What is partnership?
ARTICLE 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. (1665a)
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For a partnership to happen, the essential requisites must occur such as: a) there must be a valid contract; b) there must be a contribution of money, property, or industry to a common fund; c) it must be organized for gain or profit; and d) it should have a lawful object or purpose, and must be established for the common benefit or interest of the partners.The characteristics of a contract of partnership are:
Consensual, or a contract that is perfected by mere consent because all of the partners had a meeting of minds to enter into a contract of partnership;
Commutative, where the contribution of each partner, whether money, property or industry, is considered as the equivalent of the contribution of the other partners;
Principal, or a contract that does not depend on other contracts for its existence;
Bilateral, or a contract entered into by two or more persons;
Onerous, where each partner must contribute money, property, or industry. Of course, a partner can contribute one, some or all of these;
Nominate, or a contract which has a name in law; and
Preparatory, or a contract in preparation for another contract/s.
Contributed by Dada
De Leon. (2016). Law of Partnership, Agency, and Trust.
Domingo. (2021). Partnership Revised Corporation Cooperative Law.
