TEST BANK PARNERSHIP & CORPORATION FR: DIAZ PARTNERSHIP All present properties are contributed A Universal partnership[ B General partnership C Limited partnership D None of the above Composed of capitalist and industrial partners A Universal partnership B General partnership C Limited partnership D None of the above Partners shall enjoy practically all the profits: A Universal partnership[ B General partnership C Limited partnership D None of the above They have no voice in the management of partnership affairs: A Managing partners B Silent partners C Both A and B D None of the above They have priority if the partnership is insolvent: A Separate creditors B Partnership creditors C Both A and B D None of the above May contribute money, property or industry to the common fund: A Both general and limited partners B Limited partner C General partners D Capitalist partners One who takes charge of the winding up to partnership affairs upon dissolution: A Silent partner B General partner C Ostensible partner D Liquidating partner A, B and C are partners A contributed his services only; B, P20,000; and C, P10,000.The partnership was liquidated After payment of the partnership’s obligation, only P9,000 worth of assets remained The share of A will equal to: A P3,000 B Equal of share of B C Equal of share of C A and B entered into a universal partnership of all present property The common property of the partnership shall be: A All the properties which belonged to each of the partners at the time of the constitution of the partnership B All the properties which belonged to each of the partners after the constitution of the partnership C All the properties which belonged to each of the partners at the time of the constitution of the partnership as well as the profits which they may acquire therewith D All the properties which belonged to each of the partners at the time of the constitution of the partnership as well as the profits which they may acquire thereafter 10 A capitalist partner engaged for his own account in an operation which is of the kind of business in which the partnership is engaged Said partner can be A Compelled to sell his interest in the partnership to the other capitalist partners B Compelled to dissolve or discontinue the operation of his business C Compelled to bring to the common funds of the partnership any profits accruing to him from his transactions D Denied his share in the profits of the partnership 11 If a partner in a partnership is insolvent, the first order of preference in the distribution of his assets are: A Partnership creditors B Partners contribution to the partnership C Separate creditors of the debtor D Pro-rata between the separate creditors of the debtor and the partnership creditor 12 A, B and C are partners in a partnership C contributed his industry After payments of the partnership’s obligations, only P6,000 cash remains No other assets In the absence of terms to the contrary, the share of C in the remaining assets is: A Equal to share of A B Equal to the share of B C P2,000 D Nothing 13 X, Y and Z are equal partners of Xyz Partnership A owes the XYZ Partnership for p9,000 Z, a partner collected from A, P3,000 before X and Y received anything Z issued a receipt on the P3,000 as his share of what A owes When X and Y collected from A, A was insolvent A Partner Z shall share partners X and Y with the P3,000 B Z cannot be required to share X and Y with the P3,000 C X and Y should first exhaust all remedies to collect from A D X and Y can automatically deduct from the capital contributions of Z in the partnership their respective share in the P3,000 14 A and B are partners in a real estate partnership The partnership owns a piece of land which C desired to buy C contacted A and inform him of his desire to buy the land and A did not tell to B about it A bought B out of the partnership and afterwards sold the land to C with a big profit A The partnership is dissolved when A became the sole owner B The sale of the land to C is void because it was without the knowledge of B C A is not liable to B for the latter’s share in the profits D A is liable to B for the latter’s share in the profits 15 A, B and C are partners in ABC Partnership D represented himself as a partner in ABC Partnership to E, who, on the belief of such representation, extended P50,000 credit to ABC Partnership Assuming only B and C consented to such representation, who will be held liable to E? A E extended the credit to ABC Partnership, so a partnership liability exists, thus, all the partners, A, B and C are liable B B, C and D are partners by estoppels and thus, are liable prorate to E C Partners A, B and C who benefited from the credit extended by E are liable D D who made the representation is liable to E 16 A and B are partners in a real estate business A and B were approached by X who offered to buy a parcel of land owned by the partnership Thereafter, b sold to A, B’s share in the partnership Then, A sold the land to X at a big profit A A is liable to B for B’s share in the profits B The partnership is dissolved when A became the sole owner C A is not liable to B for the latter’s share in the profits D The sale of the land to X is void 17 One of the following incidents may be a cause for involuntary dissolution of a partnership Which is? A Termination of the term of the partnership B Insolvency of any partner C Express will of any partner D Expulsion of any partner 18 A and B are equal partners in AB Partnership Y presented himself as a partner in AB Partnership to Z, who relying on such representation, extended P50,000 credit to AB Partnership Of the two (2) partners only B knew and consented to the representation of Y Who should be held liable to Z? A Only Y, who presented himself as partner is liable B Since the credit was extended to AB Partnership, a partnership liability was created, so the two (2) partners and Y are liable C Partners A and B who benefited from the credit extended to the partnership AB Partnership shall be liable to Z D B and Y are partners by estoppel and, thus, are liable to Z 19 The following persons are disqualified to form a universal partnership Who are the exception? A Brother and sister B Husband and wife C Those guilty of adultery and concubinage D Those guilty of the same criminal offense, if the partnership is entered into a consideration of the same 20 A is the capitalist partner and B the industrial partner A is engaged personally in the same kind of business the partnership is engaged in A If there are losses, the partnership will bear the losses B If there are profits, the profits will be shares by A and the partnership C If there are profits, A will give the profits to the partnership D A will be excluded from the partnership and pay damages A is the managing partner of ABC Partnership X owes A personally and ABC Partnership P20,000 each A collected and receive from X, P10,000 and he issued a receipt wherein it is stated that the amount is applied against his personal credit A The amount received will be applied in favor the partnership credit B The amount will be applied in proportion to both credits C The amount received will be applied in the credit of A 21 D All the partners will decide as to whose favor it will apply 22 Three (3) of the following are similarities between a partnership and a corporation Which is not? A The individuals composing both have little voice in the conduct of the business B Both have juridical personality separate and distinct from that of the individuals composing them C Like a partnership, a corporation can act only through agents D Both are organizations composed of an aggregate of individuals 23 A, B and C are general partners in ABC Partnership A, the managing partner engaged personally in a business that is the same as the business of the partnership without the consent of B and C A If there are