PT SER ay = Partnership MULTIPLE CHOICE QUESTIONS eh ge a gaa Generally, a contract of partnership is: ’A preparatory and a consensual contract ‘An aleatory and a consensual contract ‘A preparatory and a formal contract ‘Analeatory and a formal contract B, and C formed ABC Partnership. They are also the major stockholders of ABC Corporation, Which of the following statements is true. ABC Partnership is a person separate and distinct from A, B, and C. This is not true with ABC Corporation. ABC Corporation is a person separate and distinet from A, B, and C. This is not true with ABC Partnershi ABC Corporation and ABC Partnership are considered as a person separate and distinct from A, B, and C, but the law treats ABC Corporation and ABC Partnership as one entity ABC Corporation and ABC Partnership are considered as a person separate and distinct from A, B, and C. Further, the law treats ABC Corporation and ABC Partnership as separate from each other. As distinguished from a partnership, a joint venture: a. Generally relates to a continuing business b. Isusually limited to a single transaction © Does not allow corporations to become venturers 4. Operates with legal personality As distinguished from a corporation, a partnership: Is created by agreement of the parties and not by operation of law Is created by operation of law and not agreement of the parties Distributes its profits to those who contributed capital to the business Does not distribute its profits to those who contributed capital to the business ‘As distinguished from stockholders of a corporation, the partners of a partnership: a, Have limited liabilityThe REBT REVIEWER @b. Have unlimited liability © Cannot generally exercise management of the partners appointed as managing partners P Uy 4. May transfer his interest without consent of the other portne, 6. Statement 1: The partnership can exist even before the existence common fund. ofa Statement 2: In order to constitute a partnership, there must be an profit to be divided. tua @ a. Only Statement 1 is true. b. Only Statement 2 is true. ¢. Both statements are true. d. Both statements are not true, 7. What is the primary purpose of establishing a partnership? a. To contribute money, property, or industry To establish a common fund To obtain profits and divide the same among the parties To conduct a business and practice a profession poe 8. Henry and Ian are the heirs of Gary. Gary passed onto both Henry and led parcel of land measuring 500 square meters. Pending the settlement of the estate, the parcel of land earned income amounting to P2,000,000, which Henry and Jan split in half amongst themselves. there a partnership between Henry and Ian. a. Yes. Co-ownership is a form of partnership. © b. No. Co-ownership does not of itself establish a partnership. c. Yes. The fact that there is sharing of profits is the hallmark of partnership. d. No. Such is not registered with the Securities and Exchang? Commission, Ian an undi 9. In which of the following, cases is receipt by a person of a share inthe profits a prima facie evidence that he is a partner? a. Receipt as payment of debt by installment ©b. Receipt as one of the managing professionals of a professional fr™ c. Receipt by way of rent to a landlord d._ Receipt of wages of an employee 330Partnership 10. In a universal partnership of all profits, which of the following is contributed? 1 Ownership of all the property 1, All that may be acquired by the partners by their industry or work I _Usufruct over the property of the partners a. Land Il only. b. only. ¢ Iand Ionly. @ 4. Mand Ml only. 1, Bobby and Teddy entered into a universal partnership of all present property. After the constitution of the partnership, Bobby inherited from her grandmother a parcel of land amounting to P20,000,000. Subsequently, the parcel of land earned P2,500,000 after being inherited by Bobby. Which of the following is true? a. Bobby and Teddy may stipulate that the parcel of land and the income from such property be included in the composition of the universal partnership. b. Bobby and Teddy may stipulate that the parcel of land be included in the composition of the universal partnership, but not the income from such. ‘c. Bobby and Teddy may stipulate that the income from the parcel of and be included in the composition of the universal partnership, but not the parcel of land itself. d. Bobby and Teddy cannot stipulate that the parcel of land and the income from such property be included in the composition of the universal partnership. Jane, Karen, and Lucy formed a partnership for a fixed term of two (2) years. After two years, Jane, Karen, and Lucy continued the partnership without any express agreement. Which of the following statements is true? a. Any contract that the partners may enter into after the two-year period is unenforceable for being entered into with lack of authority. b. Any contract that the partners may enter into after the two-year period is voidable because of the defect in the consent of the Partnership. 