PARTNERSHIP LECTURE

- Agreement between 2 or more persons who bind themselves

o To contribute money property or service to a common fund
o W/ intention to divide the profit amongst themselves
o Meeting of the minds
- They all share the profits and the loss
- ESSENTIAL ATTRIBUTES
o 1. Juridical Personality (WEAK) CONSENSUAL AND INFORMAL
 Constrated with that of a corp who has the strong juridical personality
 Very personal in character which makes it weak
 But it is the weakness that makes this an ideal contract
 Not an integral part of the partnership
 The only reason which has this is because the law says so
 Partnership can survive even without the separate juridical personality
o 2. Mutual Agency
 Every partnership embodies a contract of agency ABSOLUTELY TRUE
 Every partner has the power to bind the partnership in pursuit of the
partnership binds the partnership and also the partners
 Can go into business with only people who youwould like to go into business
with
o 3. Delectus Personae
 Principle of relativyt in a contract
 Can only bind persons who have given their consent
 Enforcement of contract of partnership at its extreme
 It is a bond that animates all the partners and once it is broken by one of the
partners destroys the bond
 Very personal in nature THEY ARE SO COLSE TOGETHER
 No one can come into the bond with out breaking it
 Once one breaks it, it is broken
 Not bound to let a stranger some in UNLESS THEY ALL AGREE
 iF it is broken the original partners may still pursue the business but it is
considered a new partnership
o 4. Unlimited Liabilty of partners vs Limited Liablity
UNLIMITED limited
- Partnership - Corporation
- Consensual - Solemn contract
- Gen rule: Partners remain liable - GEN RULE: Stockholders do not
even with all their non-invested become liable for their non-
property for the partnership debt invested liability but only what
- Default rule for partnerships they promise to contribute or
- LiABLE FOR ALL THEIR PROP even agreed to contribute
it is not part of the partnership
debts
o
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- ESSENTIAL CHARACTERISTICS
o 1. Principal and Nominate
 This means this is so important in society it is very important in law that it is
given a name in the law
 If the characeristics of the partnership are mentioned it does not matter
what the parties neame it if the elements and the characteristics are
present then it is a partnership the law applies
o 2. Consensual in nature
 Agreeing to render some service or contribute money or property establishes a
partnership
 Determine the perfection of the contract
o 3. Onerous in nature
o 4. Bilateral
o 5. It is preparatory in nature and progressive
 Going into the world to meet a greater end
 No meaning if it does not pursue a business venture must be to go out in the
world to contract the business
 The objective is always more important than the means
 The duties are open ended
o 6. Progressive
 Evolves or expands to what it needs
 The appearance of business ma change from what it may have appeared in the
beginning

- Medium of doing a business enterprise

- Multiple sole proprietors jointly own a business enterprise
- Agreement of 2 or more persons to pursue a business enterprise it is a going concern
- Not a simple one time deal it is a going concern for a indefinite period f time
- It is a firm is a going concern: YOU SEE IT
- TRI-LEVEL OF EXSISTENCE of partnership
o 1. First and foremost it is a contractual relationship between and among the parties
(long term)
 Relationship between the partners govern the relationship
 MOST NEEDED
o 2. Juridical person separate and distinct from the partners
 Means to pursue the partnership
 Meant to deal with the public
 Totally and utterly dependent on the first level of the relationship
o 3. To pursue a business enterprise
 This it the objective the partnership
 Determine the enforceability between 3rd parties
- EQUITY
o Species of dominion
 o Partnership pf a particular type of thing
o Equity in a business enterprise
- Sole Proprietorship
o Ownership of a business
o 1 person owning the business enterprise
o The moment there are more than one sole proprietorships begins a partnership
- What is a common fund?
- LEVEL OF EXSISTENCE
o 1. Assets only level= Law on Sales it is the sale of the assets
o 2. Buisness enterprise level= selling the equity interest in the business
 Means by which to earn a profit
 The firm itself this is the going concern
 Possible to have business enterprise w/o assets
 This is what attract business to the door
 The most durable especially if it is filled w assets
o 3. Juridical Entitiy level
 Expect to sell the whole business as a juridical person