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LAW ON PARTNERSHIP

1. This is a business organization established by two or more persons who bind themselves to
contribute money, property, or industry to a common fund, with the intention of dividing the
profits among themselves?
A. Sole Proprietorship
B. Partnership
C. Corporation
D. Joint venture

2. The following may be formed for the exercise of profession?

A. Sole proprietorship
B. Partnership
C. Sole proprietorship and Partnership
D. Sole proprietorship, partnership and corporation

3. The following are true regarding partnership, except?

A. Persons who are not partners as to each other are not partners as to third persons, except
partner by estoppel
B. Co-ownership or co-possession does not of itself establish a partnership, whether such-co-
owners or co-possessors do or do not share any profits made by the use of the property
C. Co-ownership or co-possession does not of itself establish a partnership, if such-co-owners
or co-possessors do not share any profits made by the use of the property
D. The sharing of gross returns does not of itself establish a partnership

Art. 1769. In determining whether a partnership exists, these rules shall apply:

(1) Except as provided by Article 1825, persons who are not partners as to each
other are not partners as to third persons;

(2) Co-ownership or co-possession does not of itself establish a partnership,

whether such-co-owners or co-possessors do or do not share any profits made by
the use of the property;

(3) The sharing of gross returns does not of itself establish a partnership, whether
or not the persons sharing them have a joint or common right or interest in any
property from which the returns are derived;

(4) The receipt by a person of a share of the profits of a business is prima facie
evidence that he is a partner in the business, but no such inference shall be drawn
if such profits were received in payment:

(a) As a debt by installments or otherwise;

(b) As wages of an employee or rent to a landlord;

(c) As an annuity to a widow or representative of a deceased partner;

(d) As interest on a loan, though the amount of payment vary with the
profits of the business;

(e) As the consideration for the sale of a goodwill of a business or other

property by installments or otherwise. (n

4. The receipt by a person of a share of the profits of a business is prima facie evidence that he
is a partner in the business, except?
A. If profits were received in payment of debt by installment
B. If profits were received in payment as wages of an employee
C. If profits were received as in payment rent to a landlord
D. All of the above

5. What is the effect if an unlawful partnership is dissolved by a judicial decree?

A. The profits shall be distribute among the partners based on profit or loss agreement, if none,
based on capital contribution
B. The profits shall be confiscated in favor of the state, with prejudice to the provision of the
Penal Code
C. The profits shall be distributed among the partners based on capital contribution, without
prejudice to the provision of the Penal Code

ATTY. IVAN YANNICK S. BAGAYAO CPA, MBA 1

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D. The profits shall be confiscated in favor of the state, without prejudice to the provision of
the Penal Code

Art. 1771. A partnership may be constituted in any form, except where immovable
property or real rights are contributed thereto, in which case a public instrument shall be
necessary. (1667a)

6. Which of the following is true?

A. A partnership may be constituted in any form regardless of the contribution
B. A partnership must be constituted in public instrument if the capital is more than three
thousand pesos, in money or property, only
C. A partnership must be constituted in public instrument when immovable property or real
rights are contributed
D. Both B and C

7. What are the requirements in every contract of partnership having a capital of three thousand
pesos or more, in money or property?
A. It shall appear in a private instrument
B. It shall appear in public instrument
C. It shall appear in public instrument and recorded in the Office of the Securities and Exchange
Commission
D. It may be established orally or if in writing it must be in public instrument

8. What is the effect in case of failure to comply with the requirements in every contract having a
capital of three thousand pesos or more?
A. The partnership has no juridical personality established
B. The liability of the partnership and members thereof to the third persons shall be affected
C. Both A and B
D. None of the above

9. What are the requirements in case an immovable property was contributed by a partner?
A. It shall appear in private instrument
B. It shall appear in public instrument and submitted to the office of the SEC
C. There must be inventory of said property, signed by the parties, and attached to the public
instrument to be submitted to the office of the SEC
D. It may be established orally or if in writing it must be in public instrument

10. What is the effect of failure to comply with the requirements in case an immovable property
was contributed?
A. The contract of partnership is still valid and juridical personality is established
B. The contract of partnership is void and shall not establish a juridical personality
C. The contract of partnership is voidable and shall establish juridical personality
D. The contract of partnership is voidable and shall not establish a juridical personality

Art. 1772. Every contract of partnership having a capital of three thousand pesos or more, in money
or property, shall appear in a public instrument, which must be recorded in the Office of the Securities
and Exchange Commission.

