PARTNERSHIP. ELEMENTS. + Art. 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. CHARACTERISTIC ELEMENTS OF PARTNERSHIP. +1. Consensual ~there must be meeting of minds. +2, Nominate — it has name/designation, +3. Bilateral/ Multilateral ~ there must be 2/more persons. +4, Onerons — the services/business of partnership has something in return; iis not gratuitous in character. +1. Intention to form a contract of partnership +2. Participation in both profits and losses +3. Community of interests 5.Commutative - partnership has something in return. (almost same meaning with onerous) 6, Principal —it can stand alone. 7.Preparatory — when you have put up a partnership, it is being set up in preparation for future contracts. ESSENTIAL FEATURES/ATTRIBUTES OF PARTNERSHIP PRINCIPLE OF DELECTUS PERSONAE (CHOICE OF PERSONS) +L. There must bea valid contract. artes must have legal capacity to enter nto the contract There must be mutual contribution of money, property, ot industry to «common fund +4. Tre object must be Zewfi. +5, The primary purpose must to obiain profits and o divide the same among the paris JURIDICAL PERSONALITY + Art. 1768. The partnership has a juridical personality separate and distinct from that of each of the partners even in case of failure to comply with the requirements of Article 1772, first Paragraph. a person has the right to select persons with whom he wants to be associated with in partnership. Partnership, a juridical person + Asan independent joriical person, «partnership may eter into ‘contacts, acquire and possess property af al kins in its name, aswell as incur obligation and bring civil or criminal ations, + Tumay enter into contracts and may sve and be sued in is frm name or by ite duly authorized represenative. + Partners cannot be Held able fer he obligations of th partnership unless its sown thatthe egal fetion of diferent juiial personality is being sed fer ‘fraudulent, unfair or llegal purpose.indo Pens 1, Natural Fern ~ red Got 2 dundal Pere reed yop, ‘opr ee cpr yn mest Pn ct spreesipae atarax athe pracy me ca cm perme foo0 oo ART. 1769. IN DETERMINING WHETHER A PARTNERSHIP EXISTS, THESE RULES SHALL APPLY: +1, Bxoept as provided by Antcle 1825, persons who are not partners as to each other are not partners as to third persons +2. Co-ownership or co-possession does not of itself ‘establish a partnership, whether such co-ownership ot co-possessors do or do not share any profits made by the use ofthe property. PARTNERSHIP VS. CO-OWNERSHIP Effect of failure to comply with statutory requirements Under Art 1772 Partnership still acquires personality despite failure to comply with the requirements of execution of public instrument and registration of name in SEC. Under Arts 1773 and 1775 Partnership with immovable property contributed, if without requisite inventory, signed and attached to public instrument, shall not acquire any Juridical personality because the contract itself is voi. This is also true for Secret associations or societies. 2.The string of gost reuse it ofl eth pasate cent peso Shang thm hve ont coma gh ones sy oper fom sich he re re 4.The sexy a paso a sho the pots of bss is prina ci evidence tha eis arte ne bic, tt oo uch niece sal be dew such pois wee ved in armen: 1 Asa debby instant or thers As wages fan employe eno nod, «©. Asananmiy fos widow orrpreenttiv decent ptt, Asin ou, though he rut of pyc ay wih he rif he bane ‘Ashe cretion fr the sale ofa geodwil of sins oor propery by insaliens oF PENAL PROVISION heed yew mayest wa cont i i com erp ny Sem i om ch ms en coe fa git — a te gwd re an BycnthoT sowed _ Methrcmet em oerpes May dwar ws ey sty ie Tp + Caner coop + Daher he pe as ae aes fone coowne (Gobet ceawnerip Effects of an unlawful partnership: 1, The contract is void and the partnership never existed in the eyes of the law; 2.The profits shall be confiscated in favor of the government; 3.The instruments or tools and proceeds of the crime shall also