BL.O.1405.Law on Partnerships.
MCQ
MULTIPLE CHOICE QUESTIONS
1. One of the following incidents as a cause for
involuntary dissolution of the partnership,
A. Termination of the definite term of 5.
partnership.
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B. Insolvency of a partner.
C. Express will of a partner in a partnership
at will.
D. Expulsion of a partner for cause as
stated in the Articles of part.
2. The following are disqualified to form a
universal partnership, except one:
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 is entered into 6.
consideration of the same
3. A is a capitalist partner and B the industrial
one. A engaged personally in the same kind
of business as that of the partnership:
A. If there are losses, the partnership will
bear the losses.
B. If there are profits, they will be shared
by A and the partnership.
C. If there are profits, A shall give them to
the partnership.
D. A may be excluded from the partnership
with liability for damages.
4. Suppose in the same facts as 7.
aforementioned, B engages in business on
his own account but different from that of
the partnership.
A. If there are profits, B and the
partnership shall share equally.
B. If there are losses, B and the partnership
shall equally share.
C. B may be excluded from the partnership
but without damages.
D. B may be excluded from the partnership
with damages.
A and B are capitalist partners while C is an
industrial partner. Both A and B equally
contributed P15, 000.00 to each to the
capital. A contractual liability in favor of X
was incurred in the amount of P40, 000.00.
After the exhausting partnership assets there
is a balance recoverable from:
A. A and B only
B. A, B and C
C. A, B and C and C can get reimbursement
from A and B.
D. A, b and C without reimbursement from
A and B in C’s favour.
In the aforementioned facts, suppose A, B
and C agreed that one of them shall not be
liable to the creditors, is the agreement
valid?
A. The stipulation that one of them shall
not be liable to the creditors is voidable
at the instance of the creditors.
B. It shall be void agreement even among
the partners because partnership is for
common benefit and interest.
C. It shall be void insofar as the creditors
are concerned.
D. It shall be voidable among the partners
themselves.
A, B and C are partners in a partnership
engaged in retail with each contributing P20,
000.00 each. D is admitted as a new partner
with a contribution of P8, 000.00. At the time
of his admission, the partnership has a pre-
existing obligation to E in the amount of P80,
000.00.
A. D is not liable to E for this obligation
incurred when he was not yet a partner.
B. D is liable to E up to his personal assets
which were not contributed.
BL.O.1405.Law on Partnerships.MCQ
C. D is liable up to his capital contribution.
D. D is liable up to his capital contribution 11. A, B and C are partners who contributed
in favor of creditors but with right of
reimbursement from A, B and C.
8. 1st Statement -The partners are liable to third
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persons jointly or equally for torts or quasi-
delict committed by any partner in the
conduct of the business or with authority of
the partners.
2nd Statement - For contractual liability, their
liability shall be solidary and all partners are
liable.
A. Both are false statements
B. Both are true
C. First is false, second is true
D. First is true, second is false
9. 1st Statement -The partnership shall be
bound in the contract entered into by the
partner who has no authority provided the
third person is in good faith although the act
of the partner is not in usual way of business.
2nd Statement - The partner’s acts although
not in the usual way of conducting the
business shall bind the partnership provided
he was authorized by his co-partners.
A. Both statements are true
B. Both are false
C. First is true, second is false
D. First is false, second is true
10. A and B are partners with A as the managing
partner. C owes A P10, 000.00 and the
partnership P30, 000.00 which are now both
due. A issued a receipt for the payment of C
in the amount of P10, 000.00 in his own
name. The payment shall be applied to:
A. This partnership credit totally.
B. The credit of A only since the receipt is
in his name.
C. The payment shall be applied equally in 14. In the preceding number, suppose I is only an
both credits.
D. The payments shall be applied
proportionately to both credits.
equally to the capital. D without the
knowledge of the death of C contracted with
A who also was unaware of the death of C.
The liability of A is P90,000.00. How much
can D collect after exhausting partnership
assets in the amount of P60,000.00.
A. P30, 000.00 from any one of A, B and C.
B. P15, 000.00 each from A and B.
C. P10, 000.00 from each of A and B and
P10, 000.00 from C’s estate.
D. The partners are not liable beyond their
capital contribution because the
partnership was already dissolved at the
time of liability.
12. This is the order of priority in general
partnership liabilities:
A. Outside creditors, creditor partner,
partner’s capital, partner’s profit.
B. Outside creditors, creditor partner,
partner’s profit, partner’s capital.
C. Creditor partner, Outside creditor,
partner’s profit, partner’s capital.
D. Creditor partner, Outside creditor,
partner’s capital, partner’s profit.
