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Title IX.

PARTNERSHIP
NCC, ARTICLE 1767.
1st par
- 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
2nd par
-two or more persons may also form
a partnership for the exercise of a
profession
NCC, ARTICLE 1768.
- the partnership has a juridical
personality
- separate and distinct from that of
each of the partners,
- even in case of failure to comply
with the requirements of Article
1772, 1st par
NCC, ARTICLE 1769.
in
determining
whether
a
partnership exists, these rules shall
apply:
- (1) Except as provided by Article
1825, persons who are not 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 a 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;

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(e) as the consideration for sale


of goodwill of a business or other
property by instalments or otherwise
NCC, ARTICLE 1770.
1st par
- a partnership must have a lawful
object or purpose, and must be
established for the common benefit
of the partners
2nd par
- when an unlawful partnership is
dissolved by a judicial decree, the
profits shall be confiscated in favor of
the State, without prejudice to the
provisions of the Penal Code
governing the confiscation of the
instruments and effects of a crime

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NCC, ARTICLE 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
NCC, ARTICLE 1772.
1st par
- every contract of partnership
having a capital of 3000 php 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
2nd par
- 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
NCC, ARTICLE 1773.
- a 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.
NCC, ARTICLE 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.
NCC, ARTICLE 1775.
- associations and societies, whose
articles are kept secret among the
members, and wherein any one
among 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.
NCC, ARTICLES 1776.
- as to its objects, a partnership is
either universal or particular
- as regards liability of the partners,
a partnership may be general or
limited
NCC, ARTICLE 1777.
- a universal partnership may refer to
all the present property or to all the
profits.

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NCC, ARTICLE 1778.


- a partnership of all present
property is that in which the partners
contribute all the property which
actually belongs to them to a
common fund, with the intention of
dividing
the
same
among
themselves, as well as all the profits
they may acquire therewith.
NCC, ARTICLE 1779.
1st par
- in a universal partnership of all
present property, the property which
belonged to each of the partners at
the time of the constitution of the
partners, as well as all the profits
which they may acquire therewith
2nd par
- a stipulation for the common
enjoyment of any other profits may
also be made;
- but the property which the partners
may
acquire
subsequently
by
inheritance, legacy, or donation
cannot
be
included
in
such
stipulations ,
- except the fruits thereof
NCC, ARTICLE 1780.
1st par
- a universal partnership of profits
comprises all that the partners may
acquire by their industry or work
during
the
existence
of
the
partnership
2nd par
- movable or immovable property
which each of the partners may
possess at the time of the
celebration of the contract shall
continue to pertain exclusively to
each, only the usufruct passing to
the partnership.
NCC, ARTICLE 1781.
- articles of universal partnership,
entered into without specification of
its nature, only constitute a universal
partnership of profits.
NCC, ARTICLE 1782.
- persons who are prohibited from
giving each other any donation or
advantage
cannot
enter
into
universal partnership
NCC, ARTICLE 1783.
- a particular partnership has for its
object determinate things, their use

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or fruits, or a specific undertaking, or


the exercise of a profession or
vocation.
Chapter 2
OBLIGATIONS OF THE PARTNERS
Section 1. Obligations of the
Partners among Themselves
NCC, ARTICLE 1784.
- a partnership begins from the
moment of the execution of the
contract, unless it is otherwise
stipulated.
NCC, ARTICLE 1785.
1st par
- when a partnership for a fix term or
particular undertaking is continued
after the termination of such term or
particular undertaking without any
express agreement,
- the rights and duties of the
partners remain the same as they as
they were at such termination, so far
as is consistent with a partnership at
will.
2nd par
- a continuation of the business by
the partners or such of them as
habitually acted therein during the
term, without any settlement or
liquidation of the partnership affairs,
is prima facie evidence of a
continuation of the partnership.
NCC, ARTICLE 1786.
1st par
- every partner is a debtor of the
partnership for whatever he may
have promised to contribute thereto
2nd par
- he shall also be bound for warranty
in case of eviction with regard to
specific and determinate things
which they have contributed to the
partnership, in the same cases and
in the same manner as the vendor is
bound with respect to the vendee
3rd par
- he shall also be liable for the fruits
thereof from the time they should
have been delivered, without the
need of any demand.
NCC, ARTICLE 1787
-when the CAPITAL or a part thereof
which a partner is bound to
contribute consists of goods, their
appraisal must be made in the

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manner prescribed in the contract of


partnership, and
- in the absence of stipulation, it
shall be made by experts chosen by
the partners, and
- according to current prices, the
subsequent changes thereof being
for the account of the partnership.
NCC, ARTICLE 1788.
1st par
- a partner who has undertaken to
contribute a sum of money and fails
to do so becomes debtor for the
interest and damages from the time
he should have complied with his
obligation.
2nd par
- the same rule applies of any
amount he may have taken from the
partnership coffers, and his liability
shall begin from the time he
converted the amount to his own use
NCC, ARTICLE 1789.
- an industrial partner CANNOT
engage in business for himself,
unless the partnership expressly
permits him to do so;
- and if he should do so, the
capitalists partners may either
exclude him from the firm or avail
themselves of the benefits which he
may have obtained in violation of
this provision, with a right to
damages in either case
NCC, ARTICLE1790.
- unless there is a stipulation to the
contrary,
the
partners
shall
contribute equal shares t the capital
of the partnership
NCC, ARTICLE 1791.
- if there is no agreement to the
contrary, in case of an imminent loss
of the business of the partnership,
any
partner
who
refuses
to
contribute an additional share to the
capital, EXCEPT an industrial partner,
to save the venture, shall be obliged
to sell his interest to the other
partners.
NCC, ARTICLE 1792.
1st par
- if a partner authorized to mange
collects a demandable sum, which
was owed to him in his own name,
from a person who owed the
partnership
another
sum
also

