Business-Laws-and-Regulations- Partnership PDF

Preview

Summary

La o PatneshiARTICLE 1767. By the contract of partnership two or more persons bind 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 forthe exercise of a profession. ● t...

Description

Business Laws and Regulations: Module 1

La o Patneshi ARTICLE 1767. By the contract of partnership two or more persons bind 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. ● two or more persons — hindi ka pwedeng bumuo ng partnership kung mag-isa ka lang. Pwedeng 100 yung partners mo dahil “or more” ● Ano ang mga maaari ipangakong ibigay ng isang partner? ○ He can either contribute money, property or industry to a common fund. ● Dividing the profits among themselves — kaya ka pumapasok sa isang partnership ay para kumita ● Maaaring gumawa ng partnership for the exercise of a profession katulad ng law firms, accounting firms. ○ Partnership engaged in the exercise of profession: GENERAL PROFESSIONAL PARTNERSHIP A profession has been defined as “a group of men pursuing a learned art as a common calling in the spirit of public service — no less a public service because it may incidentally be a means of livelihood.” Strictly speaking, the practice of a profession is not a business or an enterprise for profit. However, the law allows the joint pursuit thereof by two or more persons as partners. In such case, it is the individual partners, and not the partnership, who engage in the practice of the profession and are responsible for their own acts as such. The law does not allow individuals to practice a profession as a corporate entity. Personal qualifications for such practice cannot be possessed by a corporation. Characteristic Elements of Partnership The contract of partnership is: (1) Consensual, because it is perfected by mere consent, that is, upon the express or implied agreement of two or more persons; ● Can a contract of partnership be perfected orally or it must always be in writing? ○ A contract of partnership can be perfected orally (by mere consent). ○ Tumungo or mag-handshake lang kayo as long as may consent ng parties, you can be considered as partners na. ■ Although there are certain forms of partnership na dapat written. (2) Nominate, because it has a special name or designation in our law; ● May naibigay na pangalan ang batas sa partnership: CONTRACT OF PARTNERSHIP (3) Bilateral, because it is entered into by two or more persons and the rights and obligations arising therefrom are always reciprocal; ● Bilateral - dalawa o mahigit na tao (4) Onerous, because each of the parties aspires to procure for himself a benefit through the giving of something; ● Ang pagsali sa isang partnership ay onerous or burdensome. ○ Bago ka tanggapin sa isang partnership, kailangan mo munang may ibigay o mag-contribute ng money, property, industry or services. Kapag wala kang maibigay hindi ka pwedeng sumali sa isang partnership. Mariel Enriquez

Business Laws and Regulations: Module 1

(5) Commutative, because the undertaking of each of the partners is considered as the equivalent of that of the others; ● The contribution of each partnership is considered as equivalent (equal or enough na) of the contribution of the other partners (6) Principal, because it does not depend for its existence or validity upon some other contracts; and ● Hindi kailangan mag depend ng contract of partnership sa iba pang kontrata. Hindi ito accessory contract. (7) Preparatory, because it is entered into as a means to an end, i.e., to engage in business or specific venture for the realization of profits with the view of dividing them among the contracting parties. ● Other partners enter the contract of partnership as a way or in preparation to enter another contract Essential Features of Partnership The following are the essential features of a partnership contract: (1) There must be a valid contract; (2) The parties (two or more persons) 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; and (5) The primary purpose must be to obtain profits and to divide the same among the parties. It is also required that the articles of partnership must not be kept secret among the members; otherwise, the association shall have no legal personality and shall be governed by the provisions of the Civil Code relating to co-ownership. - Ang tawag sa contract ng partners ay ARTICLES OF PARTNERSHIP or ARTICLES OF CO-OWNERSHIP Existence of a Valid Contract (1) Partnership relation fundamentally contractual. — Partnership is a voluntary relation created by agreement of the parties. It excludes from its concept all other associations which do not have their origin in a contract, express or implied. There is no such thing as a partnership created by law or by operation or implication of law alone. Religious societies, conjugal partnerships, and others of a similar nature are not, therefore, included as they are not created by the express or implied contract of the parties. Actually, the partnership relation is not the contract itself, but the result of the contract. (a) Form. — The relation is evidenced by the terms of the contract which may be oral or written, express or implied from the acts and declarations of the parties, subject to the provisions of Articles 1771 to 1773 and to the Statute of Frauds. (infra.) Thus, an election to become a member of a partnership was held sufficient to render a member a “partner,” there being no necessity that the member should sign any articles of partnership. (b) Articles of Partnership. — While the partnership relation may be informally created and its existence proved by manifestations of the parties, it is customary to embody the terms of the association in a written document known as “Articles of Partnership” stating the name, nature or purpose and location of the firm, and defining, among others, the powers, rights, duties, and

