Professional Documents
Culture Documents
Prima Facie
Prima Facie
that is, P5,000.00 and B will pay the remaining P 15,000.00P 2,000.00P
TOTALP 60,000.00 6/6
balance since B overstepped his authority. 17,000.00
(3) To answer for risks in management
- Example:
• The same rules shall apply for losses in the partnership’s
A partnership is engaged in selling goods and a operations, however the industrial partner shall not share in
customer keeps asking for discounts and an the losses as there is no way for him to retract his industry
argument ensues between the customer, C and the and in the event of losses, his efforts would have been for
partner A. A gets injured and is brought to the vain and it can thus be said that he has already shared.
hospital. Who shall shoulder the hospital bills?
• What is the legal effect of having a stipulation that excludes
The partnership shall shoulder the hospital bills as it a partner from sharing in the profits or losses?
was during A’s time in managing the business that Under Article 1799, the stipulation shall be void because
he was injured.
there must be mutual sharing of profits and losses.
• Can the partners appoint a 3rd person to designate the
Article 1797
division of their profits and losses?
The losses and profits shall be distributed in
Yes and they will not be allowed to question his decisions
conformity with the agreement. If only the share of each
unless the designation of shares is manifestly inequitable.
partner in the profits has been agreed upon, the share of
each in the losses shall be in the same proportion. • 2 cases where partners ABSOLUTELY cannot question
designated shares by the 3rd parties:
In the absence of stipulation, the share of each
(1) When a partner begins to execute the 3rd party’s
partner in the profits and losses shall be in proportion to
what he may have contributed, but the industrial partner decision
(2) When complaints are raised AFTER three months from
shall not be liable for the losses. As for the profits, the
the point of knowledge of the designation
industrial partner shall receive such share as may be
• Can the partners designate one of themselves to distribute
just and equitable under the circumstances. If besides
profits or losses?
his services, he has contributed capital, he shall also
receive a share in the profits in proportion to his capital. No, the law prohibits this situation because there may be
disparities when it comes to the distribution of net profits.
(1689a)
Article 1863
In settling accounts after dissolution, the liabilities (1) Upon DISSOLUTION
of the partnership shall be entitled to payment in the (2) When ALL limited partners cease to be such
following order: • When should the certificate be amended?
(1) Those to creditors, in the order of priority as In all cases other than those that will cause the certificate to
provided by the law, except those to limited be cancelled.
partners on account of their contributions, and
to general partners Article 1865
(2) Those to limited partners in respect to their The writing to amend a certificate shall:
share of the profits and other compensation by (1) Conform to the requirements of Article 1844 as
way of income on their contributions far as necessary to set forth clearly the change
(3) Those to limited partners in respect to the in the certificate which it is desired to make
capital of their contributions (2) Be signed and sworn to by all members, and an
(4) Those to general partners other than for capital amendment substitution a limited partner or
and profits adding a limited or general partner shall be
(5) Those to general partners in respect to profits signed also by the member to be substituted or
(6) Those to general partners in respect to capital added, and when a limited partner is to be
Subject to any statement in the certificate or to substituted, the amendment shall also be
subsequent agreement, limited partners share in the signed by the assigning limited partner.
partnership assets in respect to their claims for capital, The writing to cancel a certificate shall be signed by
and in respect to their claims for profits or for all members.
compensation by way of income on their contribution A person desiring the cancellation or amendment of
respectively, in proportion to the respective amounts of a certificate, if any person designated in the first and
such claims. second paragraphs as a person who must execute the
writing refuses to do so, may petition the court to order
• Who has priority over distribution of assets in a limited a cancellation or amendment thereof.
partnership? If the court finds that the petitioner has a right to
(1) Creditors, including limited partners who have a claim have the writing executed by a person who refuses to do
against the partnership. so, it shall order the Office of the Securities and
(2) Limited partners’ share in profits Exchange Commission where the certificate is recorded,
(3) Limited partners’ return of capital contribution to record the cancellation or amendment of the
(4) General partners who have claims against the certificate; and when the certificate is to be amended,
partnership the court shall also cause to be filed for record in the
(5) General partners’ share in profits said office a certified copy of its decree setting forth the
(6) General partners’ return of capital contribution amendment.
• The difference of this with general partnerships is that in a A certificate is amended or cancelled when there is
general partnership, capital contributions are returned filed for record in the Office of the Securities and
BEFORE profits from surplus are shared. Exchange Commission where the certificate is recorded:
(1) A writing in accordance with the provisions of
Article 1864 the first or second paragraph
The certificate shall be cancelled when the (2) A certified copy of the order of court in
partnership is dissolved or all limited partners cease to accordance with the provisions of the fourth
be such. paragraph
A certificate shall be amended when: (3) After the certificate is duly amended in
(1) There is a change in the name of the accordance with this article, the amended
partnership or in the amount or character of the certificate shall thereafter be for all purposes
contribution of any limited partner the certificate provided for in this Chapter.
(2) A person is substituted as a limited partner
(3) An additional limited partner is admitted • What are the requisites for certificates to be amended or
(4) A person is admitted as a general partner cancelled?
(5) A general partner retires, dies, becomes (1) It must be in writing
insolvent or insane, or is sentenced to civil (2) It must be signed AND sworn by ALL concerned parties
interdiction and the business is continued (3) It must be registered with the SEC
under Article 1860
(6) There is a change in the character of the Article 1866
business of the partnership A contributor, unless he is a general partner, is not a
(7) There is a false or erroneous statement in the proper party to proceedings by or against a partnership,
certificate except where the object is to enforce a limited partner’s
(8) There is a change in the time as stated in the right against or liability to the partnership.
certificate for the dissolution of the partnership
or for the return of a contribution • A limited partner is a mere contributor, meaning, he is
(9) A time is fixed for the dissolution of the practically a stranger. This is because he has no participation
partnership, or the return of a contribution, no in management and control and is only liable to the
time having been specified in the certificate partnership, not to 3rd persons and if he is filed against as a
(10) The members desire to make a change in any general partner, he can file a counterclaim for wrongful
other statement in the certificate in order that it inclusion.
shall accurately represent the agreement • 2 exceptions to this rule:
among them. (1) To enforce his right against the partnership
• When should a certificate be cancelled?
(2) If he refuses to restore his contribution when the
partnership assets are not sufficient to pay creditors
Article 1867
A limited partnership formed under the law prior to
the effectivity of this Code, may become a limited
partnership under this Chapter by complying with the
provisions of Article 1844, provided the certificate sets
forth:
(1) The amount of the original contribution of each
limited partner and the time when the
contribution was made\
(2) That the property of the partnership exceeds
the amount sufficient to discharge its liabilities
to persons not claiming as general or limited
partners by an amount greater than the sum of
the contributions of its limited partners.
A limited partnership formed under the law prior to
the effectivity of this Code, until or unless it becomes a
limited partnership under this Chapter, shall continue to
be governed by the provisions of the old law.