Things you need to know about Articles of Partnership.
1. What is an Articles of Partnership?
The Articles of Partnership is a document where persons enter into an agreement or contract of partnership. A partnership is when two or more persons bind themselves to contribute money, property, or industry to a common fund for the purpose of conducting business and with the intention that the profits and losses will be divided among them.
Generally, a partnership can be general or limited.
General Partnership. A general partnership is one where the partners are liable for the contracts and obligations of the partnership with their personal property. Generally, the partners' liability will be in proportion to the amount that they contributed to the partnership.
Limited Partnership. On the other hand, a limited partnership is one where there is one or more general partners and one or more limited partners. Limited partners are only liable to the extent of their contribution. The partnership name of a limited partnership should always contain the word "Limited" or "Ltd.".
This document is specifically drafted for general partnerships.
2. What can the partners contribute to the partnership?
The partners can contribute cash, property or industry. They may be classified as follows:
Capital partners who contribute money and/or property to the partnership. They are required to make additional contributions in case of an imminent loss of the business of the partnership. They are also liable for the losses of the business of the partnership. Finally, they can engage in other businesses as long as the same do not compete with the business of the partnership.
Industrial partners are the partners that will only contribute industry or service. An industrial partner cannot be compelled to give additional contributions to the partnership and is not liable for losses of the partnership venture. An industrial partner cannot engage in any other business as long as they are an industrial partner unless there is a stipulation allowing them to do so.
3. What information do you need to create the Articles of Partnership?
To create your Articles of Partnership you’ll need the following minimum information:
- The details of the partnership (i.e. name, address, purpose, term); and
- The details of the partners (i.e. name, nationality, residence, TIN, contribution).
4. How much is the document?
The document costs PHP 450 for a one-time purchase. Once purchased, you have unlimited use and revisions of this type of document.
You can also avail of Premium subscription at PHP 1,000 and get (a) unlimited use of our growing library of documents (from affidavits to contracts); and (b) unlimited use of our “Ask an Attorney” service, which lets you consult an expert lawyer anytime for any legal concern you have.
