‭ asic‬

B ‭Considerations‬ ‭and‬ ‭ artners‬ ‭(Civil‬ ‭Code‬ ‭of‬ ‭the‬ ‭Philippines.‬ ‭Article‬

p
‭1768)‬ ‭Thus,‬ ‭for‬ ‭example,‬ ‭where‬ ‭Vincent‬ ‭Fabella‬
‭Formation‬ ‭and‬ ‭Wilhelmina‬ ‭Neis‬ ‭established‬ ‭a‬ ‭partnership,‬
‭three‬ ‭persons‬ ‭are‬ ‭involved,‬ ‭namely‬ ‭the‬
‭Brief History‬ ‭partnership and the partners, Fabella and Neis.‬

‭ he‬ ‭idea‬ ‭of‬ ‭partnership‬ ‭is‬ ‭quite‬ ‭ancient.‬ ‭In‬ ‭2200‬

T ‭●‬ P
‭ artnerships‬ ‭resemble‬ ‭sole‬
‭B.C.,‬ ‭Hammurabi,‬ ‭King‬ ‭of‬ ‭Babylon,‬ ‭provided‬ ‭for‬ ‭proprietorships,‬ ‭except‬‭that‬‭there‬‭are‬‭two‬
‭the‬ ‭regulation‬ ‭of‬ ‭partnerships.‬ ‭In‬ ‭ancient‬ ‭Rome,‬ ‭or more owners of the business.‬
‭the partnership was called a‬‭societa‬‭.‬
‭●‬ ‭Each owner is called a partner.‬
I‭t‬‭was‬‭during‬‭the‬‭Middle‬‭Ages‬‭in‬‭Italy‬‭that‬‭the‬‭laws‬
‭of‬‭partnership‬‭began‬‭to‬‭develop.‬‭Italian‬‭merchants‬ ‭●‬ P
‭ artnerships‬ ‭are‬ ‭often‬ ‭formed‬ ‭to‬ ‭bring‬
‭operated‬ ‭as‬ ‭limited‬‭partners.‬‭Their‬‭approach‬‭was‬ ‭together various talents and knowledge.‬
‭introduced throughout Europe.‬
‭●‬ P
‭ artnerships‬‭provide‬‭a‬‭means‬‭of‬‭obtaining‬
‭ he‬ ‭English‬ ‭settlers‬ ‭brought‬ ‭the‬ ‭concept‬ ‭of‬
T ‭more‬ ‭equity‬ ‭capital‬ ‭than‬ ‭a‬ ‭single‬
‭partnership‬‭into‬‭the‬‭US.‬‭So,‬‭the‬‭partnership‬‭law‬‭in‬ ‭individual‬ ‭can‬ ‭obtain‬ ‭and‬ ‭allow‬ ‭the‬
‭the‬ ‭United‬ ‭States‬ ‭evolved‬ ‭from‬ ‭the‬ ‭English‬ ‭law,‬ ‭sharing‬ ‭of‬ ‭risks‬ ‭for‬ ‭rapidly‬ ‭growing‬
‭the‬ ‭Partnership‬ ‭Act‬ ‭of‬ ‭1890.‬ ‭In‬ ‭the‬ ‭US,‬ ‭the‬ ‭businesses.‬
‭Uniform‬ ‭Partnership‬ ‭Act‬ ‭was‬ ‭approved‬ ‭in‬ ‭1914‬
‭ ‬ ‭profession‬ ‭is‬ ‭an‬ ‭occupation‬ ‭that‬ ‭involves‬ ‭a‬
A
‭and the Uniform Limited Partnership Act in 1916.‬
‭higher‬ ‭education‬ ‭or‬ ‭its‬ ‭equivalent,‬ ‭and‬ ‭mental‬
I‭n‬ ‭the‬ ‭Philippines,‬ ‭before‬‭the‬‭effectiveness‬‭of‬‭the‬ ‭rather‬ ‭than‬ ‭manual‬ ‭labor.‬ ‭Strictly‬ ‭speaking,‬ ‭the‬
‭new‬ ‭Civil‬ ‭Code,‬ ‭there‬ ‭were‬ ‭two‬ ‭types‬ ‭of‬ ‭exercise‬ ‭of‬ ‭a‬ ‭profession‬ ‭is‬ ‭not‬ ‭a‬ ‭business‬ ‭or‬ ‭an‬