33114, 16, ‘Te RFBT REVIEWER ge aes ict that the partners may two. ore Paraah sp that the partners may enter into after the two. seta sere exprstoncne Year Any contra period is void a. Any contract tl period is valid since constitutes renewal. Which ofthe following partnership has complied with all the requisiy, {or its lawful establishment? a. Partnership de facto b. Partnership de jure Open partnership dd. Universal partnership It is a partner who does not take active part in the business of the partnership, but may be known to be a partner by third persons a. Secret partner b._ Silent partner © Dormant partner 4. Ostensible partner When immovable property or real rights are contributed, the partnership contract: 4, May be entered into orally b, Must be in writing © Must appear in a public instrument 4. Must appear in a public instrument with an affidavit of good faith The partnership contract must appear in a public instrument where the capital is a. Atleast P3,000 b. More than P3,000 © Atleast P5,000 4d. More than P5,000 17, Generally, a contract of 2. Can be entered into b. Is require « Partnership: in any form od to be in writing Is required tobe in a public instrument 332Partnership Requires delivery of the money and property to be contributed for its _ perfection ip Failure t0 comply with the requirement for a partnership contract to appear in a public instrument where the amount of capital is at least 73,000: J. Will result to the invalidation ofthe contract of partnership b, Will not affect the liability of the partnership and the partners with third persons © . Will not be able to produce any legal effect with respect to the contracts of the partnership with third persons. 4, Will make the managing partner liable for damages to the partners in good faith 19, The managing partners may be appointed: a. Only in the articles of partnership b. Only after constitution of the partnership @ © Either in the articles of partnership or after constitution of the partnership 4. In the articles of partnership and after constitution of the partnership 20, Severus, Albus, and Harry entered into a contract of partnership for the establishment of a wizardry shop. The articles of partnership did not specify who the managing partners are. Subsequent to the constitution of the partnership, Severus was appointed by the partners as the managing partner, Subsequently, Harry wanted to take over the management of the business. Albus agrees. Harry and Albus holds the controlling interest in the partnership. Can Harry and Albus remove Severus as the managing, partner? @® No. The facts do not show in any just or lawful cause b. Yes. The partners may do so at any time and for any cause No. Severus has a vested right over the management of the Partnership ‘Yes. The removal is subject to approval by the Securities and Exchange Commission © a. Paul, Peter, John, and Lucas formed a partnership. Paul owns 10% interest in the partnership, Peter owns 60% John owns 15% and Lucas wns 15% Paul and Peter were delegated as managing partners without 333 >‘Tue REBT REVIEWER a stipulation as to their specific duties. Paul seeks to bind th, by entering into a contract of sale of merchandise. Peter op, sale to be allowed, a. Peter must vote in favor of the contract. Paul, John and Lucas must vote in favor of the contract, Allof the partners must vote in favor of the contract, No vote required. Paul is authorized to bind the partnership, 1 Partner Posed, Fah the por 22, In case there is a stipulation that none of the managing partners « without the consent of others: © a. Theconcurrence of all is necessary for the validity of the acts, b. The concurrence of majority of the number of partners is nec for the validity of the acts © The concurrence of the controlling interest in the partnership i necessary for the validity of the acts. d._ The stipulation is void. hal a essary 23, When the manner of management is not agreed upon: a. The party who has the controlling interest will be considered as the agent of the partnership, b. All capitalist partners will be considered as agents of the partnership ¢. Allindustrial partners will be considered as agents of the partnership @ 4. All partners will be considered as agents of the partnership 24, Felix, George, and Heidi are partners of FGH Partnership. FGH Partnership, through Felix, entered into a service contract with JKL Accounting Firm whereby JKL Accounting Firm will provide payroll services to the partnership, The service contract provides a stipulatiot that no party shall terminate the contract without a 30-day prior notic. Subsequently, a letter from JKL Accounting Firm was received by Heidi stating that the service contract is being terminated 30 days after date receipt of the letter. Thirty days have passed and JKL Accounting Fif™ effectively stopped rendering accounting services to FGH PartnershiP Shocked, Felix questioned the cessation of the required work 2 i seriously hampering the giving out of salaries of the employees orn Partnership. Felix sued JKL Accounting Firm for damages for failu® comply with the 30-day notice rule. Is JKL ‘Accounting Firm liable? a. Yes. The notice should have been sent to all the partners- 334Partnership ‘yes. The notice should have been sent to Felix, the person who has contracted with JKL Accounting Firm No. Notice to Heidi is notice to the entire partnership. {1 No. Even without a 30-day prior notice, rescission is a remedy in contracts of sale of services, hich of the following should first be considered in determining how * pets and losses shall be distributed? ‘Agreement Whether the partners are capitalist or industrial ‘Amount of capital contribution ‘Amount of interest in the partnership a b G a. | When an unlawful partnership is dissolved by a judicial decree, the profits: ‘a. Shall be confiscated in favor of the State b. Shall be given to the partner who did not know of the illegality Shall be distributed to each