NOTES IN BUSINESS LAW SORIANO

PARTNERSHIP

1. A contract where two or more persons bind themselves to contribute money,

industry to common fund with the intention of dividing the profits among
themselves.

a. Voluntary association
b. Corporation
c. Partnership
d. Sole proprietorship

2. One of the following is not a characteristic of 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.

3. One. of the following is not a requisite of a contract 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 s 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

4. The minimum capital in money or property except when immovable property or

real rights thereto are contributed, that will require the contact of partnership to be
in a public instrument and be registered with the Securities and Exchange
Commission (SEC).

a. P5,000.00
b. P10,000.00
c. P3,000.00
d. P30,000.00

5. If the partnership has the minimum capital mentioned in No. 4, but the contract
is not in a public instrument or the same is not recorded with the SEC, the
partnership:

a. is void.
b. is voidable.
c. does not acquire juridical personality.
.d. still acquires juridical personality

6. Joseph and Edward entered into a universal partnership of all present property.
At the time of their agreement, Joseph had a four-door apartment which he inherited
from his father 3 years earlier. Edward, on the other hand, had a fishpond which he
acquired by dacion en pqgo from Robert. During the first year of the partnership,
rentals collected on the four-door apartment amounted to P480,000.00; while fish
harvested; from the fishpond were sold for P300,000.00. During the same period,
Edward received by way of donation a vacant lot from an uncle. The partners had a
stipulation that future property shall belong to the partnership. Which of the
following does not belong to the common fund of the partnership?

a. Fishpond.
b. Rental of P480,OOO.OO
c. Apartment.
.d. Vacant land

7. Vincent and James entered into a universal partnership of profits. At the time of
the execution of the articles of partnership, Vincent had a two-door apartment
which he inherited from his father 3 years earlier. James, on the other hand, had a
fleet of taxis which he purchased 2 years before. In the first year of the partnership,
Vincent earned P500,000.00 as a radio talent, while James won PI in the lotto.
During the same period, rentals of P120,000.00 were collected from the apartment,
while fare revenues of P200,OOO.OO were realised from the operation of the fleet of
Which or the following belongs to the partnership?
a. Two-door apartment.
b. Lotto winnings of P1,000,000.00
Salary of P500,000.00 .c
d. Fleet of taxis

8. A partnership formed for the exercise 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. estoppels

9. Three of the following partnership contacts are void. Which one is not?
a. A universal partnership •of all present property between husband and wife.
b. A universal partnership of profits between a man and a woman living together as
husband and wife without the benefit of marriage.
.c. A particular partnership between husband and wife
d. A universal partnership of profits a private individual and a public

10. John, Albert and Wilfred are partners in JAW Enterprises, Not having established
yet their credit standing, the three partners requested Simon, a well-known
businessman, to help them negotiate a loan from Carlos. a money -lender. With the
consent of John, Albert and Wilfred, Simon represented himself as a partner of JAW
Enterprises. Thereafter, Carlos granted a loan of P 150,000.00 to JAW Enterprises.
What kind of partner is Simon?
a. Managing partner.
b. Liquidating partner.
c. Ostensible partner.
.d. Partner by estoppel

11. Refer to No. 10. Assuming that JAW unable to pay the loan •on due date at
which the assets of the partnership amounted only to P120.000,00 From whom may
Carlos milect the payment?

a. Simon only for the whole amount of

b. John, Albert and Wilfred who are liable jointly for P50,OOO.OO each.
c. JAW Enterprises for its assets of P 120,000.00. thereafter John, and Wilfred from
their separate property at PIO,OOO.OO each.
d. JAW Enterprises for its assets of P120,000.00. thereafter, John, Albert, Wilfred and
.Simon from their separate assets each

12. Teresa, Olga, Pamela and Sofila, partners in Tops Company Limited, a trading
company, have contributions of P50,000.00 each. Teresa and Olga are general
partners; Pamela, a limited partner, and Sonia, a general-limited partner. TOPS
Company Limited purchased merchandise on credit from Moret Sales Co. amounting
to P 180,000.00. On due date, however, TOPS Company Limited was unable to pay.
Accordingly, Moret Sales Co. filed a case of collection against the partnership which
by then had assets amounting to P 150,000.00. From whom may Moret Sales Co.
collect the sum of P180.000.00?
a. The partnership for its assets of P150,000.00; thereafter, from Teresa and Olga at
P 15,000.Ø each from their separate assets.
b. Teresa and Olga only at P90,000.00 each from their separate assets.
c. The partnership for its assets of P 150 000.00; thereafter, from Teresa, Olga, and
Sonia at P 10,000.00 each from their separate property. However, Sonia can recover
.P5,000.00 each from Teresa and Olga
d.Teresa, Olga and Sonia at P60,000.00 each. Thereafter, Sonia can recover from
Teresa and Olga P30,000.00 each,

13. Which of the following losses will not cause the dissolution of a partnership?
a. Loss before delivery of a specific thing which a partner has 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 specific thing where the partner contributed only its use and
enjoyment, he having 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.
14. Gregory, Edmond and Mark are partners in GEM Company with contributions of
P10,000.00, P40,000.00 and P50,000.00 respectively. Their agreement shows that
they will share in the profits in the ratio of 2:3:4. During the year, the partnership
sustained a loss of P9,000.00. How shall this loss be divided among the partners?
a. Equally at P3,000.00 each.
b. Gregory, P900.00; Edmond, P3,600.00; and Mark, P4,500.00.
c. Gregory, P2,000.00; Edmond, .P3,000.00; and Mark, P4,000.00
d. The partners must establish first a loss sharing agreement before the loss may
be divided because they failed to have an agreement on the division of loss.

