A partnership and the partners constituting it are one and the same person.

 *
1/1

True
False
 
 
A contract of partnership is a real, consensual, onerous and principal contract. *
0/1

True
 
False

Correct answer
False

 
As a rule, a general partnership acquires a juridical personality upon its registration
with the Securities and Exchange Commission. *
0/1

True
 
False

Correct answer
False

 
Failure of the partners to comply with the legal formalities essential for their
partnership to acquire juridical personality would render the contract of partnership
void but a partnership by estoppel may be created. *
1/1

True
 
False

 
Every partner is responsible to the partnership for damages suffered by it through his
fault. *
1/1
True
 
False

 
As a rule, a capitalist partner may be compelled to sell his interest in the partnership to
the other partners in case he failed to contribute what he had promised. *
0/1

True
 
False

Correct answer
False

 
An industrial partner can engage in business for himself other than the business of the
partnership. *
1/1

True
False
 
 
As a rule, an industrial partner is exempted from losses and liabilities to partnership
creditors. *
0/1

True
 
False

Correct answer
False

 
A stipulation in a contract of partnership that even industrial partners are liable for
losses is valid. *
0/1

True
False
 
Correct answer
True

 
A partner who fails to contribute a sum of money as promised is also liable to pay
interest thereto as well as damages upon demand by the partnership.
0/1

True
 
False

Correct answer
False

 
As a rule, husband and wife cannot enter into a particular partnership. *
0/1

True
False
 

Correct answer
True

 
In a universal partnership of profits, money won in a sweepstakes / lotto by a partner
belongs to the partnership. *
1/1

True
False
 
 
A contract of partnership in order to be valid must appear in a public instrument and
must be registered in the Securities and Exchange Commission. *
0/1

True
 
False

Correct answer
False
 
Exercise of a common profession is neither a business undertaking nor an enterprise
for profit but the law considers the joint pursuit thereof, for mutual help, as a
partnership. *
1/1

True
 
False

 
A “political credit” is considered a property and, therefore, it may be contributed into a
partnership. *
1/1

True
False
 
 
An oral contract of partnership is valid regardless of the value and nature of the
properties contributed by the partners. *
1/1

True
False
 
 
A contract of partnership to establish prostitution houses is voidable. *
1/1

True
False
 
 
In general, a person capacitated to enter into contractual relations may become a
partner in a partnership. *
1/1

True
 
False

 
The receipt by a person of a share in the net profits of a business is a conclusive
evidence that he is a partner in the business. *
0/1

True
 
False

Correct answer
False

 
A mere co-ownership even with sharing of profits earned out of the common property
does not of itself establish partnership. *
1/1

True
 
False

 
An artificial person just like a corporation may be a partner in a partnership. *
0/1

True
 
False

Correct answer
False

 
A stipulation exempting a capitalist partner from losses is valid. *
1/1

True
False
 
 
The partnership shall bear the loss of things which are contributed to the partnership
to be sold. *
1/1

True
 
False

 
The profits and losses of the partnership shall be divided equally among the partners if
they have no profit and loss sharing agreement. *
0/1

True
 
False

Correct answer
False

 
When a partner is not authorized to act for the partnership and the act of the partner is
not for apparently carrying on the business, the partnership shall be bound by the act
of such partner if the third person was not aware of the partner’s lack of authority. *
0/1

True
 
False

Correct answer
False

 
When the business of the partnership becomes unlawful any of the partners can file a
petition in court for dissolution of the partnership. *
0/1

True
 
False

Correct answer
False

 
A stipulation in a contract of partnership prohibiting dissolution except by authorization
of two-thirds of the partners is valid. *
1/1

True
False
 
 
When the partnership is dissolve, a partner can no longer bind the partnership in any
contract / transaction. *
1/1

True
False
 
 
Withdrawal by a partner from the partnership with or without justifiable reason
dissolves a partnership. *
1/1

