CPA REVIEW SCHOOL OF THE PHILIPPINES REGULATORY FRAMEWORK FOR BUSINESS TRANSACTIONS COVERAGE: Contract of Partnership Direction: Read and select the best answer for the following questions. 1. Iti « contract of two or more persons who bind Gremseves 10 contribute money, prOPETY, oF indus (0 & common fund, withthe intention of dividing the profits among themselves. I may also be formed by two oF more ‘persons forthe exercise of common profession ‘Contact of Agency 1. Convact of Partnership © Contact of Co-ownership 4. Contact of Sale 2, Which partnership sa taxable corporation for purposes of income taxation under NIRC? ‘General Professional Partnership . Commercial or Business Parnership ©. Both And B Neither A nor B 43. The following ee the characterises ofa contact of partnership, except - ‘Consensual ~It is perfected mere consent excep incase reel property is consibuted that requires certain formality fo validity. ', Principal It does not depend upon anyother contract for its valiity o existence, Bilateral or Musical ~ It is entered into by two ot more persons whose rights and obligations are reciprocal 4. Nominete—Ithas a special name given to ity iw. ‘Preparatory ~ It is a means by which other contracts willbe entered into asthe partnership purses its basins, Onerou ~The partner contribute money, property or industry toa common fund withthe intention of dividing profits mong themselves except in cuz of universal partnership which fa gratous contrat. 4g Accessory Its existence is dependent upon a principal cont. 4. The fllowing ar the essential requisites of partnership, except ‘There must bea valid partnership contact. 1. There must be a mutual contribution of money, property or industry ta common fund. .Temust have lawful objector purpose. . The parsership must be etablshed for the common benefit or interest of the partners which sto obtain profits and to divide the profits among the pares. The parteship must be registred inthe SEC. 5. Wheaan unlawful partnership is dissolved by a judicial decree, to whom shall he partnership profits go? ‘2 Tothe invent partner. 'b Toohe guilty porter. ©. Toall he partes pro-rata, 4. Toibe state (6 Which ofthe following statements concerning associations and societies, whose articles are kept secret among the ‘members, and wherin ny one of Ue members may contract in his own name with hid persons is correc? ‘2 They shall have separa juridical personaly. 'b, They shall be treated as & corporation. ©. They shall Bo treated as a partnership. 4. They shall be governed by te rules on co-owners. 7. Te following statements concerning partnership are correct, except ‘Parmership ts juridical entity which has personality separate and distinct from tht ofeach ofthe partners. b, There must be intent o form aparnership, ¢. Theres fiduciary elation among partes. , 4. All partnership contac are consensual, 1. tis «principle which means dat «parter has aright o choose those whom he wans tobe associated withthe parmership. ‘Dele personae by. Delens mits &. Diltustastus 4. Deletes focus Tof2t (CAR Rogulatory Framework for Business Tanssctions9. The following stteots pertaining othe forms of contact of parneshp are correct, exept 4 Asa general rule, a parnership contact may be constiuted in any fom, whether writen orca, t be ‘ald because itis perfected by mere consent. 1b. Where immovable property or rel right ae cotriuted tothe partnership, regardless of the amount thereof, the partnership contract must be in public instrument and an inventory of the sid real propery ahs mst be aes byte pate ad tached oe plc arumen, nore fo 0 Where the capital ofthe partnership is P3000 o more, in money or pope, the parberhip const stst be in «public instrument and registered with th SEC inode for to be ali. 4 Ifthe pareship isa limited prizes, acerca of limited co-parneship must be sgned underoath ty the partes and must be recorded with te SEC, otherwise he parverhip wil be considered as & eral parershipas to third persons bt continue to be liitd prtership among he pater. 10, What i the effect if cootract of parmership witha capital of atleast P3,000 in money isnot in a notarized document and no eistered with SEC? ‘a The contact of partnership is null and void. ‘The purvership shall be classified as «corporation. ‘The partnership sall be clasiied as a sole proprietorship. The lability of the partnership and the partners thereof to third persons wil not be affected. 11. A and B orally entered into contact of parmecship whereby A contributed building while B contributed land. ‘The parership busines is being operated by the paraers for almost 10 years alreedy. A and B divided equally the profits for 10 years. What isthe status ofthe contrat of partnership after 10 years of operation? ‘8 tis void both as to the contacting parties and to hid persons because the conrec of partnership i not in pubic instrument and n inventory ofthe immovable propery isnot signed and tached tthe public inseament ». Ttmay be considered valid as to the contacting putes on the basis of doctrine of estoppel but it may be ‘considered void asf third persons fr file to comply with the formality required by Iw. eis rescisble both ast the contracting parties and to hind person bec Is ntended to dtr third person, 4. kis unenforceable both as othe contacting parties and to third persoa because it violates statu of feud. 12. A and B orally entered into forthe formation of partership busines. A will contribute PIM while B wil contribute a car. They will deliver the agreed contribution tothe parmership thre years from the date of oral seremeat Wh is he sas ofthe areenat to frm a parma baies? 1 Voidable b. Unenforceable Void 4. Rescissble 13. An insane and a capacitated person orally entered into a contact of parmership. The insane contributed a car ‘whith capacitated person contributed PIM cash. What isthe status of contract of partnership? ‘8 Voidable onthe part ofthe insane partner i, Unenforeceable ©. Void 4 Rescissible 14, An insane and a demented person orally entered into a contract of partnership, The insane concbuted car while ‘the demeated person contributed PIM cash, What sth status of contract of partnership? 1. Voideble b. Unenforeceabe ©. Vola 4. Rescssible 15, Which ofthe following is generally not allowed t eater into a contrat of parteship? ‘Any natural person who is capacuted 1b Another partnership ©. A professional 4 Acorporation . 