Chapter 1_Nature of Partnership

8/3/2019 Chapter 1_Nature of Partnership

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Partnershipby the contract of partnership, two or more persons

bind themselves to contribute money, property, orindustry to a common fund, with the intention of dividing the profits among themselves

Article 1767 New Civil Code of the Philippines

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Elements of a Partnership1. Voluntary agreement

2. Agreement to contribute: money property, or industry

to a common fund3. Intention of dividing the profits between or among the

partners

4.Must be established for lawful purpose and for thecommon benefit or interest of the partners

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Advantages/Disadvantages of a

Partnership Advantages:Easier and less expensive to

organizedFewer legal requirementsEasy to dissolve or liquidateLess decision makers and

lesser formalities

Disadvantages:Easy to dissolvedUnlimited liability of

partners Agent of partnership may

prejudice the interest of the partnership

Capital is limited topartners actualcontribution

Ownership or interestcannot be transferred without dissolving thepartnership

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Kinds of Partnership:1. As to its Activities2. As to Liabilities of the Partners

3. As to Duration of the Partnership4. As to Legality of its Existence

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1. As to its Activitiesa. Commercial Partnershipb. Professional Partnership

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2. As to Liabilities of the

Partnersa. General Partnershipb. Limited Partnership

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3. As to Duration of the

Partnershipa. Partnership at willb. Partnership with a fixed term

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3. As to Legality of its Existencea. De Jure Partnershipb. De Facto Partnership

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Kinds of Partner:1. As to its Contribution2. As to Liability to Outsiders

3. As to Participation in Management

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1. As to its Contributiona. Capitalist Partnerb. Industrial Partner

c. Capitalist-industrial Partner

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2. As to Liability to Outsidersa. General Partnerb. Limited Partner

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3. As to Participation in

Managementa. Managing Partnerb. Secret Partner

c. Silent Partnerd. Dormant Partner

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Basic Rights of a Partner1. To share in the profits2. To participate in the management of the business

3. In event of liquidation; to share in the assets of thebusiness after satisfying the claims of creditors

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Articles of Co-Partnership1. Name of the Partnership2. Nature of the business of the Partnership3. Place of Business4. Effective date of the Partnership and its duration

5. Name and addresses of the Partners and the agreed capitalization of each6. Rights, duties, and powers of each partner including the limitations7. The profit and loss sharing ratio8. Other compensation the partners may be entitled to9. Partners investments and withdrawals subsequent to the partnership

formation

10. Provision for the arbitration of disputes and manner of partnershipliquidation

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Registration Requirements SEC Securities and Exchange Commission (SEC) Will issue certificate of registration

DTI Department of Trade and Industries

Will issue a certificate of registration of business name Mayors Permit

Where the principal office of the business is located BIR

Bureau of Internal Revenue Secure tax account number

SSS Social Securities and System Secure the SSS certificate of membership and the SSS employer ID number

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Chapter 1_Nature of Partnership

Documents

Transcript of Chapter 1_Nature of Partnership