A Partnership is a business entity that has separate juridical personality from that of its participants or partners. However, partners can either have limited liability (i.e. limited partnership) or unlimited liability (general partnership) for the debts and obligation of the partnership. In the case of a limited partnership, the word “Limited” or “Ltd” must be appended in the organization’s name. Partners who are personally legally responsible for all the obligations of the partnership are called general partners.
Those whose legal liability is only up to the amount of their capital contribution are call limited partners. The organization of a partnership entails that need of at least two people contracting to create a partnership. It is same to a single entrepreneurship or a Sole Proprietorship save that for there are two owners, who are directly responsible for all the actions of the partnership. When a general partner dies or ceases to be a partner, the old partnership needs to be dissolved and a new one should be created.
Partnerships must be duly registered with the DTI or Department of Trade and Industry if their capital is less than P3,000. However, partnership with more than P3,000.00 capital needs to register with Securities and Exchange Commission(SEC). Requirements for registration included serving a name in the appropriate registry agency, submission of a duly notarized Articles of Partnership, which define the obligations, responsibilities and roles of each partner and provisions on how the profits and losses will be shared or divided among partners. A partnership is the appropriate means for foreign companies to create join ventures with Philippines companies.
In which case, there are addition requirements for partnership with foreign partners. This included: endorsement/clearance from pertinent government agencies e.g. SEC Form No. F-105 (Application to do Business under the Foreign Investments Act of 1991) and foreign Investment Agent Application for non resident foreign partners. Registration also requires bank certificate detailing capital contribution of every partners, proof of inward remittance or affidavit representing intention not to register investment with the Central Bank of the Philippines.
Other standard documents required included other Licenses and clearance, Tax Identification Number (TIN) of partnership and Mayor’s permit TIN with Bureau of Internal Revenue. All documents needs to authenticated by the Philippines Embassy/Consulate before submitting.
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