Purpose A. Co-ownership common enjoyment of a thing B. Partnership realization of profit Duration A.

A. C to keep the thing undivided for more than 10 yrs is NOT ALLOWED B. P - no limitation Disposal of interests A. C freely do so B. P partner may not dispose of his individual interest in the partnership unless agreed upon Power to act with 3rd persons A. C co-owner cannot represent co-ownership B. P partner may bind the partnership a judgment secured against only one of the co-owners will not bind other co-owners Effect of Death A. C does not necessarily dissolve ownership B. P dissolves partnership CONJUGAL PARTNERSHIP OF GAINS - husband and wife place their incomes from their separate properties unless agreed in marriage settlements ORDINARY VS CONJUGAL Parties A. Bus voluntary agreement B. Conj future spouses; shall govern their property relations during marriage Laws A. Bus by stipulation of partners B. Conj by law Juridical Personality

A. Bus law separated by the members B. Conj none Commencement A. Bus begins in the moment of execution of contract B. Conj on the date of marriage Purpose A. Bus obtain profits B. Conj property relations between the husband and wife Distribution of profits A. Bus accdg to agreement of partners/ capital contributions B. Conj equally Management A. Bus shared equally unless theres an appointed manager B. Conj husbands decision shall prevail in case of disagreement Disposition of shared A. Bus whole interest of a partner may be disposed without consent of others B. Conj share of spouse cant be disposed during marriage even with consent of the other PARTNERSHIP VS VOLUNTARY ASSOCIATIONS Juridical Personality A. P it has B. VA none Purpose A. P organized for profit B. VA objective is lacking Contribution A. P capital (money, property or services) B. VA no contribution despite the fees being collected Liability of Members A. P partnership is liable for debts B. VA members are individually liable authorized by them, either expressly or impliedly

EFFECTS OF UNLAWFUL PARTNERSHIP A. contract is void ab initio and the partnership never existed in the eyes of the law B. profits shall be confiscated in favor of the govt C. instruments/tools and proceeds shall be forfeited for the govt D. contributions shall not be confiscated unless they fall on C. INSTANCES gambling, smuggling, leasing apartments to prostitutes, prevent competition in bidding for govt contracts, illegal monopolies or combinations in restraint of trade FORM OF PARTNERSHIP - may be oral or written regardless of contributions unless immovable property or real rights are contributed in which requires public instrument (notary public) - Real Property Registry of Property dapat PARTNERSHIP WITH CAPITAL OF 3000php or more (should be registered sa SEC and appear in a public instrument) failure to comply does not prevent formation however it is void PURPOSE: tax liablilites of big partnerships cannot be avaded and public can also determine more accurately their membership and capital ACQUISITION OR CONVEYANCE OF PROPERTY BY PARTNERSHIP - immovable property may be acquired in the partnership name. Title can be conveyed in the partnership name.

sale of real property standing in the name of partnership executed by a partner in the partnership name or in his own name are governed by 1819. SECRET PARTNERSHIP W/OUT JURIDICAL PERSONALITY - Essential that the partners are fully informed not only of the agreement but of all matters affecting the partnership - Associations whose articles or agreements are kept secret were anyone of them may contract in his own name with 3rd persons are deprived of juridical personality for evidently such associations are not partnerships. - As among themselves they shall be governed by provisions relating to co-ownership IMPORTANCE OF GIVING PUBLICITY TO ARTICLES OF PARTNERSHIP - protection of 3rd persons - a member who transacts for secret partnership in his own name become personally bound to 3rd persons and same reason for agent who acts in his own name in favor of such persons who may only sue or be sued by the agent and NOT his principal. CLASSIFICATIONS OF PARTNERSHIP I. Subject Matter A. Universal partnership (all present property which belongs to the partner to contribute to a common fund or all profits article 1778 and 1780)

B. Particular Partnership -has for its object deterrminate things, their use or fruits, a specific undertaking, exercise of a profession or vocation II. Liability of the partners A. General Partnership - partners who are liable pro rata (in proportion) and subsidiarily, sometimes solidarily with their separate property for debts B. Limited Partnership - not being liable for the obligations of the partnership III. Duration A. Partnership at will - no time is specified and which may be terminated anytime by mutual agreement B. Partnership with a FIXED term - formed for a particular undertaking and upon the expiration of the term, partnership is dissolved unless continued IV. Legality of existence A. De Jure Partnership - complied with all legal requirements B. De Facto - failed to comply V. Representation to others A. Ordinary or real partnership - Exists among partners and also to 3rd persons B. Ostensible partnership or partnership by estoppel - in reality, its not a partnership but is considered a partnership

