BUSINESS LAW AND REGULATIONS

List of Business Law in the Philippines Characteristic Element of Partnership

1. Tax Reform Act of 1997 Consensual - perfected by mere consent
(RA 8424) Nation Tax
Nominate - special name mandated by the contract
People & government has symbiotic relations
People power Bilateral - reciprocal rights and obligations by 2+
Eminent decorum – just compensation
Power to tax (CTC community tax certificate) Onerous - partners will expect something in return
2. The Local Government Code of the Philippines Gratuitous - no expectation as it is donation
(RA 7160) Law on local tax
3. Labor Code of the Philippines Commutative - equally distributed
(PD 442) Law about DOLE
Principal - it can stand alone
4. Intellectual Property Code of the Philippines
(RA 8293) SEC law on intellectual property Preparatory - preparing to receive profit and divide it
5. The Corporation Code of the Philippines to partners
(BP 68) SEC law on registration & regulation
6. Civil Law of the Philippines Essential Features of Partnership
(RA 386) OBLICON laws Valid Contract - there must be a valid contract
7. Social Security Act of 1997
(RA 8282) register business in SSS - All the partners must have a legal capacity to
8. National Health Insurance Act of 1995 enter into a contract
(RA 7875) register business in PhilHealth - There must be a mutual contribution of money,
9. Home Development Mutual Fund Law of 2009 property, or industry to a common fund.
(RA 9679) register business in Pag-Ibig Fund - The object must be lawful.
10. Food and Drug Administration (FDA) act of 2009 - The purpose must be to obtain profits and to
(RA 9711) law on health products divide among parties.
Inspection, registration, licensing, monitoring
Delectus personae (right to choose)
11. The Philippine Fisheries Code
(RA 8550) law that governs commercial fishery Admission to partnership
12. The Animal Welfare Act of 1998
(RA 8485) law of supervision and registration of all There should be evidence or legality or validity
facilities in connection with animals Partnership deture
Breeding, maintaining, keeping, treating
13. Securities Regulation Code of the Philippines Registered to law to exists
(RA 8799) law registration of security plans and Partnership defacto
protection of shareholder interest
14. Financing Company Act of 1998 Not registered under law but exists
(RA 8556) law registration of financial company
Difference of partnership and corporations
15. Truth in Lending Act
(RA 3765) disclosure of finance charges and Partnership existed - Thru voluntary agreement
Extensions of credit
Corporation existed
Special Charter of corporations meaning it is
mandated by corporation vote.
Created by the law/state thru the form of special
charter for the applicability of corporations
Numbers of people ARTICLE 1767. By the contract of partnership two or
more persons bind themselves to contribute money,
Partnership can go to 2-5 (2 or more) combined
property, or industry to a common fund, with the
Corporations not more than 15 stockholders intention of dividing the profits among themselves.

Existence Two or more persons may also form a partnership for the
exercise of a profession. (1665a)
Partnership has no limitation
ARTICLE 1768. The partnership has a juridical
- Except the will/consent of the parties involved personality separate and distinct from that of each of the
- Shall be 2/3 votes of the parties partners, even in case of failure to comply with the
Corporation is not more than 50yrs requirements of article 1772, first paragraph. (n)