Failure to comply with the requirements of the preceding paragraph shall not affect the liability of the
partnership and the members thereof to third persons. (n)

Art. 1773. A contract of partnership is void, whenever immovable property is contributed thereto, if
an inventory of said property is not made, signed by the parties, and attached to the public
instrument. (1668a)

Art. 1774. Any immovable property or an interest therein may be acquired in the partnership name.
Title so acquired can be conveyed only in the partnership name. (n)

Art. 1775. Associations and societies, whose articles are kept secret among the members, and
wherein any one of the members may contract in his own name with third persons, shall have no
juridical personality, and shall be governed by the provisions relating to co-ownership. (1669)

ATTY. IVAN YANNICK S. BAGAYAO CPA, MBA 2

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11. This is a partnership in which the partners contribute all the property which actually belongs to
them to a common fund, with the intention of dividing the same among themselves, as well as
all the profits which they may acquire therewith?
A. General partnership
B. Limited partnership
C. Universal partnership of all present property
D. Universal partnership of all profits

Art. 1778. A partnership of all present property is that in which the partners contribute all the property
which actually belongs to them to a common fund, with the intention of dividing the same among
themselves, as well as all the profits which they may acquire therewith. (1673)

Art. 1779. In a universal partnership of all present property, the property which belongs to each of
the partners at the time of the constitution of the partnership, becomes the common property of all
the partners, as well as all the profits which they may acquire therewith.

A stipulation for the common enjoyment of any other profits may also be made; but the property
which the partners may acquire subsequently by inheritance, legacy, or donation cannot be included
in such stipulation, except the fruits thereof. (1674a)

12. In a universal partnership of all present property, the property which the partners may acquire
subsequently by inheritance, legacy or donation?
A. Can be included in stipulation for common enjoyment
B. Cannot be included in stipulation for common enjoyment as well as the fruits derived
C. Can be included in stipulation for common enjoyment except the fruits thereof
D. Cannot be included in stipulation for common enjoyment except the fruits thereof

Art. 1780. A universal partnership of profits comprises all that the partners may acquire by their
industry or work during the existence of the partnership.

Movable or immovable property which each of the partners may possess at the time of the celebration
of the contract shall continue to pertain exclusively to each, only the usufruct passing to the
partnership. (1675)

Art. 1781. Articles of universal partnership, entered into without specification of its nature, only
constitute a universal partnership of profits. (1676)

Art. 1782. Persons who are prohibited from giving each other any donation or advantage cannot enter
into universal partnership. (1677)

Art. 1783. A particular partnership has for its object determinate things, their use or fruits, or specific
undertaking, or the exercise of a profession or vocation. (1678)

13. If the article of universal partnership is entered into without specification of its nature, what
shall govern?
A. Universal partnership of all present property only
B. Universal partnership of profits only
C. Either Universal partnership of all present property or profits
D. Particular partnership

14. Statement 1: A partnership begins from the moment of the execution of the contract, unless it
is otherwise stipulated.
Statement 2: Every partner is a debtor of the partnership for whatever he may have promised
to contribute thereto.
A. True;True
B. True;False
C. Fasle;True
D. False;Fasle

15. What is the liability or obligation of the partner?

A. He is bound for warranty in case of eviction the specific or determinate things promised to
be contributed
B. He is liable for the fruits from the time they should have been delivered, without the need
of demand
C. Both A and B
D. None of the above

ATTY. IVAN YANNICK S. BAGAYAO CPA, MBA 3

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16. What is the effect I the partner who undertakes to contribute a sum of money fails to do so?
A. The partner becomes a debtor for the interest only
B. The partner becomes a debtor for damages only
C. The partner becomes a debtor for the interest and damages from the time he should have
complied with his obligation
D. None of the above

