Mid-Term Examinations

1. Read statements 1 and 2 2. Select: a. if both statements are true c. if only the first
statement is true b. if both statements are false d. if only the second is true
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Points:
30/90
1.S1: The continued use of the name of a deceased partner may be allowed if
indicated in communications that the partner is deceased S2: A conveyance by a
partner of his whole interest in the partnership will dissolve the partnership.
Single choice.
(2/2 Points)
A
B
C
D
Correct answers: C
2.S1: The right to demand an accounting of the value of the partners interest
accrues to any partner or his legal representative S2: Winding up is the process of
settling the business or partnership affairs after dissolution.. Single choice.
(2/2 Points)
A
B
C
D
Correct answers: A
3.S1: Dissolution and winding up are on and the same; S2: Dissolution does
discharge the existing liability of the partner;. Single choice.

(0/2 Points)
A
B
C
 D
Your answer to question 3 is wrong. Correct answers: D
4.S1: A limited partner can be liable as a general partner if he takes part
managing the business S2: A limited partner has no right to demand full
information of all things affecting the partnership.. Single choice.
(2/2 Points)
A
B
C
D
Correct answers: C
5.S1: A limited partner may loan money to and transact other business with the
partnership. S2: A person admitted as a partner into an existing partnership is
liable for all the obligations of the partnership arising before his admission as if
he had been a partner before such obligations were incurred.. Single choice.
(2/2 Points)
A
B
C
D
Correct answers: A
6.S1: A partner cannot transfer his interest in the partnership S2: A corporation
may adopt any name provided its not identical or deceptively similar to any
registered name.. Single choice.
(2/2 Points)
A
B
C
D
Correct answers: D
7.S1: A partnership may be established for any period of time stipulated by
partners S2: In absence of stipulation partnership, the power to manage the
business of the partners is vested on all general and limited partners.. Single
choice.
(2/2 Points)
A
B
 C
D
Correct answers: C
8.S1: The sharing of gross returns aloe is not indicative of partnership S2: An
agreement in the contract to participate in both profits and losses of business
does not itself have the effect of establishing a partnership.. Single choice.
(0/2 Points)
A
B
C
D
Your answer to question 8 is wrong. Correct answers: A
9.S1: The partner who wrongfully caused the dissolution has the right to be
indemnified for damages has the right to receive his share of the surplus S2: The
partner who wrongfully caused the dissolution of the partnership has the right to
have partnership property applied. Single choice.
(2/2 Points)
A
B
C
D
Correct answers: D
10.S1: As regards specific partnership property, a party is co-owner and owned by
them S2: If unanimity is stipulated consent of all is required in all partnership
transactions. Single choice.
(0/2 Points)
A
B
C
D
Your answer to question 10 is wrong. Correct answers: B
11.S1: A partner can validly mortgage his rights in the partnership S2: A sub
partner can never become a partner. Single choice.
(0/2 Points)
A
B
C
 D
Your answer to question 11 is wrong. Correct answers: D
12.S1: A partnership contract is essence a contract of agency S2: A conclusive
evidence of partnership relation is the receipt of share of profits in business.
Single choice.
(0/2 Points)
A
B
C
D
Your answer to question 12 is wrong. Correct answers: C
13.S1: Partnership by estoppel is an exception to the rule that persons who are
not partners to each other are not partners to third persons S2: A partnership can
continue to use the name of the deceased partners. Single choice.
(2/2 Points)
A
B
C
D
Correct answers: A
14.S1: Partners as liable solidarily for torts S2: Industrial partners to creditors are
liable with their separate properties after partnership property is exhausted.
Single choice.
(2/2 Points)
A
B
C
D
Correct answers: A
15.S1: Service can be contributed by a limited partner S2: Death of any partner is
a ground to dissolve a limited partnership. Single choice.
(0/2 Points)
A
B
C
D
Your answer to question 15 is wrong. Correct answers: B
16.S1: The partner's share can be purchased without resulting to dissolution of
the partnership S2: Right of management is accorded to the purchases of the
partnership's share. Single choice.
(0/2 Points)
A
B
C
D
Your answer to question 16 is wrong. Correct answers: C
17.S1: The loss of a generic thing promised to be contributed by a partner causes
the dissolution of partnerhip S2: The partner's right to manage his property is the
effect of civil interdiction as a sentence. Single choice.
(2/2 Points)
A
B
C
D
Correct answers: D
18.S1: A conveyance executed by all partners passes all their rights when the title
to real property is in the name of all of them. S2:The legal effects of conveyance
of real property of the partnership depends on whose name it is registered and
conveyd.. Single choice.
(2/2 Points)
A
B
C
D
Correct answers: A
19.S1: As a general rule a partner cannot bind the partnership after it has been
dissolved. S2: The existing liability of a partner is discharged after the
partnership's dissolution.. Single choice.
(-/2 Points)
A
B
C
D
20.S1: A person can be both a general and limited partner at the same time S2:
All members of the limited partnership should consent to the entry of a
substitute limited partner. Single choice.
(2/2 Points)
A
B
C
D
Correct answers: A
Multiple Choice
1. Select the best answer from the given choices 2. In not more than 3 sentences explain the reason
for selecting such answer.
21.Which of the following is a cause for involuntary dissolution of a partnership.
Single choice.
(1/1 Point)
Express will of any partner
Expulsion of a partner
Insanity of a partner
Termination of the term
Correct answers: Insanity of a partner
22.Explanation. Multi Line Text.
(-/3 Points)

