BUSINESS LAWS.docx - BUSINESS LAWS The Law on Partnership Partnership → A contract whereby two or more persons bind themselves to contribute money

BUSINESS LAWS.docx - BUSINESS LAWS The Law on Partnership...

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BUSINESS LAWS The Law on Partnership Partnership → 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. Two or more persons may also form a partnership for the exercise of a profession. What are the relations created by a contract of partnership? 1. Relations among the partners themselves; 2. Relations of the partners with the partnership; 3. Relations of the partnership with third persons with whom it contracts; and 4. Relations of the partners with such third persons. Characteristics of a contract of partnership 1. Consensual 2. Principal 3. Bilateral or multilateral 4. Nominate 5. Preparatory 6. Onerous 7. Commutative Essential requisite of partnership 1. There must be a valid contract 2. There must be a mutual contribution of money, property or industry to a common fund 3. It must have a lawful object or purpose 4. The partnership must be established for the common benefit or interest of the partners What is the legal effect of the receipt by a person of a share of the profits of a business. Such receipt is prima facie evidence that he is a partner in the business. No such inference, however, shall be drawn if such profits were received in payment: · As a debt by instalments or otherwise; · As wages of an employee or rent to a landlord · As annuity to a widow or a representative of a deceased partner; · As interest on a loan though the amount of payment may vary with the profits of the business; and · As the consideration for the sale of goodwill of a business or other property by instalments or otherwise. Form of a partnership contract A partnership contract may be constituted in any form except as follows: 1. Where the immovable property or real rights are contributed to the partnership a. The partnership contract must be in a public instrument; and b. An inventory of the said property must be made, signed by the parties and attached to the public instrument. Effect if above requirements are not complied with a. The partnership contract is void. b. The partnership will not have any juridical personality. 2. Where the capital of the partnership is P3, 000.00 or more, in money or property. a. The partnership contract must be in a public instrument, and b. Registered with the Securities and Exchange Commission
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Effect if the above requirements are not complied with a. The partnership contract is still valid. Accordingly, the partnership still acquires juridical personality. b. The liability if the partnership and the members thereof to third persons are not affected. Who may become partners 1. Any natural persons who is capacitated may become a partner 2. A partnership may enter into another partnership with individuals or other partnership as there is no prohibition thereto.
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  • Winter '15
  • Arnie Dris

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