If two or more persons would like to form a partnership without putting it into writing, is it valid? Yes, subject to certain exceptions.
What is the legal basis why oral partnership is still valid?
Contract of partnership
is consensual. By mere meeting of the minds, two or more persons may form a partnership.
What are the instances when the law requires a contract of partnership be in writing?
Art. 1771. A partnership may be constituted in any form, except where immovable property or real rights are contributed thereto, in which case a public instrument shall be necessary.
Under Art. 1771 of the New Civil Code, if the partners intend to contribute immovable property or real rights, the contract of partnership must be in public instrument; otherwise, the oral contract is void.
What does it mean when the law says, “in public instrument”?
The contract of partnership must be notarized by a notary public.
In the early case of Cacnio vs. Baens (5 Phil. Rep., 742), the Supreme Court said, “that any instrument authorized by a notary public or a competent public official, with the solemnities required by law, was a public document.”