GENERAL PROVISIONS

1. Define PARTNERSHIP
- ART. 1767: By the contract of partnership, two or more persons bind
themselves to contribute money, property, or industry to a common fund
with the intention of dividing the profits among themselves. Two or more
persons may also form a partnership for the exercise of a profession.
- Other Definitions:
 An association of two (2) or more persons, as co-owners of a business
 A legal relation
 A joint undertaking
 The status arising out of a contract entered by two (2) or more
persons
 An organization
 An entity, distinct and apart from the members.
2. Characteristic elements of the contract of partnership
a.) Consensual – perfected by the presence of consent
b.) Nominate – designated in the law
c.) Bilateral – two or more persons enter the contract
d.)Onerous – each party carries a burden of giving something to share in
the benefit
e.) Commutative – each partner’s undertaking is considered as the
equivalent of that of the others
f.) Principal – non-dependent existence
g.)Preparatory – entered as a preparation for the start of something.
3. Essential features of a partnership
a.) Valid Contract
b.)Legal Capacity
c.) Mutual Contribution of Money, Property or Industry to a Common
Fund
d.)Lawful Object
e.) Primary Purpose is to obtain Profits and divide the same among
the parties
4. Legal characteristics of partnership
- The following requisites must concur: Consent, Object, Cause
- Legal capacity to enter the contract of partnership (i.e., Able to think
logically and rationally, not under the influence of toxic substance,
demented, unemancipated minors, or deaf-mutes.)
- Object must be within the commerce of men, not impossible, legally or
physically, determinate or capable of being determined, and existing or
capable of coming into existence) (object requisites: WIDE)
- Entered voluntarily, where delectus personae (choice of
person/persons) exists. Right of a person to choose whom he intends to
associate with.
5. Classification of partnerships
a.) As to subject
 Universal Partnership: 2 Kinds
 1. Universal Partnership of all present property
2. Universal Partnership of all profits
 Particular Partnership
b.)As to liability
 General Partnership – liability extends to their personal property
 Limited Partnership – liability limited to the extent of how much
he/she has contributed
c.) As to duration
 Partnership at Will – no fixed term
 Partnership with a Fixed term – has a certain period of
existence
 Partnership for a Particular Undertaking – created for a
purpose, dissolution upon completion of that certain undertaking.
d.)As to legality
 De jure Partnership – legal requirements complied
 De facto Partnership – not complied with the legal requirements
e.) As to representation to others
 Ordinary or Real Partnership – follows the definition of
partnership
 Partnership by Estoppel – persons representing themselves, or
consents another to represent them as partners in a partnership
when in fact, it is not true. (Deception may be present)
6. Kinds of partners
a.) As to contribution
 Capitalist Partners – money or property, or both
 Industrialist Partners – industry or labor
 Capitalist-Industrial Partners – mix of both
b.)As to liability
 General Partners – held liable to the extent of their personal
property
 Limited Partners – held liable up to the extent of their
contribution
c.) As to management
 Managing Partners – actively managing
 Silent Partners – not active but still shares in the profits or losses
 Liquidating Partners – tasked with the winding up or liquidation
d.)As to third persons
 Ostensible Partners – take active part, known to public
 Secret Partners – take active part, not known to public
 Dormant Partners – not active, not known
e.) As to membership
 Real Partners – partners in a legal partnership
 Partners by Estoppel – misrepresented partners (refer to
partnership by estoppel)
f.) As to continuation of the business affairs after dissolution
 Continuing Partners – partner/s who continue the partnership
after the dissolution of partnership
  Discontinuing Partners - partner/s who do not continue the
partnership after the dissolution of partnership
g.)As to the nature of membership
 Original Partners – members from the time of constitution
 Incoming Partners – up and coming members
 Retiring Partners – partner/s withdrawing from the partnership
h.)As to survivorship
 Surviving Partners – continue the partnership after its dissolution
due to death of a partner
 Deceased Partners – member of the partnership who died
i.) As to expulsion
 Expelled Partners – those expelled
 Expelling Partners – caused the expulsion/one who did the act of
expelling a member
j.) As to value of contribution
 Majority Partners – represents the majority interest
 Nominal Partners – represents the minority interest
7. Requisites of a contract of partnership with a capital of P3,000 or
more in money or property
- The contract to be presented in a public instrument, recorded and
registered with the Securities and Exchange Commission (SEC)
8. Will the partnership be void if it is not registered with the Office of
the SEC having a capital of P3,000 or more?
- No. Failure to comply does not affect the status of the partnership.
9. When shall the partnership be considered void?
- When the object is unlawful
10. Rules determining the existence of a partnership
a.) Persons who are not partners as to each other are not partners as
to third persons
b.)Co-ownership or co-possession does not immediately establish
partnership
c.) The sharing of gross returns does not of itself establish a
partnership
d.)The receipt by a person of a share in the profits is prima facie
evidence that he is a partner in the business, unless if such were
received as payment for:
 Debt by installments or otherwise
 Wages or rent
 Annuity to a widow or representative of a deceased partner
 Interest on a loan
 Consideration for the sale of a property or otherwise
11. Partnership vs. Co-ownership