16. The fllowing cases on their own do not necessarily establish «partnership, except 1 Persons who are not partners to each other, 1. Co-ownership or co-possesion, whether uch co-owmers of co-postesors do or do not share any profits ‘made by the use ofthe propery. Sharing of gross retumns, whether or not the persons sharing thm have joint or common right o intrest ‘in any propery from which the returns arelderived. 44. Receipt by a person ofa share of the profit ofa business. ena sega onewe or Basha Taran (RFBT 8608) Page 2 of17, Which of the following is prims facie evidence that «person is «partner in apariership business? ‘Receipt by such person ofa shar of the profits ofa partnership business : | Being co-owner in a co-owned property | Sharing of goss retums in a co-owned property Being a o9-possessor of co-passessed property 18. As a general rule, the receipt by @ person of s share of the profits of # partnership b Ls «prin tie evidence tt ee pane in ad putesipbainese. However, te following ae the Fceponal css oe ST that he prin sich busines, xcept ‘Asa debby isaliment or otherwise. 3) As wogstanemplsee ‘sree ort Aeterna faded ei : ona lou, tough the mounts of payment vary with the osanranl E Antscopsanaber ee cafe ptnilefs cuneate pea yale coer © Asaretum ofthe consibutin ora eum of investment in te busines { 19, Tiss typeof partmeahipin which the pares conti al he property which actually Beonged to them at the tne of erfestin tothe common fund, with th intenion of ing the sme among chelsea Well as the pois which they may aoque herent © Universal partnership of all present property. ! 'b. Universal parmership of profits. Panic parnenip 4. General potesioaal parmerhip 20. The fllowing properties shall belong to the cooumen find ina univers! parmership of all preset property, except Dopey egg pms te ine ft nice oie prep. | Profits tat may be acquired fom the presect propery Property aque by ech partner fer he formation fhe presi stilted. Profits and fits fom propery acquired by each parr, evn those fom propery acquired by inheritance, egacy o& donation afer the formation ofthe partnership If stiplated. Property acquired by inertace, legacy or donation afer the fort by the pertaenhi i stplatnd 21. This is «type partarohip whereby the common fund comprises only all thatthe partners my acquire by their work orindasty durtog the enence ofthe partes. ‘2. Usiversl pater ofall present propery. 1. Universal panerhip of profte. ©. Pariulrputerbip 4 General profesional patmeship 22, The following properties shal belong to the commoa fund in a universal partnership of profits ‘Profits obtained by the parmers by thet work or industry during the existence ofthe patership. , The usufuct or use of the propery belonging to each partner atthe time of the fonstintion of the partnership. «The profits and fre fom the properties mentioned inte a and b. 4. The profits and fut, if stipulated, of th property acquired by each partner ater the constiition of the pareeship. «. Profs acqie bythe panes witout the exertion of physical or intelectual efor, suc as se cquired by chance or lucrative ile if stipulated. 23, The ances of universal partnership is entered into without specification as to its nature, What shall bets consmiction or nterpreation? ‘2 Itisaparicular partnership. 1 isa tniens paenbpofal presen propery. | . Itisauniversal parmership of profs 4. Itisa general profesional partnership. 24 Teli per amt erin sera patel pape. taste ©: Peon wee suily of au or snag tin oman 2: Pee who were gy of ae eral afta Felcaoa kk nls sors orsoanten i py on ols poston Beer and tes i (CRAR- Regulatory Framework for Busines Transactions (RFBT 8608) Page $012425. [tis a type partnership which has forts object determinate things, their use or ut, or a specified undertaking, oF the exerise of profession such as General Professional Partership. ‘2 Universal parnersip of al present property. 1. Universal prnership of profits. & Patcularparnership 4. Ordinary partnership 126, Which of the following statements persis to partaership by eatoppel? ‘& Teis a paneship where all the parters are liable to the extent of their separate property afer the prtership assets have been exhausted, ', Itis a partoership where there is atleast one general partner who is ible up tothe extent of his separate ‘assets end a leet one limited partner whois liable up tothe extent of hs investment in the partes. Its apartnership which actually exists among te partners as well ao third persons, 4 Iisa partnership which in realty isnot partnership but is considered as one with respect o those who, by reasoa of ther condvet or admission, are precluded fom denying its existence. 21. Which ofthe following statements perans to general profesional partnership? ‘2. Itisaparrership which s established by the laping of time, ‘Its apartnershp that exits both infact and in Ia, Iisa partnership that exit in fact but nt in aw. 4. Mis aparership tht is taxable lke acorpraton in so far as income taxis concer. © Itisaparinersip that is exempted from income tx. 28, Which of the following statements perins to partnership a will? ‘2 tis oe for which a period for it duration exe bythe partners. 1b. is one whichis organized fora corn undertaking which, when atiaind, will cause the termination of the partnership. ‘& tis one where no period is feed by the panies forts duration 29, Which of te following siatements pertain oa genera-limited partaer? ‘4 He's one who is iable for partnership debt othe exent of is separate property afer all the assets ofthe partersip have been exhausted, 1. Hens one whois liable for partnership debts tothe exten of his capital contribution only. ©. He is one wh has all se rights and powers and i subject tall the resvctions ofa general partner, ‘except th, in respect to his conbuton, he shall have the rights against the other members which he would have ha i e were not als a general partner. 30. Which ofthe following statements pertains tos capitalin-industrial partner? 1 Heis one who cootrbute money or property to the commen fund. Hes one who contributes his services of ndustry 1 the partnership He's one who contributes ot only money or property but alo his services to the partoersip. 31. Which ofthe following statemerts perns to an ostensible partner? ‘8. He manages the business o affairs of Ue potnrship. '. He takes clarye ofthe witding up ofthe ais ofthe prtnersip after itis dissolved. He sno actually a pater but who may become isble a such third persons, 4. His one wo is active in management of raenerihip business and known to the publica a pater, sh ‘asby allowing his mame tobe included in the firm name, 32, Which ofthe fllowisg satements pertains to dormant partner? 