Unlike corporations whose governing law is a special law - the Corporation Code of the Philippines, partnerships in the Philippines are governed by and covered under Articles 1767 to 1867 of the Civil Code of the Philippines (circa 1950). These are the provisions of law which govern all aspects of partnerships - from their creation, formation, existence, operation and management to their dissolution and liquidation, including the obligations of the partners to one another, to the public or third persons and to the government.
Partnerships are required to be registered with the Securities and Exchange Commission (SEC). Registration is done by filing the Articles of Partnership with the SEC. The Articles of Partnership set forth all the terms and conditions mutually agreed by the partners thereto.
- Proposed Articles of Partnership;
- Name Verification Slip;
- Bank Certificate of Deposit;
- Alien Certificate of Registration, Special Investors Resident Visa or proof of other types of visa (in case of foreigner);
- Proof of Inward Remittance (in case of non-resident aliens);
It bears noting that corporations are not allowed by law to become partners in a partnership.
As a general rule, the liability of partners in a partnership organization is unlimited in the sense that the partnership creditors may run after them for any and all of their assets and property in payment of the partnership debts. Should one of the partners defray all liabilities of the partnership, he is entitled to be reimbursed by the other partners for their respective shares therein.
In the case, however, of limited partnerships, the law allows the limitation of the liability of certain partners to the extent of the amount contributed to the partnership.
Philippine law allows the dissolution of partnership for any reason, provided such dissolution does not amount to a breach of contract or is prejudicial to third parties. The death of a partner or the unauthorized transfer of ownership of his share in the partnership (in case there is a limitation to this effect) results in the dissolution thereof.
In other words, any change in the composition of the partnership, unless so allowed, will result in the dissolution thereof. Consequently, the remaining partners may form a new partnership with less or more partners.
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