‭partnerships:‬ ‭commercial‬ ‭and‬ ‭civil‬‭.‬ ‭Commercial‬ ‭enterprise‬ ‭for‬ ‭profit‬ ‭but‬ ‭the‬ ‭law‬ ‭allows‬ ‭two‬ ‭or‬
‭or‬ ‭mercantile‬ ‭partnerships‬ ‭were‬ ‭governed‬ ‭by‬‭the‬ ‭more‬‭persons‬‭to‬‭act‬‭as‬‭partners‬‭in‬‭the‬‭practice‬‭of‬
‭Code‬‭of‬‭Commerce‬‭.‬‭The‬‭old‬‭Civil‬‭Code‬‭governed‬ ‭their profession.‬
‭the civil or non-commercial partnerships.‬
‭ artnerships‬ ‭are‬ ‭generally‬ ‭associated‬ ‭with‬ ‭the‬
P
‭ he‬ ‭new‬ ‭Civil‬ ‭Code‬ ‭(Aug.‬ ‭30,‬‭1950)‬‭repealed‬‭the‬
T ‭practice‬ ‭of‬ ‭law,‬ ‭public‬ ‭accounting,‬ ‭medicine‬‭and‬
‭provisions‬‭of‬‭the‬‭two‬‭codes‬‭relating‬‭to‬‭mercantile‬ ‭other‬ ‭professions.‬ ‭Partnerships‬ ‭of‬ ‭this‬‭nature‬‭are‬
‭and‬ ‭civil‬ ‭partnerships‬‭.‬ ‭Rules‬ ‭from‬ ‭the‬ ‭two‬ ‭called‬‭general professional partnerships.‬
‭American‬ ‭Uniform‬ ‭Partnership‬ ‭Acts‬ ‭were‬
‭ n‬‭the‬‭other‬‭hand,‬‭service‬‭industries,‬‭retail‬‭trade,‬
O
‭incorporated into the new Civil Code.‬
‭wholesale‬ ‭and‬ ‭manufacturing‬ ‭enterprises‬ ‭may‬
‭also be organized as partnerships‬
‭Definition‬
I‭n‬ ‭a‬ ‭contract‬ ‭of‬ ‭partnership‬‭,‬ ‭two‬ ‭or‬ ‭more‬ ‭Characteristics of a Partnership‬
‭persons‬ ‭bind‬ ‭themselves‬ ‭to‬ ‭contribute‬ ‭money,‬
‭ he‬ ‭characteristics‬ ‭of‬ ‭partnerships‬ ‭are‬ ‭different‬
T
‭property,‬ ‭or‬ ‭industry‬ ‭to‬‭a‬‭common‬‭fund,‬‭with‬‭the‬
‭from‬ ‭the‬ ‭sole‬ ‭proprietorships‬ ‭already‬ ‭studied‬ ‭in‬
‭intention of dividing the profit among themselves.‬
‭basic‬ ‭accounting.‬ ‭Some‬ ‭of‬ ‭the‬ ‭more‬ ‭important‬
‭ wo‬‭or‬‭more‬‭persons‬‭may‬‭also‬‭form‬‭a‬‭partnership‬
T ‭characteristics are as follows:‬
‭for‬ ‭the‬‭exercise‬‭of‬‭a‬‭profession‬‭(Civil‬‭Code‬‭of‬‭the‬
‭ utual‬ ‭Contribution‬‭.‬ ‭There‬ ‭cannot‬ ‭be‬ ‭a‬
M
‭Philippines, Article 1767).‬
‭partnership‬ ‭without‬ ‭contribution‬ ‭of‬ ‭money,‬ ‭or‬
‭ n‬ ‭association‬ ‭of‬ ‭two‬ ‭or‬ ‭more‬ ‭persons‬ ‭to‬‭carry‬
A ‭industry‬‭(ie.‬‭work‬‭or‬‭services‬‭which‬‭may‬‭either‬‭be‬
‭on,‬ ‭as‬ ‭co-owners,‬ ‭a‬ ‭business‬ ‭for‬‭profit.‬‭(Uniform‬ ‭personal‬ ‭manual‬ ‭efforts‬ ‭or‬ ‭intellectual)‬ ‭to‬ ‭a‬
‭Partnership Act, Section 61)‬ ‭common fund.‬

