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Death of the creators does not dissolve the corporation On the basis of law
- as to dissolution
- as to creation
- as to liability
Difference of a co-ownership and partnership Co-ownership No juridical personality Common ownership Partnership There is a Juridical personality For financial gain
Cannot exceed 10 years on the pleasure of the partner (general rule, as to succession It is 20 years) Action of one does not bind the other the action of one binds the other
1. 2. 3. 4.
Elements of a partnership 2 or more partners Contribution of money or property There must be intention to divide profits and loss The object and purpose must be in accordance to law (the partnership is considered void if the partnership is unlawful) (general rule = if the partnership is void due to unlawful object or purpose there is no need to go to court to have the partnership dissolved, exception to the rule = if the object or purpose of the partnership is, at first, lawful then in the course of time became unlawful then there is a need to dissolve the partner) a. If the partnership is unlawful the profit from the partnership will be given in favor of the state. b. If the partnership is unlawful the capital will be returned to the partner, but if the capital was used illegally then the capital will also be confiscated.
Different determination whether the partner is existing or not. 1. Persons who are not partners as to each other are not partners in a third person. Exception = partnership of estopel when two or more persons who are not partners but represent themselves to third persons as partners they shall be later on be held liable as partners. 2. The existence of co-ownership does not in itself establish partnership even though the partners share in the profits of the property owned in common. 3. The sharing of gross returns does not of itself establish partnership, whether or not these gross returns is divided amongst these persons.
4. If you receive part of the profit of a particular business, you are presumed to be a partner but the presumption is disputable. Exemption to the presumption: a. If you receive a profit as payment of debt by instalment b. If you receive part of the profits as wage or salary c. If you receive part of the profits as annuities d. If you receive the profit as a payment of interest of a particular debt e. If the profit is in consideration of the sale of good will or other properties. A good will be equate to the reputation of the business or establishment
Designation of losses and profits can be entrusted to the Creditor of the partnership. As a general rule if no stipulation as to the kind of universal partnership the partners had entered, then the assumption is universal partnership of profits and losses. There is a difference between liability and capacity to pay. There may be liability but no capacity to pay, likewise there may be capacity to pay but no liability. If the partners executed a designation of profit and loss, even if it is unfair and unjust, then the designation shall be followed due to the principle of estoppel. The share of each partner in profits and losses depends upon the common agreement of the partners. If there are no stipulations as to the profits and losses then the division shall be based on the contribution of the partners (capitalists partners). If no stipulation is made on losses but there is a stipulation on the profits then the losses shall be based on the profits. If the stipulation only indicates the losses then the profits should be based on the capital contribution. (Art. 1797) The industrial shall bear no losses unless he is a capitalist-industrial partner. The losses he shall bear then shall be in proportion to his capital. (Art. 1797, second paragraph)
A manager is a person who runs the partnership. 2 modes of appointing a manager (in a partnership): 1. Appointment during the commencement of the partnership (the manager is appointed during the perfection of the partnership contract) the manager may perform all acts of administration. Any act related to the General Power of Attorney is needed partnership business is an act of administration. a. Law on agency can you entrust to a third person to act on your behalf? Yes, b. Acts of ownership performs acts such as selling, pledging, and donating of property. Bestowed using the special power of attorney. This is not strictly applied in a partnership. c. A person who is appointed with any power of attorney is called the Attorney-in-fact d. The powers of attorney are no longer needed in a partnership because the authority now emanates from the articles of partnership. e. The manager may only be removed when he has acted in bad faith, through the general controlling interest (holder of majority shares). 2. Appointment after the commencement of the partnership (oral appointment is allowed) a. The manager may be removed by the will of the partners (but the removal must be with due process through the controlling interest). When there is more than 1 managing partner and a disagreement shall arise then the people to resolve the problem shall be the managing partners in conflict by individual vote, if the conflict is still not resolved then the controlling interest shall take over.
The law on co-ownership in relation to Article 1811: X donated land to the partnership of A and B. Therefore A and B will own the land equally. In general co-ownership each of them may use, destroy and dispose their share in their own will. In Specific Partnership Property (SPP) The land cannot be used for personal use, unless there is consent of all partners. One partner cannot assign his/her share except when all partners had assigned their shares. SPP = property belonging to the partnership Partners interest = property belonging to the partner