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.; or it is an association of two or more persons to carry on as co-owners a business for profit.
Delectus personae is the right of persons to select persons with whom he wants to be associated in partnership. The right of choice of persons whom he wants to deal with in the partnership are those specifically and ideally persons with integrity, honesty, character, trust and confidence, and solvency.
Partnership is also an exercise of profession, not a business, nevertheless the law considers it a partnership if practice by a group, joint pursuit for mutual help. Partnership must be created or formed with a lawful purpose and that there must be a valid, purely, voluntary agreement of parties and the aim is anything other than a profit.
Articles of partnership must not be secret. All partners are entitled to know the contents of the articles of partnership and each one must be given that opportunity equally with the others.
When a partnership is formed, it creates juridical personality that is separate and distinct from the partners. Partnership having juridical personality is a separate personality. It may acquire and possess property as well as incur obligations and can sue and be sued.
To determine the existence of a partnership, it can be tested upon a contract, express or implied and the intention of the parties to become parties, Article 1769 provides the rules to determine the existence of a partnership.
A partnership to be recorded in the office of Securities and Exchange Commission, the capital of P3,000 or more in money or property which shall appear in a public instrument. Consequently, a contract is void whenever immovable property contributed and if such inventory is not made, signed by the parties and attached to the public instrument
Co-ownership exists instead of partnership in associations and societies whenever a partner kept secret among the members the articles of partnership. It shall have no juridical personality.
A universal partnership refers to all the present property or to all the profits. As regards the liability, a partnership may be general or limited. A universal partnership of all present property is one in which the partners contribute all the properties which belong to each of them. However, future properties cannot be contributed. Acceptable contributions to the partnership requires determinate things. Property acquired by inheritance, legacy and donation cannot be included by stipulation except the fruits thereof.
Universal partnership of profits is one which comprises all that the partners may acquire by their industry or work during the existence of the partnership and the usufruct of movable or immovable property which each of the partners may possess at the time of the celebration of the contract. The partners in this type of partnership retain their ownership over their present and future property. What pass to the partnership are the profits or income and the usufruct or use of the same. Upon dissolution of the partnership, such property is returned to the partners who own it.
A particular partnership is neither a universal partnership of present property nor a universal partnership of profits. It is a partnership whose object is for the exercise of a profession, to carry on of specific enterprise or business. Husband and wife may form and enter into a particular partnership. But persons prohibited by law to give donations cannot enter into a universal partnership because each of the partners virtually makes a donation, such as those: made between persons who were guilty of adultery or concubinage at the time of the donation; those made between persons found guilty of the same criminal offense; and those made to a public officer and his wife, descendants and ascendants by reason of his wife