HANDOUT NO.
1P
POINTS OF PARTNERSHIP
DISTINCTION
Governing Law Civil Code (RA 386)
Manner of Creation Mere agreement of the
parties (Art. 1767)
Number of May be organized by only
Incorporators two persons (Art. 1767)
Commencement of From the moment of the
Juridical Personality execution of the contract of
partnership, unless it is
otherwise stipulated (Art.
1784)
Powers Any power authorized by
the partners provided it is ingranted by law or implied
consonance with Art. 1306
CC
Binding Acts A partner may bind his co-
partners for acts within the agents of the corporation
scope of the business
Management When the management is
not agreed upon, every
partner is an agent of the
partnership (Art. 1803)
Effect of A partner can sue a co-
Mismanagement partner who mismanages
(Art.1794)
Right of Succession No right of succession (Arts. Has such right
1828-1831, 1860)
Page 2/Handout No. 1
CORPORATION
Corporation Code
(RA 11232)
Created by law or by
operation of law (Sec. 2)
Requires at least one
incorporator (Sec. 10)
From the date of issuance
of the certificate of
incorporation by SEC
Only the powers expressly
from those granted or
incident to its existence
Stockholders, not being
cannot bind the
corporation, except when
authorized by the
Corporation Code in the
case of close family
corporations.
Vested in the board of
directors or trustees
elected by the stockholders
or members, respectively
A suit against a member of
the board of directors or
trustees who mismanages
must be in the name of the
corporation
Extent of Liability to The partners (except limited
third persons partners) are liable
personally and subsidiarily
(sometimes solidarily) for
partnership debts to third
persons even to the extent
of their private property
(Arts. 1816,1822-1824)
Transferability of A partner cannot transfer
Interest his interest in the
partnership so as to make
the transferee a partner
without the consent of all
the other existing partners
because of the principle of
delectus personarum (Art.
1767, 1804)
Term of existence Any period of time agreed
by the partners (Arts. 1767,
1785)
Firm name A limited partnership is
required by the law to add
the word “Ltd” to its name
(Art.1844)
Death or Bankruptcy Usually causes the
of members dissolution of the firm
Dissolution At any time by the will of
any or all of the partners
(Art.1830)
Sources: Civil Law Reviewer, Desiderio P. Jurado, 2012 Edition
Comments and Cases on Partnership, Agency and Trusts
Hector S. De Leon, 2011 Edition
A. Villegas
Stockholders are liable only
to the extent of the shares
subscribed by them
A stockholder has generally
the right to transfer his
shares without the prior
consent of the other
stockholders
May not be formed for a
term in excess of 50 years
extendible to not more than
50 years in any one
instance (Sec. 11)
May adopt any firm name
provided it is not the same
or as similar to any
registered firm name.
Does not result in such
dissolution
Can only be dissolved with
the consent of the State