CHAPTER 1 Article 1769.

General Provisions In determining whether a partnership exists, these rules shall apply:
(1) Except as provided by article 1825,
Article 1767. persons who are not partners as to each other
By the contract of partnership are not partners as to third persons;
- two or more persons (2) Co-ownership or co-possession does
- bind themselves - not of itself establish a partnership,
- to contribute - whether such-co-owners or co-possessors
money, do or do not share any profits made by the use of the
property, or property;
industry (3) The sharing of gross returns does
to a common fund, - not of itself establish a partnership,
- with the intention of dividing the profits among themselves. - whether or not the persons sharing them have a
Two or more persons may also form a partnership o joint or common right or interest
- -for the exercise of a profession. (1665a) o in any property from which the returns are derived;
(4) The receipt by a person
Article 1768. - of a share of the profits of a business
The partnership has a - is prima facie evidence that he is
- juridical personality separate and distinct o a partner in the business,
- from that of each of the partners, but no such inference shall be drawn if such profits were received in payment:
even in case of failure to comply with the requirements of article 1772, first paragraph. (a) As a debt
(n) - by installments or otherwise;
(b) As wages of an employee
- or rent to a landlord;
(c) As an annuity to a widow or representative
- of a deceased partner;
(d) As interest on a loan,
- though the amount of payment
- vary with the profits of the business;
(e) As the consideration for the
- sale of a goodwill of a business or
- other property by installments or otherwise. (n)
Article 1770. Article 1774.
A partnership must have a Any immovable property or an interest therein
- lawful object or purpose, - may be acquired in the partnership name.
- and must be established for the - Title so acquired can be conveyed
common benefit or interest of the partners. only in the partnership name. (n)
When an unlawful partnership is
- dissolved by a judicial decree, Article 1775.
- the profits shall be confiscated in favor of the State, Associations and societies,
without prejudice to the provisions of the Penal Code - whose articles are kept secret among the members,
governing the confiscation of the instruments and effects of a crime. - and wherein any one of the members
(1666a) may contract in his own name with third persons,
shall have no juridical personality, and
Article 1771. shall be governed by the provisions relating to
A partnership may be constituted in any form, - co-ownership. (1669)
- except where
immovable property Article 1776.
or real rights are contributed thereto, in which case As to its object, a partnership is either
a public instrument shall be necessary. (1667a) - universal
- or particular.
Article 1772. As regards the liability of the partners, a partnership may be
Every contract of partnership having - general
- a capital of three thousand pesos or more, - or limited. (1671a)
in money
or property, Article 1777.
- shall appear in a public instrument, A universal partnership may refer to
which must be recorded in the Office of the Securities and - all the present property
Exchange Commission. - or to all the profits. (1672)

Failure to comply with the requirements Article 1778.

- of the preceding paragraph shall A partnership of
not affect the liability of the - all present property is that in which the
- partnership and - partners contribute all the property
- the members thereof which actually belongs to them to a common fund,
- to third persons. (n) - with the intention of dividing the same
among themselves,
Article 1773. as well as all the profits which they may acquire therewith. (1673)
A contract of partnership is void,
whenever immovable property is contributed thereto,
if an inventory of said property is not made,
signed by the parties,
and attached to the public instrument. (1668a)
Article 1779. Article 1781.
In a universal partnership of Articles of universal partnership,
- all present property, - entered into without specification of its nature,
- the property which belonged to - only constitute a universal partnership of profits. (1676)
each of the partners
at the time of the constitution of the partnership, Article 1782.
- becomes the common property of all the partners, Persons who are
- as well as all the profits which they may acquire therewith. - prohibited from giving each other any donation or advantage
- cannot enter into universal partnership. (1677)

A stipulation for the common enjoyment Article 1783.

- of any other profits may also be made; A particular partnership has for its object
but the property which the partners may acquire - determinate things,
- subsequently by - their use or fruits,
inheritance, - or a specific undertaking,
legacy, or - or the exercise of a profession or vocation. (1678)
donation
- cannot be included in such stipulation,
except the fruits thereof. (1674a)

Article 1780.
A universal partnership 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. (1675)
 Article 1786.
CHAPTER 2 Every partner is
Obligations of the Partners - a debtor of the partnership
- for whatever he may have promised to contribute thereto.