‭ he‬ ‭partnership‬ ‭has‬ ‭a‬ j‭uridical‬ ‭personality‬

T
‭separate‬ ‭and‬ ‭distinct‬ ‭from‬ ‭that‬ ‭of‬ ‭each‬ ‭of‬ ‭the‬
‭ ivision‬ ‭of‬ ‭Profits‬ ‭or‬ ‭Losses‬‭.‬ ‭The‬ ‭essence‬ ‭of‬
D ‭ umber‬ ‭of‬ ‭Persons‬‭.‬ ‭Two‬ ‭or‬ ‭more‬ ‭persons‬ ‭may‬
N
‭partnership‬‭is‬‭that‬‭each‬‭partner‬‭must‬‭share‬‭in‬‭the‬ ‭form‬ ‭a‬ ‭partnership,‬ ‭in‬ ‭a‬ ‭corporation,‬ ‭not‬
‭profits or losses of the venture.‬ ‭exceeding‬‭fifteen‬‭(15).‬‭A‬‭corporation‬‭with‬‭a‬‭single‬
‭stockholder‬ ‭is‬ ‭considered‬ ‭a‬ ‭One‬ ‭Person‬
‭ o-Ownership‬‭of‬‭Contributed‬‭Assets‬‭.‬‭All‬‭assets‬
C ‭Corporation‬ ‭(Sec‬ ‭10,‬ ‭Revised‬ ‭Corporation‬ ‭Code‬
‭contributed‬‭into‬‭the‬‭partnership‬‭are‬‭owned‬‭by‬‭the‬ ‭of the Philippines; in Chapter 5)‬
‭partnership‬ ‭by‬ ‭virtue‬ ‭of‬ ‭its‬ ‭separate‬ ‭and‬ ‭distinct‬
‭juridical‬ ‭personality.‬ ‭If‬ ‭one‬‭partner‬‭contributes‬‭an‬ ‭ ommencement‬ ‭of‬ ‭Juridical‬ ‭Personality‬‭.‬ ‭In‬ ‭a‬
C
‭asset‬‭to‬‭the‬‭business,‬‭all‬‭partners‬‭jointly‬‭own‬‭it‬‭in‬ ‭partnership,‬‭juridical‬‭personality‬‭commences‬‭from‬
‭a special sense‬ ‭the‬ ‭execution‬ ‭of‬ ‭the‬ ‭articles‬ ‭of‬ ‭partnership;‬ ‭in‬ ‭a‬
‭corporation,‬ ‭from‬ ‭the‬ ‭issuance‬ ‭of‬ ‭certificate‬ ‭of‬
‭ utual‬ ‭Agency‬‭.‬ ‭Any‬ ‭partner‬ ‭can‬ ‭bind‬ ‭the‬ ‭other‬
M ‭incorporation‬ ‭by‬ ‭the‬ ‭Securities‬ ‭and‬ ‭Exchange‬
‭partners‬ ‭to‬ ‭a‬ ‭contract‬ ‭if‬ ‭he‬ ‭is‬ ‭acting‬ ‭within‬ ‭his‬ ‭Commission.‬
‭express‬‭or‬‭implied‬‭authority.‬‭The‬‭act‬‭of‬‭one‬‭is‬‭the‬
‭act of all.‬ ‭ anagement‬‭.‬ ‭In‬ ‭a‬ ‭partnership,‬ ‭every‬ ‭partner‬ ‭is‬
M
‭an‬‭agent‬‭of‬‭the‬‭partnership‬‭if‬‭the‬‭partners‬‭did‬‭not‬
‭ imited‬ ‭Life‬‭.‬ ‭A‬ ‭partnership‬ ‭has‬ ‭a‬ ‭limited‬ ‭life.‬ ‭It‬
L ‭appoint‬ ‭a‬ ‭managing‬ ‭partner;‬ ‭in‬ ‭a‬ ‭corporation,‬
‭may‬ ‭be‬ ‭dissolved‬ ‭by‬ ‭the‬ ‭admission,‬ ‭death,‬ ‭management is vested on the Board of Directors.‬
‭insolvency,‬ ‭incapacity,‬ ‭withdrawal‬ ‭of‬‭a‬‭partner‬‭or‬
