Name: Jeth A.

Mahusay Date: November 2020

Instructor: Atty. Reeld Holly Rosas Course/Year: BSA- 3

Subject: Business Laws and Regulations

Formation of Partnership

At first, I asked myself why is there a need for business law and
what is its purpose? I was enlightened by our professor and was
answered my question above. There’s a need on business law not only for
profit, but also to protect our profits and assets on the business. I learned
from our professor the importance of Law on Partnership. In terms of
ownership, A partnership arrangement explains precisely who owns what
percentage of a business. In return for more of the profits, a majority
partner might take more of the responsibility. In return for putting up a
greater investment and taking a larger share of the income, he could also
ask for the opposite situation, taking less regular responsibility for
operations. A relationship arrangement defines who gets what if the
company is sold.

In liability, some partnerships are general partnerships, with

obligations and responsibilities shared by the partners. Other
arrangements are limited partnerships, with one or more partners
operating as an investor with little or no business activity and little or no
liability. Without being directly involved in the activities, a relationship
may protect partners who wish to share in the profits and open
themselves up to legal issues, such as litigation or tax liens.

In dissolutions, if one partner wishes to dissolve a partnership, the

other may trigger considerable hardship. How the business can be
dissolved or a partnership moved should be laid out in a partnership
agreement. Since they trust each other and enjoy working together,
partners also go into business together. Some put a clause in their
contracts that without giving the original remaining partner an
opportunity to buy out the other, one partner could not sell his share to a
third party. In other situations, before they can sell to a specific party,
partners may need consent. Multiple partnership arrangements cover
partners in the event of one partner's death. The relationship typically
terminates with the death of one of the partners in several general
partnerships. A new agreement could be drafted by the remaining
partners. Some partnership arrangements discuss the rights of heirs, with
some agreements enabling the surviving partners to purchase a share of
the interest of the deceased partner rather than allowing a partner to
become a spouse or child. If the company is dissolved, partnership
agreements will spell out who retains properties, such as the business
name, client list or recipes.

In future, I want to build a business and that is in a form of

Partnership. It is because I see a fair conditions on it. In future, I want to
franchise a Jollibee and my friends are my partners so the mere
agreement is easy for us to build up. These topics will apply when I have
a business such as “partner roles in signing and authorizations”, have a
very good awareness of what the company's managers or officers are
entitled to do on behalf of the company. “Duties and responsibilities of
each partner”, a clarification of the roles and duties of each partner
should be given, so that each partner knows what to expect from the
other. In addition, there should be fixed implications for partners who do
not fulfil their duties. “Contributions of capital”, what amount of time,
money, and assets are committed to the relationship by each partner?
This covers both the initial contributions and subsequent contributions
that might be required in order to continue to run the organization in the
future. “Rights to distributions, profits, compensation, and losses”, the
Partnership Agreement must explicitly and expressly lay down any right
of the Partners to obtain voluntary or mandatory distributions, including
the return of any or all of their contributions.

The reasons why I choose Partnership is its limited liability

insurance protects you from your partner's conduct (and vice versa). You
have unlimited legal responsibility without it, the operating agreement
and corresponding initial minutes and formation documents are fantastic
documents to define all of the partnership terms, the flexibility of
allocating profits, losses, and capital, as well as for allowing individual
partners to do their own tax planning after they receive their allocated
share of profit.