of the partners less payment of penalties 4d. Shall be distributed to each of the partners . Who among the following is not liable for losses? a. Capitalist partner © b. industrial partner c. General partner d. Limited partner Statement 1: A stipulation excluding one or more partners from any share in the profits or losses is void. Statement 2: If only the share in the losses has been stipulated, the share in the profits shall be in the same proportion. a. Only Statement 1 is true b. Only Statement 2 is true. © Both statements are true. 4. Both statements are not true. Upon exhaustion of the partnership assets in a partnership with all Seneral partners: © a. All partners are liable pro rata and subsidiarily with their personal Property 335| ‘THe REBT Reviewer b. All partners are liable pro rata and primarily with thei, property Perso ‘All partners, except industrial partners are liable pro yy primarily with their personal property d. All partners, except industrial partners are liable pro ,, subsidiarily with their personal property 18 ang Ala ang 30. Ned, Ophelia, and Patrick are partners in NOP Paring Subsequently, Quincy was admitted to the partnership. At the time gi admission, NOP Partnership already had a debt of P200,000 to Rant Subsequently, the partnership was dissolved and liquidated, ang a partnership's debt to Randy ballooned to P500,000. After yj partnership's assets were exhausted, the remaining amount due to Ranj, ‘was P350,000. Can Randy collect from the personal assets of Quincy, © a. Yes, but only to satisfy the P150,000 debt incurred after Quincy; admission. 4 ‘Yes, to satisfy the P350,000 debt to Randy c. No, since there is no stipulation allowing Randy to collect from Quincy d. No, Quincy's capital contribution and her personal assets shall notby used to satisfy the debt to Randy 31. Statement 1: Any stipulation against individual liability of the partnersis valid against third persons. Statement 2: Any stipulation against individual liability of the partnersis void among the partners. a. Only Statement 1 is true. b. Only Statement 2 is true. Both statements are true. @d. Both statements are not true. 32. Mario, Luigi, and Peach are partners in MLP Partnership. T™ partnership was established for the purpose of carrying a furiu® business. The managing partner designated is Mario. Luigi, represent’ himself as a partner in MLP Partnership, contacted Xavier, who i operator ofa dormitory. He was able to convince Xavier to purchase 10 pieces of furniture at a discounted price. Mario, noting that the conta Luigi entered into is prejudicial to the partnership, seeks to not bits 336 -_ |Partnership anership on the contract. Is MLP Partnership bound by the contract Envered into by Luigi? a Yes, considering that what Luigi did is merely an act of dominion * which is covered by his authority as a partner fg b. Yes considering that this is apparently forthe carying on of the ‘usual business of the partnership ¢, No, considering that Luigi is not a managing partner. d._ No, considering that Luigi exceeded his authority by entering into a contract prejudicial to the interest of the partnership and the partners. 33, Statement 1: Partners representing the controlling interest are authorized @a 4 35, toenter into a compromise concerning a partnership claim or liability. Statement 2: Partners representing the controlling interest are authorized to dispose of the goodwill of the business. a. Only Statement 1 is true. b. Only Statement 2is true. ¢c. Both statements are true. Both statements are not true. ‘The partnership can recover real property conveyed by any partner in the name of partnership when: a. The grantee does not have knowledge that the partner exceeded his authority and the grantee is a holder for value The partner has authority to carry out the usual business of the partnership The real property has been conveyed by the grantee to a holder for value b. The person claiming the right under the grantee does not know that the partner has exceeded his authority. Melissa, Hero, and Sandara are partners of MHS Partnership. MHS Partnership had a long-time supplier named Direk. Direk made his payment for the merchandise he brought to Sandara for P300,000, considering that for years, it was Sandara who had collected the amounts with no problems. However, Sandara ie se funds for her European ip recover from Dire or oe pare is liable for loss because Sandara was acting it ee ae ‘of her apparent authority 337‘THE REBT REVIEWER bs. Yes. Dire i ible for loss because Sandara was ating wig scope of her apparent authority the & No. The parinership is lable for loss because there was ngs, that Sandara was not authorized to collect from Direk. Wing 4. Yes, Dek s lable for loss because Derek should have known Sandara was not authorized to collect from Direk. thay 36. For wrongful acts of a partner in the ordinary course of the the partnership which causes loss or injury to any person a. Only the erring partner is liable, b. Only the partnership is liable. © Both the erring partner and the partnership is liable, jointly 4, Both the erring partner and the partnership is liable, solidaily Business 37. Brienne, Charlie, and Dina are friends. Brienne and Charlie are known Dina as coming from wealthy families, so Dina, misrepresenting hersel, to be partners of Brienne and Charlie, approached Elise and told Elise that they are engaged in the buying and selling of ivory statues, Flig called Charlie, and Charlie confirmed that he, together with Brienne and Dina, is indeed engaged in such business. Elise, interested in interior decorations, gave P320,000 to Dina for the latter to purchase ivory statues Subsequently, Dina failed to deliver. From the facts, who is liable for the contract with Elise? a. Noone. b. Dina only. © c. Charlie and Dina only. d. Brienne, Charlie, and Dina. . Statement 1; Partnership creditors are preferred on partnership proper Statement 2: Partner's individual creditors are preferred on parine’$ individual property. a. Only Statement 1 is true. b. Only Statement 2 is true. @ c. Both statements are true, d._ Both statements are not true. 39. It is the change in the relation of the partners caused by any pat" ceasing to be associated in the carrying on of the business. 