‭expiration‬‭of‬‭the‬‭term‬‭specified‬‭in‬‭the‬‭partnership‬ ‭ xtent‬ ‭of‬ ‭Liability‬‭.‬ ‭In‬ ‭a‬ ‭partnership,‬ ‭each‬ ‭of‬‭the‬
E
‭agreement..‬ ‭partners‬ ‭except‬ ‭a‬ ‭limited‬ ‭partner‬ ‭is‬ ‭liable‬ ‭to‬ ‭the‬
‭extent‬ ‭of‬ ‭his‬ ‭personal‬ ‭assets;‬ ‭in‬ ‭a‬ ‭corporation,‬
‭ nlimited‬ ‭Liability‬‭.‬ ‭All‬ ‭partners‬ ‭(except‬ ‭limited‬
U ‭stockholders‬ ‭are‬ ‭liable‬ ‭only‬ ‭to‬ ‭the‬ ‭extent‬‭of‬‭their‬
‭partners),‬ ‭including‬ ‭industrial‬ ‭partners,‬ ‭are‬ ‭interest or investment in the corporation.‬
‭personally‬ ‭liable‬ ‭for‬ ‭all‬ ‭debts‬ ‭incurred‬ ‭by‬ ‭the‬
‭partnership.‬ ‭If‬ ‭the‬ ‭partnership‬ ‭can‬ ‭not‬ ‭settle‬ ‭its‬ ‭ ight‬‭of‬‭Succession‬‭.‬‭In‬‭a‬‭partnership,‬‭there‬‭is‬‭no‬
R
‭obligations,‬‭creditors'‬‭claims‬‭will‬‭be‬‭satisfied‬‭from‬ ‭right‬ ‭of‬ ‭succession;‬ ‭in‬ ‭a‬ ‭corporation,‬ ‭there‬ ‭is‬ ‭a‬
‭the‬ ‭personal‬ ‭assets‬ ‭of‬ ‭the‬ ‭partners‬ ‭without‬ ‭right‬ ‭of‬ ‭succession.‬ ‭A‬ ‭corporation‬ ‭has‬ ‭the‬
‭prejudice‬‭to‬‭the‬‭rights‬‭of‬‭the‬‭separate‬‭creditors‬‭of‬ ‭capacity‬ ‭of‬ ‭continued‬‭existence‬‭regardless‬‭of‬‭the‬
‭the partners.‬ ‭death,‬ ‭withdrawal,‬ ‭insolvency‬ ‭or‬ ‭incapacity‬ ‭of‬‭its‬
‭directors or stockholders.‬
I‭ncome‬ ‭Taxes‬‭.‬ ‭Partnerships,‬ ‭except‬ ‭general‬
‭professional‬‭partnerships,‬‭are‬‭subject‬‭to‬‭tax‬‭at‬‭the‬ ‭ erms‬ ‭of‬ ‭Existence‬‭.‬ ‭In‬ ‭a‬ ‭partnership,‬ ‭for‬ ‭any‬
T
‭rate‬ ‭of‬ ‭30%‬ ‭(per‬ ‭R.A.‬ ‭No.‬ ‭9337)‬ ‭of‬ ‭taxable‬ ‭period‬ ‭of‬ ‭time‬ ‭stipulated‬ ‭by‬ ‭the‬ ‭partners;‬ ‭in‬ ‭a‬
‭income.‬ ‭corporation,‬‭shall‬‭have‬‭perpetual‬‭existence‬‭unless‬
‭its‬ ‭articles‬ ‭of‬ ‭incorporation‬ ‭provides‬ ‭otherwise‬
‭ artners'‬ ‭Equity‬ ‭Accounts‬‭.‬ ‭Accounting‬ ‭for‬
P ‭(Sec.‬ ‭11,‬ ‭Revised‬ ‭Corporation‬ ‭Code‬ ‭of‬ ‭the‬
‭partnerships‬ ‭is‬ ‭much‬ ‭like‬ ‭accounting‬ ‭for‬ ‭sole‬ ‭Philippines)‬
‭proprietorships.‬ ‭The‬ ‭difference‬‭lies‬‭in‬‭the‬‭number‬