Partnership Co-ownership
Creation By Contract. By Contract and Law.
Juridical Present. Can Sue or Absent. Cannot Sue or be
Personality be Sued. Sued.
 Purpose Profit. Common use/enjoyment of
a thing or right. Not
necessarily done for profit.
Profit Depends upon Always depend on the
Stipulation. Proportionate Shares. Any
stipulation to the contrary is
Void.
Dissolution Dissolved by death or Not Dissolved by death or
partner’s incapacity. partner’s incapacity.
Form Any, except when real No public instrument
property is contributed needed if the object is real
(public instrument property.
required).

12. Partnership vs. Joint-Stock Company

Partnership Joint-Stock Company

Creation By Contract. Operation of Law.
Juridical Acquired upon Exists from the date the
Personality Celebration of Articles of Incorporation
Contract. are issued.
Obligation Personally Liable for Limited to the Amount of
the debts and liabilities Capital Invested.
of the business.
Management When no certain Board of Directors or
stipulation exists Trustees.
regarding
management, every
Partner is an Agent.
Succession No Right Has Right
Dissolution By the Will/’s of the Through Voluntary
Partner/’s. Dissolution, Expiration of
its corporate term, Failure to
commence business
within two years,
Insolvency, or Involuntary
dissolution.
Formation Between 2 or more At least One Incorporator
individuals. for a one-person corporation
(OPC) and At least 2 but
not more than 15
incorporators for a regular
stock corporation.

13. Object or purpose of a partnership

- To gain profits, with the intention of dividing the profits among
themselves
14. In case an unlawful partnership is dissolved by judicial decree,
how shall the profits be appropriated?
- Profits shall be confiscated in favor of the Government
15. Examples of unlawful partnerships
- Partnerships involving unlawful objects
- Partnerships formed to continue operations of gambling or smuggling
- Fake charitable partnerships designed to solicit donations fraudulently
16. Form in which a partnership shall be constituted
- Any form is acceptable, except for the conditions stated in ART.
1773.
17. Can a partnership acquire immovable property?
- Yes. Immovable Property can be acquired under the partnership’s name.

