04 UST Golden Notes - Partnership.pdf - PARTNERSHIP PARTNERSHIP 6 I CONTRACT OF PARTNERSHIP 7 A DEFINITION 8 Q What is partnership A A contract whereby

04 UST Golden Notes - Partnership.pdf - PARTNERSHIP...

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P ARTNERSHIP PARTNERSHIP U N I V E R S I T Y O F S A N T O T O M A S F a c u l t a d d e D e r e c h o C i v i l A CADEMICS C HAIR : L ESTER J AY A LAN E. F LORES II V ICE C HAIRS F OR A CADEMICS : K AREN J OY G. S ABUGO & J OHN H ENRY C. M ENDOZA V ICE C HAIR FOR A DMINISTRATION AND F INANCE : J EANELLE C. L EE V ICE C HAIRS FOR L AY O UT A ND D ESIGN : E ARL L OUIE M. M ASACAYAN & T HEENA C. M ARTINEZ I. CONTRACT OF PARTNERSHIP A. DEFINITION Q: What is partnership? A: A contract whereby 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. Note : Two or more persons may also form a partnership for the exercise of a profession. (Art. 1767, NCC) B. ELEMENTS Q: What are the essential elements of a partnership? A: 1. Agreement to contribute money, property or industry to a common fund (mutual contribution to a common stock); and 2. Intention to divide the profits among the contracting parties (joint interest in the profits). (Evangelista v. Collector of Internal Revenue, G.R. No. L 9996, Oct. 15, 1987). Q: What are the requisites of a partnership? A: ICJ 1. I ntention to create a partnership 2. C ommon fund obtained from contributions 3. J oint interest in dividing the profits (and losses) Q: What are the characteristics of a partnership? A: BON CC PP 1. B ilateral it is entered into by two or more persons and the rights and obligations arising therefrom are reciprocal 2. O nerous each of the parties aspires to procure for himself a benefit through the giving of something 3. N ominate it has a special name or designation in our law 4. C onsensual perfected by mere consent 5. C ommutative the undertaking of each of the partners is considered as the equivalent of that of the others 6. P rincipal its life does not depend on the existence of another contract 7. P reparator y because it is entered into as a means to an end, i.e. to engage in business 8. F iduciary it is based on trust and confidence Q: Jose entered into a verbal agreement with Francisco to form a partnership for the purchase of cascoes for a proposed boat rental business. It was agreed that Francisco would buy the cascoes and each partner is to furnish such amount of money as he could, and that the profits will be divided proportionately. After Francisco purchased a casco with the money advanced by Jose, they undertook to draft the articles of partnership and embody the same in an authentic document. However, they did not come to an agreement. So, Francisco returned the money advanced by Jose, which the latter received with an express reservation of all his rights as a partner. 1. Was there a partnership formed between Jose and Francisco? 2. If such partnership existed, was it terminated by the receipt of Jose of the money he advanced?
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