1.

College pals Kai, Emgee, and Alexa agreed to put coffee shop business along the university
belt in Dagupan city with starting capital of one million pesos (Php1,000,000.00) divided as
follows:
 Kai: Sum of Php300,000.00 and delivery truck valued at Php250,000.00
 Emgee: Sum of Php150,000.00 and machines and equipment valued at
Php300,000.00
 Alexa: barista service and management of the shop.
So named KEA Sisters Enterprises, the partnership assumed legal personality upon—
a. Meeting of minds by the partners.
b. Execution of the Articles of Partnership.
c. Registration before the SEC
d. All of the above

2. Refer to above, to bind third persons of their arrangement that Kai’s personal property is
exempt from partnership liability in the event of insolvency, it is required of the partners to—
a. Reduce the contract in writing.
b. Prepare inventory of contributions and attach to the public instrument.
c. Register as Limited Partnership before the SEC.
d. All of the above.

3. Refer to above. In order to warn the public that Kai is a limited partner, the partnership is
required to—
a. Publish such fact in a newspaper of general circulation.
b. Send notices to creditors
c. Include in the firm name the word “Limited” or its acronym
d. All of the above.

4. Refer to above. The failure of KEA Sisters Enterprises to register as limited partnership
before the SEC will result into—
a. Void partnership
b. Voidable partnership
c. Universal partnership
d. General partnership.

5. Refer to above. On its first quarter of operation, the firm earned Php300,000.00 in business
profits. How shall the profits be divided among the partners?
a. In accordance with their agreement.
b. In proportion to capital contribution.
c. Whatever is just and equitable share in the profits.
d. To be determined by expert chosen by the partners.

6. Refer to above. Emgee is not known to the public as partner. She does not participate in the
management of the business. Emgee is a—
a. Silent partner
b. Secret partner
c. Dormant partner
d. Ostensible partner
7. Refer to above. In case of loss, the partners may be required to make additional contribution
to save the business ventures. Which statement below is false?
a. Alexa is exempt from making additional contribution.
b. Alexa may be compelled to sell her interest if she refused to make
additional contribution.
c. Capitalist partners may not be compelled to make additional contribution if
loss is not real or imminent.
d. Capitalist partners are not exempt from losses even if there is stipulation to
that effect.

