PARTNERSHIP
What is a Contract Of Partnership?
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 for the exercise of a profession.
What are the essential requisites of a
Contract of Partnership?
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valid contract
What are the tests or indicia to
determine the existence of a
partnership?
There are always 2 tests which must be applied to
determine if partnership exists:
 whether or not there is an agreement to contribute
money, property or industry to a common fund, and
 whether or not there is an intent of the contracting
parties to divide the profits among themselves
What is meant by the Common Law
and
Mercantile Law views of the nature of a
partnership?
In COMMON LAW VIEW – partnership is NOT a
juridical or legal person
In MERCANTILE VIEW – partnership is a juridical or
legal person
Note: In our jurisdiction we follow the mercantile view.
What is the
“Principle of Separate Juridical
Personality” in partnership relations?
Within the context of Philippine law, a "partnership" is
treated as an artificial being created by operation of law
with a legal personality separate and distinct from its
partners. It proceeds from the concept that persons may
be allowed to pool their resources and funds to engage in
the pursuit of a common business objective without
necessarily organizing themselves into a corporation,
upon which the law imposes a much higher form of
regulation, limitation and standards.
What is the “Principle of Delectus
Personae” in partnership
relations?
This refers to the rule which is inherent in every
partnership that no one can become a member of the
partnership association without the consent of all the
partners. Thus, even if a partner will associate another
in his share in the partnership, the associate shall not be
admitted into the partnership without the consent of
ALL the partners, even if the partner having an associate,
should be a manager.
What are the formalities required by
law for the
organization or constitution of a
partnership?
 If the partnership is general – it may be
constituted in any form, EXCEPT where immovable
property or real rights are contributed to the
common fund, in which case a public instrument, to
What are the formalities required by
law for the
which is attached an inventory of said property,
signed by any of the partners, shall be necessary for
validity. ( Arts. 1771, 1773, NCC)
organization or constitution of a
partnership?
What are the formalities required by
law for the
Furthermore, if it has a capital of P3,000.00
or more, it must appear in a public
instrument, which shall be recorded in the
securities and Exchange Commission.
However, this is not necessary for validity.
What are the formalities required by
law for the
organization or constitution of a
partnership?
 If the partnership is limited – it is required that the
contracting parties, in addition to the formalities
prescribed for the organization of a general partnership,
shall execute a certificate of limited partnership which
must be recorded in the Securities and Exchange
What are the formalities required by
law for the
Commission. ( Art. 1843, NCC)
Note: These formalities must be complied with, otherwise,
the partnership is not limited but general.
How are Partnerships formed?
Distinguish between
Partnerships are required to be registered with the Securities and
Exchange Commission [SEC]. Registration is done by filing the Articles of
Distinguish between
Partnership with the SEC. The Articles of Partnership set forth all the
terms and conditions mutually agreed by the partners thereto.
More specifically, the documents required are as follows:
[1] Proposed Articles of Partnership;
[2] Name Verification Slip;
[3] Bank Certificate of Deposit;
[4] Alien Certificate of Registration, Special Investors Resident Visa or
proof of other types of visa [in case of foreigner];
[5] Proof of Inward Remittance [in case of non-resident aliens].
Distinguish between
Partnership and Private Corporation.
PARTNERSHIP
CORPORATION
Distinguish between
Partnership and Private Corporation.
PARTNERSHIP
CORPORATION
Distinguish between
Partnership and Private Corporation.
PARTNERSHIP
period not exceeding fifty (50)
END OF
PRESENTATION