Page 1 of 27

PARTNERSHIP
> It is a CONTRACT whereby two or more persons (1) bind themselves
to CONTRIBUTE money property or ind!stry to a CO""ON #UN$ (2) with
the intention of dividing the PRO#IT% among themselves or in order to
E&ERCI%E a PRO#E%%ION

> a %TATU% and a #I$UCIAR' RE(ATION s!bsisting between persons
)arrying on a b!siness in )ommon with a view on pro*t
CHARACTERISTICS OF THE CONTRACT OF PARTNERSHIP (BONC
2
P
2
)
+, CON%EN%UA( - perfe)ted by mere )onsent
., NO"INATE - has spe)ial name and designation in the law
/, BI(ATERA( 0
1, ONEROU%0 imposes b!rden
2, CO""UTATI3E0
4, PRINCIPA(0 does not depend its e5isten)e and validity !pon other )ontra)t
6, PREPARATOR'0 it is entered as a means to an end
ESSENTIAL FEATURES OF PARTNERSHIP ( MVPOL)
+, 3A(I$ CONTRACT
., (E7A( CAPACIT'
/, "UTUA( CONTRIBUTION TO A CO""ON #UN$
1, OB8ECT "U%T BE (A9#U(
2, PRI"AR' PURPO%E I% TO $I3I$E PRO#IT A"ON7 T:E"%E(3E%
RULES ON CAPACITY TO BECOME A PARTNER
+, a person )apa)itated to enter into )ontra)t!al relations may be)ome a
partner
., an UNE"ANCIPATE$ "INOR CANNOT be)ome a partner UN(E%% his
parent or g!ardian )onsents
/, a "ARRIE$ 9O"AN )annot )ontrib!te )on;!gal f!nds as her
)ontrib!tion to the partnership UN(E%% she is permitted to do so by
her h!sband OR UN(E%% she is the administrator of the )on;!gal
partnership in whi)h the COURT m!st give its )onsent a!thority
1, a PARTNER%:IP being a ;!ridi)al person by itself )an form another
partnership
2, a CORPORATION )annot be)ome a partner on gro!nds of p!bli) poli)y
> a partner shares not only in pro*ts b!t also in the losses of the *rm
RULE:
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> the partnership has a PER%ONA(IT' %EPARATE and $I%TINCT from
that of ea)h partner
CONSEQUENCES OF THE PARTNERSHIP BEING A JURIDICAL ENTITY
+, its ;!ridi)al personality is %EPARATE and $I%TINCT from that of ea)h
partner
., the partnership CAN in 7ENERA(<
A= a)>!ire and possess property of all ?inds
B= in)!r obligations
C= bring )ivil and )riminal a)tions
$= )an be ad;!dged insolvent even if the individ!al members be
ea)h *nan)ially solvent
/, !nless he is generally s!ed a partner has no right to ma?e a separate
appearan)e in )o!rt if the partnership being s!ed is already
represented
WHAT DO NOT ESTABLISH A PARTNERSHIP
+, mere )o0ownership or )o0possession
> even with pro*t sharing
., mere sharing of 7RO%% ret!rns
> even with ;oint ownership of the properties involved
RULES TO DETERMINE THE EXISTENCE OF A PARTNERSHIP
+, persons who are not partners to ea)h other are not partners as to third
persons
EXCEPTION:
> PARTNER%:IP B' E%TOPPE(
., CO0O9NER%:IP of a property does not itself establish a partnership
even tho!gh the )o0owners share in the pro*ts derived from the
in)ident of ;oint ownership
/, %:ARIN7 O# 7RO%% RETURN% A(ONE does not indi)ate a partnership
whether or not the persons sharing them have a ;oint or )ommon right
or interest in any property from whi)h the ret!rns are derived
1, the re)eipt of the share in the pro*ts is a strong pres!mptive eviden)e
of partnership :O9E3ER no s!)h inferen)e will be drawn if s!)h
pro*ts were re)eived in payment
A= as a $EBT by installments or otherwise
B= as 9A7E% of an employee
C= as RENT to a landlord
$= as an ANNUIT' to a widow or representative of a de)eased
partner
E= as INTERE%T on a (OAN tho!gh the amo!nt of payment vary
with the pro*ts of the b!siness
#= as the CON%I$ERATION for the sale of a 7OO$ 9I(( of a b!siness
or other property or otherwise
> )reditors are not partners for their only interest in the sharing of
pro*ts is the re)eipt or payment of their )redits
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> in a partnership the partners are s!pposed to tr!st and have
)on*den)e in all the partners
PARTNERS BY ESTOPPEL
> If two persons not partners represent themselves as partners to
strangers a partnership by estoppel res!lts
PARTNERSHIP BY ESTOPPEL
> 9hen two persons who are partners in )onnivan)e with a third person
who is not a partner inform a stranger that said person is their partner a
partnership by estoppel also res!lt to the end that the stranger sho!ld not be
pre;!di)ed
RULE: LAWFUL OBJECT !" PURPOSE
> a partnership m!st have (A9#U( OB8ECT or PURPO%E and m!st be
established for the )ommon bene*t or interest of the partners
> it m!st be within the )ommer)e of man possible and not )ontrary to
law morals good )!stoms p!bli) order or p!bli) poli)y
> if a partnership has %E3ERA( PURPO%E% one of whi)h is UN(A9#U(
the partnership )an still validly e5ist so long as the illegal p!rpose )an be
separated from the legal p!rposes
EFFECTS:
> Pro*ts shall be )on*s)ated in favor of the government
> Contra)t is 3OI$ AB INITIO
Instr!ments tools and pro)eeds of the )rime shall be forfeited in
favor of the government
Contrib!tions of the partners will not be )on*s)ated !nless !nlawf!l
> one of the )a!ses for the dissol!tion of a partnership is @any event which
makes it unlawful for the business of the partnership to be carried on
RULE<
> when an UN(A9#U( PARTNER%:IP is dissolved by a ;!di)ial de)ree the
PRO#IT% shall be CON#I%CATE$ in #A3OR of the %TATE
GENRAL RULE
> a partnership may be )onstit!ted in any form
EXCEPTION< T:E #O((O9IN7 %:OU($ BE IN PUB(IC IN%TRU"ENT
+, I""O3AB(E PROPERT' is )ontrib!ted
., REA( RI7:T% are )ontrib!ted
A need for IN3ENTOR' of I""O3AB(E%
AA for E##ECTI3IT' of the partnership )ontra)t insofar as inno)ent
third persons are )on)erned the same m!st be RE7I%TERE$ if REA(
PROPERTIE% are IN3O(3E$
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> a partnership )ontra)t is NOT CON3ERE$ by the %TATUTE of #RAU$%
> an A7REE"ENT TO #OR" a partnership does not itself )reate a
partnership

RULE: if CAPITA( is P/BBB or more
REQUIRED:
+, PUB(IC IN%TRU"ENT
., RE7I%TERE$0%,E,C,
A > #AI(URE TO CO"P(' - shall not eCe)t the liability of the partnership and
its members to third persons
AA > I# REA( PROPERTIE% have been )ontrib!ted RE7AR$(E%% of the 3A(UE
a p!bli) instr!ment is needed for the )ontra)t to be valid
REQUIREMENTS WHERE IMMOVABLE $ REAL PROPERTY IS
CONTRIBUTED
+, PUB(IC IN%TRU"ENT
2.IN3ENTOR' - signed and atta)hed to the p!bli) instr!ment
> TRAN%#ER of land to the partnership m!st be d!ly @re)ordedD in the
