PARTNERSHIP LAW

LESSON 1

Phoebe Corazon C. Hidalgo, J.D. | Law 102

 CONTRACT

CONCEPT OF
PARTNERSHIP
ARTICLE

1767.

BY

CONTRACT
PARTNERSHIP

THE

OF
TWO OR MORE

TO
CONTRIBUTE MONEY,
PROPERTY,
OR
INDUSTRY
TO
A
COMMON FUND, WITH THE
PERSONS

INTENTION

BIND

OF

THEMSELVES

DIVIDING

THE

PROFITS AMONG THEMSELVES.

TWO OR MORE PERSONS MAY ALSO FORM
A PARTNERSHIP FOR THE EXERCISE OF A
PROFESSION.
Phoebe Corazon C. Hidalgo, J.D. | Law 102

ELEMENTS OF A CONTRACT MUST BE

PRESENT
ESSENTIALLY IT MUST BE BETWEEN TWO OR
MORE PERSONS

WHAT DO YOU AGREE ON

TO CONTRIBUTE MONEY, PROPERTY, OR
INDUSTRY TO A COMMON FUND

INTENTION
PURPOSE/OBJECTIVE -

PROFIT

GENERAL PROFESSIONAL PARTNERSHIP GPP

(DEFINED IN THE SECOND PARAGRAPH)

POINTS TO REMEMBER:
PARTNERSHIP IS A SEPARATE ENTITY FROM THE PARTNERS
CREATED BY FICTION OF LAW

PARTNERSHIP, IN GENERAL

GPP

GAIN PROFIT

PRACTICE OF A PROFESSION

FIDUCIARY

NOT NECESSARY

ADVERTISES

DOES NOT ADVERTISE

EXAMPLE: LAW FIRM/ACCOUNTING
FIRM

Phoebe Corazon C. Hidalgo, J.D. | Law 102

PARTNERSHIPS AND CORPORATIONS

PARTNERSHIPS
Created by MERE
agreement
At least 2 or more
persons

CORPORATIONS
Creation
Created by Law or By
Operation of Law
# of Incorporators
At least 5 but not more
or Partners
than 5 INCOPORRATORS
(Except: Corporation Sole)
Commencement
At the moment of
From the date of
execution of the contract ISSUANCE the Certificate
of Incorporation by the
SEC
Powers (to be
As may be authorized by Only those granted by law
exercised)
the partners
and those implied or4
Phoebe Corazon C. Hidalgo, J.D. | Law 102
incidental thereto

Phoebe Corazon C. Hidalgo, J.D. | Law 102

PARTNERSHIPS AND CORPORATIONS

Management

Effect of Mismanagement
Right of
succession
Extent of liability
to 3rd persons

Transferability of

PARTNERSHIPS
NOT AGREED: All
partners
AGREED: The partner
assigned
Partner can sue a copartner
NO right of succession
In general, partners are
personally liable for
partnership debts to 3rd
persons
Partner cannot transfer

CORPORATIONS
Vested in the Board of
Directors or Board of
Trustees
Derivative Suit -Corporations may be
succeeded
Shareholders are liable
ONLY to the extent of the
shares subscribed by
5
them
SH can generally transfer

PARTNERSHIPS AND CORPORATIONS

PARTNERSHIPS
CORPORATIONS
Firm name
________ Partnership
__________ Corporation/Inc.
(But the word
(provided it is not the
Limited/Ltd. Must be
same as or similar to any
found if it is a limited
registered firm name)
partnership)
Dissolution
At ANYTIME by any /all of ONLY with consent of the
the partner
state
Governing Law
Civil Code
Corporation Code
Association
A partnership can enter
A corporation, in genera,
into a another
cannot enter into a
partnership
partnership unless allowed
Phoebe Corazon C. Hidalgo, J.D. | Law 102
6
by its charter

CHARACTERISTIC ELEMENTS OF A
PARTNERSHIP CONTRACT
1.Consensual
2.Nominate
3.Bilateral
4.Onerous
5.Commutative
6.Principal
7.Preparatory
Phoebe Corazon C. Hidalgo, J.D. | Law 102