I. Overview: “Articles of Partnership” and Why They Matter

An articles of partnership is the written instrument that sets out a partnership’s essential terms—typically: the partners’ identities, firm name, purpose, principal office, term, capital contributions, profit-and-loss sharing, management arrangements, and dissolution rules. In Philippine law, the partnership is primarily governed by the Civil Code provisions on partnership (Arts. 1767–1867).

A partnership is a juridical person distinct from the partners (Civil Code, Art. 1768). As a rule, the partnership contract is consensual and may be formed even without extensive formalities—but certain situations require (1) a public instrument and/or (2) registration/recording, and limited partnerships have stricter rules.

Importantly, “registration” in this topic usually refers to recording with the Securities and Exchange Commission (SEC) under the Civil Code and related SEC practice. This is distinct from tax registration with the Bureau of Internal Revenue (BIR) and local licensing (mayor’s permit, barangay clearance), which are separate compliance steps for doing business.

II. The Baseline Rule: Form Is Generally Flexible, With Key Exceptions

A. General rule: partnership contract may be in any form

A partnership may be constituted in any form (oral or written), except where the law requires a specific form (Civil Code, Art. 1771). This is why many “registration issues” are actually exceptions to the general freedom of form.

B. When the law requires more than a simple agreement

There are three major Philippine-law triggers that elevate the formal requirements:

Contribution of immovable property or real rights (public instrument + inventory)
Capital of ₱3,000 or more (public instrument + recording with SEC)
Limited partnership (public instrument + strict SEC registration)

Each is discussed below.

III. When a Public Instrument Is Required (Notarization and Formal Execution)

A. If immovable property or real rights are contributed

If a partner contributes immovable property (real property) or real rights to the partnership, the partnership contract must be in a public instrument, and an inventory of the property contributed must be made, signed by the parties, and attached to the public instrument (Civil Code, Art. 1773).

Consequence of noncompliance: Under Art. 1773, failure to follow these formalities renders the partnership contract void as to the contribution of immovable property/real rights. Practically, this defect can jeopardize the partnership’s claim to the contributed real property and create serious enforceability problems.

Key point: This requirement is about validity and protection of property transactions, not merely about “registration for convenience.”

B. Limited partnership is also executed in a public instrument

A limited partnership must have a certificate in a public instrument and must be filed/recorded with the SEC in accordance with Civil Code provisions on limited partnerships (Civil Code, Arts. 1844–1848, particularly Art. 1844 on the certificate).

IV. When SEC Recording/Registration Is Required Under the Civil Code

A. Partnerships with capital of ₱3,000 or more

If the partnership has a capital of ₱3,000 or more (in money or property), the contract must appear in a public instrument and shall be recorded in the SEC (Civil Code, Art. 1772).

What “capital” means here: It refers to the aggregate agreed contributions committed as partnership capital—whether cash or property—based on the partnership agreement.

Legal effect of not recording with the SEC (Art. 1772)

Art. 1772 provides that failure to comply with the public-instrument and SEC recording requirement does not affect the partnership’s liability to third persons.

In plain terms:

Third persons are protected. Partners cannot avoid responsibility to outsiders by pointing to non-registration.
Between/among partners, noncompliance can create proof and enforceability issues. While the partnership relationship may exist, the lack of the required form and recording can make it harder to prove terms, settle disputes, or rely on the written stipulations as against each other and in dealings where formal documentation is expected.

Practical takeaway: For ₱3,000+ capital, SEC recording is not just a bureaucratic step; it is the Civil Code’s formal mechanism to place the partnership terms in an official record and reduce disputes and uncertainty.

B. Limited partnerships: registration is essential to limited liability status

For a limited partnership, the certificate must be filed/recorded; otherwise, the intended limited partners may not enjoy the protections associated with limited partnership status, and the arrangement can be treated in effect as a general partnership with broader personal liability exposure depending on the circumstances and compliance with the Civil Code’s limited partnership requirements (Civil Code, Arts. 1844–1848).

V. Limited Partnerships: The Strictest “Registration Required” Category

A. What makes a limited partnership different

A limited partnership includes:

at least one general partner (manages and is personally liable for partnership obligations), and
at least one limited partner (contributes capital, generally does not manage, and liability is typically limited to contribution—subject to legal conditions).

B. Certificate requirements

The Civil Code requires a certificate (in a public instrument) containing key information (e.g., name, character of business, principal place, names and addresses of partners, contributions, terms, etc.) and compliance steps for filing/recording (Civil Code, Art. 1844 and related provisions).

C. Why filing/recording is indispensable

Limited partnerships are designed to give limited partners a liability shield only when the statutory conditions are met. Registration/recording is part of the public notice system: it allows third parties to know the firm’s structure and who has what role.