be forfeited in favor of the government, 4.The contributions of the partners shall not be confiscated unless they fall under #3, ‘Art, 1770, A partnership must have a lawful object or purpose, and must be established for the common benefit, or interest of the partners. When an unlawful partnership is dissolved by a judicial decree, the profits shall be confiscated in favor of the State, without prejudice to the provisions of the Penal Code governing the confiscation of the instruments and effects of a crime CONTRIBUTION OF IMMOVABLE/REAL PROPERTY “Art. 1771. A partnership may be constituted in any form, except where immovable property or real rights are contributed thereto, in which case a public instrument shall be necessary .Form of partnership contract.General rule [No special form required for validity or existence of the contract of partnership. Contract maybe made orally or in writing regardless of ‘the value of the contributions. Where immovable property or real rights are contributed Execution of public instrument necessary for validity of contract of partnership. To affect 3rd persons, the transfer of real property to the Partnership must be duly registered in the Registry of Property CONTRIBUTION OF MONEY/ PROPERTY (PERSONAL)/ OR COMBINATION OF BOTH ART 1173. must have a public instrument if it is ‘three thousand pesos or more (P3000 or more) “must be recorded & registered w/ Securities and Exchange Commission (SEC) “-fllure to comply, shall not affect the liabilty ofthe partnership & members to the 3rd persons. CONTRIBUTION OF IMMOVABLE/ REAL PROPERTY Art 1773, *Where immovable property contributed, failure to comply w/ the following requisites will render the partnership contract void: +1. The contract must be in a public instrament; +2, An inventory ofthe property contributed must be made, signed by the partes, and attached tothe public instrument, ‘ART.IT76 |__chassiFicarions OF parTNeRsHip | 1 Astothe exe of sujet mater A. Univeral partnership, APL77.A nivel patnebip may rer al be resent propa al he of Universal partnership fal present property 1178 a ives pata fll ese prope the propery which belongs cach ofthe pares e tine be nwo af te primey Soames te corm propery fal he tery 5 well a6 Mike profs which hey may acquire wh, *h Univerl partership of profits. AP 178, A wiverlparertip of ots ‘cmp al that he partes my sequre by find wor ring te eine of| ‘eparseahip Mowble cr nmotale propery whch ec ote ster my poses tis ine of be clean of te contac sal conn fo pert excasiely och, oly the aati using te Fates. 2s 0 bity of the partners 1 Ganeral Pertmarship oe consi eel ars oa ate rata ans nd ‘etme scr er septs prope pre eS 1. Linited Partnership oe ome by tm or nora pers ning eens ono marge frnes anon cr movie paren eater! eng peta adele clans ot 3. Astoits dri 2 Panentip aa ne nfo tne cid not rm parted ‘etre onda ay by tangent fpr De Sone para somorom 3nd ro prea nrg w/e ard aro oetamer desing io ones swum ‘rarer wth dem: one nether rete prensa agred ‘ART.1775 ASSOCIATIONS & SOCIETIES, WHOSE. ARTICLES ARE KEPT SECRET AMONG ‘THE MEMBERS IS NOT A PARTNERSHIP BUT CO-OWNERSHIP. «Partnership relation is ereated only by the voluntary agreement ofthe partners. Its essential that the partners are fully informed not only of the agreement but ofall mattersafecting the partnership. Secret partners arenot by nature partnerships. Secret partnerships shall be governed by the provisions relating to co-ownership. ‘Ant 1981. Arles of universal partnership, eatreginto without, spectcation of is ature onl const «universal panes of profs, b. Particular Partnership (APL 1783) Art. 1783. A pariclar partnership has fois object determinate things, hei use or fut, or a spec undertaking othe exercise of profession o vocation. 23. Ast the legality ofits existence ‘De jure partnership: one wie has complied al the legal requireents fois cetablidment ‘De fact partnership one we hs fled o comply w/ all the egal resuirements for ‘as esublihment 4.As to representation to others ‘Ordinary or rel parmership: one wie scully exits among the pater and also sto Sd persons. 