1

PARTNERSHIP
A CONTRACT WHEREBY TWO OR MORE PERSONS BIND THEMSELVES TO
CONTRIBUTE MONEY, PROPERTY, OR INDUSTRY INTO A COMMON
FUND WITH THE INTENTION OF DIVIDING THE PROFITS AMONG
THEMSELVES
Article 1767 Civil Code of the
Philippines

2
CHARACTERISTICS OF A PARTNERSHIP
UNLIMITED
LIABILITY
MUTUAL
AGENCY
LIMITED
LIFE
MUTUAL
PARTICIPATION
IN PROFITS
CO-
OWNERSHIP
OF
PROFPERTY
LEGAL
ENTITY
INCOME
TAX
3
ADVANTAGES OF A PARTNERSHIP
EASY AND
INEXPENSIVE TO
ORGANIZE
EASY CREDIT DUE TO
UNLIMITED LIABILITY
COMBINED
PERSONAL
LIABILITIES OF
PARTNERS
MEANSEASY ACCESS
TO CAPITAL
CLOSER
SUPERVISION OF ALL
PARTNERSHIP
ACTIVITIES
PERSONAL ELEMENT
IN THE CHARACTERS
OF THE PARTNERS IS
RETAINED
4
DISADVANTAGES OF A PARTNERSHIP
UNLIMITED LIABILITY
DETERS THE
CAPITALIST TO
INVEST
WRONGFUL ACTS OF
A PARTNER MAY
SUBJECT THE
OTHERS TO
PERSONAL
LIABILITIES
CAN EASILY BE
DISSOLVED
LESS STABLE
DIVIDED AUTHORITY
AMONG PARTNERS
THE LIKELIHOOD OF
DISSENSION AND
DISAGREEMENT
5
6
AS TO ACTIVITY
7
TRADING
NON TRADING
AS TO OBJECT
8
UNIVERSAL PARTNERSHIP
OF ALL PROPERTIES
UNIVERSAL PARTNERSHIP
OF ALL PROFITS
PARTICULAR
PARTNERSHIP
AS TO LIABILITY OF PARTNERS
GENERAL PARTNERSHIP
Majority of the partners have unlimited
liability
LIMITED PARTNERSHIP
Majority of the partners have limited
liability
9
AS TO DURATION
PARTNERSHIP AT WILL
PARTNERSHIP WITH A FIXED TERM
10
ORDINARY PARTNERSHIP
PARTNERSHIP BY ESTOPPEL
11
AS TO LEGALITY OF EXISTENCE
DE JURE PARTNERSHIP
Has complied with all requirements for its
establishment
DE FACTO PARTNERSHIP
Has failed to comply with the requirements
(one or more) for its establishment
12
AS TO PUBLICITY
SECRET PARTNERSHIP
The existence of certain partners are not
known
OPEN PARTNERSHIP
Names of certain persons or partners are
made known to the public by the firm
13
14
AS TO CONTRIBUTION
CAPITALIST INDUSTRIAL
INDUSTRIAL-
CAPITALIST
15
AS TO LIABILITY
GENERAL PARTNER
LIMITED PARTNER
16
AS TO MANAGEMENT

MANAGING PARTNER
SILENT PARTNER
Does not participate in the management of
partnership affairs
17
OTHER CLASSIFICATIONS
LIQUIDATING
PARTNER
in charge of liquidating
parnterhship affairs
OSTENSIBLE
PARTNER
Active in the
management and
is known as a
partner
SECRET
PARTNER
Active in
management but
not known as a
partner
NOMINAL
PARTNER
Partner in name
only.
For the protection
of the real partner
DORMANT
PARTNER
Not active in
management and
both secret and
silent partner
18
ARTICLES OF CO-PARTNERSHIP
19
Name of the Partnership
Names and addresses of the
partners, classes of partners,
Effective date of the contact
ARTICLES OF CO-PARTNERSHIP
20
The purpose or purposes and
principal place of business
Names and addresses of the
partners, classes of partners,
Rights and duties of each
partner
ARTICLES OF CO-PARTNERSHIP
21
The manner of dividing profits and losses among
partners including allowance and interest
The conditions under which the partners may
withdraw money or other assets for personal use
The manner of keeping the books of accounts
ARTICLES OF CO-PARTNERSHIP
Causes for dissolution
Provision of the arbitration in settling
disputes
22
PLACE FOR
REGISTRATION
REQUIREMENTS FOR
REGISTRATION

CERTIFICATES ISSUED
Securities and Exchange
Commission
Articles of Co-Partnership
Filled SEC Registration
Form

SEC Certificate
23
PLACE FOR
REGISTRATION
REQUIREMENTS FOR
REGISTRATION

CERTIFICATES ISSUED
Securities and Exchange
Commission
Articles of Co-Partnership
Filled SEC Registration
Form

SEC Certificate
Department of Trade and
Industry
Articles of Co-Partnership
SEC Certificate
Certificate of Registration
of Business name (
renewable every 5 years)
24
PLACE FOR
REGISTRATION
REQUIREMENTS FOR
REGISTRATION

CERTIFICATES ISSUED
Securities and Exchange
Commission
Articles of Co-Partnership
Filled SEC Registration
Form

SEC Certificate
Department of Trade and
Industry
Articles of Co-Partnership
SEC Certificate
Certificate of Registration
of Business name (
renewable every 5 years)
City or Municipal Mayors
Office
Certificate of Registration
of Business Name
Mayors Permit and
License to Operate
(renewable annually)
25
PLACE FOR
REGISTRATION
REQUIREMENTS FOR
REGISTRATION

