Partnership

Question 1

What is a partnership?

Answer 1

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 or more persons may also form a partnership in the exercise of a profession

Art. 1767

Question 2

what is profession?

Answer 2

• a group of men
• pursuing learned art as a common calling
• in the spirit of public service

92 SCRA 1 [1979]

TN: individuals practicing a profession as a corporation is not allowed as there are [personal qualifications] that cannot be possessed by the corporation

Question 3

What is the nature of partnership contract?

Answer 3

1. Entered into for profit or future transactions
2. contract of absolute confidence

TN: if partner leaves, it dissolves the partnership

Question 4

what are the essential elements of partnership? LB

Answer 4

Art. 1767

1. mere AGREEMENT to contribute [mpi] money, proeprty, or industry to a common fund
2. an INTENT to divide the profits among themselves

TN(1): mere agreement to contribute mpi forms a juridical personality

Question 5

what are the essential features of partnership?

Answer 5

1. Valid Contract
2. 2 or more w/ legal capacity
3. Mutual Contribution
4. lawful Object
5. For Profit

Question 6

what are the characteristic elements of partnership?

Answer 6

CCBONPP
1. Consensual - mere consent perfects
2. Nominate
3. Bilateral - oblg. always reciprocal
4. Onerous - give something to benefit
5. Commutative - undertaking same w/ partners
6. Principal - validity is not dependent on other contracts
7. Preparatory -

Question 7

Alex has been operating a successful lending business for several years. Jordan provided a significant sum of money to Alex, which Alex used to expand the business.

Later, when disputes arose, Alex claimed that Jordan was a partner in the lending business. However, Jordan asserts that their involvement was limited to providing financial assistance, and no formal partnership agreement was ever made.

Is Jordan a partner?

Answer 7

No, as ruled in the case of Santos v. Sps Reyes, while there is the first element of agreement to contribute [mpi], there was no intention to divide the profits among themselves.

Question 8

When is a partnership considered a juridical entity? does not the law provide that partnership starts from the moment of the execution of the CONTRACT referring to a written contract ?

Answer 8

Even w/o a public document by the parties,
- if the contribution is at least 3,000 [or]
- if there is real property contributed by one of the partner [and] must be recorded,

the juridical person thus created from the moment of the perfection of the contract (and not from approval of SEC of the articles of partnership)

TN: articles of partnership is NOT registered w/ SEC but it is recorded

TN: SEC [records] articles of partnership but SEC [approves] articles of incorporation