15. Which of the following stipulations is valid?

a. A stipulation excluding a capitalist partner from profits.
b. A stipulation exempting a capitalist partner from losses.
.c. A stipulation exempting an industrial partner from losses
d. A stipulation excluding an industrial partner from profits.

16. 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 engage. in is of a kind different from
the partnership business.

17. Which of the following statements is false when no one among the partners was
appointed as manager?
a. Each partner will be considered as agent of the partnership
b Any one may make an important alteration in the immovable property of the
partnership without the consent of the others provided it is useful to the
.partnership
c. In case the act of one partner is opposed by another, the decision of the majority
of the partners will prevail.
d. In case of a tie in the voting, the tie shall be resolved by the vote of the partner
owning the controlling interest.

18. The following statements pertain either to a partner appointed as manager in

the articles of partnership or through. a document after the formation of the
partnership.

I. He may be removed as manager only for a just or lawful cause by the vote of the
partners owning the controlling interest.
II. He may be removed as manager with or without just or lawful cause by the vote
of the partner owing the controlling interest.
III. He may perform all acts of administrator despite the opposition of his partners
provided he is in good faith.
IV. He may perform all acts of administration in good faith but opposing partners
may resort to his removal if he persists.

Based on the foregoing:

.I and Ill pertain to a.partner appointed as manager in the articles of partnership
I and Ill pertain to a partner appointed as manager through a document after the
formation of the partnership
Il and Ill pertain to a partner appointed through a document after the formation of
the partnership. I and IV pertain to a partner appointed as manager in the articles of
partnership

19. Campos, Urbano, Tamesis and Encanto are partners in CUTE Company each one
contributing P300,000.OO except for Encanto who is an industrial partner. The
aUeed that. Campos shall be exempted, from liability to third persons. Three years
of continued losses formation of the partnership resulted in unpaid partnership
liabilities to third persons amounting to P500,OOO.OO. Partnership assets have also
been reduced P200,OOOe00. From whom may third persons collect the partnership
debts?

a. From the partnership assets of P200,000.OO; thereafter, from the partnerS for
their separate assets at PIOO,OOO.OO each except Campös who was exempted
from liability to third persons by agreement.
b. From the partnership ' assets of thereafter, from the partners for their' separate
assets at P 100,000.00 each except for Encanto since an industrial partner does .not
share in the losses.
c. From the partnership assets of P200,000.00', thereafter, from all the partners for
their separate assets at each including Campos and Encanto.
d. From the partnership assets of thereafter, from Urbano and Tamesis only for their
separate assets at P150,000.00 since Campos was exempted from liability by
agreement, Encanto, being an industrial partner is not liable for losses.

20. The partnership will bear the risk of the •loss of three of the following things.
Which is the exception?

a. Things contributed to be sold.

b. Fungible things or those that cannot be kept without deteriorating.

c. Things contributed so that only their use and fruits will be for the common
benefit.
d. Things brought and appraised in the inventory.

21. 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?
The conveyance of a partner's interest will caUse the dissolution of the partnership.
The assignee becomes a partner,
The assignee has a right to interfere in the management of the partnership
business.
The assignee has the right to i•receive the profits which the assigning partner
would otherwise be entitled to.

22. Torres is indebted for P5,000.00 to MACE Trading Company, a partnership

managed by Mendoza to whom Torres also owes P 10,000.00. The two debts which
are both demandable are unsecured. Torres remits P4,500.00 to Mendoza in
payment of his debt to him.

"Accordingly, Mendoza issues a receipt for his own credit. To which credit should
the payment be applied?
a. To Mendoza's credit because the payment made by Torres is intended for his
debt to Mendoza who issues his own receipt
b. To both the partnership credit and Mendoza's credit proportionately at P
1,500.00 and P3,000.00, respectively.
c. To Mendoza's credit because its amount is greater than that of the
partnership credit.
d. To the partnership credit because the managing partner. should not prefer his
own interest to that of the partnership.

23. In three of the following wrongful acts of partners, the partnership is solidarily
liable with all the partners to third persons. Which one is the exception?
a. For loss or injury caused to a third person by reason of the wrongful act or
omission of a partner acting in the ordinary course of business,
Where a partner acting within the scope of his apparent authority receives money
or property of a third person and misapplies it.
Where the partnership receives money or property of a third person in the ordinary
course of business
d. For loss or injury caused to a third person by reason of the use of partnership
property by a partner for personal purpose.

24. Benito, Iglacio, Gregorio, Artemio and Servando are partners in BIGAS Company
which- is engaged in the buying and selling of rice. Benito is the manager. Ignacio
was also given a special power of attorney. by the partnership to buy a van for the
company. No other power was given to all the partners. In which of the following
acts or contracts is the partnership not bound by the act of the partner?
a. Ignacio buying rice for the partnership from Teodoro who has no knowledge of
Ignacio’s lack of authority.
b. Ignacio buying a van for the partnership from Teresa.
c. Gregorio buying a van for the partnership from Thelma who has no
knowledge of Gregorio's lack of authority.
d. Benito selling rice for the partnership.

25. Assuming that no fraud is committed by gr Consented to by the partner

concerned, which of the following statements is false?
a. Notice to any partner relating to partnership affairs while already a partner is
notice to the partnership.
Knowledge of a partner acting on the particular matter acquired by him while
already a partner is knowledge of partnership.
is knowledge of the partnership.
Which of the following statements is incorrect?
partner's share in the partnership assets.

27.The change in the relation of the partners caused by any ceasing to be

associated in the carrying on the business is known as:
a. termination of the partnership,
b. winding up of partnership affairs.
c. liquidation of the partnership business.
d. dissolution of the partnership.