Registry of $eeds to ma?e the transfer eCe)tive insofar as third persons are
)on)erned
RULE:
> any immovable property or an interest therein maybe a)>!ired in the
partnership name
> title so a)>!ired )an be )onveyed only in the partnership name
RULES IF
!" articles are kept secret amon# the members
$" any one of the members may contract in his %own name with third
persons
+, NOT a partnership - NOT a (E7A( PER%ON
., it may be s!ed by third person !nder the )ommon name it !ses
/, it )annot s!e as s!)h and )annot be ordinarily be a party to a )ivil
a)tion
1, insofar as inno)ent third parties are )on)erned
> the parities )an be )onsidered as members of a partnership
2, as between themselves or insofar as third persons are pre;!di)ed
> only the r!les of )o0ownership m!st apply
CLASSIFICATION OF PARTNERSHIPS
A= !CCO&'IN( TO )!NNE& O* C&E!TION
+, ORA((' )onstit!ted
., )onstit!ted in a PRI3ATE IN%TRU"ENT
/, )onstit!ted in a PUB(IC IN%TRU"ENT
1, RE7I%TERE$ - %,E,C,
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B= !CCO&'IN( TO O$+ECT
+, UNI3ER%A(, all present property or to all pro-ts
., PARTICU(AR
C= !CCO&'IN( TO .I!$I.IT/
+, (I"ITE$ PARTNER%:IP0
., 7ENERA( PARTNER%:IP
$= !CCO&'IN( TO .E(!.IT/
+, (A9#U( OR (E7A(
., UN(A9#U( OR I((E7A(
E= !CCO&'IN( TO '0&!TION
+, for a %PECI#IC PEIO$ or #I&E$ PERIO$
., PARTNER%:IP AT 9I((
#= !CCO&'IN( TO &EP&E1ENT!TION TO OT2E&1
+, OR$INAR' PARTNER%:IP
., PARTNER%:IP B' ETOPPE(
7= !1 TO .E(!.IT/ O* EXI1TENCE
+, $E 8URE PARTNER%:IP
., $E #ACTO PARTNER%:IP
:3 !1 TO P0$.ICIT/
+, %ECRET PARTNER%:IP
., NOTORIOU% E OPEN PARTNER%:IP
I3 !1 TO P0&P1E
+, CO""ERCIA( E TRA$IN7
., PRO#E%%IONA( E NON0TRA$IN7
GENERAL PARTNERSHIP
> one where all the partners are general partners
> they are (IAB(E even with respe)t to their individ!al properties after the
assets of the partnership has been e5ha!sted
LIMITED PATNERSHIP
> one where at least one partner is a general partner and the others are
limited partners
> one whose liability is limited only !p to the e5tent of his )ontrib!tion
> a partnership where all the partners are limited partners cannot e4ist as a
limited partnership
> RE#U%E$ RE7I%TRATION
> I# it )ontin!o!s as s!)h it will be )onsidered as a general partnership
and all the partners will be general partners
&INDS OF UNIVERSAL PARTNERSHIP
+, PARTNER%:IP O# A(( PRE%ENT PROPERT'
., PARTNER%:IP O# A(( PRO#IT%
'UNIVERSAL PARTNERSHIP OF ALL PRESENT PROPERTY
> CONTRIBUTION of
+, A(( the properties a)t!ally belonging to the partners
., the PRO#IT% a)>!ired with said property
> BECO"E% CO""ON PROPERT'
> E&CEPT all #UTURE PROPERT'
> #RUIT% of #UTURE PROPERT' - INC(U$E$ I# %TIPU(ATE$ UPON
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'UNIVERSAL PARTNERSHIP OF PROFITS
> )omprises all that the partners may a)>!ire by the IN$U%TR' or 9ORF of
the partners be)ome )ommon property regardless of within said pro*ts were
obtained thro!gh the !s!fr!)t )ontrib!ted
> EXCEPT PRIGE% and 7I#T%
BIANCA
P)"*+,"-./0 C!1!2+,"-./0 C!+345)6
0)"*+,"-./0 !7
5)/+-
V!64+*)"8
A--!9/)*/!+
J4"/:/9)6 P,"-!+)6/*8
'es No No No
P"/;)"8 P4"0!-,
Pro*t
Common
en;oyment
RULE<
> arti)les of !niversal partnership entered witho!t spe)i*)ation of its nat!re
only )onstit!te a !niversal partnership of PRO#IT%
RULE:
> persons who are prohibited from giving ea)h other any donation or
advantage )annot enter into !niversal partnership
52O<
+, :U%BAN$ and 9I#E
., those g!ilty of A$U(TER' or CONCUBINA7E
/, those g!ilty of the same )riminal oCense if the partnership was
entered into in )onsideration of the same
> while spo!ses )annot enter into a !niversal partnership they )an enter into
a parti)!lar partnership or be members thereof
> a !niversal partnership is virt!ally a donation to ea)h other of the partners
properties or at least their !s!fr!)t
PARTICULAR PARTNERSHIP
> a parti)!lar partnership has for its OB8ECT<
+, $ETERN"INATE T:IN7% - their !se or fr!its
., %PECI#IC UN$ERTAFIN7
/, E&ERCI%E of a PRO#E%%ION or 3OCATION
OBLIGATIONS OF THE PARTNERS
RULE<
> a PARTNER%:IP BE7IN% from the moment of the E&ECUTION of the
CONTRACT
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A > even if )ontrib!tions have not yet been made the *rm already e5ists for
partnership is a )onsens!al )ontra)t
DURATION OF PARTNERSHIP
> UN(I"ITE$
A > "A' BE A7REE$ UPON
+, E&PRE%%(' - de*nite period
., I"P(IE$(' - !pon a)hievement of its p!rpose
PARTNERSHIP AT WILL
> a partnership wherein its )ontin!ed e5isten)e really depends !pon the will
of the partners or even on the will of any of them
6 7IN'1:
+, when there is no term e5press or implied
., when it is )ontin!ed by the habit!al managers altho!gh the period has
ended or the p!rpose has been a))omplished
IMPORTANT DUTIES OF EVERY PARTNER <C= D1F= W>
+, d!ty to CONTRIBUTE what had been promised
., d!ty to $E(I3ER the #RUIT% of what sho!ld have been delivered
3.d!ty to 9ARRANT IN CA%E O# E3ICTION
RIULES ON THE DUTY TO CONTRIBUTE
+, the )ontrib!tion m!st be made at the time the partnership is entered
into UN(E%% a diCerent period is stip!lated
., no demand is needed to p!t the partner in defa!lt
/, the partner m!st e5er)ise d!e diligen)e in preserving the property to
be )ontrib!ted before he a)t!ally )ontrib!tes the same
1, a partner who promises to )ontrib!te to the partnership be)omes a
promissory debtor of the partnership
RULES ON THE DUTY TO DELIVER THE FRUITS
+, If property has been promised the fr!its thereof sho!ld also be given
., the fr!its referred to are those arising from the time they sho!ld have
been delivered witho!t a need of any demand
/, I# the partner is in BA$ #AIT: he is liable not only for the fr!its
a)t!ally prod!)ed BUT also for those that )o!ld have been prod!)ed
1, I# "ONE' :A% BEEN PRO"I%E$ INTERE%T and $A"A7E% from the
time he sho!ld have )omplied with his obligation sho!ld be given
2, NO $E"AN$ is needed to p!t the partner in defa!lt
4, it is $E(I3ER' a)t!al or )onstr!)tive that TRAN%#ER% O9NER%:IP
RULES ON THE DUTY TO WARRANT
+, the warranty in )ase of evi)tion refers to spe)i*) and determinate
things already )ontrib!ted
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., there is E3ICTION whenever by a *nal ;!dgment based on a right prior