17. What is the remedy of the capitalist partner if an industrial partner engages in business for
himself without express permission by the partnership?
A. The capitalist partner may exclude him from the partnership
B. The capitalist partners may avail of the benefits obtained by the industrial partner
C. The capitalist may exclude the industrial partner and avail the benefits obtained by the
latter, with right to damages in both cases
D. The capitalist may exclude the industrial partner or avail the benefits obtained by the latter,
with right to damages in either case

Art. 1789. An industrial partner cannot engage in business for himself, unless the partnership
expressly permits him to do so; and if he should do so, the capitalist partners may either exclude him
from the firm or avail themselves of the benefits which he may have obtained in violation of this
provision, with a right to damages in either case. (n)

Art. 1790. Unless there is a stipulation to the contrary, the partners shall contribute equal shares to
the capital of the partnership. (n)

18. What is the consequence in case a partner refuses to contribute additional capital to save the
partnership from imminent loss?
A. The partner, including industrial partner, shall be obliged to sell his interest to other partners
B. The partner, excluding industrial partner, shall be obliged to sell his interest to the other partners
C. The partner shall be immediately excluded from the partnership
D. The partner shall remain to be a partner despite the refusal

19. What will be the effect if the authorized managing partner collects a demandable sum which is
owed to him in his own name, from a person who owed the partnership another sum also
demandable?
A. Sum collected shall be applied to the account of the partnership only
B. Sum collected shall be applied to the account of the managing partner only
C. Sum collected shall be applied to the two credits in proportion to their amounts, even though
the managing partner may have given receipt for his own credit only
D. Sum collected shall be applied to the two credits in proportion to their amounts, if receipt
was given for the account of partnership

20. What will be the effect if the authorized managing partner collects a demandable sum which is
collected from a person who owed both partner and partnership but was given on account of
the partnership?
A. Sum collected shall be applied to the account of the partnership only
B. Sum collected shall be applied to the account of the managing partner only
C. Sum collected shall be applied to the two credits in proportion to their amounts, even though
the managing partner may have given receipt for his own credit only
D. Sum collected shall be applied to the two credits in proportion to their amounts, if receipt was
given for the account of partnership

21. The following are correct regarding sharing of profit, except?

A. The losses and profits shall be distributed in conformity with the agreement.
B. If only the share of each partner in the profits has been agreed upon, the share of each in
the losses shall be in the same proportion.
C. In the absence of stipulation, the share of each partner in the profits and losses shall be in
proportion to what he may have contributed, but the industrial partner shall not be liable
for the losses.
D. In the absence of stipulation, the share of each partner in the profits and losses shall be in
proportion to what he may have contributed, and the industrial partner shall be liable for
the losses.

22. May partners intrust to a third person the designation of the share of each one in profits and
losses?
A. No, because a third person is not privy to the contract of partnership
B. Yes, and the designation will be final and cannot be impugned
C. Yes, the designation may be impugned only when it is manifestly inequitable within a period
of three (3) months from knowledge
D. Yes, and the designation may be impugned only when it is manifestly inequitable
Within a period of six (6) months from knowledge

ATTY. IVAN YANNICK S. BAGAYAO CPA, MBA 4

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23. The following are correct regarding profit or loss, except?

A. The designation of losses and profits cannot be intrusted to one of the partners.
B. The designation of losses and profits can be intrusted to one of the partners.
C. The designation of losses and profits can be intrusted to third person
D. A stipulation which excludes one or more partners from any share in the profits or losses is
void.