28. A decree by the court is necessary to dissolve a general partnership based on

three of the following grounds. Which one will not require such decree but will cause
the automatic dissolution of the partnership?
a. The business of the partnership can only be carried on at a loss.
b. A partner is shown to be of unsound mmd.
c. A partner has been guilty of such conduct as tends to affect prejudicially the
carrying Jn of the business.
d. A partner is civilly interdicted.

Three of the following will cause the automatic dissolution of a general Partnership.
Which one will not?
a. When any event makes it unlawful for the business bf the partnership to be
carried on or for the members to carry it on in partnership.
Expulsion of any partner from the business bona fide in accordance with such a
power conferred by the agreement between the partners.

A partner becomes in any way incapable of performing his part of the partnership
contract.
The insolvency of a partner or of the partnership.

When is the partnership not bound by the act/s of a partner after dissolution in the
following cases?
a. Acts necessary to wind up affairs.
b. Acts to complete transactions begun before dissolution.
c. New transactions where the' third person is a previous creditor and there was a
publication of the dissolution in a newspaper of general circulation in the. place or
places where the business had been carried on but such third person has not read
it.
d. New transactions where the third person is a new creditor and there was
publication of the dissolution in a newspaper of general circulation in the place or
places where the business had been carried on but such creditor has not read it.

The partnership -is not bound in three of the following acts of a partner after
dissolution. However, it is bound in one. Which is it?

Where the partner acting is insolvent.

When it is unlawful to carry on the business.
When the partner has no authority to wind up partnership affairs and the third
person is a

previoUs creditor who had no knowledge of the partner's lack of authority.

d. When a partner has no authority to wind up partnership affairs and the third
person is a new creditor who has not read the publication of the lack of authority of
the partner in a newspaper of general circulation in the place or places where the
partnership business is. carried on.

What is the order of payment of liabilities of a dissolved general partnership using

the code number representing each liability?
1. Those owing to partners other than for capital or for profits.
11. Those owing to creditors other than partners.
111. Those owing to partners in respect of profits, IV. Those owing to partners
in respect of capital.

1, 11, 111, IV.

11, 1, IV, 111.
11, 1, 111, IV.
1, 11, IV, 111.

In a limited partnership where there are 4 partners:

All the partners must be limited partners.

The number of limited partners must be equal the number of general partner, that
is, 2:2.
The number of limited partners must be greater than the number of general
partners, that is, 3:1.
It is enough that there is one •limited partner; rest may all be general partners,

34.
A limited partner may contribute:

Money and/or property.

Money and/or services.
Property and/or services.
Services only.

A limited partner shall be liable as general partner in three of the following cases.
Which one is the exception?
When he is a.general-limited partner as stated in the certificate.

b, When he takes part in the control of the business. When he participates in the
management of the business.
When his surname which appears in the partnership name is also the surname of a
general.
 partner.

which of the following omissions will make a partnership formed as a limited

partnership liable as a general partnership?
1. The certificate is not signed and sworn to by all the partners.
11. The certificate is not registered with the Securities and Exchange Commission.

11K The name does not include the word "Limited" or "Ltd.", its abbreviation, in
the certificate.

1 and 11,
11 and 111.
1 and 111.
1, 11 and 111.

A person admitted to all the rights of a limited partner who has died or has
assigned his interest iri the partnership is known as:

An ostensible partner.
A liquidating partner.

c. A substituted limited partner.

d. A general:limited partner.
38. If the assignee does not become the partner referred to in the preceding
number, his rights do not include:
The receipt of the assignor's share of the profits.

The receipt of the assignor's other compensation by way of income.

The return of the assignor's contribution.
The inspection of partnership books or account of partnership transactions.

39. What is the order of payment of- liabilities of a dissolved limited partnership
using the code number representing liability?
Those owing .to general partners other than for capital or for profits,
accöunt of their contributions and general partners.
111. Those owing to limited partners by way of" their share in the profits and other
compensation by way of income.
Those, owing to limited partners ih respect to the' capital of their contributions.
Those owing to general • partners in respec€ of capital. Those owing to general
partners in respect of profité.
a. 1, 11, 111, IV, V,

b. 11, 1, 111, IV, V, VI.

c. 11, IV, VI, V.
d. 11, 111, IV, l, V.

Which of the following will not cause the automatic dissolution of a limited
partnership?

Death of a general partner.

Death of a limited partner,

Insolvency of a general partner.

d. Insanity of a general partner.

One of the distinctions between a partnership and a corporation is that a

partnership:

a. May be formed by one person:

b. Is created by operation of law.
c. Acts through a board of directors.
d. May exist for an indefinite period.

Belinda, Ara, Rica and Klaudia are partners in BARK Enterprises, a pet shop, with
Belinda contributing P50,OOO.OO; Ara, P20,OOO.OO•, and Rica,. P30,OOO.OO.
Klaudia is an industrial partner and manages the

Based on the foregoing information, which of the following statements is false?

a. Belinda may engage in the buying and selling of rice without the consent of the
other partners.
e. Klaudia may engage in the buying and selling of rice without the consent of the
other partners.
f. Klaudia is not liable for the losses of the partnership.
g. Klaudia may be held liable by third persons for partnership debts AVi{h her
separate property.

