QUIZ # 1
 
PART I: TRUE OR FALSE
1.       A partnership may be constituted in any form. T
2.      A partnership may be constituted in any form, save when immovable property or real
rights are contributed thereto or when the partnership has a capital of below P3,000, in
which case a public instrument shall be necessary. F
3.       An inventory is still required if aside from real property, personal property is
contributed. T
4.       In partnership, there is a co-ownership and co-possession of partnership property. T
5. Partnership with a capital of P3,000 or more must register with the SEC. Registration
requirement is mandatory. F
6.       An oral contract of partnership is as good as written one. T
7.       When an unlawful partnership is dissolved by judicial decree, the profits shall not be
confiscated in favor of the State. F
8.       Articles of universal partnership, entered into without specification of its nature, only
constitute a universal partnership of all present property. F
9.       If a person receives a share in the profits of a business, he is prima facie presumed to
be a partner in business. T
10.       Co-ownership or co-possession does not in itself establish a partnership, except
when such co- owners or co-possession share in the profits made by the use of the
property. T

PART II: MULTIPLE CHOICE

1. It means that it is a contract which has name in law.
A. Consensual
B. Nominate
C. Preparatory
D. Onerous
2. The Latin phrase “delectus personae” means
A. Choice of the person
B. Choice of the people
C. Choice of the public
D. None of the above
3. Any external thing over which the rights of possession, use, and enjoyment are
exercised.
A. Money
B. Property
 C. Industry
D. None of the above
4. An entity created by law and given certain legal rights and duties of a human being or a
being, real or imaginary, who for the purpose pf legal reasoning is treated more or less
as a human being.
A. Natural person
B. Juridical person
C. Normal person
D. None of the above
5.  Where a partnership not duly organized has been recognized as such in its dealing with
certain persons.
A. Ordinary partnership
B. De jure partnership
C. De facto partnership
D. Partnership by estoppel
6. The following are the effects of unlawful partnership except:
A. The contract is voidable from the very beginning.
B. The profits shall be confiscated in favor of the government.
C. The instruments or tools and proceeds of the crime shall be forfeited in favor of
the government.
D. The contributions of the partners shall not be confiscated.
7. A group of men pursuing a learned art as a common calling in the spirit of public service.
A. Business
B. Service
C. Profession
D. Artists
8. The following are requisites of partnership, except:
A. There must be valid contract;
B. There must be a contribution of money, property, and industry to a common
fund;
C. The partnership must be organized for gain or profit; and
D. The partnership should have lawful object or purpose, and must be established
for the common benefit or interest of the partners.
9. There are two tests to determine the existence of a partnership:
First test: Determine whether or not there is an agreement to contribute money,
property or industry to a common fund.
Second test: Determine whether or not there is an intent of the contracting parties to
divide the profits among themselves.
A. Only I is true
B. Only II is true
C. Both are true
D. Both are false
 10.  It means that it is a contract that is perfected by mere consent because all the partners
had a meeting of the minds to enter into a contract.
A. Consensual
B. Principal
C. Preparatory
D. Commutative

PART III: MULTIPLE CHOICE

1. It is one which has not complied with all the legal requirements for its creation.
A. De facto partnership
B. De jure partnership
C. Real partnership
D. Ordinary partnership
2. Q was an accountant in a partnership, with a yearly salary amounting to 10% of the net
profits for the year. Thus, he is a partner in the said partnership.
The receipt by a person of a share of the profits of a business us conclusive evidence
that he is partner in the business
A. Only I is true
B. Only II is true
C. Both are true
D. Both are false
3. The following are disqualified to form a universal partnership, except:
A. Brother and sister
B. Husband and wife
C. Those guilty of adultery or concubinage
D. Those guilty of the same offense, if the partnership entered into in consideration
of the same
4.  X and Y verbally entered into a partnership with each of them contributing P2,000 each
and some personal properties in the amount of P500 each. The partnership contract is:
A. Unenforceable because of the amount involve exceeds P500.00
B. Void because it is not in public instrument.
C. Valid
D. Void, because it is not registered in SEC.
5. The following are instances, except one, when a partnership is unlawful. Which is the
exception?
A. A partnership formed for the purpose of selling illegal drugs.
B. A partnership formed for the purpose of buying lands.
C. A partnership formed to create illegal gambling.
D. A partnership formed for selling smuggled cars.
6. X and Y orally agreed to for a partnership. Each contributed worth P15,000 to common
fund. But they did not register the partnership with the Securities and Exchange
Commission.
A. The partnership is void
 B. The partnership is voidable
C. The partnership is still valid
D. The partnership is valid and unenforceable
7. The partners contribute all the property which actually belongs to then 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. Universal partnership of all profits
B. Universal partnership of all present property
C. Practical partnership
D. None of the above
8. A particular partnership has for its object determinate things, their use of fruits, or
specific undertaking, or the exercise of a profession of vocation.
A. Universal partnership if all profits
B. Universal partnership of all present property
C. Particular partnership
D. None of the above
9.  It is one where there is at least one general partner and one limited partner.
A. De jure partnership
B. De facto partnership
C. Limited partnership
D. General partnership
10.  It is one where the life of period of existence of the partnership has been agreed upon
by the partners.
A. Partnership with fixed term
B. Partnership for a particular undertaking
C. Partnership at will
D. De facto partnership

PART IV:
1.       What are the rights of a partnership?
1. Right to take part in the conduct of the Business
All the partners of a partnership firm have the right to take part in the business conducted by
the firm as a partnership business is a business of the partners, and their management powers
are generally coextensive.

