Partnership Contract Philippines

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Partnership Contract Philippines: What You Need to Know

If you`re planning to start a business in the Philippines with a partner, it`s important to have a partnership contract in place. This legal document outlines the rights and obligations of each partner and helps prevent disputes down the line. In this article, we`ll go over some of the key points you should include in your partnership contract.

Partnership Type

The first thing you should decide is what type of partnership you want to form. In the Philippines, there are three types of partnerships:

1. General partnership – all partners share equally in the profits and losses of the business.

2. Limited partnership – there are both general partners (who manage the business and have unlimited liability) and limited partners (who are passive investors and have limited liability).

3. Joint venture – this is a partnership formed for a specific project or transaction, rather than an ongoing business.

Partners’ Roles and Responsibilities

Once you`ve decided on the type of partnership, you should outline each partner`s roles and responsibilities. This includes things like who will manage the day-to-day operations of the business, who will handle finances, and who will be responsible for marketing and sales.

Ownership Structure

You`ll also need to decide how ownership of the partnership will be distributed. Will each partner have an equal share, or will certain partners have a larger percentage based on their investment or level of involvement?

Capital Contributions

Partners will need to make capital contributions to the business in order to get it up and running. You should decide how much each partner will contribute, and whether any additional funding will be required down the line.

Profits and Losses

Your partnership contract should outline how profits and losses will be distributed among partners. Will they be divided equally, or will certain partners receive a larger percentage based on their investment or involvement in the business?

Decision-Making

It`s important to have a clear decision-making process in place in order to avoid disputes down the line. Will all partners have an equal say in business decisions, or will certain partners have more authority?

Dispute Resolutions

Finally, your partnership contract should include a mechanism for resolving disputes among partners. This could be mediation, arbitration, or another method of alternative dispute resolution.

In conclusion, a partnership contract is an essential document for any business formed between partners in the Philippines. By outlining each partner`s roles and responsibilities, ownership structure, capital contributions, profit and loss distribution, decision-making process, and dispute resolution, you can prevent disputes and ensure a successful business partnership. If you need help drafting a partnership contract, consider consulting with a lawyer or legal professional who is experienced in Philippine business law.

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