24. The power of a managing partner appointed in the articles of partnership is/are?
A. He may execute acts of administration if there is no opposition from his partners
B. He may execute acts of administration despite opposition of his partners, unless he acted in
bad faith
C. His power may be revoked at any time
D. Both B and C

25. What is the effect if two or more partners have been intrusted with the management of the
partnership without specification of their respective duties?
A. Each one may separately execute all acts of administration, but if any of them should oppose
the acts of the others, the decision of the majority shall prevail.
B. In case of a tie, the matter shall be decided by the partners owning the controlling interest.
C. Both A and B
D. The concurrence of all shall be necessary for the validity of the acts

26. When the manner of management has not been agreed upon, which of the following rules shall
be observed?
A. All the partners shall be considered agents and whatever any one of them may do alone
shall not bind the partnership, without prejudice to the provisions of Article 1801
B. All the partners shall be considered agents and whatever any one of them may do alone
shall bind the partnership, with prejudice to the provisions of Article 1801 [WITHOUT]
C. Partners may, without the consent of the others, make any important alteration in the
immovable property of the partnership, if it may be useful to the partnership.
D. None of the partners may, without the consent of the others, make any important alteration
in the immovable property of the partnership, even if it may be useful to the partnership.

27. The following are correct regarding partnership books, except?

A. The partnership books shall be kept, subject to any agreement between the partners, at the
principal place of business of the partnership
B. Every partner shall at any reasonable hour have access to and may inspect and copy any of
them
C. Partners shall render on demand true and full information of all things affecting the
partnership to any partner
D. None of the above

28. May a capitalist partner engage for his own account in any operation of business?
A. Yes, even if of same kind of business in which the partnership is engaged
B. No, if he engage in the same kind of business which the partnership is engaged
C. No, if he engage in the same kind of business which the partnership is engaged unless there
is stipulation to the contrary
D. Yes, even if of same kind of business in which the partnership is engaged unless there is
stipulation to the contrary

29. What are the property rights off a partner?

A. Rights in specific partnership property only
B. Rights in specific partnership property and interest in the partnership only
C. Rights in specific partnership property, interest in the partnership and right to participate in
management only
D. Rights in partnership property, interest in partnership and rights to profits of partnership
only

30. Statement 1: Every partnership shall operate under a firm name, which must include the name
of one or more of the partners.
Statement 2: Those who, not being members of the partnership, include their names in the firm
name, shall be subject to the liability of a partner.
A. True;True
B. True;False
C. False; True
D. False;False

ATTY. IVAN YANNICK S. BAGAYAO CPA, MBA 5

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31. Which of the following shall bind the partnership?

A. The act of every partner, including the execution in the partnership name of any instrument,
for apparently carrying on in the usual way the business of the partnership
B. An act of a partner which is not apparently for the carrying on of business of the partnership
in the usual way [ Unless Authorized by the other partners]
C. Both A and B
D. None of the above

32. Which of the following is correct where the title to real property is in the name of one or more
or all the partners, or in a third person in trust for the partnership?
A. A conveyance executed by a partner in the partnership name, or in his own name, passes
the equitable interest of the partnership, if the act is within the authority of the partner
B. A conveyance executed by a partner in the partnership name, or in his own name, passes
the equitable interest of the partnership, even if the act is not within the authority of the
partner
C. Both A and B
D. None of the above

33. What is the effect when a person, by words spoken or written or by conduct, represents himself,
or consents to another representing him to anyone, as a partner in an existing partnership with
one or more persons not actual partners?
A. He is not liable to third person but too partners only
B. He is liable to any such persons to whom such representation has been made
C. When a partnership liability results, he is liable as though he were an actual member of the
partnership
D. Both B and C

34. What is the effect if a person is admitted as a partner into an existing partnership?
A. He is liable for all the obligations of the partnership arising before his admission
B. He is liable for all the obligations of the partnership arising after his admission only
C. He is liable for all the obligations of the partnership arising after his admission except that
this liability shall be satisfied only out of partnership property
D. None of the above

35. This is the change in the relation of the partners caused by any partner ceasing to be associated
in the carrying on as distinguished from the winding up of the business?
A. Formation
B. Operation
C. Dissolution
D. Liquidation

36. The following are correct regarding dissolution of partnership, except?

A. On dissolution the partnership is terminated
B. On dissolution the partnership is not terminated, but continues until the winding up of
partnership affairs is completed
C. Dissolution of partnership is caused by insolvency of any partner
D. Dissolution is caused by civil interdiction of any partner

