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RFBT > 01 Partnerships > Flashcards

01 Partnerships Flashcards

1
Q

Why are partnerships formed?

A
  • divide profits
  • practice of profession
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2
Q

Characteristics of Partnership

A

Consensual - perfected by mere of consent, express or implied
Nominate - special name or designation in law
Bilateral - 2 or more persons with reciprocal rights and obligations
Onerous - benefit by giving something
Commutative - undertaking of each partner is considered reciprocal
Principal - does not depend on existence of other contracts
Preparatory - means to and end
Contract of agency

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3
Q

T/F
Consent to form a partnerhip must be express.

A

False

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4
Q

Essential Requisites or Features of Partnership

A
  1. Valid contract - consent, object, cause
  2. Legal capacity of partners
  3. Mutual contribution
  4. Lawful object
  5. Primary purpose is to divide profits
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5
Q

What is delectus personae?

A

Person is free to choose whom he wants to be associate with in the partnership.

So, consent of all partners is required to add a new partner.

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6
Q

Does partnership have a juridical personality?

A

Yes

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7
Q

When does contract of partnership begin?

A

Moment of execution of contract

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8
Q

T/F
To have a juridical personality, a partnership must be registered at the SEC.

A

False because the contract of partnership begins at the execution of the contract

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9
Q

General rule on form of partnerships

A

Any form

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10
Q

If capital is P3,000 or more in money or property is contributed in a partnership, ______________________.

A

The partnership contract must be in a public instrument and registered with SEC.

If not complied with, partnership is still valid.

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11
Q

If immovable or real rights is contributed in a partnership, ______________________.

A

Must be in a public instrument
Inventory of property must be made, signed by parties and attached to the public instrument

If not complied with: VOID partnership with no juridical personality. It is transformed into a formal contract.

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12
Q

If partnership is a limited partnership, __________________ is required.

A

Certificate signed under oath by the partners and recorded with the SEC

If not complied with, partnership is considered a GP.

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13
Q

Who can enter into partnerships?

A

Persons with legal capacity - emancipated minors, insane or demented persons, deaf mutes who cannot write, etc.
Partnerships - term person in the Code includes juridical persons
Corporations - except for the purpose of practicing professions

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14
Q

Define each kind of partner:
Capitalist
Industrial
General
Limited
Managing
Liquidating
Partner by estoppel
Continuing
Surviving
Sub-partner
Ostensible
Secret
Silent
Dormant

A

Capitalist - contribute money or property
Industrial - contribute of industry/service
General - liability extends to separate or personal property
Limited - liability is limited to capital contribution
Managing - manages affairs or business of the partnership
Liquidating - in charge of winding up during dissolution
Partner by estoppel - liable as partner even if not really a partner to protect 3rd persons
Continuing - continues business of partnership after being dissolved by admission, retirement, death…
Surviving - remains after dissolution by death
Sub-partner - not a member but contracts with a partner regarding share in partnership
Ostensible - take active part and known to public as partner
Secret - take active part but not known to outside parties
Silent - does not take active part
Dormant - does not take active part and not known as partner

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15
Q

Does a partnership automatically exist in co-ownership or co-possession?

A

No

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16
Q

Does a partnership automatically exist in gross returns?

A

No

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17
Q

Persons who are not partners as to each other are not partners as to third person except partnership by _________.

A

Estoppel

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18
Q

What is a prima facie evidence that someone is a partnership in a business?

What are the exceptions?

A

Receipt of share of profits

Exceptions:
Debt by installment
Wages as employee
Rent to landlord
Annuity to a widow or heir
Interest on loan
Sale of goodwill, etc.

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19
Q

Define:
Universal partnership
a. Present Property
b. All Profits

A

Universal Partnership
- did not specify which properties is contributed specifically

Present Property
- includes present property
- profits of present property
- by stipulation:
(a) future property except acquired by inheritance, legacy, donation
(b) fruits of future property including those acquired by ILD

All Profits (default)
- present property obtained through work or industry
- usufruct / right to use/enjoy present property
- by stipulation:
(a) fruits of future property

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20
Q

Differentiate partnership and corporation:
Manner of creation

A

Partnership - contract
Corporation - law

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21
Q

Who cannot enter into a universal partnership?

