Laws on Partnership

and Corporation
HC-8

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 Types of Business Ownership
Public Limited
Sole Proprietorship Companies, PLC

Not-for-profit
Partnership Organisation

Private limited
Cooperatives
companies (LTD)

There are six main types of Business Ownership.

In this presentation, I will be discussing about laws involving Partnership.

Starting a business is a big decision that comes with a lot of challenges. The first challenge
business owners face is deciding the ownership structure they want to use. This structure
will be heavily influenced by the type of business ownership employed.

Each business ownership type has its unique advantages and disadvantages which
contribute to the decision-making process. Understanding ownership is essential before
setting up your own business. Let's take a closer look.

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 Business Ownership
Business ownership refers to legal control over a business. It gives
the owner the legal right to make certain business decisions.

1 Sole Proprietorship
This is the most common form of business ownership and the simplest. Sole
proprietorship means that a business is owned and directed by one individual.
2 Partnership
A partnership is an association of two or more persons to carry on as co-
owners of a business for profit
3 Private limited companies (LTD)
A private limited company - also referred to as LTD - is an incorporated
business entity that is privately held and controlled.
4 Public limited companies (PLC)
A PLC is managed by a board of directors and owned by shareholders. A PLC's
shares can be traded with the public on the stock exchange.
5 Non-for-profit Organization
.
A non-profit organisation has been established for purposes other than profit generation.
The organisation's generated income does not go to the owners or members.
6 Cooperatives/ Cooperation
A cooperative is a business structure whose owners are consumers of its services.

1. This is the most common form of business ownership and the simplest. Sole
proprietorship means that a business is owned and directed by one individual. This
individual owns all the rights to run the business however they deem fit. In other words, if
you start a brand new business, and you are the only person owning and running the
business, it is considered a sole proprietorship (sole trader).
2. A partnership is an association of two or more persons to carry on as co-owners of a
business for profit. The definition does not include religious associations, conjugal
partnerships, and others of a similar nature because a partnership as defined by law refers
only to associations the purpose of which is to obtain profits to be distributed among the
partners. A partnership contract is based on trust and confidence.
3. A private limited company - also referred to as LTD - is an incorporated business entity
that is privately held and controlled. The ownership of the business is divided by shares in
the company. Those who own the shares are known as shareholders. This type of business
ownership provides limited liability to the owners. Limited liability provides the
shareholders' personal assets with protection from liabilities incurred by the business.
4. A public limited company - also known as PLC - is a business ownership style unique to
the United Kingdom, although it is equivalent to what is known as corporation in other
countries. A PLC is an incorporated business, meaning it exists legally as a separate entity
from its owners. It also has limited liability, as it offers protection to its shareholders from
business liabilities.
5.A non-profit organisation has been established for purposes other than profit
generation. The organisation's generated income does not go to the owners or members.
6. A cooperative is a business structure whose owners are consumers of its services. It is
operated to provide benefits to those people.

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 Partnership
Partners

Article 1767. 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.

The essential requisites of a partnership are:

(1) An agreement to contribute money,
property, industry to a common fund. This is
complied with if:
a.) Each one of the partners brings or is
obliged to bring something to the
partnership
b.) and that which is brought becomes
common property.
2).Intent to divide the profits among
themselves. This is complied with if:
(a) partnership is established to obtain
profits;
(b) profit must be common to all parties; and
(c) profit or loss must be divided among the
partners.

A partnership is an association of two or more persons to carry on as co-owners of a

business for profit. Hindi nito sakop ang ang religious na mga gawain o ano pa man maliban
sa pinaka-goal nito, ang kumita.

1.Para makabuo ng isang partnership, kailangang ang partners ay may agreement na

matrabaho for the business. They need to ensure that the business is one of their
responsibilities. They are obligated to do something for the partnership. And of course,
their main goal should be on one common goal.
2. Dapat rin nilang isaalang alang ang paraan o kasunduan ng paghahati hati ng kanilang
kikitain. Dapat itong pagkasunduan ng bawat myembro ng partnership.

