Partnership (General Discussion)

1. General Provisions of Partnership

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3. Contract of Partnership SEC Valid contract juridical person Articles of Partnership
immovable property Legal capacity secret partnerships Lawful object universal
partnership Capital particular partnership Property common fund Money sharing of
profits Industry sharing of losses Public Instrument intention to divide profits
4. Mechanics The class will be divided into two groups. Each group will choose a
representative. The representative will act out the word. (no mouthing) The group will
guess the right term/s. Each group will be given one (1) minute to guess the right term/s.
After one minute and the group did not able to guess the right term, the representative
will reveal the term. Thereafter, the representative will choose one member of the group
to say something of substance about the term/s. However, if the group is able to guess
the right term/s, it will choose a member from the other group to say something of
substance about the term/s.
5. Nature of Partnership Within the context of Philippine law, a "partnership"
is treated as an artificial being created by operation of law with a legal personality
separate and distinct from the partners thereof. Philippine partnerships operate under
the concept of unlimited liability and unless otherwise agreed upon by the partners, each
one of them acts as manager and agent of the partnership and consequently, their acts
bind the partnership.
6. Partnership Governing Law Unlike corporations whose governing law is a special law
- the Corporation Code of the Philippines, partnerships in the Philippines are governed
by and covered under Articles 1767 to 1867 of the Civil Code of the Philippines [circa
1950]. These are the provisions of law which govern all aspects of partnerships - from
their creation, formation, existence, operation and management to their dissolution and
liquidation, including the obligations of the partners to one another, to the public or third
persons and to the government.
7. Definition by law 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. Two or more persons may also form
a partnership for the exercise of a profession.
8. Essential Features/Charactersitic Elements of Partnership(De leon/Agbayani) -There
must be a contract. The partners must have legal capacity to enter into a contract. There
must be mutual contribution of money, property or industry to a common fund. The
purpose must be to obtain pecuniary profits and to share the same. The purpose must
be lawful, and The articles of co-partnership must not be kept secret.
9. 1) There must be a Contract The three essential requisites of a contract must be
complied with: consent, object and cause. As in other cases of contracts, in order to
make an agreement for partnership valid, there must be a valid consideration existing
between the partners. Each partner must surrender to the partnership an interest in his
property, labor, skill, or energy, in accordance with the express or implied stipulations of
their mutual agreement. The contract can be entered into orally or written.
10. Fiduciary in Nature Partnership is a form of voluntary association entered into by the
association. It is a personal relation in which the element of delectus personae exists.
What does Delectus personae mean? It involves trust and confidence between partners.
11. Cases In Ortega v. Ca G.R. No. 109248 July 3, 1995, a partnership that does not fix
its term is a partnership at will. The birth and life of a partnership at will is predicated on
the mutual desire and consent of the partners. The right to choose with whom a person
wishes to associate himself is the very foundation and essence of that partnership. Its
continued existence dependent on the constancy of the mutual resolve, along with each
partners capability to give it, and the absence of a cause for dissolution provided by the
law itself.
12. 2) The parties must have legal capacity Only those person with legal capacity to give
consent may enter into a contract of partnership. Trivia Question: Who cannot give
consent to a contract of partnership? They are: 1)Unemancipated Minors 2)Insane or
demented persons 3)Deaf mutes who do not know how to write 4)persons who are
suffering from civil interdiction 5)incompetents who are under guardianship (Art. 1327,
1329 of the NCC) Trivia Question: May a juridical person enter into a contract of
partnership?