Mariel Enriquez

Business Laws and Regulations: Module 1

liabilities of the partners among themselves, their contributions, the manner by which the profits and losses are to be shared, and the procedure for dissolving the partnership. (c) Requisites. — Since partnership is fundamentally contractual, all the essentials of a valid contract must be present. Under the law, the following requisites must concur: 1) Consent and capacity of the contracting parties; 2) Object which is the subject matter of the contract; and 3) Cause which is established. Obviously, a person cannot enter into a contract of partnership solely with himself; there must be at least two competent parties. As in other cases of contracts, in order to make an agreement for a partnership valid, there must be a valid consideration existing as between the partners. Each partner surrenders to the partnership an interest in his property, labor, skill, or energy, in accordance with the express or implied stipulations of their mutual agreement. (2) Partnership relation fiduciary in nature. — Partnership is a form of voluntary association entered into by the associates. It is a personal relation in which the element of delectus personae exists, involving as it does trust and confidence between the partners. ● Delectus Personae: choice of the person, may kakayahan at karapatan kang piliin kung sino ang gusto mo maging ka-partner. ○ Hindi ka pwedeng pilitin na maging ka-partner ang isang tao kung wala kang tiwala sa kanya dahil ang ginagawa ng isang partner ay maaring makaapekto sa kapwa partner niya. (a) Right to choose co-partners. — Unless otherwise provided in the partnership agreement, no one can become a member of the partnership association without the consent of all the other associates. The fiduciary nature of the partnership relation and the liability of each partner for the acts of the others within the scope of the partnership business require that each person be granted the right to choose with whom he will be associated in the firm. (b) Power to dissolve partnership. — Neither would the presence of a period for its specific duration or the statement of a particular purpose for its creation prevent the dissolution of any partnership by an act or will of a partner. Among partners, mutual agency arises and the doctrine of delectus personae allows them to have the power, although not necessarily the right, to dissolve the partnership. Verily, any one of the partners may, at his sole pleasure, dictate a dissolution of the partnership at will. He must, however, act in good faith, not that the attendance of bad faith can prevent the dissolution of the partnership but that it can result in a liability for damages. (c) Application of principles of estoppel. — A partnership liability may be imposed upon a person under principles of estoppel where he holds himself out, or permits himself to be held out, as a partner in an enterprise. In such cases, there is no actual or legal partnership relation but merely a partnership liability imposed by law in favor of third persons.