8. Refer to above. Assume that the partnership is limited. It is indebted to several creditors in
the aggregate sum of Php1.3 Million in excess of the partnership property (Php1 Million).
Who among the partners will answer for the balance of Php300,000.00 and for how much?
a. Kai, Emgee, and Alexa: Php100,000.00. each
b. Emgee and Alexa: Php150,000.00 each
c. Emgee and Alexa: Php200,000.00 and Php100,000.00 respectively.
d. Emgee only: Php300,000.00
9. Refer to above. In the articles of partnership, Alexa was named the managing partner. As
such manager, the extent of her power is anything which may be encompassed or falling
within __________.
a. Acts of administration.
b. Acts of strict dominion.
c. Scope of authority.
d. Managerial prerogative.
10. Refer to above. Which act below requires the consent of all partners or specific authority
from the partnership?
a. Payment of wages to staff.
b. Donation to victims of flood.
c. Lease of front space for food cart for a period of one year.
d. Entering into compromise agreement concerning partnership claims.
11. Refer to above. Alexa’s power is revocable—
a. On just and lawful cause.
b. By vote of partners owning the controlling interest
c. Both (a) and (b)
d. With or without lawful cause provided with the vote of the majority of
partners.
12. Refer to above. As industrial partner, Alexa’s right to use any specific partnership property is
in exercise of her—
a. Power as managing partner
b. Property right as partner
c. Interest in the partnership
d. Right to manage partnership affairs.
13. Refer to above. Which statement is true about Alexa’s limitation as industrial partner?
a. She may not inspect partnership books.
b. She may not cause judicial dissolution of the partnership.
c. She may not assign her interest to third persons without consent of the
partners.
d. She may not engage in business outside of the partnership without express
permission.
14. Refer to above. Kai, capitalist partner, engaged in business of bread and pastry across the
coffee shop of the partnership. If such act is without the consent or against the wishes of her
partners Emgee and Alexa, the latter may—
a. Expel Kai from the firm.
b. Sue Kai for damages.
c. Demand from Kai to turn in the profits of her business and personally bear
all the losses.
d. File judicial dissolution of partnership citing loss of faith and confidence in
Kai.
15. Refer to above. Kai’s interest in the partnership consists of—
a. Her right to use specific partnership property.
b. Her share in the profits and surplus.
c. Her right to manage partnership affairs.
d. Her capital contribution.
16. Refer to above. Kai is pursued by several personal creditors, some already obtained judgment
against her. In the enforcement of the judgment by way of attachment, which statement
below is true?
a. The delivery truck she contributed to the partnership may be seized to
answer for the judgment credit.
b. Her share in the profits of the business may be charged or garnished for
satisfaction of debts.
c. Her personal property may be attached but preference is given to
partnership creditors.
d. The creditors may apply for dissolution of the partnership if necessary to
collect payment out of Kai’s return of capital contribution and/or share in
the surplus.
17. Refer to above. Kai assigned to personal creditors her interests in the partnership until her
debt is fully paid. Which statement is true about this assignment?
a. The partnership is deemed dissolved.
b. The assignment to be valid requires the consent of all the partners.
c. The assignee is entitled to receive Kai’s share in the profits of the business.
d. The assignee is admitted as new partner in the firm.
18. Refer to above. Assume that none of the partners designated among themselves who the
manager is. Today, the coffee shop was running low on stocks. The old creditor that used to
supply the shop could not meet pending orders. To ensure the continuity of the business, Kai
was compelled to purchase from the rival company for supplies at 10% price difference. Kai’s
act is best described as—
a. Partnership act committed in the exercise of property rights.
b. Partnership act committed by express authority of the firm.
c. Ultra vires act done without express authority of the firm.
d. Void for lack of express authority to represent the firm.
19. Refer to above. On the same day that Kai transacted with the rival company, Alexa opposed
the decision. How shall the conflict be resolved within the firm?
a. Alexa will give way to Kai because she is the capitalist partner.
b. Alexa may have the contract annulled in court on the ground of fraud.
c. Kai will give way to Alexa because her decision is not in the best interest
of the partnership.
d. The deadlock will be resolved by vote of Emgee to break the tie.
20. Refer to above. In purchasing coffee beans for business, is there need for Kai to obtain power
of attorney or express authority from the partnership?
 a. Yes, in order for the agent to bind the principal, there must be express
authority.
b. Yes, in order for the contract of sale to be valid.
c. No, because as managing partner, Kai may execute acts of administration
without the concurrence of his co-partners.
d. No, because of emergency, any of the partners may make purchases with
dispatch even without consulting each other.
21. Refer to above. Assume that Alexa was the partner authorized to purchase coffee beans from
accredited suppliers. Unknown to Alexa who was presently in Tagaytay city, Kai transacted
business with a new supplier at discounted price. Does the contract of purchase entered by
Kai as unauthorized partner bind the partnership?
a. Yes, because it is apparently carried out in the usual way the business of
the partnership provided the third person is not aware of the lack of
authority.
b. Yes, because the act benefited the partnership having obtained discount for
the price of the coffee beans.
c. No, because absent authority, the contract is void.
d. No, because absent authority, the contract is unenforceable.
22. Refer to above. Assume that Alexa is the partner authorize to act for the firm in the purchase
of libera coffee beans (barako) in Tagaytay city, which required her to stay and transact
business there for a week. Today, Alexa purchased sacks of barako coffee in the aggregate
sum of Php175,000.00. Unknown to her, Alexa’s partner Kai was declared insolvent by
competent court few hours before the purchase. How shall the obligation of Php175,000.00
be paid?
a. From the partnership assets.
b. From the separate properties of partners.
c. From (a) and, if insufficient, from (b)
d. From the separate property of the acting partner.
23. Refer to above. What becomes of the partnership upon the insolvency of Kai, one of the
partners?
a. It is deemed terminated.
b. It is deemed dissolved.
c. It becomes a partnership at will.
d. The partnership likewise becomes insolvent.
24. Refer to above. In the payment of its liabilities upon dissolution of the partnership and during
winding upon, which below enjoys preference over others.
a. Obligation to partners other than return of capital.
b. Obligation to partners for return of capital.
c. Obligation to distribute surpluses.
d. Obligation to partnership creditors.
25. Refer to above. A partner is released from partnership liability to creditors upon—
a. Dissolution
b. Termination
c. Death of the partner
d. Agreement to release the partner signed by the creditor, the firm, and
himself.