'bOstensible partnership or partnership or partnership by estppel: one wi in reality isnot parsrship, buts considered a parnersip only in relation those who, by ter conductor admission, are precluded to deny or cisprove its existence.‘5. Asto representation to others ‘4.0rdinury or real partnership one wie actully exists among the parters and alo a5 1 3d persons. /bOstemsile partnership or partnership or partnership by estoppel one win reality isnot partnership, but is considered partnership only in relation to those who, by tei ‘conduct or admission, ae precludd © deny or daprove is existence 6.A8to pubiciy ‘Secret partnership: one wherein the existence of certain persons a partes isnot, ‘vowed or made kaown tothe pubic by any of he parsers ‘bOpen or notorious partnership: one whos existences avowed or made known othe public by the members ofthe fm, Capitalist Partner contributes money/propery +2. Industrial Partner contributes a combination ofboth money, propery industry. +4, General Partner lable wp to his personal propery “Continues the business of the partnership afer it hasbeen dissolved, 10. Surviving Partner -remsins afer paiaership has been dissolved by death of any arin. MI. Subpartner not being a member of parinership,comacis w/ a parr w/ reference to latter's share in the partnership. UNIVERSAL PARTNERSHIP WITHOUT ‘SPECIFICATION OF ITS NATURE “Art. 1781. Articles of universal partnership, entered into ‘without specification of its nature, only constitute a Universal partnership of profits. + Reason for presumption: universal partnership of profits imposes less obligations on the partners, since they preserve the ownership of their separate property. As to purpose a.Commercial or trading partnership: one formed or the transaction of business. Professional or non-trading partnership: one formed for the exercise of a profession S. Limited Partner -liable up to his capital contribution only. 6, Managing Partner manages the affairs / business of the partnership -known 2 general/ real partner. 7. Liquidating Partner ~takes charge upon dissolution. 8 Partner by Estoppel -not really a partner, but liable asa partner -known as partner by implication! nominal partner/ quasi-pariner. 1. numeric oe wh ace pu snow epi apt sce pare ot no er oie pan ese tit amen bearer by sepa loupe ye ser pros Hes aia pat ‘Sea pr so eat ey se pain ee stg my Delanuni be pra ‘Orin pariner ne wo isa mambo retire ie fa eatin 6 Incoming port prin iehyrshe e en i axsigpmntp tt meme “ating purer an its fom pret. «wining ater AIT A Shen pop mylene se poy the pte **Persons who can’t make donation/advantage: ‘+ Husband & wife Persons found guilty of adultery Persons found guilty of concubinage Clients to his lawyer & vice versa itigans to judges Citizens to gov't employeesWHEN DOES PARTNERSHIP BEGINS? + Art. 1784. A parmesip begins fom te moment ofthe exeouion ofthe com unless itis + Went corporat’ dey? + Whee cpr ode cy dt Mey 1980 We he ey deft C8 Cate a te Ppl? Partnership at will Sinstances: 1. Partnership was created without fixed term, 2 Partnership was crested with a fxed term, but after the expiration of suc fem, the partership stil continue transacting busines. 3 Prtnerbhip was created fora particular parpose/ undertaking fer atsning such purpose, the partnership stil contin wansacting business, PARTNERSHIP AT WILL. ‘Art, 1785, When a contract for a fixed term or particular ‘undertaking is continued after the termination of such term or particular undertaking without any express agreement, the rights and duties ofthe partners remains the same as they were at such termination, so far as is ‘consistent with a partnership at wil AR. 1786 EVERY PARTNER (5A DEBTOR OF THE PARTNERSHIP FOR, WHATEVER HE MAY HAVE PROMISEDTO CONTRIBUTE THERETO. *He shall also be bound for warranty in case af