SectionRight to be consulted
When a difference of any sorts arises between the partners of a firm concerning the business of
the firm, it shall be decided by the views of the majority among the partners. Every partner in
the firm shall have the right to express his opinion before the decision is made. However, there
can be no changes like the business of the firm without the consent of all the partners involved.
As a routine matter, the opinion of the majority of the partners will prevail. Although, the
majority rule would not apply when there is a change like the firm itself. In such situations, the
unanimous consent of the partners is required.

Section 12(d): Right of access to books

Every partner of the firm, regardless of being an active or a sleeping partner, is entitled to have
access to any of the books of the partnership firm. The partner has the right to inspect and take
a copy of the same if required. However, this right must be exercised bonafide.

Section 13(a): Right to remuneration

No partner of the firm is entitled to receive any remuneration along with his share in the profits
of the business by the firm as a result of taking part in the business of the firm. Although, this
rule may always vary by an express agreement, or by a course of dealings, in which case the
partner will be entitled to remuneration. Thus, a partner may claim remuneration even in the
absence of a contract, when such remuneration is payable under the continued usage of the
firm. In simpler words, where it is customary to pay remuneration to a partner for conducting
the business of the partnership firm, the partner may claim it even in the absence of a contract
for the payment of the same.

It is common for partners to agree that a managing partner will receive over and above his
share, salary or commission for the trouble that he will take while conducting the business of
the firm.

Section 13(b): Right to share profits

Partners are entitled to share all the profits earned in the business equally. Similarly, the losses
sustained by the partnership firm is also equally contributed. The amount of a partner’s share
must be ascertained by inquiring whether there is an agreement in that behalf among the
partners. If there is no agreement, then it can be presumed that the share of profit is equal and
the burden of proving that the shares are unequal, will lie on the party alleging the same.

The is no relation between the proportion in which the partners shall share the profits and the
percentage in which they have contributed to the capital of the partnership firm.

Section 13(c): Interest on capital

If a partner subscribes interest on capital is payable to the partner under the partnership deed,
then the interest will be payable out of the profits only in such a case. In a general rule, the
interest on a capital subscribes by partners is not permitted unless there is an agreement or a
usage to that effect. The underlying principle in this provision of law is that with concern to the
capital brought by a partner in the business, the partner is not a creditor of the firm but an
adventurer.

The following elements must be ensured before a partner can be entitled to interest on the
capital brought by the partner in the business.

1. An express agreement to the same effect or the practice of a particular partnership.

2. Any trade custom to that effect; or
3. A statutory provision which entitles him to such interest on the capital.

Section 13(d): Interest on advances

If a partner makes an advance to the partnership firm in addition to the amount of capital to be
contributed by him, the partner is entitled to claim interest thereon at 6 per cent per annum.
While the interest on capital account ceases to run on dissolution, the interest on advances
keeps running even after dissolution and up to the date of payment. It can be noted that the
Partnership Act makes a distinction between the capital contribution of a partner and the
advance made by him to the firm. The advance by the partner is regarded as loans which should
bear interest while the capital interest takes interest only when there is an agreement to this
effect.

Section 13(e): Right to be indemnified

All the partners of the firm have the right to be repaid by the firm in respect of the payments
made and the liabilities incurred by him in the ordinary and proper conduct of the business of
the firm. This also includes the performance of an act in an emergency for protecting the firm
from a loss, if the payments, liability and action are such as a prudent man would make, incur
or perform in his case, under similar circumstances.

Section 31: Right to stop the admission of a new partner

All the partners of a partnership firm have the right to prevent the introduction of a new
partner in the firm without the consent of all the existing partners.

Section 32(1): Right to retire

Every partner of a partnership firm has the right to withdraw from the business with the
consent of all the other partners. In the case of a partnership formed at will, this may be done
by giving a notice to that effect to all the other partners.
Section 33: Right not to be expelled
Every partner of a partnership firm has the right to continue in the business. A partner cannot
be dismissed from the firm by any majority of the partners unless conferred by a partnership
agreement and exercised in good faith and for the advantage of the partnership firm.

Section 36(1): Right of outgoing partner to carry on a competing business

A partner outgoing from the partnership firm may carry on a business competing with that of
the firm. The partner may even advertise such activity but has to do so without using the firm’s
name or representing himself as carrying on the business of the firm or soliciting the clients
who were dealing with the firm before the partner ceased to be a part of the partnership firm.

