Law on Partnership - General Provisions Flashcards
By the contract of partnership two or more persons bind themselves to contribute ______, ______, or ______ to a ________, with the intention of dividing the profits among themselves.
Two or more persons may also form a partnership for the exercise of a _________.
Money; property; industry; common fund; profession
What is the legal definition of partnership?
The legal definition of partnership, often referred to as “co-partnership,” is presented from the viewpoint of a contract.
Provide definitions of a partnership.
A partnership is the following:
1. A contract
2. An association
3. A legal relation
4. A status arising out of a contract
5. An organization
6. An entity distinct from its members
7. Joint undertaking
Describe the partnership’s relation to sole proprietorship and corporation.
As a form of business organization, it falls between two EXTREMES of organizational form — the single proprietorship and the corporation.
What may partners contribute with each other?
Partners may contribute their (1) money, (2) property (3) effects, (4) labor, (5) skill, or (6) some combination of these to a partnership.
How does Article 1767 of the Civil Code relate to the concept of partnership?
Article 1767 of the Civil Code considers the term “partnership” as the agreement itself out of which a partnership is created, characterizing it as a contract.
How does the Anglo-American idea of partnership differ to the Civil Code’s view in terms of the basis of the concept?
The Anglo-American idea of partnership is based on the RESULT of the contract or agreement of the parties creating the partnership, representing the juridical relation growing out from the express or implied agreement of the parties. The Civil Code views the partnership as the agreement itself.
Is the difference between the Civil Code and American concept of partnership substantial or superficial?
The difference between the Civil Code and American concept of partnership is more apparent than real, emphasizing the semantic distinction between considering a partnership as the agreement itself (Civil Code) and as the juridical relation resulting from the agreement (American concept).
What is a basic tenet of Spanish and Philippine law regarding the juridical personality of a partnership?
A basic tenet of Spanish and Philippine law is that a partnership has a JURIDICAL personality of its own, distinct and separate from that of each of the partners (Art. 1768).
How does the American and English law view the juridical personality of a partnership?
The American and English law does NOT RECOGNIZE a separate juridical personality for a partnership; instead, a partnership is considered merely an extension of its members. Some U.S. states classify partnerships as legal entities.
What theory of partnership does the Uniform Partnership Act codify, and how does it differ from the entity theory?
The Uniform Partnership Act codifies the “aggregate theory” of partnership more than the “entity theory” or Roman Law theory. Unlike the entity theory, which views a partnership as a separate legal entity, the aggregate theory considers a partnership as a conglomerate of individuals, not as a separate legal entity from its owners.
What is the aggregate theory of partnership of the US legal system in terms of its obligation to pay taxes?
The aggregate theory of partnership states that a partnership form of business does not exist separately as a legal entity from its owners; therefore, a partnership is not treated as an entity that pays taxes.
What is the taxation treatment of partnerships in the Philippine jurisdiction?
Partnerships (except general professional partnerships) are treated as corporations for income tax purposes and are subject to tax as such.
Is the practice of a profession considered a business or enterprise for profit in a general professional partnership?
Strictly speaking, the practice of a profession is NOT considered a business or enterprise for profit.
What does the law allow regarding the joint pursuit of a profession by two or more persons?
The law allows the joint pursuit of a profession by two or more persons as partners. However, in such cases, it is the individual partners, not the partnership itself, who engage in the practice of the profession and are responsible for their own acts.
Can individuals practice a profession as a corporate entity?
No, the law does not allow individuals to practice a profession as a corporate entity. Personal qualifications necessary for the practice of a profession cannot be possessed by a corporation.
According to the aggregate theory, why could a partner not maintain an action against his partnership?
Under the aggregate theory, since a partnership is seen as an aggregate of individuals rather than a separate entity, a partner suing the partnership would essentially be suing himself. In this view, obtaining a judgment both in favor of and against the same person simultaneously is not possible.
How is practicing law in terms of a partnership characterized?
The right to practice law is a privilege or franchise rather than a natural or constitutional right.
What is the distinction between a partnership for the practice of law and partnerships formed by other professionals or for business?
The text emphasizes that a partnership for the practice of law is not akin to partnerships formed by other professionals or for business. It is not formed for carrying on trade or business or for holding property. It is ONLY a mere relationship or association for a non-business purpose.
How is the use of nom de plume, assumed, or trade names in law practice viewed? Why?
The use of a nom de plume, assumed name, or trade name in law practice is deemed improper.
In legal practice, the right to practice law is often regulated by state-specific licensing requirements. Using a misleading name or representation, such as a nom de plume, might create a FALSE IMPRESSION that all members have EQUAL PROFESSIONAL STANDING or are LOCALLY ADMITTED when that may not be the case.
In the formation of partnerships for the practice of law, no person should be admitted or held out as a practitioner or member who is not a member of the legal profession duly authorized to practice, and amenable to professional discipline.
How is the partnership for practice of law distinguished from partnership for business?
The practice of law is distinguished from business by emphasizing its intimate and peculiar relationship to the administration of justice, and it is cautioned against being considered a mere “money-making trade.”
What are the primary characteristics that distinguish the legal profession from business?
The primary characteristics that distinguish the legal profession from business include:
(a) A DUTY of public service, with emolument being a by-product, where one can attain eminence without necessarily making much money.
(b) A RELATION as an “officer of court” to the administration of justice, involving sincerity, integrity, and reliability.
(c) A FIDUCIARY relationship with clients in the highest degree.
(d) A RELATIONSHIP with colleagues at the bar characterized by candor, fairness, and an unwillingness to resort to business methods of advertising, encroachment on their practice, or direct dealing with each other’s clients.
What are the characteristic elements of a partnership?
- Consensual
- Nominate
- Bilateral
- Onerous
- Commutative
- Principal
- Preparatory
Why is the contract of partnership considered consensual?
The contract of partnership is considered consensual because it is perfected by mere consent, meaning it is established upon the express or implied agreement of two or more persons.