eviction with regard to specific and determinate things which he may have contributed to the partnership, in the same cases and in the same manner as the vendor is bound with respect to the vendee. He shall also be liable for the fruits thereof from the time they should have been delivered, without the need of any demand. ‘ART. 1787 ‘ART. 1788 PARTNERS CONTRIBUTE PERSONAL PROMISSORY NOTE ISA VALID SUM OF PROPERTIES: MONEY ‘a. Amount of contribution will be based on the ‘manner prescribed in the partnership sb.If there is no prescribed manner, manner, consult an expert (professional appraiser) Liability of partner for estata Failure to return the money taken, there is the element of fraudulent appropriation of the money delivered to a partner with specific instructions for the use of the partnership, then estafa is committed under the Revised Penal Code. +-if you failed to make your promises you will be considered as partnership's debtor for the interest & damages from the time you should have complied with the obligation. ‘if! the partner had taken from the partnership coffers (Funds), his liability shall begin from the time he converted the amount to his own use. ART 1789. INDUSTRIAL PARTNER “Art, 1789. An industrial partner cannot engage in any business for himself, UNLESS the partnership expressly permits him to do so; and if he should do so, the capitalist partners may cither exclude him from the firm or avail themselves of the benefits which he may have obtained in violation of this provision, with a right to damages in either case.Capitan Parner (Ant1408) eam engaged in other busines, EXCEPT in buss withthe ulin fhe partes he ‘Sens ih ‘SANCTIONS if capil parmer engaged wih usin with he eine fhe parresp be engaged wih bot De oat fhe putes petro ART 1790 CONTRIBUTION *Art. 1790. Unless there is a stipulation to the contrary, the partners shall contribute equal shares to the capital of the partnership ART. 17! IN CASE OF IMMINENT LOSS “Art, 1791, If there is no agreement to the contrary, in case of an imminent loss of the business of the partnership, any partner who refuses fo contribute an additional share to the capital, except an industrial partner, to save the venture, shall be obliged to sel his interest to the other partners. ‘Queston: A (debe owes managing garner BP 4000 & CDE Paerip P20, 00a the Same ime He pid al of P10, 000 the maging pre. How sould the payment oA eid Avawer Te anapng pre shold vie operons: 210% P10, 00-2000 Fer DE: 10x Po, o9Pe000 tia NO met ve he payer propionate 2 tsi th dtr ay te Ex. Aewes B,C, D, E and F P100, 000. After paying B 25, 000 ‘A became insolvent, Is partner B obliged for the share of partners C, D, E, and F in the payment given by the debtor? YES. B shall give C, D, E and F C PS, 000 each from that P25,000_he received from A. ARETE OBLIGATION OF THE MANAGING PARTNER TO DIVIDE ‘THE PAYMENT IN PROPORTION TO THE TWO (2) ‘Art, 1792. If « partner authorized to manage collects « demandable sum, which was owed to him in his own name, from a person who ‘owned the partnership another sum also demandable, ‘the sum thus collected shall be applied to the two eredits in proportion to their amounts, even though he may have given a receipt for his own credit only; but should he have given it forthe ‘account ofthe partnership credit, the amount shall be fully applied to the later, ART. 1793 IF THE DEBTOR BECOMES INSOLVENT ‘Art, 1793. A pertner who has received, in whole or in part, his share of a partnership credit, when the other partners have not collected theirs, shall be obliged, if the debtor should thereafter become insolvent, (0 bring to the partnership capital what he received even though he may have given reecipt for his share only. “ART.1797 3 RULES INTHE DISTRIBUTION OF PROFITS LOSSES: “Lf theres an agreement sto division of profit & losses, apply the agreement. +2 If theres no agreement a othe division of profit, bt ther isan agreement ast division of loses, in case of profivincome, apply the agreement of os tothe profit +3. theres no agreement as to the division of profit & losses, vie it in proportion of tei capital contribution.