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Agency & Partnership > Partnership > Flashcards

Partnership Flashcards

1
Q

Tri-level existence of partnership

A

1) Contractual relationship between and among partners
2) means of doing business through a separate juridical personality
3) Business enterprise

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2
Q

Elements

A

Consent: Meeting of the minds
Subject matter: Creation of common fund to undertake a business venture
Consideration: Contribution of cash, property or industry with the goal of gaining profit

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3
Q

Partnership

A

1) 2 or more persons bind themselves to contribute money, property or industry to a common fund
2) With the intention of dividing profits among themselves

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4
Q

Juridical persons can:

A

1) Acquire and possess properties
2) Incur obligation
3) Bring civil and criminal actions

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5
Q

When public instrument required? (Art. 1771)

A

When immovable property o real rights are contributed

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6
Q

When public instrument and recording with SEC required? (Art. 1772)

A

When capital of 3K or more in money or property is had

Failure to comply won’t affect liability to 3rd persons

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7
Q

When inventory, signed and attached to the public instrument required? (Art. 1773)

A

When immovable property is contributed

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8
Q

Rationale behind Art. 1772

A

1) To prevent evasion of tax liability by big partnerships
2) To safeguard the public by enabling it to determine more accurately the membership and capital of
partnerships before dealing with them

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9
Q

Significance of formal requirements in Art. 1772

A

1) Conclusive evidence of the partnership

2) Evidence of the agreement between parties

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10
Q

Rationale behind Art. 1773

A

1) Protect 3rd persons

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11
Q

Effect of non-compliance with Art. 1771 and 1772

A

Unenforceable based on Statute of Frauds

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12
Q

Rank of claims against an insolvent partner

A

1) Separate creditors
2) Partnership creditors
3) Partners by way of contribution

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13
Q

Kinds of partnerships

A

1) Universal
2) Particular

3) General
4) Limited

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14
Q

Universal partnership

A

One where the contract of partnership encompasses either all the present properties of the partners or to all of the profits.

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15
Q

Particular partnership

A

One that has for its object determinate things, their use or fruits, or a specific undertaking, or the exercise of a profession or vocation.

ex. Professional partnership and JVA

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16
Q

Presumption regarding kind of partnership

A

Presumption that the parties have a particular partnership

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17
Q

Solidary liable of partners when:

A

1) Any partner commits any wrongful act or omission while acting in the ordinary course of business OR When with the authority of co-partners, loss or injury is caused to another or any penalty is incurred.
2) Partner received money or property of a third person but misapplied by any partner while in the custody of the partnership

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18
Q

Limited partnership

A

One or more general partners who are unlimitedly liable, with one or more limited partners, who are liable for partnership debts only to the extent of their stipulated contributions under the articles of partnership.

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19
Q

Prima facie evidence of continuation of partnership

A

No settlement or liquidation and partners continue to act as they habitually acted

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20
Q

Characteristics of a partnership at will

A

1) Mutual desire and consent of partners
2) Continued existence depends on constancy of that mutual resolve and partners’ capability to give it; as well as an absence of cause for dissolution
3) Any partner may dictate a dissolution at will. (Must be in good faith)

21
Q

Capitalist partner

A

Contributes money and/or property

22
Q

Industrial partner

A

Contributes industry or service

23
Q

Rule re: spouses and partnerships

A

Can’t enter into a universal partnership

24
Q

Rule re: corporations and partnerships

A

GEN: Can’t because corporations can only be controlled by their duly-appointed officers

EXC: Can enter a one so long as the power to enter into a partnership is provided in their charter

25
Q

Obligations of partners

A

1) To contribute to the common fund

2) Debts and torts

26
Q

Remedy for a defaulting partner in the obligation to contribute

A

1) Specific performance – seek collection and interest and damages
2) Seek dissolution

27
Q

Obligations of non-partners

A

1) When in estoppel

1) When public is made to believe that one is a partner when in fact, is not

28
Q

When shall partnership bear risk of things contributed

A

When goods:

1) Are fungible
2) Cannot be kept in a condition without deteriorating
3) Are contributed to be sold

29
Q

Remedy if industrial partner engages in business

A

1) Exclude him from firm

2) Avail of benefits he may have obtained

30
Q

Doctrine of unlimited liability

A

All partners, including industrial ones, shall be liable pro rata with all their property and after all the partnership assets have been exhausted, for the contracts which may be entered into in the name and for the account of the partnership, under its signature and by a person authorized to act for the partnership.

