LA- Prelims #2 Flashcards
two (2) forms of business organizations:
- sole proprietorship
- partnership
- owner is in command of the whole business
- ex. small business and sari-sari stores
sole proprietorship
- two or more persons are involved (max of 5) and bind themselves
- contribute money/property to a common fund with the intention of dividing profits among themselves
partnership
three (3) forms of partnership:
general partnership
limited partnership
limited liability
- basic form
- all partners manage the business and are personally liable for their debts
general partnership
- certain limited partners relinquish their ability to manage the business in exchange for limited liability for partnership debts
- manager can make/ break a business
limited partnership
all partners have limited liability
- limited but still has no control
- ex. hire people to manage/ franchise
limited liability
three (3) types of partners:
- general
- limited
- silent partners
- have obligation of strict liability to third parties injured by a partnership
- “nautangan” (same payment; $3M debt = $1M each)
general partners
liability is limited to their investments
limited partners
- share in profit and losses of business
- uninvolved in the management and association with the business is not publicly known
silent partners
according to the nature of a partnership, partners are ___ in character.
fiduciary (involves trust)
this means all partners must have trust and confidence in one another
fiduciary
the person has the right to choose the person they want to become partners or to occupy a specific position
delectus personae
according to delectus personae, you have to consider these:
- honesty
- integrity
- trust
- confidence
seven (7) essential elements
- valid and voluntary contract to become partners
- contribution of money, property, and industry for the common fund to be used exclusively for the common interest and benefits of the partnership
- must be an association of profit- intention of dividing profits
- partners- mutual agents of each other
- lawful purpose
- articles of partnership must not be kept secret
- juridical partnership
an essential element that refers to the intention of dividing profits
must be an association of profit
an essential element that refers to there being mutual agents of each other
partners
TRUE/ FALSE: there should be a valid and obligatory contract to become partners
FALSE (obligatory- voluntary)
TRUE/ FALSE: contribution of money, property, and industry for the common fund to be used inclusively for the common interest and benefits of the partnership
FALSE (inclusively- exclusively)
an essential element that refers to a separate entity and is distinct from the individual personality of each partner
juridical partnership
- an artificial being
- created by operation of law
- having the right of succession and powers
- attributes and properties expressly authorized by law/ incident to its existence
corporation
TRUE/ FALSE: a corporation is created by operation of law
TRUE
TRUE/ FALSE: if the partnership dies, there is a succession of family.
FALSE (partnership- corporation)
TRUE/ FALSE: if a corporation dies, look for a substitute.
FALSE (corporation- partnership)
TRUE/ FALSE: if a partnership dies, look for a substitute.
TRUE
two (2) classifications of corporation as to place of incorporation:
- domestic
- foreign
- a classification of corporation wherein it is obtained through incorporation under PH laws
- ex. Jollibee in the US follows PH laws
domestic
- a classification of corporation wherein one is licensed by SEC to do business in the PH
foreign
SEC
securities and exchange commission
- juridical necessity (to give, to do, to not to do)
- everyone is obligated
- article 1156 of the civil code of the philippines
obligation
TRUE/ FALSE: having rights means having an obligation
TRUE
three (3) kinds of obligations under the law:
- to give
- to do
- to not to do
a kind of obligation wherein the debtor is obliged to deliver the movable/ immovable thing to creditor
to give
TRUE/ FALSE: to give means that the creditor is obliged to deliver the movable/ immovable thing to the debtor
FALSE
a kind of obligation wherein all kinds of works/ services either physical/ mental are covered by this obligation
to do
a kind of obligation that means refraining from doing some acts. one can refuse if unlawful/ dishonest (article 56)
to not do