13. C and P are capitalist partners while I is
industrial partner, who in addition to his
services also contributed capital to the
partnership. There is no agreement as to the
profits and losses. The partnership realized
profit in the amount of P21, 000.00. The
share of I in the profits shall be:
A. C and P will determine I’s share in the
profits.
B. I’s share shall be P7, 000.00.
C. Pro rata to his contributed capital.
D. Just and equitable under the
circumstances.
industrial partner, his share in the profits
shall be:

A. Just and equitable under the
circumstances.
B. In proportion to the capital contribution
of his co-partners.
C. Equal to the least share in the profit of a
capitalist partner.
D. The average share of all the capitalist
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partners.
15. Suppose instead of profit, the partnership
suffered loss in the same amount of P21,
000.00 the share of the capitalist partners in 19. A partnership which must be in public
the loss shall be:
A. In accordance to their profit sharing
agreement.
B. In accordance with their loss sharing
agreement.
C. In proportion to their capital
contribution.
D. Equally among them.
16. With still the same facts, as industrial
partner, the share of I in the loss shall be:
A. Just and equitable under the
circumstances.
B. As agreed upon by the partners before
the loss was realized.
C. None, he being an industrial partner.
D. In proportion to his capital contribution.
17. 1st Statement -After dissolution, the partners
can still enter into new business transactions
in the name of the dissolved partnership
although not for the purpose of winding up
partnership affairs.
2nd Statement - Insanity of either general or
limited partner in a limited partnership shall
dissolve the partnership.
A. Both statements are false
B. Both are true
C. First is false, second is true
D. First is true, second is false
18. A and B orally entered into a partnership
with each of them contributing P3, 000.00
BL.O.1405.Law on Partnerships.MCQ
each and some personal properties in the
amount of P1, 000.00 each. The partnership
contract is:
A. Unenforceable because the amount
involved exceeds P500.00.
B. Void because it is not in public
instrument.
C. Valid
D. Void, because it is not registered with
the SEC.
instrument to be valid is:
A. Contribution immovables or real rights
therein regardless of the value thereof.
B. Contribution is P3, 000.00 or more or
personal property.
C. General partnership
D. Particular partnership
20. 1st Statement -A universal partnership
entered into without designation is
considered one of profits.
2nd Statement -A limited partner’s surname
cannot appear in the partnership name if it is
also the surname of a general partner to
prevent misrepresentation to third persons.
A. Both statements are false
B. First is true, second is false
C. Both are true
D. First is false, second is true
21. Which of the following statements is not
correct?
A. A partnership contract is not covered by
the Statute of Frauds
B. A limited partner shall not be bound by
the obligations of the partnership.
C. A limited partner who takes part in the
control of the business shall be liable as
a general partner.
D. A stipulation which excludes a partner
from sharing in the profits or loss is void.
22. Which of the following is incorrect?
BL.O.1405.Law on Partnerships.MCQ
A. An industrial partner who engages in
business for himself may be excluded
from the firm.
B. An industrial partner may not engage in
business for himself unless there is a
contrary stipulation.
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C. A capitalist partner may engage in the
same line of business as that of the 26. 1st Statement -A universal partnership of
partnership.
D. An offending capitalist partner may not
be excluded from the firm.
23. 1st Statement -A partner’s interest in the
partnership is not assignable unless the other
partners consent.
2nd Statement - An act of strict dominion may
be performed by a partner without the
consent of his co-partners if it is
advantageous to the partnership.
A. Both statements are false
B. Both are true
C. First is true, second is false
D. First is false, second is true
24. 1st Statement -The death, insanity,
retirement, insolvency or civil interdiction of
a limited partner does not dissolve the
partnership.
2nd Statement -In a general partnership, the
fact that the business can only be carried on
at a loss does not result in the dissolution of 28. 1st Statement -If a person receives a share in
the partnership.
A. First statement is false, second is true
B. First is true, second is false
C. Both are true
D. Both are false
25. 1st Statement -A partnership contract begins
from the moment of the execution of the
contract unless it is otherwise stipulated
2nd Statement -Even if a third person is in
good faith, the partnership is not bound in 29. 1st Statement -If a person shares in the gross
the contract entered into by a partner after
the dissolution of the partnership if the
business of the partnership has become
unlawful.
A. First statement is false, second is true
B. First is true, second is false
C. Both are false
D. Both are true
present property shall include the profits
which the partners may acquire therewith
such as properties to be acquired through
legacy, donation or inheritance.
2nd Statement -After dissolution, the partners
may still enter into contracts in the name of
the dissolved partnership if it is for the
purposes of winding up.
