a. Definition and Separate Juridical Personality

Partnership Defined

Partnership is a contract whereby 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 (Art. 1767)¹

Elements of a Partnership (ACD)

• Meeting of minds (Agreement)
• To Contribute money, property, or industry to a common fund; and
• Intent to Divide profits among the contracting parties (Jarantilla v. Jarantilla, G.R. No. 154486, 1 December 2010)²

Essential Features of Partnership (VaLeCLO)

• There must be a Valid contract.
• The parties must have Legal capacity to enter into the contract.
• There must be a mutual Contribution of money, property or industry to a common fund. (Art. 1767)³
• There must be a Lawful object. (Art. 1770)⁴
• The purpose or primary purpose must be to Obtain profits and divide the same among the parties. (Art. 1767)

Additional Requirement for Juridical Personality

• Associations whose articles are kept secret among the members and wherein any one of the members may contract in his own name with third persons shall have no juridical personality and shall be governed by the provisions on Co-ownership. (Art. 1775)⁵
• "Kept secret among the members" means that the association’s articles are kept among its members and are not disclosed to third persons. (Art. 1775)
• This does not mean that there could be no contractual relations amongst the parties; there is only no partnership or association with distinct legal personality.

Characteristics of a Partnership

• Essentially contractual in nature (Arts. 1767⁶, 1784)
• Separate juridical personality (Art. 1768⁷)
• Delectus personae (Arts. 1804⁸, 1813)
• Mutual Agency (Art. 1803⁹)
• Personal liability of partners for partnership debts (Arts. 1816¹⁰, 1817)

Rules to Determine Existence – Civil Code, Articles 1769¹¹