43. Josephine, Ellen, Wilma, Edith and Lydia are partners in JEWEL Company, Ltd.
Josephine, Ellen and Wilma are general partners, Edith is' a general-limited partner,
while Lydia is a limited partner. Based on the foregoing information, which of the
following statements is false?

a. Josephine, Ellen and Wilma may be held liable with their separate property after
the exhaustion of partnership assets.
b. Edith may participate in the management of the partnership,
c. Edith may not be held liable with her separate property for partnership debts
after the exhaustion of partnership assets.
d. Lydia may not be held liable with her separate property for partnership debts
after the exhaustion of partnership assets.
44. Which of the following will not cause the automatic dissolution of a general
partnership?
a. Death of a partner.
b. Insolvency of a partner.
c. When the partnership business becomes unlawful.
d. Insanity of a partner.

45. Wilma, Olga and Wynona ,agreed to form a limited partnership with Wilma and
Olga as general partners contributing P50,000.00 each, and Wynona as limited
partner contributing P 100,000.00. The partnership which is to engage in the trading
of garments was named "WOW Garments Co., Limited" as indicated in the .
certificate signedJ and sworn to by the partners before a notary public, However,
the certificate was not filed .with the Securities and Exchange Commission. Oln the
meantim the partners already began operating the business transacting with third
persons.
a. The partnership entered into by , the Wilma, Olga and Wynona is void.
b. The. partnership will be considered a general partnership assets.
c. The partnership will be considered •a limited partnership as indicated in its
name. Only Wilma and Olga will be liable with their separate Property after the
exhaustion of partnership assets.
d. Wilma, Olga and Wynona will be considered separately as sole proprietors
with each one having a • capital equivalent to their respective contributions.

46. Fernando, Filoteo, Fortunato and Fulgencio are partners •in the firm F4
Enterprises which is engaged in the trading of ertilizers. Fernando contributed
P50,000.00; Filoteo, P3 ,000.00; and Fortunato, P20,000.00. Fulgencio is an
industrial partner and manages the partnership. Based on the foregoing facts,
which of the following stateménts is incorrect?
Fernando may engage in the business of trading car spare parts without the
consent of the other partners.
b. Filoteo may be validly exempted from losses incurred by the partnership by
agreement of the partners.
Fulgencio may not engage in the car repair business without the consent of his
Fulgencio is exempt from losses although there is no agreement among the
partners.

47 Bettina, Ertinda, Amanda, Ursula, Teresa and Yolanda are partners in BEAUTY
Enterprises, a dealer in cosmetics and other beauty products, with contributions of
P60,OOO.OO, P50,OOO.OO, P40,OOO.OO;
P20,000.00, and P 10,000.00,- respectively. No one was appointed as Fnanager in
the articles of partnership.

a. Bettina is the manager because she made the biggest investment.

b. Every act in the ordinary. course of the business will have to bé decided by the
.majority determined on a per head basis.
c. Every act in the ordinary course of the business will have to be decided by the
controlling interest (biggest investment) although the partners owning them•do not
constitute the majority.
d. All the partners are agents or-managers of the partnership and any one of them
may perform acts of administration.

Which of the following will not cause the automatic dissolution of a general
partnership?
a. Death of a capitalist partner.
b. Insolvency of a capitalist partner.
c. Insanity of an industrial partner.
d. Civil interdiction of an industrial partner.

PATOK Enterprises, å partnership engaged in the business of renting.out video

films, is owned by Patricia, Alice, Tina, Olga, and Kaye, with Kaye as the manager.
Diana owes PATOK Enterprises P6,OOO.OO and Olga, P4,000.00. Both debts are
ansecured and are already due. Diana pays Olga P4,000.OO for which Olgå issues
her own receipt.

a. The payment should be applied to Olga's credit only.

b. The payment should be applied to PATOK's credit only.
c. The payment should be divided proportionately between PATOK and Olga, at
P2,400.00 and P 1,600.00, respectively.
d. The payment should be divided equally between PATOK and Olga at P2,OOO.OO
each.

Federico, Alberto, Sofronio and Teodoro are partners in FAST Motorparts Company,
a dealer of car spare parts:

Federico, Alberto and Sofronio invested P500,000.OO, P200,000.00 and

P300,000.00, respectively, Teodoro is an industrial partner who manages the
partnership. The partners have stipulated that Federico shall be' from liability to
third persons. At the end of three yearPt the assets of the partnership have
dwindled to P220,000.OO while its liabilities go third persons have balance of
P340,000.00. How much ultimately will be the share of each partner after payment
to third persons the settlement among the partners?
a. P30,000.00 for each partner.
b. Federico, P60,OOO.OO; Alberto; P24;OOO.oo. Sofronio, P36,000.00; and
Teodoro, none.
c. Federico, . none; Alberto, P48,OOO.OO:, Sofronio P72,000.00; and Teodoro,
none.
d. Federico, none; Alberto, • Sofronio and Teodoro P40,OOO.OO each.

51. Johh Solanda and Sons is a partnership composed of three Partners, namely:
Robert Solanda, Simon Solanda and Theodore Solanda. The partners are the sons of
John Solanda who has retired from business but who suggested that they include his
name in the firm to éve them an advantage since he is well-known in the business
community.
John Solanda shall have all the fights of a general partner.
11. John Solanda shall have all the liabilities of a general partner.
Based on the foregoing facts:
a. Both statements are true.
b. Both statements are false.
c. Statement I is true; Statement is false.
d. Statement I is false; Statement Il is true.