‭of‬ ‭partners'‬ ‭equity‬ ‭accounts.‬ ‭Each‬ ‭partner‬ ‭has‬‭a‬ ‭Classifications of Partnerships‬
‭capital‬ ‭account‬ ‭and‬ ‭a‬ ‭withdrawal‬ ‭account‬ ‭that‬
‭serves‬ ‭similar‬ ‭functions‬ ‭as‬ ‭the‬ ‭related‬ ‭accounts‬ ‭1. According to object:‬
‭for sole proprietorships.‬
‭ niversal‬ ‭partnership‬ ‭of‬ ‭all‬ ‭present‬ ‭property‬‭.‬
U
‭ artnership‬
P ‭Distinguished‬ ‭from‬ ‭All‬ ‭contributions‬ ‭become‬ ‭part‬ ‭of‬ ‭the‬ ‭partnership‬
‭fund.‬
‭Corporation‬
‭ niversal‬ ‭partnership‬ ‭of‬ ‭profits‬‭.‬ ‭All‬ ‭that‬ ‭the‬
U
‭ anner‬ ‭of‬ ‭Creation‬‭.‬‭A‬‭partnership‬‭is‬‭created‬‭by‬
M
‭partners‬ ‭may‬ ‭acquire‬ ‭by‬ ‭their‬ ‭industry‬ ‭or‬ ‭work‬
‭mere‬ ‭agreement‬ ‭of‬ ‭the‬ ‭partners‬ ‭while‬ ‭a‬
‭during‬ ‭the‬ ‭existence‬ ‭of‬ ‭the‬ ‭partnership‬ ‭and‬ ‭the‬
‭corporation is created by operation of law.‬
‭use‬ ‭of‬ ‭whatever‬ ‭the‬ ‭partners‬ ‭contributed‬ ‭at‬ ‭the‬
‭time‬‭of‬‭the‬‭institution‬‭of‬‭the‬‭contract‬‭belong‬‭to‬‭the‬
‭ artnership.‬‭If‬‭the‬‭articles‬‭of‬‭universal‬‭partnership‬
p ‭ e‬‭is‬‭not‬‭allowed‬‭to‬‭contribute‬‭to‬‭industry‬
H
‭did‬ ‭not‬ ‭specify‬‭its‬‭nature,‬‭it‬‭would‬‭be‬‭considered‬ ‭or services only.‬
‭a universal partnership of profits.‬
‭3.‬ C
‭ apitalist‬ ‭partner‬‭.‬ ‭One‬ ‭who‬ ‭contributes‬
‭ articular‬ ‭partnership‬‭.‬ ‭The‬ ‭object‬ ‭of‬ ‭the‬
P ‭money or property to the common fund‬
‭partnership‬ ‭is‬ ‭determinate—its‬ ‭use‬ ‭or‬ ‭fruit,‬
‭specific‬ ‭undertaking,‬ ‭or‬ ‭the‬ ‭exercise‬ ‭of‬ ‭a‬ ‭4.‬ I‭ndustrial‬ ‭partner‬‭.‬ ‭One‬ ‭who‬ ‭contributes‬
‭profession or vocation.‬ ‭his‬ ‭knowledge‬ ‭or‬ ‭personal‬ ‭service‬ ‭to‬‭the‬
‭partnership.‬
‭2. According to liability:‬
‭5.‬ M
‭ anaging‬ ‭partner‬‭.‬ ‭One‬ ‭whom‬ ‭the‬
‭ eneral‬‭.‬ ‭All‬ ‭partners‬ ‭are‬ ‭liable‬ ‭to‬ ‭the‬ ‭extent‬ ‭of‬
G ‭partners‬‭has‬‭appointed‬‭as‬‭manager‬‭of‬‭the‬
‭their separate properties.‬ ‭partnership‬