1 He sone whoce connection with the partmesship s kept from the publi He sone who bs no voie ine management of te bsiness, © He is who does no partcpnte i the management of the business end not known to the public as 8 parte. 4 He is one who is no longer @ parter of busines but as left ie capital inthe business as lan. He ‘eeives interest on such a long 3 the loan nt pido. 33. Which of te following statements peruins co substituted limited partner? ‘He's ane who decided to lave he parmersip er reaching tie age ofretiement. b, Heise puta wh i acimined oon exist prnership and who able as limited partner to existing Habis of parmership before his admission and who is lable asa general pare 1 new lists of the parinersp ater his admission He isa pers admited ol te rights of mite partner who has died or has assigned his intrest ina artershp. oe (CAR = Rygulatary Framework for Suneiss Tawzcrion: (RFAT 8608) Page 402834, How shall the profits and losses ofthe partnership be distributed among the parsers? ‘ Mshoudbe dviedemuly me bi. Itshould be divided according to their profits and losses sharing agreement. ©: tshould be divided proportionately in accordance to the capital contribution, 35. Inthe absence of egeement as toe sharing of profs, bow shall indir parmer hare with i? The industrial partner shall share onthe basis of loss agreement ratio. | 5. The indus arter sal receive an gual share ia profit 6. The industrial arter sal recive the lowes share eeived by capitalist parte, 4. The indus partrr stall fist reosve a just and equitable shure inthe profs before dstibuton to capitalist panes. 36. In the absence of agreement a¢ to the starog of profits, how shll the remaining profits after distribution to industrial partners of his just and reasoeable share in profits be distributed tothe capitalist partners? ‘ Itshould be divided equally. ‘bi. Itshould be divided according to loss sharing agreement. Itshould be divided proportionately in eecerdance tothe pital contribution ratio, 37. In the absence of agreement a8 tothe sharing of profits, how shall a capitalist-indostria partner share in partnership profits? ‘2 He sal share on the basis of oss agrrent ratio. 'b. He shall receive an equal share in prof. He shall receive the Lowest share receive by a capitalist parines. 4. He shall receive a just and equitable share inthe profit fr being an industial partner and then he shall Also share inthe remaining profits a a capitalist parteron the bass of capital contribution ratio. 38, Inthe absence of egreement as tothe sharing of losses, how shall industrial partner sare with if? ‘The indusal partner shall nt shar in the losses. 1. The losses shall share on the basis of profit agroeront rato, ‘The indastal partner sall receive the lowest share recived bya capitalist partner. ‘4. The industrial partner sll fit receive just end equitable share inthe losses. 39, In the absence of agreereat a othe sharing of losses, how shall he losses be distributed to capitalist partners? ‘& Itshould be divided equally i, Itshoold be divided in accordance with the profit agreement {._Ttshould be divided proportionately in accordance to the capital contribution ratio. 40. In the absence of agreement as to the sharing of profits and losses, bow shall the loses be distribute to capitalist pamers? ‘a Teshould be divided equally 1. Te should be divided in accordance wit ine spent in working fr the partnership. ‘© Teshoald be divided proportionately in accordance to the capil contribution ratio. 41m the absence of agreement at to the sharing of losses, how shall a capitlist-industial partner share in partnership loses? 1 He shall share on the basis of profit agreement ratio, 1b, He shall receive an equal share in losses. ©. He shall receive the lowest share received by a capitalist parte. 4 Forbeing an industrial parmer, he sball not sare in losses but for being capitalist partner he sal bare in the losses onthe bass of profit rato. 42, Which ofthe following stipulations isthe sharing of profit or losses is vad? ‘2. A stipulation excluding a capitalist parzer i the share of profits ', A stipulation excluding «capitalist parmer inte share of lasses A slipulation excluding an ingustal pemer fo the share of profits. 2A stipulation excluding an industrial parenerin the share of losses 10. an ete ino a cnn of parm fr ad of 0 yu, , x apa pa dan (tein aged wi efit ptosis ate rod ae opera tS ies Onan de tecsiped POH or O01, tard POLO 2aeSoe Up oamnaon af ts en fm evi! a he word pot ely ely as Paracas celine ptt Haw mach ht sed ty a hrf to yr pte ia Flot asad pero fhe te ne &. Pst yer a0 Pode hal fom ptr! P00 at ene ete ‘Sean Scobey nil puter bso fete, {Flop hcuse fe sono (CEAR — Regulatory Fomewrk for Basins (RFBT 8608) Page Sof 24‘44. The following statements concerning the designaior of share inthe profits and lasses by e third person or by ® parmeraze correct. except f enrusted by the partners to a third person, iis binding upon the partners and may be impugned only ‘when i is manifestly inequitable. '. Ifthe designation by «thir person is manifestly inequitable, it can no longer be impugned by @ partner ‘who has begun to execute it the designation by a third person is manifestly inequitable, it ean no longer be impugned by eny parte ithe months had already inpsed Som the time he oblsined knowledge thereof. entrusted to one ofthe partner, the designation is valid. 4S. What isthe prescriptive period for a partner to fle an action to impugn or question the manifestly ineuitable Sharing of partnership profits or lossasdesignted by a thre pesca? a. ‘Within 3 months from the knowledge of such designtion but it must be before the sid permer executes 1. Within 2 moothsffom the Inowledge of such designation but it must be before the said partner executes at ihn | month Som the knowiedge ef such desigoation but it must be before the sai parte execites it thin 6 months from the knowledge of such designation but it must be before the sid partner executes 46, Whon a prier hasbeen appointed manager inthe ates of co-parteraip, the following ar the ries of parceship management ote obsoved except ‘The managing pater buy exec al acs of amination dept the opposition of his partners feats ined ath f Wij o awl use o te managing rartnr atin bad uth, he revocation of he power pf he mansging partner an be mde byte vote cle ars represening th conven mise ‘Without jst rtf ease o ifthe maraping patra in god fi the evoctin ofthe poke of the maging pater canbe made ony withthe cysent of a ihe panes cluding ta maging perce. ‘The managing partner's decision on acts of sdministrcion may be reversed by the vote of majority ofthe parmners. a 447, When s parter hes been appointed manager after the partxenh'p has been constituted ot has been appointed in & ‘separate document other than articles of co-purtnershlp, the following are the rules of partuership ‘management 1 be observed, except The managing partner may execute al act of adminis zat. '. In case of opposition to the decision of the maznging partnes on sets of administration, the presenting the controlling interest ma sesort to voting for his removal as manager & He may be removed wit jus cause by the vote ofthe parsers epesenting the controling interest. | 4. Hiecan only be removed without js cause bythe vote ef all parts clad the managing pare 48. The following are the rules of parte: managers, except ‘& When there is @ specification of their respective dutes, cach managing parm shall perform only the duties specified in his appoitress 1. When there is no specification ofthe respective duties or thee is no stipulation that ooe shall not ct Without the consent ofthe others, each one sey senarrely execute al ais of sdminstration. ‘When there is no spevifia'ion of heir respective due or there is stipulation tht one shall not act ‘without the coasent of the ether, ti dausion of *he matty ofthe managing partners shall preval is ‘ase of opposition. ‘When thers is 90 spesifiation of thir respective dues or there is no stipulation that one shall not act ‘without the consent of te others, the decision of parier owning the eonrolling interest shall preva ix case of tis in voting, ‘When theze is sipuliion that nove ofthe maracivg yarters shall act without the consent ofthe others, the vote of the aajority of manogngpartars shall be suicien forte validity of dhe acts ip management wisn wo oF mere parmets bave been appt as 49. In case it should have been snpulsied thst anne ofthe managing parters shall administratively get without the ‘consent of the others, the cuncurence of all maraging yurtrers sll be accessary for the validity of the administrative act. When may the prset manogiog pareersadininistrtiveiy act validly by alleging the absence or disability ofthe other manage partners? 1 When the present purters reson the malarty of ine partnership When the preseatparers represent Ue contra ute stn the partnership, (6 When there is tminent danger of grave or arepssahk injury te the partnership. errr CAR Regulatory Framework for Businass Tenacrires (RFBT PCB) Page 6 of 2450, When the manner of management fas not been agreed upon, the following are the rules of parierthip management to be observed, except ‘All the partes shal be considered agents ofthe parmership oral of them are managers. 1 Whatever any ofthe partners may do alone shall bid the prtershi '& In case of opposition ofthe other pariners, the decision of the majority shal prevail and the decision of the pares owing the cortlling interest sll preval in case of fe. 4. Any of the partners may make any important alteration in the immovable property ofthe partnership ‘without the consent of the others if it may be useful to he partersip. ‘5. Which ofthe following partners is mot allowed to participate inthe management of partnership? Capitalist partner b. Industial partner ©. Nominal partner Managing parmer 52, The following sets ofa pertner binds the partnership, except 1. Any act of a parmer forthe purpose ofthe partnership business. 1. “Any act of « parser incuding the execution in the partnership name of any instrument, for apparently ‘carrying on inthe usual way the busines ofthe parmership of which be is a member. Any act ofa partner which is not apparently forthe carrying on of business ofthe partnership in the usual ‘way but authorized by the other partners. 4 Any act ofa partner wa has in fact no authority to act forthe partnership in the particular mater, and the ‘person with whom be is dealing has knowledge of the fact that he bas no such authority ‘3. In which of the following instances shall the partnership be bound by the acts ofthe partners? 1f the parner is euthorizod wo at forthe parteship whether or not the act is for apparally carrying om in the usual way th business ofthe parmership, TL Ifthe parmer is not authorized to at forthe partnership bu the acti fr apparently carrying on inthe usual ‘way the business ofthe partnership and the third person hat no knowledge ofthe partner's ack of authority. TIL When although the act is for the apparedly carying on in the usual way the business ofthe parership, the parmer is not authorized to act fr the partnership andthe third person has knowledge ofthe partner's lack of authority. TV. When the partners not authorized to at forthe parmership and the act isnot for apparently carrying on in the ‘usual way the business of the parmership whether or not the third peson has knowledge ofthe partner's lack of \V. Any actin contravention of a resrition on authority of « partner to persoas having knowledge of the restcton [andl b. WendIV ©. Tand I @ Mandi 54. The following ats are not considered administrative acts of acts for apparently carrying on in the usual way of business of the partership and may not be performed by a single parmer without authorization from al the eer parmers or these ae acts which require unanimous vote ofthe partners because they are considered acts of strict ‘ownership or dominion, except ‘Assignment of parmersip property in tst for ereiters or onthe assignes's promise to pay the debts of the prtership. '. Disposition ofthe goodwill of the business {Acts which would make it imposible to cary onthe ordinary busines of the partnership. 4 Confession ofjodgment. ‘Entering into & compromise concerning a partnership's claim o ibility. Submission ofa parmershp lain or Habit to arbitration, {Renunciation of claim ofthe partnership. 1A, Payment ofthe salary of partnership's employees. 155, Which of the following acs is considered an act of administration that may be done by the mansging partner alone? ‘2 Disposition of the goodwill ofthe basness the partnership. Selection ofthe major supplier ofthe parinership. «©. Renunciation ofa claim of the partoersip. 