TOPIC 1: PARTNERSHIP
ARTICLE 1767: By the contract of Partnership Vs Corporation
partnership two or more persons bind
1. Easier to organize
themselves to contribute money,
2. Less requirements
property, or industry to a common fund,
with the intention of dividing the profits Disadvantages
among themselves.
1. Easily dissolved
Two or more persons may also form a 2. Creates personal obligations
partnership for the exercise of a 3. Less effective than corp. To raise
profession. capital
Underlying Principle:
PARTNERS CORPORATI
Affectio Societatis - Intention to form a HIP ON
partnership
Manner of Agreement Operation of
Delectus Personae - Choice of the creation Law
person
No. of 2 or more 1; not more
partners than 15
Characteristic of Partnership (MUSCLE) Commencem Art. of Cert. of
ent of partnership incorporatio
1. Mutual Agency juridical n
personality
2. Unlimited Liability
Management GR: All
3. Separate Juridical Personality partners
4. Co-ownership are agent
XPN: BOD
- Property Managing
partner
-Profits
Extent of Personal Investment
5. Limited Life Liab. Assets
6. Ease of Formation Right of X /
succession
Terms of As agreed GR:
Characteristic:
existence Perpetual
1. Consensual - Formed by mere XPN: AOI
agreement between the parties (specific)
2. Bilateral - Creates mutual rights and
obligations among the partners Establishment of Partnership:
3. Nominal - Contract with a specific General: Any Form
name and is recognized by law
Exception:
4. Principal - Independently and does not
1. Immovable Property
depend on another contract.
2. 3000 or more capital
5. Onerous - Formed for the purpose of
obtaining profit or benefit
Classification of Partnership
1. As to object
Advantages
1.1 Universal partnership of all
Partnership Vs Sole Proprietorship
present property
1. Greater financial capability
1.2 Universal partnership of all
2. Combines skills and expertise
present profits
3. Management
2. As to Liability
2.1 General TOPIC 2: PARTNERSHIP FORMATION
2.2 Limited I. VALUATION OF CONTRIBUTION
1. CASH
3. As to Duration
- Local Currency @
3.1 With a fixed term Face Amount
- Foreign Currency @
3.2 At will Current exchange
4. As to Purpose rate
4.1 Commercial
4.2 Professional 2. NON CASH ASSETS
A. Agreed Value
5. As to Legality of Existence B. Fair Market Value
5.1 De jure C. Carrying Value/Book
Value
5.2 De facto
3. LIABILITIES
- Only if assumed
Kinds of Partners (must be
specifically stated)
1. General - manages the business
and is personally liable for all ↪️IF SILENT : AV = FMV
partnership debts.
2. Limited - contributes capital but ↪️CONTRA ASSET :
has liability limited to their - Allowance for Doubtful Accounts
investment and does not manage. - Accumulated Depreciation
3. Capitalist - Contributes money or
property to the partnership.
4. Industrial - Contributes only skills II. FORMATION
or services, not money or
property. 1. 2 OR MORE INDIVIDUALS
5. Managing - Responsible for 2. INDIVIDUAL/S + SP
running the daily operations of 3. SP + SP
the partnership. 4. ADMISSION OF A NEW PARTNER
6. Liquidating - Assigned to wind up
the partnership affairs after
dissolution.
7. Dormant - Not active but known
8. Silent - Invests, no management
participation.
9. Secret - Active but not known
10.Nominal / Partner by Estoppel -
does not actually invest but is
held liable because they appear or
are represented as a partner.
TOPIC 3: PARTNERSHIP DISSOLUTION
- Change in the relationship of the
partners in the partnership
A. ADMISSION OF A NEW PARTNER
1. Purchase of Interest
I. ALL
II. SPECIFIC
2. Investment
I. BONUS METHOD
(TCC=TAC)
II. REVALUATION
METHOD (TCC≠TAC)
- TCC>TAC =
OVERVALUED
ASSETS
- TCC<TAC=
UNDERVALUE
D ASSETS
B. WITHDRAWAL OF AN EXISTING/ OLD
PARTNER
1. RETIREMENT
➡️
2. DEATH
SETTLEMENT > INTEREST = BONUS
➡️
TO RETIRING
SETTLEMENT < INTEREST = BONUS
TO REMAINING
C. INCORPORATION
REVALUATION MUST BE EXPLICITLY
STATED!