10 Questions
What is a necessary condition for a partnership to be formed under Philippine law?
The intention of sharing profits among partners
Which of the following is NOT a characteristic of a partnership?
Unilateral, or involving only one party's rights and obligations
What is the primary purpose of a partnership, as indicated by its definition under Philippine law?
To engage in lawful commercial activities
According to the Uniform Partnership Act, what is a key feature of a partnership?
The mutual contribution of partners
What is a key distinction between a partnership and other legal entities?
Partnerships involve joint ownership and profit-sharing
What is the primary purpose of a partnership?
To engage in business for profit
What is required for a partnership agreement to be valid?
The consent, capacity, object, and cause
In what cases are partnerships allowed for professional practice?
In some cases, such as law and medicine
What influences the treatment of partnerships in the Philippines?
The Uniform Partnership Act
How are partnerships generally treated for taxation purposes in the Philippines?
Similarly to corporations, especially non-professional partnerships
Study Notes
Legal Definition of Partnership
- Defined in Article 1767 of the Civil Code as a contractual agreement where two or more persons contribute money, property, or industry to a common fund with the intention of sharing profits among themselves.
- Encompasses various forms of partnerships, including those formed for business purposes and those for exercising a profession.
Additional Definitions
- American Jurisprudence and the Uniform Partnership Act emphasize common themes of joint ownership, profit-sharing, and mutual contribution among partners.
- Partnerships can involve contributions of capital, labor, skill, or a combination thereof, and are typically formed for lawful commercial activities.
Characteristics of Partnership
- Consensuality: formed by mutual consent.
- Nominate: having a specific name.
- Bilateral: involving reciprocal rights and obligations.
- Onerous: with the aim of obtaining benefits.
- Commutative: each partner's contribution is equivalent.
- Principal: self-sufficient.
- Preparatory: established as a means to engage in business for profit.
Essential Elements of Partnership
- Valid contract: requires consent, capacity, object, and cause.
- Legal capacity of the parties: must be legally capable of entering into a contract.
- Mutual contributions: each partner contributes something of value, such as property, labor, or skill.
- Lawful objectives: formed for lawful commercial activities.
- Primary purpose of profit-sharing: among partners.
- Transparency: articles of partnership must not be kept secret among members.
Existence of a Valid Contract
- Partnership fundamentally relies on a contractual relationship between parties.
- Can be established through written agreements (Articles of Partnership) or the parties' actions and declarations.
Partnership for Professional Practice
- Partnerships formed for professional practice are governed by specific regulations.
- Allowed for the practice of professions in some cases, such as law.
Legal Personality and Taxation
- Partnerships have a separate legal personality, distinct from their individual members.
- Treated similarly to corporations for taxation purposes, especially non-professional partnerships.
- Uniform Partnership Act's influence on the treatment of partnerships.
- Differences in legal theories regarding partnership identity.
Test your knowledge of partnership under Philippine law, covering its legal definition, essential features, and distinctions from other legal entities. This quiz assesses your understanding of Article 1767 of the Civil Code and its implications.
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