only in relation to those who are to disprove (to prove to be false) its existence (EXAMPLE PAGE 28) VI. Publicity A. Secret Partnership - its existence of certain persons as partners is not known to public B. Open or notorious Partnership - known to public by the members of the firm VII. Purpose A. Commercial (trade) - formed for the transaction of business B. Professional (nontrade) - for the exercise of profession KINDS OF PARTNERS I. Under the civil code A. Capitalist - who contributes money or fund to the common fund B. Industrial - industry or personal service C. General - may be capitalist or industrial partner - liability extends to his separate property D. Limited - limited to his capital contribution - special partner - not participate in management of business E. Managing - manages affairs of the partnership - appointed either in the articles of partnership or after the constitution of partnership

F. Liquidating - winding up affairs upon dissolution G. Partner by estoppel - not really a partner, not being a party to a partnership agreement but is liable for the protection of 3rd persons. - AKA partner by implication or nominal partner quasipartner - Liable for the debts of the firm to those who believed him to be a partner H. Continuing - who continues the business of a partnership after it has been dissolved by reason of admission of a new partner or retirement, death or expulsion of one or more partners I. Surviving - who remains after a partnership has been dissolved by the death of any partner J. Subpartner - not a member of the partnership contracts with a partner with reference to the partners share in partnership II. Other classifications A. Ostensible - takes active part and known to the public as a partner in the business whether OR NOT he has actual interest in the firm if not actually a partner, (partner by estoppel) B. Secret - participates in profits and losses - active part in the business but not known to public

C. Silent - he may be known to be a partner but is active in the business D. Dormant - NOT active; NOT known as partner - Both SILENT AND SECRET - Interest is only SHARING THE PROFITS earned E. Incoming - about to be taken into a partnership F. Original - member form the time of its organization G. Retiring - withdrawn from the partnership UNIVERSAL PARTNERSHIP OF ALL PRESENT PROPERTY - contribute properties that they own at the constitution of the partnership to a common fund with intention of dividing the same among themselves as well as profits (and losses) CONTRIBUTION OF FUTURE PROPERTY - in general, future properties (donations) cannot be contributed - Property acquired by INHERITANCE, LEGACY OR DONATION CANNOT be included by stipulation except the fruits thereof. (void if any stipulation occurs) Profits from other sources (not from contributed properties) will become common property if theres stipulation

UNIVERSAL PARTNERSHIP OF PROFITS EXPLAINED - comprises all that the partners may acquired by their industry or work during the existence of the partnership and USUFRUCT (right to enjoy the property of another with the obligation of preserving its form and substance unless the otherwise provides) of movable or immovable property which each of the partners ay possess at the time of the celebration of contract A. Ownership of present and future property - partners retain their ownership over present and future property, what pass to the partnership are the profits or income and the usufruct or use of the same. - In dissolution, property is returned to the partners B. Profits acquired through chance such as lottery, or by lucrative title without employment of any physical or intellectual efforts are not included. C. Fruits of property subsequently acquired - dont belong to the partnership but can be included by stipulation PRESUMPTION IN FAVOR OF UNIVERSAL PARTNERSHIP OF PROFITS - the parties intended merely a partnership of profits - because a universal partnership of profits imposes less obligations on the partners since they preserve the

ownership of SEPARATE PROPERTY. LIMITATIONS UPON THE RIGHT TO FORM A UNIVERSAL PARTNERSHIP - prohibited by law to give donations because each of the partners virtually makes a donation. - To allow will be like permitting them to do indirectly what the law expressly prohibits and will be considered null AND void. - Husband and wife may enter in a particular partnership or be members PERTINENT LEGAL PROVISIONS 1. Every donation or grant of gratuitous advantage, direct or indirect between the spouses during marriage shall be VOID except moderate gifts which the spouses may give each other on the occasion of family rejoicing. It shall also apply to persons living together as husband and wife without a valid message. (art.87) 2. Following donations shall be void: (art.739) a. those made between persons who were guilty of adultery at the time of donation b. those made between persons on same criminal offense c. made to a public officer r his wife, descendants, and ascendants by reason of his office. it is not required that there be a previous conviction for adultery.

PARTICULAR PARTNERSHIP - neither universal partnership of present property or universal partnership of profits EXAMPLE: - acquisition of immovable property for the purpose of reselling for profit and the common enjoyment of its use and benefits - or established for the purpose of carrying out a specific enterprise such as construction of building or those formed for the practice of profession/vocation *for ex: two or more persons as accountants associate themselves in the practice of accountancy BUSINESS OF PARTNERSHIP NEET NOT BE CONTINUING IN NATURE