Definitions of partnership

Contract, association, legal relation, joint undertaking, status arising out of a contract, organization,
entity.

Partnership for the exercise of a profession

Definition of profession- calling, whole body

GPP

Fiduciary relation
Voluntary association= element of delectus personae (involves trust and confidence)
-Right to choose co-partners- mutual agency
-Power to dissolve partnership- period/purpose. One-good faith

Essential features of a partnership

MVPLL, not kept secret
*existence of a valid contract= voluntary & personal association, creation & proof
*legal capacity of parties= valid consent, partnership, corporation
*legality of object= contrary-void ab initio
*intention to realize and divide profit
*mutual contribution= Contributions must be equal unless there is stipulation to the contrary

Juridical personality
-distinct and separate from the partners
-art 1772 (3000 failure public instrument & SEC) /juridical
-art 1773- no inventory=void,
-art 1775- article kept secret= void
-conveyance of property

Existence of partnership
-in case of doubt 1769 shall apply, existence may be questioned by an affected party
*persons not partners to each other- estoppel
*co-ownership/co-possession- profits must be from operation/undertaking not merely ownership
*sharing of gross returns- equal voice as a proprietor
*receipt of share in profit/loss

Partnership vs co-ownership CJPDDDA

*Creation= by contract | by law
*Juridical personality= has | has none
*Purpose= realization & division of profits | common enjoyment
*Duration= unlimited | not more than 10 yrs.
*Disposal of interest= may not | may
*act with third person= may | may not
*effect of death= dissolution | none

Partnership vs CPG
-CPG= husband and wifes fruits & income into a common fund
*parties= 2 or more from either sex | man and woman
*laws which govern= stipulation | family code
*juridical personality= has | has none
*commencement= execution of the contract | celebration of marriage
*purpose= obtain profits | regulate property relations
*distribution of profits= agreement | equally
*management= both | husband
*disposition of interest= may | may not even with consent

Partnership vs voluntary associations

*juridical personality= has | has none
*purpose= profit | moral/social
*contributions of members= capital | no contribution, fees only
*liability of members= partnership | members

Object or purpose of partnership

-object must be lawful and for the common interest of partners
*effects of unlawful partnership= void ab initio, profits confiscated, instrument & proceeds forfeited,
contributions not confiscated unless part of instrument
*dissolution of unlawful= judicial decree not necessary but may be secured for convenience

Form of partnership contract

General rule- no special form required= oral/in writing
Immovable property/real right- public instrument, inventory
Importance of inventory= how much is due, without which public instrument is useless
Capital exceeds 3000= public instrument- SEC

Articles kept secret

-not partnerships, governed by provisions relating to co-ownership
-important for the protection of partners and third persons

Classification of partnerships
Extent of subject matter
-Universal partnership
*Prohibited from giving each other donation- cannot enter
-Present property= current property & profit
Future by inheritance, legacy, or donation- not included except fruits
-Profits= what they may acquire by industry/work & usufruct.
Partners retain ownership
Acquired by chance-not included
Fruits of property not included unless stipulated
Assumed if silent
-Particular partnership=determinate things us or fruits, undertaking, profession
Liability of the partners
General= liable pro rata and subsidiarily, sometimes solidarily
Limited=1+ limited, 1+ general, 2+ members
Duration
At will= may be terminated or continued at will
With a fixed term= has period or undertaking-dissolved. Unless continued
Legality of its existence
De jure= complied with all legal requirements
De facto= failed to comply with all legal requirements
Representation to others
Ordinary or real= actually exist among partners and third persons
Ostensible or by estoppel=mislead parties
Publicity
Secret= existence of other partners not known
Open or notorious
Purpose
Commercial or trading= transaction of business
Professional or non-trading= exercise of a profession
Kinds of partners
Under the civil code SLICEGM
-Surviving=remains after death
-Subpartner
-Limited=liability up to capital contribution, also called special, not involved in management
-Liquidating= in charge of winding up
-Industrial= industry/personal service
-Capitalist=money or property
-Continuing= continues after dissolution
-By estoppel=also known as quasi-partner or nominal, not really a partner, liable as a partner
-General= liable up to his personal property
 -Manager=manages the partnership, also called general or real
Other classifications DORIS
-Dormant=not active, not known
-Ostensible= active and known
-Original= member from time of its organization
-Retiring= withdrawing
-incoming= about to be
-Secret= active, not known
-Silent=not active, known
Relations created by a contract of partnership
Among partners
Partners with partnership
Partnership with third persons
Partners with third persons

Commencement of partnership
From the time of execution, consensual (not absolute- future, agreement, do not agree on material
terms)
Essential requisites must be present

Continuation of partnership beyond fixed term

May be extended or renewed expressly (orally or written) or impliedly. The rights and duties remains
the same.
Partnership for a fixed term is dissolved and a new partnership at will is created

Obligations w/ respect to contribution of property FEWBIP

Contribute at the beginning/stipulated time
Answer for eviction
Fruits of the property that should have been contributed
Preserve said property w/ diligence of a good father
Indemnify the partnership for damage caused
Property will be owned by the partnership and cannot be withdrawn w/o consent

W/ respect to contribution of money

Contribute at the date due
Reimburse money converted to personal use
Pay agreed interest, indemnify for damages (from the time he should have made the contribution)

W/ respect to contribution of service

Industrial partner becomes debtor
If he engages for himself- prejudicial, absolute
Remedy of other capitalist partner= exclude him or avail benefits he may have obtained

Effect of failure to contribute property

Partner becomes debtor even without demand
Remedy of other partner
Specific performance with interest and damage
Rescission or annulment on ground of fraud
Eviction governed by law on sales
Appraisal of goods or property contributed
Needed because-In the absence of stipulation, basis for share in profit/loss
Appraisal made- 1st=contract of partnership 2nd=experts

Imminent loss
Capitalist partner obligated to contribute more or he shall be obliged to sell his interest to other partner.
Requisites: (NROI) no agreement not oblige to contribute, refusal to contribute, opinion to contribute,
imminent loss
Obligation of managing partner who collects debt
Person indebted to partnership and managing partner. Any amount received shall be applied to both
credits in proportion to their amounts unless amount received is for partnership only.
Requisites:
2 debts: partner & partnership
Both demandable
Partner actually manages
If the partners debt is more onerous payment may be applied to him

Obligation of partner who receives share of partnership credit

Partner is obliged to return if debtor becomes insolvent
Requisites:
A partner received his share (whole or part)
Others have not collected theirs
Debtor becomes insolvent