23.If an industrial partner engages in business for himself without express

permission from the partnership, the remedy of the capitalist partner is:. Single
choice.
(1/1 Point)
Compel the industrial partner to sell his interest to the said capitalist partners
To exclude him from sharing in the profits of the partnership
To remove him as manager if he is appointed as manager of the partnership
To expel him from the partnership and claim for damages
Correct answers: To expel him from the partnership and claim for damages
24.Explanation. Multi Line Text.
(-/3 Points)
25.X, Y and Z are partners. X is an industrial partner. During the 1st year of
operation, the firm realized a profit of P60,000. During the 2nd year, the firm
sustained a loss of P30,000. The net profit for the 2 years of operation was only
P30,000. In the articles of partnership, it was agreed that X, the industrial partner
would get 1/3 of the profit but would not share in the losses. X will get:. Single
choice.
(0/1 Point)
P 20,000 or the 1/3 of the profit of the 1st year of operation
P10,000 or 1/3 of net profit
P20,000 in the first year, none in the second year
X will share in the loss in the 2nd year
Your answer to question 25 is wrong. Correct answers: P10,000 or 1/3 of net profit
26.Explanation. Single line text.
(-/3 Points)

27.Which of the combination is not correct in a Limited partnership composed of

X, Y and Z. Single choice.
(1/1 Point)
X-services (limited partner), Y-cash (general partner), Z-tools (general partner)
X-land (limited partner), Y-services (general partner), Z-cash (general partner)
X-cash (limited partner), Y-building (general partner), Z-services (general partner)
X-cash (limited partner), Y-car (general partner), Z-services ) general partner)
Correct answers: X-services (limited partner), Y-cash (general partner), Z-tools (general partner)
28.Explanation. Single line text.
(-/3 Points)

29.Man, Dione and Giano are partners of DMG and Co., an investment firm. Giano
fraudulently obtained an investor named Racel Foo money in the ordinary course
of business and used it to purchase a Toyota Fortuner for his benefit in 2012
instead of investing it for the partnership. Man and Dione were not aware of
Giano’s actions and discovered in only in 2015. Which statement is true.. Single
choice.
(0/1 Point)
 Giano is liable to Foo with his separate property
Man, Dione and Giano are pro rata liable to Foo with their separate property
Man and Dione are not liable to Foo with their separate property
All partners are solidary liable
Your answer to question 29 is wrong. Correct answers: All partners are solidary liable
30.Explanation. Single line text.
(-/3 Points)