4d. Submission ofa partnership claim or libiliy to arbitration, Neen ee eee evel (CAR Rglatory Framework for Business Transactions (REBT 8608) Page 7 of 245. Which ft following sateen i tr a east th ight of india pre to engage in enter 1 An industrial partner is only probbied to engage in business ofthe sume ind but not to business of ferent kind. 3 Aa industrial partes ant engin ny Busnes fr hms les the panei expres permis it odo 0, ©. An industrial purer may engage in business of diffrent kind for himself, unless the patership ‘expreslyprobibis hrs to do so. 4. An industriel partaer may engage in a business of the stm kind for himself, unless the partnership ‘expressly probibits him to do s0. 57. What is the remedy ofthe capitalist partner ifthe indusral parr engages in business for himself without the express permission of he partnership? 1. Exclude him from the partnership with aright to damages 1. Avail themselves of the benefits obtained from the business he engage in with aright to damages Either or! b. Neither nor ©. Loaly 4 Maly 58. Wish of he flowing elon is tuna eect the it fei parr wo eng in ante ines? 1. The capitis partner cant engage in any kindof business witbout permission of the other partes b, The capitis partner can ony engage in a busines of different kind if there is stipulation allowing him to dos0. ‘© The copilist partner can engage in a business ofthe same kind even without stipulation allowing him to dos. ‘4. The capitalist parer can engage ina business of different kind even without stipulation allowing hin to . 1-1 V-m-v-vE ¢ I-I-M-W-I-¥ 4 I-1-1V--VI-v Page 17 of 24126. nthe fllowing cases creditors ofthe dissolved partnership are also creditors ofthe person or partnership continuing the business except {When ay aw pane is adined nto an exiting partnership or when any parte retires and assign (or the repesemative of the decesed parte essgs) his rights im partrsip Propet to two oo ofthe partes, orto one of more ofthe parters and one or more third persons, ifthe business is conti ‘without liquidation of the partsership eff: '. When all bat one parte rei nd asin (or the representative of deceased pares assigns) hi ight in paruership property te the remaining partes, who continues the businss without liquidation partership affairs, eitber alone or wih thers, ‘& When any partner ttre or dies andthe busine nf the dissolved partnership is continued as se fort 2 letra and b of this article, with the consent othe ried paers or the representative of the deceased ‘parne, but without any assignment of his right in parmershp property 4 When all the partes or dct representatives eslgn thir rights in partnership property to one or more ‘dpe who promise py the db and who continue he ses of the died presi. When any partner wrongfully causes a dstohien and the remaining parters continue the business under the provisions of anicle 1837, second paragraph, No. 2, cider alone or with others, and, without liguiation ofthe partnership airs, When parte is expelld end the remaining partners continue the busines either alone or with others without quidation of the partership far. " '& When te new partnership discontines the business of the old prtnership ad liquidate it. 127. Inthe sbsence of stipulation to the contrary, what isthe nature of lability of a third person betoming & part in the partzeship costing the business of tho dissoived partnership? ‘For ereitors prior to dissolution, his Tab is only pro-rata but fot subsiiaily but when it fomes to creditor ofthe new parteship, his Tibi shall b po~ata and subsidiary , His ibility shall be pro-rata and subidialy to all reir either before or aBer the dissolution, Histiability shall be soidary and subd arly t ll reir iter before or afer the disso 4 His ails pro-ara but wot subsidiary to alleredics either before or after the cisolution. ‘effect on the nature of Tieily of the deceased partner hy ths use by the person or partnership ‘business ofthe partzeship nae, or the name of & deceased partner as part thereat? ‘Ht shall make the iadividual or eepaate property ofthe deceased partner liable pro-ata and “a ily for any debs contracted by such person o partnership in the ne partzership. | | 12h twat dnt af peti wih eal conan fp, tise Shing te , shall rake te indi dual or separate property of Ue deceased parr lable solidarity ands for any debts contacted by soch person cx partnership in the new partership. -Teshall make the inivial or separate propery ofthe deceaved partner isle pro-rata but not subi for any debiscoutraie by such person or partes in tie new parnersip. 4. shall ot of tel make te individual property ofthe deceased partner liable for any debts conacted by ‘such petso ce partnership in the new partaeskip. 129. _In the absence of agreement ro the contrary, whan shall the right to an account of his interest foru to 130, What isthe minimus composition 132. Heisa purer ina ‘contribution on ‘2 Limited partner B. General partner © Nominal partner CeAR- any pare, or his legal rpresetatie as aginst the winding up perers or the surviving partners ort person ‘or parership continuing the business? | “Artie dae ofthe tof operation of the new business, At the date of dissolution. t ‘3 mots from the date of dsslution, | mom from the dte of dissolution, pere Atleast one nowina! parr snd atleast one genera pare “Allmste limited peeme>. “Atleast one lnited puoer anJ at lest one general pater ‘Allius: be general paras, eeee eis. partner ina linited pertershic whois able for parrchi's debts upto the extent of his separate assets afer the exhaustion of inted partnership's ase, ‘2 Limited parte 1b, General pacer ©. Silent partner 4. Dormant partaer ile partnership whois lisble for partership's debts upto the extent of his capital Regulatory Framewor for Busnes Traction: (REBT 8608) Page 18 0f24133, Whats the effec if there is no substantial compliance with the registration of certificate of limited co- Partership with the SEC? “ ‘8. The partnership contract is ull end void. 1b. The limited parmership exits. ‘6 The partnership wil be considered general partnership as to third persos but continue to be a limited ertership among the partners. 134, Mblchofte lowing may at be cotibued bys pare tined partner? cs Personal property Real propery Services, industry or Inbor ae 135, Asa general ul, the sumame of a limited partner shall nctapperin the limited partnership name. When ‘may the limited partner's name appear inthe partnership name without increasing the lability of such limited parinero a general partner? 