18. Define universal partnership of all present property

- ART. 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.
- ART. 1779: In a universal partnership of all present property, the property
which belongs to each of the partners at the time of the constitution of the
partnership, becomes the common property of all the partners, as well as
all the profits which they may acquire therewith.
A stipulation for the common enjoyment of any other profits may also be
made; but the property which the partners may acquire subsequently by
inheritance, legacy, or donation cannot be included in such stipulation,
except the fruits thereof.
- Based on understanding: A universal partnership of all present
property is formed when partners contribute all their existing assets to a
common fund, sharing both the pooled property and any profits generated
from it (Art. 1778). Once established, each partner's property becomes
jointly owned by all partners, and they may also agree to share other
profits. However, assets acquired later through inheritance, legacy, or
donation remain personal property, except for the fruits derived from
them (Art. 1779).
19. In a universal partnership of all present property which
property becomes the common property of all the partners?
- All present property of the partners which is contributed to the
partnership, as well as all the profits they may acquire therewith.
20. May the partners contribute future properties to a universal
partnership of all present property?
- No, as stated in ART. 1779
21. Define universal partnership of profits
- ART. 1780: A universal partnership of profits comprises all that the
partners of profits comprises all that the partners may acquire by their
industry or work during the existence of the partnership.
 Movable or immovable property which each of the partners may possess
at the time of the celebration of the contract shall continue to pertain
exclusively to each, only the usufruct passing to the partnership.
- Based on understanding: A universal partnership of profits includes all
earnings from the partners' work during the partnership. However, each
partner retains ownership of their pre-existing property, with only its
usufruct (right to use and benefit) belonging to the partnership.
22. To whom shall movable or immovable property which each of
the partners may possess at the time of the celebration of the
contract of universal partnership of profits pertain?
- Ownership is not transferred to the partnership; therefore, it still pertains
to each of the partner.

23. If such movable or immovable property shall pertain

exclusively to the partner who owns it at the time of the celebration
of the contract, what then shall pass to the partnership?
- The profits and the usufruct of the properties.
24. Will the usufruct of properties subsequently acquired by the
partners in a universal partnership of profits belong to the
partnership?
-
25. How shall the partnership be treated in case the articles of
partnership fail to specify its nature whether it is one of “present
property” or of “profits”?
- When it is not specified what type of universal partnership, it is presumed
to be a universal partnership of all profits, as it imposes less
obligations on the partners where they retain ownership to their
properties.
26. Persons prohibited from entering a universal partnership
- Persons who are prohibited from giving each other donation or
advantage.
27. Donations that are considered void and therefor prohibited
a.) Legally married husband and wife.
b.) Husband and wife without valid marriage.
c.) Those who are guilty of adultery or concubinage, at the time of
donation
d.) Those who were found guilty of the same criminal offense, in
consideration thereof.
e.) A person or persons and public officer, his wife, ascendants, and
descendants, by reason of his office.
28. Define a particular partnership
- ART. 1783: A particular partnership has for its object determinate things,
their use or fruits, or specific undertaking, or the exercises of profession or
vocation.
29. Can a husband and wife enter a particular partnership?
- Yes, they can.
30. Fundamental difference between a universal partnership and a
particular partnership.

Universal Partnership Particular Partnership

Definitio where partners has for its object determinate things,

n contribute either all their use or fruits, or specific
present properties or all undertaking or exercise of profession
profits (industry, or vocation (ART 1783)
usufruct)

Object vague and indefinite limited and well-defined, confined to

has degree of continuity an undertaking which is
single, temporary, or ad hoc (for a
particular purpose)

