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Business Law and Regulation

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0% found this document useful (0 votes)
123 views6 pages

Business Law and Regulation

can help student to study more

Uploaded by

Princess Audhrie
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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BUSINESS LAW AND REGULATION professional partnership.

(They do
not have a common profession)
Partnership (General Provisions) (part 1)
- Ex. G, an architect and H, an
Definition of Partnership engineer, cannot form a
partnership that will qualify as a
(Art.1767) Law is will see in Civil code general professional partnership.
-by the contract of partnership two or more - Ex. I and J both Certified Public
persons bind themselves to contribute money, Accountants, in partnership selling
property, or industry to a common fund with business machines, are not in a
the intention of dividing the profits among general professional partnership.
themselves. (Business partnership) (Business professional partnership)

(General Professional partnership) QUALIFICATION OF GPP

Two or more persons may also form a Three Elements


partnership for the exercise of a profession. 1. The partners have a common
Contract- is a meeting of minds between two profession.
persons whereby one binds himself, with 2. The purpose is to practice the common
respect to the other, to give something or profession
render some service 3. No part of the net income is derived
from engaging in any trade or business.
(a one person wants to build partnership and
the other person is agree meeting of minds) PARTNERSHIP

Industry- may be either physical manual efforts -A partnership is also a business organization
or intellectual Forms of Business Organization
- Services/skills 1. Sole proprietorship- is owned by one
They have intention that’s why they contribute person
money, property or industry. To divide the 2. Partnership
profits among themselves. 3. Corporation- is an artificial being
created by operation of law.
GENERAL PROFESSIONAL PARTNERSHIP
Characteristics of a contract of partnership
- A general professional partnership
is a partnership formed for the (ConPriBiMuNoPreOne)
purpose of practicing a common 1. Consensual- it is perfected by mere
profession. consent of the parties.
- Ex. A and B, both Certified Public 2. Principal- it does not depend upon any
Accountants, can form a general other contract for its validity or
professional partnership to go into existence. (it’s called accessories
public accounting. contract when it depends on the
- Ex. C and D, both lawyers, can form contract)
a general professional partnership 3. Bilateral or Multilateral- it is entered by
to practice law. two or more persons whose rights and
- Ex. a lawyer, and F, a Certified obligations are reciprocal.
Public Accountant, cannot go into 4. Nominate- it has a special name given
the practice of taxation as a general to it law. Ex. contact of partnership,
contract of sales, contract of lease and 3 It must have a lawful object or purpose.
contract of loan. (No name it called
-partnership, being a contract, must have a
innominate contract) ex. I give that you
lawful object.
may do, I do that you may give and I do
that you may do. - if a partnership has an unlawful object, it is
5. Preparatory- it is a means by which void.
other contracts will be entered into as
the partnership pursues its business. -the object is unlawful when it is contrary to
Ex. contract of sales a rise between the law, morals, good customs, public order, or
sale and the buyer. public policy (against)
Contract of sales between the -if such illegality constitutes a crime, the
partnership and the renter. partners will be criminally prosecuted and the
6. Onerous- the partnership contributes profits and effects and instruments of the crime
money, property, or industry to a will be confiscated in favor of the government.
common fund.
4. The partnership must be established for the
Essential requisites of Partnership common benefits or interest of the partners
1. There must be a valid contract. which is to obtain profits and to divide the
-in order for partnership to exist, there profits among the partners.
must be a voluntary agreement among The very purpose of a business partnership is to
the parties to carry on the business as obtain profits.
partnership.
If a partnership is formed for the practice of a
Doctrine of delectus personae (personarum) common profess, its primary purpose ids to
- “A person is free to choose those render service to the public
whom he wants to be associated GPP- primary purpose public purpose
with in partnership. (Must not be
force) BP- to obtain profits