A. First statement is false, second is true
B. First is true, second is false
C. Both statements are false
D. Both are true
27. Three of the following are property rights of
a partner. Which is not?
A. Right to specific partnership property.
B. Right to participate in the management.
C. Right to demand formal accounting of
partnership affairs.
D. Interest of the partner in the
partnership
the profits of a business, he is a prima facie
presumed to be a partner in business.
2nd Statement -In partnership there is agency,
co-ownership and co-possession of
partnership property.
A. Both statements are true
B. Both are false
C. First is false, second is true
D. First is true, second is false
returns by the use of a property he is
deemed to be a partner.

2nd Statement -If co-owners shared in the
profits derived from the use of the property
owned in common, there is partnership.
A. Both are true
B. First is false, second is true
C. First is true, second is false
D. Both are false
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30. 1st Statement -A person who represents
himself as a partner, when in fact he is not,
shall be liable as a partner by estoppel even
if third person has knowledge that he is not.
2nd Statement -A partnership is always
created by agreement of the parties
A. Both statements are false
B. Both are true
C. Firs is true, second is false
D. First is false, second is true
st
31. 1 Statement -A general partnership is
dissolved by the insanity of a partner.
2nd Statement -A limited partnership is
dissolved by the insanity of a limited partner
A. Both statements are false
B. Both are true
C. First is false, second is true
D. First is true, second is false
32. A limited partner shall be liable as general
partner unless:
A. He takes part in the control of the 36. Still with the same facts except that there is
business.
B. His surname appears in the partnership
name.
C. His contribution is service.
D. He renounces his share in the profits
after knowledge of the error that he was
made a general partner.
33. A partnership is dissolved, except:
A. Death of a partner
B. Insolvency of a partner or of the
partnership 37. With the same facts in the immediately
C. Partnership business can only be carried
on at a loss.
BL.O.1405.Law on Partnerships.MCQ
D. Partnership business has become
unlawful.
34. A, B and C are partners contributed the
following: A - P6, 000.00; B – P4, 000.00; and
C – service. They agreed that the profits and
losses shall be distributed as follows to wit: A
– 35%; B- 25% and C – 40%. How shall the
loss of P10, 000.00 be distributed?
A. A – P6, 000.00; B – P4, 000.00; C – none
B. A – P3, 333.33; B – P3, 333.33; C – P3,
333.33
C. A – P3, 500.00; B – P2, 500.00; C – P4,
000.00
D. A – P5, 000.00; B – P2, 500.00; C – none
35. In the same facts in the preceding number,
suppose it is a profit of P10, 000.00, how
shall it be distributed?
A. A – P5, 000.00; B – P5, 000.00;
C – none
B. A – P3, 333.33; B – P3, 333.33;
C – P3, 333.33
C. A – P6, 000.00; B – P4, 000.00;
C – none
D. A – P3, 500.00; B – P2, 500.00;
C – P4, 000.00
no agreement as to the sharing of profits and
losses, how shall the profits of P10, 000.00
be distributed?
A. A – P3, 500.00; B – P2, 500.00;
C – P4, 000.00
B. A – P6, 000.00; B – P4, 0000.00;
C – just
C. A – P5, 000.00; B – P5, 000.00;
C – none
D. A – P3, 333.33; B – P3, 333.33;
C – 3, 333.33
preceding number, if it was a loss of P10,
000.00, how shall it be distributed?
A. A – P3, 500.00; B – P2, 500.00;
BL.O.1405.Law on Partnerships.MCQ
C – P4, 000.00
B. A – P6, 000.00; B – P4, 000.00;
C – none
C. A – P3, 333.33; B – P3, 333.33;
C – P3, 333.33
D. A – P5, 000.00; B – P5, 000.00;
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C – none
38. Partnership assets and liabilities are as
follows:
12/31/2014 12/31/2013
Assets P 200, 000 P 50,000
Liabilities 100, 000 200, 000
Capital
A – P50, 000;
B – P50, 000 100, 000 150, 000
A and B, general partners, have fully paid 40. A is the managing partner of A and B
their capital contributions. What is the
remedy of creditor C?
A. Collect partnership liability from the
partnership.