‭ imited‬‭.‬‭The‬‭limited‬‭partners‬‭are‬‭liable‬‭only‬‭to‬‭the‬
L ‭6.‬ L
‭ iquidating‬ ‭partner‬‭.‬ ‭One‬ ‭who‬ ‭is‬
‭extent‬ ‭of‬ ‭their‬‭personal‬‭contributions.‬‭In‬‭a‬‭limited‬ ‭designated‬‭to‬‭wind‬‭up‬‭or‬‭settle‬‭the‬‭affairs‬
‭partnership,‬ ‭the‬ ‭law‬ ‭states‬ ‭that‬ ‭there‬ ‭shall‬ ‭be‬ ‭at‬ ‭of the partnership after dissolution.‬
‭least one general partner.‬
‭7.‬ D
‭ ormant‬‭partner‬‭.‬‭One‬‭who‬‭does‬‭not‬‭take‬
‭3. According to duration:‬ ‭active‬ ‭part‬ ‭in‬ ‭the‬ ‭business‬ ‭of‬ ‭the‬
‭partnership and is not known as a partner.‬
‭ artnership‬ ‭with‬ ‭a‬ ‭fixed‬ ‭term‬ ‭or‬ ‭for‬ ‭a‬ ‭particular‬
P
‭undertaking.‬ ‭8.‬ S
‭ ilent‬ ‭partner‬‭.‬ ‭One‬ ‭who‬ ‭does‬ ‭not‬ ‭take‬
‭active‬ ‭part‬ ‭in‬ ‭the‬ ‭business‬ ‭of‬ ‭the‬
‭ artnership‬ ‭at‬ ‭will.‬ ‭One‬ ‭in‬ ‭which‬ ‭no‬ ‭term‬ ‭is‬
P ‭partnership‬ ‭though‬ ‭may‬ ‭be‬ ‭known‬ ‭as‬ ‭a‬
‭specified‬ ‭and‬ ‭is‬ ‭not‬ ‭formed‬ ‭for‬ ‭any‬ ‭particular‬ ‭partner.‬
‭undertaking.‬
‭9.‬ S
‭ ecret‬‭partner‬‭.‬‭One‬‭who‬‭takes‬‭an‬‭active‬
‭4. According to purpose:‬ ‭part‬ ‭in‬ ‭the‬ ‭business‬ ‭but‬ ‭is‬ ‭not‬ ‭known‬ ‭to‬
‭be a partner by outside parties.‬
‭ ommercial‬ ‭or‬ ‭trading‬ ‭partnership.‬ ‭One‬ ‭formed‬
C
‭for the transaction of business.‬ ‭10.‬ ‭Nominal‬‭partner‬‭or‬‭partner‬‭by‬‭estoppel‬‭.‬
‭One‬‭who‬‭is‬‭actually‬‭not‬‭a‬‭partner‬‭but‬‭who‬
‭ rofessional‬ ‭or‬ ‭non-trading‬ ‭partnership.‬ ‭One‬
P
‭represents himself as one.‬
‭formed for the exercise of profession.‬

