Automatic dissolution also takes place when a new partner is admitted or when a partner retires,

withdraws, or is expelled from the partnership.

TRUE

Every partnership shall operate under a _____ , which may or may not include the name of one
or _____ of the partners.
firm name
more

Every partnership shall operate under a firm name, which shall include the name of all of the
partners.
FALSE

The rule of respondent superior (also called the rule of vicarious liability) does not apply to the
law of partnership.
FALSE

A and B are capitalist partners, with C as an industrial partner. A and B contributed P100,000.00
each to the capital of the partnership. A contractual liability of P260,000.00 was incurred by the
partnership in favor of D.
D can sue the firm and all the partners including C, the industrial partner.
D can recover the amount from A, B, and C jointly at P20,000.00 each.
The Capital assets of P2,000,000.00 shall first be exhausted thereby leaving an
unsatisfied liability of 60,000.
After paying D, C can recover for reimbursement of P10,000.00 each from A and B.

The rules to be applied as to the nature of individual liability of partners insofar as partnership
debts are concerned.
Liability of industrial partners  The partner/s has to pay, he can recover the amount
he/she has paid from the capitalist partners unless there is an agreement to the contrary.
pro rate liability  The fact that a partner has left the country and the payment of his
share of the liability is condoned by the creditor cannot increase the liability of the other
partners.
subsidiary liability  The partners become personally liable only after all the
partnership assets have been exhausted.
Persons who, not being partners, include their names in the firm name do not acquire the rights
of a partner but shall be subject to the liability of a partner insofar as third persons without notice
are concerned.
TRUE

Those who, not being members of the partnership, include their names in the firm name, shall
be subject to the liability of a partner.
TRUE

In partnership business, a liability and a loss are treated alike.

FALSE

On dissolution the partnership is terminated, but continues until the winding up of partner- ship
affairs is completed.
FALSE

1st: A limited partner shall have the same rights as a general partner to have dissolution and
winding up by voluntary consent.
2nd: A person may be a general partner and a limited partner in the same partnership at the
same time.
1st statement is false, 2nd statement is true

A limited partner shall not become liable as a general partner even if he takes part in the control
or management of the partnership business.
FALSE

In limited partnership, the retirement, death, insolvency, insanity or civil interdiction of a general
partner dissolves the partnership, unless the business is continued by the remaining general
partners:
Under a right so to do stated in the certificate of limited partnership
With the consent of all members.

All partners, excluding 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
FALSE
A person admitted as a partner into an existing partnership is liable for all the obligations of the
partnership arising _____ his admission as though he had been a partner when such obligations
were incurred, except that this liability shall be satisfied only out of _____ property, unless there
is a stipulation to the contrary.
before
partnership

The individual property of a deceased partner shall be liable for all obligations of the partnership
incurred while he was a partner, but subject to the prior payment of his separate debts.
TRUE

The individual property of a deceased partner shall be liable for all obligations of the partnership
incurred while he was a partner, but subject to the prior payment of his separate debts
That point in time when the partners cease to carry on the business together. =>
Dissolution
The actual process of settling the business or partnership affairs after dissolution,
involving the collection and distribution of partnership assets, payment of debts, and
determination of the value of each partner’s interest in the partnership. => Winding up
That point in time when all partnership affairs are completely wound up and finally
settled. => Termination
It represents the demise of a partnership. => Dissolution
It is the final step after dissolution in the termination of the partnership. => Winding up
It signifies the end of the partnership life. => Termination

The liabilities of the partnership shall rank in order of payment (1 being the first):
Those owing to creditors other than partners
Those owing to partners other than for capital and profits
Those owing to partners in respect of capital
Those owing to partners in respect of profits

A person who is a general, and also at the same time a limited partner, shall have all the rights
and powers and be subject to all the restrictions of a _____ partner; except that, in respect to
his _____, he shall have the rights against the other members which he would have had if he
were not also a general partner.
general
contribution
In limited partnership, a general partner has authority to admit another person as a general
partner even without written consent or ratification by all the limited partners.
FALSE

The _____ of a partnership is the change in the relation of the partners caused by any partner
ceasing to be associated in the carrying on.
dissolution

Liability for inclusion of name in firm name applies to:

(a) a limited partner who allows his name to be included in the firm name;
(b) a person continuing the business of a partnership after dissolution, who uses the name of
the dissolved partnership or the name of a deceased partner as part thereof.
FALSE

For acts which are not apparently for carrying on in the usual way the business of the
partnership, the partnership is not bound, unless _____ by all the other partners or unless they
have _____ the business.
authorized
abandoned

J is a partner in a law firm. Later on, J is appointed Judge of the Regional Trial Court. Under the
law, a Judge of the Regional Trial Court is prohibited from engaging in the practice of law. In this
case:
It would be unlawful for J to continue as a partner in the law firm and his appointment
dissolves the partnership.

Creditors of a partnership are bound, in entering into a contract with any of the partners, to
ascertain whether or not the partner with whom the transaction is made has the consent of the
other partners.
FALSE

Rank the following 1 being the first: Where a partner has become insolvent or his estate is
insolvent, the claims against his separate property shall be applied in the order:
1  Those owing to separate creditors
2 Those owing to partnership creditors
3 Those owing to partners by way of contribution
The solidary liability of partners apply when:
a. 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 a third person/creditor.
b. one partner acting within the scope of his apparent authority receives money or
property of a third person and misapplies
c. 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.

An act of a partner which is not apparently for the carrying on of business of the partnership in
the usual way does not bind the partnership unless _____ by the other partners.
authorized

The surname of a limited partner shall not appear in the partnership name unless:
It is also the surname of a general partner
Prior to the time when the limited partner became such, the business has been carried
on under a name in which his surname appeared.

1st: The creditors of the partnership shall be preferred to those of each partner as regards the
partnership property.
2nd: No act of a partner in contravention of a restriction on authority shall bind the partnership to
persons having knowledge of the restriction.
Both statements are true

As a rule, a limited partner whose surname appears in a partnership name is liable as a _____
partner to partnership _____ who extend credit to the partnership without actual knowledge that
he is not a general partner.
general
creditors

“A, B, C, D, and E” (which are family names) is the firm name of a law partnership. A passed
away. B, C, and D, the surviving partners, filed a petition for authority to continue use of the firm
name “A, B, C, D, and E.” Issue: May the partnership continue the use of the name of the
deceased partner?
YES, surviving partners of a law firm may continue the use of the name of a deceased
partner provided there is an indication that the said partner is already dead.
The rule explaining that 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 is absolute and with no exception.
FALSE

The instances of acts which are generally within the implied power of a partner under the
principle of agency:
Compliance with the statutory submission with BIR and SEC
Fulfillment of benefits for personnel
payment of the necessary maintenance expenses for furniture fixture and equipment

A limited partner shall not receive from a general partner or out of partnership property any part
of his contributions until:
All liabilities of the partnership, except liabilities to general partners and to limited
partners on account of their contributions, have been paid or there remains property of
the partnership sufficient to pay them.
The consent of all members is had, unless the return of the contribution may be rightfully
demanded.
The certificate is cancelled or so amended as to set forth the withdrawal or reduction.

Where the _____ to real property is in the name of all the partners a conveyance executed by
all the partners passes all their _____ in such property
title
rights

In the absence of an agreement to the contrary, all partners have equal rights in the
management and conduct of the partnership business.
TRUE

Allan, Brian, and Charlie are partners in a business. Each of them contributed P100,000.00
each. They stipulated that the liability of Allan shall not exceed his capital contribution. The
partnership assets have been exhausted and there still remains an unpaid balance of
P90,000.00 in favor of creditor David.
Allan is entitled to credit from Brian and Charlie for the amount of P30,000.00 paid by
him to David because the stipulation is binding for all the three partners. (TRY)
After paying David, Allan cannot recover his contribution of P100,000.00 (TRY)
David can recover P45,000 each from Brian and Charlie. Allan is excluded because of
the stipulation on liability. (TRY)
Where
A partnership may be dissolved without violation of the partnership agreement by: 1.67 out of 4
Termination of the definite term or particular undertaking (TRY)
The express will of all the partners (TRY)
(d ko alam ano pa yung dalawa haha)
Limitations upon the authority of any one of the partners are binding upon innocent third
persons dealing with the partnership.
FALSE