to the sale or an a)t imp!table to the partner the partnership is
deprived of the whole or a part of the thing p!r)hased
RULE WHEN CONTRIBUTION CONSISTS OF GOODS
> APPRAI%A( of 3A(UE is needed to determine how m!)h was )ontrib!ted
2O5 !PP&!I1!. )!'E
+, as PRE%CRIBE$ in the CONTRACT
., in defa!lt by E&PERT% )hosen by the partners and at CURRENT
PRICE%
A> ne)essity of the IN3ENTOR' - APPRAI%A(
RULE !+ RIS& !7 LOSS
> after goods have been )ontrib!ted the partnership bears the ris? of
s!bse>!ent )hanges in the val!e
RULE:
> a partner who has !nderta?en to )ontrib!te a s!m of money and fails to
do so be)omes a debtor for the interest and damages from the time he
sho!ld have )omplied with his obligation
CAPITALIST PARTNER
> one who #URNI%:E% CAPITA(
A> NOT E&E"PTE$ from (O%%E%
A> he )an engage in other b!siness PRO3I$E$ there is no )ompetition
between the partnership and his b!siness
A> share in the pro*ts a))ording to agreements
INDUSTRIAL PARTNER
> one who #URNI%:E% IN$U%TR' or (ABOR
A> he is E&E"PTE$ from (O%%E% as between the partner BUT liable to
strangers witho!t pre;!di)e to reimb!rsement from the )apitalist partner
A> he CANNOT engage in any other BU%INE%% 9IT:OUT the e5press
CON%ENT of the other partners OT:ER9I%E
+, he )an be E&C(U$E$ from the *rm
0 pl!s damages OR
., the BENE#IT% he obtains from the other b!sinesses CAN BE A3AI(E$ of
by the other partners
- pl!s damages
> whether or not there is CO"PETITION
A> in )omp!ting always loo? for 00000> NET PRO#IT%
00000> NET (O%%E%
CAPITALIST @ INDUSTRIALIST PARTNER
> one who )ontrib!tes BOT: CAPITA( and IN$U%TR'
GENERAL PARTNER
> one who is liable @beyondD the e5tent of his )ontrib!tion
LIMITED PARTNER
> one who is liable @onlyD to the e5tent of his )ontrib!tion
Page A of 27
AAA> an industrial partner )an only be a general partner never a limited
partner
MANAGING PARTNER
> one who manages a)tively the *rms aCairs
SILENT PARTNER
> one who does not parti)ipate in the management tho!gh he shares in the
PRO#IT% or (O%%E%
LIQUIDATING PARTNER
> one who winds !p or li>!idates the aCairs of the *rm after it has been
dissolved
OSTENSIBLE PARTNER
> one whose )onne)tion with the *rm is p!bli) and open
SECRET PARTNER
> one whose )onne)tion with the *rm is )on)ealed or ?ept se)ret
DORMANT PARTNER
> one who is both a se)ret Hhidden= and silent Hnot managing= partner
NOMINAL PARTNER
> one who is not really a partner BUT who may be)ome liable as s!)h insofar
as third persons are )on)erned
RULE:
> partners shall CONTRIBUTE EIUA( %:ARE% to the )apital of the partnership
A> it is permissible to )ontrib!te UNEIUA( %:ARE% I# there is a stip!lation
to this eCe)t
A> in the absen)e of proof the shares are pres!med to be e>!al
CONDITIONS before a capitalist partner is obliged to sell his
shares / interest to the other partners <IL= RC= NA>
+, if there is I""INENT (O%% of the BU%INE%% of the partnership
., he RE#U%E% to CONTRIBUTE an A$$ITIONA( %:ARE to the CAPITA(
/, there is no agreement to the )ontrary
A> IN$U%TRIA( PARTNER I% E&E"PTE$
'RULE /7 MANAGING PARTNER COLLECTS A CREDIT
REQUISITES:
+, e5isten)e of at least . debts 0000> PARTNER%:IP
0000> PARTNER
., both s!ms are demandable
/, the )olle)ting partner is the managing partner
Page 1B of 27
A> the s!m th!s )olle)ted shall be applied to the two )redits in
proportion to their amo!nts
RULE:
A> where a partner receives his share in the partnership credit
CONDITIONS<
+, a partner has re)eived his share in the partnership )redit - in whole or
in part
., the other partners have not )olle)ted their part of the )redit
/, the debtor s!bse>!ently be)omes IN%O(3ENT
RULE< 0 the partner shall be obliged to bring to the partnership
)apital what he re)eived even tho!gh he may have given re)eipt for
his share only
A> $OE% NOT APP(' when debt was )olle)ted after dissol!tion of the
partnership
RULE<
A> every partner is responsible to the partnership for damages s!Cered by it
thro!gh his fa!lt
A> he )annot )ompensate them with the pro*ts and bene*ts whi)h he
may have earned for the partnership by his ind!stry

A> the )o!rts may e>!itably lessen his responsibility
CRES PERIT DOMINOD
'RULES ON WHO BEARS THE RIS& OF LOSS
+, if %PECI#IC and $ETER"INATE T:IN7% NOT #UN7IB(E whose
U%U#RUCT is en;oyed by a *rm
> the PARTNER who O9N% it bears the loss for ownership was never
transferred to the *rm
., #UN7IB(E or $ETERIORAB(E
> #IR" bears the loss for it is evident ownership was transferred
/, T:IN7% CONTRIBUTE$ to be %O($
>#IR" bears the loss for evidently the *rm was intended to be the
owner
1, CONTRIBUTE$ !nder APPRAI%A(
> #IR" bears the loss be)a!se this has the eCe)t of an implied sale
RULE !+ RESPONSIBILITY !7 *., FIRM
Page 11 of 27
+, to RE#UN$ amo!nts disb!rsed on behalf of the *rm pl!s legal interest
from the time e5penses where made
., to AN%9ER to ea)h partner for OB(I7ATION% he may have entered into
in good faith in the interest of the partnership as well as the ris?s in
)onse>!en)e of its management
A> RE#UN$ m!st be made even in )ase of fail!re of the enterprise entered
into provided the partner is not at fa!lt
A> A"OUNT $I%BUR%E$ - does not refer to the ORI7INA( CAPITA(
'HOW PROFITS ARE DISTRIBUTED
+, a))ording to A7REE"ENT
., I# NONE a))ording to amo!nt of CONTRIBUTION
'HOW LOSSES )", DISTRIBUTED
+, a))ording to A7REE"ENT as to losses
., I# NONE a))ording to agreement as to PRO#IT%
/, I# NONE a))ording to amo!nt of CONTRIBUTION
A> an IN$U%TRIA( PARTNER shall re)eive a 8U%T and EIUITAB(E share in the
pro*ts
'RULE !+ INDUSTRIAL PARTNERSE LIABILITIES
0 may be held liable by third persons BUT he may re)over what he has paid
from the other )apitalist partners
ARULE !+ DESIGNATION F8 THIRD PERSON !7 SHARES /+ PROFITS
)+: LOSSES
A> third person is NOT a P!&TNE& 00> appointed to only distrib!te shares
A> the designation of shares by third persons may be I"PU7NE$ I# it is
"ANI#E%T(' INEIUITAB(E
A> the designation of shares by third persons CANNOT be I"PU7NE$ E3EN I#
"ANI#E%T(' INEIUITAB(E I#<
+, the aggrieved partner has already BE7UN to E&ECUTE the de)ision
., the aggrieved partner has not I"PU7NE$ the distrib!tion within /
months he had ?nowledge
'RULE IF APPOINTMENT OTHER THAN /+ *., ARTICLES !7
PARTNERSHIP
+, power to a)t may be RE3OFE$ at AN' TI"E with or witho!t ;!st )a!se