‭5. According to legality of existence:‬ ‭Articles of Partnership‬

‭ e‬ ‭jure‬ ‭partnership‬‭.‬ ‭One‬ ‭which‬ ‭has‬ ‭complied‬

D ‭ ‬ ‭partnership‬ ‭may‬ ‭be‬ ‭constituted‬ ‭orally‬ ‭or‬ ‭in‬
A
‭with‬ ‭all‬ ‭the‬ ‭legal‬ ‭requirements‬ ‭for‬ ‭its‬ ‭writing.‬‭In‬‭the‬‭latter‬‭case,‬‭partnership‬‭agreements‬
‭establishment.‬ ‭are‬ ‭embodied‬ ‭in‬ ‭the‬ ‭Articles‬ ‭of‬ ‭Partnership.‬ ‭The‬
‭following‬‭essential‬‭provisions‬‭may‬‭be‬‭contained‬‭in‬
‭ e‬ ‭facto‬ ‭partnership‬‭.‬ ‭One‬ ‭which‬ ‭has‬ ‭failed‬ ‭to‬
D ‭the agreement:‬
‭comply‬ ‭with‬ ‭all‬ ‭the‬ ‭legal‬ ‭requirements‬ ‭for‬ ‭its‬
‭establishment.‬ ‭1.‬ T
‭ he‬ ‭partnership‬ ‭name,‬ ‭nature,‬ ‭purpose‬
‭and location;‬
‭Kinds of Partners‬ ‭2.‬ T
‭ he‬ ‭names,‬‭citizenship‬‭and‬‭residences‬‭of‬
‭1.‬ G‭ eneral‬‭partner‬‭.‬‭One‬‭who‬‭is‬‭liable‬‭to‬‭the‬ ‭the partners;‬
‭extent‬‭of‬‭his‬‭separate‬‭property‬‭after‬‭all‬‭the‬
‭3.‬ T
‭ he‬‭date‬‭of‬‭formation‬‭and‬‭the‬‭duration‬‭of‬
‭assets of the partnership are exhausted.‬
‭the partnership;‬
‭2.‬ L
‭ imited‬ ‭partner‬‭.‬ ‭One‬ ‭who‬ ‭is‬ ‭liable‬ ‭only‬
‭4.‬ T
‭ he‬ ‭capital‬ ‭contribution‬ ‭of‬ ‭each‬ ‭partner,‬
‭to‬ ‭the‬ ‭extent‬ ‭of‬ ‭his‬ ‭capital‬ ‭contribution.‬
‭the‬ ‭procedure‬ ‭for‬ ‭valuing‬ ‭non-cash‬
 i‭nvestments,‬ ‭treatment‬ ‭of‬ ‭excess‬ ‭ ccreditation‬ ‭to‬ ‭Practice‬ ‭Public‬
A
‭contribution‬‭(‬‭s‬‭capital‬‭or‬‭as‬‭loan)‬‭and‬‭the‬
‭penalties‬ ‭for‬ ‭a‬ ‭partner's‬ ‭failure‬ ‭to‬ ‭invest‬
‭Accountancy‬
‭and maintain the agreed capital;‬ ‭ ertified‬ ‭public‬ ‭accountants‬ ‭(CPAs),‬ ‭firms‬ ‭and‬
C
‭partnerships‬ ‭of‬ ‭CPAs,‬ ‭engaged‬ ‭in‬‭the‬‭practice‬‭of‬
‭5.‬ ‭The rights and duties of each partner;‬
‭public‬ ‭accountancy,‬ ‭including‬ ‭the‬ ‭partners‬ ‭and‬
‭6.‬ T‭ he‬‭accounting‬‭period‬‭to‬‭be‬‭adopted,‬‭the‬ ‭staff‬ ‭members‬ ‭thereof,‬ ‭shall‬ ‭register‬ ‭with‬ ‭the‬
‭nature‬ ‭of‬ ‭accounting‬ ‭records,‬ ‭financial‬ ‭Professional‬ ‭Regulation‬ ‭Commission‬ ‭and‬ ‭the‬
‭statements‬ ‭and‬ ‭audits‬ ‭by‬ ‭independent‬ ‭Professional‬ ‭Regulatory‬ ‭Board‬ ‭of‬ ‭Accountancy.‬
‭public accountants;‬ ‭The‬ ‭registration‬ ‭shall‬ ‭be‬ ‭renewed‬ ‭every‬ ‭three‬
‭years‬ ‭(The‬ ‭Philippine‬ ‭Accountancy‬ ‭Act‬ ‭of‬ ‭2004,‬
‭7.‬ T‭ he‬ ‭method‬ ‭of‬ ‭sharing‬ ‭profit‬ ‭or‬ ‭loss,‬ ‭Sec.‬ ‭31).‬ ‭The‬ ‭rules‬ ‭and‬ ‭regulations‬ ‭covering‬ ‭the‬
‭frequency‬ ‭of‬ ‭income‬ ‭measurement‬ ‭and‬ ‭accreditation‬ ‭for‬ ‭the‬ ‭practice‬ ‭of‬ ‭public‬
‭distribution,‬ ‭including‬ ‭any‬ ‭provisions‬ ‭for‬ ‭accountancy‬ ‭are‬ ‭specified‬ ‭in‬ ‭Annex‬ ‭B‬ ‭of‬ ‭The‬
‭the‬ ‭recognition‬ ‭of‬ ‭differences‬ ‭in‬ ‭Rules‬‭and‬‭Regulations‬‭Implementing‬‭Republic‬‭Act‬
‭contributions;‬ ‭9298‬ ‭otherwise‬ ‭known‬ ‭as‬ ‭the‬ ‭Philippine‬
‭Accountancy Act of 2004.‬
‭8.‬ T‭ he‬ ‭drawings‬‭or‬‭salaries‬‭to‬‭be‬‭allowed‬‭to‬
‭partners;‬