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 Pros and Cons of
Partnership
Pros
Easy to form
Cons
Improved growth possibilities Instability
Freedom from bureaucracy Difficulty in obtaining large sums of
capital Difficulty in obtaining large sums of
capital
Firm is tied to the acts and judgment one
of partner as agent

Ang Partnership ay maaaring maging maganda o di maganda ang kalalabasan.

Kabilang sa mga Good benefits or advantages ng partnership ay madali itong maform.
Kahit verbal agreement lang ay pwede na . Any ideas for the partnership is pwede rin. It
has a wide open door for ofortunities

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 Classifications of Partnership
(1) According to subject matter:
(a) Universal partnership - a partnership where all of the partners contribute all of their properties to
the common fund and speaks of no particular purpose or subject matter, as long as the purpose in
forming a partnership is to obtain profits and is not contrary to law, morals, public order and public
policy. Nowadays, seldom if none do you experience business establishments forming universal
partnership.

(b) Particular partnership-a particular partnership has for its object determinate things, their use or
fruits, or a specific undertaking, or the exercise of a profession or vocation."

(2) According to liability:

(a) General partnership 1 composed of general partners where
liabilities extend to their personal properties.
(b) Limited partnership (usually attaches the word "Ltd" or
"Limited" at the end of the company name), one formed by two
or more persons having as members one or more general
partners and one or more limited partners, where the liability of
the latter to third persons is limited to their capital contribution."
(3) According to the duration:
(a) Partnership for a fixed term- is one in which the
term of its existence has been agreed upon expressly
(as when there is a definite period) or impliedly (as
when a particular enterprise or transaction is
undertaken). The expiration of the term thus fixed or
the accomplishment of the particular undertaking
specified will cause the automatic dissolution of the
partnership.

Classification of Partnership
(1) According to subject matter- ito ang goal ng partnership.
Ang universal partnership ay tumutukoy sa pangunahing goal ng partnership, para sa kita o
profits. While the second one is for the end goal of the partnership.
(2) According to liability: it is the liabilities of each member to the partnership. General
partnership - this involves an investment from all partners, and all partners bear the
responsibility for any debt incurred by the business. The partnership usually doesn’t need
a formal agreement as it could be verbal between business owners.

Limited Liability Partnership, LLP - LLP provides protection for each partner against debt
incurred by the other partner(s). It usually requires a formal agreement between partners
to protect each from the actions of the others.

(3) According to the duration: ito naman ay yong time allocated for the partnership to last.
And automatically, a partnership is dissolved or natatapos na when the end goal is achieve
or pwede namang hindi na kaya ang goal kaya tatapusin na ang partnership.

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 Forms of Partnership
A partnership can be in any form, even if not recorded at the
Office of the Securities and Exchange Commission except:

(1) when it is stipulated;

(2) when immovable property or real rights are contributed, in which case there must be a
public instrument to which is attached an inventory of the immovable properties and
signed by the parties, otherwise the partnership is void.

(3) In case of limited partnership, the parties must:

(a) sign and swear to a certificate, which shall state, among others the name of the
partnership adding the word "Limited," and the character of the business;

(b) File for record the certificate in the Office of the Securities and Exchange Commission."
Failure to comply with the foregoing formal requirements will only make the partnership a
General Partnership.

Forms of partnership

Ang Partnership can be in any form as long as its goal like i said is to make profits.
However, there are instances na ang partnership ay magiging isang general Partnership Or
a legal based partnership.
Ang isang partnership ay magiging hindi na partnership because it will become a higher
type of partnership when.

#1.

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 References:
https://www.studysmarter.co.uk/explanations/business-
studies/introduction-to-business/business-ownership/
https://corporatefinanceinstitute.com/resources/managem
ent/partnership/

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 Thank you
FOR LISTENING!
Don't hesitate to ask any questions!

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