profits, A will give the profits to the partnership B If there are losses, the partnership will bear the losses C If there are profits, they will be shared by partner A and the ABC Partnership D The profits or losses will be shared equally by A and the ABC Partnership 24 Three (3) of the following are rights of a general partner and also of a limited partner in a limited partnership Which is not? A To inspect and copy at reasonable hours the books of the partnership and have them kept at the principal place of business B To demand true and full information of all matters affecting the partnership and a formal account of partnership affairs C To have dissolution and winding up by decree of court D None of the above 25 The partnership is insolvent These are preferred as regards to the partnership property A Partnership creditors B Partners separate creditors C Partners with respect to their capital D Partners with respect to their profits 26 27 Bears the loss of property contributed to the partnership A Capitalist partner B Limited partner C None of the above D Partners contributing usufructory rights 28 When cash or property worth P3,000 or more is contributed as capital The Articles of CoPartnership shall be in a public instrument and be registered with the Securities and Exchange commission If the said requirements are not complied with: A It will render the partnership void B It will not affect the liability of the partnership and the partners to third parties C It will not give a legal personality to the partnership D It will give the partnership a de-facto existence 29 A, B and C are equal partners in Santos Brothers Partnership The partnership is indebted to PC for P150,000 Partner A is indebted to SC for P20,000 PC attached and took all the assets of the partnership amounting to P90,000 B and C are solvent while A is insolvent and all what he owns is a land valued at P15,000 A SC has the priority to the land of A as a separate creditor B PC has priority to the land of A to cover A’s share of the P60,000 remaining liability of the partnership C B and C have priority to the land of A if they paid PC the 60,000 remaining liability of the partnership D PC and AC shall have priority to the land o A in proportion to their claim of P60,000 and P20,000 respectively 30 A partnership is not dissolved upon the death of a: A General partner B Industrial partner C Limited partner D General limited partner 31 A and B are equal partners in AB Partnership C contacted XYZ and Co and represented himself as partner in AB Partnership XYZ and Co contacted A who confirmed that C is in fact a partner of AB Partnership XYZ and Co extended credit to C for AB Partnership in the amount of P60,000 Who is liable to XYZ and Co.? A A and C are partners by estoppels and are liable to XYZ and Co B XYZ and Co extended the credit to C for AB Partnership, so a partnership liability exists, so both partners, A and B together with C are liable C The AB Partnership benefited, so it is liable D Only C who made the representation is liable 32 A, B and C are partners in a trucking and freight business B and C without the knowledge of A approached X and offered to sell to X all the trucks of the partnership at a price very much higher than their book value Then B and C bought-out A from the partnership and thereafter X bought all the trucks with a big profit of B and C A The sale of the trucks to X is void because it is without the knowledge and consent of A B B and C are not liable to A whatsoever C B and C are liable to A for his share in the profits in the sale D When A was bought-out of the partnership, the partnership was dissolved so A has no more share in the profits in the sale 33 When the capital (of a partnership) is P3,000 or more, it must be in a public instrument and must be recorded with the Securities and Exchange Commission (Article 1772) A, B and C agreed to form a partnership and each contributed P10,000 as capital of the partnership There was no compliance in the provisions of Article 1772 A The partnership was not established B The partnership did not have juridical personality C The partnership was established and any partner may compel the execution of a public instrument D The partnership is void 34 A, as a partner contributed P30,000; B as partner, P15,000; and C as industrial partner, his services in the partnership After payment of all liabilities and expenses, only P18,000 remain as partnership assets A A, P12,000; B, P6,000; C, None B A, P6,000; B, P6,000; C, P6,000 C A, P9,000; B, P9,000; C, None D A, P8,000; B, P4,000; C, P6,000 35 This is the order of preference in the liquidation of a partnership: A 1.Outside creditors 2.Partners with respect to their capital 3.Partners with respect to their profit 4.Partners aside from capital and profit B Partners with respect to their capital 2.Partners with respect to their profit 3.Partners aside from capital and profit Outside creditors C Outside creditors Partners aside from capital and profit Partners with respect to their capital 4.Partners with respect to their profit D Partners aside from capital and profit Outside creditors 3.Partners with respect to their capital 4.Partners with respect to their profit 36 Three (3) of the following are rights of a partners Which one is not? A Right to associate another person to his share B Right to admit another partner C Right to inspect and copy partnership book D Right to ask dissolution of the firm at the proper time 37 The following are similarities between partnership and a corporation Which is the exception? A Both have juridical personalities separate and distinct from that of the individuals composing them B Like a partnership, a corporation can act only through agents C Both are organization of an aggregate of individuals D The individuals composing both have little voice in the conduct of the business 38 In the partnership of A, B and C, A was appointed in the Articles of Co-Partnership as managing partner As such manager in good faith: A His power is revocable even without consent B His power can be revocable at any time even without just cause provided C He may execute all acts of administration despite the opposition of B and C D He can be removed for valid cause even without the vote of the partners owning the controlling interest 39 In the ABC Partnership, A and B contributed P20,000 each and C , his services After paying all the creditors of the partnership, only P18,000 in cash remains In the absence of terms to the contrary, the share of C is equal to: A P6,000 B The share of A C The share of B D Nothing 40 X and Y established a partnership by contributing, each at P50,000 Z, a third party allowed his name to be included in the firm name of the partnership The partnership was insolvent and after exhausting all the remaining asset, there was left a liability to third persons the amount of P30,000 The creditors can compel: A Z to pay P30,000 remaining liability B X, Y and Z to pay P10,000 each C X or Y to pay P30,000 remaining liability D X and Y to pay P15,000 each 41 W, X, Y and Z formed a partnership W, X and Y are general partners and contributed P50,000 each while Z, an industrial partner contributed his services only All the partners signed an agreement stipulating that the liability of W is limited to its contribution After all the assets of the partnership were exhausted there remains an unpaid liability of P40,000 The creditors of the partnership can compel: A X and Y to pay the P40,000 B X, Y and Z to pay the P40,000 C W, X, Y and Z to pay P10,000 each and W and Z can demand reimbursement from X and Y D X and Y to pay P40,000 42 A partner in a partnership who is not really a partner, not being a party to the partnership agreement, but is made liable as a partner for the protection of innocent third persons is known as A Secret partner B Dormant partner C Nominal partner or partner