True
 
False

 
Death of a partner dissolves a partnership and discharges his existing liability. *
1/1

True
False
 
 
Partners who did not wrongfully caused the dissolution have the right to continue the
business under the same firm name either by themselves or jointly with others. *
1/1

True
 
False

 
After settling partnership liabilities to all creditors, those owing to partners in respect to
capital shall first be satisfied before distribution of profit, if any. *
0/1

True
False
 
Correct answer
True

 
Creditors of the dissolved partnership are also creditors of the persons or partnership
continuing the business without liquidation. *
1/1

True
 
False

 
A partner may be a creditor or debtor of the partnership. *
1/1

True
 
False

 
An industrial partner is liable even to the extent of his personal properties. *
0/1

True
False
 

Correct answer
True

 
A third person who purchased the interest of a partner has the right to cause the
dissolution of the partnership. *
0/1

True
False
 

Correct answer
True

 
Insanity of one of the partners will automatically dissolve the partnership. *
0/1
True
 
False

Correct answer
False

 
A partner who has been appointed manager in the firm may execute acts of
administration and ownership. *
0/1

True
 
False

Correct answer
False

 
A managing partner who has been designated / appointed as such in the contract of
partnership can be removed at will by the other partners. *
1/1

True
False
 
 
Dissolution of a partnership carries with it the extinguishment of the liabilities of the
partners. *
1/1

True
False
 

MULTIPLE CHOICE
15 of 40 points
Choose the best answer from the given choices

 
The following are characteristics of contract of partnership, except: *
0/1

a) Consensual
b) Real
c) Onerous
d) Principal
e) Preliminary
 
f) None of the above

Correct answer
b) Real

 
Partnership formed for a definite purpose or undertaking. *
1/1

a) Universal Partnership
b) Particular Partnership
 
c) Professional Partnership
d) Partnership at will
e) General Partnership
f) None of the above

 
Partnership where all the partners are liable for losses & partnership creditors. *
1/1

a) Universal Partnership
b) Particular Partnership
c) Professional Partnership
d) Partnership at will
e) General Partnership
 
f) None of the above

 
Partnership without definite term or period agreed upon by the partners for its
existence.
1/1

a) Universal Partnership
b) Particular Partnership
c) Professional Partnership
d) Partnership at will
 
e) General Partnership
f) None of the above

 
Partnership wherein all present properties of the partners are deemed contributed to a
common fund. *
1/1

a) Universal Partnership
 
b) Particular Partnership
c) Professional Partnership
d) Partnership at will
e) General Partnership
f) None of the above

 
Partnership formed for the exercise of a common profession. *
1/1

a) Universal Partnership
b) Particular Partnership
c) Professional Partnership
 
d) Partnership at will
e) General Partnership
f) None of the above

 
Partner who is liable even up to the extent of his separate property. *
0/1

a) Industrial Partner
b) Capitalist Partner
c) Limited Partner
d) Silent Partner
e) Partner by Estoppel
f) None of the above
 

Correct answer
a) Industrial Partner

 
Partner who does not participate in the management of the business of the
partnership. *
1/1

a) Industrial Partner
b) Capitalist Partner
c) Limited Partner
d) Silent Partner
 
e) Partner by Estoppel
f) None of the above

 
A third person who allowed himself to be represented as a partner by the actual
partners of an existing partnership. *
1/1

a) Industrial Partner
b) Capitalist Partner
c) Limited Partner
d) Silent Partner
e) Partner by Estoppel
 
f) None of the above

 
Partnership formed for an unlawful purpose is: *
0/1

a) Invalid
b) Void
c)Voidable
d) Rescissible
e) Unenforceable
f) All of the above
 

Correct answer
b) Void

 
An industrial partner is definitely a: *
0/1

a) Silent Partner
b) Capitalist Partner
c) Limited Partner
 
d) Silent Partner
e) Partner by Estoppel
f) None of the above

Correct answer
f) None of the above

 
The following are the duties of every partner to the partnership, except: *
0/1

a) To contribute what he had promised.

