MCA – PARTNERSHIP AND CORPORATION LAW

1. B. Contract of Partnership
It is found in Article 1767. By the contract of partnership, two or more persons bind themselves
to contribute money, property, or industry to a common fund, with the intention of dividing the
profits among themselves. Two or more persons may also form a partnership for the exercise of a
profession.

2. B. Commercial or Business Partnership

Because General Professional Partnerships are not subject to income tax. Only the persons
engaging in business as partners in a general professional partnership shall be liable for income
tax only in their separate and individual capacities.

3. G. Accessory
A to G are not characteristic of a contract of partnership.

4. E. The partnership must be registered in the SEC

Even if the partnership failed to register with the SEC, it still has a separate juridical personality.

5. D. To the state
The contract is void ab initio. Thus, the profits shall be confiscated in favor of the government.

6. D. They shall be governed by the rules on co-ownership.

Article 1775 states that associations and societies, whose articles are kept secret among the
members, and wherein any one of the members may contract in his own name with third persons,
shall have no juridical personality, and shall be governed by the provisions relating to co-
ownership

7. D. All partnership contracts are consensual.

8. A. Delectus personae
Explained in Articles 28 and 30. It is a principle in partnership (and in corporation law,
particularly for closed corporations which literally means “choice of the person.”

9. C. Where the capital of the partnership is P3,000 or more. in money or property,

the partnership contract must be in a public instrument and registered with the
SEC, in order for it to be valid.
Article 1772 states that failure to comply with any of the requirements shall not affect the liability
of the partnership and the members thereof to third persons.

10. D. The liability of the partnership and the partners thereof to third persons will not
be affected.
 Stated in Article 1772. Every contract of partnership having a capital of three thousand pesos or
more, in money or property, shall appear in a public instrument, which must be recorded in the
Office of the Securities and Exchange Commission. Failure to comply with the requirements of
the preceding paragraph shall not affect the liability of the partnership and the members thereof to
third persons.

11. B. It may be considered valid as to the contracting parties on the basis of the
doctrine of estoppel but it may be considered void as to third persons for failure
to comply with the formality required by law.
Only third persons directly affected by this void contract may ask for a declaration of nullity of
the contract of the partnership but not the partners because they are guilty of estoppel.
As per Article 1825, estoppel is a bar which precludes the contracting parties from denying or
asserting anything contrary to that which has been established as the truth by his own deed or
representation, either express or implied, making this case valid to the contracting parties. It is
void as to third persons because —

12. B. Unenforceable
One of the foundations for a contract to be enforceable is a consideration where the exchange of
reasonable value for compensation must be in writing and signed by both parties. The case was
formed with an oral agreement, thus, making the contract an unenforceable contract.

13. Voidable on the part of the insane partner

The Law on Partnerships and Private Corporations provides that there can only be a valid contract
if the contracting parties have the necessary legal capacity to enter into the contract. Being an
insane or incapacitated person means that he or she cannot give his or her consent to a contract of
partnership, thus, concluding that the contract of the partnership is voidable on the part of the
insane partner.

14 B, according to Article 1403, the following contracts are unenforceable:

(1) Those entered into in the name of another by one without or acting in excess of authority; (2) Those
that do not comply with the Statute of Frauds; and (3) Those where both parties are incapable of giving
consent.

15 D, as the law provides or as a general rule, corporations cannot enter into a partnership contract, it
may, however, engage in a joint venture if the nature of the venture is authorized by its charter.

16 D, because it is stated in article 1769

OR according to Art. 1769, in determining whether partnership exists, these rules shall apply:

The receipt by a person of a share of the profits of a business is prima facie evidence that he is a partner
in the business, but no such inference shall be drawn if such profits were received in payment:

a. As a debt by installments or otherwise.

b. As wages of an employee or rent to a landlord.
c. As an annuity to a widow or representative of a deceased partner.
d. As interest on a loan, though the amount of payment vary with the profits of the business.
e. As the consideration for the sale of a goodwill of a business or other property by installments or
otherwise.

17 A, because according to article 1769, the receipt by a person of a share of the profits of a business is
prima facie evidence that he is a partner in the business.

18 G, because it is stated in article 1769.

OR according to Art. 1769, in determining whether partnership exists, these rules shall apply:

The receipt by a person of a share of the profits of a business is prima facie evidence that he is a partner
in the business, but no such inference shall be drawn if such profits were received in payment:

a. As a debt by installments or otherwise.

b. As wages of an employee or rent to a landlord.
c. As an annuity to a widow or representative of a deceased partner.
d. As interest on a loan, though the amount of payment vary with the profits of the business.
e. As the consideration for the sale of a goodwill of a business or other property by installments or
otherwise.