OBLIGATIONS OF THE PARTNERS

1. Relations created by a contract of partnership
a.) Between partners
b.) Between the partners on one hand and the partnership on the other
c.) Between the partners on one hand and the third persons on the other
d.) Between the partnership and the third persons
2. When does a partnership acquire a separate juridical personality?
- From the moment of the celebration of the contract where the essential
requisites are present, even when the partners have not yet actually given
their contributions, or even though its conditions or details, such as the
participation of the partners in the profits and losses and the nature of the
partnership have not yet been fixed, as they pertain to the accidental and
not to the essential parts of the contract.
3. What constitutes prima facie evidence of a continuation of the
partnership after the expiration of its fixed term?
- The continuation of the partnership by the partners, as habitually acted
therein during the term, without any settlement or liquidation of the
partnership affairs.
4. In the preceding question, is there any change in rights and duties
of the partners?
- No, their rights and duties remain the same as they were at such
termination.
5. When is a partner considered a debtor of the partnership?
- The moment he promised to contribute money, property, or industry in
the partnership.
6. Obligations of a partner with respect to his promise to contribute
property
a.) To contribute money, property or industry at the beginning of the
partnership or at the stipulated time.
b.) To answer for eviction in case the partnership is deprived of the
determinate property contributed.
c.) To answer for the fruits of the property the contribution of which he
delayed, from the date they should have been contributed up to the
time of actual delivery.
d.) To preserve the property pending delivery with the diligence of a
good father
e.) To indemnify for any damage caused by the retention of the same
or by the delay in its contribution.
7. If the capital or part thereof which a partner is bound to contribute
consists of goods, how shall said good be appraised?
- General rule: In accordance with the stipulation made.
- Exception: By experts chosen by the partners, using current prices as
basis.
8. The liabilities of the partner who has undertaken to contribute a sum
of money and fails to do so
a.) Liable for the interests (May be based on stipulation or legal
interest) from the time he failed to contribute
b.)Indemnification for damages
9. Rule in the event a partner converts partnership money to his
personal use
a.) Reimbursement of the amount he may have taken from the
partnership coffers and converted to his own use.
b.)Liable for the interests (May be based on stipulation or legal
interest) from the time he failed to contribute
c.) Indemnification for damages
10. May industrial partner engage in business for himself?
- An industrial partner is prohibited from conducting business for personal
gain unless expressly permitted by the other partners. This
restriction exists because their primary contribution to the
partnership is their time and effort. Additionally, it ensures their
commitment to the partnership and prevents any conflict of interest.
11. Does this prohibition apply to a business the same as the
business of the partnership?
- Yes, an industrial partner cannot engage in business in the same kind of
business the partnership is engaged.
12. The remedies available to the partnership if an industrial
partner engages in business for himself without the express
permission of the partnership.
a.) Exclude the industrial partner from the partnership plus damages; or
b.) Avail themselves of the benefits which the industrial partner may have
obtained plus damages.
13. If A, B and C form a partnership stipulating that the capital
shall be P150,000.00 without specifying the share of each partner,
how much shall each partner contribute?
- Each partner should contribute equally for P50,000 each, unless there
is a stipulation to the contrary
14. In case of imminent loss of the business of the partnership,
which partners are required to contribute additional capital to save
the business of the partnership?
- If there is no agreement to the contrary, the Capitalist Partners are
bound to contribute additional capital in case of imminent loss of
the business of the partnership.
15. The remedy in case a capitalist partner refuses to contribute
additional fund when he is bound to do so
- Obliged to sell their interests to the other capitalist partners who are
willing to contribute additional capital.
16. Which partner is not bound to contribute additional fund
despite imminent loss of the business of the partnership?
- The Industrial Partner
17. A and B are partners in A and Company. A is the managing
partner. X owes A and Company P50,000.00 and A, in his personal
capacity, another sum of P50,000.00. Both debts are due and
demandable. If A collects the amount of P50,000.00 from X, how
shall such payment be applied?
- It depends on whose name is written in the receipt (How the sum
collected is accounted for).
- If in partnership’s name, all are applied to partnership.
- If A issued a receipt for his own credit, the P50,000 would be applied to
the two credits in proportion to the amounts owed which is 50:50: P25,000
would be applied to A’s credit and the other P25,000 to A and Company. If
in partnership’s name, all are applied to partnership.
- Reminder: The partner referred to here is a managing partner, authorize
to collect debts for the partnership. The provisions of this article are to be
understood to be without prejudice to the right granted to the debtor by
Article 1252, but only if the personal credit of the partner should be more
onerous to him.
18. The obligation of a partner who has received in whole or in
part, his share of a partnership credit when the other partners have
not collected their share and the partnership debtor thereafter
becomes insolvent
- The share of a partnership credit received in whole or in part will be
shared to the partners, even though he may have given receipt for his
share only.
- Rationale: Equity demands proportionate share in the benefits and
losses.