by estoppel D Answer not given 43 A and B are capitalist partners, with C as industrial partner A and B contributed P15,000 each to the capital of the partnership A contractual liability of P40,000 was incurred by the partnership in favor of X The capital assets of P30,000 shall first be exhausted thereby leaving an unsatisfied liability of P10,000 X can recover the amount from: A A and B only B A, B and C C A, B and C and C can recover for reimbursement from A and B D Answer not given 44 A, B and C are partners engaged in a retail business Their contribution is P20,000 each D is admitted as a new partner with a contribution of P8,000 At the time of his admission, the partnership has an outstanding obligation to E in the amount of P80,000 In this case: A D is not liable to E for this obligation B D is liable to E for this obligation so that amounting to P68,000 will be exhausted leaving a balance of P12,000 Only A, B and C shall be liable jointly or pro-rata, out of their separate property C D is liable to E for this obligation so that after the assets of the partnership will be exhausted, leaving a balance of P12,000, all the partners shall be liable jointly or pro-rata, out of their separate property D Answer not given 45 A, B and C are general partners in ABC Partnership D is a debtor to the partnership in the amount of P15,000 A received from Debtor D the sum of P5,000 and issued a receipt identifying the amount as his share Then D became insolvent, B and C cannot collect the P10,000 A A cannot be compelled to share the P5,000 with B and C B B and C can charge the capital of A with their share of the P5,000 C A can be compelled to share B and C the P5,000 D B and C automatically sue D to collect the P10,000 46 M and O are partners of M & O Partnership M is the managing partner N owes M P10,000 and M & O partnership P30,000 The obligations of N are both due M collected from N the debt of N to M in the amount of P10,000 and issued a receipt in the name of M To which obligation will the P10,000 be applied? A The whole of the P10,000 be applied to debt of N to M B The P10,000 be applied to debt of N to M and to the partnership C P5,000 each of debt of N to M and to the partnership D P2,500 to debt of N to M and P7,500 debt of N to the partnership 47 A, B and C are partners in D-3 Partnership On April 29,2010, partner C died Not knowing that C died, on May 1, 2010, A contracted a liability to D who also not know the death of C The partnership debt is in the amount of P30,000, he can collect A P30,000 from A B P15,000 from A and P15,000 from B C P10,000 from estate of C; P10,000 from A ; P10,000 from B D P20,000 from A and P10,000 from B 48 This the order of preference in the liquidation of a general partnership: A Outside creditors; Partner as creditors; Partners capital; Partners profit B Partner as creditors; Outside creditors; Partners capital; Partners profit C Partners capital; Outside creditors; Partner as creditors; Partners profit D Outside creditors; Partner capital; Partners profit; Partners as creditors 49 R, S and T are partners T is the industrial partner who in addition to his services, he also contributed capital to the partnership There is no stipulation as to sharing of profits and losses The partnership realized profits of P21,000 The share of T in the profits: A R and will determine T’s share I, in the profits B T’s share is P7,000 C Pro-rata to his contributed capital D Nothing, because he is an industrial partner 50 W, X, Y and Z are partners They contributed capital as follows: W, P50,000; X, P30,000; Y, P20,000 and Z, is an industrial partner, his services The partnership’s obligation to outsiders exceed the total net assets by P18,000 Who and by how much will the partners be liable for the payment of the P18,000? W X Y Z A P9,000 P5,400 P3,600 B P4,500 P4,500 P4,500 P4,500 C P6,000 P6,000 P6,000 P6,000 D P4,500 P2,700 P1,800 P9,000 51 Which of the following is a characteristic of partnership as a contract? A Formal B Innominate C Gratuitous D Preparatory 52 One who takes active part in the business, but is not known to be a partner by outside parties is: A Silent partner B Dormant partner C Nominal partner D Secret partner 53 Can the partners stipulate that the newly admitted partner shall not be held liable for the obligations of the partnership arising before his admission? Which of the following statement is not correct? A No, because the newly admitted partner should be deemed to have assumed all the debts of the partnership upon his voluntary participation in the partnership B No, because newly admitted partner is liable with respect to his capital contribution which forms part of the partnership C No, because the third person are always protected by law D No, because the subject of the stipulation is that the liability of the new partner should not be satisfied out of the partnership property 54 I II The arrival of the term of a partnership with a fixed term or period shall not dissolve the partnership if the partners continue with the business of the partnership but such partnership may be terminated anytime dependent on the will of the continuing partners The general rule is that the loss of the specific thing contributed to the partnership when only the use of the thing is contributed by the partner and such thing after its transfer to the partnership which used the same or sometime was subsequently lost, the partnership is not dissolved A B C D True; False True; True False; False False; True 55 May contribute money, property or industry to the common fund: A General partner B Industrial partner C Limited partner D Managing partner 56 A limited partner who takes active part in the management of the firm becomes: A A managing partner B Liable as a general partner C A general partner D A general partner and a limited partner at the same time 57 Which of the following statements is not correct? A A general partner in a limited partnership manages the business of the partnership but cannot perform acts of ownership without the consent of the limited partners B Valid contributions of a limited partner are money and property but not services C Additional limited partners may be admitted into the limited partnership with the consent of all the partners D A person who is both a general partner and a limited partner is deemed a limited partner only with respect to the return of his contribution 58 A is the managing partner of A and Company X is indebted to A for P20,000 and to the partnership for P60,000 When both debts mature, X pays A P20,000 and the latter issues a receipt for his personal credit The payment for P20,000 shall be applied: A ¼ in favor of A and ¾ in favor of the partnership B To the whole debt owing to A C ½ in favor of A and ½ in favor of the partnership D To the debt owing to the partnership 59 Which of the following is an essential element of partnership? A There must be a contribution of money, property, or industry to a common fund B It must an association for profit with the intention to divide the profits among themselves C There must be a valid and voluntary agreement D All of the above 60 A and B are partners On June 15, 2009 when the total obligation of the partnership totaled P80,000 C was admitted as new partner At the time C’s admission, the partnership creditors were M for P50,000 and N for P30,000 After June 15, the partnership borrowed from O P20,000 and P40,000 from P On December 15, 2009, the partnership became insolvent leaving an obligation totaling P140,000 and partnership assets amounting to P30,000 The creditors are going after the separate properties of the partners to satisfy their remaining claims How are the creditors’ claims satisfied? Answer - M and N can go after the separate properties of A and B but C’s separates properties are not answerable to their claims Answer – O and P can go after the separate