1.

General Rule
a. Unemancipated minors
PART1 PARTNERSHIP b. Insane or demented persons
c. Deaf-mutes (Do not know how to write)
CHAPTER1 PROVISIONS
d. Persons who are suffering from civil interdiction
Article 1767 e. Incompetents who are under guardianship
2. Exceptions
By the contract of the partnership 2 or more persons bind 3. Capacity of partnership/corporation to be a partner
themselves to contribute money, property, or industry, to a
common fund, with the intension of dividing the profits
among themselves.
MUTUAL CONRIBUTION TO A COMMON FUND
2 or more persons may also form a partnership for the
1. Proprietory or financial interest without the
exercise of a profession.
element of mutual contribution to a common fund,
CONCEPT OF A PARTNERSHIP there can be no partnership
2. Form of contribution The partners must contribute
1. A partnership is an association money, property and/or industry or services to the
2. A partnership is a legal relation common business
3. A partnership is an joint undertaking to share in the a. Money
profit and loss b. Property
4. A partnership is a status c. Industry
5. A partnership is an organization
6. A partnership is an entity LEGALITY OF OBJECT

CHARACTERISTIC ELEMENTS OF PARTNERSHIP 1. Effect of illegality - the object is unlawful when it is

contrary to law, moral, good customs, public order
1. Consensual or public policy
2. Nominate 2. Businesses partnership not permitted to engage in
3. Bilateral
4. Onerous INTENTION TO REALIZE AND DIVIDE PROFITS
5. Commutative
1. Very reason for existence of partnership
6. Principal
2. Sufficient if obtaining profit principal purpose
7. Preparatory

ESSENTIAL FEATURES OF A PARTNERSHIP **Sharing of profits & losses**

1. There must be a valid contract ART. 1768

2. The parties must have legal capacity to enter the
contract
3. There must be a mutual contribution of money,
property, or industry to a common fund
4. The object must be lawful ART. 1769 In determining whether a partnership exists these
5. The purpose of a primary purpose must be obtain rule shall apply:
profits and divide the same among parties
1. Except as provided by art.1825, persons who are not
EXISTENCE OF A CONTRACT partners as to each other are not partners to third
persons
1. A form of voluntary and personal association 2. Co-ownership or co-possession does not itself
2. Creation and proof f existence establish a partnership, whether such co-ownership
3. Other forms of association excluded or co-possessors do or do not share any profits made
by the use the property
LEGAL CAPACITY OF PARTIES TO ENTER A LEGAL CONTRACT
 3. The sharing of gross returns does not of itself PARTNERSHIP DISTINGUIDHED FROM CO-OWNERSHIP
establish a partnership, whether or not the persons
sharing them have a joint or common right or 1. Creation may exist even without a contract but
interest in any property from which the returns are partnership is always created by a contract.
derived 2. Juridical personality separate and distinct from
4. The receipt by a person of a share of the profits of a that of each partner, while co-ownership is none
business is a prima facie evidence that he is a 3. Purpose realization of profits while in co-
partner in the business, but no such interference ownership, it is common enjoyment of a thing or
shall be drawn if such profits were received in right
payment: 4. Duration there is no limitation upon the duration
a. As a debt by installments or otherwise of a partnership, while in co-ownership, an
b. As wages of an employee or rent to a landlord agreement to keep the thing undivided for more
c. As annuity to a widow or representative of a than 10 years is not allowed
deceased partner 5. Disposal of interests a partner must not dispose of
d. As a consideration for the sale of a goodwill of a his individual interest in the partnership so as to
business or other property by installments or make the assignee a partner unless agreed upon by
otherwise. all of the partners, while co-owner may freely do so.
6. Power to act with third persons a partner may bind
RULES TO DETERMINE EXISTENCE OF A PRTNERSHIP partnership , while co-owner cannot represent co-
ownership
- In general all its essential features or characteristics 7. Effect of death the death of partner results in the
must be shown as being present. dissolution of the partnership but he death of a co-
owner does not necessarily dissolve the co-
PERSONS NOT PARTNERS AS TO EACH OTHER
ownership
1. Partnership, a matter of intention
PARTNERSHIP DISTINGUISHED FROM CONJUGAL
2. Partners by estoppel
PARTNERSHIP OF GAINS
SHARING OF GROSS RETURNS
1. Parties
RECEIPTS OF SHARE IN THE PROFITS 2. Laws which governs
3. Juridical personality
TEST AND INCIDENTS OF PARTNERSHIP 4. Commencement
5. Purpose
1. Only those terms of contract upon which the
6. Distribution of profits
parties may have reached an agreement may afford
7. Management
a test by which to ascertain the existence of a
8. Disposition of shares
partnership
2. Some of a typical incidents of a partnership PARTNERSHIP DISTINGUIDHED FROM VOLUNTARY
a. The partners share in profits and losses ASSOCIATIONS
b. They have equal rights in the management and
conduct of a partnership business 1. Juridical personality
c. Every partner is an agent of the partnership, and 2. Purpose
entitled to bind the other partners by his acts, 3. Contribution of members
for the purpose of its business 4. Liability of members
d. All partners are personally liable for the debts of
a partnership with their separate property
except that limited partners are not liable
beyond their capital investments
e. A fiduciary relation exists between the partners
f. On dissolution, the partnership is not
terminated, but continues until the winding up
of the partnership is completed
ART 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

FORM OF PARTNERSHIP CONTRACT

As a general rule, no special form is required for the validity

of the contract of partnership. The contract may be made
orally or in writing regardless of the value of the
contributions unless immovable property or real rights are
contributed.

ART 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

1. The contract must be in a public instrument

2. An inventory contributed must be made, signed by
the parties, and attached to the public instrument