BUSINESS
ORGANIZATIONAt
a GlancePARTNERSHIP
Partnership, nature:
Within the context of
Philippine law, a"partnership"
is treated as an artificial being created by operation of law with a
legal
personality separate and distinct from the partners thereof. It
proceeds
from the concept that persons may be allowed to pool their resources
and
funds to engage in the pursuit of a common business objective without
necessarily
organizing themselves into a corporation, upon which the law imposes a
much higher form of regulation, limitation and standards. Philippine
partnerships
operate under the concept of unlimited liability and unless otherwise
agreed
upon by the partners, each one of them acts as manager and agent of the
partnership and consequently, their acts bind the partnership.cralaw:red
Partnership, governing
law:
Unlike
corporations whose governing law is
a special law - the Corporation Code of the Philippines, partnerships
in
the Philippines are governed by and covered under Articles 1767 to 1867
of the Civil Code of the Philippines [circa 1950]. These are the
provisions of law which govern all aspects of partnerships - from their
creation, formation, existence, operation and management to their
dissolution
and liquidation, including the obligations of the partners to one
another,
to the public or third persons and to the government.
Partnership, how
formed; registration requirement:
Partnerships
are required to be registered
with the Securities and Exchange Commission [SEC]. Registration
is
done by filing the Articles of Partnership with the SEC. The
Articles
of Partnership set forth all the terms and conditions mutually agreed
by
the partners thereto.
More
specifically, the documents required
are as follows:
[1]
Proposed Articles of Partnership;
[2]
Name
Verification Slip;
[3]
Bank
Certificate of Deposit;
[4]
Alien
Certificate of Registration, Special Investors Resident Visa or proof
of
other types of visa [in case of foreigner];
[5]
Proof
of Inward Remittance [in case of non-resident aliens].
It bears noting that corporations are
not
allowed by law to become partners in a partnership. Partners,
liability:
As a general
rule, the liability of partners
in a partnership organization is unlimited in the sense that the
partnership
creditors may run after them for any and all of their assets and
property
in payment of the partnership debts. Should one of the partners defray
all liabilities of the partnership, he is entitled to be reimbursed by
the other partners for their respective shares therein.
In the case,
however, of limited partnerships,
the law allows the limitation of the liability of certain partners to
the
extent of the amount contributed to the partnership.
Partnership, dissolution:
Philippine
law allows the dissolution of partnership
for any reason, provided such dissolution does not amount to a breach
of
contract or is prejudicial to third parties. The death of a
partner
or the unauthorized transfer of ownership of his share in the
partnership
[in case there is a limitation to this effect] results in the
dissolution
thereof. In other words, any change in the composition of the
partnership,
unless so allowed, will result in the dissolution thereof.
Consequently,
the remaining partners may form a new partnership with less or more
partners.
Back
to Top - Back
to Home - Back
to Corporate Index
Since
19.07.98 chanroblesvirtualawlibrary
|