4 Ifthe name of limited partner is also the surname ofa general partner. '. Ifprir tothe time when the Kmited parer became suc, the busines hes been caried on under a name in which his surname appeared. ©. Either A or. Neither A nor B, 136, What isthe effect if limited partners name appears inthe limited partueship name contrary to allowed insances provide by law? ‘8 The limited purer is liable pro-rata and subsiinily t parmership creditors who extend credit tothe parinersbip without acral knowledge that he isnot «general pustoer. '. The limited partner is lable pro-rata but act subsidianly to partnership creditors who extend credit othe parterhip without actual knowledge that he is nota general pares. ©. Th limited partner is liable solidarly and subsiialy to parmecship creditors who extend credit to the pareebip without actual knowiedge that he isnot a general partner. 4 The limited partner is ible pro-ata and subsidiarity to all partnership creditors regardless of the stun! Iknowiedge tat he is nota general partner. 137. When may a limited parmer be lisble proata and subsidiary like a general partner to the parmership editors? ‘© Ifhe allows his name to be included in he partership name contrary to allowed instances of lew. '. fhe takes par inthe contol or management ofthe busines. © EiterAorB. 4. Neither Ano: B, 138. A general parter shall have all he rights and powers and be subject o al the restctons and liabilities of 4 partner in a partieship without limited partoers. However, the fellowing acts can only be made by «general partner if there is writen conseat or ratfcation by all he limited parmers, except ‘Dos actin contravention ofthe certificate of limited eo-parnership . Doany act which would make it impossible o cary on the ordinary business ofthe pertership Confess «judgment aguas the partnership 4. Possess partnership property, or assign their rights in specific parmership propery, for other than a armership purpose e Adita person asa general partner Admit a person asa limited partuer, unless the right so to dois given inthe cetfcte of limited co- parership Continve the business with partnership property on the death, reitment, insanity, civil interdiction or Insolvency ofa general pater, unless the righ ot doi given inthe certifcate ‘Acts ofadminisration 139, A limited parmer shal have the following rights enjoyed by general pares, except ‘Have the parmership books kept atthe pricipl place of business ofthe partnership, and at a reasonable our to inspect and copy any of them; ', Have on demand true and fll information wf al things affecting the partnership, and a formal account of partnership airs whenever circumstances render it just and reasonable; and Have dissolution and winding up by decre of cour. Have the power to participate inthe conol and management ofthe partnership busines. ee a Reneemeey-orereeeeree (CRAR~ Regulatory Framework for Busines Tensactons (RFBT 6608) Page 19 of 24M0, When a pecson contributed a capital to business conducted by a person oc partership erroneously televig that he ar become ied pater in ined pare, wha wl be ost fis aby to third person if he exercises the rights of limited partoer? He is always able ike a general partner with that partnership. 'b. He will not be lable asa general partner with thet parmership if upon ascertainment ofthe misake he promptly rencunces his interest in the profits of the business, or cther compensation by way of income, 6. He wil not befiabe as general partner inal instances. 4. He wil aot be lable lke a limited parte. 141. Which ofthe following statements conceming limited partnership is incorrect? © A person may be a general partner and # limited partner in the sume partnership atthe same tine, ‘rovided that his fact shall be stated in the certfiat of lite co-patership. b. A person who i genera, and leo at the same tine a limited puter shall have all the rights and powers and be subject to llth restrictions of a general partner; except that, in respect to his contribution he sll have the rights against the other members which be would have had ifhe were nt also « general pare, ‘© A limited pater also may loan money to and transac other business withthe parmership, and, unless he is also a general partner, receive on account of resulting claims agains the partnership, with genera creditors, a pro rata share of the asses 4. A limited partner wio bas made aloun tothe partnership may recive or hold ax collateral security any pareeship property for hs claim othe parmership or receive fiom a general parmer or the parership| any payment, conveyance, or release fom lability if atthe time the assets of te partership are not sufficient wo discharge partership bilities to persons not claiming es general or limited pater. 142. What isthe stars of the contact of security when a limited parmer who has made a loan to the ‘artnership receive or old as collseral security any parzership property fr hs claim tothe partnership? 2 Voidable 1b Rescisibe © Unenforceable Null mad Void 143. Where there are sever! limited partes the members may agree tht one or more ofthe limited partners Shall ve a priority over eter limite partners ast tbe seta oftheir contributions, as to ther compensation by ‘nay of income, ora to any other matter, What isthe formality required by law fr this agreement to be binding among the shall be stated inthe certificate of tinited copartaership. ‘The agreement must be notarized. ‘The agreement must be ia writing ‘The agreement must be registered inthe Regist of Propery. 144. What isthe proper lasfiestion of en industrial prmer i nite partnership? General parmer Limited parmer Eyer general pater or limited peter ‘Nominal parer epee eeer 145. What isthe requirement or precondition before a limited parte may recive ftom the partnership the ‘share of the profits er the compeasation by way of income stipulated for inthe cerficato of limited co- partnership during the lifeime ofthe partnership? 1 There i net income during the period although sucessive net los in prior periods. ‘The partnership's tot asets arin ensas ofthe partnership's total abilities to third person. Theres net oss during the period 44. The partnership's ttl ibis to thid persons ae more than the total parnersip's asses. 