Mariel Enriquez

Business Laws and Regulations: Module 1

Legal Capacity of the Parties to Enter into the Contract (1) Individuals. — Before there can be a valid contract of partnership, it is essential that the contracting parties have the necessary legal capacity to enter into the contract. As a general rule, any person may be a partner who is capable of entering into contractual relations. Consequently, any person who cannot give consent to a contract cannot be a partner. Hence, the following cannot give their consent to a contract of partnership: (a) Unemancipated minors; (Dapat at least 18 years old) (b) Insane or demented persons; (Mga baliw at nasisiraan ng ulo) (c) Deaf-mutes who do not know how to write; (d) Persons who are suffering from civil interdiction; and (Civil interdiction: karagdagang parusa sa mga nakukulong, hindi nila pwedeng i-manage yung mga assets nila sa labas ng kulungan) (e) Incompetents who are under guardianship. Under Article 1782, persons who are prohibited from giving each other any donation or advantage cannot enter into a universal partnership. A married woman may enter into a contract of partnership even without her husband’s consent, but the latter may object under certain conditions. (2) Partnerships. — There is no prohibition against a partnership being a partner in another partnership. When two or more partnerships combine with each other (or with a natural person or persons) creating a distinct partnership, say, partnership X, all the members of the constituent partnerships will be individually liable to the creditors of partnership X. (3) Corporations. — The doctrine adopted by our Supreme Court is that, unless authorized by statute or by its charter, a corporation is without capacity or power to enter into a contract of partnership.

ARTICLE 1768. The partnership has a juridical personality separate and distinct from that of each of the partners, even in case of failure to comply with the requirements of article 1772, first paragraph. ● Once mag-invest ka ng property sa isang partnership, yung property na iyon ay pag mamay-ari na ng partnership at hindi mo na ito personal property. ARTICLE 1769. In determining whether a partnership exists, these rules shall apply: (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; ● Co-ownership: Dalawa kayong may-ari sa isang bagay. ○ Reasons bakit nagkakaroon ng co-ownership — nag-aambagan para makabili ng isang bagay (not necessary na partners na kayo) or may ipinamang bagay yung magulang mo sa inyong magkakapatid (co-owner kayo nung bagay na iyon)

Mariel Enriquez

Business Laws and Regulations: Module 1

Ex. Ipinama sa inyo ay isang apartment at after mamatay ng magulang mo ay kayong magkakapatid na ang kumukuha ng renta amounting to 60k, kaya may kita kayo na tig 20,000. ■ Question: Dahil ba pinaghahatian niyo na ang kita ng apartment na ipinama sa inyo, maari niyo na bang i-consider na may partnership kayong magkakapatid? NO, mere distribution nung kita ng property is not sufficient proof that a partnership was already established. At most, co-ownership lang ang meron sila dahil itinutuloy lang nila ang nasimulan ng magulang nila. ■ Kelan ito maaring maging isang partnership? Kapag nag-decide yung magkakapatid na mag-contribute ng additional money at magdagdag ng isang floor sa apartment to earn more profit. (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 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 amount 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. ○

ARTICLE 1770. A partnership must have a lawful object or purpose, and must be established for the common benefit or interest of the partners. When an unlawful partnership is dissolved by a judicial decree, the profits shall be confiscated in favor of the State, without prejudice to the provisions of the Penal Code governing the confiscation of the instruments and effects of a crime. ● Bawal gumawa ng partnership para gumawa ng mga illegal na bagay. ● Common benefit or interest: lahat ng partners ay may share sa kita ARTICLE 1771. A partnership may be constituted in any form, except where immovable property or real rights are contributed thereto, in which case a public instrument shall be necessary. ● A partnership is consensual because it can be perfected by mere consent, pwedeng oral (in any form). ● Except pag nag-contribute ng immovable objects such as building or land, kailangan in the form of written contract at dapat public instrument — dapat notarized yung contract of partnership niyo. ARTICLE 1772. Every contract of partnership having a capital of three thousand pesos or more, in money or property, shall appear in a public instrument, which must be recorded in the Office of the Securities and Exchange Commission. Failure to comply with the requirements of the preceding paragraph shall not affect the liability of the partnership and the members thereof to third persons.

Mariel Enriquez

Business Laws and Regulations: Module 1

●

mababa yung total dahil itong article ay ginawa pa noong 1950 kung saan mataas na ang value ng 3k Hindi maapektuhan ang liability or utang ng partnership sa third persons kahit hindi nila magawang in public instrument yung contract nila.