> RE"O3A( sho!ld be done by the )ontrolling interest
., E&TENT of PO9ER
> as long as he remains manager he )an perform all a)ts of
administration
BUT - if others oppose and he persists he )an be removed
'RULE WHEN *.,", )", 2 !" MORE MANAGERS
CONDITIONS:
+, . or more partners are managers
., there is no spe)i*)ation of respe)tive d!ties
/, there is no stip!lation re>!iring UNANI"IT'
Page 12 of 27
SPECIFIC RULES<
+, ea)h may separately e5e)!te all a)ts of administration
> UN(I"ITE$ PO9ER to A$"INI%TER
., I# any of the managers OPPO%E
> "A8ORIT' RU(E
> IN CA%E O# A TIE
0 persons owning )ontrolling interest prevail provided they are also
managers
A> right to oppose is not given to NON0"ANA7ER%
A> OPPO%ITION sho!ld be done BE#ORE the a)ts prod!)e legal eCe)ts insofar
as third persons are )on)erned
RULE WHEN UNANIMITY /- REQUIRED
+, the CONCURRENCE of all shall be ne)essary for the validity of the a)ts
., the AB%ENCE or $I%ABI(IT' of AN'ONE of them CANNOT BE A((E7E$
UN(E%% there is imminent danger of grave or irreparable in;!ry to the
partnership
RULE ON DUTY !7 THIRD PERSONS
> third persons are not re>!ired to in>!ire as to whether or not a partner with
whom he transa)ts has the )onsent of all the managers
*RULES to be observed when the manner of management has not
been agreed upon:
+, all the partners are )onsidered A7ENT%
> whatever any one of them may do alone shall not bind the
partnership
., I# the a)ts of one are opposed by the rest the ma;ority shall prevail
/, when a partner a)ts in his O9N NA"E he does not bind the
partnership
1, a!thority to bind the *rm does not apply if somebody else has been
given a!thority to manage in the arti)les of organiJation or thro!gh
some other means
2, A(TERATION% REIUIRE UNANI"IT'
0 I""O3AB(E partnership property
0 BUT if the ref!sal to )onsent by the others is pre;!di)ial to the interest
of the partnership
0 COURT% INTER3ENTION may be so!ght
RULES !+ ASSOCIATE !7 PARTNER
+, every partner may asso)iate another person with him in his share
., for a partner to have an asso)iate in his share
> )onsent of all the other partners is NOT REIUIRE$
/, for the asso)iate to be)ome a partner
> A(( "U%T CON%ENT
Page 1 of 27
RULES !+ PARTNERSHIP BOO&S
+, ?ept at the prin)ipal pla)e of b!siness of the partnership
., at any reasonable ho!r every partner shall have a))ess to and may
inspe)t and )opy any of them
DUTY !7 PARTNERS TO GIVE INFORMATION
> good faith not only re>!ires that a partner sho!ld not ma?e any #A(%E
CONCEA("ENT BUT he sho!ld abstain from all )on)ealment
DUTY *! ACCOUNT <B= P= U1PK
> every partner must account to the partnership
+, any bene*t a)>!ired
., any pro*ts re)eived
/, any !se of partnership property
RIGHT TO DEMAND ) FORMAL ACCOUNT
> any partner shall have the ri#ht to a formal account as to partnership
a8airs
+, if wrongf!lly e5)l!ded from partnership BU%INE%%
., if wrongf!lly e5)l!ded from partnership PROPERT' by his )o0partners
/, if the right e5ists !nder the terms of agreement
1, if the other partner re)eives other bene*ts pro*ts or !ses partnership
property
2, whenever other )ir)!mstan)es render it ;!st and reasonable
A> the right to demand an a))o!nting e5ists as long as the partnership e5ists
A> pres)ription begins to r!n only !pon the dissol!tion of the partnership
when the *nal a))o!nting is done
PROPERTY RIGHTS OF PARTNERS <P= I= M>
+, rights in spe)i*) PARTNER%:IP PROPERTIE%
., INTERE%T% in the PARTNER%:IP
/, right to PARTICIPATE in the "ANA7E"ENT
RULE<
A> a partner is CO0O9NER with his partners of %PECI#IC PARTNER%:IP
PROPERT'
'> RIGHTS !7 ) PARTNER /+ SPECIFIC PARTNERSHIP PROPERTY
+, he has e>!al rights with his partners to PO%%E%% the property BUT only
for PARTNER%:IP PURPO%E%
> he may possess s!)h property for other p!rposes PRO3I$E$ the
other partners e5pressly or impliedly gives their CON%ENT
., he CANNOT A%%I7N his right to the property E&CEPT if all the other
partners assign their rights in the same property
/, his right to the property is NOT %UB8ECT to ATTAC:"ENT or
E&ECUTION E&CEPT on a )laim against partnership
1, his right to the property is NOT %UB8ECT to (E7A( %UPPORT
Page 1# of 27
A> if there is PARTNER%:IP $EBT the spe)i*) property )an be atta)hed
RULE:
A> a PARTNER% INTERE%T in the partnership is his %:ARE of the PRO#IT% and
%URP(U%
IT C!N $E< <A= A= LS>
+, A%%I7NE$
., ATTAC:E$
/, be s!b;e)t to (E7A( %UPPORT
'EFFECTS !7 CONVEYANCE F8 PARTNER !7 ./- INTEREST /+ *.,
PARTNERSHIP
+, I# he )onveys his 9:O(E INTERE%T
A= partnership may still remain
B= partnership may be dissolved
A> mere )onveyan)e does not dissolve the partnership
., the A%%I7NEE does not ne)essarily be)ome a partner
> the A%%I7NOR is still the partner with a right to demand a))o!nting
and settlement
/, the A%%I7NEE CANNOT interfere in the "ANA7E"ENT or
A$"INI%TRATION of the *rm
> the !11I(NEE C!NNOT also 'E)!N' <I= A= I>
A= IN#OR"ATION
B= ACCOUNTIN7
C= IN%PECTION of partnership boo?s
AAA> while a partners INTERE%T in the *rm may be C:AR7E$ or (E3IE$ !pon
his INTERE%T in a spe)i*) *rm PROPERT' CANNOT be atta)hed,
RIGHTS !7 *., ASSIGNEE
+, to get whatever pro*ts the assignor0partner wo!ld have obtained
., to avail himself of the !s!al remedies in )ase of fra!d in the
management
/, to as? for ANNU("ENT of the )ontra)t of assignment I#<
A= he was ind!)ed to enter into it thro!gh any of the vi)es of )onsent
OR
B= he himself was in)apa)itated to give )onsent
1, to demand an a))o!nting BUT only if the partnership is dissolved
PREFERENTIAL RIGHTS !7 PARTNERSHIP CREDITORS
A> partnership )reditors are entitled to PRIORIT' over partnership assets
in)l!ding the partners interest in the pro*ts
AA> %EPARATE or IN$I3I$UA( )reditors have PRE#ERENCE in separate or
individ!al properties
Page 1% of 27
A> when the C:AR7IN7 OR$ER is applied for and granted the )o!rt may
appoint a re)eiver of the partners share in the pro*ts
> the re)eiver appointed is entitled to any relief ne)essary to )onserve the
partnership assets for partnership p!rposes
A> interest )harged may be redeemed at any time before fore)los!re
A> !*TE& *O&EC.O10&E the interest may still be redeemed by 9without
causin# dissolution3
+, with separate property by any one or more of the partners OR