ART. 1792 ART. 1793

 No. of Two distinct credits; one in One credit in favor of partnership
credits favor of partnership and in favor
of managing partner

Applicability Only to managing partner Any partners

Debtor is not insolvent Debtor is insolvent

19. If the partnership suffers loss or damage due to the fault or

negligence of a partner, who shall be responsible?
- Every partner is responsible to the partnership for the damages he caused
through his fault
20. Can the partner who is responsible for the damage
compensate them with the profits and benefits which he may have
earned for the partnership by his industry?
- No, it cannot be set-off with the profits and benefits the partner earned
for the partnership by his industry.
21. Who shall bear the risk of loss of things contributed to the
partnership?
- Two things to look at: Whether ownership is transferred or not.
- If ownership of property is transferred, the partnership will bear the
risk including things to be sold and things to be conveyed, fungible or
consumable things, and brought and appraised in the inventory.
- If ownership is retained (usufruct of properties are only contributed), it is
the partner who owned and contributed who will bear the risk of loss.
22. Who shall be answerable for the amounts disbursed and for
the obligations a partner may have contracted in good faith in the
interest of the partnership business and for risks in consequence of
its management?
- The partnership will be answerable for the amounts disbursed on behalf of
the partnership, for the corresponding interest from the time expenses
were made, for obligations entered by a partner in good faith for the
interest of the partnership within his scope of authority, and for the risks
in consequence of its management.

23. How shall be the profits and losses be distributed among the
partners?

Distribution of Profit Distribution of Loss

With GR: In conformity with GR: In conformity with
Agreement the agreement. the agreement.
EXCP: If there is no
agreement for loss and
if there is an
 agreement for profits,
the share of each in
the losses shall be in
the same proportion.
No Capitalist Partners: In Capitalist Partners:
Agreement proportion to their In proportion to their
contribution contribution

Industrial Partners: Industrial Partners:

Just and Equitable share Not liable for losses
determined by all the
other partners

- The industrial partner shall receive such share, which must be satisfied
first before the capitalist partners shall divide the profits.
- For Capitalist-Industrial Partners, they are also entitled to the pro rata
share if there is no agreement and the agreed portion to be shared based
on his Capital Contribution. (Pro Rata Share + Just and Equitable Share)
24. Can the designation of the share of the partners in profits and
losses be entrusted to a third person?
- Yes, by common consent, except if it is manifestly inequitable.
25. If the decision of the third person is to be impugned, within
what time shall it be brought?
- Within 3 months.
26. The 2 distinct ways of appointing a partner as managing
partner.
 Appointment as manager in the articles of partnership (Inside)
 Appointment as manager made in an instrument other than the
articles of partnership. (Outside)
27. What are the rights and obligations of a managing partner
whose appointment is contained in the articles of co-partnership?
- To execute all acts of administration (strict ownership or dominion not
included) despite opposition of his partners, unless he should act in bad
faith.
- General Rule: Power is irrevocable without just or lawful cause.
- EXCP:
 To remove him for just cause, vote of partners having controlling
interest is necessary.
 To remove him without just cause, there must be unanimity
including his own vote.

28. What are the powers of 2 or more managing partners whose

respective duties are not specified?
- General Rule: Each one may separately execute all acts of
administration
- EXCP: If any of the managers should oppose:
  Decision of majority (per head) of managing partners shall prevail.
 In case of tie, decision of managing partners owning the
controlling interest (more than 50%) shall prevail.
29. How shall management be exercised in case it is stipulated
that none of the managing partners shall act without the consent of
the others?
- Unanimous consent of all the managing partners shall be necessary for
the validity of acts
- EXCP: Where consent not necessary:
 If there is imminent danger of grave or irreparable injury to the
partnership, unanimity of consent is not necessary.
30. Who shall manage the partnership incase no manner of
management has been agreed upon?
- All partners are considered managing partners when there is no agreed
stipulation as to management.
31. Can a partner associate another person with him in his share in
the partnership without the consent of the other partners?
- No, a partner may associate another person with him in his share, but the
associate shall not be admitted into the partnership without the consent of
all the other partners, even if the partner having an associate should be a
manager.
32. Can the associate take part in management?
- No, as he is not part of the principal partnership.
33. What will the associate share with the partner?
- The partner’s profit based on the stipulated share.
34. Where shall be partnership books be kept?
 At the place that was agreed upon.
 If no stipulation, at the principal place of business.
35. What are the rights of the partners with respect to the books
of the partnership?
- The right to have access to, inspect and copy the partnership books
during reasonable hours.
- Reasonable hours according to the Supreme Court should be on
business days throughout the year.
36. To whom shall partners be obligated to render information of
all things affecting the partnership?
 Any partner
 Legal representative of any deceased partner
 Legal representative of any partner under legal disability