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13. Answer: Yes, in Mervyn v. Bieber, (184 CA 637) corporations which are expressly
authorized by statute, or there is an express grant of such authority in the charter, a
corporation has authority to enter into a contract of partnership. Also, there is no
prohibition against a partnership being a partner in another partnership. When two or
more partnerships combine with each (or with natural person or persons) other creating
a distinct partnership.
14. 3) There must be mutual Contribution of money, property or industry Both real and
personal property can be contributed. Money-Legal Tender of the Philippines not
checks, drafts or other representatives of money.(they must be cashed first) PropertyLicense to construct and operate a cock pit may be given as a contribution to a
partnership. Industry-active cooperation, the work of the party associated, which may be
either personal, manual efforts or intellectual, and for which he receives share in the
profits of the business, not just salary.
15. 4) The purpose must be to obtain profits etc. The purpose must be to obtain profits
and to divide the same among the partners and that it is necessary that such profits or
benefits shall be common to all partners.
16. Sharing of profits Sharing of gross profits is not partnership when the agreement is
to divide the gross earning or receipts of a venture, will not for itself constitute a
partnership as to third persons. It does not amount to an agreement to share profits and
losses. Sharing of profits is a prima facie evidence of partnership because it is an
essential element of the relationship.
17. When sharing profits not prima facie evidence of partnership? One who merely
makes a loan or money or credit to the owner of a business in consideration of a share
of its profits in repayment of such loan or in lieu of, or in addition to interest for its use
does not thereby become a partner in the business. Where an employee receives 35%
of the net profits, instead, of a salary, there is no partnership in the absence of any
contract showing the same. In Navarro v. CA, 222 SCRA 675-679 (1993), a cursory
examination of the evidence presented no proof that a partnership, whether oral or
written had been constituted at the inception of this transaction. While there may have
been co-ownership or co-possession of some items and/or sharing of proceeds by way
of advances received by both plaintiff and the defendant, there is no indicative and
supportive of the existence of partnership between them. The court held in Muasque

v.CA, 139 SCRA 533 (1985), even if there was a falling out or misunderstanding
between the partners such does not convert it into a sham organization.
18. 5) The purpose must be lawful A partnership cannot be formed for an illegal purpose
and where the thing to be done is illegal, the contract of partnership for the purpose of
doing such is equally illegal. Art. 1770 of the New Civil Code states, When an unlawful
partnership is dissolved by judicial decree, the profits shall be confiscated in favor of the
State.
19. Effect of unlawful purpose of partnership The Court will refuse to recognize its
existance and will not lend their aid to assist either of the parties thereto in an action
against the other. The profits shall be confiscated in favor of the State. The instruments
and effects of the crime, if the purpose is a criminal act, may be confiscated under the
provisions of the RPC. The contributions of the partners shall not be confiscated.
20. 6) The Articles of Partnership must not be kept secret Art. 1775 provides that,
associations and societies, whose articles are kept secret among the members, and
wherein any one of the members may contract in his own name with third persons, shall
have no juridical personality, and shall be governed by the provisions relating to coownership.
21. De Leon: What are the characteristic elements of partnership? Explain. Consensual
Nominate Bilateral Onerous Commutative Principal Preparatory
22. Juridicial Personality of Partnerships Art. 1768. The partnership has a judicial
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. Trivia Question: If A and
B decide to form a partnership. How many persons are involved? 3. A, B and the
Partnership of A and B.
23. Art. 1772. Every contract of partnership having a capital of three thousand pesos or
more, in money or property, shall appear in a public instrument, which must be recorded
in the Office of the Securities and Exchange Commission.
24. What is referred to in Art. 1772? What is referred to here is that registration in SEC is
not necessary for the acquisition of juridical personality. The contract of partnership is a
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consensual contract. Hence it is perfected from the moment of consent, and its juridical
personality begins therefrom.
25. Partnerships like corporations are subject to absolute jurisdiction, supervision and
control of the SEC
26. Art. 1769. In determining whether a partnership exists, these rules shall apply: (1)
Except as provided by Article 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-owners or co-possessors do or do not share
any profits made by the use of the property; (3) The sharing of gross returns does not of
itself establish a partnership, whether or not the persons sharing them have a joint or
common right or interest in any property from which the returns are derived; (4) The
receipt by a person of a share of the profits of a business is prima facie evidence that he
is a partner in the business, but no such inference shall be drawn if such profits were
received in payment: (a) As a debt by installments or otherwise; (b) As wages of an
employee or rent to a landlord; (c) As an annuity to a widow or representative of a
deceased partner; (d) As interest on a loan, though the amount of payment vary with the
profits of the business; (e) As the consideration for the sale of a goodwill of a business
or other property by installments or otherwise. (n)
27. Trivia Question If Juan and Pedro are merely co-owners but Juan represents to
Padring that he and Pedro are partners, can they be partners as to Padring, a third
person?
28. Answer The general rule is, no, they cannot be partners as to Padring, who is a third
person if they are not partners as to eachother. The exception is, where there is
estoppel in Art. 1825 of the Code. So, as to Padring, Juan and Pedro are partners even
if they are not real partners.
29. Trivia Question: Juan and Pedro agree to buy a piece of land under the condition
that each should pay one-half of the price thereof, and that the property should be
divided between them. Is there partnership in the case? (Gallemit v. Tagbiliran, 20 Phil
241) No.
30. Partnership v. Co-ownership As a general rule, an agreement between joint-owners
of property to carry common trade or business and to share the profits and losses

