Partnership Establishment

Partnership establishment refers to the creation of an artificial being brought about by the expedient act of collaborating or pooling of interests, industry or capital of at least two or more persons intended primarily to serve or perform a particular business undertaking or enterprise. Compared to corporations wherein its formation demands tedious and several legal formalities and has to comply with several regulations, partnership establishment is much uncomplicated and easier to carry out. Partners act as agents of each other and of the partnership. Each partner is bound by the acts and representations made by their co-partners in dealing and transacting with third persons.

In general, the liability of the partnership is likewise the personal liability of each and every partner. However, partnership establishment may specify the kind liability undertaking that each of the partners is bound to assume. A partner may have a limited liability only which means he is not bound to answer for the liabilities of the partnership beyond his interest or contribution. He cannot be held personally liable for partnership debts. In partnership establishment however, it is a settled rule that despite the concept of limited liability, a partnership should always have at least one general partner to shoulder the partnership liability at his personal expense. Moreover, a partner may contribute not only money or capital contribution. He may likewise put in his industry in the partnership. Unlike a general partner, an industrial partner cannot be held personally liable for partnership obligations.

Verily, partnership establishment may take various forms, different variants depending on how the partners agree to create it and to undertake their ventures. Despite these variations, however, the partnership creditors and third persons dealing with the partnership are fully protected by law. On the same note, to likewise fully guard the interests of the partners in the conduct of their business, the establishment of the partnership must likewise be in accordance with law and applicable rules and regulations. In this regard, we can help you achieve a smooth and efficient setting up and formation of your entity.