A

Those who cannot donate to each other
(a) guilty of adultery
(b) guilty of the same criminal offense
(c) public officer by reason of office
(d) spouses

22
Q

Define particular partnership.

A

Objects/contributions are determinate thing, specific undertakings, specified profession.

23
Q

Define: Partnership by estoppel

A

Person by words or conduct represent themselves as partner (with or without consent of an existing partner).

24
Q

Differentiate partnership and corporation:
Commencement of juridical personality

A

Partnership - execution of contract
Corporation - date of issuance of certificate of incorporation

25
Q

Differentiate partnership and corporation:
Incorporators

A

Partnership - minimum 2 persons
Corporation - 1 to 15 persons

26
Q

Differentiate partnership and corporation:
Dissolution

A

Partnership - any time
Corporation - dissolved with consent of State

27
Q

Who has the authority to manage the partnership?

A

Appointed by articles - acts of admin despite opposition unless bad faith
Other way - acts of amin but if opposed, partner owning controlling interest can remove him

28
Q

What if there are two managers appointed and they do not agree?

A

Majority rules (between managers)
* if tied, all partners vote and whoever has the total controlling interest wins

29
Q

If there is no manager agreed upon, what is the limitation of the partners?

A

Cannot make important alteration in the immovable property without consent of others

29
Q

T/F
Since a partner has rights in specific partnership property, they are free to use said property.

A

Only for partnership purposes, not personal

30
Q

T/F
Property contributed to the partnership can still be used against personal creditors.

A

No, only partnership creditors

31
Q

T/F
Assigning interest in the partnership will dissolve the partnership.

A

False

31
Q

What are the obligations of a partner?

A

a. Contribution of capital
b. Prohibition in engaging business for himself
* if industrial - absolutely prohibited unless stipulated
* if capitalist - same kind only unless stipulated
c. Additioal capital
d. Receipt of share in partnership credit
e. Pay damages to partnership suffered through his fault
f. Bear risk of property contributed
g. Render info
h. Account profits

32
Q

When are partners required to contribute additional capital?

A

Imminent loss to save the partnership

if they disagree, they have to sell their interest

32
Q

If a partner was not able to deliver capital during perfection, what will happen?

A

If no stipulation otherwise:
They are in delay and subject to interest even without demand.

32
Q

Can industrial partners be held liable by third persons?

A

Yes

Partners can only stipulate among themselves regarding exemption and can ask for reimbursement.

33
Q

Who bears the risk of property contributed in a partnership?

A

Contributor

34
Q

A partnership can be liable for a partner’s actions despite no authority when _____________.

A

They were carrying on in the usual way the business of the partnership AND third party did not know lack of authority.

35
Q

In case of partnership tort, partners are ___________ liable.

A

solidarily

36
Q

When are partners solidarily liable in partnership tort?

A
  1. wrongful act of any partner acting in the course of business or with authority of co-partners caused loss or injury
  2. misapplication of money or property received from third person
  3. misapplication of any money or property in custody of partnership
37
Q

T/F
Any admission made by one partner within the scope of his authority is evidence against the partnership.

A

False

38
Q

Liability of new partner to debts prior to admission

A

Extent of contribution only unless stipulated otherwise

39
Q

Causes of dissolution

A
40
Q

Authority of partners to act for partnership is terminated without notice if the dissolution was not caused by __________________.

A

Acts
Insolvency
Death

41
Q

Order of preference of liabilities of the partnership (general and limited)

A

General
a. owing to external creditors
b. owing to internal creditors
c. capital contribution
d. profit

Limited
a. owing to external creditors
b. owing to internal creditors - limited
c. profits - limited
d. capital contribution - limited
e. owning to internal creditors - general
f. profit - general
g. capital contribution - general

42
Q

Characteristic of limited partnership

A

Limited as to liability
(a) partner is only liable up to his contribution
(b) can only contribute cash or property
(c) cannot use surname in partnership name - becomes liably as general partner

43
Q

Can contribution of limited partner be amended if they are not able to come up with whole amount?

A

Yes

44
Q

In case of retirement, death, civil interdiction, insanity or insolvency of a partner, is a limited partnership dissolved?

A

Yes if it is the limited partner

45
Q

Can there be a general-limited partner?

A

Yes
Rights & powers & restrictions - general
Contribution - limited

46
Q

Is interest of limited partnership transferrable?

A

Yes

RFBT (2 decks)

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