thereof will constitute a partnership. A mere community if interest, such as exists

between tenants in common or joint tenants of real or personal property, does not make
such owners partners or raise a presumption that partnership exists.
31. Partnership, once established, has juridical personality, while a co-ownership as
none. A Partnership is created always by contract, while co-ownership may exist by
operation of law. A co-owner may dispose of his individual interest in the common
property as an incident inherent in ownership, a partner has no such power. The object
of partnership is gain, a co-ownership does not necessarily exist for profit. The right of a
co-owner descent to his heir; those of a partner (as partner in partnership) do not,
unless expressly stipulated in the contract of partnership.
32. Trivia Case Juana died leaving heirs, her husband Pedro and her children. After the
partition, the properties were not distributed to Pedro and the other heirs. Instead Pedro,
as administrator, used such properties in business by leasing or selling them and
investing the income derived therefrom and the proceeds from the sales thereof in real
properties and securities. Every Year the heirs returned from income tax purposes their
shares in the net income derived from the properties and investments, and paid the
corresponding income taxes. However, the heirs did not actually receive their shares
which were left in the hands of Pedro, the administrator. The BIR decided that the heirs
had formed an unregistered partnership and therefore subject to the corporate income
tax pursuant to Section 24 and 84 (b) of the Tax Code.
33. Question 1: Is the BIR correct in contending that the heirs had formed an
unregistered partnership? When did the unregistered partnership begin? Yes, the BIR is
correct in contending that the heirs had formed an unregistered partnership from the
partition of the properties of the deceased Juana was approved by the court. From the
moment the petitioners allowed not only the incomes from their respective shares from
the inheritance but even inherited properties themselves to be used by Pedro as a
common fund in undertaking several transactions or in business, with the intention of
deriving profit to be shared by them proportionally, such act was tantamount to actually
contributing such income to a common fund, and in effect, they thereby formed an
unregistered partnership within the purview of the above-mentioned provisions of the
Tax Code. However, up until the time the partition was approved by the court, the heirs
are not considered to have formed an unregistered partnership. Before the partition and
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distribution of the estate of the deceased, all the income thereof does belong commonly
to all the heirs, obviously, without them becoming thereby unregistered co-partners.

in the absence of an express agreement vested with the rights of management, whereas
in a conjugal partnership it is almost always the husband who manages the same.

34. Question 2: Are the heirs, as unregistered partnership liable to pay corporate income
tax? Yes, the heirs, as constituting an unregistered partnership, are liable to the
corporate income tax. The Court differentiated the concept of partnership under the civil
code from that of unregistered partnership and held that, such unregistered partnership
are considered as corporations under Sec. 24 and 84 (b) of the NIRC. For purpose of
tax on corporations, our NIRC, includes these partnerships- with the exception only for
duly registered general co-partnership-within the purview of the term corporation.