B. Collect partnership liability from B only
C. Collect partnership liability from A only
D. Collect partnership liability from A and
B capital contributions (including
personal assets)
39. A and B are partners engaging in the humble
business of merchandising. On January 15,
2010 when the total obligation of the 41. XYZ partnership composed of three (3)
partnership totals P80, 000, Raymond was
admitted as new smiling face partner with or
without reason who secretly promised to
himself that the partnership will maximize
profit up to nine digits. At the time of C’s
admission, the partnership creditors were M
for P50, 0000 and N for P30, 000. After
January 15, 2010, the partnership borrowed
from O, P20, 000 and P40, 000 from P. On
June 15, 2010, the partnership becomes
terribly insolvent despite the presence of the
promising new partner whose promises were
made to be broken leaving an obligation
totalling to P140, 000 and the 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 1 – M and N can go after the
separate properties of A and B but
Raymond’s separate properties are not
answerable to their claims.
Answer 2 – O and P can go after the separate
properties of A, B and Raymond.
A. Both answers are wrong.
B. Both answers are correct.
C. Answer 1 is wrong but answer 2 is
correct.
D. Answer 1 is correct but answer 2 is
wrong.
company. X is indebted to A for P20, 000 and
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. To the whole debt owing to A.
B. ¼ in favor of A and ¾ in favor of
partnership.
C. Debt owing to the partnership.
D. ½ in favour of A and ½ in favour of the
partnership.
capitalist partners and one industrial partner
suffered business losses. Its remaining assets
amounting to P100, 000. The partnership is
indebted to its supplier C in the amount of
P160, 000. How can C recover the 160, 000?
A. C can recover from the partnership
P100, 000 and the balance of P60, 000
from the other capitalist partners.
B. C can recover from the partnership
P100, 000 and the balance of P60, 000
from any of the partners solidarily.
C. C can recover from the partnership
P100, 000 and the balance of P60, 000

from the four (4) partners jointly
including the industrial partner.
D. C can recover from the partnership
P100, 000 only and suffer as his list in
the balance of P60,000.
42. A, B and C formed the partnership with A as
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general partner, B as limited partner and C as
industrial partner. A and B contributed P50,
000 each. The partnership failed and after
disposing all its assets to pay partnership
debts there still remains a note payable in
the sum of P 30, 000.00
A. A legal representative of a limited
partner.
B. A and B are liable to pay P15, 000.
C. Only A is liable to pay P30, 000
indebtedness.
D. C is liable to pay P15, 000.
43. Which of the following persons are not
disqualified to form a universal partnership?
A. Those guilty of adultery and
concubinage
B. Husband and wife
C. Brother and sister
D. Those guilty of the same criminal
offense, if the partnership is entered
into in consideration of the same.
44. A limited partnership formed in 2004 by
Raymondo as general partner and Zeus and
Sharryl as limited partners. In 2005,
Raymondo and Sharryl got married. Did the
marriage dissolve or change the form of the
partnership?
1st answer – yes, partnership is dissolved by
the marriage because there is a change in
equity and status among the partners.
2nd answer – no, because spouses can enter
into a universal partnership.
A. Both answers are correct.
B. 1st answer is wrong, 2nd answer is correct
C. Both answers are wrong
D. 1st answer is correct, 2nd answer is wrong
BL.O.1405.Law on Partnerships.MCQ
45. Which of the following incidents may be a
cause for involuntary dissolution of a
partnership?
A. Expulsion of any partner
B. Insolvency of any partner
C. Express will of any partner
D. Termination of term of the partnership
46. Which of the following liabilities of the
partnership shall rank 1st 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 or profit.
47. A, B and C are partners in a joint venture
engaged in real estate and land
development. A without the knowledge of B
and C offered to sell to D all the remaining
unsold lots at a price very much higher than
the prevailing market prices. Later, A bought
out B and C from the partnership and
thereafter finally sold the lots at a very high
profit.
1st conclusion – When A bought out B and C
from the partnership, the partnership was
dissolved so B and C have no more share in
the profit of the sale.
2nd conclusion – The sale of the lots between
A and D is void because it was without the
knowledge and consent of B and C.
A. Both conclusions are correct
B. Both conclusions are wrong
C. 1st conclusion is correct, 2nd conclusion is
wrong
D. 1st conclusion is wrong, 2nd conclusion is
correct
48. A and B are capitalist partners with C as
industrial partner. A and B contributed P20,
BL.O.1405.Law on Partnerships.MCQ
000 each to the capital of the partnership. A
contractual liability of P50, 000 was incurred
by the partnership in favour of REX. The
assets of the partnership has been exhausted
still leaving an unpaid liability of P12, 000.
What are the rights and obligation of the
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partner if any?
A. A and B only
B. C only
C. A, B and C are liable to REX and C after
giving his share may ask reimbursement
from A and B, unless otherwise
stipulated.
