Title RFBT Self Study Part 3.pdf ✅

BUSINESS ORGANIZATIONS LAW ON PARTNERSHIP I. Basic Concepts & Classifications Definition A partnership is a contract where two or more persons bind themselves to contribute money, property, or industry to a common fund, with the intention of dividing profits among themselves. Legal Personality Has a juridical personality separate from its partners, formed upon execution of agreement. Essential Requisites 1. Mutual contribution 2. Lawful object 3. Intent to divide profits 4. Valid consent 5. Compliance with formalities (if capital > P3,000 – must be in writing) Classification of Partnerships: Criteria Types By creation Voluntary / Involuntary By object Universal (all present/future property or profits) / Particular (specific undertaking) By liability General (all liable) / Limited (some limited partners) By duration Term / At-will By publicity De jure / De facto / Ostensible / Secret 💡 Tip: Know the different types and effects of formation and dissolution. The exam often gives scenarios where you must classify or determine the legal consequences. II. Partnership Agreement & Contribution Capital Contribution: • May be in money, property, or industry (skills/labor). • Capitalist partners vs. Industrial partners: o Capitalist: contributes money/property o Industrial: contributes labor/industry only Effects of Contribution: • Failure to deliver = liable for interest and damages • Property contributed becomes partnership property (not personal) 💡 Tip: Frequently tested — difference in profit/loss sharing when no agreement exists. III. Obligations and Rights of Partners Obligation Note Contribute agreed amount Liable with interest if delayed Share profits and losses In absence of agreement: profits = equal; losses = in proportion to capital Account for partnership property Fiduciary duty Refrain from competing business Unless expressly allowed