52. The following partnership contracts were presented to you for evaluation:
1. A partnership engaged in the sale of office supplies with a capital of P 100,00
0 broken down into: cash, P30,000.00; office supplies for sale; P50,OOO.OO; and
office equipment, P2Ö,OOO.OO. The agreement is in a private instrument.
A partnership engaged in the lease of office spaces with a capital of P700,000.00
broken down into:
land, PIOO,OOO.OO; building, P500,OOO.OO; cash, P80,OOO.OO•, and office
equipment, P20,OOO.OO. The agreement is in a public instrument"attached to
which is the inventory of the land and the building signed by the partners. The
ageement is not recorded with the Securities and Exchange Commission.
111. A partnership engaged in the trading Of computers whose name is "Lamont
Enterprises; Ltd." It has a total capital of P500,000.OO broken down into P
100,000.00 cash and computers worth P400,000.00, contributed by both general
and limited partners. • The. agreement was subscribed and sworn to by all the
partners before a notary public but not recorded with the Securities and Exchange
Commission.
Based on the fpregoing:
a. Each partnership has a separate juridical personality.
b. I and I! have separate juridical personality.
c. Il and Ill have separate juridical personality.
d. None of the partnerships has a separate juridical personality.

53. GREAT Company, a partnership engaged in • the distribution of generators, is

composed of Oeotge, Roland, Edmond, Albert and Troy. George is the managing
partner. During the month of April, the following transactions were entered into by
the following partners in behalf. of the partnership without any authority:

1. The sale of a generator by Roland to Juan •Totres

who was not aware that Roland had no authority. Juan Torres has paid for the
generator which is due for delivery.
The purchase of a car by Edmond from Intrepid Motors whose owner was not aware
of Edmond's lack of authority. The car and the price are due for delivery and
payment, respectively.
Based on the foregoing, the partnership is bound by:
a. Transaction I only.
b. Transaction Il only.
c. Both Transactions I and Il. c.
d. Neither Transaction I nor IL

MARK Company, is a partnership engaged in the trading business, with Marquez,

Alconcer, Ramos, and Kanapi partners. Marquez, Alconcer and Ramos are capitalist
partners, contributing PIOO,OOO.OO,and P40,000.00, respectively. Kanapi is an
industrial partner; The partners have a stipulation thaf Marquez shall. not be liable
for partnership liabilities. After three years of continued losses, the partnership
incurred liabilities of P200,000.00 at which time its assets had dwindled to
P140,000.00. After partnership •assets have been exhausted, partnership creditors
may go after the Separate assets of:
a. all the partners.

Marquez, Alconcer and Ramos, but not those of Kanapi.

Alconcer, Ramos and Kanapi, but not those of Marquez.

•d. Alconcer and Ramos only.

Sibal, Untalan, Parefio, Eusebio, and Rances are partners in SUPER Enterprises
whose business is car painting and repairs. All partners are capitalist partners with
Sibai as manager. After five years of operations, Rances resigned from the
partnership. Although Sibal was aware of the resignation of Rances, he still bought
50 gallons of car paint from Masterpaint owned by Marcelo who had been dealing
with SUPER for the past. 5 years, and car spare parts from Supremeparts, owned by
Salviejo who was transacting for the first time with SUPER. The dissolution of SUPER
was Published in the Manila Bulletin but neither Marcelo nor Salviejo read it. Neither
one knew at the time they transacted with Sibal that the partnership had been
dissolved.

a. SUPER is liable to both Masterpaint and Supremeparts.

b. SUPER is liable to Masterpaint only.
c. SUPER is liable to Supremeparts only.
d. SUPER is not liable to both Masterpaint and Supremeparts.
56. TRIUMPH Company, a partnership engaged in the buying and selling of car
spare parts, has for its partners and. their respective contributions the following:
Tomas,

p 10,000.00; Ramon, PQO,OOO.OO; Ignacio; P30,OOO.OO; Urbano; P40,000.00;

Marcos, PIOO,OOO.OO; Pablo,

200,000.00; and Hilario, P300,OOO.OO. •No one was as manager of the

partnership. In the course of the operation of the partnership, Tomas proposed to
buy spare parts from Dominion Motors, but his proposal was opposed by Ramon. A
voting among the partners took place and Ignacio, Urbano and Marcos sided with
Tomas, while Pablo and Hilario sided with Ramon.
a. The group of Tomas, Ignacio, .Urbano and Marcos will prevail because they
constitute the majority.

The group of Ramon, Pablo and Hilario will prevail because they own the controlling
interest.
None will prevail because no- one was appointed as manager of the partnership.
The partners will. have to appoint a manager in order to resolve the conflict.

57. Refer to No. 56. Assuming that when the voting took place, Marcos abstained,
Ignacio and Urbano sided with Tomas, while Pablo and Hilario sided with Ramon.
a. None will prevail because the voting was equal.
b. The of Ramon, Pablo and Hilario will prevail because they own the controlling
interest.
 c. None will prevail because no one was appointed as manager of the partnership.

d. The partners will have to appoint a manager in order to resolve the con Äicte
58. Refer to No. 56. Assume the same facts except that in the articles of
partnership, Tomas,• Ramon, Ignacio, Urbano and Marcos were appointed
managers. In the course of the operation of the partnership, Tomas proposed to buy
car spare parts from Dominion Motors, but his proposal was opposed by Ramon. A
voting among the managing

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partners took place and Ignacio and Urbano sided With Tomas, while Marcos sided
with sided with Ramon.
a. The group of Tomas, Ignacio and Urbano Will prevail because they constitute
the majority of the managing partners.
b. The group of Ramon and Marcos will prevail because they own the controlling
interest among the manaöng partners.
c. The conflict will have to be referred to Pablo. and Hilario because they
represent the controlling interest among all the partners.
d. The partners will have to agree that all of them must be managers iri order to
resolve the conflict,
59. Refer to No. 58. Supposing that when the voting among the managing partners
took place, Ignacio sided with Tomas, Urbano abstained, while Marcos sided with
Ramon.
a. None will prevail because the voting was equal.
b. The group of Ramon and Marcos will prevail because they own the' controlling
interest among the managing partners,
The conflict will have to be referred to Pablo and Hilario because they represent
$he controlling interest among all the partners.
The conflict will have to be referred to an arbiter for its resolution.
Donna, Emma, Alma and Rona are partners in DEAR Company withs Donna as
manager. , Tricia owes DEAR Company P5,500.00 and Donna, in Donna's .personal
capacity, P4,500eOO. Tricia's debt to Donna is secured by a pledge of her diamond
ring. Both debts are already due. Tricia pays P4,500.00 to Donna afid tells her that
the same is in payment of her debt to Donna. Donna, thus, issues her personal
receipt.
a. The payment of' P4,500.00 will be applied proportionately to the two credits:
to the partnership credit at P2,475.00; to Donna's credit at P2,025.00.• This is
so because Donna should not place her interest before that Of DEAR Company.

