CHAPTER 01: GENERAL PROVISIONS
PROVISION
Art. 1767: Definition of
Partnership
Art. 1768: Partnership has a
juridical personality
Art. 1769: Rules in determining
partnership do exist
CONTENT
Partnership: (1) two or more persons bind themselves (2)
to contribute Money, Property, or Industry to a common
fund (3) with the intention of dividing profits/losses among
themselves.
Requisites of contract of partnership
● Valid contract
● Contribution (MPI)
● Organized for profit of loss
● Have a lawful object/purpose, for the common
benefits of partners;
Does partnership exist?
● Agreement to contribute?
● Intention to divide profit/loss?
Characteristics of a contract of partnership
● Consensual
● Principal
● Commutative
● Bilateral
● Nominate
● Onerous
● Preparatory
Doctrine of Delectus Personae
The right to choose with whom a person wishes to
associate himself
● Delectus Personae - choice of the person
● Delectus personarum - choice of persons
Partners cannot be held liable to the obligation of the
partnership even failure to comply with Art.1772
Artificial person/ Juridical personality
● Treated more or less as a human being
● Given certain legal rights and duties;
Rule #01: Persons who are not partners as to each other
are not partners as to third person
● Partnership by Estoppel
Rule #2: Co-ownership/co-possession does not itself
establish a partnership
● Partnership vs. Co-ownership
Rule #3: Sharing of gross return does not of itself establish
a partnership

Art 1770: Lawful object/purpose
of partnership; common benefit
of the partners
Art. 1771: Partnership in any
form, unless immovable property XPN: Real property or real rights contributed
contributed, in public instrument
Art. 1772: Contract of
partnership must be in public
instrument and recorded in SEC.
Failure does not void the
contract = De facto partnership
Art. 1773: Contract validating
inventory requirement
Art. 1774: Immovable property /
interest acquired in
PARTNERSHIP’S NAME
Art. 1775: Articles kept secret
● Gross profit vs. Net profit
● Unless the agreement states that the division of
profit is by gross profit.
Rule #4: Receipt , share of profit of a business, is a prima
facie evidence that he is a partner.
● Prima facie - presumption, to be approved
● EXP:
○ debt by installment;
○ Wage of employee / rent
○ Annuity to widow/ representative of a
deceased partner
○ Interest on a loan
○ Consideration for the sale of a goodwill;
:
Lawful object/purpose, within the commerce of man, not
impossible, not contrary to law, morals, good custom,
public order, or public policy.
Effect of Unlawful partnership
● Contract is VOID
● Profits = confiscated by the govt.
● Instruments / tools and proceeds from crime =
forfeited in favor of govt.
● Contributions of partner = not confiscated unless
#3 applied
GR: in any form, written or oral
Capital of 3,000 or more (personal property only)
● Public instrument
● Recorded in SEC
Capital below 3,000 or more
● No form required
Purpose of Registration
● Issuance of licenses
● Avoid tax evasion
Inventory of immovable property not made = Contract is
VOID
Inventory of immovable property made = Contract is Valid
What is the intention?
● To protect third persons
Reason : partnership has a juridical personality
Partnership vs Associations
from members, shall have no
juridical personality and shall be
governed by provisions of
co-ownership
Art. 1776; Classification of
partnership
Art. 1777: Kinds of universal
partnership
Art. 1778: Universal partnership
of all present property
Art. 1779: Universal partnership
of all present property =
common property of partners.
Art. 1780: Universal partnership
of all profits
Art. 1781: Articles of partnership Presumption:
w/o specification of nature =
Object
● Universal partnership
○ Of all present property
○ Of all profits
● Particular partnership
Liability
● General
● Limited
Duration
● Partnership at will
● Partnership with fixed term
● Partnership for a particular undertaking
Representation to others
● Ordinary partnership
● Partnership by estoppel
Legality of existence
● De jure partnership
● De facto partnership
● Universal partnership
○ Of all present property
○ Of all profits
Contribution:
● All properties actually belongs to them
● Profits acquired with those properties
GR: all profits from present property contributed became a
common property of partners
XPN: future property acquired by partner,exp fruits.
● Successional rights
● Contributed things be determinate, known, certain
● Implies donation, future property cannot be
donated.
Partners retain their ownership.
Usufruct, passing to the partnership.
All profits from industry or work contributed in a common
fund during existence of partnership
Imposes less obligation
universal partnership