properties of A, B and C A Both answers are wrong B Answer is wrong but answer is correct C Both answers are correct D Answer is correct but answer is wrong 61 A and B are capitalist partners with C as industrial partner A and B contributed P20,000 each to the capital of the partnership A contractual liability of P50,000 was incurred by the partnership in favor of X The assets of the partnership had been exhausted still leaving an unpaid liability of P10,000 X can recover the amount from: A A, B and C and C can recover by way of reimbursement from A and B unless stipulated otherwise B A and B only C C only D A, B and C and C has no right for reimbursement from A and B unless expressly stipulated 62 Which of the following liabilities of the partnership shall rank first in the order of payment? A Those owing to creditors other than partners B Those owing to partners in respect to profits C Those owing to partners in respect to capital D Those owing to partners other than for capital and profits 63 I II A B C D 64 True; True True; False False; False False; True I A person may be a general and a limited partner in the same partnership at the same time II A person admitted as a partner into an existing partnership is not liable for partnership obligations existing before his admission A B C D 65 The contribution of a limited partner may be cash, property or service A limited partner who takes part in the management of the business of the partnership is not a general partner but he shall be liable as a general partner True; True True; False False; False False; True I A partner cannot assign his interest in the partnership to a third person without the consent of the other partners II A partner’s interest in the partnership is his personal property A B C D True; True True; False False; False False; True 66 I The creditor of each partner shall be preferred to those of the partnership as regards the partner’s separate property II An industrial partner is exempted from losses but not from partnership liabilities A True; True B True; False C False; False D False; True 67 I An industrial partner with the consent of the other partners can engage in any business for his own account II An industrial partner is not a general partner D Vice President and Secretary 74 The right of a corporation to exist as juridical person during its term as stated in its Articles of Incorporation despite the death of any of its stockholders is: A Right of existence C Right of succession B Right of redemption D Pre-emptive right 75 The interest or right of the owner in the corporation’s profits or in the net assets of the corporation on dissolution is: A Dividend C Certificate of stock B Share of stock D Capital 76 Requirement to effect the amendment of by-laws of a corporation A Majority vote of the board of Directors B Vote of 2/3 of the outstanding capital stock C Majority vote of the Board of Directors and majority vote of the outstanding capital stock D Majority vote of the outstanding capital stock 77 The nationality of the corporation is determined by the place of the controlling stockholders This test is: A Control test C Incorporation test B Domicile test D Capitalalization test 78 The following person can not be incorporator of a corporation A A resident alien B A married woman without the consent of the husband even if the payment of her shares is her paraphernal property C A subscriber on the share of the corporation who pays less than 25% of his subscription D A corporation organized under the laws of the Philippines 79 One of the following is not required and does not form part of the three-fold duty of directors of a corporation Which one? A Duty of diligence C Duty of obedience B Duty of loyalty D Duty of efficiency 80 These not form part of the outstanding capital stock: A Bonus shares C Founder’s shares B Treasury shares D Redeemable shares 81 One of the following does not require stockholder’s approval: A Merger or consolidation B Change of corporate name C Investment of corporate funds for a purpose outside of the main purpose of the corporation D Declaration of cash dividend 82 Under this test, a corporation is a national of the country pursuant to whose laws it is incorporated: A Nationality test C Control test B Capitalization test D Incorporation test 83 Which of the following statements is not correct? A In the delinquency sale at public auction, the highest bidder is one who offers to pay the full amount of the balance of the subscription plus interest and expenses of the sale for the highest number of shares B The sale of delinquent stock at public auction can be stopped if the Board of Directors stops the sale for valid reason C Payment of unpaid subscription may not be enforced by applying cash dividends to delinquent stockholders D The Board of Directors shall order, by resolution, the sale of delinquent stock specifying the amount due plus accrued interest, the place, time and date of the sale 84 A stockholder who does not approve the action taken by the Board of Directors in proposing to amend the Articles of Incorporation is allowed to withdraw from the corporation in one of the following instances: A Merger or consolidation B Investment of corporate funds in another corporation C Creating, incurring, increasing or decreasing any bonded indebtedness D Shortening or prolonging corporate existence 85 I Membership in a non-stock corporation and all rights arising therefrom cannot be transferred even if provided in the articles of incorporation or by laws because membership and the rights arising therefrom are personal and non-transferable II Treasury stocks sold for less than par or issued value are considered “watered stock” and as such are prohibited by law Which is correct? A B C D True; False Both statements are false False; True Both statements are true TEST BANK LAW ON PARTNERSHIP & CORPORATION fr: cpar PARTNERSHIP One of the following is not a characteristic of a contract of partnership A Real, in that the partners must deliver their contributions in order for the partnership contract to be perfected B Principal, because it can stand by itself C Preparatory, because it is a means by which other contracts will be entered into D Onerous, because the parties contribute money, property or industry to the common fund One of the following is not a requisite of partnership Which is it? A There must be a valid contract B There must be a mutual contribution of money, property or industry to a common fund C It is established for the common benefit of the partners which is to obtain profits and divide the same among themselves D The articles are kept secret among the members The minimum capital in money or property except when immovable property or real rights thereto are contributed, that will require the contract of partnership to be in public instrument and be registered with SEC A P 5,000 B P10,000 C P 3,000 D P30,000 X and Y entered into a universal partnership of all present property At the time of their agreement X had a four-door apartment which he inherited from his father years earlier Y, on the other hand, had a fishpond which he acquired by dacion en pago from Z During the first year of the partnership, rentals collected on the four-door apartment amounted to P480,000; while fish harvested from the fishpond were sold for P300,000 During the same period B received by way of donation a vacant lot from an uncle The partners had an stipulation that future property shall belong to the partnership Which of the following does not belong to the common fund of the partnership? A Fish pond B Rental of P480,000 C Apartment D Vacant lot D and E entered into a universal partnership of profits At the time of execution of the articles of partnership, D had a two-door apartment which he inherited from his father years earlier E on the other hand, had fleet of taxis which he purchased two