STUDY GUIDE

Chapter 1
I. Definitions
Partnership Two or more person bind themselves to contribute money, property, or industry
common fund, with the intention of dividing the profits among themselves.

to a

Element of delectus personae No one can become a member of partnership association without the
consent of all the other associates.
Particular partnership A particular partnership has for its object determinate things, their use or fruits, or a
specific undertaking, or the exercise of a profession or vocation.
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
Universal partnership of profits - ART. 1780 compromises all that the partners may acquire by their industry
or work during the existence of the partnership.

II. Discussions

Essential features of partnership

1.
2.
3.
4.
5.

There must be a valid contract

The parties must have legal capacity to enter into the contract
There must be mutual contribution of money, property, or industry to a common fund
The object must be lawful
The purpose or primary purpose must be to obtain profits and divide the same among the parties.
Explain and illustrate: a partnership is juridical person.
Like a corporation, a partnership duly formed under the law is juridical person to which the law grants a
juridical personality separate and distinct from that of each of the partners. As a juridical person, a
partnership may acquire and possess property of all kinds, as well as incur obligations and bring civil or
criminal actions in conformity with the laws and regulations of its organization.

Cases when a person who is not a partner has a right to share in the profits of
partnership
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 in such profits were received in payment:
(a) As a debt by the installments or otherwise
(b) As wages of an employee or rent to a landlord
(c) As an annuity to widow or representative of a deceased partner
(d) As interest on a loan, though the amounts of payment vary with the profits of business
(e) As the consideration for the sale of goodwill of business or other property by installments or
otherwise.

What is the importance of giving publicity to the articles of partnership?

It is essential that the articles of partnership be given publicity for the protection not only of the
members themselves but also third person.

Give the effects where a partnership is formed for an unlawful purpose.

The following are the consequences of partnership formed for an unlawful purpose:
(1) The contract is void ab initio (from beginning) and the partnership never existed in the eyes of the
law
(2) The profits shall be confiscated in favor of the government
(3) The instrument or tools and proceeds of the rime shall also be forfeited in favor of the government;
and
(4) The contributions of the partners shall not be confiscated unless they fall under No. 3

Chapter 2
I. Definitions (section 1)
Partnership with fixed term
Subpartnership
Industrial partner
Eviction
Future partnership
II. Discussions
1. Illustrated the relations created by a contract of partnership.
2. State the (5) obligations of a partner with respect property he promised to contribute.
3. Give the requisites before a capitalist partner may be obliged to sell his interest in a
partnership to the others partners.
4. Why is appraisal of the value of the goods or property contributed by a partner required?
How shall it be made?
5. State the liability of a partner if he fails or delays his obligation with respect to contribute
of property. What is the reason for the rule?

I. Definitions (section 2)
Partners interest in a partnership
Profit
Surplus
Partnership Capital

II. Discussions
1. What are the property rights of a partner in a partnership?
2. What rights are not acquired by an assignee or transferee of a partner who conveys all his
interest in a partnership?
3. What are the only rights acquired by said assignee or transferee?
4. What is considered as the extent of a partners interest in a partnership?

I. Definitions (section 3)
Pro rata liability
Subsidiary liability
Equitable interest or title
Estoppel
II. Discussions
1. May a partnership continue to use in its firm name the name of partner who has died?
2. In what cases are partners solidarily liable with the partnership to third persons?
3. Can W who is not a partner in a partnership be held liable as a partner. Explain.
4. Give the rule governing the liability of a partner for partnership contract