19 A, according to Art. 1778. A partnership of all present property is that in which the partners
contribute all the property which actually belongs to them to a common fund, with the intention of
dividing the same among themselves, as well as all the profits they may acquire therewith.

20 E, according to Art. 1779. In a universal partnership of all present property, the property which
belongs to each of the partners at the time of the constitution of the partnership becomes the common
property of all the partners, as well as all the profits which they may acquire therewith. A stipulation for
the common enjoyment of any other profits may also be made; but the property which the partners may
acquire subsequently by inheritance, legacy or donation cannot be included in such stipulation, except the
fruits thereof.

21 B, according to Art. 1780. A universal partnership of profits comprises all that the partners may
acquire by their industry or work during the existence of the partnership.
22 E, according to Art. 1780. A universal partnership of profits comprises all that the partners may
acquire by their industry or work during the existence of the partnership. Movable or immovable property
which each of the partners may possess at the time of the celebration of the contract shall continue to
pertain exclusively to each, only the usufruct passing to the partnership.

23 C, according to art. 1781, Articles of universal partnership, entered into without specification of its
nature, only constitute a universal partnership of profits.

24 E, because it is stated in Article 1782

OR because article 1782 states that persons who are prohibited from giving each other any donation
or advantage cannot enter into universal partnership. As such, the following are prohibited to enter into
universal partnership, thus:

a. Donations between spouses during the marriage, except moderate gifts given on the
occasion of the family rejoicing. The prohibition applies to persons living together as
husband and wife without the benefit of marriage.
b. Those made between persons who were guilty of adultery or concubinage at the time of
the donation.
c. Those made between two persons found guilty of the same criminal offense, in
consideration thereof.
d. Those made to a public officer or his wife, descendants or ascendants, by reason of his
office.

Therefore, not being enumerated therein, brother and sister are not disqualified in forming a universal
partnership.

25 C, According to Art. 1783, a particular partnership has for its object determinate things, their use or
fruits, or a specific undertaking, or the exercise of a profession or vocation.

26 D, under the civil code, a partnership by estoppel is one which in reality is not a partnership, but is
considered a partnership only in relation to those who, by their conduct or admission, are precluded to
deny or disprove its existence.

27.) E. A general professional partnership is taxed not by the partnership’s income but to their own
individual capacities.

28.) C. A Partnership at will has no specified time or particular undertaking as to the

partnership but is only formed at will and can be terminated anytime by mutual agreement
 29.) C. Definition as stated in the answer 30.) C.

Definition as stated in the answer

31.) D. An ostensible partner takes an active part in managing and is also known to the public as
a partner, whether or not he has an actual interest in the partnership.

32.) C. Definition as stated in the answer. He is a secret and silent partner that has only the
interest of takepart in the partnership’s sharing of profit.
33.) C. Art. 1859 provides that a substitute limited partner is a person admitted to all the rights of
a limited partner who has died or has assigned his interest in the partnership
34.) C. It is necessary that the intention of the partnership is to divide profits but it is not
necessarily in equal shares. The same applies to losses which arose as consequences to the operation of
the partnership

35.) D. As for the profits, the industrial partner shall receive such share as may be just and
equitable under the circumstances. But, if besides his services he has contributed capital, he shall also
receive a share in the profits in proportion to his capital.

36.) C. In the absence of an agreement, the industrial partner shall receive first a just and
equitable share of the profits and thereafter, each capitalist partner shall share in the profits in proportion
to the capital contribution.

37.) D. The capitalist-industrial partner shall first receive a just and equitable share of the profits
in his capacity as industrial partner. Thereafter, each capitalist partner, including the capitalist-industrial
partner in his capacity as a capitalist partner, shall share in the profits in proportion to his capital
contribution.

38.) A In the absence of stipulation, the share of each partner in the profits and losses is in
proportion to what he may have contributed. However, an industrial partner who contributed purely his
services is not liable for the losses.

39.) B. In the absence of an agreement the share of each partner in the profits and losses shall be
in proportion to what he may have contributed. The partner who contributes his services only shall
receive a share equal to the one who has contributed the least.

