Balangue Allen John C.

a. Summarize the video by stating only the facts (no comments or assessments
yet at this stage) – just narrate the facts. Answer should not be less than 50 words
but not more than 100 words. (10 points)

John was in 50/50 partnership with Gary. They were best friends. They had no
business partnership documentation between the partners. John assigned on
sales, Gary did the operations it was just the two of them for over ten years they
drew relatively equal salaries although they both paid themselves the same
amount, but John was taking a little bit more money out of the company and you
know with Gary’s understanding not anything sort expressed, nothing in writing-
just kind of an acknowledgement that john needed a little bit more money out .
They hadn’t had meaningful conversation about business.

b. Based on the narration, what is wrong in that partnership from the moment it
was formed? Why it did not work out? This is where you will discuss the factors like
the 50-50 sharing, partners are best friends before the creation of the partnership
but no business relationship; constant conversation, etc.) (10 points)
Theres zero documentation, and you can arue with someone youve been over
20 years you dont need a partnership agreement, youre never going to sue each
other. Its hard to know always, even if youve known the person for 20 years or
more you just really dont know what could happen here. The biggest issue is they
haven’t had a meaningful conversation about the business or the partnership in
a year. Obviously change is constant therefore you need to have a back up plan
or contingency plan to continue earning profits. They both paid themselves the
same amount through payroll, but john was taking a little bit more money out of
the company

c. What are the suggestions of the narrator to prevent these problems, or similar
ones, in forming a partnership? (10 points)
The suggestion of the attorney in the video that he think having a document,
having something to enforce one day is helpful. You need to be sure you have a
really good clear understanding of what the other party's expectation and
tensions are like how things ought to work to avoid misremembering
disagreement over that sort of stuff. So they dont have any documentation. They
were siloed in the division of labor.So John doing sales and garys doing operation
youve probably heard me talk about merger of equals where uouve got two ceos
and people are running thing stogether and it just like thats not great situation
where people are kind of stepping on each other toes. And if there are
employees they do not know to report thats not great. Talk everything through.
So the discipline of putting a partnership agreement on paper, in that process you
do that through a corporate lawyer like any attorneys. The attorney suggest that
he have three choices but john didn’t know it that’s why it is the suggestion for
John on what he can do for him. The first one is walk away from the partnership.
Second they should talk about whats going on their business. Third is it is already
gone south but he is not willing to walk away and to bring someone like him and
to make thing more formal and more sort of step things up ahead down the
dispute track.
d. Assessing this video in the Philippine context or situation, what are the
articles/provisions in the Civil Code on partnership that were not followed or
observed by the partners? Explain. (10 points)

The articles/ provisions in the Civil Code on partnerhisp that were not followed or
observerd by the partners is article 1797 base on the partners did They both paid
themselves the same amount through payroll, but john was taking a little bit more
money out of the company. They should received the same amount of profit
since they are 50/50 partnetship. The Article. 1797 can prove that they not follow
or observed. 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. 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.