CHAPTER 2: SEC.

1
MANAGEMENT OF
A PARTNERSHIP
ARTICLE 1800 & 1801

PREPARED BY: KENNETH R. EDIZA

TOPICS TO BE
DISCUSSED:
TITLE LOREM IPSUM
SIT DOLOR AMET

1.WHO SHALL MANAGE THE

PARTNERSHIP?
2. TWO MODES OF APPOINTMENT
3. WHEN TWO OR MORE MANAGING
PARTNERS HAVE BEEN ENTRUSTED
WITH THE MANAGEMENT
WHO SHALL MANAGE
THE PARTNERSHIP?
EITHER ONE, SOME
OR ALL OF THE
PARTNERS DESIGNATED
AS MANAGING
PARTNERS
 ARTICLE 1800
The partner who has been appointed manager in the
articles of partnership may execute all acts of
administration despite the opposition of his partners,
unless he should act in bad faith; and his power is
irrevocable without just or lawful cause. The vote of the
partners representing the controlling interest shall be
necessary for such revocation of power.
A power granted after the partnership has been
constituted may be revoked at any time.
TWO MODES OF APPOINTMENT
1. APPOINTMENT AS MANAGER IN THE ARTICLES OF
PARTNERSHIP
General Rule: Power is irrevocable without just or lawful
cause.
Exception: To remove him for just cause, vote of partners
having controlling interest is necessary.
To remove him without just cause, there must
be unanimity including his own vote.
TWO MODES OF APPOINTMENT
2. APPOINTMENT AS MANAGER MADE IN AN
INSTRUMENT OTHER THAN THE ARTICLES OF
PARTNERSHIP
Rule: The power to act may be revoked at any time,
with or without just cause by the partners owning
the controlling interest.
LET US TRY!
Upon the formation of the Kathniel Partnership, Kathryn is
appointed as a managing partner who has a 30% share while
Daniel is a silent partner who has a 70% share in the partnership.
In its second year of operations, the partnership is collapsing
and the only way to save it is for the partners
to sell their interests.

Supposed that Liza buy half of the

interest of the partnership, 35% from
Daniel and 15% from Kathryn.
LET US TRY!
Another Scenario: After the partnership agreement, Liza is an
additional partner. After admitting Liza she was appointed as
managing partner.
Question: Is the management right
revocable? At any time and at any cause?
Answer: Yes, according to the second
paragraph of article 1800, A power
granted after the partnership has been
constituted may be revoked at any time.
LET US TRY!
Another Scenario: After the partnership agreement, Liza is an
additional partner. After admitting Liza she was appointed as
managing partner.
Question: Is the management right
revocable? At any time and at any cause?
Answer: Yes, according to the second
paragraph of article 1800, A power
granted after the partnership has been
constituted may be revoked at any time.
LET US TRY!
Question: Is the service of the managing
partners, both Liza and Kathryn, entitled
for compensation?

Answer: In the general rule, the managing partner are not

entitled for compensation beyond his/her share in the profits of
the business.
However, in case there is an absence of any prohibition in the articles
of partnership for the payment of salaries to general/managing
partners to enter into a collateral verbal agreement or even in proper
cases the law may imply a contract of compensation
 1.
ARTICLE 1801
If two or more partners have been intrusted with the
2.
management of the partnership without specification of
3
their respective duties, or without a stipulation that one of
them shall not act without the consent of all the others,
each one may separately execute all acts of administration,
but if any of them should oppose the acts of the others, the
decision of the majority shall prevail. In case of a tie, the
matter shall be decided by the partners owning the
controlling interest.
WHEN TWO OR MORE MANAGING
PARTNERS HAVE BEEN ENTRUSTED
WITH THE MANAGEMENT
General Rule: Each one may separately execute all acts of
administration.
Exceptions: If any of the managers should oppose:
1. The decision of the majority (per head) of the managing
partners shall prevail.
2. In case of a tie, the decision of the managing
partners owning the controlling interest shall prevail.
BBOYS COMPANY

MARK= 7% JOHN= 5% ERIC= 10% ALEX=15% LIAM= 18% IVAN= 20% KING= 30%
• Except Ivan and King, all the rest are managers without any
specification as to their respective duties.
• Mark wants to buy fabric to Astro Company. Liam opposes it

>
BBOYS COMPANY

MARK= 7% JOHN= 5% ERIC= 10% ALEX=15% LIAM= 18% IVAN= 20% KING= 30%
• John abstains.

=
7% + 5% = 12% 18% + 15% = 33%
 SUM IT UP!
APPOINTMENT
ONE (1800) SOME (1801)
IN ARTICLES OF AFTER NO
PARTNERSHIP PARTNERSHIP IS STIPULATION
CONSTITUTED -NOT SPECIFIC
ALL ACTS
-IRREVOCALBE ALL ACTS ALL ACTS
-REVOCALBE -CAN OPPOSE EITHER
JUST CAUSE W/O JUST
GOOD OR BAD FAITH
CAUSE
VOTE W/ Vote of
VOTE W/ CONTROLLING Vote of
VOTE OF ALL managing
CONTROLLING INTEREST majority of the
partner w/
INTEREST Managing
Controlling
Partner
Interest
REFERENCES
• De Leon, H. S. (2010). Obligations of The Partners. Comments and Cases on
Partnership Agency, and Trusts (Eight Edition) (pp.116-122). REX Publishing.
• Domingo, A. D. (2021). Obligations of The Partners. Partnership Revised
Corporation Cooperative Law (Second Edition) (pp.58-60). Coaching For
Results Publishing.
• Soriano, F. R. (2016). Rules of Management. Notes in Business Law (2016
Edition) (pp.657-660). GIC Enterprises & Co., Inc.
• Gleana (2018). Obligations of The Partners. The Law on Partnerships.
https://www.wattpad.com/969013116-the-law-on-partnerships-article-1800.
• Gleana (2018). Obligations of The Partners. The Law on Partnerships.
https://www.wattpad.com/970868600-the-law-on-partnerships-article-1801.
 LESSON SPOTLIGHT
A person who strives to live in a
“eudaimonia” is a kind of person who
will effortlessly do good things and
have a good life.