‘SHARE OF INDUSTRIAL PARTNER IN PROFITS AND Losses ‘ART. 1789, A STIPULATION WHICH EXCLUDES ONE OR MORE PARTNERS FROM ANY SHARE IN THE PROFITS OR LOSSES IS VOIN. “Unless agreed upon, the industrial partner shall receive such share inthe profits as may be just and equitable under the circumstances. As for the losses, the industrial partner is not liable, However, under Art. 1816, if the partnership has contractual debt and it cannot pay, the industrial parmer equally with the capitalist partners, can be compelled by the creditor to pay his pro rata share out of his own property or assets. ‘AR. 1800 [A PARTNER APPOINTED AS MANAGER MAY EXECUTE ALL ACTS OF ADMINISTRATION. Unless he should act in bad faith, His power is revocable nly upon just and lawful cause and upon the vote of the partners representing the controlling interest. *Appointment as manager after the constitution of the partnership. Appointment may be revoked at any time for any cause what so ever. ART. 1801. IF TWO OR MORE PARTNERS HAVE BEEN ENTRUSTED WITH THE MANAGEMENT OF THE PARTNERSHIP thou specification of heir duties or without stipulation tat one of thr shall not at without the conseot of al cthers each one separately execute all acts of adeinstration. *Ifone or more ofthe managing partners shall oppose the acts of the others, then the decision of the majority of the managing partners shall preva Right to oppose can be exercise only by those enrsted with mg. “Incase of ti, matter sal be decided by the vote ofthe pares owning the contralting interes. “EXCEPTION: INDUSTRIAL PARTNER ‘EXCEPTION TO THE EXCEPTION : Art. 1816 “REASON: An industrial partner is not liable for losses because ifthe partnership fails to realize any profits, the industrial partner would have contributed his labor in vain. Scope of the power of the managing partner General rule: partner appointed as manager as al the powers of a general agent as well as all the incidental powers necessary to camry out the abject of the partnership inthe transaction of its business. Exception: When powers of manager is specifically restricted. A managing Partner may not bind the partnership by contrac foreign to its business. ART. 1802 WHEN UNANIMITY OF ACTION STIPULATED ‘CONCURRENCE NECESSARY FOR VALIDITY OF ACTS + Axa the pnts may igi a ane he maging ater sl itu te cone fects nsuch seu, Se waninous consent fale ani ptt al be cy ‘ete vai of roc PXCEPTION: fone of he mating pre i set, ince of repre in & et Sing tte cn me kd mee emai aries my ce wath poe NOTE: Conf mnaging partes sot esr in oun ansactons ‘ART. 1803. WHEN THE MANNER OF MANAGEMENT HAS NOT AGREED UPON, THE, FOLLOWING RULES SHALL OBSERVED: +1 All parmers are agents. All of them shall considered mrs, and agents and whatever eny ge of them Tray do alone shall ind the partnership. I theres timely opposition same rele as Art. 1801 “2 None ofthe partners, wo convent of thes ca mike important Siteratton in te unmavable property of tre parserhip, even tt ie wef wo the purer, but if thre ts eis ofthe consent by the “ober partes is manifestly prowdical to the iferest of the parmership, the court's intervention may be sougt. ATE ‘APARDIER HAS ABIGHT TO ASSIGN HIS INTEREST TO 23 HERSONS, HOWEVER THE SAID ASSIGNEES ARNOTOE [AUTOMATICALLY HD AS APARTIIR W/O CONSENT OF AL THE PRT “Person for ¢ division of the profits coming to him fom the parneship enterprise i termed subpertnership. *Subparmership agreements donot affect the composition, existence, or operations ofthe fim. The subpainers are partners incre, “However, inthe absence of the muteal assent of all the partis, # subpartner does not become a member of the Partnership, even if the other partners know about the agreement, Not being ¢ member of the partarship, he dots not acquire te rights of partner ner she Hable for