The payment of P4,500.OO will be applied entirely to Donna's credit.

The payment will be applied in partial payment of the partnership credit of
P5,50C.CO; hence, there will be a balance of P 1,000.00.
Tricia, Donna and DEAR Company will have to agree as to which credit the payment
shall apply.

Which of the following statements concerning the name of a partnership is false?

 The partnership name may include the name of only one of the partners.
The partnership name may include the names of two or more, but not all of the
partners.
The partnership name may include the names of all the partners.
The partnership cannot adopt a name which does not include the name of at least
one of the partners.

Ornussa, the owner of a vacant lot, 'leased the same to Florida under an agreement
that the rental shall be paid by Florida at the rate of 10% of the annual net income
of the flower business that she would put up on the lot. A private agreement was
signed by the pasties. In the first year of operations, Ornussa received from Florida
the amount of P20,000.00 representing 10% of the net income of the flower shop
business.

Omussa is a partner of Florida by her mere receipt of the share of the net profits of
the flower business of Florida.

the relationship of Ornussa and Florida is only that of a lessor and lessee.
Ornussa and Florida have a •dual contract: partnership and lease.

Ornassa and Florida are not partners; neither are they lessor and lessee because
their agreement was not. in a public instrument.

LIFE Company, a partnership engaged in the water distribution business, is

composed of partners Larredo, Ingles, Filler and Encanto. One day; Larredo was
driving the firm's delivery truck beyond the speed limit in order serve its customers,
when he rammed into and caused extensive damage on the parked car of Tertullo.

Only Larredo can be held liable for damages by Tertullo.

LIFE Company and Larredo are solidarily liable for damages to Tertullo.

LIFE Company and the four partners are solidarily liable for damages to Tertullo.
d. LIFE Company and the four partners are jointly liable for damages to Tertullo.

A person admitted as a partner into an exis partnership shall be liable up to the

extent of his Separate assets for what obligations?
a. Obligations of the partnership existing at the time of his admission only if there
was a stipulation.
Obligations of the partnership incurred after his admission only if Chere was a
stipulation.
Obligations of the partnership incurred before and after his admission even if there
was no stipulation.
Obligations of the partnership incurred before his admission if there was a
stipulation, and those incurred after his admission even if there was no stipulation.
PARAGON Enterprises, a partnership engaged in the garments manufacturing
business, is composed of partners Pacis, Ramas and Gonzales; During the year,
PARAGON bought a computerized embroidering machine amounting to P300,000.00
from Tadena with the following stipulation: down payment of P50,000.00; balance to
be paid in amount equal to 20% of the monthly net profits of PARAGON until the full
amount is paid.

a. Tadena is an actual partner of Pacis, Ramas and Gonzales during the time that he
receives a share of the profits of PARAGON as payment of the purchase price of the
machine.
b. Tadena is only a partner by estoppel of Pacis, Ramas and Gonzales during the
time that he receives a share or the profits of PARAGON as payment of the purchase
price of the rndthine.

Tadena is not a partner of Pacis, Ramas and Gonzales whether before or after he
has received the full payment of the purchase price of the machine from PARAGON.
Tadena is only a nominal partner of Pacis, Ramas and Gonzales during the time that
he receives a share of the profits of PARAGON as payment of the purchase price of
the machine

66. MAGIC Company is a partnership composed of' Martha, Agnes, Glenda, Irene
and' Candice, with Martha as manager who is authorized to collect the credits of the
partnership. Theresa owes Martha P4,OOO.OO which is due on December 10. She
also owes MAGIC Company p6,OOO.OO which is due on December 20. On December
15, Theresa tendered payment in the amount of P4,OOO.OO to Martha in payment
of her debt to the latter. Martha issued her own receipt acknowledging the payment.
The payment will be applied proportionately to the credits of MAGIC and Martha : in
the amount of P 1,600.00 and 92,400.00, respectively.
The payment will be applied in its entirety to Martha's credit.
The payment will be applied in its entirety to MAGIC's credit.
The payment will be applied equally to the two debts of Theresa.

67. Aseron, the managing partner of ACE Company, was driving the delivery truck
of the firm when he rammed it into an electric post resulting in damages to the
vehicle amounting to P50,000.00. To make up for accident, Aseron worked long
hours for the firm and was able to •increase its sales from to P 15,000,000.00.

a. Aseron will no longer be liable for damages to ACE because he was able to
generate unusual revenues for the firm through his extraordinary efforts.
b. Aseron will still be liable to the firm for damages but the amount will be equitably
reduced since he was able to generate unusual profits for the through his
.extraordinary efforts
c. Aseron’s obligation to the firm for damages Will extinguished by compensation
since ACE Is also liable to him • for the extraordinary efforts exerted to increase its
sales.
d. Aseron and ACE will share equally in the damages of P50,000.00

68. Trevor owes P3,000.00 to CHAMP Company, a partnership composed of Charles,

Harry, Albert, Mark and Prince, With Mark as the manager who is authorized to
collect credits of the firm. He also owes Charles the amount of P6,000.00. Both
debts are already due. Trevor gives P3,000.00 to Charles in payment of his debt to
the latter. Charles thus issues his own receipt.
a. Payment will be applied proportionately to the credits at P1,000.00 for Charles'
credit and P2,000.00 for CHAMP's credit.
b. Payment will. be applied equally to the two credits.
.c. Payment will be applied in its entirety to Charles' credit
d. Payment will be applied in its entirety to CHAMP's credit.