38. Joint Venture, A form of Partnership The legal concept of a join venture is of
common law origin. It is no precise legal definition, but it has been generally understood
to mean an organization formed for some temporary purpose. The main distinction cited
by most opinions in common law jurisdications is that the partnership contemplates a
general business with some degree of continuity, while the joint venture is formed for the
execution of a single transaction, and thus of a temporary nature. A corporation though
cannot enter into a partnership contract, may enter into a joint venture with others.

35. Question 3: May the heirs deduct from the income tax due their unregistered
partnership the income tax they paid on their individual incomes of which the share in
the net profit of their unregistered partnership is a part? No, the heirs may not deduct the
individual income taxes they paid from the income tax due their unregistered
partnership. The partnership profits distributable to the partners should be deduced by
the amounts of income tax assessed against the partnership. For more details. Read the
case: Oa v. CIR, May 25, 1972, 45 SCRA 74, 81-82.

39. Example of Joint Venture Hypor Partnership Strong in Philippines NETHERLANDS Just two and a half years ago, what began as a development project, is now a prime
example of how business to business co-operation can lead to long-term sustainable
development - with additional benefits to environmental initiatives and animal welfare.
Hypig was formed through the signing of a joint venture agreement in June 2005
between Hypor B.V. (a Hendrix Genetics company, Holland) and Holly Farms Inc.
(Bounty Fresh Food group, the Philippines). This joint venture was precipitated by a
contract Hypor signed in late 2004 with the International Business and Cooperation
Agency of the Dutch government (EVD) to set up a Bio-Hypor breeding farm on
Mindanao. The agreement was made through the agency's Programme for Cooperation
with Emerging Markets (PSOM). A piece of land complying with the Hypor's bio-security
requirements was found in barrio Lantapan, Malaybalay, Bukidnon province. The Kelsey
farm lies amid banana and pineapple plantations, with no other animal farms in the
vicinity. The barns were constructed by December 2005, and 270 nucleus sows and
boars from Hypor Canada arrived in February 2006. By this time Hypig felt the demand
was greater than originally forecast and another shipment of pure line Hypor pigs was
delivered.

36. Partnership V. Joint Venture Joint account exists when one person (called silent
partner) contributes capital to another who is in business (called ostensible partner) who
acts in his own name. A partnership has a firm name, while a joint account has none and
it is conducted in the name of the ostensible partner; A partnership has a juridical
personality. While a joint account has no juridical personality, and that action must be
brought against the ostensible partner only; A partnership is a common fund, while a
joint account has no common fund; Liquidation of a partnership may be entrusted to
other persons, the ostensible partner always liquidates the joint account.
37. Partnership V. Conjugal Partnership An ordinary partnership is created by the will of
the parties whereas a conjugal partnership arises from the mere celebration of marriage,
that is, by operation of law; In an ordinary partnership, it is the agreement of the parties
that determines its object, duration, etc. whereas in a conjugal partnership, it is the law
that regulates such matters. In an ordinary partnership, the profits are distributed in
accordance with the agreement of the the parties, and in the absence thereof, in
accordance with the provisions of law, whereas in a conjugal partnership, the profits are
always divided equally between the spouses. In an ordinary partnership, all partners are,

40. 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. (1667a) Art. 1772. Every contract of partnership having a capital of three
thousand pesos or more, in money or property, shall appear in a public instrument,
which must be recorded in the Office of the Securities and Exchange Commission.
Failure to comply with the requirements of the preceding paragraph shall not affect the
liability of the partnership and the members thereof to third persons. (n) Art. 1773. A
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contract of partnership is void, whenever immovable property is contributed thereto, if an