37. Dissolution is caused by the following without violation of agreement between partners, except:
A. By the termination of the definite term or particular undertaking specified in the agreement
B. By the express will of any partner, who must act in good faith, when no definite term or
particular is specified
C. By the express will of all the partners who have not assigned their interests
D. By the express will of all the partners, who must act in good faith, when no definite term or
particular is specified

38. The court shall decree a dissolution upon application by or for the partner in the following,
except?
A. When there is death of any partner
B. When a partner has been declared insane in any judicial proceeding
C. When the business of the partnership can only be carried on at a loss
D. When a partner wilfully or persistently commits a breach of the partnership agreement

39. The partnership is in no case bound by any act of a partner after dissolution, except?
A. Where the partnership is dissolved because it is unlawful to carry on the business
B. Where the partner has become insolvent
C. Where the partner has no authority to wind up partnership affairs
D. Where the partner performs any act appropriate for winding up partnership affairs or
completing transactions unfinished at dissolution

ATTY. IVAN YANNICK S. BAGAYAO CPA, MBA 6

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40. When dissolution is caused in contravention of the partnership agreement the rights of the
partners shall be?
A. Each partner who has not caused dissolution wrongfully shall have The right, as against
each partner who has caused the dissolution wrongfully, to damages breach of the
agreement.
B. The partners who have not caused the dissolution wrongfully, if they all desire to
continue the business in the same name either by themselves or jointly with others,
may do so, during the agreed term for the partnership.
C. Both A and B
D. None of the above
41. In settling accounts between the partners after dissolution, the following rules shall be
observed, subject to any agreement to the contrary?
A. The assets of the partnership are the partnership property
B. The assets of the partnership are the contributions of the partners necessary for the
payment of all the liabilities
C. The partners shall contribute the amount necessary to satisfy the liabilities.
D. All of the above

42. The liabilities of the partnership shall rank in order of payment, as follows?
A. Those owing to creditors other than partners after owing to partners in respect of profit
B. Those owing to partners other than for capital and profits before creditors
C. Those owing to partners in respect of capital before profits
D. Those owing to partners in respect of profits before capital

43. Where a partner has become insolvent or his estate is insolvent, the claims against his separate
property shall rank in the following order?
A. Those owing to partnership creditors then to partners by way of contribution then to
separate creditors
B. Those owing to separate creditors, then to partnership creditors then to partners by way
of contribution
C. Those owing to separate creditors, then to partners by way of contribution, then to
partnership creditors
D. Those owing to partnership creditors then to separate creditor only

44. When will the creditors of the dissolved partnership be considered as creditors of the person or
partnership continuing the business?
A. When a partner is expelled and the remaining partners continue the business either
alone or with others without liquidation of the partnership affairs
B. When any new partner is admitted into an existing partnership without liquidation of the
partnership affairs
C. When all the partners or their representatives assign their rights in partnership property
to one or more third persons who promise to pay the debts and who continue the
business of the dissolved partnership
D. All of the above

45. This is formed by two or more persons, having as members one or more general partners and
one or more limited partners.
A. General Partnership
B. Limited Partnership
C. Universal Partnership
D. Particular Partnership

46. The following are correct regarding limited partnership, except?

A. The limited partners shall not be bound by the obligations of the partnership.
B. Two or more persons desiring to form a limited partnership shall add word “Limited”
C. The contributions of a limited partner may be cash or property, but not services.
D. The contributions of a limited partner may be cash, property or services.

47. The surname of a limited partner shall not appear in the partnership name unless?
A. It is also the surname of a general partner
B. Prior to the time when the limited partner became such, the business has been carried
on under a name in which his surname appeared
C. Both A and B
D. None of the above

48. What is the effect if the limited partner’s surname appears in the partnership name contrary to
the provision of first paragraph of Article 1846?
A. The limited partner shall not be liable to partnership creditor
B. The limited partner shall be liable to all partnership creditors as a general partner
C. The limited partner shall be liable as general partner to partnership creditors who have
no actual knowledge that the former is not a general partner
D. The limited partner shall be liable as general partner to partnership creditors who have
actual knowledge that the former is not a general partner

