A Partnership Is a Meeting of the Minds Between Two Or More Persons, Where in They Bind

Partnership  According to Purpose o Commercial or Trading partnership Definition o Professional or Non-trading partnership A partnership is a meeting of the minds between two  According to Legality of Existence or more persons, where in they bind themselves to contribute o De Jure partnership money property, and/or industry to a common fund, with the purpose of dividing the profit from among them or exercising o De Facto partnership a common profession. Kinds of Partners Characteristics  General Partner  Mutual Contribution  Limited Partner  Division of Profits or Losses  Capitalist Partner  Co-ownership of Contributed Assets  Industrial Partner  Mutual Agency  Managing Partner  Limited Life  Liquidating Partner  Unlimited Liability  Dormant Partner  Income Taxation  Silent Partner  Partner’s Equity Account  Secret Partner  Nominal Partner/ Partner by Estoppel Advantages versus Sole Proprietorship  Brings greater financial capability to the business Limited Liability Partnership  Combines special skills, expertise and experience of  Indicate such to Name (LLP or Ltd.) the partners  Offers relative freedom and flexibility of action in Articles of Partnership decision-making It is a document that contains the partners’ agreements. Advantage versus Corporation  Easier and less expensive to organize Legalities  Contributions of real or immovable properties must  More personal and informal be done in a public instrument or else the partnership is void Disadvantages of Partnerships  A partnership whose initial capital is at least P 3,000  Easily dissolved thus unstable compared to a must register to the SEC, however, still acquires legal corporation personality even without doing so.  Mutual agency and unlimited liability may create personal obligations to partners GPP for CPAs  Less effective than a corporation in raising large  Provisions for such is found in R.A. 9298, the amounts of capital Philippine Accountancy Act of 2004

Partnership Distinguished from Corporation Accounting for Partnerships  Manner of Creation  Capital Account  Number of Persons Needed Partner's Capital  Commencement of Juridical Personality Debit Credit  Management  Extent of Liability Permanent Withdrawals Original Investment  Right of Succession Closing of temporary Additional Investment  Terms of Existence Withdrawals

Classifications of Partnerships Share in Profit  According to Object o Universal partnership of all present property o Universal partnership of profits  Withdrawal Account o Particular partnership Partner's Withdrawal  According to Liability Debit Credit o General Partnership Temporary Withdrawals o Limited Partnership  According to Duration o Partnership with a fixed term of for a  Loans to Partner particular undertaking  Loans from Partner o Partnership at will