Liabilities ARTICLE 1769. In determining whether a partnership

exists, these rules shall apply:
Partnership - can be extended to private property
(1) Except as provided by article 1825, persons who are
Corporation - limited to capital contribution not partners as to each other are not partners as to
third persons;
Transferability
(2) Co-ownership or co-possession does not of itself
Partner transfer should be consented by all partners establish a partnership, whether such co-owners or
co-possessors do or do not share any profits made by
Corporation doesnt need consent of members the use of the property;
Remedy (3) The sharing of gross returns does not of itself
establish a partnership, whether or not the persons
Partnership - internal talk or file a case sharing them have a joint or common right or
interest in any property from which the returns are
Corporations - right to have derivative suit
derived;
Nationality (4) The receipt by a person of a share of the profits of a
business is prima facie evidence that he is a partner
Partnership should be pure filipino managed in the business, but no such inference shall be drawn
Can have foreigner investors if such profits were received in payment:
a. As a debt by installments or otherwise;
Right of succession b. As wages of an employee or rent to a landlord
Partnership dissolution should have consent c. As an annuity to a widow or representative of a
deceased partner;
Corporations - can pass thru sons or someone d. As interest on a loan, though the amount of payment
vary with the profits of the business;
By the rulings of law
e. As the consideration for the sale of a goodwill of a
General law to enter business or other property by installments or
otherwise. (n)
Partnership - 3000 or more should be minimum for
capital frame ARTICLE 1770. A partnership must have a lawful
object or purpose, and must be established for the
Capitalist partner - Gives capital common benefit or interest of the partners.
Industrial partner - Offers industry and/or labor When an unlawful partnership is dissolved by a judicial
Silent partner - One who does not participate decree, the profits shall be confiscated in favor of the
State, without prejudice to the provisions of the Penal
Secret partner - Participates but not known Code governing the confiscation of the instruments and
effects of a crime. (1666a)
Doorman partner - Can be secret and silent partner
Limited partner – to contribute money or property
ARTICLE 1771. A partnership may be constituted in ARTICLE 1779. In a universal partnership of all present
any form, except where immovable property or real property, the property which belonged to each of the
rights are contributed thereto, in which case a public partners at the time of the constitution of the partnership,
instrument shall be necessary. (1667a) becomes the common property of all the partners, as
well as all the profits which they may acquire therewith.
ARTICLE 1772. Every contract of partnership having a
capital of three thousand pesos or more, in money or A stipulation for the common enjoyment of any other
property, shall appear in a public instrument, which must profits may also be made; but the property which the
be recorded in the Office of the Securities and Exchange partners may acquire subsequently by inheritance,
Commission. legacy, or donation cannot be included in such
stipulation, except the fruits thereof. (1674a)
Failure to comply with the requirements of the preceding
paragraph shall not affect the liability of the partnership ARTICLE 1780. A universal partnership of profits
and the members thereof to third persons. (n) comprises all that the partners may acquire by their
industry or work during the existence of the partnership.
ARTICLE 1773. A contract of partnership is void,
whenever immovable property is contributed thereto, if
an inventory of said property is not made, signed by the Movable or immovable property which each of the
parties, and attached to the public instrument. (1668a) partners may possess at the time of the celebration of the
contract shall continue to pertain exclusively to each,
ARTICLE 1774. Any immovable property or an interest
only the usufruct passing to the partnership. (1675)
therein may be acquired in the partnership name. Title so
acquired can be conveyed only in the partnership name. ARTICLE 1781. Articles of universal partnership,
(n) entered into without specification of its nature, only
constitute a universal partnership of profits. (1676)
ARTICLE 1775. Associations and societies, whose
articles are kept secret among the members, and wherein ARTICLE 1782. Persons who are prohibited from
any one of the members may contract in his own name giving each other any donation or advantage cannot enter
with third persons, shall have no juridical personality, into universal partnership. (1677)
and shall be governed by the provisions relating to co-
ARTICLE 1783. A particular partnership has for its
ownership. (1669)
object determinate things, their use or fruits, or a specific
ARTICLE 1776. As to its object, a partnership is either undertaking, or the exercise of a profession or vocation.
universal or particular. (1678)
As regards the liability of the partners, a partnership may
be general or limited. (1671a)
ARTICLE 1777. A universal partnership may refer to all
the present property or to all the profits. (1672)
ARTICLE 1778. A partnership of all present property is
that in which the partners contribute all the property
which actually belongs to them to a common fund, with
the intention of dividing the same among themselves, as
well as all the profits which they may acquire therewith.
(1673)