inventory of said property is not made, signed by the parties, and attached to the public
instrument. (1668a) Art. 1774. Any immovable property or an interest therein may be
acquired in the partnership name. Title so acquired can be conveyed only in the
partnership name. (n) Art. 1775. Associations and societies, whose articles are kept
secret among the members, and wherein any one of the members may contract in his
own name with third persons, shall have no juridical personality, and shall be governed
by the provisions relating to co-ownership.
41. The requirement of a public instrument were immovable property or real rights are
contributed is only in order that the contract of partnership may be effective with respect
to third persons, but as far as the partners themselves are concerned, said contract is
valid and effective, not only could they compel each other to reciprocally comply with the
required formalities from the moment the contract is entered into, but the partners can
also mutually require each other to fulfill all the obligations they have incurred. Art. 1773
complements the provisions of Art. 1771, because the execution of public instrument
would serve no purpose if the inventory of the real property contributed is omitted. With
out said inventory, the contract could not be registered in the register of property, and
such contributions to the partnerships would no way prejudice third persons who,
moreover, might evidently defrauded in their transactions with the partnership, because
of their belief in the efficacy of the guaranty which said property might constitute. It will
be noted that where the inventory is not made or signed by the parties and attached to
the public instrument the contract of partnership is void.

who are prohibited from giving donations or advantage to each other cannot enter into a
universal partnership (Art. 1782).
46. Commissioner of Internal Revenue v. Suter Facts: A, B and C formed a limited
partnership to engage in the importation, marketing and operation of radios, television
sets and amusement machines, their parts and accessories, with B and C as limited
partners. Subsequently, A and B got married and thereafter, C sold his share to A and B.
So, A and B filed a separate income return for the limited partnership and a consolidated
return for them as spouses.
47. Issue Whether or not the partnership was dissolved after the marriage of A and B
and the subsequent sale to them by C of the latters share.
48. Ruling The firm was not a universal partnership, but a particular one. It follows that
the partnership was not one that A and B were forbidden to enter under Art. 1782. Nor
could the subsequent marriage of the partners operate to dissolve it, such marriage not
being one of the causes provided for that purpose by law. Note: Article 1782 Persons
who are prohibited from giving each other any donation or advantage cannot enter into a
universal partnership.
49. b. PARTICULAR PARTNERSHIP - has for its objects: i. Determinate things ii. Their
use or fruits iii. Specific undertaking iv. Exercise of profession or vocation

43. CLASSIFICATIONS OF PARTNERSHIP

50. As to LIABILITY OF PARTNERS a. GENERAL PARTNERSHIP - consists of general

partners who are liable pro rata and subsidiarily and sometimes solidarily with their
separate property for partnership debts. b. LIMITED PARTNERSHIP - one formed by 2
or more persons having as members one or more general partners and one or more
limited partners , the latter not being personally liable for the obligations of the
partnership.

44. As to extent of its SUBJECT MATTER a. UNIVERSAL PARTNERSHIP i.

UNIVERSAL PARTNERSHIP OF ALL PRESENT PROPERTY - comprises the following:
a) Property which belonged to each of the partners at the time of the constitution of the
partnership b) Profits which they may acquire from all property contributed

51. As to DURATION a. PARTNERSHIP AT WILL - one in which no time is specified and

is not formed for a particular undertaking or venture which may be terminated anytime
by mutual agreement. b. PARTNERSHIP WITH A FIXED TERM - the term for which the
partnership is to exist is fixed or agreed upon or one formed for a particular undertaking.

42. The most important single central fact about a free market is that no exchange
takes place unless both parties benefit. Milton Friedman

45. ii. UNIVERSAL PARTNERSHIP OF PROFITS - comprises all that the partners may
acquire by their industry or work during the existence of the partnership Note: Persons
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52. As to LEGALITY OF EXISTENCE a. DE JURE PARTNERSHIP - one which has

