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KINDS OF PARTNERSHIPS - Coggle Diagram

- - - - FOR A TERM OR UNDERTAKING
        Automatically dissolved upon the expiration of the stipulated term or achievement of the particular undertaking stipulated.
        
        COMMERCIAL
        Organized for the pursuit of business or trade.
        
        PROFESSIONAL
        Organized for the exercise of profession.
        
        BY ESTOPPEL (1825)
        
        MAY BE IN PAIS OR BY DEED(1825)
        When a person, by words spoken or written or by conduct, represents himself, or consents to another representing him to anyone, as a partner in an existing partnership or with one or more persons not actual partners,
        he is liable to any such persons to whom such representation has been made, who has, on the faith of such representation, given credit to the actual or apparent partnership,
        
        EFFECT OF REPRESENTATION
        AS TO LIABILITY (1825)
        
        PARTNERSHIP LIABILITY - When a partnership liability results, he is liable as though he were an actual member of the partnership;
        
        NO PARTNERSHIP LIABILITY - When no partnership liability results, he is liable pro rata with the other persons, if any, so consenting to the contract or representation as to incur liability, otherwise separately.
        
        EFFECT OF REPESENTATION:
        REPRESENTOR BECOMES AGENT (1825)
        When a person has been thus represented to be a partner in an existing partnership, or with one or more persons not actual partners, he is an agent of the persons consenting to such representation to bind them to the same extent and in the same manner as though he were a partner in fact, with respect to persons who rely upon the representation.
        
        1 more item...
        
        EFFECT OF REPRESENTATION
        AS TO CONSENTING PARTNERS (1825)
        
        IF ALL CONSENT - When all the members of the existing partnership consent to the representation, a partnership act or obligation results; but
        
        IF NOT ALL CONSENT - in all other cases it is the joint act or obligation of the person acting and the persons consenting to the representation. (n)
        
        EFFECT OF PUBLIC REPRESENTATION = LIABLE, REGARDLESS OF ACTUAL COMMUNICATION TO ONE GIVING CREDIT
        and if he has made such representation OR consented to its being made in a public manner, he is liable to such person, whether the representation has or has not been made or communicated to such person so giving credit by OR with the knowledge of the apparent partner making the representation or consenting to its being made:
        
        pls transfer to obligations of a partner (liability of new partners)
        Article 1826. A person admitted as a partner into an existing partnership is liable for all the obligations of the partnership arising before his admission as though he had been a partner when such obligations were incurred, except that this liability shall be satisfied only out of partnership property, unless there is a stipulation to the contrary. (n)
        
        NEW PARTNERS ARE ONLY LIABLE DEPENDING ON THEIR SHARE.
        HOWEVER, JUST REMEMBER THEY ARE ALSO LIABLE FOR EQUITY.
        
        1 more item...
        
        Article 1767. By the contract of partnership 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.
        Two or more persons may also form a partnership for the exercise of a profession. (1665a)
        
        Article 1767. By the contract of partnership 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.
        Two or more persons may also form a partnership for the exercise of a profession. (1665a)
        
        EFFECT OF CONTINUATION AFTER TERMINATION (1785)
        When a partnership for a fixed term or particular undertaking is continued after the termination of such term or particular undertaking without any express agreement, the rights and duties of the partners remain the same as they were at such termination, so far as is consistent with a partnership at will.
        
        Continuation of business/Habitually acting therein + NO Settlement/Liquidation =
        prima facie Continuation
        A continuation of the business by the partners OR such of them as habitually acted therein during the term, without any settlement or liquidation of the partnership affairs, is prima facie evidence of a continuation of the partnership.
        
        Continuing Partner - Continues business after dissolution due to reasons under NCC 1840
        
        Discontinuing Partner - One who does not participate in the partnership business after its dissolution.
        
