Partnership and Co-ownership Basics

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Questions and Answers

What is required for a new partner to join an existing partnership?

Consent from the majority of partners.

Consent from all partners. (correct)

An oral agreement.

A written contract.

If A and B leased inherited land but did not form a partnership, what is their legal status?

They have formed a partnership.

They are engaged in business operations.

They are co-owners. (correct)

They are considered partners by default.

What must happen if A and B wish to create a partnership after sharing profits?

They can continue without any changes.

A new partnership must be created and the old one dissolved. (correct)

They must get a court order.

They need to formalize an agreement to avoid partnership of estoppel.

Can a partnership be created without a written contract?

Yes, it can be formed orally. Signup and view all the answers

What is the classification of a partner who contributes money or property to a partnership?

Capitalist Signup and view all the answers

What is the implication if A and B sold land profitably but did not conduct business operations?

They are not partners but co-owners. Signup and view all the answers

Which type of partner has their liability limited to the amount of their contribution?

Limited Signup and view all the answers

In a case of estafa, who legally owns the property if A sells the same plot of land to both B and C, and C registers the transfer?

C Signup and view all the answers

What is required for a contract involving immovable property in a partnership?

A notarized document is required. Signup and view all the answers

Which partner is primarily responsible for managing the operations of a partnership?

Industrial Signup and view all the answers

If A and B built and rented an apartment, how can this be classified legally?

As a partnership due to profit-sharing. Signup and view all the answers

What does the partnership of estoppel imply for A and B?

They are legally bound as partners despite informalities. Signup and view all the answers

What classification of partner continues to operate the business after dissolving the partnership?

Surviving Signup and view all the answers

What becomes common property of all partners in a universal partnership of all present property?

Profits acquired through their contributions Signup and view all the answers

What is excluded from the stipulation of a universal partnership of all present property?

Property acquired through legacy or donation Signup and view all the answers

Why is the universal partnership of all present property not popular in the Philippines?

Prohibition of donations between partners Signup and view all the answers

Which of the following is a restriction for entering a universal partnership?

A husband and wife cannot be partners Signup and view all the answers

In a universal partnership, what happens to the ownership of property contributed by partners?

It becomes common property of the partnership Signup and view all the answers

What type of partnership can a husband and wife join instead of a universal partnership?

Partnership for a specific project Signup and view all the answers

Which of the following accurately describes a universal partnership of all present property?

All contributions become common property Signup and view all the answers

What may partners in a universal partnership dictate regarding profits?

They can stipulate the sharing of common enjoyment of profits Signup and view all the answers

Under which condition will the risk of specific, determinate, and non-fungible things be borne by the partner who owns them?

If both debts are due and demandable Signup and view all the answers

What happens to the risk associated with fungible contributions that are subject to deterioration?

The risk is transferred to the partnership Signup and view all the answers

If a partner has received a share of a partnership credit and the debtor becomes insolvent, what is the partner obligated to do?

Bring back what was received to the partnership capital Signup and view all the answers

What limitation applies to a partner who collects a share of a credit when the other partners have not?

Their claim is limited to the value at which it was appraised Signup and view all the answers

What should the partners consider when dealing with debts contributed by multiple partners?

Only the partner who collects is liable Signup and view all the answers

What happens if determinate and non-fungible contributions are lost and only their use was contributed?

The owner of the contribution bears the loss Signup and view all the answers

Which statement best describes the condition required for the application of Article 1795 regarding risks?

Two conditions must be met: two debts due and demandable Signup and view all the answers

What does Article 1793 imply about the obligations of partners regarding received shares of credit?

Partners who have received a share must return it if the debtor is insolvent Signup and view all the answers

What distinguishes a particular partnership from a universal partnership?

It is formed for the acquisition and sale of specific properties. Signup and view all the answers

In a Universal Partnership of All Profits, what happens to the assets contributed by partners upon dissolution?

They are returned to the original owners. Signup and view all the answers

What does Article 1781 imply about unclear articles of universal partnership?

They are interpreted as a universal partnership of all profits. Signup and view all the answers

What is a unique feature of the Universal Partnership of All Profits regarding ownership?

Partners retain the title of ownership of their contributions. Signup and view all the answers

Which of the following forms a basis for potential disputes in a particular partnership?

The equal distribution of profits despite unequal contributions. Signup and view all the answers

What assumption is made when the articles of partnership do not specify their nature?

They function as a universal partnership of all profits. Signup and view all the answers

In a partnership formed for specific acquisitions, what is the nature of the partnership?

It is a particular partnership. Signup and view all the answers

What does Article 1784 regulate in terms of partnerships?

Relations between the partners and the partnership. Signup and view all the answers

Study Notes

Partnership Basics

An industrial partner is exempt for obligations to partners but cannot represent themselves to third parties without rights preserved.
A partnership of estoppel occurs with partners A and B due to their agreements.
All partners must consent for anyone to join a partnership; otherwise, it must be dissolved first.

Co-ownership vs. Partnership

A & B co-own land; leasing it for P50,000/month does not constitute a partnership as their profits stem from co-ownership rather than business operations.
Selling inherited land does not indicate a partnership; mere profit-sharing from sale is not enough for partnership recognition.

Oral Partnerships

Partnerships can be created orally and are not bound by the Statute of Frauds, thus not necessarily needing written contracts.

Property Contributions

If immovable property is contributed to a partnership, its contract must be formalized through a public instrument.
Property owned at the contribution time becomes common property; only profits derived from business operations are shared.

Universal Partnership of All Present Property

Defined by Article 1778, this partnership includes property owned at the time of contribution but excludes inherited property unless specifically stated.
Popularity issues arise in the Philippines due to prohibitions against donations between certain parties, like spouses.

Contributions and Risks

Contributions must be determined; risks associated with specific property are borne by individual partners unless specified otherwise.
Specific risks of contributions depend on whether items are fungible or non-fungible.

Types of Partners

Partners classified under the Civil Code include:
- Capitalist (money/property contributor)
- Industrial (industry contributor)
- General (personal asset liability)
- Limited (liability limited to contribution)
- Managing (partnership manager)
- Liquidating (responsible during dissolution)
- By Estoppel (not an actual partner)
- Continuing (business continuance after dissolution)
- Surviving (remains after a partner's death)
- Sub-partner (contracts with partners)

Particular vs. Universal Partnerships

Particular partnerships focus on specific goals, like acquisition and sale of property, and differ from universal partnerships.
Universal partnerships for profits allow retention of ownership by partners; profits become shared unless otherwise stated.

Obligations of Partners

Article 1781 introduces the obligations within a partnership, primarily concerning relationships between partners and the partnership.
Clear specifications in partnership agreements dictate the nature of the partnership and the profits shared among partners.

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Description

This quiz covers essential concepts related to partnerships and co-ownership, focusing on obligations, consent, and oral agreements. Understand the distinctions between co-ownership and partnerships, and the implications of property contributions. Test your knowledge on these foundational concepts of business law.