Essential Elements of a contract (COC) GPP- to render public service

1. Consent of the contracting parties Partnership (General Provision) part 2


2. Object certain which is the subject Kinds of Partnership
matter of the contract
3. Cause of the obligation which must be 1. Kinds of partners as to Liability
established 2. Kinds of partners as to contribution
3. Other classifications of partners
2.There must be a mutual contribution of
money, property, or industry to a common Kinds of partners as to Liability
fund.
1. General partner- is a partner who is
-the property that may be contributed may be liable for partnership debts to the
real or personal. Tangible or intangible. extent of his or her separate property
after all the assets of the partnership
-industry may be physical manual efforts or have been exhausted
intellectual industry. 2. Limited partner- is a partner who is
However, a limited partner may be contributing liable for partnership debts to the
cash or other property, but not service. extent of his or her capital contribution
only (ex. X contribute 100k he is only 2. Industrial partner- is a partner who
liable up to his capital contribution contributes his or her services or
Hindi siya pwedeng habolin industry to the partnership
3. General-limited partner- is a partner 3. Capitalist-industrial partner- is a partner
who is liable pro-rata to partnership who contributes not only money or
creditors to the extent of his or her property but also his or her service to
separate assets after the partnership the partnership
assets have been exhausted, but he or
Other classifications of partnership
she can demand reimbursement of the
amount he or she paid from his or her 1. Managing partner- is a partner who
co-partners. (pro-rata- in proportion) manages the business of the affairs of
the partnership
As to third persons, a general-limited partner
2. Liquidating partner- is a partner who
is a general partner.
takes charge of the winding up of the
Ex. creditors sila ang nag pautang (liable up to affairs of the partnership after the
his separate property/assets) but she or he can partnership is dissolved
demand)
Stages in the life of partnership
-among the partners, a general-limited partner
1. Formation- initial stage in the life of
is a limited partner (he is only liable for his
partnership contribution of money
contribution only)
property and industry
Example 2. Operation- division of profits and losses
3. Dissolution- admission of new partner,
X,y and Z are partners in XYZ company, Ltd
retirement, and death
X-limited partner 4. Liquidation- winding up of affairs
(settling the business or affairs of the
Y-general Partner partnership after dissolution
Z-general-limited partner 3 nominal partner- is one who is not actually a
Assets- 50,000 partner who may become liable as such to a
third person
Liabilities- 80,000
Example
-In the settlement of the liabilities, the assets
will first be exhausted. Partner by estoppel- is one who is not really a
partner, not being a party to a partnership
-after that, the creditors can collect the balance agreement, but is liable as a partner for the
of 30,000 from the separate assets of Y and Z protection of innocent third person.
who will be liable for 15,000 each.
4 ostensible partner- is a partner who is active
-after payment to the creditors, Z may demand and known to the public as a partner, such as by
reimbursement of 15,000 from Y. allowing his or her name to be included in the
Kinds of partners as to contribution firm name

1. Capitalist partner- is a partner who 5. Secret partner- is a partner whose


contributes money or property to a connection with the partnership is kept
common fund from the public
- He or she participates in the
management of partnership affairs
6. Silent partner- is a partner who has no Effect is the 2 requirements are not
voice in the management of the compiled with
business (though he or she shares in the
1. The partnership is void
profits and losses)
2. The partnership will not have any
- He or she does not take any active
juridical personality.
part in the business but he or she is
known to be a partner Exceptions:
7. Dormant partner- is a partner who
does not participate in the 3 if the partnership is a limited partnership,
management of the business and not a certificate signed under oath by the
known to the public as a partner. partnership and recorded with Securities
Exchange and commission is required
Form of a partnership contract
Effect if the requirements are not compiled
- A partnership contract may be with
constituted in any form (i.e., oral or
written) 1. The partnership will be considered as a
general partnership
Exceptions:
Limited partnership- is composed at least 1
1. Where the capital of the partnership is general partner and at least 1 limited
3,000 or more, in money or property partner) (2 limited partner and general
a. The partnership contract must be in partner) (1 limited partner and 1 general
a public instrument Ans partner)
b. Registered with the Securities and
Exchange Commission (SEC) General partner where all the partnership
are general partnership
Effect if the 2 requirements are not compiled
with Partnership (General provisions) part 3

1. The partnership contract is valid. The 1. Kinds of partnership as to object


partnership still acquires juridical 2. Kinds of partnership as to liability
personality. 3. Kinds of partnership as to duration
Juridical personality- the partnership 4. Kinds of partnership as to
has a personality separate and distinct representation to others
from the personality of the partners Kinds of partnership as to object
2. The liability of the partnership and the
members thereof to third persons are 1. Universal partnership
not affected. a. Universal partnership of all present
property
Exceptions -is a partnership in which all the
2 where immovable property or real rights partners contribute all the property
are contributed to the partnership (regardless which actually belong to them to
of the amount thereof) the common fund, with the
intention of dividing the same
a. The partnership contract must be in among themselves, as well as the
public instrument, and profits which they may acquire
b. An inventory of the said property must therewith.
be made, signed by parties and
attached to the public instrument.
Properties which shall belong to the common Rule in case universal partnership is
fund without any specification