D. C has no right for reimbursement from A
and B unless stipulated
49. The common property of a universal
partnership shall be
A. All the properties that shall belong to
each of the partners after the
constitution of the partnership.
B. All the properties which belongs to each
of the partners at the time of the
constitution of the partnership as well
as the profits which they may accrue.
C. All the properties which belong to each
of the partners at the time of the
constitution of the partnership.
D. All the properties which belong to each
of the partners at the time of the
constitution of the partnership as well
as properties which may acquire
therewith
. after the assets of the partnership
50. X, Y and Z are partners and contributed to
the partnership P40, 000. P30, 000and
services, respectively. The partnership was
later liquidated and after payment of the
partnership indebtedness, only P20, 000
worth of assets remained. How much is the
share of Z?
A. Zero
B. Equal to the share of X
C. Equal to the share of Y
D. P6, 000
51. The following are instances, except one,
when a partnership is unlawful. Which is the
exception?
A. A partnership formed to furnish
apartment houses to be used as venue
for illegal gambling.
B. A partnership formed to create cartel of
monopolies.
C. A partnership formed for smuggling of
contrabands.
D. A partnership formed for the purpose of
buying lands.
52. 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. Dormant partner
B. Secret partner
C. Partnership by estoppel
D. Partner by estoppel
53. A, B and C are partners engaged in retail
business. Their contribution is P20, 000 each.
D is admitted as 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 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.
B. D is not liable to E for this obligation.
C. D is liable to E for this obligation so that
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.

54. A, B and Raymundu are equal partners in X
partnership. On April 29, 2010, After
incurring unexpected heavy losses like
several mountains that fall on the little and
tiny partnership, partner Raymundu died
after walking and crying not only a river but 57. This is the order of preference in the
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an ocean on the lonely road of broken
dreams. Not knowing that Raymundu died,
on May 1, 2010 A feeling alone contracted a
liability to D who also does not know of the
death of Raymundu, the liability is P90, 000.
After D exhausted the net assets of X
partnership in the amount of P60, 000, he
can collect:
A. P10, 000 from estate of Raymundu; P10,
000 from A; P10, 000 from B
B. P15, 000 from A and P15, 000 from B
C. P20, 000 from A and P10, 0000 from B
D. P30, 000 from A
55. A and B are partners of X partnership. A is
the managing partner. E owes A P10, 000
and X partnership P30, 000. The obligations
of E are both due. A collected from E the
debt of E to A in the amount of P10, 000 and
issued a receipt in the name of A.
A. The whole of the P10, 000 will be
applied to debt of E to A.
B. P10, 000 will be applied to debt of E to
the partnership,
C. P2, 500 to debt of E to A and P7, 500 to
debt of E to the partnership.
D. P 50, 000 each to debt of E to A and to
the partnership.
56. A, B and C are general partners in ABC
partnership. G is debtor to the partnership in
the amount of P15, 000. A received from the
debtor G the sum of P5, 000 and issued a
receipt identifying the amount collected as
P5, 000.
A. A can be compelled to share B and C
their P5, 000.
BL.O.1405.Law on Partnerships.MCQ
B. B and C should automatically sue G to
collect the P10, 000.
C. B and C can charge the capital of A with
their share of the p5, 000.
D. A cannot be compelled to share the P5,
000 with B and C.
liquidation of a general partnership.
A. Outside creditors; partner’s creditors;
partner’s capital; partner’s profit
B. Outside creditors; partner’s creditors;
partner’s profits; partner’s capital
C. Partner’s creditors; outside creditors;
partner’s capital; partner’s profits
D. Partner’s capital; outside creditors;
partner’s creditors; partner’s profits
58. F, G, H and I are partners. They contributed
capital as follows: F – P5, 000; G – P30, 000;
H – P20,000; and I as the industrial partner,
his services. The partnership obligation to
outsiders exceeds the total net assets by
P18, 000.Who and by how much will the
partners be liable for the payment of the
P18,000?
A. F – P9, 000; G – P 5,4 00; H – P3, 600; I –
nothing
B. F – P6, 000; G – P 6, 000; H – P6, 000; I –
nothing
C. F – P4, 500; G – P 2, 700; H – P1, 800 I –
nothing
D. F – P4,500; G – P 4,500; H – P4, 500; I
P4, 500
59. B and Y orally agreed to form a partnership.
Each contributed cash and properties worth
P10, 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 unenforceable
60. A partnership which comprises all that the
partners may acquire by their work or
industry during the existence of the
partnership is:
BL.O.1405.Law on Partnerships.MCQ

A. Particular partnership C. Universal partnership of all present

B. General partnership property
D. Universal partnership of profits

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