complied with all the legal requirements for its establishment. b. DE FACTO - one which
has failed to comply with all the legal requirements for its establishment.
53. As to REPRESENTATION TO OTHERS a. ORDINARY OR REAL PARTNERSHIP one which actually exists among the partners and also as to 3rd persons. b.
PARTNERSHIP BY ESTOPPEL - one which in reality is not a partnership but is
considered a partnership only in relation to those who, by their conduct or omission, are
precluded to deny or disprove its existence.
54. As to PUBLICITY a. SECRET PARTNERSHIP - one wherein the existence of certain
persons as partners is not avowed or made known to the public by any of the partners.
b. OPEN OR NOTORIOUS PARTNERSHIP - one whose existence is avowed or made
known to the public by the members of the firm.
55. As to PURPOSE a. COMMERCIAL OR TRADING PARTNERSHIP - one formed for
the transaction of business. b. PROFESSIONAL OR NON TRADING PARTNERSHIP one formed for the exercise of a profession.
56. BUSINESS PARTNERSHIPS
57. Edison Electric Light Co. Thomas Edison and J.P. Morgan and the Vanderbilts
Founded in 1880 The electric light bulb catapulted Thomas Edison to fame and fortune.
But Edison, like many entrepreneurs with more ideas than capital , needed financial
partners to fund his inventions. Throughout the 1870s and 1880s, Edison received
funding from a group of wealthy investors, including J.P. Morgan and the Vanderbilt
family, helping lay the groundwork for what eventually became the Edison Electric Light
Co. In 1879, Edison demonstrated the incandescent electric light bulb to his backers and
launched it publicly shortly thereafter. Three years later, Edison watched as the first
commercial central power system was installed in Manhattan. By 1887, 121 Edison
central power stations spanned the country.
58. Thomas Edison and J.P. Morgan and the Vanderbilts
59. Warner Brothers Sam, Jack, Albert, and Harry Warner Founded in 1923 The sons of
Polish-born Jewish immigrants, Sam, Jack, Albert, and Harry Warner co-founded what
would become Warner Bros. Studios. They got their start in the early 1900s working in

film production and distribution. They ran a traveling movie business, established their
own movie house, and began producing their own films when the cost of rentals became
too steep. Sam Warner is credited with ending the silent film era after he obtained the
technology that allowed his studio to produce the first feature-length talkie, The Jazz
Singer, which the studio released in 1927. The blockbuster film (which grossed some $3
million) established Warner Bros. as a major player and revolutionized the film industry.
60. McDonalds (MCD) Richard and Maurice McDonald Founded in 1948 The New
Hampshire-born brothers moved to southern California in the late 1920s with the goal of
opening their own business and earning $1 million before they hit 50. After an
unsuccessful attempt to break into the movie business, they opened and ran a hot dog
stand and a barbecue restaurant, gaining experience they would later use to pioneer the
fast-food industry. In 1948, the brothers reinvented their McDonald's Famous BBQ, firing
their car hops, slashing the number of items on the menu, getting rid of utensils and
plates, and turning the kitchen into a mechanized assembly line.
61. Hewlett-Packard (HP) Bill Hewlett and David Packard Founded in 1939 After
graduating with degrees in electrical engineering from Stanford in 1934, Bill Hewlett and
David Packard forged a friendship during a two-week camping and fishing trip in
Colorado. Four years later, the pair began working part-time on a product based on
Hewlett's study of negative feedback in a rented Palo Alto garage with $538 in cash and
a used drill press. The result was the HP200A, an audio oscillator designed to test
sound equipment. One of their first customers was Walt Disney Studios (DIS), which
purchased eight of the devices to test a new sound system for the movie Fantasia. In
1939, the men formalized their partnership, flipping a coin to decide their startup's name.
Hewlett-Packard continued to create innovative technology products throughout the
1940s. It also become known for its equally innovative open corporate culture and
management style. By 1942, HP had eight employees and $522,803 in yearly revenue.
In 1961, the company was earning $87.9 million and was listed on the New York Stock
Exchange. Today, the company that introduced laser jet printers, touch screens, and
personal computers is a global behemoth with $104.3 billion in annual sales.
62. Hewlett-Packard (HP)
63. Microsoft (MSFT) Bill Gates and Paul Allen Founded in 1975 Back in 1968, a
computer club meeting about BASIC programming at Seattle's private Lakeside School
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brought Gates and Allen together. The two students soon became obsessed with
programming a mainframe of a local computer and quickly saw the future of microprocessing. However, it was an article in Popular Mechanics about personal computers
that triggered their realization that writing and selling software was the new frontier. Fast
forward to the early 1970s. Allen, who was three years older than Gates, went to work
for Honeywell (HON) in Boston, and Gates enrolled at Harvard. In 1974, the pair devised
a BASIC platform for the Altair 8800 in Gates' dorm room and sold it, earning Gates
disciplinary charges from the university for running a business in his dorm. A year later,
Gates (who dropped out of Harvard) and Allen formed Microsoft, which today is the
world's largest software company.
64. Bill Gates and Paul Allen
65. Apple (AAPL) Steve Jobs and Steve Wozniak Founded in 1976 College dropouts,
Steve Jobs and Steve Wozniak met in the early 1970s when Jobs was attending
lectures at Hewlett-Packard, where Wozniak worked. The two were also involved in the
Homebrew Computer Club in Silicon Valley, where they experimented with hardware
and software. Soon they developed an idea for a new kind of personal computer. To
raise money for their new venture, they sold off some of their belongings, including a
Volkswagen minibus and programmable HP calculator. The pair blended Wozniak's
computer and software prowess and Jobs' marketing genius to build the first Apple
computer in Jobs' family garage in 1976. The first single-board computer with onboard
ROM and a video interface, revolutionized computer functionality, and design. They sold
their first 50 computers to the Byte Shop in Mountain View, Calif. In 1980, the company
went public, making both multimillionaires. Today, Apple is a $32.4 billion company
known for its innovative products, ranging from the Macintosh to the iPod to the iPhone.
66. Steve Jobs and Steve Wozniak
67. Google (GOOG) Larry Page and Sergey Brin Founded in 1998 Page and Brin (both
the sons of academics, economists, and mathematicians) met working on their
doctorates in computer science at Stanford University in 1995. Together, they created a
proprietary algorithm for a search engine, with the goal of organizing the vast amount of
information available on the Net. Initially called BackRub, the software catalogued
search results according to the popularity of pages. Fairly quickly it became apparent
that in most cases the most popular results were also the most useful. Presto, another

