Short answer. Very likely yes. The Civil Code defines a partnership as two or more persons contributing money, property, or industry to a common fund with the intention of dividing profits among themselves. If those elements are present, a partnership exists — the absence of a written contract does not prevent it.
What the law says
By the contract of partnership two or more persons bind themselves to contribute money, property, or industry to a common fund, with the intention of dividing the profits among themselves.
Civil Code, Article 1767 — Contract of Partnership Defined. Read the full provision →
What the law requires for a partnership to exist
Article 1767 of the Civil Code defines the contract of partnership: By the contract of partnership two or more persons bind themselves to contribute money, property, or industry to a common fund, with the intention of dividing the profits among themselves. Notice what the definition does not say — it does not require a written document, a notarized agreement, or even an explicit declaration. What it requires is a meeting of minds: contributions to a common fund, and an intention to share profits. If both elements are present in fact, the partnership exists in law.
Form: when a written agreement is required
The general rule is that a partnership may be formed in any form, even orally or by conduct. However, there is one important exception: a partnership where immovable property or real rights are contributed requires a public instrument — a notarized deed — and the property must be listed in that instrument. For a partnership that involves only money or movable property, no special form is needed. If two people are pooling cash with a profit-sharing intent, a handshake or an exchange of messages may be sufficient to constitute a partnership in law.
Intention to divide profits is the key element
The defining feature that distinguishes a partnership from a mere joint investment or co-ownership is the intention of dividing the profits among themselves. People can own property together without being partners. What makes a partnership is the shared business purpose — contributing resources and dividing the gains from a common activity. If the two people simply pooled money to buy an asset and have no plan to operate it as a business, they may be co-owners rather than partners. The moment they begin operating it jointly for profit, the analysis shifts.
Why this matters practically
Whether or not there is a written contract, a partnership that exists in law carries full legal consequences. Both parties have fiduciary duties to each other. Both are personally liable, jointly and severally, for the obligations the partnership incurs to third parties. Profits and losses must be divided according to their agreement or, absent an agreement, equally. The convenience of operating without paperwork is often offset by the exposure it creates: if the venture fails and leaves debts, creditors may look to each person individually. Formalizing the arrangement with a written partnership agreement is strongly advisable.
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.
- Aniceto G. Saludo, Jr. vs. Philippine National Bank, G.R. No. 193138, August 20, 2018 — read the decision on LawPhil →
- Antonia Torres, et al. vs. Court of Appeals, et al, G.R. No. 134559, December 9, 1999 — read the decision on LawPhil →
- Pedro D. Dusol and Maricel M. Dusol vs. Emmarck A. Laso, as owner of, G.R. No. 200555, January 20, 2021 — read the decision on LawPhil →
- Federico Jarantilla, Jr. vs. Antonieta Jarantilla, et al, G.R. No. 154486, December 1, 2010 — read the decision on LawPhil →