NOVEMBER 20, 2010

KINDS OF PARTNERSHIPS

A. CONTRIBUTIONS

Art. 1767 - Contributions

1.) Capitalist - Contribution of money or property.
Money is the currency which is legal tender in the Philippines.
Property may be real or personal, tangible or intangible
2.) Industrialist
Industry is the work or services of the party associated
May be personal manual efforts, or intellectual for which a share in profits is received

B. TERMS

Art. 1784 - Commencement of Partnership

Partnership begins from execution of the contract

Commencement of the partnership

1.) Essentials of a contract must be present
2.) When a partnership results, the law fixes the incidents of the relation

Executory agreement of partnership

1.) Future partnership
When a future date is stipulated for commencement of the partnership, they do not become partners unless the
agreed time as arrived/condition has happened
2.) Agreement to create partnership
As long as agreement to enter partnership remains executor, no partnership exists

Art. 1785 - Continuation of a Partnership Beyond Fixed Term

When a partnership continues after the fixed term, the rights and duties of partners remain the same as if they were at
such termination. The continuation of the business by partners without liquidation is prima facie evidence of the
continuation of the partnership

Partnership with a fixed term:

-The term of existence has been agreed upon expressly (definite period) or impliedly (particular transaction is
undertaken).
-Expiration of term = Automatic dissolution of the partnership

Partnership at will
-May be extended or renewed by expressed written or oral agreement OR impliedly (continuation of business w/o
liquidation or settlement).
-Partnership with fixed term is dissolved and a new partnership is created and existence depends upon will of the partners
(Partnership at will)

C. OBJECT

Art. 1776 - Classification of Partnerships, Kinds of Partners

A partnership may be either universal or particular. Partners may be general or limited.

1. Universal Partnership

Art. 1777 - Universal Partnership

Universal partnership may refer to all the present property or profits

Art. 1781 - Presumption in Favor of Universal Partnership of Profits

Articles of universal partnership that do not specify nature presume it is for profit.

-Universal partnership for profits imposes less obligation on partners since they preserve the ownership as separate
property
Art 1782 - Limitations Upon the Right to Form a Universal Partnership
Those prohibited from donating cannot form a universal partnership

Limitations upon the right to form a universal partnership

1.) Those prohibited by law
2.) Husband and wife CAN enter a particular partnership and be partners; EXCEPT
a. Those between persons guilty of adultery or concubinage
b. Those guilty of criminal offense
c. Those made to a public officer, his wife, descendant and ascendants

A. Present Property
.
Art. 1778 - Universal Partnership of All Present Property
Partners contribute all the determinate properties which belong to a common fund, with the intention of dividing the same
and profits among them.

Art. 1779 - Universal Partnership of all Present Property

The following become common property:
1.) Property which belonged to each at time of constitution of the partnership.
2.) Profits to be acquired from property
-Future property (acquired by inheritance, legacy or donation) cannot be contributed.
-Property from other source, as well as fruits of the property will become common only if there is stipulation.

B. Profits

Art. 1780 - Universal Partnership of Profits

Universal Partnership of Profits comprises all that the partners may acquire by industry or work during partnership.
Immovable or Movable property shall pertain exclusively to each partner, but usufructuary use passes to partnership
* usufructuary - right to enjoy benefits or profits from something, as real property, while not being the owner of it.

Universal Partnership of Profits

-Partners retain ownership over present and future property. What passes is usufruct, profits or income. Upon dissolution
of the partnership, the property is returned to those who own it.
-Profits acquired by partners thru chance are not included.
-Fruits of property subsequently acquired:
Do not belong to the partnership
May be included by express stipulation

2. Particular Partnership

Art 1783 - Particular Partnership

The object of a particular partnership is determinate things, their use or fruits, or a specific undertaking, or the exercise of
a profession or a vocation.

Particular Partnership
-It is neither universal partnership of present property or profits
-Examples: those formed for acquisition of immovable property with intention to resell, those carried out with purpose of
carrying out a specific enterprise, or a profession//vocation
-Carrying on of a business is not essential to constitute a partnership

Art 1767 (second paragraph)

Two or more persons may also form a partnership for the exercise of a profession

Profession
-Calling in the preparation for/practice, of which academic learning is required, and has the prime purpose of rendering
public service.
-May refer to a whole body of persons or a group engaged in a calling

D. LIABILITY OF PARTNERS

Art. 1776 - Kinds of Partners

Liability of partners may be general or limited
E. PARTNERSHIP BY ESTOPPEL

See Reviewer - Nature of Partnership