338 |Partnership winding UP Liquidation ‘Termination Dissolution wich ofthe following loss would dissolve a parinership by operation of @ logs of a generic thing which a partner had promised to contribute before delivery @ ». Loss of a specific thing which a partner had promised to contribute before delivery «Loss of a generic thing which a partner had promised to contribute after delivery 4. Loss of a specific thing which a partner had promised to contribute after delivery 41, Which of the following does not dissolve a partnership by operation of law? Death of any partner Insolvency of a partner Civil interdiction of a partner Absence of a partner 42, Statement 1: The courts can declare a partnership dissolved. Statement 2: A partner acting in good faith may unilaterally cause the dissolution of a partnership @ Only Statement 1 is true. b. Only Statement 2 is true. © © Both statements are true. 4. Both statements are not true. ‘8. Andres, Jose, and Marcelo are partners of AJM Partnership. One of their long-time suppliers is Emilio. On October 30, 2020, the partners decided to discontinue the partnership. Days after the dissolution, Jose entered into a contract with Emilio for the purchase of supplies. Emilio did not have personal notice of the dissolution of the partnership, but two days before, Andres had caused the dissolution to be advertised in a "ewspaper of general circulation. Does the contract with Emilio bind the Partnership? 339 i a‘THE REBT REVIEWER a. Yes, because Emilio did not have personal notice ofthe g, b. Yes, because the law requires that the dissolution be newspaper of general circulation thrice. © © No, because the dissolution was already advertised in of general circulation Ne apapg 4. No, because even without the publication, the partnersh, longer juridical and legal existence. HP has 9, solu advert a 44, Aside from the partner designated in the agreement oF those wh not wrongfully dissolved the partnership, who else can 10 have partnership affairs? a, The partner owning controlling interest © b. The legal representative of the last surviving solvent partner c. The spouse of the partner who has not wrongfully dissolve hy partnership . The industrial partners who must also be managing partner Wind up iy 45, The limited partners: a. Shall not be bound by the obligations of the partnership. Ther personal assets and capital contributions shall not be used to satisfy partnership debts. © b. Shall not be bound by the obligations of the partnership. Ther personal assets shall not be used to satisfy partnership debi. However, their capital contribution may be used to sali partnership debts. ¢. Shall not be bound by the obligations of the partnership. Their pit! contribution shall not be used to satisfy partnership debts. Hower’ their personal assets may be used to satisfy partnership debts. d. Shall be bound by the obligations of the partnership. 46. A limited partnership: a. Shall have no general partners. b. Shall have two or more limited partners. © ©. Shall have one or more limited partners. . Shall have equal number of general and limited partners: ie 47, Statement 1: A limited partner has no right to participa? " management of the partnershi rine Statement 2: A limited partner cannot become an industrial P® 340Partnership only Satement Lis tue ony Sotement 21 rue. np statement are tru. © © peanstatements are not tue ag: Foire tle the certificate reguted for inte partnership with the Eeearities and Exchange Commission: oe rhe partnership becomes a general partnership. * ae partnership becomes a general partnership, but only with espect © fo third persons. ‘q_ The partnership becomes a general partnership, but only with respect to the partners themselves. 4, The partnership does not obtain legal existence. 49, Which of the following acts may not be done by a limited partner? a. Loan money to the partnership bb. Inspect and copy the partnership books at a reasonable time c Assign a substituted limited partner @ d. Receive or hold as collateral security any partnership property 5), in the settlement of accounts of a limited partnership upon dissolution, which of the following is the correct order of payment after satisfaction of creditors’ claims? 1. Those to general partners, in respect to their share of the profits Il. Those to general partners, in respect to their capital contribution Ill, Those to limited partners, in respect to their share of the profits IV. Those to limited partners, in respect to their capital contribution @2 WWL0 b. ML LIV, 1 « LILMLIV 4. LU 1,1V 3a‘THE REBT REVIEWER RS TO MULTIPLE CHOICE QUESTIONS B > 27. 28. 29. 30. 31. 32. 33. 34. 35. 36. 37. 38. 39. a. 42. 46. 47, 48. 49, s 342, aes8 >oeanean GBOrPrre OVFONNOy>