game changer was born. In 1998, the pair dropped out of Stanford, changed their
startups name to Google, set up shop in a friend's garage, and raised about $1 million
in capital from friends, family, and other investors. Initially, Google received 10,000
queries a day (today that number is estimated at 235 million) and in 1999 the pair
received $25 million in venture-capital funding. Five years later, Google went public,
opening at $85 a share. Arguably the world's No. 1 Internet search engine, last year the
company earned $16.5 billion in salesmost of which was generated through ad sales.
68. Larry Page and Sergey Brin
69. Is a Business Partnership the Right Choice for You? Starting a business with a
partner offers many benefits, not the least of which is having someone to share the
many responsibilities of running a business. But partnerships can quickly go bad if you
don't give it ample forethought and planning. Patricia Schaefer
70. The Sam-Rachel Partnership Story Ten years ago, Samantha was sitting in her best
friend Rachel's kitchen, and an idea was born for them to start a business together.
Their only consideration was the excitement they felt. They soon had their first client,
and agreed they would each work an equal amount of hours and split their profits 50/50.
Within a year, their client base increased to the point that it allowed them to each work
their goal of 30 hours per week.
71. After a few years, Rachel's time on the job and quality of work suffered. For every
hour of work Rachel performed, Samantha was putting in two. Clients commented to
Samantha about their dissatisfaction with Rachel's job performance. Rachel was
sensitive by nature and exploded in teary screams when Samantha tried to gently tell
her that the quality of her work had deteriorated.
72. Instead of performing client services together, Samantha slowly transitioned the
business whereby each was independently attending to client needs. A few years later,
Rachel was down to one client while Samantha's client base was teeming. Their
partnership soon dissolved, and so did their friendship.
73. Thought to Ponder This real-life scenario is just one testament to the fact that a
business partnership formed without necessary forethought is likely to be doomed to
failure. With the proper planning and consideration, though, a partnership can be an
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unequivocal success. It is the simplest and least expensive co-owned business