years before In the first year of the partnership, D earned P500,000 as radio talent while E won P1,000,000 in the lotto During the same period, rentals of P120,000 were collected from the apartment, while fare revenues of P200,000 were realized from the operation of the fleet of taxis Which of the following belongs to the partnership? A Two-door apartment B Lotto winnings of P1,000,000 C Salary of P500,000 D Fleet of taxis A partnership formed for the exercised of a profession which is duly registered is an example of A Universal partnership of profits B Universal partnership of all present property C Particular partnership D Partnership by estoppel A, B and C are partners in ABC Enterprises Not having established yet their credit standing, the three partners requested D, a well known businessman, to help them negotiate a loan from E, a money lender With the consent of A, B and C, D represented himself as a partner of ABC Enterprises Thereafter, E granted a loan of P150,000 to ABC enterprises What kind of partner is D? A Managing partner B Liquidating partner C Ostensible partner D Partner by estoppel Using the preceding number, assuming ABC Enterprises was unable to pay the loan on due date at which time the assets of the partnership amounted to P120,000 From whom may E collect the payment? A D only for the whole amount of P120,000 B A, B and C who are liable jointly for P50,000 each C ABC Enterprises for its assets of P120,000; hereafter, A, B and C from their separate assets at P10,000 each D ABC Enterprises for its assets of P120,000 thereafter, A, B, C and D from their separate assets at P7,500 each Which of the following losses will not cause the dissolution of a partnership? A Loss before delivery of a specific thing which a partner had promised to contribute to the partnership B Loss of a specific thing after its delivery to and acquisition of its ownership by the partnership from the partner who contributed the same C Loss after delivery of a specific thing where the partner contributed only its use and enjoyment where such partner reserved the ownership thereof D Loss before delivery of a specific thing where the partner promised to contribute only its use and enjoyment, reserving the ownership thereof 10 A partner can engage in business for himself without the consent of his co-partners if he is A A capitalist partner whether or not the business he will engage in is of the same kind as or different from the partnership business B An industrial partner whether or not the business he will engage in is of the same kind as or different from the partnership business C A capitalist partner and the business he will engage in is of a kind different from the partnership business D An industrial partner and the business he will engage in is of a kind different from the partnership business 11 The partnership will bear the risk of loss of three of the following things, except A Things contributed to be sold B Fungible things or those that cannot be kept without deteriorating C Non-fungible things contributed so that only their use and fruits will be for the common benefit D Things brought and appraised in the inventory 12 A partner’s interest in the partnership is his share of the profits and surplus which he may assign to a third person Which of the following statements concerning such right is correct? A The conveyance of a partner’s interest will cause the dissolution of the partnership B The assignee becomes a partner C The assignee has the right to interfere in the management of the partnership business D The assignee has the right to receive the profits which the assigning partner would otherwise be entitled thereto 13 Partnership as distinguished from corporation A Acquires juridical personality upon approval by the SEC and the issuance of certificate B Has limited liability C Created by operation of law D No power of succession 14 Essential elements or feature of a partnership, except A Must have a lawful object or purpose B There must be a contribution of money, property or industry to a common fund C With intention to divide and contribute whatever profits they make to other people D Must be established for the common benefit or interest of the partners 15 Partner who contributes money and/ or property, except A General B Capitalist C Industrial D Managing 16 Partner who contributes industry or labor A General B Capitalist C Industrial D Managing 17 Partner who contributes both capital and industry A B C D General Limited Managing Capitalist-industrial 18 Partner who is liable beyond the extent of his contribution A General B Limited C Industrial D Silent 19 Partner who is liable only to the extent of his contribution A Limited B General C Industrial D Managing 20 Partner who manages actively the firm’s affairs A Silent B Liquidating C Managing D Dormant 21 Partner who does not participate in the management though he shares in the profits or losses A Liquidating B Nominal C Ostensible D Silent 22 Partner who winds up the affairs of the firm after it has been dissolved A Liquidating B Managing C Industrial D Capitalist 23 Partner whose connection with the firm is known to the public A Ostensible B Secret C Silent D Nominal 24 Partner whose connection with the firm is concealed or kept secret A Ostensible B Secret C Silent D Nominal 25 Partner who is both a secret and silent partner A Nominal B Ostensible C Limited D Dormant 26 Partner who is not really a partner but who may become liable as such insofar as third persons are concerned A Nominal B Ostensible 27 C Silent D Secret May contribute money, property or industry to the common fund A Limited partner B General partner C Both limited and general partners D Dormant partner 28 May be required to make additional contribution in case of imminent loss: A Capitalist partner B Limited partner C Industrial partner D Choices A, B and C 29 A, B and C are partners each contributing P10,000 The firm’s indebtedness amounts to P90,000 It was stipulated that A would be exempted from liability Assuming that the capital of P30,000 is still in the firm, which of the following is not correct? A The creditors may get the P30,000 and still collect each P20,000 from A, B and C B A can recover P10,000 each from B and C should he (A) be required to pay the creditors C A cannot recover his original capital of P10,000 D The creditors can recover P45,000 each from B and C 30 A newly admitted general partner is liable to creditors existing at the time of his admission and his liability is A Up to his capital contribution only if there is stipulation B Up to his separate property even there is no stipulation C Up to his capital contribution even if there is stipulation D Up to his separate property only if there is stipulation 31 Using the preceding number, but the obligations were contracted after his admission, which of the following is correct? A He is liable to the creditors before and after his admission up to his separate property B He is liable to the creditors before and after his admission only up to his capital contribution C He is liable to the creditors before and after his admission up to his capital contribution and to the creditors after his admission up to his separate property D He is not liable to creditors existing before his admission 32 A and B are partners engaged in the real estate business A learned that C was interested in buying a certain parcel of land owned by the partnership, even for a higher price Without informing B of C’s offer A was able to convince B to sell to him (A) his (B’s) share in the partnership Then A sold the land at a big profit Which of the following is correct? A A is liable to B for the latter’s share in the profit B C is liable to B for the latter’s share in the profit C A new partnership is formed between A and C D The sale of the land to C is void since it was without the knowledge of B 33 