Practice question
Two persons validly agree to contribute capital and work to a common enterprise and divide profits, satisfying all applicable formation requirements. Before opening day no profit payment has yet occurred. One says Article 1769 makes actual profit receipt indispensable to existence. Which is correct?
- A partnership can never exist before first profit
- No contribution agreement is relevant
- Article 1767’s formation elements may establish the partnership; Article 1769’s receipt inference is not an exclusive mandatory method of proof.
- Only a business that never loses can be a partnership
- Every promise to share profits is automatically a corporation
Legal references
- Civil Code, RA 386, Articles 1767-1775: https://lawphil.net/statutes/repacts/ra1949/ra_386_1949.html
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