31.Alden acting for the Tape Inc. partnership bought a parcel of land from Dub.
Before the sale, Alden acquired knowledge that the land is in litigation which
Erica claims to be the owner. Alden however did not relay the information to the
partnership. In 2014, Erica won and was able to recover the land. Which
statement is true:. Single choice.
(1/1 Point)
Alden is guilty of fraud
Alden’s knowledge is not knowledge of the partnership
Dub must return the purchase price to Tape Inc.
D is not liable to the partnership
Correct answers: D is not liable to the partnership
32.Explanation. Single line text.
(-/3 Points)

33.A, B and C are partners in CAB 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 CAB Enterprises. Thereafter, E granted a
loan of P150,000 to CAB Enterprises. What kind of partner is D?. Single choice.
(1/1 Point)
Managing partner
Liquidating partner
Ostensible partner
Partner by estoppel
Correct answers: Partner by estoppel
34.Explanation. Single line text.
(-/3 Points)
35.A, B and C are partners in CAB 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 CAB Enterprises. Thereafter, E granted a
loan of P150,000 to CAB Enterprises. Assuming that CAB Enterprises was unable
to pay the loan on due date at which time the assets of the partnership
amounted only to P120,000. From whom may E collect the payment?. Single
choice.
(0/1 Point)
D only for the whole amount of P120,000
A, B and C who are liable jointly for P50,000 each
CAB Enterprises for its assets of P120,000; thereafter, A, B and C from their seperate property at
P10,000 each
CAB Enterprises for its assets of P120,000 therafter, A, B, C and D from their separate assets at
P7,500 each
Your answer to question 35 is wrong. Correct answers: CAB Enterprises for its assets of P120,000
therafter, A, B, C and D from their separate assets at P7,500 each
36.Explanation. Single line text.
(-/3 Points)

37.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?. Single choice.
(1/1 Point)
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 receive the profits which the assigning partner would otherwise be
entitled thereto
Correct answers: The assignee has the right to receive the profits which the assigning partner would
otherwise be entitled thereto
38.Explanation. Single line text.
(-/3 Points)

39.Which of the following losses will not cause dissolution of the partnership.
Single choice.
(0/1 Point)
 Loss before delivery of a specific thing which a partner had promised to contribute to the
partnership
Loss of specific thing after its delivery to and acquisition of its ownership by the partnership from
the partner who contributed the same
Loss after deliver of a specific thing were the partner contributed only its use and enjoyment,
where such partner reserved ownership thereof.
Loss before delivery of a specific thing where the partner promised to contribute only its use and
enjoyment, reserving the ownership thereof.
Your answer to question 39 is wrong. Correct answers: Loss of specific thing after its delivery to and
acquisition of its ownership by the partnership from the partner who contributed the same
40.Explanation. Single line text.
(-/3 Points)

Legal Problem
After having read the legal problem answer the questions clearly and concisely. Answers should be
accompanied with legal basis. A YES or NO answer without an accompanying explanation will not be
given credit.
41.Tito, Tita and Tata are partners and established 3T’s Partnership in 2008, which
owns Chi-chi-MA Café, a restaurant serving a fusion of Italian, French and
Kapampangan cuisine. All three partners contributed P100,000 each as capital for
the business. In January 1, 2018, Toto joined the partnership, where he likewise
contributed P100,000 as capital. Upon accounting of partnership affairs at the
close of the year 2017, it was found out that in the partnership incurred losses
amounting to P800,000 in the fiscal year 2017. On April 20, 2018, Tito Tita and
Tata demanded contribution from Toto to shoulder the share in the partnership
losses of the previous year. a. How much will Toto’s share be in the partnership
obligations if any? Explain. Multi Line Text.
(-/5 Points)

42.b. Would your answer be the same if Toto joined 3T’s partnership on January
1, 2010? Explain.. Multi Line Text.
(-/5 Points)

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