a property belonging to the partners at the time Articles of universal partnership entered into
of the constitution of the partnership without specification of its nature, only
constitute a universal partnership of profits
b profits that may be acquired from the present
property This is because a universal partnership of profits
transmits less rights and interest.
c property acquired by each partner after the
formation of the partnership but only if Prohibition to enter into universal partnership
stipulated. This property shall include:
Persons not allowed to form a universal
1. The property itself except that the partnership: those who cannot donate to each
stipulation shall not include property other namely:
acquired by inheritance, legacy, or
1. Husband and life-article 133
donation (exclusive property of
2. Those guilty of adultery and
partners)
concubinage
2. The profits and fruits therefrom
Adultery – crime committed by the wife
including those from property acquired
kapag nangaliwa siya.
by inheritance, legacy or donation only
Concubinage-article 739 crime
if there is stipulation.
committed by the husband kapag
nangaliwa siya
b. Universal partnership of profits
3. Those guilty of the same criminal
- This comprises all that the partners
offense, if the partnership was entered
may acquire by their work or
into in consideration of the same
industry during the existence of the
(universal partnership is a donation)
partnership
Particular partnership
Profits/property which shall belong to the
partnership A particular partnership has for its object (1)
determine things, their use or fruits, or (2)
A) Profits obtained by the partners by their
specific undertaking, or (3) the exercise of a
work or industry during the existence of
profession or occupation.
the partnership.
Example:
-accordingly, profits acquired by the
partners without the exertion of physical or 1. A real partnership whereby partner X
intellectual efforts, such as those acquired contributed a parcel land and partner Y
by chance or lucrative title are excluded. a building.
2. A real estate lessor partnership
B) the usufruct (the use) of the property
whereby X contributed cash and Y the
belonging to each partner at the time of the
use and lease of his building.
constitution of the partnership
3. A partnership formed for the exercise of
c) the profits and fruits from the properties the law profession.
aforementioned (items “a” and “b”)
Question: may a husband-and-wife form or be
d) profits and fruits, if stipulated, of partners in a general professional partnership?
property acquired by each partner after the
constitution of the partnership.
Answer: Yes, since general professional 1. Ordinary partnership
partnership is only particular partnership for the - Is a partnership which is an actually
exercise of a common profession or occupation. exist among the partners as well as
to third persons
Kinds of partnership as to liability
2. Partnership by estoppel
1. General partnership - Is one which reality being not
- Is a partnership where all the partnership but is considered as
partners are general partners that one with respect to those who, by
are liable up to their separate asset reason of their conduct or
(unlimited liability) admission, are precluded from
2. Limited partnership denying its existence
- Is a partnership where there is a t
Business laws and regulations
least 1 general partner and at least
1 limited partner up to their capital Partnership (general provision) part 4
contribution only. (Limited liability)
Rules on division of profits and loss
Kinds of partnership as to duration
1. If all are capitalist partners
1. Partnership for fixed term 2. If aside from capitalist partners,
- Is a partnership for which a period there is also an industrial partner
for its duration is fixed by the (or there are industrial partners)
partners 3. Is aside from capitalist partners,
there is also a capitalist-industrial
Example: partnership with a term of 3
partner 9or there are capitalist-
years
industrial partners)
2. Partnership for particular undertaking
If all are capitalist partners
-is a partnership which is organized for
A. Profits and losses shall be divided
certain undertaking which, when attained,
according to their agreement
will cause the termination of the
Partners- XYZ
partnership.
Profit or loss ration- 2:3:5=10
Example: partnership formed to construct
Share of X= 2/10; share of Y= 3/10; share of Z =
15 residential houses
5/10
3. Partnership at will
B. If only the sharing of the partners in
- Is a partnership where no period is
the profits has been agreed upon,
fixed by the parties for its duration;
the share of each partner in the
hence, may be terminated at will by
losses shall be in the same
the partners.
proportion as to share of each in
If a partnership for fixed term or particular the profits
undertaking is continued after the expiration of C. In the absence of both , the share
the said term or the attainment of the said of each partner in the profits and
undertaking without any express agreement, losses shall be in proportion to his
the partnership becomes a partnership at will. or her capital contribution.

Kinds of partnership as to representation to


others

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