‭9.‬ T‭ he‬ ‭provision‬ ‭for‬ ‭arbitration‬ ‭of‬ ‭disputes,‬

‭dissolution, and liquidation.‬

‭ ‬ ‭contract‬ ‭of‬ ‭partnership‬ ‭is‬ ‭void‬ ‭whenever‬

A
‭immovable‬ ‭property‬ ‭or‬‭real‬‭rights‬‭are‬‭contributed‬
‭and‬‭a‬‭signed‬‭inventory‬‭of‬‭the‬‭said‬‭property‬‭is‬‭not‬
‭made and attached to a public instrument.‬

‭SEC Registration‬
‭ hen‬‭the‬‭partnership‬‭capital‬‭is‬‭P3,000‬‭or‬‭more,‬‭in‬
W
‭money‬‭or‬‭property,‬‭the‬‭public‬‭instrument‬‭must‬‭be‬
‭recorded‬ ‭with‬ ‭the‬ ‭Securities‬ ‭and‬ ‭Exchange‬
‭Commission‬‭(SEC).‬‭Even‬‭if‬‭it‬‭is‬‭not‬‭registered,‬‭the‬
‭partnership‬ ‭having‬ ‭a‬ ‭capital‬‭of‬‭P3,000‬‭or‬‭more‬‭is‬
‭still valid and therefore has legal personality.‬

‭ he‬ ‭SEC‬ ‭shall‬ ‭not‬ ‭register‬ ‭any‬ ‭corporation‬

T
‭organized‬ ‭for‬ ‭the‬ ‭practice‬ ‭of‬ ‭public‬ ‭accountancy‬
‭(The‬ ‭Philippine‬ ‭Accountancy‬ ‭Act‬ ‭of‬ ‭2004,‬ ‭Sec.‬
‭28).‬

‭ he‬ ‭purpose‬ ‭of‬ ‭the‬ ‭registration‬ ‭is‬ ‭to‬ ‭set‬ ‭"a‬

T
‭condition‬ ‭for‬ ‭the‬ ‭issuance‬ ‭of‬ ‭the‬ ‭licenses‬ ‭to‬
‭engage‬ ‭in‬ ‭business‬ ‭or‬ ‭trade.‬ ‭In‬ ‭this‬ ‭way,‬‭the‬‭tax‬
‭liabilities‬ ‭of‬ ‭big‬ ‭partnerships‬ ‭cannot‬ ‭be‬ ‭evaded,‬
‭and‬ ‭the‬ ‭public‬ ‭can‬ ‭also‬ ‭determine‬ ‭more‬
‭accurately‬ ‭their‬ ‭membership‬ ‭and‬ ‭capital‬ ‭before‬
‭dealing‬ ‭with‬ ‭them."‬ ‭(Dean‬ ‭Capistrano,‬ ‭IV‬ ‭Civil‬
‭Code of the Philippines)‬