., with partnership property by any one or more partners with the )onsent
of all the partners whose interests are not so )harged or sold
A> )onsent of the delin>!ent partner not needed
RULE:
> every partnership shall operate !nder a #IR" NA"E
A> the *rm name may or may not in)l!de the name of one or more of the
partners
AA> %TRAN7ER% who in)l!de their names in the *rm are liable as partners
be)a!se of E%TOPPE( BUT do NOT have the RI7:T% of partners
AA> I# a (I"ITE$ PARTNER in)l!des his name in the *rm name he has
obligations BUT not the rights of a general partner
RULE !+ LIABILITY 7!" CONTRACTUAL OBLIGATIONS
A> all partners in)l!ding ind!strial ones shall be liable pro0rata with all their
property and after all the partnership assets have been e5ha!sted
A> NOT APP(ICAB(E for TORT% or CRI"E% 00000> (O%%
00000> IN8UR'
00000> "I%APPROPRIATION
AA> while an IN$U%TRIA( PARTNER is e5empted by law from (O%%E% as
between the partners he is NOT E&E"PTE$ from liability insofar as third
persons are )on)erned
> he may re)over what he has paid from the CAPITA(I%T partners
A> !nder the law the liability of the partners is s!bsidiary and ;oint NOT
prin)ipal and solidary
'RULE !+ LIABILITY !7 ) PARTNER 2.! .)- WITHDRAWN
+, a partner who withdraws is not liable for liabilities )ontra)ted after he
has withdrawn
., if his interest has not yet been paid him
> his right to the same is that of a mere )reditor
AA> a stip!lation e5empting liability to third persons is 3OI$
A> any partner may enter into a separate obligation to perform a partnership
)ontra)t
RULE:
Page 1( of 27
A> every partner is an @agentD of the partnership for the p!rpose of its
b!siness
GGRG1 the a)t of every partner for apparently )arrying on in the U%UA( 9A'
the b!siness of the partnership of whi)h he is member binds the partnership
EXCEPT:
+, if he has NO AUT:ORIT' and
., the person with whom he was dealing with :A% FNO9(E$7E of the fa)t
that he has no s!)h a!thority
RULE:
> an a)t of a partner whi)h is not apparently for the )arrying on of b!siness
of the partnership in the !s!al way does not bind the partnership UN(E%%
a!thoriJed by the other partners
A> a partnership is a CONTARCT of "UTUA( A7ENC' ea)h partner a)ting as a
prin)ipal on his own behalf and as an agent for his )o0partners or the *rm
REQUISITES !+ WHEN 9)+ ) 0)"*+," BIND *., 0)"*+,"-./0
+, e5pressly or impliedly AUT:ORIGE$
., when he a)ts in BE:A(# AN$ IN T:E NA"E of the partnership
INSTANCES !7 IMPLIED AUTHORIHATION
+, when the other partners $O NOT OB8ECT altho!gh they have
?nowledge of the a)t
., when the a)t is for @apparently )arrying on in the !s!al way the
b!siness of the partnership
A> this is binding on the *rm even if the partner was not really
a!thoriJed PRO3I$E$ that the third party is in 7OO$ #AIT:
RULE !+ UNUSUAL ACTS
> one or more but less than all the partners 2!:E NO !0T2O&IT/ TO<
<AP= DG= AI= CJ= EC= SA= RC>
+, A%%I7N the PARTNER% PROPERT'
., $I%PO%E of 7OO$9I((
/, do any other a)t whi)h wo!ld ma?e it impossible to )arry on the
ordinary b!siness of the partnership
1, CON#E%% a ;!dgment
2, ENTER into a CO"PRO"I%E
4, %UB"IT to ARBITRATION
6, RENOUNCE to C(AI"
'RULES !+ CONVEYANCE !7 REAL PROPERTY
;" where title to real property is in the partnership name
> any partner may )onvey title to s!)h property by a )onveyan)e
e5e)!ted in the partnership name
<> P!&TNE&12IP )!/ &ECO:E& 10C2 P&OPE&T/
EXCEPT<
+, if the *rm is engaged in the b!ying and selling of land HU%UA(
BU%INE%%=
., if property was )onveyed to a :O($ER for 3A(UE and who had
NO FNO9(E$7E of the partners (ACF of AUT:ORIT'
Page 17 of 27
., where title is in the name of the partnership and partner sold in his
O5N N!)E

> I# $ONE IN U%UA( BU%INE%%
> b!yer does not be)ome owner BUT ACIUIRE% EIUITAB(E
INTERE%T
> I# NOT $ONE IN U%UA( BU%INE%%
> b!yer does not be)ome owner and is not even entitled to
e>!itable interest
/" where title is in the name of one or more $0T not all the partners

> partners in whose name the title is named "A' CON3E' BUT the
PARTNER%:IP may RECO3ER s!)h property I# done not in its U%UA(
BU%INE%% E&CEPT if he had transferred it to a :older for val!e
1, when property %held in trust by partner

> a sale only )onveys EIUITAB(E INTERE%T
=" when title is in the name of all partners
> )onveyan)e e5e)!ted by all partners possess all rights of s!)h
property
EQUITABLE INTEREST
0BENE#ICIA( INTERE%T BUT NOT NAFE$ O9NER%:IP
'RULE !+ ADMISSION !" REPRESENTATION MADE F8 ) PARTNER
> an admission by a partner is an admission a#ainst the partnersip>under the
followin# conditions<
+, the admissions m!st )on)ern partnership aCairs
., m!st be within the s)ope of his a!thority
RESTRICTIONS ON THE RULE:
+, admissions made BE#ORE $I%%O(UTION are binding only when the
partner has a!thority to a)t on the parti)!lar matter
., admissions made A#TER $I%%O(UTION are binding only if the
admissions were ne)essary to 9IN$ UP the b!siness
/, an admission made by a former partner made after he has RETIRE$
from the partnership is not eviden)e against the *rm
EFFECT !7 NOTICE *! ) PARTNER
noti)e to a partner is noti)e to the partnership
Anoti)e to a partner given while already a partner is a noti)e to the
partnership PRO3I$E$ it relates to partnership aCairs
EFFECT !7 &NOWLEDGE ALTHOUGH NO NOTICE WAS GIVEN:
A knowled#e of the partner is also knowled#e of the -rm P&O:I'E' T2!T<
Page 1? of 27
+, the ?nowledge was a)>!ired by a partner who is a)ting in the
parti)!lar matter involvedLand
., the partner having ?nowledge had reason to believe that the fa)t
related to a matter whi)h had some possibility of being the s!b;e)t of
the partnership b!siness AN$ he was so sit!ated that he )o!ld
)omm!ni)ate it to the partner a)ting on that parti)!lar matter
A %ER3ICE of P(EA$IN7% on the partner in a law *rm is also servi)e on the
whole *rm and the other partners
LOSS OR INJURY
RULE !+ WRONGFUL ACT !" OMISSION !7 ) PARTNER (SOLIDARY
LIABILITY)
A the partnership is solidarily liable with the partner if the wrongf!l a)t or
omission
+, the partner is a)ting in the ordinary )o!rse of b!siness of the
partnership OR
., with a!thority of his )o0partners
A innocent partners have right to re)over from the g!ilty partner
* When the frm and other partners not liable:
