PARTNERSHIP ART.

1767
● 2 or more person bind themselves
● Contribute money, property, or industry to
a common fund.
● Intention to/dividing the profits among
themselves
● 22 or more person may form partnership for
exercise of a profession,
Characteristics elements of partnership
1. Consensual (perfected by mere consent)
2. Nominate (special name/designation in law)
3. Bilateral (2 or more person)
4. Onerous (Benefit so they give something)
5. Commutative
6. Principal (doesn’t depend for its existence or
validity contract)
7. Preparatory (profits dividing among themselves)
Essential Features of Partnership
1. Valid Contract
2. Legal Capacity to enter into the contract
3. Mutual contribution of money, property, industry to
a common fund.
4. Object must be lawful
5. Purpose or primary purpose must obtain and divide
the same among the partners.
Note: Articles of partnership must not be kept secret among
members.
Delectus Personae- choice of the person.
Limited Partnership- cannot be created by mere voluntary
agreement legal capacity of parties enter into the contract.
GR: Before there can be a valid contract of partnership,
it is essential that the contracting parties have the necessary
legal capacity to enter into the contract. Consequently,
person who cannot legally give consent to a contract cannot
be a partner. Ff.
● Unemancipated minors
● Insane or demented person
● Deaf- mutes who do not know to write
● Suffering from civil interdiction
● Incompetents under guardianship
EXPNs: Cannot enter into universal partnership, people
who are giving each other any donation or advantage
cannot. Married women can enter into partnership. Even
without her husband's consent.
Mutual Contribution to a common fund
1. Proprietory of financial interest- w/o the element
of mutual contribution to a common fund, there
can be no partnership.
2. Form of contribution:
a. Money- Currency;(x) Checks, derafts,
promissory notes, payable and other
mercantile documents. They are only
representative of money.
b. Property- real, personal, tangible, or
intangible. Credit such as promissory note
or other evidence of obligation or even
mere goodwill may be contributed as it is
considered property.
c. Industry- “worked or service of party
associated” it may be “intellectual” or “
personal manual effort.”
Note: Limited partner in a limited partnership, cannot
contribute mere industry or services.
Legality of Object
1. Effect of Illegality- No partnership can arise as the
contract is void if the object is unlawful, when it
contracts to law morals, goods customs, public
order, or public policy.
2. Businesses partnership not permitted to engage
in- a partnership may be organize for any purpose
except that it may not engage in an enterprise for
which the law requires a specific form of business
organization.
Intention to realize and divide profits.
1. Very reason for existence of partnership- idea of
obtaining pecuniary profit or gain (distinguished
church).
2. Sufficient if obtaining profit principal purpose
Sharing of profits
1. Not necessarily in equal shares- SC “ there must be
a joint interest in the profits”
2. NOt conclusive evidence of partnership.
Sharing of Losses.
1. Necessary corollary of sharing in profits- under 1767
refers to “ profits” only and is silent as to “ Losses”
object of partnership is primarily the sharing of
profits.
2. Agreement not necessary- it is not necessary for the
parties to agree upon a system of sharing.
ART 1788
● Partnership has a juridical personality:
● Separate and distinct from that of each
partner
Partnership, Juridical person
● Under the law
● Partnership may acquire and possess
property of all kinds, incur obligations and
bring civil or criminal action.