40.) C. With absence of an agreement, division of profits is in accordance with capital

contributions
 41. D. For being an industrial partner, he shall not share in losses but for being capitalist partner he
shall share in the losses on the basis of the profit ratio. - Rules on division of profit and losses (Article
1797)

42. D. A stipulation excluding an industrial partner in the share of losses.

Status of Stipulation exempting a partner from share in partnership profit or partnership
loss (article 1799)
a. Stipulation excluding any partner from share in partnership profit is void.
b. Stipulation excluding a capitalist partner from share in partnership loss is void.
c. Stipulation excluding an industrial partner from share in partnership loss is valid

43. B. P5,000 because the year- 2010, P10,000 net loss shall be netted from year-2011, P20,000 net
income before distribution.

44. D. If entrusted to one of the partners, the designation is valid. - Article 1798

45. A. Within 3 months from the knowledge of such designation but it must be before the said partner
executes it.

46. D. The managing partner’s decision on acts of administration may be reversed by the votes of
the majority of the partners.
Rules on partnership management when a partner has been appointed manager in the
articles of co-partnership (Article 1800)
a. The managing partner may execute all acts of administration despite the opposition of his partners
unless he acts in bad faith.
b. With just or lawful cause, the revocation of the power of the managing partner can be made by the
vote of the partners representing the controlling interest.
c. Without just or lawful cause, the revocation of the power of the managing partner can be made
only with the consent of all the partners including the managing partner.

47. D. He can only be removed without just cause by the vote of all partners including the managing
partners.
Rules on partnership management when a partner has been appointed manager after the
partnership has been constituted or has been appointed in a separate document other
than articles of co-partnership
a. The managing partner may execute all acts of administration.
b. In case of opposition to the decision of the managing partner on acts of administration, the partners
representing the controlling interest may resort to voting for his removal as manager.
c. He may be removed with or without just cause by the vote of the partners representing the
controlling interest.

48. A. When there is a specification of their respective duties, each managing partner shall perform
only the duties specified in his appointment.
Requisites of Powers of two or more managing partners
1. two or more partners have been appointed as managers
2. there is no specification of their respective duties
3. there is no stipulation that 1 of them shall not act without the consent of all the others

49. C. When there is imminent danger of grave or irreparable injury to the partnership - article
1802 (In case it should have been stipulated that none of the managing partners shall act
 without the consent of the others, the concurrence of all shall be necessary for the validity of the acts, and the absence

imminent danger of grave or irreparable injury to the partnership)

50. C. In case of opposition of the other partners, the decision of the majority shall prevail and the decision of t

ARTICLE 1803. When the manner of management has not been agreed upon, the following
rules shall be observed:
(1) All the partners shall be considered agents and whatever any one of them may do alone shall bind the
partnership, without prejudice to the provisions of article 1801.
(2) None of the partners may, without the consent of the others, make any important alteration in the
immovable property of the partnership, even if it may be useful to the partnership. But if the refusal of
consent by the other partners is manifestly prejudicial to the interest of the partnership, the court’s
intervention may be sought.

51. C. Nominal partner

A nominal partner does not have any real or significant interest in the partnership
firm. In simple words, he is only lending his name to the firm and does not have a voice in the
management of the firm.

52. D. Any act of a partner who has in fact no authority to act for the partnership in the particular
matter, and the person with whom he is dealing has knowledge of the fact that he has no such authority.

53. A. I and II
I. If the partner is authorized to act for the partnership whether or not the act is for apparently carrying on
in the usual way the business of the partnership.
II. If the partner is not authorized to act for the partnership but the act is for apparently carrying on in the
usual way the business of the partnership and the third person has no knowledge of the partner’s lack of
authority.

54. H. Payment of the salary of partnership’s employees

55. B – The law provides that as a general rule, a partner appointed as manager has all the necessary
and incidental powers to carry out the object of the partnership in the transaction of its business. In short,
it manages the affairs of business of the partnership.

56. B – The law provides in Article 1789 that an industrial partner cannot engage in any business for
himself, unless the partnership expressly permits him to do so.

57. A – The law provides in Article 1789 that once the industrial partner engage in business for himself,
the capitalist partner may either exclude him from the firm or avail themselves of the benefits which he
may have obtained in violation of this provision, with a right to damages in either case.
58. D – The law provides that prohibition against engaging in business as regards to capitalist partners
is that it extends only to any operation which is of the same kind of business in which the partnership is
engaged unless there is a stipulation to the contrary (Article 1808).

59. D – The law provides that the remedies available to injured partners when a capitalist partner
engages in the same kind of business without stipulation allowing him to engage in that business. First is
to ask the guilty capitalist partner to bring to the common fund any profits accruing to him from the said
transaction, the second one is to ask the guilty capitalist partner to bear all the losses from the said
transaction.

