Channel Purpose: Simplifying the law, explaining concepts and principles in under 10 minutes.
Definition of Partnership
Partnership: An agreement between two or more persons to contribute money, property, or industry to a common fund with the intention of obtaining profits.
Legal Reference: Civil Code Article 1767.
Reasons for Forming a Partnership
Lack of capital to start a business.
Presence of capital but lacking the talent or industry to make the business prosper.
Need for contributions of property or industry to achieve business goals.
Key Consideration: Trust
Delectus Personae: A principle indicating that partnerships are fiduciary in nature and based on trust and confidence.
Importance of choosing a trustworthy partner due to the ability of partners to bind the partnership legally.
Who Can Enter into a Contract of Partnership?
Anyone not disqualified by law can form a partnership.
Exceptions:
Minors
Deaf-mutes who cannot read or write
Insane or demented persons
Incompetent individuals under guardianship
Those under civil interdiction
Individuals prohibited by law from making donations to each other (circumvention of donation laws).
Professional Partnerships
Allowed for various professions:
Lawyers (law firm)
Accountants (accounting partnership)
Architects, engineers, etc.
Legal Personality of a Partnership
Formation creates a juridical person: e.g., A, B, and C form "ABC Partnership" represents four entities (A, B, C, and ABC Partnership).
Legal Reference: Article 1768 of the Civil Code - Partnerships have a personality separate and distinct from that of individual partners.
Implications of Juridical Personality
Obligations of the partnership remain with the partnership, not individual partners.
Creditors can only pursue the partnership for debts, not individual partners, except in cases of fraud.
Advantage over Sole Proprietorship:
In a sole proprietorship, the owner is personally liable for business debts due to the absence of a separate legal personality.
In a partnership, debts belong to the partnership, protecting individual partners from personal liability.
Conclusion
Overview of partnership concepts and distinctions from sole proprietorship.
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