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themselves to contribute money, property or industry to a common fund, with the intention of dividing the profits among themselves. Two or more persons may also form a partnership for the exercise of a profession.
2. 3.
Concepts of Partnership:
1. An association of two or more persons to carry on as co-owners a business for profit. 2. 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 profits. 3. A joint undertaking to share in the profit and loss.
4. 5.
association without the consent of all the other associates. The right to choose with whom a person wishes to associate or continue to associate himself is the very foundation and essence of partnership. The parties must have legal capacity to enter into the contract. There must be a mutual contribution of money, property or industry to a common fund. a. Money Philippine currency. b. Property Real or personal, tangible or intangible. Credit such as promissory note or other evidence of obligation or even a mere goodwill may be contributed as it is considered property. c. Industry the work or services of the party associated may be either personal manual efforts or intellectual, and for which he receives a share of profits of the business. The object must be lawful. The purpose must be to obtain profits and to divide the same among the parties. The parties intend to share the profits in certain proportions.
4. The 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 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, though the amounts of payments 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.
Classification of partnership.
As to the extent of its matter 1. Universal partnership a. Of all present property property which belonged to each of the partners at the time of the constitution of the partnership. Profits which they acquire from all the property contributed. a. Of profits comprises all that the partners may acquire by their industry or work during the existence of partnership. 2. Particular partnership has for its objects: a. Determinate things b. Their use or fruits c. Specific undertaking d. Exercise of profession or vocation Note: Persons who are prohibited from giving donations or advantage to each other cannot enter into a universal partnership. (Art. 1782) As to liability of the partners 1. General partnership consists of general partners who are liable pro rata & subsidiarily, sometimes solidarily with their separate property for partnership debts;
2. Limited partnership -- one form by 2 or more persons having as members one or more general partners & one or more limited partners, the latter not being personally liable for the obligations of the partnership. As to its duration 1. Partnership at will one in which no time is specified & is not formed for a particular undertaking or venture & which may be terminated anytime by mutual agreement. 2. Partnership with a fixed term the form for which the partnership is to exist is fixed or agreed upon or one formed for a particular undertaking. As to legality of existence 1. De jure has complied with all the legal requirements for its establishment 2. De facto has failed to comply with all the legal requirements for its establishment. As to representation to others 1. Ordinary or real one which actually exists among the partners & also to third persons. 2. Ostensible or partnership by estoppel one in which in reality is not partnership but is considered only in relation to those who, by their conduct or admission are precluded to deny or disprove its existence. As to its publicity 1. Secret existence of certain persons as partners is not avowed or made known to the public. 2. Open or notorious known to public. As to its purpose 1. Commercial or trading formed for the transaction of the business 2. Professional or non-trading existence for profession
6. Liquidating one who takes charge of the winding up of partnership affairs upon dissolution 7. Partners by estoppel one who is not really a partner but is liable as partner for the protection of innocent 3rd persons. Also known as partner by implication or nominal partner. 8. Subpartner one who is not a member of the partnership who contracts with a partner with the reference to the latters share in partnership 9. Continuing partner one who continues the business after it has been dissolved. 10. Surviving partner one who remains after a partnership has been dissolved by the death of any partner. Partners that are subject to liability for all partnership obligations. 11. Ostensible one who takes active part & known to the public as partner in the business. 12. Secret one who takes active part in the business but not known to be a partner by outside parties. 13. Silent one who does not take any active part in the business although he may be known to be a partner. 14. Dormant one who does not take active part in the business & is not known or held out as partner. 15. Incoming person lately or about to be, taken into a partnership as a member. 16. Retiring one withdrawn from the partnership
Kinds of Partners
1. Capitalist contributes money or property to the common fund. 2. Industrial contributes only his industry or personal service 3. General one whose liability to 3rd persons extends to his separate property 4. Limited or special partner liability to 3rd persons is limited to his capital contributions. 5. Managing- one who manage the business.
without any express agreement, the rights & duties of the partners remain the same as they were at such termination, so far as is consistent with a partnership at will. A continuation of the business by the partners or such of them as habitually acted therein during the term, without any settlement or liquidation of the partnership affairs, is prima facie evidence of continuation of the partnership.
current prices, the subsequent changes thereof being for the account of the partnership. Appraisal of goods or property contributed 1. The appraisal of the value of the goods contributed is necessary to determine how much has been contributed by the partners. 2. In the case of immovable property, the partnership made in the inventory of said property.