LAW OF PARTNERSHIP AND CORPORATION

Articles 1767 to 1867 of the Civil Code of the Philippines

It is a contract wherein 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.

It is treated as an artificial being created by operation of law with a legal personality

separate and distinct from the partners thereof. It proceeds from the concept that
persons may be allowed to pool their resources and funds to engage in the pursuit of a
common business objective without necessarily organizing themselves into a corporation,
upon which the law imposes a much higher form of regulation, limitation and standards.

Partners, liability:
As a general rule, the liability of partners in a partnership organization is unlimited in the
sense that the partnership creditors may run after them for any and all of their assets and
property in payment of the partnership debts. Should one of the partners defray all
liabilities of the partnership, he is entitled to be reimbursed by the other partners for their
respective shares therein.
In the case, however, of limited partnerships, the law allows the limitation of the liability of
certain partners to the extent of the amount contributed to the partnership.

Partnership, dissolution:
Philippine law allows the dissolution of partnership for any reason, provided such
dissolution does not amount to a breach of contract or is prejudicial to third parties. The
death of a partner or the unauthorized transfer of ownership of his share in the partnership
results in the dissolution thereof. In other words, any change in the composition of the
partnership, unless so allowed, will result in the dissolution thereof. Consequently, the
remaining partners may form a new partnership with less or more partners.
 LAW OF PARTNERSHIP AND CORPORATION

REPUBLIC ACT No. 11232 , February 20, 2019

An Act Providing for the Revised Corporation Code of the Philippines

“Revised Corporation Code”

This act shall allow the formation of a corporation by a single person or one stockholder.
The old code required at least 5 stockholders in the formation of corporations. It also
removes the provision setting a minimum on the authorized capital stock.

The amended law also grants a perpetual corporate term for existing and future
corporations, unless specified in their articles of incorporation. The old code set a 50-year
term.

Violation of any of the other provisions of this Code or its amendments not otherwise
specifically penalized therein shall be punished by a fine of not less than Ten thousand
pesos (₱10,000.00) but not more than One million pesos (₱1,000,000.00). If the violation is
committed by a corporation, the same may, after notice and hearing, be dissolved in
appropriate proceedings before the Commission; Provided, That such dissolution shall not
preclude the institution of appropriate action against the director, trustee, or officer of the
corporation responsible for said violation: Provided, further, That nothing in this section
shall be construed to repeal the other causes for dissolution of corporation provided in this
Code.

Liability for any of the foregoing offenses shall be separate from any other administrative,
civil, or criminal liability under this Code and other laws.