QUICKNOTES on Law on Partnership
Characteristics: Consensual, Principal, Bilateral/Multilateral, Nominate, Preparatory, Onerous
Receipt of a share of profits of a partnership in a business is prima facie evidence of a partnership.
MAY DELAY kahit walang demand sa Law of Partnership
Requirement Consequence
Immovable property is contributed Notarized + Attached Inventory VOID
Contributed AT LEAST ₱3,000 Notarized and Registered VALID
Certificate of Limited Co-partnership Recorded with the SEC General Partnership
When shall the juridical personality of the partnership begin? Date of agreement. If none, from the moment
of execution of the contract of partnership.
ALLOWED if stipulated EXCLUSIVE even if stipulated
Universal Partnership of ALL Present Property
Profits and Fruits from Property acquired from Property acquired from Donation, Legacy or
Donation, Legacy or Inheritance Inheritance even if stipulated
Property acquired after formation
Universal Partnership of Profits
Profits and Fruits acquired after formation Profits acquired without the exertion of effort,
such as those by chance or lucrative title.
Dormant partner – does not participate and not known to the public
Ostensible partners – active in management and known in public
Quasi-partners – no longer a partner of the business but has left his capital as loan
Substituted Limited Partner – admitted to all the rights of a limited partner who has died or assigned
his interest in a partnership (if not yet admitted, it is called assignee)
SLP are the partners with the LEAST liability because he is only LIABLE FOR
OBLIGATIONS KNOWN TO HIM the time he was admitted as a partner
Industrial Partner Limited Partner Newly Admitted General
Limited liability as to partners, Limited liability as to partners Old debts up to his separate
BUT NOT as to 3rd persons AND 3rd persons property ONLY IF stipulated
Limited Partner
STILL Limited Pro-rata AND Subsidiarily Liable
Name is in the partnership BUT: He allows his name to be included in the
o Name of limited is also the name of the partnership name contrary to allowed
general partner instances of law
o Prior to the time, business has been He takes part in the control or management
carried on under that name of the business
Loan to Partnership with Collateral Security Limited Partner’s Priority Over Other Ltd. Part.
Violation of Trust Fund Doctrine Stated in the certificate of limited co-
Rescissible partnership
Demand Of Capital Contribution by
All Limited Partner
liabilities, •on the dissolution He has the right to
except receive CASH in return
•when the date specified in the certificate
those to for his contribution
has arrived
partners, regardless of property
have been •after he has six month's notice in writing contributed
paid to all other members if not time
specified
Order of Payment of Liabilities: General: Capital then Profit. Limited: Profit then Capital
Partnership Suffered Damages
Ordinary Knowledge
Authorized
Course of 3rd If through the fault of the partner, the courts may
equitably reduce his responsibility to the
Binding ✓ ✓ ✓ or ✘ partnership through the partner’s extra-ordinary
✘ ✓ ✘ efforts in other activities of the partnership,
unusual profits have been realized.
✘ ✓ ✓
Not Binding
✘ ✘ ✓ or ✘
Automatic Causes of Dissolution Non-Automatic Causes
(EDI Ci ULo2) (InSan Guilty ng Loss)
Express will of any partner at any time Incapability of partner from doing his part
Death of any partner Declaration of Insanity of partner
Insolvency of any partner or the partnership Partner is guilty of conduct that affects
Civil interdiction of any partner prejudicially the carrying of business
Unlawful business of the partnership Business of partnership is carried at a loss
Loss of Property BEFORE or AFTER UPP Other circumstances that render dissolution
Loss of Property BEFORE UPAPP equitable
Prescriptive period to impugn the manifestly inequitable sharing of partnership profits: 3 months
It cannot be impugned by a partner who has begun to execute it (acceptance).
Application of Payment to Managing Partner
1. If partnership receipt, application to partnership debt only
2. If partner’s receipt, application is proportionate unless:
a. Partner is not authorized
b. Partnership debt is not yet due
c. Partner’s debt is more onerous and exercises his right to application of payment
3. If non-managing partner, payment to him is only for him
Rules on Management
Specification of Respective Duties Each shall perform duties specified
No Specification of Duties or No Stipulation 1. Majority per head of all managing partners
that one shall not act without the other 2. Majority per interest of all managing partners
3. Majority per interest of ALL partners
Stipulation: One SHALL NOT act w/o the other Unanimous decision of all partners
Manner of Management has not been agreed 1. Majority per head of all partners
upon 2. Majority per interest of all partners
Acts Not on the Ordinary Course of Business Partnership Shall Be Solidarily Liable
(Unanimous Vote is Needed) (DACS ERA) (LOP) or Quasi-Delicts
Disposition of the goodwill of the business Loss or injury to third persons acting in the
Assignment of property in trust for creditors ordinary course of business
Confession of judgment One partner acting within the scope of his
Submission of a claim or liability to arbitration apparent authority receives money or
Entering into a compromise concerning a property of a third person and misapplies it
partnership’s claim or liability Partnership in the course of business
Renunciation of a claim of the partnership receives money or property of a 3rd person
Act which would make it impossible to carry on the and such is misapplied by any partner
ordinary business of the partnership while it is in custody of partnership