A and B are partners in a real estate business A and B were approached by X who offered to buy a parcel of land owned by the partnership Thereafter B sold to A, B’s share in the partnership Then A sold the land to X at a big profit Which is correct? A The sale of the land to X is void B A is liable to B for B’s share in the profits C B may rescind the contract between A and X D A is not liable to B for any share in the profits 34 The following persons are disqualified to form a universal partnership, except A Husband and wife B Brother and sister C Those guilty of adultery and concubinage D Those guilty of the same criminal offense; if the partnership is entered into in consideration of the same 35 A, B and C are capitalist partners while D is an industrial partner A, the managing partner engaged personally in a business that is the same as the business of the partnership without the consent of the other partners As a result, A If there are losses, the partnership will bear the losses B If there are profits, the profits will be shared by A and the partnership C If there are profits, A will give the profits to the partnership D A will be excluded from the partnership and will pay damages 36 A, a managing partner is B’s creditor to the amount of P1,000 already demandable B also owes the partnership P1,000, also demandable A collects P1,000 from B One is not correct A If A gives a receipt for the partnership it is the partnership’s credit that has been collected B If A gives a receipt for his own credit, it is A’s credit that has been collected C If A gives a receipt for his own credit, P500 will be given to him, P500 to the partnership D B may decide that he is paying only A’s credit if the personal credit of A is more onerous to B 37 The remedy of capitalist partners against an industrial partner who engaged in a business for himself without the expressed permission from the partnership is: A To compel him to sell his interest to the said capitalist partners B To exclude him from sharing in the profits of the partnership C To remove him as manager if he is appointed as manger of the partnership D To expel him from the partnership and claim for damages 38 A partnership which comprises all the profits that the partners may acquire by their work or industry during the existence of the partnership is called: A Universal partnership of all present property B Universal partnership of profits C Particular partnership D Partnership at will 39 A partnership whereby the partners contribute to a common fund all the property actually belonging to them at the time of the constitution of the partnership, with the intention of dividing the same among themselves, as well as the profits which they may acquire therewith is: A Universal partnership of all present property B Universal partnership of profits C Particular partnership D Partnership at will 40 A partnership without a definite period of existence and which can be dissolved at any time by any of the partners is called: A Universal partnership of all present property B Universal partnership of profits C Particular partnership D Partnership at will 41 A, B and C, capitalist partners, each contributed P10,000 and D, the industrial partner contributed his services Suppose X, is the creditor of the firm amounting to P90,000 After getting the P30,000 capital assets of the partnership, which is correct? A X can recover P20,000 each from A, B and C only B X can recover P60,000 from either A, B and C only C X can recover P15,000 each from A, B, C and D D X can recover P15,000 each from A, B and C but D is exempt because he is an industrial partner 42 A, B and C are partners D is admitted as a new partner Will D be liable for partnership obligations contracted prior to his admission to the partnership? A No, only for those contracted after his admission B Yes, and his liability would extend to his own individual property C Yes, but his liability will extend only to his share in the partnership property and not to his own individual property D Yes, as if he had been an original partner 43 A partner who has all the rights, powers and subject to all restrictions of a general partner but whose liability is, among themselves, limited to his capital contribution is: A General partner B Limited partner C General-limited partner D Dormant partner 44 Bears the risk of things contributed to the partnership: A General partner B Limited partner C Partner contributing usufructuary rights over fungible things D Partner contributing usufructuary rights over non-fungible things 45 A, B and C, capitalist partners, each contributed P10,000 After exhausting the assets of the firm, the firm’s indebtedness amounts to P90,000 It was stipulated that A would be exempted from liability Which is correct? A A may recover his original capital of P10,000 B The creditors may collect P30,000 each from A, B and C C A can recover P20,000 each from B and C should he be required to pay the creditors D The creditors can recover P45,000 each from B and C 46 Instances when a partnership is unlawful, except A A partnership formed to furnish apartment houses which would be used or prostitution B A partnership formed for the purpose of acquiring parcels of land C A partnership formed for gambling purposes D A partnership formed to create illegal monopolies or combinations in restraint of trade 47 A and B orally agreed to form a partnership two years from today, each one to contribute P1,000 If at the arrival of the period, one refuses to go ahead with the agreement, can the other enforce the agreement? A Yes, because the partnership contract is not governed by the Statute of Frauds B Yes, because the prior agreement was voluntarily made C No, because the agreement was merely oral and executor D No, since the agreement is to be enforced after one year from the making thereof, the same should be in a public instrument to be enforceable 48 Where at least one partner is a general partner and the rest are limited partners A General partnership B Partnership by estoppels C Partnership de facto D Limited partnership 49 Where all the partners are general partners A General partnership B Partnership by estoppels C Partnership de facto D Limited partnership 50 A and B are equal partners in AB Partnership by contributing P50,000 each on June 1, 2010 On July 1, 2010, the partnership contracted an obligation to pay Z the amount of P180,000 on August 31, 2010 On August 10, 2010, C was admitted as a new partner C contributed P50,000 How will the obligation be paid? A A P60,000; B P60,000; C P60,000 B A P90,000; B P90,000; C None C A P180,000 or B P180,000 and C P50,000 D A P65,000; B P65,000; C P50,000 51 A, B and C are equal partners in ABC Partnership On April 29, 2010, C died Not knowing that C is dead, on May 2, 2010, A contracted a liability to D who also did not know about the death of C The liability is P90,000 After D exhausted the net assets of the partnership in the amount of P60,000, he can collect A P30,000 from A or P30,000 from B B P15,000 from A and P15,000 from B C P10,000 from the estate of C, P10,000 from A and P10,000 from B D P30,000 from the estate of C or P30,000 from B or P30,000 from C 52 A, B and C are partners Their contributions are as follows: A, P60,000; B, P40,000 and C, services The partners agreed to divide profits and losses in the following proportions: A, 35%; B, 25% and C 40% If there is a loss of P10,000, how should the said loss be shared by the partners? A A P6,000; B P4,000; C nothing B A P3,000; B P2,000; C P5,000 C A P3,500; B P3,500; C P3,000 D A P3,500; B P2,500; C P4,000 53 Using the preceding number, but the partners did not agree on how to divide profits and losses If there is a loss of P10,000, how should the said loss be shared by the partners? A A P6,000; B P4,000; C nothing B A P3,000; B P2,000; C P5,000 C A P3,500; B P3,500; C P3,000 D A P3,500; B