Section 37: Right of outgoing partner to share subsequent profits

If a partner has passed away or ceased to be a partner and the existing partners carry on the
business of the firm with the property of the firm without any final settlement of accounts as
between them and the outgoing partner or his estate, the outgoing partner or his estate has, at
his or his representative’s option, the right to such share of profit made since he ceased to be a
partner as may be attributable to the use of his share of the property of the firm or interest at 6
per cent per annum on the amount of the partner’s share in the property of the firm.

Section 40: Right to dissolve the firm

A partner of a partnership firm has the right to dissolve the partnership with the consent of all
the other partners. However, where the partnership is at will, the firm may be dissolved by any
partner by giving notice in writing to all the other partners of his intention to dissolve the firm.

2.        X and Y entered into a contract of partnership where they intended to operate a

fish pond, not to engage in a fishpond business. Is there a need to comply with the
requirement that an inventory be attached to the public instrument? Why?
No, the contract is still valid despite the lack of inventory. The purpose of the
partnership was not to engage in the fishpond business but to operate a fishpond.
Neither said fishpond nor a real right to any fish pond was contributed to the
partnership or become part of the capital of the partners thereof.
 

 
3.      X and Y are close friends. X is engaged in a panciteria business. Y gave him the
amount of P10,000.00 with the understanding that would be entitled to 22% of his
annual profit. Is there a partnership between the two? Why?
4. (PEQ!
"/
5. "C
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6. "C
!
7. 
8. (PEQ!
"/
9. "C

10. "C
!
11. 
Yes, because there is an agreement to contribute to a common fund and there’s an
intention to divide profits. It is under the express trust, wherein a settlor giving explicit
instructions as to how his or her property is to be held and Y has an intention to create a
deal with X..
 
4.      X and Y are friends. X is engaged in business. Y gave him the amount P500,000.00 to
help X finance the expansion of his business with an agreement that Y would ne
entitled to at least 30% of his profits as payment if the amount given. Is there a
partnership between X and Y?
No, because Y is not a partner the amount of money that Y gave to X is extended in the
form of financial assistance. Y has an intention to receive his share as a payment of X for
his financial support in the expansion of X’s business. Also, the sharing of profits does
not establish a partnership wherein it must equally share 50% of X profits.

5.        May the husband and wife enter into a universal partnership? Why?
A husband and a wife may not enter into a contract of general co-partnership, because
under the Civil Code, which applies in the absence of express provision in the Code of
Commerce, persons prohibited from making donations to each other are prohibited
from entering into universal partnerships.
MIDTERM
1. I. only a natural person, trust, or an estate may form a One Person Corporation.
II. Banks and quasi-banks, preneed, trust, insurance, public and publicly-listed companies and
non-chartered government-owned and controlled corporations may not incorporate as One
Person Corporations. C. BOTH ARE TRUE

2. This is the maximum amount fixed in the articles of incorporation that may be subscribed and
paid by the stockholders of the corporation. C. AUTHORIZED CAPITAL STOCK

3. The following are limitations in the amendment of the articles of incorporation, except.
A. The amendment must be legitimate purposes and must not be contrary to the corporation
code and special laws.
B. the amendment requires the vote or written assent of stockholders’ representing majority of
the outstanding capital stock or majority members if it be a non-stock corporation
C. the amendment must be approved by a majority of the board of directors or board of
trustees
D. the original and amended articles together shall contain all provisions required by law to be
set out in the articles of incorporation

3. I. a corporation shall have perpetual existence unless its articles of incorporation

provide otherwise
II. The general rule as to corporations is that each corporation must have a name by
which it is to sue and be sued and all legal acts. A. ONLY I IS CORRECT
4. I. It is the certificate of incorporation that gives juridical personality to a corporation and
places it under the jurisdiction of the securities and exchange commission.
II. a corporation commences its corporate existence and juridical personality and is
deemed incorporated from the date the DTI issues certificate of incorporation under its
official seal. A. ONLY I IS CORRECT
5. The following are the requirements before one can qualify as a de facto corporation,
except.
 a. The existence of a valid law under which it may be incorporated
b. An attempt in good faith to incorporate
c. Assumption of corporate powers
d. None of the above
6. The following are the three-fold nature of the articles of incorporation except:
a. A contract between the corporations inter se
b. A contract between the state and the corporation
c. A contract between the corporation and its stockholders
d. A contract between the stockholders inter se
7. The purpose of the principal of the corporation are the following except
a. To fix the residence of the corporation in a definite place
b. For purpose of stockholders or members meeting
c. To determine the venue of court cases involving the stockholders
d. To determine the place wehere the books and records of the corporation are
ordinarily kept.
8. I. the number of directors shall not be more than 15
II. the number of trustees may be more than 15
9. I. the articles of incorporation of a nonstock corporation may be amended by the vote or
written assent of majority of the trustees and at least 2/3 of the members
II. the amendment of the articles of incorporation shall take effect upon their approval
by the SEC or from the date of filing with the Sec if not acted upon within 9 months from
the date of filing for a cause not attributable to the corporation
10.