60. A – The law provides in Article 1816 that all partners, including industrial ones, shall be liable pro
rata and subsidiarily with all their property and after all the partnership assets have been exhausted.

61. D – The law provides in Article 1822-1823 that Where, by any wrongful act or omission of any
partner acting in the ordinary course of the business of the partnership or with the authority of his co-
partners, loss or injury is caused to any person, not being a partner in the partnership, or any penalty is
incurred, the partnership is liable therefor to the same extent as the partner so acting or omitting to act.

ARTICLE 1823. The partnership is bound to make good the loss:

(1) Where one partner acting within the scope of his apparent authority receives money or property
of a third person and misapplies it; and

(2) Where the partnership in the course of its business receives money or property of a third person
and the money or property so received is misapplied by any partner while it is in the custody of the
partnership.

Hence, the answer is not a part of it.

62. D – The law provides that a stipulation among the partners contrary to the pro rata and subsidiary
liability expressly imposed by Article 1816 is void and of no effect insofar as it affects the rights of third
persons. It is valid and enforceable only as among the partners.
63. D – The law provides that all partners, including industrial ones, shall be liable pro rata with all
their property and after all the partnerships assets have been exhausted.

64. B – The law provides that limited partner is defined as one whose liability to third persons is limited
only to his capital contribution.

65. C – The law provides that general partner is defined as one whose liability to third persons extends
to his separate property; he may either be a capitalist or industrial partner, hence why a general partner is
liable pro rata and subsidiarily.

66. D – The law provides in Article 1805 that the partnership books shall be kept, subject to any
agreement between the partners, at the principal place of business of the partnership, and every partner
shall at any reasonable hour have access to and may inspect and copy any of them.

67. D – The law provides in Article 1808 that the capitalist partners cannot engage for their own
account in any operation which is of the kind of business in which the partnership is engaged, unless there
is a stipulation to the contrary.

68. B – The law provides in Article 1789 that an industrial partner cannot engage in any business for
himself, unless the partnership expressly permits him to do so.

69. E.
The following instances wherein any partner shall have the right to a formal account of the partnership
affairs are if the partner is wrongfully excluded from the partnership business or possession of its property
by his copartners, if the right for formal accounting is provided under the terms of articles of co-
partnership, if the other partners derived profits without the consent of other partners from any transaction
connected with the formal conduct, or liquidation of the partnership or from any use by him of its
property, and whenever the circumstances render formal accounting just and reasonable. (Article 1809)

70. C
This is in accordance with Art. 1815 which states that Every partnership shall operate under a firm name,
which may or may not include the name of one or more of the partners. Those who, not being members of
the partnership, include their names in the firm name, shall be subject to the liability of a partner. So the
third person shall be liable pro-rata and subsidiarily and will be treated as nominal partner.
71. B
The law provides that the juridical personality of the partnership begins from the moment of the execution
of the contract of partnership. This is in accordance with article 1784 which states that A partnership
begins from the moment of the execution of the contract,
unless it is otherwise stipulated.

72. A
In the absence of partnership agreement, partners contribute equally to the capital of the partnership. This
is in accordance with the law provided under the ARTICLE 1790 which states that Unless there is a
stipulation to the contrary, the partners shall contribute equal shares to the capital of the partnership.

73. E.
Article 1786 provides that, every partner is a debtor of the partnership for whatever he may have
promised to contribute thereto. A partner is liable to the partnership even without the demand by the other
partners.

74. D
The following are the obligations of the partners with respect to the contribution of money under Article
1788, first is to deliver to the partnership at the time it was constituted or on the date stipulated the money
he has promised to contribute. Second, to pay interest on the amount he had promised to contribute from
the time he should have complied with his obligation even without demand. And lastly, to pay damages
suffered by the partnership by reason of the default. So the answer is letter d.

75. D
The following are the obligations of the partner with respect to partnership fund misappropriated, first is
to reimburse to the partnership the amount that he has taken from the partnership coffers. Second, is to
pay interest on the amount he had converted for his own use from the time of conversion. And lastly, to
pay the damages suffered by the partnership by reason of the conversion. So the answer is letter D.

76. A
In the absence of agreement to the contrary, the obligation of a partner in case of imminent loss of the
business of the partnership is to contribute additional share of capital to the partnership to save the
venture unless he is an industrial partner or capitalist partner exempted by stipulation or to sell his
capital interest to the other partners if he refuses to contribute such additional capital. This is in
accordance with article 1791.