VI. “Registration” vs. Other Mandatory Compliance: SEC, BIR, and Local Permits

Even when a partnership contract might be valid between partners under the Civil Code, operating a partnership as a business in the Philippines typically involves multiple layers of compliance:

A. SEC registration/recording (Civil Code focus)

This is the recording requirement discussed in Arts. 1772 (₱3,000+ capital) and the filing/recording essential to limited partnerships (Arts. 1844–1848), and it is also the standard institutional route for formally organizing partnerships that will transact with banks, counterparties, and government agencies.

B. BIR registration (tax compliance)

A partnership (as a juridical entity) generally must register with the BIR for tax identification and invoicing/receipting compliance once it will operate and earn income. This is not the same as the Civil Code’s “recording” concept, but it is often functionally mandatory to legally do business.

C. Local government permits (business operations)

To actually operate at a location, a partnership commonly needs local permits (e.g., barangay clearance, mayor’s permit, other regulatory clearances depending on the line of business). These are operational requirements distinct from the partnership’s civil-law validity.

Important distinction: A partnership can exist as a legal relationship, but doing business without the relevant tax and licensing registrations can expose the partnership and partners to administrative and financial consequences.

VII. What Must Be Included in Articles of Partnership (Practical Contents)

While the Civil Code does not prescribe a single fixed “template” for general partnerships, properly drafted articles typically include:

Partnership name (firm name)
Type of partnership (general partnership; or limited partnership with designation)
Primary purpose and secondary purposes
Principal office address
Term (fixed term or “at will”)
Partners’ names, nationalities, addresses
Capital contributions (cash/property/services), valuation method for property contributions
Profit and loss sharing (and rules if silent; note that stipulations eliminating a partner’s share in profits or losses may be problematic under general principles)
Management and authority (who can bind the firm; banking authority; signing limits)
Admission of new partners / transfer of interests
Accounting period, books, audit/internal controls
Dispute resolution (venue, arbitration if desired, governing law)
Dissolution and liquidation provisions (events of dissolution, liquidation process)

For limited partnerships, the certificate’s legally required particulars must be covered consistent with the Civil Code’s limited partnership provisions.

VIII. Consequences of Noncompliance: A Detailed Map

A. Failure to use a public instrument when required

Immovable property/real rights contributed: Partnership contract is void with respect to that contribution if Art. 1773 requirements are not met, creating major enforceability and ownership risk.

B. Failure to record when Art. 1772 applies (₱3,000+ capital)

Does not excuse partners from liability to third persons (Civil Code, Art. 1772).
Raises avoidable issues on proof of terms, internal enforcement, and formal dealings.

C. Failure to comply with limited partnership filing/recording

Jeopardizes the intended limited partnership structure and may expose parties to broader liability than expected, depending on compliance and conduct, because the limited partnership is a creature of statute requiring public notice.

IX. Common Scenarios (Philippine Practice) Where Registration Is Functionally Necessary

Even beyond the minimum Civil Code triggers, partners often need SEC-accepted documentation because counterparties require it:

Opening business bank accounts
Applying for loans, credit lines, or leases
Issuing official receipts/invoices and registering books (tax compliance steps often expect SEC papers)
Bidding for contracts or dealing with government agencies
Bringing in investors or institutional partners
Establishing clear authority of signatories and binding powers

This is not “registration required for validity” in every case—but it is often required to operate effectively.

X. Step-by-Step: Typical SEC Recording/Registration Flow (High Level)

Draft articles of partnership with complete terms.
Notarize (public instrument), especially when required by law or by Art. 1772 threshold.
Prepare SEC filing documents (SEC forms, partner information, and supporting documents).
Submit to SEC for recording/registration and pay applicable fees.
After SEC acceptance, proceed to BIR registration (TIN/registration, invoicing/receipts compliance, books if applicable).
Obtain local permits and any industry-specific licenses.

(Exact documentary lists and fees can vary depending on SEC requirements and business circumstances, but the Civil Code triggers above remain the core legal reasons registration becomes mandatory.)

XI. Key Doctrinal Points to Remember

Partnership formation is generally flexible (Art. 1771), but the law imposes formalities to protect public notice and property transactions.
Immovable property/real rights contributions demand strict formal compliance (Art. 1773).
₱3,000+ capital triggers the requirement of a public instrument and SEC recording (Art. 1772), while protecting third persons regardless of compliance.
Limited partnerships are statutory and depend on proper public documentation and filing (Arts. 1844–1848).
“Registration” under the Civil Code is different from tax and local licensing, which are separate—but commonly necessary to lawfully operate a business.

XII. Civil Code Provisions Most Directly Involved

Art. 1768 (partnership as juridical person)
Art. 1771 (form of partnership contract; general rule and exceptions)
Art. 1772 (₱3,000+ capital; public instrument and SEC recording; effect of noncompliance vis-à-vis third persons)
Art. 1773 (immovable property/real rights contributions; public instrument + inventory; consequence)
Arts. 1844–1848 (limited partnership certificate and filing/recording framework)