Short answer. No. The Civil Code declares void any stipulation that excludes one or more partners from any share in the profits or losses. Partners are free to divide profits unequally, but a clause that shuts a partner out entirely is not enforceable, no matter what the partnership agreement says.
What the law says
A stipulation which excludes one or more partners from any share in the profits or losses is void.
Civil Code, Article 1799 — Void Exclusion From Profits/Losses. Read the full provision →
The rule voids exclusion, not unequal sharing
Article 1799 is precise about what it strikes down: a stipulation that excludes a partner from any share in profits or losses. It does not require every partner to receive an equal cut, and it does not stop partners from agreeing to a lopsided split reflecting different contributions of capital, labor, or industry. What it forbids is a clause that leaves a partner with nothing at all — zero, not merely less. A partnership by definition contemplates that everyone who is genuinely a partner shares in the venture's fortunes to some degree.
Why the law treats total exclusion as void, not just unfair
A partnership rests on the idea of a common enterprise undertaken for mutual profit. A partner who is written out of any share in the profits or losses is, in substance, not sharing in the venture the way a partner is supposed to, whatever label the document uses. Because the defect goes to the nature of the arrangement itself, the article does not describe this as merely unenforceable or voidable at someone's option — it says the stipulation is void, meaning it produces no legal effect from the outset.
What voiding the clause does to the rest of the agreement
Article 1799 targets the offending stipulation, not necessarily the whole partnership. A void exclusion clause does not, by its own terms, automatically dissolve the partnership or invalidate every other term the partners agreed to; it simply fails to achieve what it tried to do, leaving the partner's share to be determined under the rules that would otherwise apply. If your agreement contains a clause like this, treat the exclusion itself as unenforceable rather than assuming it reflects your actual rights.
What to do if you have been cut out
If your partnership agreement, or a side arrangement among the partners, denies you any share of profits or losses, that provision does not bind you regardless of when you signed it or how the other partners characterize your role. Gather the partnership agreement, records of your contributions, and any financial statements showing what the venture actually earned, since establishing that you are a real partner — and what share the law or the rest of the agreement would otherwise assign you — is the practical starting point.
Cases citing this provision
These Supreme Court decisions cite the provision above. We list them so you can read them yourself; the summaries of what each decided are not ours to give.
- Miguel Cuenco vs. Concepcion Cuenco Vda. De Manguerra, G.R. No. 149844, October 13, 2004 — read the decision on LawPhil →