77. C
In accordance with Article 1791, If there is no agreement to the contrary, in case of an imminent loss of
the business of the partnership, any partner who refuses to contribute an additional share to the
capital, except an industrial partner, to save the venture, shall be obliged to sell his
interest to the other partners. As a general rule, a capitalist partner is not bound to contribute to the
partnership more than what he agreed to contribute.

In case, however, of an imminent loss of the business, and there is no agreement to the contrary, he is
under obligation to contribute an additional share to save the venture, If he refuses to contribute, he shall
be obliged to sell his interest to the other partner.

78. E
In accordance with Article 1793 and 1794, the following are obligations of a partner to the partnership.
First is to bring to the partnership capital his share of a partnership credit which he has received in whole
or in part even he may have given his receipt if the other partners have not collected their shares and the
debtor becomes insolvent after the partner has received the payment. Second, to pay to the partnership for
damages suffered by it through his fault but he cannot compensate them with the profits and benefits
which he may have earned for the partnership by his industry. And Next is to render on demand true and
full information of all things affecting the partnership to any partner, legal representative of a deceased
partner or legal representative of any partner under disability. And lastly, to account to the partnership for
any benefit and hold as trustee for it any profits, derived by him without the consent of the partners from
any transaction connected with the formation, conduct or liquidation of the partnership or from use by
him of its property.

79. C.
If the partnership suffered damages through the fault of a partner, the court may equitably reduce his
responsibility to the partnership if through the partner's extraordinary efforts in other activities of the
partnership, unusual profits have been realized. This is in accordance with Article 1794. It is also stated in
Article 1173, where a partner's fault must be determined in accordance with the nature of the obligation
and the circumstances of the person, time, and place.

80. C
The law provides that the responsibility of two or more persons who are liable for a quasi-delict is
solidary (Article 2194 of the Civil Code).

81. D
The partnership shall bear the risk of loss for the following contributions of partners, first is fungible
things or those that cannot be kept without deteriorating. Second, Things contributed to the partnership to
be sold. And lastly, Things brought and appraised in the inventory of partnership unless there is a
stipulation to the contrary but the amount of partnership obligation will be limited to the value at which
they were appraised. This is in accordance with Article 1795.

82. D
The following are the liabilities or obligations of the partnership to the partners, first, the partnership shall
be responsible to every partner for the amounts he may have disbursed on behalf of the partnership and
for the corresponding interest, from the time the expense is made.
Next, The partnership shall answer to each partner for the obligations he may have contracted in good
faith in the interest of the partnership business. And lastly, the partnership shall answer to each partner
the risks as a consequence of its management. This is in accordance with Article 1796.

83. B - the partnership and corporation law stipulates that each partner in the partnership have the right to
take part in the business proceeding. But this right is subject to a contract to the contrary. However, this
right may be waived by a partner himself. Included in the righ of a partner are a, c, and d.
84. D - the partnership and corporation law stipulates in section 2 which is the property rights of a
partner, that the property rights of the partners are a, b, and c
85. D - the partnership and corporation law does not provide that specific partnership property is
subject to legal support.
86. C - the partnership and corporation law stipulates that a partner’s interest in the partnership is his
share of the profits and the surplus as mentioned in article 1812.
87. D - The partnership and corporation law does not provide the letter d. Letter can
88. D
89. D
90. C
91. E
92. A
93. A
97. A - the conveyance will transfer title property to the buyer. The law provides that the
partnership may recover such property if the partners’ act does not bind the partnership under the
provisions of the first paragraph of article 1818, unless the purchaser or his assignee, is a holder for value,
without knowledge.
98. A - If the partners' act is not for apparently carrying on in the usual way the
business of the partnership of which he is a member. ARTICLE 1819. Where title to real
property is in the partnership name, any partner may convey title to such property by a conveyance
executed in the partnership name; but the partnership may recover such property unless the partner’s act
binds the partnership under the provisions of the first paragraph of article 1818, or unless such property
has been conveyed by the grantee or a person claiming through such grantee to a holder for value without
knowledge that the partner, in making the conveyance, has exceeded his authority.
99. A - The conveyance passes the equitable interest of the partnership, provided the
act is one within the authority of the partner and for apparently carrying on in the usual
way the business of the partnership of which he is a member. .Where title to real property is
in the name of the partnership, a conveyance executed by a partner, in his own name, passes the equitable
interest of the partnership, provided the act is one within the authority of the partner under the provisions
of the first paragraph of article 1818
100.A - . The conveyance passes all the rights of the partners in said real property.
101. B - The admission must be in a public instrument. All are part of the requisites in order
for an admission or representation of a partner to be used as evidence against the partnership, except B
102. D - All of the following are knowledge of a partner binds the partnership, except D
Notice or knowledge of a partner in case of fraud committed on or against the partnership by the partner
having notice or knowledge.
103. A - The nominal partner is liable pro-rata and subsidiarily like a general partner
only to persons to whom such representation has been made, who has, on the faith of
such representation, given credit to the actual or apparent partnership. According to
ARTICLE 1825. When a person, by words spoken or written or by conduct, represents himself, or
consents to another representing him to anyone, as a partner in an existing partnership or with one or
more persons not actual partners, he is liable to any such persons to whom such representation has been
made, who has, on the faith of such representation, given credit to the actual or apparent partnership.