        WHEN CREDITORS OF PARTNERSHIP DISSOLVED ARE CREDITORS OF
        CONTINUING PARTNERS
        In the following cases creditors of the dissolved partnership are also creditors of the person or partnership continuing the business:
        
        When any new partner is admitted into an existing partnership, or when any partner retires and assigns (or the representative of the deceased partner assigns) his rights in partnership property to two or more of the partners, or to one or more of the partners and one or more third persons, if the business is continued without liquidation of the partnership affairs;
        
        When all but one partner retire and assign (or the representative of a deceased partner assigns) their rights in partnership property to the remaining partner, who continues the business without liquidation of partnership affairs, either alone or with others;
        
        When any partner retires or dies and the business of the dissolved partnership is continued as set forth in Nos. 1 and 2 of this article, with the consent of the retired partners or the representative of the deceased partner, but without any assignment of his right in partnership property;
        
        When all the partners or their representatives assign their rights in partnership property to one or more third persons who promise to pay the debts and who continue the business of the dissolved partnership;
        
        When any partner wrongfully causes a dissolution and the remaining partners continue the business under the provisions of article 1837, second paragraph, No. 2, either alone or with others, and without liquidation of the partnership affairs;
        
        When a partner is expelled and the remaining partners continue the business either alone or with others without liquidation of the partnership affairs.
    - - REQUISITES FOR PRO RATA LIABILITY
        All partners are liable pro rata for
        contracts entered into
        
        NAME and ACCOUNT - in the name and for the account of the partnership
        
        SIGNATURE - Under the partnership's signature
        
        PERSON AUTHORIZED - By a person authorized to act for the partnership
      - XCPN: WHEN THERE IS SOLIDARY LIABILITY
        (Lim Tong Lim v. PH Fishing Gear Industries)
        
        WRONGFUL ACT OR OMISSION - When Wrongful Act or Omission of any partner acting in the ordinary course of the business of the partnership OR with the authority of his co-partners,
        Loss or Injury is caused to any person, not being a partner in the partnership, OR any penalty is incurred, the partnership is liable therefor to the same extent as the partner so acting or omitting to act.
        
        APPARENT AUTHORITY+MISAPPLY FUNDS One partner acting within the scope of his apparent authority receives money or property of a third person and the money or property so received is misapplied by any partner while it is in the custody of the partnership.
  - - - UNIVERSAL PARTNERSHIP OF
        ALL PROFITS (1780)
        A universal partnership of profits comprises all that the partners may acquire by their industry or work during the existence of the partnership.
        
        EXCLUSIVE OWNERSHIP OF PROPERTIES
        Movable or immovable property which each of the partners may possess at the time of the celebration of the contract shall continue to pertain exclusively to each, only the usufruct passing to the partnership.
        
        USUFRUCT PASSES
        Only the usufruct of movable or immovable properties pass to the partnership.
      - UNIVERSAL PARTNERSHIP OF ALL PRESENT PROPERTY(1779)
        In a universal partnership of all present property, the property which belonged to each of the partners at the time of the constitution of the partnership, becomes the common property of all the partners, as well as all the profits which they may acquire therewith.
        
        MAY INCLUDE OTHER PROFITS
        BY STIPULATION
        A stipulation for the common enjoyment of any other profits may also be made;
        
        INHERITANCE, LEGACY, OR DONATION SUBSEQUENTLY ACQUIRED EXCLUDED
        The property which the partners may acquire subsequently by inheritance, legacy, or donation cannot be included in such stipulation, except the fruits thereof.
        
        FRUITS OF [ILD] MAY BE INCLUDED
        except the fruits thereof. (Of properties acquired by inheritance, legacy or donation)
- - - - MANAGING
        
        BY ESTOPPEL
        
        Article 1825. When a person, by words spoken or written or by conduct, represents himself, or consents to another representing him to anyone, as a partner in an existing partnership or with one or more persons not actual partners, he is liable to any such persons to whom such representation has been made, who has, on the faith of such representation, given credit to the actual or apparent partnership, and if he has made such representation or consented to its being made in a public manner he is liable to such person, whether the representation has or has not been made or communicated to such person so giving credit by or with the knowledge of the apparent partner making the representation or consenting to its being made:
        (1) When a partnership liability results, he is liable as though he were an actual member of the partnership;
        (2) When no partnership liability results, he is liable pro rata with the other persons, if any, so consenting to the contract or representation as to incur liability, otherwise separately.
        When a person has been thus represented to be a partner in an existing partnership, or with one or more persons not actual partners, he is an agent of the persons consenting to such representation to bind them to the same extent and in the same manner as though he were a partner in fact, with respect to persons who rely upon the representation. When all the members of the existing partnership consent to the representation, a partnership act or obligation results; but in all other cases it is the joint act or obligation of the person acting and the persons consenting to the representation. (n)
        
