How to fill in this partnership agreement
- 1Date signed
e.g. November 12, 2026 - 2Place signed
e.g. Iloilo City - 3Partner 1
e.g. Ramon F. Gonzaga - 4Partner 1's details
e.g. married, residing at 21 Gen. Luna St., Brgy. Sambag, Jaro, Iloilo City - 5Partner 2
e.g. Kristel Mae P. Dela Peña - 6Partner 2's details
e.g. single, residing at Purok 4, Brgy. Tabucan, Mandurriao, Iloilo City
Money partner and work partner
An industrial partner contributes only work, skill or industry (Civil Code Art. 1767). The law protects both sides: the industrial partner shares in profits as agreed and, as between the partners, is not liable for losses (Art. 1797); in return the industrial partner may not work in another business without the others' consent (Art. 1789).
- The industrial partner's value in the capital table stays at zero — the share is in the profit column.
- Write down the hours and duties expected, so "work" can be checked.
Agree on these before you sign
Partners fall out over money and work, rarely over the business idea. Settle these now, while you agree on everything.
- What each partner puts in — cash, equipment, a vehicle, work — and what it is worth.
- How profits and losses are split, and when profits are paid out.
- Who manages day to day, and which decisions need both partners.
- What happens if one partner leaves, falls ill or dies.
After signing: register the partnership
Notarize the agreement, then register with the SEC (its online registration system takes articles of partnership), then the BIR, the barangay and the mayor's office. Open the bank account in the partnership's name, never a partner's.
Questions people ask
Does the industrial partner share in losses?
Not as between the partners — the Civil Code (Art. 1797) exempts the purely industrial partner from losses. Creditors of the partnership may still go after the partners after the partnership's assets are exhausted, but the capitalist partner then reimburses the industrial partner.
Do we need to register our partnership with the SEC?
Yes, when the capital is ₱3,000 or more in money or property: the Civil Code (Art. 1772) requires the partnership to be in a public instrument — notarized — and recorded with the Securities and Exchange Commission. Failing to record it does not make the partnership void, but you will need the SEC registration for the BIR, the bank and the mayor's permit anyway.
Is a partnership the same as a sole proprietorship with a partner?
No. A sole proprietorship is one owner registered with the DTI. A partnership has its own juridical personality, is registered with the SEC, files its own BIR returns, and its partners share profits and losses as agreed. Partners can be personally liable for partnership debts after its assets are used up.
What if a partner wants out?
The agreement decides: notice, how the partner's share is valued, and how and when it is paid out. Without such terms, the Civil Code rules on dissolution and winding up apply — which are slower. This paper sets a notice period and a book-value buy-out.
Is this legal advice?
No. It is a common Philippine format for a small two-partner business. For a bigger business, land contributions, or a professional partnership, have a lawyer prepare the articles you file with the SEC.
This page explains common practice and is not legal advice. Offices set their own rules — when in doubt, call ahead or ask your notary or lawyer.