+, if the wrongf!l a)t or omission was NOT $ONE
A= within s)ope of partnership b!siness
B= with a!thority of the other )o0partners
., if the a)t or omission is NOT 9RON7#U(
/, if the a)t or omission altho!gh wrongf!l did not ma?e the partner
)on)ern liable
0 $A"NUN AB%IUE IN%URIA
1, if the wrongf!l a)t or omission was )ommitted after the *rm had been
dissolved and the same was not in )onne)tion with the pro)ess of
winding !p,
LIABILITY !7 PARTNERSHIP 7!" MISAPPROPRIATION @ (SOLIDARY
LIABILITY)
+, RECEI3IN7 PART' "I%APPROPRIATE%
., AN' PARTNER "I%APPPROPRIATE%
- money or property in )!stody of partnership
PARTNER BY ESTOPPEL
a person who represents himself or )onsents to another E others
representing him to anyone as a partner either in an e5isting partnership or
in one that is *)titio!s or apparent
PARTNERSHIP BY ESTOPPEL
when all the members of the e5isting partnership )onsent to s!)h
representation of a partner by estoppel
Page 1A of 27
RULES AND SITUATIONS:
;" if a third person is misled and acts because of such misrepresentation
the de)eiver is a partner by estoppel
6" if the partnership consented to such misrepresentation
partnership liability res!lts
?" if the -rm had not consented
no partnership liability res!lts BUT the de)eiver is )onsidered still as
a @partner by estoppelD with all the obligations b!t not the rights of a
partner
@" when a person represents himself as a partner of a NON,EXI1TENT
partnership
NO partnership liability res!lts BUT the de)eiver and all persons who
may have aided him in the misrepresentation are still liable
liability wo!ld be 8OINT or PRO0RATA
A when altho!gh there is misrepresentation if the third party is not
de)eived the do)trine of estoppel does not apply
BURDEN !7 PROOF
the )reditor or whoever alleges the e5isten)e of a partner or partnership
by estoppel has the b!rden of proving the e5isten)e of the
"I%REPRE%ENTATION AN$ INNOCENT RE(IANCE on it
ENTRY OF A NEW PARTNER /+*! )+ EXISTING PARTNERSHIP
RULE:
A he shall be liable for all the obligations of the partnership BUT his liability
will e5tend only to his share in the partnership property
A his own individ!al property shall be e5)l!ded
A same liability of a limited partner
PREFERENCE !7 PARTNERSHIP CREDITORS
RULE:
A the )reditors of the partnership shall be preferred to those of s!)h
partner as regards the partnership property
without preudice to this right
the private )reditors of ea)h partner may as? the atta)hment and p!bli)
sale of the share of the latter in the partnership assets
AAI# a partner sells his share to a third party BUT the *rm itself still
remains %O(3ENT partnership )reditors CANNOT assail the validity of the
sale by alleging that it is made in fra!d of them sin)e they have not really
been pre;!di)ed
DISSOLUTION AND WINDING UP
the )hange in the relation of the partners )a!sed by any partner )a!sing
to be asso)iated in the )arrying on of the b!siness
it is the point of time the partners )ease to )arry on the b!siness together
Page 2B of 27
WINDING UP
the pro)ess settling b!siness aCairs after dissol!tion
TERMINATION
the point in time after all the partnership aCairs have been wo!nd !p
RULE ON DISSOLUTION
A on dissol!tion the partnership is not terminated BUT )ontin!es !ntil the
winding !p of partnership aCairs is )ompleted
'EFFECT !+ OBLIGATIONS
+, ;!st be)a!se a partnership is dissolved this does not ne)essarily mean
that a partner )an evade previo!s obligations entered into by the
partnership
., dissol!tion saves the former partners from new obligations to whi)h
they have not e5pressly or impliedly )onsented UN(E%% the same be
essential for winding !p
'CAUSES OF DISSOLUTION
+, witho!t 3IO(ATION of the A7REE"ENT between the partners
A= TER"INATION of the $E#INITE TER" or PARTICU(AR
UN$ERTAFIN7
B= E&PRE%% 9I(( or AN' PART' in 7OO$ #AIT: HPARTNER%:IP by
9I((=
C= E&PRE%% 9I(( of A(( of the PARTNER% e5)ept those who have
Hinterests= A%%I7NE$ or whose interests have been Hseparate
debts= C:AR7E$
$= E&PU(%ION in good faith of a member
., in CONTRA3ENTION of the agreement between the partners
by the E&PRE%% 9I(( of AN' PARTNER at any time
/, UN(A9#U(NE%% of the BU%INE%%
1, (O%% - thing promised
A= %PECI#IC T:IN7 - PERI%:E% before delivery
B= U%U#RUCT is lost E&CEPT if ownership had been transferred to
the partnership
2, $EAT: of AN' partner
4, IN%O(3ENC' of any partner or of the partnership
6, CI3I( INTER$ICTION of any partner
M, $ECREE of COURT
AAA if the )a!se is not ;!sti*ed or no )a!se was given the withdrawing
partner is liable for $A"A7E% BUT in no )ase )an he be )ompelled to remain
in the *rm
A the insolven)y need not be ;!di)ially de)lared it is eno!gh that the
assets be less than the liabilities
DISSOLUTION F8 JUDICIAL DECREE WHEN ALOWED:
(I= UM= I1PP= C= PB= BL= OC)
+, partner de)lared @insaneD in any ;!di)ial pro)eeding or is shown to be
of UN%OUN$ "IN$
., partner be)omes INCAPAB(E of performing his part of the partnership
)ontra)t
Page 21 of 27
/, partner has been g!ilty of s!)h CON$UCT as tends to aCe)t
pre;!di)ially the b!siness
1, partners PER%I%TENT BREAC: of agreement
2, the b!siness of the partnership )an only be denied on at a loss
4, other )ir)!mstan)es whi)h render dissol!tion e>!itable
IN CASE OF PURCHASER !7 PARTNERS INTEREST
+, after the termination of the spe)i*ed term or parti)!lar !nderta?ing
., AT AN' TI"E if the partnership was a @partnership at willD when the
interest was assigned or when the )harging ordered was iss!ed
A proof as to the e5isten)e of the *rm m!st *rst be given
A even if a partner has not yet been previo!sly de)lared insane by the
)o!rt dissol!tion may be as?ed as long as the insanity is d!ly proved in
)o!rt
A in a s!it for dissol!tion the )o!rt may appoint a RECEI3ER at its
dis)retion
EFFECTS OF DISSOLUTION
RULE:
A when the *rm is dissolved a partner )an no longer bind the partnership
A a dissolved partnership still has the personality for the windin# up of its
a8airs
the *rm is still allowed to )olle)t previo!sly a)>!ired )redits
the *rm is still bo!nd to pay of its debts
DISSOLUTION CAUSED F8 A1I1D
RULE: H%TI(( BOUN$= @ as to ea)h partners
GGRG where the dissol!tion is )a!sed by the ACT IN%O(3ENC' or $EAT: of