arrangement.
74. Some possible pros: Shared cost of start-up. Shared responsibilities and work.
Shared business risks and expenses. Complementary skills and additional contacts of
each partner can lead to the achievement of greater financial results together than
would be possible apart. Mutual support and motivation.
75. Some possible cons: Partners in a general partnership are jointly and individually
liable for the business activities of the other. If your partner skips town, you'll be liable for
all the debts, not just half of them. Shared profits. You do not have total control over the
business. Decisions are shared, and differences of opinion can lead to disagreements, a
"falling out," or even one partner buying out the other. A friendship may not
survive a partnership. Keep in mind John D. Rockefeller's famous words: "A
friendship founded on business is a good deal better than a business founded on
friendship."
76. Are you the business partner type? A business match is much like a marriage, and
just as one would normally take great care, time and consideration in the selection of a
mate, so it should be in the selection of a business partner.
77. Dating Period Do we have the same motivation, values and similar work habits? Do
we have a similar vision, ideas and objectives about how to run the business? Is each of
our strong points and skills complementary to one another? Are we both able to
communicate well with one another in a pleasant, respectful and comfortable manner?
Do you trust this individual?
78. It is rare to find a business partner who is selfless. If you are lucky it happens once
in a lifetime. Michael Eisner
79. Cons All owners are subject to unlimited personal liability for the debts, losses and
liabilities of the business (except in cases of limited partnerships and limited liablity
partnerships). Individual partners bear responsibility for the actions of other partners.
Poorly organized partnerships and oral partnerships can lead to disputes among
owners.

80. How to register a PARTNERSHIP with the Philippine SEC Verify and reserve the
proposed partnership name. You could do this the hard way, at the SEC Verification
Unit, located at the SEC Building, EDSA, Greenhills, Mandaluyong City (right across the
Philippine Overseas Employment Administration [POEA] and the EDSA Shrine). If you
want to make your life a bit easier, you could do the verification and registration online,
through the SEC-iRegister , a 24-7 portal. After paying the reservation fee, you will get a
Name Verification Slip, which is submitted together with the other requirements. 2.
Prepare the Articles of Partnership. This is equivalent to the Articles of Incorporation,
which is one of the required documents for corporations. 3. Prepare the: (i) Written
Undertaking to Change Partnership Name by any Partner; and (ii) Registration Data
Sheet. There are additional requirements for certain partnerships, like customs
brokerages, which are required to submit the customs broker licenses and professional
tax receipts (PTR) of at least two partners. 4. File the complete documents with the
SEC, upon payment of the requisite filing fees. The SEC website, http://www.sec.gov.ph/
, offers an on-line calculator for your estimated registration fees to pay. Should need a
more detailed process you can always check out the Securities and Exchange
Commission .
81. Articles of Partnership While the partnership relation may be informally created and
its existence proved by the manifestation of the parties, it is customary to embody the
terms of the association in a written document. The Articles of Partnership states the
name, nature or purpose and location of the firm, and defining, among others, the
powers, rights, duties, and liabilities of the partners among themselves, their
contributions, the manner by which the profits and losses are to be shared, and the
procedure for dissolving the partnership.
82. Video Conference from Atty. Zachery Mc Nathan Alvarado
83. Activity Look for your report partner Get a bondpaper from the reporter You want to
make form a business partnership and establish the following establishment: (choose)
-Ukay2x -Bakeshop -Fishball Vendor -Balot Business -Sarisari Store -Internet Caf
-Load Station -Barbeque Station -Ice Cream Shop -Carenderia Make your own Articles
of Partnership and present your business and AOP to the class. Use your imagination.
Act as if you are truly making a business to make it more realistic. (Sample is in .PDF
form)
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