146. What ar the essential requisites befor linited parmer may receive from a general partner of out of rei rca am prof his capital onion during he fine fe pares? All lables ofthe partnership, except ible to general partners and to limited partners on account of their contributions, have been pad e thee reais property ofthe partnership sutTicen o pay them; 'b, The consent of ali members is had, unlese the retum of the comtbution may be rightfully demanded _nder te provisions ofthe second paragraph; end ‘The cerificatis cancelled r so amended a8 ost forth the withdrawal or reduction. All the above. ee 147, When may the limited partner demand ftom the parmership the return of his capital contibution? On the dissolution of a partnership. ‘When the date specfiod inthe eortifcate forts eta has etved ‘Afler he has sx months notice in writing fo all other mearbers, ifn time is specified. ‘Any ofthe above. —_——— (CRAR Regulatory Framework for Busines Tansactions (RFBT 8608) Page 20 0f 24 aree148 wearer any Satement inh eit te cnt ote consent fll meme, what om ‘ofretum of capital contributed shouldbe received by a lmited partner? a ECS th ht © demand an recive cash in ret fo his contribution iespectve ofthe propery con This the ght to demand and receive particular propery contribute in return fr his contribution, | Seba the htt demand and receive iveror in re fr his contribution expect ofthe property contri ‘4 Hie has the right to demand and receive land in return fr his contribution iespestive ofthe property contributed. 1 eter ee my limited partner demand the dissolution of he parmership and its subsequent winding up of artership airs? ‘When he rightfully but unsucsessflly demands the return of his contibution, '. When ater liaiites ofthe partnership ave not bee pai, cr the partnership property i instficent for their payment, andthe limited partner would otherwise be entitled tothe reture of ho oatibaton Either A or B Neither A noe B, 150, What are thelailies of imited partner othe partnership? ‘Hei ible forthe difference berween his conrbuioe as actually made and tut saad inthe crtifiate shaving been made He is lable for any unpaid conuibtion which he agreed in the certificate to make in the fue atthe time and onthe conditions stated in the certicate. Both A und B. Neither A norB. ry 151, Whats the autre of ite partae’s interest? Assignable Waivable ‘Non-ransferable Irreplaceable 152. __Nist isthe term used tothe person admit 1o all the right ofa limited partner who bas ded or has ‘sasigned his interest ina partnership? Assignee of limited parmer 2, Transferee of limited partner © Trustee of limited partner 4. Substituted ited partner 153, Whats the right ofan asigne of limited partner who doesnot become a substtted inte parte? He bas aright to require any information or account ofthe partnership ransctons. He has aright inspect the parmership books, “He bes aright o manage and conta the He is cnly entitled to receive the share ofthe profits or other compensation by way of income, othe ‘turn of his conibuion, to which his asigner would otherwise be ented peer aver 154, Wht are the instances when an assigne of limited partner may become a substitte limited partaer? ‘a Hfallthe members ofthe partnership concent thereto, If the assigning limited parver or assgnor is empowered to admit the asignee as substnted Knit partner as provided inthe certificate of limited co-partmeship and gives the assignee that right. ‘When the articles of certificate of co-panersip i appropriately amended in accordance with aw. ‘Aay ofthe shove, 155. Which ofthe following statements the aubstiutio of assignee as subsite Hmitod partes is ‘incorrect? ‘4 The substituted limited partner has all the righs and powers, and is subject to all the restictions and liabilities of his assign. The substiued limited parmer i ible to linbilties of which he was ignorant at the time he Became @ limited prier and which couldnt be scerind from the cerifcate ‘The substnuion ofthe assigns as a Hmited pasrner does not relese the assign fom laity to the artoership under cetist of Limited d-putarsip. 4 On the deat of Hmied partner his extetor reinstate shall have alle rights of mite pater for the purpose of sting his esate, ad such power asthe deceased had to consi his asgnee 8 Substitute limited partner. (COAR Regulatory Framevor for Burnes Tasactond (RFBT 8608) Page 21 of 241586 peer 1s. ‘When isthe cerifct of tne co-partnereip required tobe canceled? ‘When the parersip dissolved ‘When all limited partners cese to be such Either A o B Neither A nor B, The fllowing ae the instances when cent fete of limited co-parnership may be amended only but not canceled, except rere rer 18. 138, me ve 161, pee 182, aeer (CRAR.— Regulatory Framework for Busines Faractions (RFBT 8608) ‘There sa change inthe name ofthe partnership or inthe amount or character ofthe contribution of eny Iimitedpariner A person is substined asa limited partner ‘An adéitonal limited pare is adaited ‘ person is admited as general partner ‘A general parmer retires, dies, beromes insolvent or insane, ois sentenced to civil interdiction an the business is wontinued under ante 1860, ‘There is a change inthe characier ofthe business ofthe partnerthip ‘Ther isa fae or eroneous statement inthe cenifcate There i a change i the time as sated in the erfcate fr the dissolution ofthe partnership or forthe retum ofa eontibaton A time is fixed forthe dissolution ofthe specified inthe cerifcate ‘The members desire to make a change in any other statement in the certificate in order hat it shall sccurately represent the agreement among them ji ‘When all ited partes die | psrership, or the retam of contribution, ote having been Which of the following statements concerning a limited parershp is incorrect? Adina mie parr maybe adit afer the formation by ing an amendment othe oii éerifiate without dissolving the lived partnership. ‘The retiement, death, civil interdiction, insanity or insolveney ofa general pater dissolves tbe limited Prmerhip une the business i contaaed by the remaining gener partirs under ight to do so in 'stces of parership or withthe content of ll members. | ‘An industrial partner may become a general parirer but i not allowed to become a limited partner, ‘The retirement, death cil interdiction, insanity or insolvency of «Limited partner always dissives the limited partnership | The following are te difeences ofa general partnership fom a private corporation, except | General parteships created by mere consent while a private corporton is created by operation flaw. Generar we eel ate a oe exe of spate propre whi Socks we ‘generally lable only up 0 the extent of thei capital cortcbution General putnership is generally managed by the partners themselves while private corportion is ‘manage by the Board of Dirctors, Dissolution of «general panei sa ciangs inthe celationship among the parmers while disoluton of private corporation i the end of he life of corporation. i General partnership has no right of succession ile private corporation has right of succession, Il General partnership hes no spare personality fo the pater while private corporation has eparate ‘Personality distinct fom the shareholders, Which ofthe following hs no itt inspect the partnership books? ‘Nominal parner Silent permer Secret parter Dorman partner ‘What isthe prope lasifcation of an indus! partner? General panier Limited parner Dormant partner ‘Nominal partee ‘Which ofthe felling is not comsidered a partner? Assignee of partner ‘Substuted imied partner Silent pater Secret pater Page 22 of 24163. Which of te folowing parers may be valiy removed by vue of provisos of Civil Code fr ‘sggig in enter business wibo the peemsion of te cer partner? 