Handout 3

Question 1

The owner is in command of his whole business and stands to lose as much as he puts in and even more to the extent of all his personal holdings. The establishment, operations, and management of this form of business are not governed by a special law. If some legal issues and disputes confront it, the proprietor can use general laws and prevailing civil obligations and contracts in commercial
transactions

Answer 1

Sole Proprietorship.

Question 2

The law on partnership is governed by the Civil Code of the Philippines. Article 1767 states,
“By the contract of partnership 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 (2) or more persons may also form a partnership for the exercise of a profession.

Answer 2

Partnership.

Question 3

is based on trust and confidence. Hence, the fiduciary relationship (relationship in which an individual places complete confidence, trust, and reliance in someone who has a duty to act for the individual’s benefit)

Answer 3

partnership contract

Question 4

wherein no one can become a partner in a partnership without the consent of all the partners

Answer 4

delectus personae