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    SEC Opinion Dated February 29, 1980

    Uploaded by

    Vince Christian Tapia
    The document discusses whether two or more medium-sized corporations can form a partnership or joint venture to qualify for large-scale public highway projects. It states that corporations generally cannot form partnerships as it would mean losing their separate identities. Exceptions may be allowed if the corporation's charter expressly authorizes partnerships, all partners manage the partnership, and partners are jointly and severally liable for obligations. Corporations can form joint ventures if allowed by their charters through a voluntary agreement, but no new legal entity is formed and registration is not required.

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    SEC Opinion Dated February 29, 1980

    Uploaded by

    Vince Christian Tapia
    16 views2 pages
    The document discusses whether two or more medium-sized corporations can form a partnership or joint venture to qualify for large-scale public highway projects. It states that corporations generally cannot form partnerships as it would mean losing their separate identities. Exceptions may be allowed if the corporation's charter expressly authorizes partnerships, all partners manage the partnership, and partners are jointly and severally liable for obligations. Corporations can form joint ventures if allowed by their charters through a voluntary agreement, but no new legal entity is formed and registration is not required.

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    SEC Opinion dated February 29, 1980

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    The document discusses whether two or more medium-sized corporations can form a partnership or joint venture to qualify for large-scale public highway projects. It states that corporations generally cannot form partnerships as it would mean losing their separate identities. Exceptions may be allowed if the corporation's charter expressly authorizes partnerships, all partners manage the partnership, and partners are jointly and severally liable for obligations. Corporations can form joint ventures if allowed by their charters through a voluntary agreement, but no new legal entity is formed and registration is not required.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    16 views2 pages

    SEC Opinion Dated February 29, 1980

    Uploaded by

    Vince Christian Tapia
    The document discusses whether two or more medium-sized corporations can form a partnership or joint venture to qualify for large-scale public highway projects. It states that corporations generally cannot form partnerships as it would mean losing their separate identities. Exceptions may be allowed if the corporation's charter expressly authorizes partnerships, all partners manage the partnership, and partners are jointly and severally liable for obligations. Corporations can form joint ventures if allowed by their charters through a voluntary agreement, but no new legal entity is formed and registration is not required.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    of 2

    From: Rosario N.

    Lopez,
    Director,
    Corporate and Legal Department of SEC

    To: Antonio E. Librea,


    Acting Director, Legal Service,
    Office of the Minister Ministry of Public Highways

    Issue:
    Whether two or more medium-size corporations (contractors) may enter into a
    partnership or joint venture/consortium for the purpose of qualifying in terms of
    capitalization and equipment in large-scale projects of the Ministry of Public
    Highways through competitive bidding.

    Opinion:
    Corporations cannot ordinarily enter into a contract of partnership with another
    corporation or individual. According to the prevailing view, a corporation has no
    implied power to become a partner with an individual or another corporation.
    This limitation is based on public policy, since in a partnership the corporation
    would be bound by the acts of persons who are not duly appointed and
    authorized agents and officers, which would be entirely inconsistent with the
    policy of the law that the corporation shall manage its own affairs, separately
    and exclusively.

    It is fairly well-settled that corporations cannot ordinarily enter into partnerships


    with other corporations or individuals, for, in entering into a partnership the
    identity of the corporation is lost or merged with that of another and the
    direction of the affairs is placed in other hands than those permitted by the law
    of its creation. A corporation can act only through its duly authorized agents and
    is not bound by the acts of anyone else, while in a partnership each member
    binds the firm when acting within the scope of the partnership

    Exceptions to the application of this general rule may be allowed by this


    Commission, provided that the following conditions are adequately met:
    1) The articles of incorporation of the corporations involved must expressly
    authorize the corporation to enter into contracts of partnership with others in the
    pursuit of its business;
    2) The agreement or articles of partnership must provide that all the partners
    will manage the partnership; and
    3) The articles of partnership must stipulate that all the partners are and shall be
    jointly and severally liable for all the obligations of the partnership.

    Two or more corporations may enter into a joint venture/consortium if the


    nature of the venture is in line with the business authorized by its charter
    through a contract or voluntary agreement between the said parties. Please note
    that no independent legal entity is borne out of it and the same need not be
    registered with the Commission. However, when the joint venture/consortium
    would result in the formation of a corporation or partnership, the same has to be
    registered with the Commission and the conditions and requirements above-
    mentioned should be complied with.

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