CERTIFICATES ISSUED


Bureau of Internal
Revenue


SEC Registration
Articles of Co-Partnership
BIR Registration No.
Tax identification No.
Registration of books, invoices, and
official receipts
26
PLACE FOR
REGISTRATION
REQUIREMENTS FOR
REGISTRATION

CERTIFICATES ISSUED


Bureau of Internal
Revenue


SEC Registration
Articles of Co-Partnership
BIR Registration No.
Tax identification No.
Registration of books, invoices, and
official receipts
Social Security
System
Filled SSS Application Form
List of Employees
SSS Certificate of Membership
SSS Employee ID Number
27
PLACE FOR
REGISTRATION
REQUIREMENTS FOR
REGISTRATION

CERTIFICATES ISSUED


Bureau of Internal
Revenue


SEC Registration
Articles of Co-Partnership
BIR Registration No.
Tax identification No.
Registration of books, invoices, and
official receipts
Social Security
System
Filled SSS Application Form
List of Employees
SSS Certificate of Membership
SSS Employee ID Number
Philhealth Insurance
Corp.
SEC Registration
Employee Data Record
Philhealth Employer Number and
Certificate of Registration
Philhealth Identification Number and
member Data Record
28
PLACE FOR
REGISTRATION
REQUIREMENTS FOR
REGISTRATION

CERTIFICATES ISSUED


Bureau of Internal
Revenue


SEC Registration
Articles of Co-Partnership
BIR Registration No.
Tax identification No.
Registration of books, invoices, and
official receipts
Social Security
System
Filled SSS Application Form
List of Employees
SSS Certificate of Membership
SSS Employee ID Number
Philhealth Insurance
Corp.
SEC Registration
Employee Data Record
Philhealth Employer Number and
Certificate of Registration
Philhealth Identification Number and
member Data Record
PAG_IBIG Fund SEC Registration
Articles of Co-Partnership

PAG-IBIG Fund Certificate of
Membership
PAG-IBIG Fund Employer ID No.
29
30
ASSETS
Current Assets
Cash P 993,000.00
Trade and other receivables ( note1) 42,000.00
Prepaid expenses ( Note 2) 56,000.00
1,091,000.00
Non- Current Assets
Plant, property and equipment (Note 3) 585,000.00
Total assets P 1,676,000.00
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities
Trade and other payables (note 4) P 64,000.00
Partners' Equity
Marie, capital P 806,000.00
Rodario, capital 806,000.00 1,612,000.00
TOTAL LIABILITIES & PARTNERS' EQUITY P 1,676,000.00
32
Unadjusted Adjusted Increase/(Decrease)
Trade and other receivables* 5,000.00 8,000.00 (3,000.00)
Supplies inventory 38,000.00 36,000.00 (2,000.00)
Building 300,000.00 280,000.00 (20,000.00)
Sewing Equipment 225,000.00 220,000.00 (5,000.00)
Furniture and fixtures 82,000.00 85,000.00 3,000.00
(27,000.00)
# Trade and other receivables
Accounts receivable 50,000.00 50,000.00
Allowance for doubtful
Accounts 5,000.00 8,000.00
Net realizable value 45,000.00 42,000.00
FORMS OF INVESTMENT
CASH FACE VALUE
NON- CASH ASSETS AGREED VALUE / FAIR MARKET VALUUE / BOOK
VALUE
SERVICES

33
EXERCISE 1-4 CASE A
34
DR CR
Cash 500,000.00
Equipment 45,000.00
Rose, capital 545,000.00
Investment of Rose
EXERCISE 1-4
35
Furniture and fixtures 100,000.00
Guada, capital 100,000.00
Investment of Guada
EXERCISE 1-4
36
Marie, capital
Marie invested her
management expertise
in the business.
EXERCISE 1-4 CASE B
37
Building 1,500,000.00
Office equipment 30,000.00
Mortgage payable 300,000.00
Romy, capital 1,230,000.00
Investment of Romy
CASE B
Cash 550,000
Office equipment 220,000
Furniture and fixtures 50,000
Vic, capital 820,000
Investment of Vic
Computation:
Romy, capital 1,230,000.00
Romy's interest 60%
Total partners' equity 2,050,000.00
Vic' interest 40%
Vic, capital 820,000.00
Vic's investment 270,000.00
Vic's additional investment 550,000.00
EXERCISE 1-4
38
39
CASE C
DEBIT CREDIT
Cash 205,000.00
Accounts receivable 95,000.00
Allowance for doubtful accounts 10,000.00
Office supplies 12,000.00
Office equipment 320,000.00
Furniture and fixtures 140,000.00
Rosario, capital 320,000.00
Guadalup, capital 225,000.00
Maria, capital 217,000.00
772,000.00 772,000.00
RGM PARTNERSHIP
STATEMENT OF FINANCIAL POSITION
JULY 4, 2012
40
ASSETS
Current Assets
Cash P 205,000.00
Trade and other receivables (Note 1) 85,000.00
Office supplies 12,000.00
Total 302,000.00
Non-current assets
Plant property and eequipment note 2) 460,000.00
Total Assets P 762,000.00
PARTNERS' EQUITY
Rosario, capital P 320,000.00
Guadalupe, capital 225,000.00
Maria, capital 217,000.00
P 762,000.00