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demandable,
- the sum thus collected shall be
applied to the two credits in
proportion to their amounts, even
though he may have given a receipt
for his own credit only;
- but should he have given it for the
account of the partnership credit, the
amount shall be fully applied to the
latter
2nd par
- the provisions of this article are
understood to be without prejudice
to the right granted to the debtor by
Article 1252,
- but only if the personal credit of the
partner should be more onerous to
him
NCC, ARTICLES 1793.
- a partner who has received, in
whole or in part, his share of a
partnership credit, when the other
partners have not collected theirs,
shall be obliged to, if the debtor
should thereafter become insolvent,
to bring to the partnership capital
what he received even though he
may have given receipt for his share
only
NCC, ARTICLE 1794.
- every partner is responsible to the
partnership for damages suffered by
it through his fault, and he cannot
compensate them with the profits
and benefits which he may have
earned for the partnership by is
industry
- however, the courts may equitably
lessen this responsibility if through
the partners extraordinary efforts in
other activities of the partnership,
unusual profits have been realized.
NCC, ARTICLE 1795.
1st par
- the risk of specific and determinate
things, which are NOT fungible,
contributed to the partnership so
that only their use and fruits may be
for the common benefit, shall be
borne by the partner who owns
them.
2nd par
- if the things contributed are
FUNGIBLE, or can be kept without
deteriorating, or if they were
contributed to be sold, the risk shall
be borne by the partnership
- in the absence of stipulation, the

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risk shall also be borne by the


partnership, and in such case the
claim shall be limited to the value at
which they were appraised

NCC, ARTICLE 1796.


- the partnership shall be responsible
to every partner for the amounts he
may have disbursed on behalf of the
partnership
and
for
the
corresponding interest, from the time
the expenses are made;
- it shall also answer to each partner
for the obligations he may have
contracted in good faith in the
interest of the partnership business,
and
- for the risks in consequence of its
management
NCC, ARTICLE 1797.
1st par
- the LOSSES and PROFITS shall be
distributed in conformity with the
agreement
- if only the share of each partner in
the profits has been agreed upon,
the share of each in the losses shall
be in the same proportion
2nd par
- in the ABSENCE OF STIPULATION,
the SHARE of each partner in the
profits and losses shall be in
proportion to what he may have
contributed,
- but the industrial partner shall not
be liable for the losses
- as for the PROFITS, the industrial
partner shall receive such share as
may be just and equitable under the
circumstances
- if, besides his services he has
contributed capital, he shall also
receive a share in the profits in
proportion to his capital
NCC, ARTICLE 1798.
1st par
- if the partners have agreed to
entrust to a THIRD PERSON the
designation of the share of each one
in the profits and losses, such
designation may be impugned only
when it is manifestly inequitable.
- in no case may a partner who has
begun to execute the decision of the
third person, or who has not
impugned the same within a period
of THREE MONTHS from the time he
had knowledge thereof, complain of

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such decision.
2nd par
- the designation of losses and
profits cannot be entrusted to one of
the partners
NCC, ARTICLE 1799.
- a STTPULATION which excludes one
or more partners from any share in
the profits or losses is VOID
NCC, ARTICLE 1800.
1st par
- the partner who has been
appointed manager in the articles of
partnership may execute all acts of
administration despite the opposition
of his partners, unless he should act
in bad faith;
- and his power is irrevocable without
just or lawful cause
the
vote
of
the
partners
representing the controlling interest
shall
be
necessary
for
such
revocation of power
2nd par
- a power granted after the
partnership has been constituted
may be revoked at any time
NCC, ARTICLE 1801
- if TWO or MORE partners have been
entrusted with the management of
the partnership without specification
of their respective duties, or without
stipulation that one of them shall not
act without the consent of all the
others
- each one may separately execute
all acts of administration,
- but if any of them should oppose
the acts of the others, the decision of
the majority shall prevail
- in the case of a tie, the matter shall
be decided by the partners owning
the controlling interest
NCC, ARTICLE 1802.
- in case it should have been
stipulated that none of the managing
partners shall act without the
consent of the others,
- the concurrence of all the absence
or disability of any one of them
cannot be alleged, unless there is
imminent danger or grave or
irreparable injury to the partnership.
NCC, ARTICLE 1803.
- when the manner of management
has not been agreed upon, the

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following rules shall be observed:


(1) all the partners shall be
considered agents and whatever any
one of them may do alone shall bind
the partnership, without prejudice to
the provisions of Article 1801
(2) none of the partners may,
without the consent of the others,
make any important alteration in the
immovable
property
of
the
partnership, even if it may be useful
to the partnership
- but if the refusal of consent by
the other partners is manifestly
prejudicial to the interest of the
partnership, the courts intervention
may be sought
NCC, ARTICLE 1804.
- every partner may associate
another person with him in his share,
but the associate shall not be
admitted
into
the
partnership
without the consent of all the other
partners, even if the partner having
an associate should be a manger
NCC, ARTICLE 1805.
- the partnership books shall be kept,
subject to any agreement between
the partners
- at the principal place of business of
the partnership,
- and every partner shall at any
reasonable hour have access to and
may inspect and copy any of them

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