a partner ea)h partner is liable to his )o0partners for his share of any liability
)reated by any partner a)ting for the partnership
EXCEPTION: 0 individ!al liabilities
+, if dissol!tion by ACT
the partner a)ting for the partnership :A$ FNO9(E$7E of the
dissol!tion OR
., if dissol!tion by $EAT: or IN%O(3ENC'
the partner a)ting for the partnership :A$ @?nowledge or noti)eD of the
death or insolven)y
A only the partner a)ting ass!mes liability
AAFTER DISSOLUTION= ) 0)"*+," 9)+ -*/66 CF/+:D *., PARTNERSHIP
(WU= UT= TB)
+, By any ACT appropriate for 9IN$IN7 UP partnership aCairs
., By CO"P(ETIN7 transa)tions UN#INI%:E$ at dissol!tion
/, By any TRAN%ACTION whi)h )o!ld bind the partnership I# dissol!tion
had not ta?en pla)e PRO3I$E$ the other party is<
Page 22 of 27
A= PRE3IOU% CRE$ITOR and had NO FNO9(E$7E or NOTICE of the
dissol!tion OR
B= NOT a PRE3IOU% CRE$ITOR had NO FNO9(E$7E or NOTICE and
dissol!tion was NOT PUB(I%:E$
A if there was p!bli)ation of the dissol!tion it is pres!med he already
?nows regardless of a)t!al ?nowledge on non ?nowledge
WHEN /- *., PARTNERSHIP NOT BOUND
+, new b!siness with third parties who are in bad faith
., *rm dissolved be)a!se UN(A9#U( e5)ept for a)ts of winding !p
/, partner who a)ted be)ame IN%O(3ENT
1, partner not a!thoriJed to wind !p E&CEPT if )!stomer in good faith
A if after dissol!tion if a stranger will represent himself as a partner
altho!gh he is not one he will be a partner by estoppel
RULE:
A the dissol!tion of the partnership does not itself dis)harge the @e5isting
liabilityD of any partner
NEE' for an !(&EE)ENT $ET5EEN
+, partner )on)erned
., other partners
/, )reditors
RULE<
A the IN$I3I$UA( PROPERT' of a $ECEA%E$ PARTNER shall be liable for all
obligations of the partnership in)!rred while he was a partner BUT s!b;e)t to
prior payments of his separate debts
A I# there be a NO3ATION of the O($ PARTNER%:IP $EBT% and s!)h
novation is done after one of the partners has @retiredD and witho!t the
)onsent of s!)h partner
said partner )annot be held liable by )reditors who made the novation
with ?nowledge of the *rms dissol!tion
EXTRAJUDUCIAL AND JUDICIAL WINDING1UP
EXTRAJUDICIAL:
+, by the partners who have not wrongf!lly dissolved the partnership
., by the legal representative of the last s!rviving partners
JUDICIAL:
!nder the )ontrol and dire)tion of the )o!rt !pon proper )a!se that is
shown to the )o!rt
A pro*ts that will a)t!ally enter the *rm after dissol!tion as a )onse>!en)e
of transa)tions already made before dissol!tion are in)l!ded be)a!se they
are )onsidered as pro*ts e5isting at the time of dissol!tion
A any other in)ome earned after the time li?e interest or dividends on
sto)? owned by the partners or partnership at the time of dissol!tion sho!ld
not be distrib!ted as pro*ts BUT as merely additional in)ome to the )apital
BETTER RIGHTS !7 INNOCENT PARTNERS
Page 2 of 27
inno)ent partners have better rights than g!ilty partners and that the
g!ilty partners are re>!ired to indemnify for the damages )a!sed
A RIGHT !7 INOCENT PARTNERS TO CONTINUE *., BUSINESS
in essen)e this is a new partnership
)an !se the same *rm name
)an as? new members to ;oin
$0T shall: for protection of #uilty partners
+, give a BON$ approved by the )o!rt
., to PA' g!ilty partners his interests at the time of dissol!tion "INU%
$A"A7E%
A a g!ilty partner who is E&C(U$E$ will be indemni*ed against all present
or f!t!re partnership liabilities
RIGHT TO GET CASH
in )ase on non0)ontin!an)e of the b!siness the interest of the partner
sho!ld if he desires be given in )ash
assets may be sold
a g!ilty partner in as)ertaining the val!e of his interest is not entitled to a
proportional share of the val!e of 7OO$ 9I(

RIGHTS OF INNOCENT PARTNERS IN CASE !7 RESCISSION F)-,: !+
FRAUD AND MISREPRESENTATION
+, Right to (IEN or RETENTION %URP(U%
CAPITA(
A$3ANCE%
., Right of %UBRO7ATION - as )reditor
/, Right of IN$E"NI#ICATION
'ORDER !7 PAYMENT /+ WINDING1UP !7 PARTNERSHIP LIABILITIES
GENERAL PARTNERSHIP: <C= R= C= P>
+, those owing to @)reditorsD other than partners
., those owing to @partnersD other than for )apital or pro*ts -
REI"BUR%E"ENT%
/, those owing to partners in respe)t to CAPITA(
1, those owing to partners in respe)t to PRO#IT%
A I# the partnership assets are ins!N)ient the other partners m!st
)ontrib!te more money or property
PREFERENCE 2/*. RESPECT *! *., ASSETS
;" re#ardin# partnership property
partnership )reditors have preferen)e
6" re#ardin# individual properties of partners
individ!al )reditors are preferred
RULE /7 PARTNER /- INSOLVENT
0 :ow IN$I3I$UA( PROPERT' is $I%TRIBUTE$
Page 2# of 27
ORDER OF PREFERENCE:
+, IN$I3I$UA( or %EPARATE CRE$ITOR%
., PARTNER%:IP CRE$ITOR%
/, those owing to other partners by way of )ontrib!tion
AWhen creditors of the dissolved partnership are also creditors of
the partnership continuing business:
+, new partner is admitted witho!t li>!idation
., a partner retires and assigns his rights I# the b!siness is )ontin!ed
witho!t li>!idation of the partnership aCairs
/, all b!t one partner retire witho!t li>!idation
1, when all partner assign their right to a person who will ass!me their
debt
2, after wrongf!l dissol!tion remaining partners )ontin!e the b!siness
witho!t li>!idation
4, when partner e5pelled and remaining partners )ontin!e the b!siness
witho!t li>!idation
A liability of third person be)oming a partner in the partnership )ontin!ing
the b!siness to the )reditors of the dissolved partnership shall be satis*ed
o!t of the partnership property ON('
7,R, - when a partner retires he is entitled what is d!e him after li>!idation
BUT no li>!idation is needed if there is already a settlement at the date of
dissol!tion
JURISPRUDENCE
$!1TI'! vs" )ENAI
A arti)les of asso)iation by whi)h . or more persons obligate themselves to
pla)e in a )ommon f!nd any property ind!stry or any of these things in
order to obtain pro*t shall be CO""ERCIA(
$O&+! vs" !''I1ON
A a s!rviving h!sband may form a partnership with the heirs of the
de)eased wife for the management and )ontrol of the )omm!nity property
BUT in the absen)e of the formalities pres)ribed by the Civil Code
?nowledge of the e5isten)e of the new partnership or )omm!nity of property
m!st at least be bro!ght home to third persons dealing with the s!rviving