104. C - The nominal partner is liable pro-rata and subsidiarily like a general partner to
persons giving credit whether the representation has or has not been communicated to
the latter. As the Article 1825 prodes that if he has made such representation or consented to its being
made in a public manner he is liable to such person, whether the representation has or has not been made
or communicated to such person so giving credit by or with the knowledge of the apparent partner
making the representation or consenting to its being made.
105. C - Both A and B are correct. When a person has been thus represented to be a partner in an
existing partnership, or with one or more persons not actual partners, he is an agent of the persons
consenting to such representation to bind them to the same extent and in the same manner as though he
were a partner in fact, with respect to persons who rely upon the representation. Where all the members of
the existing partnership consent to the representation, a partnership act or obligation results; but in all
other cases it is the joint act or obligation of the person acting and the persons consenting to the
representation.

106. D - all are the rules in preference of credits of partnership creditors and partner's
creditors, except D Partnership creditors shall be paid out first using partner's separate assets while the
partner's personal creditors shall be paid out first using the partnership's assets
107. A - according to Article 39 A partnership business shall first of all use all of its
property to repay its debts. Whereas the property of the partnership business is
insufficient for repayment of its payable debts, each partner shall shoulder unlimited
joint liabilities for the repayment.
108. A - It is the change in the relation of the partners caused by any partner ceasing to
be associated in the carrying on of the business.
109. F - All are the automatic causes of dissolution of general partnership even without
a need of court order, except F loss after delivery of specific thing, which a partner has promised to
contribute to the Universal Partnership of All Present Property.
110. G - All are the instances wherein a general partnership may be dissolved by a
decree of court upon application by a partner also known as non-automatic causes of
dissolution, except G death of a partner.
111. F - Loss after delivery of specific things, which a partner has promised to contribute
to the Universal Partnership of All Present Property. In accordance with this provision of Article
1830 which refers only to specific things, loss after delivery of specific things promised is not dissolved,
but it assumes the loss of the thing that has acquired its ownership. Therefore, letter F is an exemption.

112. G - Death of any partner. Because it was clearly specified in Article 1830, and the causes
provided under this article result in the automatic dissolution of the partnership.

113. C - Either A or B a purchaser of a partner’s interest under Articles 1813 or 1814 may apply for
judicial dissolution of a partnership under Art. 1831.

114. E - By any transaction which is not for the usual carrying on of the partnership
affairs and the acting partner has no authority. Because the NIL provides that an act of a partner
of business of the partnership in the usual way does not bind the partnership unless authorized by other
partners.

115. C - Both A and B. Under Article 1825.

116. C - Either A or B. Based on Article 1832 and 1833.

117. A - They shall be liable pro rata and subsidiarily for the obligation created after the
dissolution.

118. D - Where the act is necessary for winding up partnership affairs. Article 1834 provides
that after a dissolution, a partner can bind the partnership, except as provided in the third paragraph of this
article: (1) By any act appropriate for winding up partnership affairs or completing transactions
unfinished at dissolution; (2) By any transaction which would bind the partnership if dissolution had not
taken place, provided the other party to the transaction: (a) Had extended credit to the partnership
prior to dissolution and had no knowledge or notice of the dissolution; or (b) Though he had not so
extended credit, had nevertheless known of the partnership prior to dissolution, and, having no knowledge
or notice of dissolution, the fact of dissolution had not been advertised in a newspaper of general
circulation in the place (or in each place if more than one) at which the partnership business was regularly
carried on.

119. D - The dissolution of the partnership automatically results in the liquidation of the
partnership’s affairs. According to Art. 1829, on dissolution, the partnership is not terminated,
but continues until the winding up of partnership affairs is completed.