37. When are partners accountable to the partnership and are

considered as trustees for the partnership?
- When a partner derives profits and benefits by his acts without the
consent of the other partners. These transactions relate to the formation,
 conduct, or liquidation of the partnership or from any use by him of its
property.
38. Can a capitalist partner engage in business for his own account
without the consent of the other partners?
- No, he cannot engage for his own account in the same kind of business as
the partnership, unless there is a stipulation to the contrary.
39. What is the liability of a capitalist partner who engages in the
same business that of the partnership without the const of the other
partners?
 Shall bring to the common fund the profits accruing to him and
 Shall personally bear the losses
40. Under what circumstances shall any partner demand a formal
account as to partnership affairs?
 Partner is wrongfully excluded from the partnership business or
possession of its property by his co-partners
 Right to demand for accounting exists under the terms of any
agreement
 He is accountable and holds as a trustee for the profits or
benefits derived by him in the name of the partnership (ART. 1807)
 Other circumstances that render it just and reasonable

PROPERTY RIGHTS OF A PARTNER

1. What are the property rights of a partner?

 Rights in specific partnership property
 Interest in the partnership
 Right to participate in the management
2. As regards specific partnership property, what relationship exists
between and among the partners?
- Co-ownership exists between them
3. What are the incidents of this co-ownership?
 Has an equal right with partners to possess specific partnership
property for partnership purposes(but has no right to possess such
property for any other purpose with consent of the other partners).
 Right of a partner in a specific partnership property is not
assignable(except in connection with the assignment of right of all the
partners in the same property).
 Right of a partner in a specific partnership property is not subject to
attachment or execution(except on a claim against the partnership,
cannot claim homestead or exemption laws)
 Right of a partner in a specific partnership property is not subject to
legal support under ART. 291
4. What is the nature of a partner’s interest in the partnership?
 - A partner's interest in the partnership are the profits and surplus.
5. Can a partner assign his whole interest in the partnership to another
without the consent of the other partners?
- Yes, he may, in the absence of stipulation to the contrary.
6. Will the assignee become a partner?
- No, as he does not acquire the rights of partner nor is he liable for the
partnership's debt
7. Will the conveyance of a partner of his whole interest in the
partnership dissolve the partnership?
- No, conveyance by a partner of his whole interest does not of itself
dissolve the partnership.
8. What are the rights of an assignee of a partner’s interest?
 Receive the profits to which the assigning partner would otherwise be
entitled
 In case of fraud in the management of the partnership, the assignee
may avail himself of the usual remedies provided by law
 In case of dissolution, to receive the assignor’s interest and
 In case of dissolution, the assignee may require an account from the
date only of the last account agree to by all the partners
9. What rights cannot be exercised by an assignee?
 Cannot interfere management
 Cannot require information or accounting in partnership's transaction
 Cannot inspect books of partnership
10. Is a partner’s interest in the partnership subject to attachment
or execution for his personal debts?
- Yes. His interest is separate from the partnership. A creditor can secure a
judgment on his credit and apply for a “charging order” in a proper court.
This is without prejudice to the preferred rights of partnership creditors
which must be satisfied first before the creditors of the partners.
11. May the interest so charged be redeemed and with what
property shall it be redeemed?
- Yes, at any time before foreclosure and even after foreclosure without
causing dissolution:
 With separate property of a partner or
 With partnership property with the consent of all partners whose
interest are not so charged or sold
12. What other right may a partner whose interest has been so
charged avail of?
- Right to homestead or exemption laws

