Prepared by: Borjal, Carla J.

Elements & Kinds of Partnership

ELEMENTS OF PARTNERSHIP

number of partners

Legal entity

Sharing profit and loss

Unlimited Liability

Agreement

Capital

Mutual Confidence

Transferability of Share

Kinds Of Partnership

A partnership may be classified according to the following:

a. Commercial Partnership- is one engaged in either trading, manufacturing, or servicing business. The income tax on the earnings of business id paid by the partnership.

1. As to its Activities

b. Professional Partnership- is one engage to exercise of vocation or profession. (e.g., Accounting firm, Law firm etc.) The income tax on the earnings of the partnership., which are distributed to the partners, is paid by the partners

a. General Partnership-A partnership where the liability of all the partners is unlimited, they can personally liable for the partnership debts. It is a partnership where all the partners are general partners.

2. As to liability of partners

b. Limited Partnership- is a partnership where the liability of one or more but not all partners is limited only up to the extent of his interest or capital in the partnership. In a limited partnership, the law provides that there must be at least one general partner.

a. Partnership at will- is one in which there is no fixed term for its existence. It can be terminated anytime.

3. As to Duration of the Partnership

b. Partnership with a fixed term- in one formed for a specific purpose, undertaking or venture and is terminated upon completion of the undertaking of accomplishment of the objective. It is also a partnership where the partners agree on the term of its existence.-it becomes a partnership at will if after the expiration of the term , the partners will decide to continue the business.

a. De Jure Partnership-one that has complied with all the legal requirements pertaining to its formation.b. De Facto Partnership- one that has not complied with all the legal requirements pertaining to its formation.

4. As to legality of its existence

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