ART. 1772.
Every contract of partnership — The requirement of public instrument is
having a capital of three thousand pesos or
more, in money or property, shall appear in
a public instrument, which must be
recorded in the Office of the Securities and
Exchange Commission. Failure to comply
with the requirements of the preceding
paragraph shall not affect the liability of the
partnership and the members thereof to
third persons.
Registration of partnership.
(1) Partnership with capital of P3,000.00 or
more.
— There are two requirements where the
capital of the partnership is P3,000.00 or
more,25 in money or property, namely:
(a) The contract must appear in a public
instrument; and
(b) It must be recorded or registered with the
Securities and Exchange Commission.
However, failure to comply with the above
requirements does not prevent the
formation of the partnership (Art. 1768.) or
affect its liability and that of the partners to
third persons.
But any of the partners is granted the right by
the law (see Arts. 1357, 1358.) to compel
each other to execute the contract in a
public instrument. This right cannot be
availed of if the partnership is void under
Article 1773.
(2) Purpose of registration.
imposed as a prerequisite to registration, and
registration is necessary as “a condition for the
issuance of licenses to engage in business or
trade.
In this way, the tax liabilities of big partnerships
cannot be evaded and the public can also
determine more accurately their membership
and capital before dealing with them.
(3) When partnership considered registered.
— The Securities and Exchange Commission
performs the works of a mercantile registrar
insofar as the recording of articles of
partnership is concerned.
Since the recording of articles of partnership
is not for the purpose of giving the partnership
juridical personality (see Art. 1784.), the only
objective of the law is to make the recorded
instrument open to all and to give notice
thereof to interested parties.
This objective is achieved from the date the
partnership papers are presented to and
left for record in the Commission. For this
reason, when the certificate of recording of the
instrument is issued on a date subsequent to
the date of presentation thereof, its effectivity
retroacts as of the latter date.
In other words, the date the partnership papers
are presented to and left for record in the
Commission is considered the effective date of
registration of the articles of partnership. This
conforms with the ordinary rule of
jurisprudence that: “Ordinarily, an instrument is
deemed to be recorded when it is deposited
with the proper office for the purpose of being
recorded.”
ART. 1773. A contract of partnership is void,
whenever immovable property is
contributed thereto, if an inventory of said
property is not made, signed by the parties,
and attached to the public instrument.
Partnership with contribution
of immovable property
. An inventory is required only “whenever
(1) Requirements.
Where immovable property, regardless of
its value, is contributed, the failure to
comply with the following requirements will
render the partnership contract void in so
far as the contracting parties are concerned:
(a) The contract must be in a public
instrument; and
(b) An inventory of the property contributed
must be made, signed by the parties, and
attached to the public instrument.
(2) As to contracting parties.
The absence of either formality renders the
contract void. Although Article 1771 does not
expressly state that without the public
instrument the contract is void, Article 1773 is
very clear that the contract is void if the
formalities specifically provided therein are
not observed, implying that compliance
therewith is absolute and indispensable for
validity.
(3) As to third persons.
Article 1773 is intended primarily to protect
third persons. With regard to them, a de facto
partnership or partnership by estoppel may
exist. (see Art. 1825.)
There is nothing to prevent the court from
considering the partnership agreement an
ordinary contract from which the parties’ rights
and obligations to each other may be inferred
and enforced.
When inventory is not required.
immovable property is contributed.”
Hence, Article 1773 does not apply in the case
of immovable property which may be
possessed or even owned by the partnership
but not contributed by any of the partners.
Thus, it has been held that a partnership
contract which states that the partnership is
established “to operate a fishpond” (not “to
engage in a fishpond business”) is not
rendered void because no inventory of the
fishpond was made where it did not clearly and
positively appear in the articles of partnership
that the real property had been contributed by
anyone of the partners.
If personal property, aside from real property,
is contributed, the inventory need not include
the former.
Importance of making inventory of real
property in a partnership.
Article 1773 complements Article 1771.
(1) An inventory is very important in a
partnership to show how much is due from
each partner to complete his share in the
common fund and how much is due to each of
them in case of liquidation.
(2) The execution of a public instrument of
partnership would be useless if there is no
inventory of immovable property contributed
because without its description and
designation, the instrument cannot be
subject to inscription in the Registry of
Property, and the contribution cannot
prejudice third persons.

This will result in fraud to those who contract

with the partnership in the belief of the efficacy
of the guaranty in which the immovables may
consist. Thus, the contract is declared void by
law when no such inventory is made.

ART. 1774. Any immovable property or an

interest therein may be acquired in the
partnership name. Title so acquired can be
conveyed only in the partnership name.

Acquisition or conveyance of property

by partnership.

Since a partnership has juridical personality

separate from and independent of that of the
persons or members composing it (Art. 1768.),
it is but logical and natural that immovable
property may be acquired in the
partnership name. Title so acquired can,
therefore, be conveyed only in the partnership
name. (see Art. 46.)

The legal effects of conveyance of property

standing in the name of the partnership
executed by a partner in the partnership name
or in his own name are governed by Article
1819, paragraphs one and two.

The right of a partnership to deal in real as well

as personal property is subject to limitations
and restrictions prescribed by the
Constitution (see Art. XIV, Secs. 3, 5, 8, 9, 11
thereof.) and special laws. A partnership is an
“association” within the meaning of the word
as used in the Constitution.