69. Barranda wrote Salvador a letter wherein he• placed an order for a laptop
computer worth P80,OOO.OO. In writing the letter, Barranda used a stationery which
had for its letterhead "Barranda and Bermudez, Real Estate Agents." Bermudez is
not really a partner of' Barranda but they agreed to use the said letterhead to give a
semblance of bigness by making it appear that the two of them are partners.
Salvador delivered the laptop computer but Barranda defaulted in his payment of its
price. Against whom may Salvador-proceed?

a. Barranda only since Bermudez is not his partner.

b. Barranda only since the purchase of the laptop computer is his personal
transaction
c. Barranda and Bermudez since they are partners in so far as Salvador is
.concerned
d. “Barranda and Bermudez, Real Estate Brokers,” only since an actual partnership
was created between Barranda and Bermudez and it has a personality separate and
distinct from the two.

70. Daoang and Depante have been partners for more than 5 years in the purified
water business. At the start of the sixth year, Daoang assigned his interest in the
partnership to Trinidad, but Depante objected on the ground that he did not want
Trinidad to be his partner.
a. Trinidad automatically became a partner of Depante when Daoang conveyed his
interest to him.
b. Daoang and Depante continue to be partners despite Daoäng's conveyance of his
.interest to Trinidad
c.The partnership between Daoang and Depante was automatically dissolved when
Daoang conveyed his interest to Trinidad.
d. The conveyance by Daoang of his interest in the partnership to Trinidad entitled
the latter to inspect the books, and participate in the management of the
partnership.

71. Palacios, Atienza, Tablante, Elamparo, Robledo, Ocampo and Sajenes are
partners in PATEROS Poultry Farms. Palacios, Atienza and Tablante have been
appointed as managers of the firm with the stipulation that none shall act without
the consent of the other two. On the date of the scheduled delivery of 500 kilos of
frozen dressed chickens ordered by Caintacky Restaurant, heavy rains caused a
power failure and made transport difficult due to landslides. A local resident offered
to purchase the dressed (which were already thawing) at 80% of the contract price.
However, only Palacios and Atienza were around to decide as Tablante, who was on
business trip for the firm, could not be contacted due to poor communication
signals.

a. Palacios and Atienza cannot decide by themselves because the managing

partners must act with unanimity.
b. Palacios and Atienza may decide by themselves since any further delay would
.result in more losses to the firm
c. Palacios and Atienza can decide by themselves since they constitute the majority
among managing partners, which is the required vote notwithstanding a stipulation
that one cannot without the consent of the other managers.
d. The absence of Tablante cannot bc alleged since there was stipulation that none
of the managing partners shall act without the consent of the others,

72. Querubin, Roces and Solis are partners in a law firm. Querubin was appointed as
judge of Regional Trial Court. Such appointment:
a. suspends the participation of Querubin in the manegement of the firm without
causing the dissolution of the partnership.
b, prohibits the inclusion of the name of Querubin in the firm name without
dissolving the partnership.
.c. results in the dissolution of the partnership
d. merely requires the disclosure of Querubin's appointment to the court without
dissolving the partnership.

73. Braganza, Ortiz and Nevado want to form a partnership with Braganza
contributing P500,000.00; Ortiz, office equipment; and Nevado, his services. If the
three were to form a limited partnership, who among them will be the limited
partner/s?
.a. Either Braganza or Ortiz or both of them
b. Either Ortiz or Nevado or both of them.
c. Either Braganza Or Nevado or both of them.
d. All the three must be limited partners.

74. Refer to the preceding number. Assume that the three decide to form a general
partnership, As a result, which of the following is incorrect?

a. Any of the three may be appointed as manager,

h. All of them may be appointed as managers.
c. Only Nevado may be appointed as manager because he only contributes his
.services
d. Any two of them may be appointed as managers

75. CROWN Enterprises is composed of partners Chuck who contributed P50,000.00;

Rainier, Oscar, P40,000.00; Waldorf, P 10,000.00; and Nelson, P5,000.00. No one
was appointed as manager. Two proposed contracts were voted upon by the
partners during a meeting which took place as follows:
Contract I - Voting for approval of the contract were Chuck and Rainier; voting for
rejection were Oscar, Waldorf and Nelson.
Contract Il — Voting for approval were Chuck and Rainier; voting for rejection were
Oscar and Waldorf; Nelson abstained.
Which of the foregoing contracts are considered approved?
a. Both contracts.
b. Neither of two contracts.
c. Contract I only.
.d. Contract Il only

76. MACK’s Restaurant is a partnership composed of Manalo, Alferez, Cancio and

Kilayco, with Manalo as the manager whose contribution is 80% of the firm's
capital . Manalo made Ongpauco his associate by assigning one-half of his share in
the firm to the latter. Did Ongpauco become a partner in the firm?

a. Yes, because Manalo is the manager.

b. No, because the other partners must give their consent in order that Ongpauco
.may be admitted to the partnership
c. Yes, because the assignment by Manalo of his share in the firm did not affect his
ownership of the controlling interest.
d. No, because the assignment by Manalo of his share in the firm diminished his
interest in the partnership.