h!sband in regard to the )omm!nity real property in order to bind them by
the )omm!nity agreement
7IE. vs" 1!$E&T
A the de)larations of one partner not made in the presen)e of his )o0
partner are not )ompetent to prove the e5isten)e of a partnership between
them as against s!)h partner
A the e5isten)e of a partnership )annot be established by general
rep!tation r!mor or hearsay
E:EN(E.I1T! vs" C"I"&"
Page 2% of 27
A By the )ontra)t of partnership . or more persons bind themselves to
)ontrib!te money property or ind!stry to a )ommon f!nd with the intention
of dividing the pro*ts among themselves
ESSENTIAL ELEMENTS !7 ) PARTNERSHIP
+, an agreement to CONTRIBUTE money property or ind!stry to a
CO""ON #UN$
., intent to divide the pro*ts among the )ontra)ting parties
A when o!r internal Reven!e Code in)l!des @partnershipsD among the
entities s!b;e)t to the ta5 on @)orporationsD said )ode whi)h are not
ne)essarily @partnershipsD in the te)hni)al sense of the term
A PARTNERSHIPS @ in)l!des a %'N$ICATE 7ROUP POO( 8OINT 3ENTURE
or other !nin)orporated organiJation thro!gh or by the means of whi)h any
b!siness *nan)ial operation or vent!re is )arried on
A a ;oint vent!re need not be !nderta?en in any of the standard forms
or in )onformity with the !s!al re>!irements of the law on partnerships in
order that one )o!ld be deemed )onstit!ted for p!rposes of the TA& on
)orporations
P!1C0!. vs" C"I"&"
A )o0ownership or )o0possession does not itself establish a partnership
whether s!)h )o0owners or )o0possessors do or do not share any pro*ts
made by the !se of the property
A the sharing of gross ret!rns does not itself establish a partnership within
the persons sharing them have a ;oint or )ommon right or interest in any
property from whi)h the ret!rns are derived
A aside from the circumstances of pro-t> the presence of other elements
constitutin# partnership is necessary> such as<
+, the )lear intent to form a partnership
., the e5isten)e of a ;!ridi)al personality diCerent from that of the
individ!al partners AN$
/, the freedom to transfer or assign any interest in the property by one
with the )onsent of the others
A an isolated transa)tion whereby . or more persons )ontrib!te f!nds to
b!y )ertain real estate for pro*t in the absen)e of other )ir)!mstan)es
showing a )ontrary intention )annot be )onsidered a partnership
A persons who )ontrib!te property or f!nds for a )ommon enterprise and
agree to share the gross ret!rns of that enterprise in proportion to their
)ontrib!tion BUT who severally retain the title to their respe)tive
)ontrib!tion are not thereby rendered partners
they have no )ommon sto)? or )apital and no )omm!nity of interest
as prin)ipal proprietors in the b!siness itself whi)h the pro)eeds derived
A a ;oint p!r)hase of land by two does not )onstit!te a )o0partnership in
respe)t thereto NOR does an agreement to share the pro*ts and losses on
the sale of land )reate a partnership
A /+ !":," *! 9!+-*/*4*, ) PARTNERSHIP INTER SESE *.,", ;4-* F,:
Page 2( of 27
A= an intent to form the same
B= generally parti)ipating in both pro*ts and losses AN$
C= s!)h a )omm!nity of interest as far as third persons are
)on)erned as enables ea)h party to ma?e a )ontra)t manage
the b!siness and dispose of the whole property
A the )ommon ownership of property does not itself )reate a partnership
between the owners tho!gh they may !se it for the p!rpose of ma?ing gains
AN$ they may witho!t be)oming partners agree among themselves as to
the management and !se of s!)h property and the appli)ation of the
pro)eeds therefrom
A the sharing of ret!rns does not in itself establish a partnership within the
persons sharing therein have a ;oint or )ommon right or interest in the
property
*.,", ;4-* F,:
+, )lear intent to form a partnership
., the e5isten)e of a ;!ridi)al personality diCerent from the individ!al
partners AN$
/, the freedom of ea)h party to transfer or assign the whole property
'0TE&TE vs" &!..O1
A an agreement between . persons to operate a )o)?pit by whi)h one is to
)ontrib!te his servi)es and the other to provide the )apital the pro*ts to be
divided between them )onstit!tes a partnership
'E.0!O vs" C!1TEE.
A a )ontra)t of partnership to e5ploit a *shpond pending its award to any
>!ali*ed party or appli)ant is 3A(I$ BUT a )ontra)t of partnership to divide
the *shpond after s!)h award is I((E7A(
A one of the )a!ses of dissol!tion is - any event whi)h ma?e it !nlawf!l for
the b!siness of the partnership to be )arried on or for the members to )arry
it on in partnership
C"I"&" vs" 10TE&
A a UNI3ER%A( PARTNER%:IP re>!ires either that the ob;e)t of the
asso)iation be<
+, all the present property of the partners as )ontrib!ted by them to the
)ommon f!nd OR
., all that the partners may a)>!ire by their ind!stry or wor? d!ring the
e5isten)e of the partnership
A the s!bse>!ent marriage of the partners )o!ld not operate to dissolve
the partnership be)a!se it is not one of the )a!ses provided for dissol!tion
by law with regards to limited partnerships
A partnership has distin)t and separate personality from that of its partners
A a h!sband and wife may not enter into a )ontra)t of general )o0
partnershipE UNI3ER%A( partnership
!CO!' vs" )!$!TO
Page 27 of 27
A a partnership may be )onstit!ted in any form E&CEPT where immovable
property or real rights are )ontrib!ted thereto in whi)h )ase a p!bli)
instr!ment shall be ne)essary
A A CONTRACT !7 PARTNERSHIP /- VOID
whenever immovable property is )ontrib!ted thereto if @inventoryD
of said property is not made signed by the parties and atta)hed to the p!bli)
instr!ment
E:!N(E.I1T! vs" !$!' 1!NTO1
A an IN$U%TRIA( PARTNER )annot engage in BU%INE%% #OR :I"%E(#
UN(E%% the partnership e5pressly permits him to do so
I# :E %:OU($ $O %O the )apitalist partners may either<
+, E&C(U$E him from the *rm OR
., A3AI( themselves of the bene*ts whi)h he may have obtained in
violation of this provision
with a right to $A"A7E% in either )ase
A the prohibition against an ind!strial partner engaging in b!siness for
himself see?s to prevent any )onOi)t of interest between the ind!strial
partner and the partnership and to ens!re faithf!l )omplian)e by said
partner with his prostation