JH Flashcards
KH
What is a partnership?
A contract where 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.
What are the requisites of a contract of partnership?
The requisites include:
* A valid contract
* Contribution of money, property, or industry to a common fund
* Organized for gain or profit
* Lawful object or purpose established for the common benefit or interest of the partners.
List the characteristics of a partnership.
- Consensual
- Bilateral or Multilateral
- Onerous
- Nominate
- Principal
- Preparatory
When does a partnership begin?
A partnership begins from the moment of the execution of the contract, unless otherwise stipulated.
What is a Leonine Partnership?
A partnership where one partner is made liable for losses but is not entitled to share in the profits; this is NOT ALLOWED under the jurisdiction.
What does Article 1768 state about partnership?
The partnership has a judicial personality separate and distinct from that of each partner, even if the requirements of Article 1772 are not complied with.
What is the requirement for a partnership with a capital of three thousand pesos or more?
It must appear in a public instrument recorded in the Office of the Securities and Exchange Commission.
What happens if immovable property is contributed to a partnership without an inventory?
The contract of partnership is void.
What is the significance of Article 1774?
Any immovable property or interest therein may be acquired in the partnership name, and title can only be conveyed in the partnership name.
True or False: Co-ownership establishes a partnership.
False.
What are the two tests to determine the existence of a partnership?
- Agreement to contribute money, property, or industry to a common fund
- Intent to divide the profits among themselves.
What does Article 1770 say about unlawful partnerships?
When an unlawful partnership is dissolved by a judicial decree, the profits shall be confiscated in favor of the State.
What are the types of partners based on liability?
- General
- Limited
Differentiate between capitalist and industrial partners.
- Capitalist: Contributes money or property
- Industrial: Contributes only skill or industry.
What is the principle of delectus personae?
No one can become a member of a partnership without the consent of all partners.
What are the rights of a partnership?
- Has a personality separate from the partners
- Can acquire or possess property
- Can incur obligations
- Can bring actions
- Can be adjudged insolvent.
What is the default division of profits in a partnership without an agreement?
In proportion to the amount of the contribution.
What is the distinction between ordinary partnership and conjugal partnership?
- Ordinary Partnership: Created by will, possesses legal personality, formed for profit.
- Conjugal Partnership: Created by operation of law upon marriage, does not possess legal personality.
What happens when a partner conveys their whole interest in the partnership?
It does not dissolve the partnership and does not entitle the assignee to interfere in management.
What is implied authorization in a partnership?
Occurs when other partners do not object to an act, or when the act is for carrying on the usual business of the partnership.
What is a ‘charging order’ in partnership law?
A remedy available to a judgment creditor of a debtor partner.
Fill in the blank: A partnership must have a _______ object or purpose.
[lawful]
What are the instances where receipt of a share of profits does not imply partnership?
- Debt by installment
- Wages of an employee
- Annuity to a widow
- Interest on a loan.
What is the effect of an unlawful partnership when dissolved?
Profits are confiscated in favor of the State.
What is a ‘charging order’ in the context of partnerships?
A remedy available to a judgment creditor of a debtor partner to charge the interest of the latter in the partnership by means of a court order.
Under what circumstances can a partnership not recover properties conveyed under Art. 1819, NCC?
When:
* The partner’s act binds the partnership under Art. 1818
* The purchaser or his assignee is a holder for value, without knowledge that the partner had exceeded authority.
What constitutes knowledge of a partner in relation to the firm?
Knowledge of the partner is also knowledge of the firm if:
* Acquired by a partner acting in the particular matter involved
* Acquired prior to becoming a partner and is present to his mind.
Define dissolution in the context of partnerships.
Dissolution is the change in the relation of the partners caused by any partner ceasing to be associated in the carrying on of the business.
What is meant by ‘winding up’ in partnership terms?
The process of settling the business affairs after dissolution.
What is the termination of a partnership?
The point in time after all the partnership affairs have been wound up.
List the causes of dissolution under Art. 1830.
- No violation of agreement
- Termination of the definite term or specific undertaking
- Express will of partner who must act in good faith
- Expulsion in good faith of a member.
What are the effects of dissolution on a partner’s ability to bind the partnership?
Once the firm is dissolved, a partner can no longer bind the partnership.
True or False: When a dissolution is caused by acts like withdrawal or insolvency, all partners are still bound to each other.
True
What distinguishes a general partner from a limited partner?
General partners:
* Can be held personally liable for partnership obligations
* May participate in management
* Name may appear in the firm name.
Limited partners:
* Cannot be held personally liable
* Do not participate in management
* Name does not appear in the firm name.
What rights do partners have after dissolution under Art. 1837, NCC?
Rights include:
* Application of partnership property to discharge partnership liability
* Surplus to be paid in cash to partners
* Right to damages for breach of agreement for innocent partners.
What is the right of a partner when the contract is rescinded?
Rights include:
* Right of lien or retention
* Right of subrogation
* Right of indemnification.
What is a substituted limited partner?
A person admitted to all rights of a limited partner who has died or assigned his interest, subject to all restrictions and liabilities of his assignor.
When may a partner demand formal accounting?
When:
* Wrongfully excluded from partnership business
* Right exists under any agreement
* Profits derived from transactions connected with the partnership.
Who are the persons authorized to wind up a partnership?
Authorized persons include:
* Partners who have not wrongfully dissolved the partnership
* Legal representatives of the last surviving partner.
What is the order of payment in the winding up of partnership liabilities for general partnerships?
Order of payment:
* Those owing to creditors other than partners
* Those owing to partners other than for capital or profits
* Those owing to partners in respect of capital
* Those owing to partners in respect of profits.
Fill in the blank: A partner can no longer _______ the partnership once the firm is dissolved.
bind
