Business Laws and Regulations (LAW 20023)

Week 2 – Module 2
NICAVERA, Jarell Carven L. BSA 2-4

1. Select at least three legal word or term from the module and define it using your own
words in not less than 100 words each.

Industrial Partner
According to Article 1767, a partnership is existent when two or more persons bind themselves to
contribute cash or money, property, or industry to a common fund, with the intention to divide
profit proportionately among them. The partner who contributes industry, skills, or services is
called the industrial partner. He is considered the owner of his services, which is his contribution
to the common fund. An industrial partner cannot take participation in doing business for himself
unless the partnership allowed him to do so but if he do so, without the partnership’s consent, the
capitalist partners can remove him from the company or avail the benefits which he have gain and
with the right for damages, too.

Capitalist Partner
One of the types of partners of a partnership is the capitalist partner. From its root word “capital”
we already know what it means. A capitalist partner is a partner that contributes cash or money, or
property into the common fund to be utilized by the partnership in order to generate profits to be
divided among the partners. He cannot take participation for his own account in any operation
which is the kind of business in which the business in which the partnership is engaged unless
there is a stipulation in the contrary. If he violates this, all his benefits will be brought to the
common fund and will personally bear the losses.

Manager
In the articles of partnership, a partner can be appointed as the manager by the partners. The
manager may execute all administrative actions and decisions even if when the partners oppose
him unless he is doing things in bad faith. The power of the manager cannot be revoked unless
there is a legal or just basis. The vote of the partners representing the controlling interest can be a
basis to revoke the manager’s power. Additionally, this pawer can be revoked any time. The
partnership can have two or more partners assigned to be the appointed managers to do the
administrative acts.

2. Pick the most important lesson you learned in the module. In 300 words, discuss it and
explain why you consider it as important.

In the second week’s module, the most important lesson that I can extract is that as a member of
the partnership or as a partner, one must take accountability and responsibility for all the actions
and decisions that one has done for and against the contract created by the partners of the
partnership. It was stated that if one who has promised to contribute any sum of money in the
 Business Laws and Regulations (LAW 20023)
Week 2 – Module 2
partnership fails to do so, one becomes a debtor for the interests and damages created by one’s
non-compliance. As a responsible partner, if you have undertaken to contribute any amount to the
partnership, you must comply with it until your due because it may cause unwanted situations for
the partnership in the future. Another one, if you were voted and assigned in managing the
partnership by the other partners in the article of partnership, you have the capability to execute
all administrative actions even against your partners’ oppositions. However, if you will be doing
acts in bad faith, it can drive your partners to revoke your position or even exclude you from the
partnership and take accountability of the damages your devious acts had resulted. One should
always prioritize the welfare of the partnership and your partners. They have given you their trust
to do the administrative management so you shall do your honest actions in accomplishing the
goals of your partnership in order to not just benefit the partnership and its members but to also
gain honor from the effort and good faith you have dedicated in your role as the manager. Lastly,
in dividing the profits and losses of the partnership, the division must be done in accordance to the
agreed ratio but if there is no agreement, it must be divided according to the contribution of the
partners. However, industrial partners cannot be liable for the losses. With this, the partners can
take responsibility of the results the operating activities of the partnership, whether it is a gain or
loss.

3. Contact one of your classmates and copy his/her answer in question no. 2. In 150 words,
comment on whether you agree or not on his/her answer.

The essence of management is the most important key point in this module because without
management it could not bring organizations within the partnership into one goal. Management
supposed to integrate different activities of organization and blends organizations into unified
whole. Not just in partnership but in any form of business needs management to establish vision
for the betterment of their entity.

On a legal basis, the grant to be part of management was based on the decision written in the
Articles of Partnership or be made in an instrument. Appointment based on the Articles of
Partnership happened having an agreement and consent of all. While appointment by means of
instrument, happened by delegation of power or rights.

According to the general rule about management, it should execute all acts of administration
regardless of the opposition of other partners. One of the examples of “acts of administration” is
ensuring the efficient performance of all organizations. Partners that have been part of
administration should have a just or lawful act to their co-partners, should act with good faith, and
should not abuse their power, otherwise their position or rights are revocable. At any time, the
power of who are in the position might took off depending on their action, this might happen based
on the decision of the majority.

I found this as the most important lesson because management establish coordination within the
business. It harmonizes organizations to meet in one purpose, thus it is significant for the
 Business Laws and Regulations (LAW 20023)
Week 2 – Module 2
management to provide clear instructions. Management is the most vital department in the business
that establishes visions and goals and provide motivation to the work force. Hence, if they act in
bad faith, and focus to abuse their position or power, the business will possibly not work towards
the goal and most probably their action could not coordinate.

Comment:

I totally agree with what my classmate think the most important lesson of the module even though
we have different answers. It is true that management is significant in an organization, even in
anything else. Without management, an organization or partnership will lack centralization which
can lead to poor performance and might affect the partnership’s operating activities and generation
of profits. A manager has the power to execute administrative acts in order to maintain the
efficiency of the activities of the partnership regardless of the oppositions of the other partners but
shall the acts in good faith or otherwise, if the manager caught doing devious acts, the power given
can be revoke with lawful and just legal basis. Since the manager is voted and appointed by the
partners consensually in the Articles of Partnership, one should be responsible in executing
managerial task for the benefit of the partnership and to dignify one’s honor and image.

4. In 200 words, give a summary on what the module is all about.

If ever one of the partners of a partnership has promised to contribute money and failed to do so
or have taken any amount from the partnership’s funds, he will become a debtor for the interests
and damages; the liability will arise from the moment the time he should have complied with his
undertaking or from the time he converted the money for his personal use.

An industrial partner is a partner that contributes industry, labor, or service to the partnership. He
cannot engage in the business himself unless permitted by the partnership, otherwise, he can be
excluded from the partnership and the remaining partners can enjoy the benefits he should have
received and can have the right for the damaged his actions resulted.
Two or more partners can be appointed as manager/s in the Articles of Partnership. Their role is
to execute administrative tasks even regardless of the objection of the other partners. Unless he
will be doing his tasks in bad faith, his managerial position, even if irrevocable, can be revoked by
the other partners with legal and just basis. He shall also be responsible and shall take
accountability for the interests and damages his devious acts have resulted.