasing furnished apartments to prostitutes,or to prevent competition in bidding for government contracts,is void and nonexistent. 16.What are the consequences of an unlawful partnership? 1.The contract is void ab initio and the partnership never existed in the eyes of the law. 2.The profits shall be confiscated in favor of the government. 3.The instruments or tools and proceeds of the crime shall also be forfeited in favor of the government. 4.The contributions of the partners shall not be confiscated unless they fall under no.3 17.What are the formalities needed for the creation of a partnership? 1.There must be a valid contract 2.The parties must have legal capacity to enter into the contract 3.There must be a mutual contribution of money,property,or industry to a common fund. 4.The object must be lawful

5.The purpose or primary purpose must be to obtain profits and to divide the same among the parties. 18.What are the formalities required by law when real property is contributed to a partnership? 1.The contract must be in a public instrument. 2.An inventory of the property contributed must be made,signed by the parties,and attached to the public instrument. > applies regardless of the value of the real property > applies even if only real rights over the real property are contributed

19.What is a Public instrument? - is one which is acknowledged before a notary public or any official authorized to administer oath,by the person who executed the same. 20.What is the purpose of registration of the partnership with the SEC (Securities and Exchange Commission) office? - Registration is necessary as a condition for the issuance of licenses to engage in business or trade.In this way,the tax liabilities of big partnership cannot be evaded and the public can also determine more accurately their membership and capital before dealing with them. 21.What is/are the effect/s of non-registration with the SEC?

22.What are the classification of partnership according to: A.Manner of creation; 1.orally constituted 2.constituted in a Private Instrument 3.constituted in a Public Instrument 4.registered S.E.C. B.According to Object; 1.Universal 2.Particular C.According to Liability 1.Limited partnership 2.General Partnership D.According to Legality; 1.Lawful or legal 2.Unlawful or Illegal E.Duration 1.For a specific period or fixed period 2.Partnership at will F.Representative to others

1.Ordinary Partnership 2.Partnership by estoppel 23.Define: A.General partnership one where all the partners ere general partners - they are LIABLE even with respect to their individual properties,after the assets of the partnership has been exhausted. B.Limited partnership one where at least one partner is a general partner and the others are limited partners. - One whose liability is limited only up to the extent of his contribution.

24.What are the Kinds of Universal Partnership?Briefly explain and distinguish each. 1.Partnership of all present property. - one in which 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. 2.Partnership of all Profits - one which comprises all that the partners may acquire by their industry or work during the existence of the partnership and the usufruct of movable or immovable property which each of the partners may possess at the time of the celebration of the contract. 25.What is a Particular Partnership? - one which has for its objects determinate things,their use or fruits,or a specific undertaking,or the exercise of a profession or vocation.