SECTION 1 He shall also be bound

Obligations of the Partners Among Themselves - for warranty
Article 1784. - in case of eviction
A partnership begins from with regard to specific and determinate things
- the moment of the execution of the contract, which he may have contributed to the partnership,
- unless it is otherwise stipulated. (1679) in the same cases
and in the same manner
Article 1785. as the vendor is bound with respect to the vendee.
When a partnership He shall also be liable for the fruits thereof
- for a fixed term - from the time they should have been delivered,
- or particular undertaking - without the need of any demand. (1681a)
is continued after the termination of such term or particular undertaking
- without any express agreement, Article 1787.
the rights and duties of the partners When the capital or a part thereof which a partner is bound to contribute
- remain the same - consists of goods,
- as they were at such termination, - their appraisal must be made
- so far as is consistent with a partnership at will. in the manner prescribed in the contract of partnership,
and in the absence of stipulation,
A continuation of the business it shall be made by experts
- by the partners chosen by the partners,
- or such of them as habitually acted therein during the term, and according to current prices,
without any settlement or liquidation of the partnership affairs, the subsequent changes thereof being for
is prima facie evidence of a account of the partnership. (n)
- continuation of the partnership. (n) Article 1788.
A partner who has undertaken
- to contribute a sum of money
- and fails to do so
becomes a debtor
- for the interest
and damages
- from the time he should have complied with his obligation.

The same rule applies to

- any amount
he may have taken from the partnership coffers,
- and his liability shall
begin from the time he converted the amount to his own use.
(1682)
Article 1789. Article 1793.
An industrial partner cannot engage A partner who has received,
- in business for himself, - in whole or in part,
- unless the partnership expressly permits him to do so; - his share of a partnership credit,
and if he should do so, - when the other partners have not collected theirs,
- the capitalist partners may either shall be obliged,
exclude him from the firm - if the debtor should thereafter become insolvent,
or avail themselves of the benefits which he may have obtained in to bring to the partnership capital
violation of this provision, - what he received
- with a right to damages in either case. (n) - even though he may have given receipt for his share only. (1685a)

Article 1790. Article 1794.