        DISTRIBUTION OF COLLECTED SUM(1792)
        FOR WHOSE CREDIT
        If a partner authorized to manage collects a demandable sum which was owed to him in his own name, from a person who owed the partnership another sum also demandable, the sum thus collected shall be applied to the two credits in proportion to their amounts, even though he may have given a receipt for his own credit only;
        but should he have given it for the account of the partnership credit, the amount shall be fully applied to the latter.
        
        NO PREJUDICE(1792)
        The provisions of this article are understood to be without prejudice to the right granted to the other debtor by article 1252, but only if the personal credit of the partner should be more onerous to him.
        
        DEBTOR WITH VARIOUS DEBTS OF SAME KIND TO SAME CREDITOR:
        APPLICATION OF PAYMENT
        Article 1252. He who has various debts of the same kind in favor of one and the same creditor, may declare at the time of making the payment, to which of them the same must be applied. Unless the parties so stipulate, or when the application of payment is made by the party for whose benefit the term has been constituted, application shall not be made as to debts which are not yet due.
        If the debtor accepts from the creditor a receipt in which an application of the payment is made, the former cannot complain of the same, unless there is a cause for invalidating the contract. (1172a)
        
        SINGLE MANAGING PARTNER'S POWER:
        EXECUTE ACTS OF ADMINISTRATION
        DESPITE OPPOSITION
        The partner who has been appointed manager in the articles of partnership may execute all acts of administration despite the opposition of his partners, UNLESS he should act in BAD FAITH;
        
        GR: IRREVOCABLE, IF APPOINTED AS MANAGER IN ARTICLES OF PARTNERSHIP (1800)
        [The managing partner's] power is irrevocable without just or lawful cause.
        
        GROUNDS FOR REVOCATION: JUST OR LAWFUL CAUSE
        
        HOW REVOKED: VOTE REPRESENTING CONTROLLING INTEREST (1800)
        The vote of the partners representing the controlling interest shall be necessary for such revocation of power.
        
        XCPN: REVOCABLE, IF POWER GRANTED AFTER PARTNERSHIP (1800)
        A power granted after the partnership has been constituted may be revoked at any time.
        
        MULTIPLE MANAGING PARTNERS THAT
        MAY SEPARATELY EXECUTE ACTS OF ADMINISTRATION(1801)
        If two or more partners have been intrusted with the management of the partnership without specification of their respective duties, or without a stipulation that one of them shall not act without the consent of all the others, each one may separately execute all acts of administration.
        
        MULTIPLE MANAGING PARTNERS THAT CANNOT SEPARATELY EXECUTE ACTS REQUIRE CONCURRENCE(1802)
        In case it should have been stipulated that none of the managing partners shall act without the consent of the others, the concurrence of all shall be necessary for the validity of the acts.
        
        GR: ABSENCE OR DISABILITY
        CANNOT BE ALLEGED
        The absence or disability of any one of them cannot be alleged.
        
        XCPN: IMMINENT DANGER OR
        GRAVE IRREPARABLE INJURY
        UNLESS there is imminent danger of grave or irreparable injury to the partnership.
        
        OPPOSITION = MAJORITY VOTE WINS
        BUT if any of them should oppose the acts of the others, the decision of the majority shall prevail.
        
        IF TIE = CONTROLLING INTEREST WINS
        In case of a tie, the matter shall be decided by the partners owning the controlling interest.
      - EQUAL SHARES IN ABSENCE OF STIPULATION (1790)
        Unless there is a stipulation to the contrary, the partners shall contribute equal shares to the capital of the partnership.
        