77. A partner is a co-owner with his partners of specific partnership property. Such
co-ownership:

a. allows a partner to assign his right in such property.

.b. allows a partner to use such property for partnership purposes
c. entitles the spouse, children and other relatives of the partner to claim support
from such property
d. gives the private creditors of a partner to attach his right in such property.

78. CLEAN Laundry Services Company is a partnership composed of Carpio, Legaspi,

Encinas, Alzate and Noval. Without the knowledge of the other partners, Carpio
used a coat brought to the shop by a customer for dry-cleaning in a party he
attended. The coat was accidentally stained with food sauce during the said party.
Who will be liable to the customer for damages?
a. Carpio only since he used the coat without the knowledge of the other partners.
b. CLEAN Laundry Services Company and Carpio solidarily.
c. CLEAN Laundry Services Company end all the partners jointly;
.d. CLEAN Laundry Services Company and all the partners solidarily

79. A limited partner is prohibited on account of his claim against the partnership
from performing the following acts, except:

a. To receive or hold as collateral security any partnership property„

b. To receive from a general partner or the partnership any payment, conveyance
or release from liability, if partnership assets are not sufficient to discharge
partnership liabilities to outside creditors.
.c. Transact business with the partnership
d. None of the foregoing.
80. Lazarte, a limited partner in Bellevue Company, Ltd., received the amount of P
100,000.00 representing his contribution which was being returned on the date
stipulated in the certificate. Partnership records, however, showed that the firm had
liabilities of P220,000.00 which arose before Lazarte received the return of his
contribution, and assets of only P90,000.00 after such return of contribution.

a. Lazarte is bound to bring back to the partnership the amount of P 100,000.00

.plus interest thereon
b. Lazarte is bound to give the partnership P220,000.00 plus interest thereon.
c. Lazarte is bound to give the partnership P130,000.00 plus interest.
d. Lazarte is not bound to return to the partnership any amount because he
received the return of his contribution pursuant to a contractual stipulation.

TRUE OR FALSE
TRUE 1. An artificial person like a corporation, may be a partner in a partnership.
TRUE 2. A limited partner may contribute money and/or property to a partnership
but not services.
TRUE 3. A partnership has a personality separate and distinct from each of the
partners.
TRUE 4. A partnership begins from the moment of the execution of the contract,
unless a different date is stipulated.
FALSE 5. A partnership whose capital in money or property amounts to P3,000.00 or
more does not acquire juridical
personality if the contract is not recorded with the Securities and Exchange
Commission.
TRUE 6. The sharing of gross returns does not of itself establish a partnership even
if the persons sharing them have a joint or common interest in the property from
which the returns are derived.
TRUE 7. In a universal partnership of all present property, the partners may
stipulate that future property shall belong to the partnership but the stipulation
cannot include property acquired by inheritance, legacy or donation.
TRUE 8. In a universal partnership of profits, property belonging to each partner at
the time of the establishment of the partnership shall continue to pertain to each
partner with only the usufruct passing on to the partnership.
FALSE 9. Articles of universal partnership entered into without specification of its
nature, only constitute a universal partnership of all present property.
FALSE 10. A man and a woman living together as husband and wife
without the benefit of marriage may enter into a universal partnership.
TRUE 11. A partnership for a fixed term or a particular undertaking which is
continued after the expiration of the term or the attainment of the undertaking
becomes a partnership at
TRUE 12. Spouses can validly enter into a particular partnership with each other.
FALSE 13. The profits and losses of .the partnership shall be divided equally among
the partners if they have no profit and loss sharing agreement.
FALSE 14. A stipulation exempting a capitalist partner from losses is valid.
FALSE 15. When a partner has been appointed manager in the articles of
partnership, he may be removed without just cause by the vote of the partner
owning the controlling interest.
FALSE 16. An industrial partner can engage in business for himself if it is of a kind
different from the partnership business even without the consent•of the other
partners.
TRUE 17. All partners including industrial ones shall be liable pro rata with all their
separate property after the partnership assets have been exhausted,
TRUE 18. The partnership shall bear the loss of things which are contributed to the
partnership to be sold.
TRUE 19. A newly-admitted partner is liable for partnership debts contracted before
his admission to the extent of his contribution, unless there is a contrary stipulation.
TRUE 20. A partner. may associate another person with him in his share but the
associate shall not be admitted to •the partnership without the consent of all the
partners,
TRUE 21. The partnership shall be solidarily liable with all the. partners if one
partner acting within the scope of his apparent authority receives money or
property of a third person and misapplies it.
FALSE 22.When a partner is not authorized to act for the partnership and the act of
the partner is not for apparently carrying on the business, the partnership shall be
bound by the act of such partner if the third person was not aware of the partner's
lack of authority
TRUE 23.Notice to any partner relating to partnership affairs is notice to the
partnership.
TRUE 24. The private creditor of a partner shall have preference over such partner's
separate property.
FALSE 25.A general partnership is automatically dissolved by reason of the insanity
of a partner.
TRUE 26. After dissolution, a partnership is still bound by the act of a partner
authorized to act for, the partnership with respect to the completion of transactions
begun before dissolution.
TRUE 27. A partnership intended to be formed as a limited partnership but without
the word "Limited" or "Ltd." appended to its name shall be considered . as a general
partnership.
TRUE 28. A partner may be a limited and general partner at the same time.
TRUE 29. As a rule, a limited partner shall be liable as a general partner if he allows
the use of his surname to be included in the partnership name.
TRUE 30. A limited partner may assign his interest to another person.