is debsPROHIBIBITION ON CAPITALIST PARTNERS +Art 1808 Capitalist partner CANNOT engage in the same kind of business of w/c the partnership. “Any capitalist partner violating this prohibition, shall bring to the common fund any profits derived from his transactions, & shall PERSONALLY bear all the losses. PROPERTY RIGHTS OF A PARTNER “Art. 1810 Three (3) property rights of a partner: His rights in specific partnership property His interest in the partnership His right to participate in the mgmt. ART. 1811 A PARTNER IS CO-OWNER W/ HIS PARTNERS OF ART, 1815. EVERY PARTNERSHIP SHALL OPERATE UNDER A FIRM NAME WHICH MAY OR MAY NOT INCLUDE THE NAME OF ONE ‘OR MORE OF THE PARTNERS. THOSE WHO, NOT BEING MEMBERS. (OF THE PARTNERSHIP INCLUDE THEIR NAMES IN THE FIRM NAME, |__suat be suimeCT TO LiARLITY OFA paRTNER | ‘Right ofthe partners to choose fem name The partners enjoy the utmost freedom nthe selection ofthe partnership name, “Asa general ue, they may adopt any fm name desired. Use of misleading name ~The partnes cannot use a name thats identical ot deceptively confusingly sir to that of any existing partnership 0 corporation orto any otver name already protected by law ors patent deceptive, confusing or “contrary to existing laws, as to mislead the public by passing isl of 25 another Partnership or corporation, or ts goods or series those of such other company LABILITY “Ant 1816. All partners, including industrial ones, shall be liable pro rata weith all their property end efter all the partnership assets have ‘been exhausted. forthe contracts which may be extered into in the ‘name and for the account of the partnership, weder is signature and Dy a person authorized to act for the partnership, However, any partner ‘may enter into a separate obligation to perform a partnership contract, ‘ART. 1812. A PARTNER'S INTEREST IN THE PARTNERSHIP IS HIS SHARE OF THE PROFITS AND SURPWS. *Shace of profs and surplus ~ The partner's interest nthe parersip consists of his ‘share inthe vdisibted profits ding the life ofthe pateship as «going concer and his share in he undsunbtedsupls afer its dssoliion “Profits: the exces of returns ver expenditure na transaction o eis of ransations ‘or the net income ofthe partnership forgiven period + Surplus: the assets ofthe partnership afer partnership debs and bilities ae paid and seed and the sights ofthe partners among themselves ae ajusted. Is the exces of sets over falites. IF the liabilities are mpre than the asses, the difference represen the extent ofthe ls. Liability inclusion of name in the firm name Persons who, not being partners, Include ther mes nthe fr name do not aequire the rights ofa partner but stall be subject to the liability ofa partner insofar as 3d Persons witbou notice ‘are concerned, Art. 1815 does not caver the case ofa limited partner who allows his name to be included inthe firm name, oof a person continuing the business of Partnership after dissolution, who uses the name ofthe dissolved partnership or the name of deceased partner as part thereof. Pro rata Habilty — Literally, pro ra ibility means proportionate dsrbuton of ‘ibilgyIn the law of ebligatins th concurrence of two oF more debts none ard the sme obligation makes it pina facie joint (pro rata) abigaton, and the debts i presumed éivided info as many equal shass as there ae debtors and each one of them i Sound to pay only his haeADMISSION/REPRESENTATION AS EVIDENCE +AMt.1820 An admission‘representation made by partner concerningpartnershipaffairs w/in any the of his authority in accordance w/ this Title is evideseapagainst the partnership. PARTNER LIABLE FOR WRONGFULACT OF A PARTNER “Ar. 1822. Where, by any wromgfal et or emission of any parner ating in the ccdinary couse of the business of the parnessip or with the authority of co-parters, loss or injury i caused to any person, not being a parmer in the [artership, or any penalty i mcured, the partnership is abl therefor to the sare exteat as the pare