120. D - Any of the above. Under Art. 1836, Unless otherwise agreed, the partners who have not
wrongfully dissolved the partnership or the legal representative of the last surviving partner,
not insolvent, has the right to wind up the partnership affairs, provided however, that any partner, his
legal representative or his assignee, upon cause shown, may obtain winding up by the court.

121. D - When said partner or legal representative or assignee shows valid cause for
liquidation. According to Art. 1836, upon cause shown, any partner or legal representative or assignee
may obtain winding up by the court.

122. D - To be exempted from pro-rata and subsidiary liability to third persons. A, B, and C
are stated under Art. 1838 except D.

123. A - I, II, III, IV. The proper order or payment of partnership liabilities and equity are clearly stated
in the second number in Article 1839.

124. A - I, II, III . In the last number of Article 1839, it indicates the property on priority of claims
against the separate property of a partner who is insolvent or whose estate is insolvent.

125. A. I, II, III, IV, V, VI - According to PArtnership and Corporation Law, ART. 1863. In settling
accounts after dissolution the liabilities of the partnership shall be entitled to payment in the following
order: (ANSWER)

126. Except G - Art. 1840. In the following cases creditors of the dissolved partnership are also
creditors of the person or partnership continuing the business: (A-F)

127. A. - It is stated under Art. 1840. In the following cases creditors of the dissolved partnership are
also creditors of the person or partnership continuing the business that The liability of a third person
becoming a partner in the partnership continuing the business, under this article, to the creditors of the
dissolved partnership shall be satisfied out of the partnership property only, unless there is a stipulation to
the contrary.
When the business of a partnership after dissolution is continued under any conditions set forth in this
article the creditors of the dissolved partnership, as against the separate creditors of the retiring or
deceased partner or the representative of the deceased partner, have a prior right to any claim of the
retired partner or the representative of the deceased partner against the person or partnership continuing
the business, on account of the retired or deceased partner's interest in the dissolved partnership or on
account of any consideration promised for such interest or for his right in partnership property.

128. D. It shall not of itself make the individual property of the deceased partner liable for
any debts contracted by such person or partnership in the new partnership. - It is stated
under Art. 1840 The use by the person or partnership continuing the business of the partnership name, or
the name of a deceased partner as part thereof, shall not of itself make the individual property of the
deceased partner liable for any debts contracted by such person or partnership.
129. B. At the date of dissolution - ARTICLE 1842. The right to an account of his interest shall
accrue to any partner, or his legal representative as against the winding up partners or the surviving
partners or the person or partnership continuing the business, at the date of dissolution, in the absence of
any agreement to the contrary.

130. C. At least one limited partner and at least one general partner - ARTICLE 1843. A
limited partnership is one formed by two or more persons under the provisions of the following article,
having as members one or more general partners and one or more limited partners. The limited partners as
such shall not be bound by the obligations of the partnership.

131. B. General partner - It is stated in Partnership corporation law in Kinds of partners that a General
partner is the one whose liability to 3rd persons extends to his separate property.

132. A. Limited partner - It is stated in Partnership corporation law in Kinds of partners Limited
partner: one whose liability to 3rd persons is limited to his capital contribution. Art. 1845. The
contributions of a limited partner may be cash or property, but not services. Limited partners can only
contribute money and property and cannot contribute services to the partnership to protect persons
dealing with the firms with frauds.

133. D. The partnership will be considered a general partnership as to third persons but
continue to be a limited partnership among the partners. - Under Art 1772
Partnership still acquires personality despite failure to comply with the requirements of execution of
public instrument and registration of name in SEC. Art. 1772. Every contract of partnership having a
capital of three thousand pesos or more, in money or property, shall appear in a public instrument, which
must be recorded in the Office of the Securities and Exchange Commission. Failure to comply with the
requirements of the preceding paragraph shall not affect the liability of the partnership and the members
thereof to third persons.

134. D. Services, industry or labor - Art. 1845. The contributions of a limited partner may be cash
or property, but not services.
Limited partners can only contribute money and property and cannot contribute services to the
partnership to protect persons dealing with the firms with frauds.

135. C. Either A or B. - ARTICLE 1846. The surname of a limited partner shall not appear in the
partnership name unless:
(1) It is also the surname of a general partner, or
(2) Prior to the time when the limited partner became such, the business had been carried on under a
name in which his surname appeared.