P2,500; C P4,000 54 When the manner of management has not been agreed upon, who shall mange the affairs of the partnership? A Capitalist partners B Industrial partners C Capitalist-industrialist partners D All of the partners 55 A, B and C are partners in a partnership business A contributed P10,000, B contributed P5,000 and C his services only After payment of partnership debts, what remains of the partnership assets is P6,000 only In the absence of stipulation to the contrary, the share of C will equal to: A That of A B P2,000 C That of B D Nothing 56 A, B and C are partners in ABC Co D owes the partnership P4,500 A, a partner, received from D a share of P1,500 ahead of partners B and C, giving D a receipt for his share only When B and C were collecting from D, the latter was already insolvent Which of the following is correct? A Partner A can be required to share the P1,500 with B and C B A cannot be required to share the P1,500 with B and C C B and C should automatically exhaust first all remedies to collect from D 57 D B and C can automatically deduct from the capital contribution of A in the partnership, their respective share in the P1,500 A partnership suffered losses in the first year of its operation A, a capitalist partner, cannot contribute an additional share to the capital because of insolvency Can A be obliged to sell his interest to the other partners on the ground of such refusal? A Yes, A’ refusal to contribute additional share reflects his lack of interest in the continuance of the partnership B No, because there is actually no imminent loss of the business C Yes, provided that A is paid the value of his interest D No, because his refusal is justifiable 58 Which of the following is considered prima facie evidence of the existence of a partnership? A Where payment of interest on a loan depends on the profit of the business B The receipt by a person of a share in the profits C The sharing of gross returns of a business D Where the parties are established as co-owners of a property 59 A and B are partners, with A as the managing partner D is indebted to A in the amount of P10,000 and to the partnership in the amount of P5,000 Both debts are due and demandable D paid AP3,000 A issued to D a receipt in his own name How should the amount of P3,000 be applied? A The P3,000 should be applied to the indebtedness of D to A B The P3,000 should be applied to the indebtedness of D to the partnership C P2,000 should be applied to the indebtedness of D to the partnership and P1,000 to the indebtedness of D to A D P1,000 should be applied to the indebtedness of D to the partnership and P2,000 to the indebtedness of D to A 60 Using the preceding no but A issued to D a receipt in the name of the partnership How should the payment of P3,000 be applied? A The P3,000 should be applied to the indebtedness of D to A B The P3,000 should be applied to the indebtedness of D to the partnership C P2,000 should be applied to the indebtedness of D to the partnership and P1,000 to the indebtedness of D to A D P1,000 should be applied to the indebtedness of D to the partnership and P2,000 to the indebtedness of D to A 61 A, B, C and D are partners Their contributions are as follows: A, P50,000; B, P30,000; C, P20,000; D, services The partnership incurred obligations to third persons which the firm was unable to pay After exhausting the assets of the partnership, there still is unpaid balance of P10,000 to E Who are liable to E for the payment of the unpaid balance of P10,000 and how much should each pay to E? A A P5,000; B P3,000; C P2,000; D nothing B A P2,500; B P2,500; C P2,500; D P2,500 C A P4,000; B P3,000; C P2,000; D P1,000 D A P4,000; B P4,000; C P2,000; D nothing 62 One or more but less than all the partners have no authority to perform the following acts, except: A Do any act which would make it impossible to carry on the ordinary business of the partnership B Submit a partnership claim or liability to arbitration C Renounce a claim of the partnership D Convey partnership property in the ordinary course of partnership business 63 A, B and C are equal partners in ABC Partnership The partnership is indebted to D for P150,000 Partner A is indebted to E for P20,000 D attached and took all the assets of the partnership amounting to P90,000 B and C are solvent while A is insolvent and that he owns is a land valued at P15,000 Which is correct? A E has priority to the land of A as a separate creditor B D has priority to the land of A to cover A’s share of the P60,000 remaining liability of the partnership C B and C have priority to the land of A if they paid D the P60,000 remaining liability of the partnership D D and E shall both have priority to the land of A in proportion to their claims of P60,000 and P20,000, respectively 64 A, B and C are partners A is an industrial partner During the first year of operation, the firm realized a profit of P60,000 During the second year, the firm sustained a loss of P30,000 So, the net profit for the two years of operation was only P30,000 In the Articles of Partnership, it was agreed that A, the industrial partner would get 1/3 of the profit but would not share in the losses How much will A, the industrial partner will get? A A will get only P20,000 which is 1/3 of the profit of the 1st year of operation B A will get only P10,000 which is 1/3 of the net profit C A will get only P20,000 in the first year and none in the second year D A will share in the loss in the second year 65 Three (3) of the following are rights of a partner Which one (1) is not? A Right to associate another person to his share B Right to admit another partner C Right to inspect and copy partnership books D Right to ask dissolution of the firm at the proper time 66 I Partnership with a capital of three thousand pesos or more, in money or property, shall appear in a public instrument, and recorded at SEC Failure shall not affect the liability of a partnership and members thereof to third person II When immovable property is contributed, an inventory of said property is needed, signed by the parties and attached to the public instrument, otherwise the contract of partnership is void A True; True B False; False C True; False D False; True 67 I Co-ownership or co-possession does not in itself establish a partnership, except when such coowners or co-possessors share in the profits made by the use of the property II The sharing of gross returns does not of itself establish a partnership, except when the persons sharing them have a joint or common right or interest in any property from which the returns are derived A True; True B False; False C True; False D False; True 68 I The receipt by a person of a share of the profits of a business is conclusive evidence that he is a partner in the business II A partnership of all present property is where the partners contribute all property which actually belong to them to a common fund, with the intention of dividing the same among themselves, as well as all the profits which they may acquire therewith A True; True B False; False C True; False D False; True(?) 