OBLIGATIONS OF THE PARTNERS WITH REGARD TO THIRD PERSONS

1. Under what name shall every partnership operate?
- Under a firm name which may or may not include the name of one or
more of the partners.
2. Is there any limitation as to the firm name a partnership may adopt?
- A partnership cannot use an identical or deceptively confusing name
of an existing partnership or corporation or to any other names already
protected by law or contrary to existing laws.
3. What is the liability of a person, who not being a partner includes his
name in the partnership’s name?
- Subject to the liability of a partner.
- Based on the principle of estoppel. The person is subsidiarily liable up to
its personal liabilities in so far as third persons are concerned.
4. How are partners including industrial ones be liable for contractual
obligations of the partnership?
- Liable subsidiarily (after all the partnership assets have been exhausted,
liability extends to their personal properties) and pro rata (proportionately
liable or joint), unless stipulated otherwise.
5. What is meant by subsidiary liability of the partners?
- Partners are liable with their separate properties after all the
partnership assets have been exhausted.
6. What is meant by the partner’s pro-rata liability?
- Pro-rata means joint. In so far as third persons are concerned, they are
liable for a proportionate share of a liability.
7. How do you reconcile the exception of an industrial partner from
loss and his pro-rata liability for partnership contractual obligations?
- The industrial partner can demand for reimbursement from all the other
partners for the portion he contributed to the contractual obligations of
the partnership.
8. When is a partnership contractual obligation incurred?
- Partnership liability - If partners enter into obligation (subject to
management, authority) in the name of the partnership
9. What is the effect of a stipulation among the partners contrary to
the pro-rata and subsidiary liability of the partners?
- It is valid as among the partners but void as to third persons.
10. In the absence of any agreement to the contrary, who shall act
as agent of the partnership?
- Every partner is an agent of the partnership for apparently carrying on in
the usual way the business of the partnership.
11. Classify the acts of a partner in the partnership.
 Acts of administration - acts apparently for carrying on in the usual way
the business of the partnership
 Acts of ownership/strict dominion - acts not apparently for carrying on
in the usual way the business of the partnership
 Acts in contravention of restriction of authority
12. If a partner who has no authority performs an act for
apparently carrying on in the usual member manner the business of
the partnership, will such act be binding upon the partnership?
 - Yes, it will be binding to the partnership as long as the third person is in
good faith. Partners can ask for reimbursement from the one who acted
with no authority. If such a third person acted in bad faith (knows that
such authority does not exist), it will not be binding.
13. Give examples for acts of strict dominion.
 Assign partnership property in trust of creditors or the assignee’s
promise to pay for partnership debts
 Disposal of goodwill of the business
 Do any acts that will make it impossible to carry on the ordinary
business of a partnership
 Confess a judgment
 Enter a compromise concerning the partnership claim or liability
 Submit a partnership claim or liability to arbitration and
 Renounce the claim of the partnership
14. When shall the partnership be bound by any act of strict
dominion?
- The partnership is not bound, unless authorized by all the other partners
or unless they have abandoned the business.
15. Under whose name may real property owned by the
partnership be registered?
 The partnership
 One or more but not all the partners
 One or more partners or a third person in trust for the partnership or
 All partners
Where title to real property is in the partnership name, who may convey title to
such property?
One title is conveyed may the partnership recover such property?
Where title to real property is in the name of the partnership, and a conveyance is
executed by a partner in his own name, will title pass to the grantee?
Define equitable interest.
When may conveyance of real property of the partnership by a partner in his own
name pass title to the grantee?
Where title to real property is in the name of one or more or all the partners, or in a
third person in trust for the partnership and is conveyed by a partner in his own
name or in the partnership name, will title pass to the property?
If real property is registered in the names of all the partners and is conveyed by all
the partners, what passes to the grantee?
When may admission or representation made by a partner be considered evidence
against the partnership?
Under what cases may notice or acknowledge of any partner of any matter relating
to partnership affairs operate as notice to or knowledge of the partnership?
How is a partnership tort committed?
Who shall be charged liable for partnership tort?
How does a person not a partner become a partner by estoppel?
If a person is admitted as a partner into an existing partnership, shall he be liable
for all the obligations of the partnership incurred by the partnership before his
admission?
For obligations of the partnership incurred after he was admitted into the
partnership, to what extend shall he be liable?
In respect to partnership assets between the partnership creditors and the creditors
of the individual partners, who shall be preferred?