b) To deliver the fruits of what he should have contributed / delivered.
c) To pay interest and damages in case of default to contribute the money he had promised upon
demand by the partnership
d) To warrant against eviction the specific and determinable things already contributed;
 
e) None of the above

Correct answer
e) None of the above

 
A partner who has been appointed / designated as Manager in the Articles of
Partnership may: *
0/1

a) Be removed at any time with just cause.

b) Be removed at any time without just cause provided there is unanimity of votes among all the
partners;
c) Do all acts of administration despite opposition of his partners
 
d) All of the above
e) None of the above

Correct answer
d) All of the above

 
The following are entitled to true and full information regarding partnership affairs,
except *
1/1

a) Any partner
b) Legal representative of a deceased partner
c) Legal representative of any partner under legal disability
d) Assignee of the whole interest of a partner-assignor
 
e) None of the above

 
A capitalist partner is prohibited from engaging for his own account in any operation in
the same or similar business as that of the partnership, except: *
0/1
a) When it is expressly stipulated that the capitalist partner can so engage himself;
 
b) When the other partners expressly allow him to do so;
c) When the other partners impliedly allow him to do so;
d) When the partnership ceases to be engaged in the same or similar business;
e) None of the above

Correct answer
e) None of the above

 
The following cannot enter into universal partnership, except: *
0/1

a) Lawful husband and wife

 
b) Common-law husband and wife
c) Demented persons
d) Deaf mutes who know how to write
e) Persons suffering from civil interdiction
f) None of the above

Correct answer
d) Deaf mutes who know how to write

 
Articles of Partnership not registered with the Securities and Exchange Commission
is *
0/1

a) Void
b) Voidable
c) Rescissible
d) Unenforceable
e) Valid
f) Invalid
 

Correct answer
e) Valid

 
The following are the rights of a partner, except: *
1/1

a) Right to possess specific partnership property for partnership purposes;

b) Right to participate in the management of the business of the partnership
c) Right to inspect, examine and copy partnership books
d) Right to sell, transfer or assign his interest in the partnership
e) Right to demand formal accounting of partnership affairs
f) None of the above
 
 
It constitutes the partner’s interest in the partnership: *
0/1

a) Participate in the management of business of the partnership

b) Demand true and full information of partnership affairs
c) Proportionate share in the profits and surplus
d) Demand formal accounting of partnership affairs
e) All of the above
 
f) None of the above

Correct answer
c) Proportionate share in the profits and surplus

 
The following are the rights of assignee of partner’s interest, except: *
1/1

a) To receive in accordance with his contract the profits accruing to the assignor-partner;
b) To receive the assignor-partner’s interest in case of dissolution;
c) To avail himself of the usual remedies provided by law in the event of fraud in the
management;
d) To inspect and examine partnership books for the purpose of determining the extent of
assignor-partner’s share in the profits;
 
e) None of the above

 
Three of the following partnership contracts are void. Which one is not? *
0/1

a) A universal partnership of all present property between husband and wife.

 
b) A universal partnership of profits between common law husband and wife.
c) A particular partnership between husband and wife
d) A universal partnership of profits between a private individual and a public officer.
e) None of the above

Correct answer
c) A particular partnership between husband and wife

 
Which of the following statements concerning the name of a partnership is false? *
0/1

a) The partnership name may include the name of only one of the partners.
 
b) The partnership name may include the names of two or more, but not all of the partners.
c) The partnership name may include the names of all the partners.
d) The partnership cannot adopt a name which does not include the name of at least one of the
partners.

Correct answer
d) The partnership cannot adopt a name which does not include the name of at least one of the
partners.