Unless there is a stipulation to the contrary, Every partner is
- the partners shall contribute - responsible to the partnership
equal shares to the capital of the partnership. (n) - for damages suffered by it
through his fault,
Article 1791. and he cannot compensate them
If there is no agreement to the contrary, - with the profits and benefits
- in case of an imminent loss of the business of the partnership, - which he may have earned for the partnership by his industry.
- any partner who
refuses to contribute an additional share to the capital, However, the courts
except an industrial partner, - may equitably lessen this responsibility
to save the venture, - if through the partner's extraordinary efforts
- shall he obliged to sell his interest to the other partners. (n) in other activities of the partnership,
- unusual profits have been realized. (1686a)
Article 1792.
If a partner authorized to manage Article 1795.
- collects a demandable sum The risk of specific and determinate things,
which was owed to him in his own name, which are not fungible,
- from a person who owed the partnership - contributed to the partnership
another sum also demandable, - so that only their use and fruits may be for the common benefit,
- the sum thus collected shall be shall be borne by the partner who owns them.
applied to the two credits
in proportion to their amounts, If the things contribute are
even though he may have given a receipt for his own fungible,
credit only; or cannot be kept without deteriorating,
- but should he have given it for the account of the partnership credit, or if they were contributed to be sold,
the amount shall be fully applied to the latter. the risk shall be borne
- by the partnership.
The provisions of this article are understood to be In the absence of stipulation,
- without prejudice to the right granted - the risk of the things brought and appraised in the inventory,
to the other debtor by article 1252, - shall also be borne by the partnership,
- but only if the personal credit of the partner - and in such case the claim shall be
should be more onerous to him. (1684) limited to the value at which they were appraised. (1687)
Article 1796. Article 1799.
The partnership shall be responsible A stipulation which
- to every partner - excludes one or more partners
for the amounts he may have disbursed on behalf of the - from any share in the profits or losses
partnership - is void.
and for the corresponding interest,
- from the time the expense are made; Article 1800.
it shall also answer to each partner for the The partner who has been
- obligations he may have contracted - appointed manager
in good faith in the articles of partnership
in the interest of the partnership business, - may execute all acts of administration
- and for risks in consequence of its management. (1688a) despite the opposition of his partners,
unless he should act in bad faith;
Article 1797. - and his power is irrevocable
The losses and profits shall be distributed without just or lawful cause.
- in conformity with the agreement. The vote of the partners
If only the share of each partner in the profits has been agreed upon, - representing the controlling interest shall be
- the share of each in the losses shall be in the same proportion. - necessary for such revocation of power.
A power granted
In the absence of stipulation, - after the partnership has been constituted
- the share of each partner in the profits and losses - may be revoked
- shall be in proportion to what he may have contributed, at any time. (1692a)
but the industrial partner shall not be liable for the losses.
As for the profits, the industrial partner shall Article 1801.
receive such share as may be just and equitable If two or more partners have been
under the circumstances. - intrusted with the management of the partnership
If besides his services he has contributed capital, - without specification of their respective duties,
he shall also receive a share in the profits - or without a stipulation that one of them
in proportion to his capital. (1689a) shall not act without the consent of all the others,
each one may separately execute all acts of administration,
Article 1798. - but if any of them should oppose the acts of the others,
If the partners have agreed to the decision of the majority shall prevail.
- intrust to a third person
- the designation of the share of each one in the profits and losses, In case of a tie, the matter shall be
such designation may be impugned only - decided by the partners owning the controlling interest.
- when it is manifestly inequitable.
In no case may a partner Article 1802.
- who has begun to execute the decision of the third person, In case it should have been stipulated that
- or who has not impugned the same - none of the managing partners shall act
within a period of three months - without the consent of the others,
from the time he had knowledge thereof, the concurrence of all
complain of such decision. - shall be necessary for the validity of the acts,
- and the absence or disability of any one of them cannot be alleged,
The designation of losses and profits cannot be intrusted unless there is imminent danger of
- to one of the partners. (1690) grave or irreparable injury to the partnership. (1694)
 Article 1807.
Article 1803. Every partner must
When the manner of management has not been agreed upon, the following rules - account to the partnership for
shall be observed: any benefit,
- All the partners shall be considered agents - and hold as trustee for it
and whatever any one of them may do alone any profits derived by him
shall bind the partnership, without the consent of the other partners
without prejudice to the provisions of article 1801. from any transaction connected with the
- None of the partners may, formation,
without the consent of the others, conduct,
make any important alteration or liquidation of the partnership
in the immovable property of the partnership, or from any use by him of its property. (n)
even if it may be useful to the partnership.
But if the refusal of consent by the other partners is Article 1808.
manifestly prejudicial to the interest of the partnership, The capitalist partners cannot engage
the court's intervention may be sought. (1695a) - for their own account
- in any operation which is
Article 1804. of the kind of business in which the partnership is engaged,
Every partner may unless there is a stipulation to the contrary.
- associate another person with him
- in his share, Any capitalist partner violating this prohibition shall
but the associate shall - bring to the common funds
- not be admitted into the partnership any profits accruing to him from his transactions,
- without the consent of all the other partners, and shall personally bear all the losses. (n)
even if the partner having an associate should be a manager. (1696)
Article 1809.
Article 1805. Any partner shall have the right to a formal account as to partnership affairs:
The partnership books shall be kept, (1) If he is wrongfully excluded from the partnership business or
- subject to any agreement between the partners, possession of its property
- at the principal place of business of the partnership, by his co-partners;
and every partner shall (2) If the right exists
- at any reasonable hour under the terms of any agreement;
have access to and (3) As provided by article 1807;
may inspect (4) Whenever other circumstances render it
and copy any of them. (n) just and reasonable.

Article 1806.
Partners shall render on demand
- true and full information of all things affecting the partnership to any partner or
the legal representative of any deceased partner or of any partner under legal
disability. (n)