136. A. The limited partner is liable pro-rata and subsidiarily to partnership creditors who extend credit
to the partnership without actual knowledge that he is not a general partner. - It is stated under Art. 1846
that A limited partner whose surname appears in a partnership name contrary
to the provisions of the first paragraph is liable as a general partner to partnership creditors who extend
credit to the partnership without actual knowledge that he is not a general partner.

137. C. Either A or B - ART. 1848. A limited partner shall become liable as a general partner unless,
in addition to the exercise of his rights and powers as a limited partner, he takes part in the control of the
business.

138. H. Do any act of administration - ART. 1850. A general partner shall all have the rights and
powers and be subject to all the restrictions and liabilities of a partner in a partnership without limited
partners. However, without the written consent or ratification of the specific act by all the limited
partners, a general partner or all of the general partners have no authority to: ( A- G)

153. D - All of the following are the instances when an assignee of a limited partner can
become a substituted limited partner
a. If all the members of the partnership consent thereto.
b. If the assigning limited partner or assignor is empowered to admit the assignee as
substituted limited partner as provided in thecertificate of limited co-partnership and
gives the assignee that right.
c. When the articles of certificate of co-partnership is appropriately amended in
accordance with law.

154. B - The following statements concerning the substitution of assignee as substituted

limited partner are correct and included in the law, except choice B- . The substituted
limited partner is liable to liabilities of which he was ignorant at the time he became a
limited partner and which
could not be ascertained from the certificate. It is not included in the law.

155. C - Either A or B.
According to the law on Partnership under the Cancellation of certificate, the time
certificate of limited co-partnership required to be cancelled is
• When the partnership is dissolved, and
• When all limited partners cease to be such.

156. K - When all limited partners die. According to ARTICLE 1864. The certificate shall
be cancelled when the partnership is dissolved or all limited partners cease to be such.
All the choices from A to J are all included in the law except K - When all limited partners
die.
157. D - The retirement, death, civil interdiction, insanity or insolvency of a limited
partner always dissolves the limited partnership.
Under Articles 1843-1867 in Limited Partnership, all the choices are part of the limited
partnership except, D - The retirement, death, civil interdiction, insanity or insolvency of
a limited partner always dissolves the limited partnership.

158. F.
The following options from A-E are all part of the differences of private corporation
against general partnership as stated in the Partnership and Corporation Law, excluding
F - General partnership has no separate personality from the partners while private
corporation has a separate personality distinct
from the shareholders.

159. A - Nominal partner. This type of partner that does not have any real or significant
interest in the partnership. So, in essence, he is only lending his name to the partnership.
He will not make any capital contributions to the firm, and so he will not have a share in
the profits either. Thus, doesn't have a right to inspect the partnership book.

160. A - General Partner. Some characteristics of a general partner is they can

contributemoney, property orindustry and is prohibited fromengaging in abusiness
likepartnership’s. Industrial partner defines as the one who contributesonly his industry
or personal service. Thus, Industrial partner is classified as a general partner.
161. A -
162. B -
163. B -
164. A -
165. C -
166. A -

167. D - All the partners; since A, B, and C are appointed as managing partners who shall be
considered as the administrator of the partnership.

168. A - The decision of the majority (per head) of the managing partners shall prevail.

Under ARTICLE 1801. If two or more partners have been entrusted with the management of the
partnership without specification of their respective duties, or without a stipulation that one of them shall
not act without the consent of all the others, each one may separately execute all acts of
administration, but if any of them should oppose the acts of the others, the decision of the majority shall
prevail. In case of a tie, the matter shall be decided by the partners owning the controlling interest.
(1693a)
169. B - A, B, and C - Under Article 1816. All partners, including industrial ones, shall be liable pro
rata with all their property and after all the partnership assets have been exhausted, for the contracts
which may be entered into in the name and for the account of the partnership, under its signature and by
a person authorized to act for the partnership. However, any partner may enter into a separate obligation
to perform a partnership contract.

170. A - A and B only -

171. C - ABC Partnership or A or B or C -
172. C - A and B only -
173. A - A and B only -
174. A - 2,000 - Under Article 1787. When the capital or a part thereof which a partner is bound to
contribute consists of goods, their appraisal must be made in the manner prescribed in the contract of
partnership, and in the absence of stipulation, it shall be made by experts chosen by the partners, and
according to current prices, the subsequent changes thereof being for the account of the partnership.

176. C - P 800 to ABC Partnership and P 200 to A’s credit -

177. B - P 1,000 to ABC Partnership’s credit only
178. A - P 1,000 T B’s credit only
179. D - Those owing to partners with respect to profit share
180. D - Those owing to the general partners with respect to capital contribution