so etng or omitting “arinership may proceed against negligent partner Where a partnership is able to third person, there i ight of indemnity aginst the partner whose negligence caused the injuries ART, 1824,ALL PARTNERS ARE LIABLE SOLIDARILY WITH THE PARTNERSHIP FOR EVERYTHING (CHARGEABLETO THE PARTNERSHIP UNDER ARTICLES 1822 AND 1823. Law imposes solidary liability “The law imposes solidary lability upon the partners and the parinership in ‘eases of torts and acs of conversion by a pariner as provided in Art. 1824 It rmay be stated that the liability of @ pariner for a debt of the partnership ‘depends upon whether the debts is contractual of it artes from tort of ‘conversion. fit arises from contract, the lability is subsidiary and pro ata; iit arses from 1071 or conversion, the liailty is soldary. ART. 1821 NOTICETO A PARTNER ISA NOTICETO ALL THE “Notice to partner is notice to partnership Clearly a third person desiring to give notice to a partnership of some matter pertaining to the partnership business need not communicate with all of the partners. If notice is delivered 10 a partner, that is an effective communication to the Partnership. ‘ART, 1823, THE PARTNERSHIP IS BOUND TO MAKE. GOOD THE LOSS: “1. Where one partner acting within the scope of his apparent ‘authority receives money oF property of # third person and rmisapplis +2. Where the partnership in the couree of its busines receives ‘monty or propety ofa third person andthe money er property ‘50 received is misapplied by any parter while it i in the ‘cuted ofthe partnership. ART. 1825 PARTNERSHIP BY ESTOPPEL *Estoppel~ A preclusion inlay, which prevents a man fom alleging or denying a fact, in consequence of his own previous act, allegation, or denial of contrary tenor. Person hound by his representation A person who hold himself out a5 partner in a busines, or consents to his being so held cutis liable on conuacts made with third persons who deal with the person carrying on the business onthe fith ofthe representation. He is stopped to deny the apparent agency ART. 1826 ADMISSION OF A NEW PARTNER INTO A PARTNERSHIP WITH AN EXISTING OBLIGATION, incoming partner liable for existing obligations A newly admitted parner is ible for obligations of the partnership at the time of his admission, The ‘obligation of the incoming partner shall be satisfied only out of partnership ‘property. This is not a harsh rule Because the incoming partner “partakes of the Deneit ofthe partnership propery, and an established business. He has every means of obtaining full knowledge of protecting himself, because he may insist, ‘02 the liquidation or settlement of existing parnership debts. On the other hand, the ereditors have no means of protecting themselves, ART, 1827. THE CREDITORS OF THE PARTNERSHIP ‘SHALL BE PREFERRED TO THOSE OF EACH PARTNER AS REGARDS THE PARTNERSHIP PROPERTY. WITHOUT PREJUDICE TO THIS RIGHT, THE PRIVATE CREDITORS OF EACH PARTNER MAY. ASK THE ATTACHMENT AND PUBLIC SALE OF THE SHARE OF THE LATTER IN THE PARTNERSHIP.CHAPTER 3 DISSOLUTION & WINDING UP. 1808 *Disoltion- isthe change in ration ofthe pares caused by any pare ceasing 0 tbe ssc inthe caying on of the Bases. panes ease 9 cary on the busines together. represents he demise ofthe panes. ning ip ithe proces of ein th busines! paroehip aire er estate Termination: th pont in ine wheal atari aise completely wound op ial sted. +-en of pares (2) Incontravention ofthe agreement bet. partes... (GhAny event w/e makes it unlawful forthe business ofthe partnership to be carried on... (4When a specific thing, wie a partner promised to contribute tothe partnership, perishes before the delivery. (5) By the death of any partner (6) By the insolvency of any partner/ ofthe partnership. (0) By civil interdiction of any partner. ()_ By decree of court General Rule Dissolution terminates the authority ofthe partners to bind partnership. Exceptions Any act appropriate for winding-up partnership affsirs or