69 I In a universal partnership of all present property, the property which belong to each of the partners at the time of constitution of the partnership becomes a common fund of all partners and all profits which they may acquire through inheritance, legacy, or donation cannot be included in such stipulation, except the fruits thereof II The universal partnership of profits comprises all that the partners may acquire by industry or work during the existence of the partnership Movable or immovable property which each may possess at the time of the celebration of the contract shall continue to pertain exclusively to each, only the usufruct passing to the partnership A True; True B False; False C True; False D False; True 70 I A partnership must have a lawful object or purpose, and must be established for the common benefit or interest of the partners II When an unlawful partnership is dissolved by a judicial decree, the profits and partners’ contributions shall be confiscated in favor of the State A True; True B False; False C True; False D False; True 71 I A partnership may be constituted in any form, except where immovable property or real rights are contributed thereto, in which case a written instrument shall be necessary II Every contract of partnership having a capital of three thousand pesos or more in money or property shall appear in a public instrument which must be recorded in the office of the SEC, otherwise the partnership is void A True; True B False; False C True; False D False; True 72 I A contract of partnership is void, whenever immovable property is contributed thereto, if an inventory of said property is not made, signed by the parties and attached to the public instrument II A universal partnership of profits is that in which the partners contribute all the property which actually belongs to them to a common fund with the intention of dividing the same among themselves, as well as the profits which they may acquired therewith A True; True B False; False C True; False D False; True 73 I In a universal partnership of profits, the property which belong to each of the partners at the time of the constitution of the partnership becomes the common property of all the partners, as well as all the profits which they may acquire therewith II A universal partnership of all present property comprises only all that the partners may acquire by their industry or work during the existence of the partnership A True; True B False; False C True; False D False; True 74 I A universal partnership of profits comprises all movable or immovable property which each of the partners may possess at the time of the celebration of the contract and all that the partners may acquire by their industry or work during the existence of the partnership II Future property by inheritance, legacy or donation, including the fruits thereof cannot be included in the stipulation regarding the universal partnership of all present property A True; True B False; False C True; False D False; True 75 I A and B are partners in a universal partnership of profits Subsequently, A won first prize in the sweepstakes The prize money will belong to the partnership II A and B are partners in a universal partnership of profits Later A purchased a parcel of land The fruits of said land belong to the partnership A True; True B False; False C True; False D False; True 76 I Persons who are prohibited from giving each other any donation or advantage cannot enter into universal or particular partnership II A partnership begins from the moment of the execution of the contract, unless it is otherwise stipulated A True; True B False; False C True; False D False; True 77 I 78 I The partners shall contribute equal shares to the capital of the partnership II If there is no agreement to the contrary, in case of an imminent loss of the business of the partnership, any partner who refuses to contribute additional share to the capital, to save the venture, shall be obliged to sell his interest to the other partners A True; True B False; False C True; False D False; True 79 I If a partner collects a demandable sum, which was owed to him in his own name, from a Person who owed the partnership another sum also demandable, the sum thus collected shall be applied to the two credits in proportion to their amounts, even though he may have given a receipt for his own credit only, but should he have given it for the account of the partnership credit, the amount shall be fully applied to the latter II The risk of specific and determinate things contributed to the partnership so that only their use and fruits may be for the common benefit, shall be borne by the partner who owns them A True; True B False; False C True; False D False; True If property has been promised by a partner as contribution to the partnership, the fruits Arising from the time the property should have been delivered should also be given provided prior demand was made II A partner who has undertaken to contribute a sum of money and fails to so becomes a debtor for the interest and damages from the time he should have complied with his obligation, without the need of any demand A True; True B False; False C True; False D False; True 80 I In the absence of stipulation, the share of each partner in the profits and losses shall be equal to each other II A stipulation which excludes one or more partners from any share in the profits or losses is void, as a general rule A True; True B False; False C True; False D False; True 81 I The partner who has been appointed manager may execute all acts of administration despite the opposition of his partners, unless he should act in bad faith and his power is irrevocable without just or lawful cause II When the manner of management has not been agreed upon, none of the partners may, without the consent of the others, make any important alterations in the property of the partnership, even if it may be useful to the partnership A True; True B False; False C True; False D False; True 82 I Every partner may associate another person with him in his share, provided it is with the consent of all of the other partners II The capitalist partners cannot engage for their own account in any operation which is of the kind of business in which the partnership is engaged, unless there is stipulation to the contrary A True; True B False; False C True; False D False; True 83 I Every partnership shall operate under a firm name, which shall include the name of one or more of the partner II All partners, excluding industrial ones, shall be liable pro-rata with all their property and after all partnership assets have been exhausted, for the contracts which may be entered into in the name of and for the account of the partnership, under its signature, and by a person authorized to act for the partnership A True; True B False; False C True; False D False; True 84 I Persons who are not partners as to each other are not partners as to third persons, except in cases of estoppel II An admission or representation made by any partner concerning partnership affairs is evidence against the partnership A True; True B False; False C True; False D False; True 85 I A person admitted as a partner into an existing partnership is liable for all the obligations of the partnership arising before his admission as though he had been a partner when incurred and that such liability will extend to his own individual property II B has worked for M and Co., as procurer of contracts for fertilizers to be manufactured by the firm, and as supervisor of the mixing of the fertilizers However, he had no voice in the management of the business except in his task of supervising the mixing of said fertilizers For his service, he is entitled to 35% of the profits in the fertilizer business He is a partner in M and Co A True; True B False; False C True; False D False; True 86 I C was a bookkeeper in a partnership named “AB”, with a yearly salary amounting t 5% of the net profits or each year C, however had no vote at all in the management of the business He is a partner in AB II Unless there is a stipulation to the contrary, the partners shall contribute equal shares to the capital of the partnership A True; True B False; False C True; False D False; True 87 I Every partner may associate another person with him in his share, but the associate shall not be admitted in the partnership without the consent of all the other partners, even if the partner having an associate should be a manager II Articles of universal partnership, entered into without specification of its nature, only constitute universal partnership of profits A True; True B False; False C True; False D False; True