 
DANUM Company, a partnership engaged in refilling and distribution of water
business, is composed of partners Don, Amy, Nik, Uro and Mon. One day, Mon was
driving the firm’s delivery truck beyond the speed limit in order to serve its customers,
when he rammed into and caused extensive damage on the parked car of Laus. Who
is liable for the damages suffered by Laus? *
0/1

a) Only Mon can be held liable for damages by Laus.

b) DANUM Company and Mon are solidarily liable for damages to Laus.
 
c) DANUM Company and the five partners are solidarily liable for damages to Laus.
d) DANUM Company and the five partners are jointly liable for damages to Laus.

Correct answer
c) DANUM Company and the five partners are solidarily liable for damages to Laus.

 
A person admitted as a partner into an existing partnership shall be liable up to the
extent of his separate assets for what obligations? *
0/1

a) Obligations of the partnership existing at the time of his admission only if there was a
stipulation.
b) Obligations of the partnership incurred after his admission only if there was a stipulation.
c) Obligations of the partnership incurred before and after his admission even if there was no
stipulation.
 
d) Obligations of the partnership incurred before his admission if there was a stipulation and
those incurred after his admission even if there was no stipulation.

Correct answer
d) Obligations of the partnership incurred before his admission if there was a stipulation and
those incurred after his admission even if there was no stipulation.
 
The partnership will bear the risk of loss of three of the following things. Which is the
exception? *
1/1

a) Things contributed to be sold.

b) Fungible things or those that cannot be kept without deteriorating.
c) Things contributed so that only their use and fruits will be for the common benefit.
 
d) Things brought and appraised in the inventory.

 
A and B are partners in buying and selling motor vehicles. A, by agreement with B,
was authorized to buy motor vehicle on a cash basis only and never on installment
plan. One day, A bought on credit a car from X, a client of the partnership. X did not
know of A’s lack of authority. A’s purchase was made on behalf and in the name of the
partnership. Is the partnership bound? *
0/1

a) No, because A has in fact no authority to buy a car on credit.

b) Yes, because A is impliedly authorized and X was in good faith.
c) No, because A and X acted in bad faith. A knew that he has in fact no authority to buy on credit
and X, being a client of the partnership, ought to know A’s lack of authority.
d) Yes, because the purchased was made on behalf and in the name of the partnership.
 

Correct answer
b) Yes, because A is impliedly authorized and X was in good faith.

 
A and B are partners in business known as AB Travel Agency. A misappropriates a
sum of money belonging to customer X but already in the possession and custody of
the partnership. Whom can X hold liable? *
0/1

a) A, B or AB Travel Agency are solidarily liable

b) A, B and AB Travel Agency are jointly or pro-rata liable
 
c) A or B are solidarily liable
d) A and B are jointly or pro-rata liable
e) A only

Correct answer
a) A, B or AB Travel Agency are solidarily liable

 
A and B are partners in business known as AB Travel Agency. A misappropriates a
sum of money belonging to customer X but already in the possession and custody of
the partnership. What is the nature of the liability of A, B and/or AB Partnership? *
0/1

a) Sole liability of A
b) Joint
 
c) Solidary
d) Pro-rata

Correct answer
c) Solidary

 
A, B and C are partners. D is admitted as a new partner. Will D be liable for
partnership obligations contracted prior to his admission to the partnership? *
0/1

a) No, because that would be unduly harsh and unfair considering that those obligations were
incurred before he became a partner.
b) Yes, so long as he was made aware of those obligations at the time he was admitted as a new
partner.
 
c) No, if was not informed prior to or at the time of his admission as a new partner.
d) Yes, but his liability will extend only to his share in the partnership property, not to his own
individual properties.

Correct answer
d) Yes, but his liability will extend only to his share in the partnership property, not to his own
individual properties.

 
Which of the following causes of dissolution requires court decree to dissolve a
partnership: *
0/1

a) By expiration of the definite term / period agreed upon by the partners.

b) By accomplishment of particular undertaking specified in the partnership contract.
c) By expulsion, withdrawal, death or insolvency of a partner.
d) By incapacity or insanity of a partner.
e) None of the above
f) All of the above
 

Correct answer
d) By incapacity or insanity of a partner.
 