ARTICLE 1773. A contract of partnership is void, whenever immovable property is contributed thereto, if an inventory of said property is not made, signed by the parties, and attached to the public instrument. ● Nagiging void ang contract of partnership kapag walang inventory ng mga immovable property na binigay ng isang partner at kung hindi ito napirmahan ng parties at hindi naka-attach sa public instrument ARTICLE 1774. Any immovable property or an interest therein may be acquired in the partnership name. Title so acquired can be conveyed only in the partnership name. ● A partnership has a personality, distinct and separate from the partners ● Being a juridical entity kaya niyang mag-acquire ng property or pumasok sa ibang contract under its name ARTICLE 1775. Associations and societies, whose articles are kept secret among the members, and wherein any one of the members may contract in his own name with third persons, shall have no juridical personality, and shall be governed by the provisions relating to co-ownership. ARTICLE 1776. As to its object, a partnership is either universal or particular. As regards the liability of the partners, a partnership may be general or limited. Classifications of Partnership As to object: ● Two kinds of Universal Partnership: ○ Universal Partnership of all present property ■ All the present property belonging to the partners at the time of constitution are contributed to the partnership which become the common property of all partners ■ The contributions of the partners here are the ff: ● All properties actually belonging to the partners ● The profits acquired with said properties ○ Universal Partnership of profits ■ Only the usufruct (use of and fruits) of the properties of the partners become common property of all the partners and the partnership As to liability of partners ● General Partnership: consists of general partners who are liable pro rata and subsidiarily and sometimes solidarily with their separate property for partnership debts ○ ALL are general partners ○ General Partners - liable up to the extent of their personal property (pwedeng habulin hanggang sa kanilang sari-sariling arian)

Mariel Enriquez

Business Laws and Regulations: Module 1

Limited partnership: one formed by 2 or more persons having as members one or more general partners and one or more limited partners, the latter not being personally liable for the obligations of the partnership ○ Dapat may at least isang general partner ○ Limited partner - liable up to the extent of their investment to the partnership As to duration ● Partnership at will: one in which no time is specified and is not formed for a particular undertaking or venture which may be terminated anytime by mutual agreement ● Partnership with a fixed term: term for which the partnership is to exist is fixed or agreed upon or one formed for a particular undertaking As to legality of existence ● De Jure Partnership: one which has complied with all the legal requirements for its establishment ● De Facto: one which has failed to comply with all the legal requirements for its establishment As to representation to others ● Ordinary or Real Partnership: one which actually exists among the partners and also as to 3rd persons ○ Meron talagang partnership at ipinapaalam niyo sa iabng tao na partners kayo ● Ostensible or 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 omission, are precluded to deny or disprove its existence ○ Hindi talaga kayo partners pero nagpapakilala kayo as such As to publicity ● Secret Partnership: one wherein the existence of certain persons as partners is not avowed or made known to the public by any of the partners ○ May mga partners kayo na hindi niyo ipinapaalam sa ibang tao na kasama niyo ● Open of Notorious Partnership: one whose existence is avowed or made known to the public by the members of the firm ○ Alam ng public kung sino ang mga partners As to purpose ● Commercial or Trading Partnership: one formed for the transaction of business ● Professional or Non trading Partnership: one formed for the exercise of a profession ●

1. 2. 3. 4. 5. 6.

Kinds of Partners Capitalist - one who contributes money or property to the common fund Industrial - one who contributes only his industry or personal service ● Capitalist-Industrial Partner: nag-invest ka ng pera at service General - one whose liability to 3rd persons extends to his separate property Limited or Special - one whose liability to 3rd persons is limited to his capital contribution (up to his investment only) Managing - one who manages the affairs or business of the partnership Liquidating - one who takes charge of the winding up of partnership affairs upon dissolution (ikaw ay naatasan na mag benta ng assets ng partnership kapag nalugi kayo)

Mariel Enriquez

Business Laws and Regulations: Module 1

7. Real Partners - partners in an existing legal partnership 8. Partners by Estoppel or Qua...