2 Managing pamer nde pera Capit parzer Seat puter 164, Which maneging pares may be validly removed by parners having coating interests dept the ‘sence of ali cae for removal? ‘Managing per spond in aris of co-parnehip Marans armrest oer ise cfeptip Either Aor Neither A nor 165. How i contract of partnership wherein the contribution involves personal propery wih value of atleast 700m pred? 3y mere const By delivery ofthe contribution By notarizaton ofthe articles of co-prtership By registration of the notarized articles of co-partarship o SEC epee 166. Which ofthe following causes is wot an automatic ground for dissolution of generl partnership? Death ofa partner Insolvency ofa partaet Civil intertiction ofa pataer Insanity of partner 167. Which puter is exempted from making additional capital contribution to the partnership in order to save the venture ffom imminent los? ‘Industral parner b, Managing partner Silent parser Secret pares aore 168. Ifo one is appointed as managing partner, who shal be considered the administrator ofthe partnership? 2 The oldest purer ‘The pactoer with the largest capital contribution ©. The industrial paraer 4. Allthe pacters 169. Incase more than one partner is appointed as managing partners, bow shall ct of management be seed {in eae of objection ty any of the managing parties? ‘The decision of majority ofthe managing partners shall prevail Tue decision of the contlling partes shall preva €. Tue dscsion ofthe contllng managing pertner shall prevail, 4. The decision ofthe oldest partaer shall prevail. 170. A, B and C are parmers in TEN General Patership. A and B are capitalit parters while C it an industrial parmer. After exhaustion of partnership asses, partnership liabilities amounting to P30,000 remained ‘paid. Among the pater, from whom may the prtersip creditors collect? ‘2 Conly b ABaic © A‘mdBoaly 4. None ofthe partners 171, A,B, Cand D are partner in FIX Generel Partnership. A, Band C are capitals parmers while Dis an industrial partner. The Articles of Co-Partership provides that Cis exempted from liability ofthe parmership to third persons. Afler exhaustion of partnership assets, parnership Ubiles amounting to P60,000 remained ‘upsid. Among the parmers, who ultimately shoalder the unpaid partnership's liabilities? ‘Awd Bonly b A,Band Dooly © AB.CandD 4. None ofthe partners OSE Par aeremmmer paren eee (CAR Regulatory Framewor for Busnss Tramactons (RFBT 8608) Page 23 of 24172 eit B att C are partes in ABC Packing General Partnership. D deposited his car to the parking lof the Barcersip for fee while A is managing the parking lt. After seing D's pared ear, B borowed the sid car. ‘Unfortnaely, the ca was crue by an accident Who willbe lsle forthe vali of theca to D? ‘2 ABC Partnership only ABC Partnership or B only © ABCParrership or Aor or C 4 ABC Partnership or Aor B aly 173, _A,Band are parners in AB Ltd Parmersbip. A and B ae general partners while Cis limited parte. After ‘uhaostion of paraership assets, parmersipUbilties amounting 10 P30,000 remained unpaid. Among te partner fen whan my teppei ale B ABandc & Alm only None ofthe partners 174 A.B,C,D, E and Fare partners in ABC Lid Partnership. A, Band Fare general capitalist parsers while Eis ‘mn indusal partner. The Arisls of Co-Parnrsip proves tht F is exempted from Hib of the partnership to third persons. C and D ae lnited partners but Dis eppoite as maeging parber. Among he partners, who uliately shoulder the unpaid parmernip's bits? ‘Aand Bonly ABE und Fonly ‘A. BandFoaly A.B,C,D,EandF 5. And B are general parters in AB Parership with ousting lables ofPé,000 before the edison of CC is admited to the existing parieshp of A and. Afler several years of operation, the ia labile of the ‘amership increased fo P12000 wile the ttl assets ofthe partnership are fully exhausted. How much may the ‘unpaid reir ofthe partnership validly collec rom C2 = P2000 b. P3000 © P4000 & 6,000 176. _D tas two outstanding and matured obligations to ABC Purtmeship and A, managing parber of ABC Parmersip in the amount ofP,000 and PI,00, respectively. D paid 1,000 to A who issved his personal rcp. How stall the P,000 be applied othe cred? PI,000%0 A's eet only '. Pl.000t ABC Parmerships cet nly {© F800 to ABC Paresh and P2000 A's eedt <4. S00 to ABC Partership and P5001 As credit 77. Using the same dats in the precoding number but assuming A iued the reeipt ofthe parte, how shall ‘the P,000 be eppied othe credits? 1.” P1,000%0 As creditonly 'b PI.000 ABC Partnerships credit only © R000 ABC Partrahip snd P200 to A credit ‘4. P5000 ABC Partnership and PSOD 0 As credit 178, _Dhas to onstandng and matired obligations to ABC Paraership and B, a non-managing prt of ABC Partersip in th amoutof P4000 and P00, respectively. D pa PI,000 to B wh issued his personal receipt How ‘lth P1000 be applied wo the cred? P1000 19 BS credit only be PL000 0 ABC Parterships cre only {© P8ODt ABC Parsership and P200 to credit 4500 ABC Parership and PS00 to Bs eet 179. Which ofthe following credits shall bested asin general partnership? ‘Thase owing tothe eedtors ther than the pstners ‘Those owing to partes other than for cata and profits ‘Those owing to partes with espect to cpitalcortibution ‘Those owing to partners with respect o profit ure 180. Which of the fllowing credits shll beset lst in limited partzership? peer Us, ‘Those owing to he limited paroers 1. Those owing tothe general parners ther tap fr cpt and pros Those owing tothe general partners with esp te prof share 4. These owing tothe general partes with ep to apt contribution -END- Gea toplioy Pancwo fo bata Tonactow (PBT 6808) Page 24-0f 24