The following can sue for dissolution of a partnership, except; *
0/1

a) Any partner at any time for any valid and legal cause;
b) Any partner at any time even without valid and legal ground;
 
c) The purchaser of a partner’s interest at any time in case of partnership at will;
d) The purchaser of a partner’s interest at any time before the expiration of the specified term or
particular undertaking.
e) None of the above.

Correct answer
d) The purchaser of a partner’s interest at any time before the expiration of the specified term or
particular undertaking.

 
A, B and C were partners. A resigned from the firm. B knew A’s resignation, and yet
he (B) still deliberately entered into a new transaction (not needed for winding up) with
X, an innocent customer. Is the firm bound? *
0/1

a) No, because the firm is already dissolved at the time the new transaction was entered into by
B with X.
 
b) No, because B has knowledge of A’s resignation at the time he entered into the new
transaction with X.
c) Yes, because X is an innocent customer.
d) Yes, because the firm benefited from the new transaction.

Correct answer
c) Yes, because X is an innocent customer.

 
A, B and C were partners. A resigned from the firm. B knew A’s resignation, and yet
he (B) still deliberately entered into a new transaction (not needed for winding up) with
X. If X knew of A’s resignation at the time he entered into a new transaction with B,
who is bound by such transaction? *
1/1

a) X and B
 
b) The firm and X
c) A, B, C and X
d) The firm, A, B, C, and X

 
The partnership is in no case bound by any act of partner after dissolution: *
0/1

a) Where the partnership is dissolved because it is unlawful to carry on the business and the act
is appropriate for winding up.
b) Where the partner acting for the partnership has become insolvent.
c) Where the partner acting for the partnership has no authority to wind up partnership affairs and
he transacted with a previous creditor who has no knowledge or notice of his want of authority.
d) Where the partner acting for the partnership has authority to wind up partnership affairs.
 
e) None of the above.

Correct answer
c) Where the partner acting for the partnership has no authority to wind up partnership affairs and
he transacted with a previous creditor who has no knowledge or notice of his want of authority.

 
A, B and C are partners. A dies. Is A’s estate (separate properties) liable for his share
of the partnership liabilities incurred while he was still a partner? *
1/1

a) Yes, because the partnership obligations were incurred prior to his death, that is, when he was
still a partner.
b) No, because his liability is up to the extent of his capital contribution only.
c) No, because partnership creditors should be paid out of partnership properties while the
personal creditors of A should be paid out of his separate properties.
d) Yes but his individual creditors are to be preferred.
 
 
A limited partner is prohibited on account of his claim against the partnership from
performing the following acts, except:
0/1

To receive or hold as collateral security any partnership property

To receive from a general partner or the partnership any payment, conveyance or release from
liability, if partnership assets are not sufficient to discharge partnership liabilities to outside
creditors
Transact business with the partnership
None of the foregoing
 

Correct answer
Transact business with the partnership

 
A person admitted as a partner into an existing partnership shall be liable up to the
extent of his separate assets for what obligations?
0/1

Obligations of the partnership existing at the time of his admission only if there was a stipulation
 
Obligations of the partnership incurred after his admission only if there was a stipulation
Obligations of the partnership incurred before and after his admission even if there was no
stipulation
Obligations of the partnership incurred before his admission if there was a stipulation, and those
incurred after his admission even if there was no stipulation

Correct answer
Obligations of the partnership incurred before his admission if there was a stipulation, and those
incurred after his admission even if there was no stipulation

 
A limited partner shall be liable as general partner in three of the following cases.
Which one is the exception?
0/1

When he is a general-limited partner as stated in the certificate

 
when he takes part in the control of the business
when he participates in the management of the business
when his surname which appears in the partnership name is also the surname of a general
partner

Correct answer
when his surname which appears in the partnership name is also the surname of a general
partner

 
A person admitted to all the rights of a limited partner who has died or has assigned
his interest in the partnership is known as:
1/1

An ostensible partner
A liquidating partner
A substituted limited partner
 
A general-limited partner

 
Which of the following will not cause the automatic dissolution of a limited partnership?
1/1
Death of a general partner
Death of a limited partner
 
Insolvency of a general partner
Insanity of a general partner

IDENTIFICATION
9 of 20 points
Provide the answer that is being asked. ANSWER IN BOLD / CAPITAL LETTERS.