= Pro rata and subsidiary

31
Q

Conditions for solidarity liability with partnership to apply

A

1) Act was done pursuant to a partnership business

2) Partner doing it has authority

32
Q

Defense against solidary liability

A

1) Not done in ordinary course of business

20 3rd party had knowledge (bad faith)

33
Q

Property rights of a partner

A

1) Specific partnership property
2) interest in the partnership
3) Right to participate in management

34
Q

Rule regarding authority

A

GEN: Every partner is an agent of the partnership and he is allowed to carry out acts in the usual way of business

EXC: When the partner has no authority in that particular matter OR the person he’s dealing with has knowledge that he has no authority

35
Q

Doctrine of apparent authority

A

A third party dealing with a juridical entity is allowed to rely upon the validity and enforceability of contracts entered into with an officer or representative who has been by practice endowed with apparent authority to act for the juridical person.

36
Q

When will partnership not be liable

A

1) Person acting had no authority

2) 3rd person knew the acting partner had no authority

37
Q

Rights of a partner

A 
Management right
Co-ownership
Equity interests
Participate in profits and obligation to share in loss
Reimbursed
To associate another
To inspect books
To demand full information and accounting
To dissolve the partnership
38
Q

Obligations to third parties

A 
Bound by authorized acts of partners
Repay disbursement of partners
Bound by admission or representation
Bound by notice to partner
Liability for loss or injury
Misapplication of funds
39
Q

Dissolution

A

Change in the relation of the partners caused by any partner ceasing to be associated in the carrying on

40
Q

Termination

A

All matters relating to the enterprise have been completed

41
Q

Causes of dissolution

A

(1) Without violating the agreement
- Termination of the term/undertaking
- express will of any partner acting in good faith (no term)
- Express will of all partners who haven’t assigned rights
- Expulsion of any partner from the business bonafide

(2) In contravention to the agreement, by express will at any time
(3) Any event making business unlawful
(4) Specific thing promised to be contributed perishes where no right of ownership was passed to the partnership
(5) Death of a partner
(6) Insolvency of a partner/partnership
(7) Civil interdiction of a partner
(8) Decree of court

42
Q

Dissolution divided into

A

(1) ipso jure

(2) Court decree

43
Q

Particular rule of limited liability

A

GEN: A partner may be bound personally to liabilities with third parties in good faith

BUT liabilty is limited– liability will be satisfied out of partnership assets WHEN:

1) Partner is unknown to the 3rd party
2) Partner is unknown and inactive in partnership affairs; partnership’s reputation can’t by any degree be connected to him

44
Q

Winding up

A

Process of settling business affairs after dissolution. It concludes after complete liquidation of the partnership business enterprise

45
Q

Limited partnership

A

A partnership of two or more persons having as members on or more general partners and one or more limited partners

46
Q

Rights of limited partners

A

1) Limited liability
2) Return of his contributions
3) Share in the profits and compensation by way of income
4) Assign his equity interest
5) HAve the oartnership books kept and inspect and copy them
6) Have on demand true and full information of all things affecting the partnership & a formal account
7) Dissolution and winding up

47
Q

Compensation by way of income

A

Arrangement wherein distribution of profits is done on a regular or periodic basis

48
Q

Obligations of a limited oartner

A

1) Property and money supposed to be contributed by him (as trustee)
2)

Agency & Partnership (2 decks)

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