completing {ransactons unfinished a dissolution If third persons that transacted had no actual knowledge of the dissolution. ‘Persons extending credit prior 10 dissolution are eniled to notice of dissolution, I they had no notice or knowledge of dissolution, they may hold the «etied partes for obligations made by continuing partners after dissolution ‘ART. 1639 INN SETTLING ACCOUNTS BET-THE PARTNERS AFTER DISSOLUTION. THE FF RULES SHALL BE ‘OBSERVED, SUB] TO AGREEMENT TO THE CONTRARY (0) Te ae of te amen are +2 Thepoetip pope “The conten of th pare +(2) he aes of epost kn tro eye Tos owing coe eer thin pares Thee ning parr ter han capa & poi Tose owing to pres in eset feapial + Thos owing pre rps pois ‘ART. 1830 (AUTOMATIC DISSOLUTION) (NO NEED TO FILEA PETITION SA REGIONAL TRIAL COURT + Dissolution is caused: + (2) Without violation ofthe agreement bet. the partners + 1 By temination of dficitetrm/parcular undertaking By expres will of any pars. +e By express will of all parnes 4. By expulsion of any partes fom the business, "ART. 1831 JUDICIAL DISSOLUTION) (NEED TO FILE 'APETITION SA REGIONAL TRIAL COURT FOR L___unic pissousriony + Onsoplicon by! fora pre. te ou sal rea ssoltion whenever: “(1A pamer as bon decane insane in any joi proceeding iso be sown tobe ansaid 2) capaci parte 0) A pare a es sity of conduc (A pare willy petty commits each of partes apeemen 15) The snes ofthe praeip cn only be cated @ os. (6) Or ccumsanees entra dsliin qb General Rule Dissolution ofa partnership does not itself discharge the existing liability of any partner. Exception ‘A partner can be discharged from any existing liability upon dissolution of the partnership provided that there is an agreement between the partnership creditor and the person or partners ‘continuing the business, “Individual properties of the deceased partner shall be liable to all ‘obligations of the partnership made while he was partner. 3) Where a partner has become insolvent/ his estate is insolvent, the claims against his separate property shall rank in the ff. order: a. Those owing to separate creditors b. Those owing to partnership creditors «. Those owing to partners by way of contributionART 1846 CHAPTER 4 ‘THE SURNAME OF A LIMITED PARTNER SHALL LIMITED PARTNERSHIP [NOT APPEAR INTHE PARTNERSHIP NAME oan 188 Aline patnatip is one farmed by tno or more penons under the provisies of the ‘owing ale, bavig 2 members ene of mote gene puters an ove ot mote lined paraers. Te inited puters such shal ot be body he oligos fe porters. sn. as +The cararions finite paste my be cash her propery, bat ma Sevies. ‘ART. 1848 ‘ALUIMITED PARTNER SHALL NOT BECOME LIABLE AS GENERAL PARTNER UNLESS, IN ADDITION TO THE EXERCISE OF HIS RIGHTS ‘& POWERS AS A LIMITED PARTNER, HE TAKES PART INTHE ne iN “Limited partner has no control in business. A limite parner i excluded fiom any active voice i the control ofthe affairs ofthe fem, “Limited partner cannot perform acts of administration. Limited partners ‘ay not perform any act of administration with espect 10 the interests ofthe arinership, not even inthe capacity of agents ofthe managing partners. “UNLESS: “Its ls 2 surname ofa general partner. +2. Prior tothe time when the limited partner became such, the business had been ‘aed on under such name in wie his sumame appeared. “A limited partner whose surame appears in a partnership name contrary tothe provisions of the fist paragraph is Table a general parner to parnrship| ‘reditrs who extend credit othe parinership without actual knowledge that be is nota general pare, ART. 1853 ‘A PERSON MAY BEA GENERAL & A LIMITED PARTNER @ THE SAME TIME,THIS FACT MUST BE +A person who is a general, and also at the same time a limited partner, shall have all the rights and powers and be subject to all restrictions of a general partner; except that, in respect to his contribution, shall have the rights against the ‘other members which he would have had if he were not also a general partner.