 
It is considered as a contract of “mutual agency”. *
0/1

UNLIMITED LIABILITY
 

Correct answers

Partnership
partnership
PARTNERSHIP

 
One that is composed of general partners, industrial partners, and capitalist partners. *
0/1

GENERAL PARTNER
 

Correct answers

General Partnership
general partnership
General partnership
GENERAL PARTNERSHIP

 
It is the interest of partners in the partnership. *
0/1

PARTNER'S INTEREST
 

Correct answers

His share in the profits and surplus

share in the profits and surplus
profits and surplus
PROFITS AND SURPLUS
HIS SHARE IN THE PROFITS AND SURPLUS
SHARE IN THE PROFITS AND SURPLUS
SHARE IN PROFITS AND SURPLUS
share in profits and surplus

 
The nature of liability of all partners for contractual obligations. *
0/1

PARTNER'S RIGHTS IN SPECIFIC PARTNERSHIP

 

Correct answers

Joint
joint
JOINT

 
A person chosen by the partner to receive his shares or interest in the business. *
0/1

SUBPARTNER
 

Correct answers

Assignee
assignee
ASSIGNEE

 
The vote required where the act performed is one of strict dominion. *
0/1

POWER OF AUTHORITY
 

Correct answers

Unanimous
unanimous
UNANIMOUS

 
Partnership formed for an unlimited period. *
1/1

PARTNERSHIP AT WILL
 
 
The process of settling business affairs after dissolution. *
0/1

WINDING UP
 

Correct answers
Winding-up
winding-up
WINDING-UP

 
It refers to the assets of partnership after partnership debts and liabilities are paid and
settled and the rights of the partners among themselves are adjusted.
1/1

SURPLUS
 
 
One which in reality is not a partnership but is considered only as such in relation to
those who, by their conduct or admissions, are precluded to deny or disprove its
existence. *
1/1

PARTNERSHIP BY ESTOPPEL
 
 
These are activities that are not apparently for carrying on in the usual way the
business of the partnership. *
0/1

REAL PROPERTY
 

Correct answers
New Business
new business
NEW BUSINESS

 
The change in the relation of the partners caused by any partner ceasing to be
associated in the carrying on of the business of the partnership. *
1/1

DISSOLUTION
 
 
One which is for a specific undertaking or the exercise of a profession or vocation. *
1/1

PARTICULAR PARTNERSHIP
 
 
It is the point in time after all the partnership affairs have been wound up. *
1/1

TERMINATION
 
 
One who represents himself as a partner of an existing partnership without the
consent of the latter. *
0/1

GENERAL PARTNER
 

Correct answers

Partner by estoppel
partner by estoppel
Partner by Estoppel
PARTNER BY ESTOPPEL

 
A partner who does not participate in the management of the partnership business
although he shares in the profits or losses. *
0/1
DORMANT PARTNER
 

Correct answers

Silent partner
silent partner
Silent Partner
SILENT PARTNER

 
A partner who is liable beyond the extent of his contribution. *
1/1

GENERAL PARTNER
 
 
A partner who is liable only to the extent of his contribution. *
1/1

LIMITED PARTNER
 
 
It comprises all that the partners may acquire by their work or industry during the
existence of the partnership. *
0/1

INDUSTRIAL PARTNER
 

Correct answers

Universal partnership of all profits

universal partnership of all profits
UNIVERSAL PARTNERSHIP OF ALL PROFITS

 
Persons who are prohibited from entering into universal partnership. *
1/1

HUSBAND AND WIFE