1. Partnership Characteristics Flashcards
Characteristics of the partnership
(1) Separate Legal Personality.
(2) Mutual Agency.
(3) Limited Life.
(4) Unlimited Liability.
(5) Division of Profits.
(6) Taxable Entity.
(7) Co-ownership of Properties
(8) Voluntary Agreement.
A partnership has a juridical personality separate and distinct from that of each of the partner.
Separate Legal Personality
Each partner can act as agent of the partnership in matters which are within the nature of its business.
Mutual agency
Each partner, except a limited partner, is individually liable for the debts of the firm.
Unlimited liability
Each partner is entitled to receive a share in the profits realized by the business.
Division of Profits
Just like a corporation, the income of a partnership is taxable. However, the general professional partnership, organized for the purpose of Exercising a common profession, is exempted in paying such tax.
Taxable Entity
By virtue of separate legal personality, all properties contributed by the partners belong to the partnership.
Co-ownership of properties
Partnership is formed by voluntary act of each partners.
Voluntary agreement
The life of the partnership is limited or highly unpredictable due to several causes of its dissolution.
Limited life
Means choice of the persons
Doctrine of delectus personae
Desire to formulate active union where there’s mutual confidence and trust among partners.
Doctrine of effectio societatis
Characteristics of a contract of partnership
- Consensual
- Principal
- Bilateral or multilateral
- Nominate
- Preparatory
- Onerous
It is perfected by mere consent
Consensual
Does not depend upon any other contract for its validity or existence
Principal
It is entered into by two or more persons whose rights and obligations are reciprocal.
Bilateral or multilateral
Has a special name given by the law
Nominate
It is a means by which other contracts will be entered into as the partnership pursues its business
Preparatory
The partners contribute money, property or industry to a common fund
Onerous
Essential requisites of a partnership
- There must be a valid contract
- Mutual contribution to a common fund
- Lawful object or purpose
- Must be established with the common interest of obtaining a profit, except to the GPP
Essential features of partnership
- Valid contract
- Legal capacity
- Mutual contribution to a common fund
- Lawful
- Purpose to obtain profits and to divide.
Existence of a valid contract
- Voluntary and personal association
- Conduct or acts of the parties
- Other forms of association excluded
Requisites of a valid contract
- Consent and capacity
- Subject matter of the contract
- Cause which is established
Legal capacity of parties to enter into the contract
- Not an unemancipated minors
- Sane
- Not deaf-mutes who do not know how to write
- Not suffering from civil interdiction
- Not incompetent who are under guardianship
- Partnership can be a partner to the partnership