        XCPN: STIPULATION TO CONTRARY
        Unless there is a stipulation to the contrary.
      - DISTRIBUTION BY AGREEMENT(1797)
        The losses and profits shall be distributed in conformity with the agreement.
        
        IF ONLY SHARE OF PROFITS IS AGREED ON, LOSSES SHALL BE IN SAME PROPORTION
        If only the share of each partner in the profits has been agreed upon, the share of each in the losses shall be in the same proportion.
        
        WITHOUT STIPULATION, PROFITS & LOSSES = IN PROPORTION TO CONTRIBUTION
        In the absence of stipulation, the share of each partner in the profits and losses shall be in proportion to what he may have contributed
      - CAPITALIST PARTNERS CANNOT ENGAGE IN ANOTHER BUSINESS OF SAME KIND (1808)
        The capitalist partners cannot engage for their own account in any operation which is of the KIND of business in which the partnership is engaged, unless there is a stipulation to the contrary.
        
        UNLESS STIPULATION PERMITS
        [Partners may engage in another business of the same kind if there is a stipulation permitting them.]
        
        EFFECT OF VIOLATION: CONTRIBUTE PROFIT + PERSONALLY BEARS LOSS
        Any capitalist partner violating this prohibition shall bring to the common funds any profits accruing to him from his transactions, and shall personally bear all the losses. (n)
        
        RATIO: TO PREVENT COMPETITION
        SIR: Whether they're of the same/similar "kind" as prohibited is whether they would compete.
        Therefore, gold mining and magnetite mining corporations are not the same/similar "kind" of business as contemplated in 1808.
        (This preceded the anti-competition law)
        
        1808 is an often forgotten rule
        as much as possible, stipulate (even if it is a general rule)
        
        How to know if products are competing?
        How to know if they're competing
        Once you inject 5% in the price of that product, will buyers switch to the other product?
      - RIGHT TO EXCLUDE or AVAIL + DAMAGES (1789)
        Capital partners have a right to
        
        EXCLUDE OR AVAIL - exclude him from the firm OR avail themselves of the benefits which he may have obtained in violation of this provision,
        
        DAMAGES with a right to damages in either case. (n)
      - NOT OBLIGED TO ENGAGE IN THE DAY
        TO DAY BUSINESS
        SIR
    - - XCPN: WHEN EXPRESSLY PERMITTED
        (1789)
        unless the partnership expressly permits him to do so;
      - EFFECT OF VIOLATION (1789)
        and if he should do so, the capitalist partners may either
        
        EXCLUDE OR AVAIL exclude him from the firm OR avail themselves of the benefits which he may have obtained in violation of this provision,
        
        DAMAGES with a right to damages in either case. (n)
        
        CAPITALIST PARTNERS ALWAYS ENTITLED TO DAMAGES IN EITHER CASE
      - RATIO:
        SIR: THE QUALITY OF THE
        [INDUSTRIAL PARTNER'S] WORK MAY SUFFER. IF HE STRETCHES HIS FOCUS, WORK SUFFERS. THERE IS ONLY ONE INDUSTRIAL PARTNER WITH HIS TALENTS.
    - - IN THE ABSENCE OF STIPULATION
        
        INDUSTRIAL PARTNER'S SHARE OF PROFITS:
        JUST AND EQUITABLE - QUANTUM MERUIT (1797)
        As for the profits, the industrial partner shall receive such share as may be just and equitable under the circumstances.
        
        IF INDUSTRIAL PARTNER CONTRIBUTED CAPITAL, SHARE IS IN PROPORTION
        TO CAPITAL (two hats)
        If besides his services he has contributed capital, he shall also receive a share in the profits in proportion to his capital.
        
        INDUSTRIAL PARTNERS NOT LIABLE FOR LOSSES (1797)
        In the absence of stipulation, the share of each partner in the profits and losses shall be in proportion to what he may have contributed, but the industrial partner shall not be liable for the losses.
        
        UNLESS STIPULATION
        (Remember the context is there absence of stipulations)
      - THE CONTRACT OF PARTNERSHIP IS DETERMINATIVE SIR