Art. 1782: Persons who cannot Violation

enter into a universal ● Partnership is null or void
partnership; ● No legal personality
Examples of person who cannot enter in U.P
● Legally married spouses
● Living together as husband and wife
● Person guilty of adultery / concubinage
● Person found guilty of same criminal offense
● Person by reason of his office

Art. 1783: Particular partnership ● Usufruct

● Specific undertaking’
● Exercise of professions
- Husband and wife can enter P.P

CHAPTER 02: OBLIGATIONS OF THE PARTNERS

PROVISION CONTENT

INTRODUCTION Kinds of partners

Contribution
● Capitalist P.
● Industrial
● Capitalist-Industrial
Liability
● General
● Limited
Management
● Managing
● Silent
● Liquidating
Third person
● Ostensible
● Secret
● Dormant
Membership
● Real
● Partnership by estoppel
Continuation
● Continuing
● Discontinuing
Nature of membership
● Original
● Incoming
● Retiring
State of survivorship

Art. 1784: Partnership begins
the moment of execution of
contract. (when nagstart ang
partnership?)
Art. 1785: Continuation of
partnership after termination.
Art. 1786: Every partner is a
debtor to partnership
Art. 1787: Appraisal of goods
contributed to the partnership/
common fund
Art. 1788: Partner becomes a
debtor of partnership
● Surviving
● Deceased
Effect of expulsion
● Expelled
● Expelling
Value of contribution
● Majority
● Nominal
GR: The moment of execution
XPN: when partners agreed to start the partnership on a
different date.
When partnership by:
● Partnership with fixed term
● Partnership for a particular undertaking
Terminated and partners decided to continue it became
● Partnership at will
Obligation of every partner
● Contributed what had been promised
○ Debtor without demand if failure to
contribute happened
○ EXP to no demand, no delay
○ REMEDY, specific performance with interest
and damages
● Deliver the fruits thereof;
○ Delivered without any demand
○ Partner acted in bad faith = liable for fruits
must be delivered and could have been
produced
● Warrant
○ Only applies to specific or determinate
things contributed by partner
Manner of Appraisal:
● By stipulation
● Must be made by the third person chose by the
partnership
Why?
● In order to know how much should be accounted
for the capital contribution
● Can be a basis for dividing P/L when there is no
stipulation
If he failed to contribute on time
● He became liable with interest and damages

Art. 1789:Prohibition to an
Industrial Partner
Art.1790: Equal contribution, if
no stipulation
Art. 1791: Obligation of
capitalist partner to contribute
additional capital
Art. 1792: Obligation of
Managing Partner to collect debt
Art. 1793: Obligation of non
managing partner who collect
part of his credit on the
partnerships credit
Art. 1794: Partnership suffers
If he use the money of partnership for personal
purposes
● He became liable for the money he taken and
injury/ damages / interest
Demand is not necessary
● Time is the essence
● even w/o actual injury suffered by the partnership
Industrial Partner:
● Shall not engage into business for himself, unless
he is permitted to do so
● If he engage into business even he is not permitted
to do so, he may be excluded from the division of
profit, take the profit he earned in that business by
the capitalist partner
● He is not liable for the loss of the partnership,
unless he wants to and stipulated
● Have the right to receive division of profit in just
and equitable amount
● If there is no stipulation on how much should be the
contribution, partners must share equal amounts
GR: C.P are not bound to contribute additional capital
XPN:
● By stipulation
● Partnership will face an imminent loss;
○ If C.P refuses to contribute additional
capital, he must sell his interest to the
partner that is willing to contribute additional
capital
DOES NOT APPLY TO AN INDUSTRIAL PARTNER
Requisites:
● 2 debts exist (Manahing partner and partnership)
● Both debts are demandable
Rulling:
● Receipt to Managing Partner - divided
proportionate to M.P and Partnership
● Receipt to Paetnership - whole amount to
partnership
● Only one debt
● Anyone can collect
● Debtor becomes insolvent
damage through partners fault
or ne

CHAPTER 04: LIMITED PARTNERSHIP

PROVISIONS CONTENTS