ATTY. IVAN YANNICK S. BAGAYAO CPA, MBA 7

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49. The written consent or ratification of the specific act by all the limited partners is necessary in
order to authorize a general partner in the following cases, except?
A. Do any act in contravention of the certificate
B. Do any act which would make it impossible to carry on the ordinary business of the
partnership
C. Confess a judgment against a partner [it should be partnership]
D. Possess partnership property, or assign their rights in specific partnership property, for
other than a partnership purpose

50. A general partner has no authority without the written consent or ratification of the specific act
by all the limited partners in the following cases, except?
A. Admit a person as a general partner
B. Admit a person as a limited partner, unless the right so to do is given in the certificate
C. Continue the business with partnership property on the death, retirement, insanity, civil
interdiction or insolvency of a general partner, unless the right so to do is given in the
certificate.
D. Continue the business with partnership property on the death, retirement, insanity, civil
interdiction or insolvency of a general partner, even though the right so to do is given
in the certificate.

Art. 1851. A limited partner shall have the same rights as a general partner to:
(1) Have the partnership books kept at the principal place of business of the partnership, and
at a reasonable hour to inspect and copy any of them;

(2) Have on demand true and full information of all things affecting the partnership, and a
formal account of partnership affairs whenever circumstances render it just and reasonable;
and

(3) Have dissolution and winding up by decree of court.

A limited partner shall have the right to receive a share of the profits or other compensation by way
of income, and to the return of his contribution as provided in Articles 1856 and 1857.

Art. 1852. Without prejudice to the provisions of Article 1848, a person who has contributed to the
capital of a business conducted by a person or partnership erroneously believing that he has become
a limited partner in a limited partnership, is not, by reason of his exercise of the rights of a limited
partner, a general partner with the person or in the partnership carrying on the business, or bound
by the obligations of such person or partnership, provided that on ascertaining the mistake he
promptly renounces his interest in the profits of the business, or other compensation by way of
income.

51. Statement 1: A person may be a general partner and a limited partner in the same partnership
at the same time, provided that this fact shall be stated in the certificate provided for in Article
1844. [ Under Article 1853]
Statement 2: A limited partner also may loan money to and transact other business with the
partnership.
A. True; True
B. True; False
C. False; True
D. False; False

52. What is the effect if a person who is a general partner is also at the same time a limited partner?
A. He shall have all the rights and powers and be subject to all the restrictions of a general
partner
B. He shall have all the rights and powers and be subject to all the restrictions of a limited
partner
C. In respect to his contribution, he shall have the rights against the other members if he
were not a general partner
D. Both A and C

ATTY. IVAN YANNICK S. BAGAYAO CPA, MBA 8

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Art. 1853. A person may be a general partner and a limited partner in the same partnership at the
same time, provided that this fact shall be stated in the certificate provided for in Article 1844.

A person who is a general, and also at the same time a limited partner, shall have all the rights and
powers and be subject to all the restrictions of a general partner; except that, in respect to his
contribution, he shall have the rights against the other members which he would have had if he were
not also a general partner.

53. A limited partner shall not receive from a general partner or out of partnership property any
part of his contributions until?
A. All liabilities of the partnership have been paid or there remains property of the
partnership sufficient to pay them
B. The consent of all members is had, unless the return of the contribution may be rightfully
demanded under the provisions of the second paragraph
C. The certificate is not yet cancelled or amended as to set forth the withdrawal or
reduction.
D. All of the above

54. When may a limited partner rightfully demand the return of his contribution?
A. On the dissolution of a partnership
B. When the date specified in the certificate for its return has arrived
C. After he has six months' notice in writing to all other members, if no time is specified in
the certificate, either for the return of the contribution or for the dissolution of the
partnership
D. All of the above

Art. 1859. A limited partner's interest is assignable.

A substituted limited partner is a person admitted to all the rights of a limited partner who has died
or has assigned his interest in a partnership.

An assignee, who does not become a substituted limited partner, has no right to require any
information or account of the partnership transactions or to inspect the partnership books; he is only
entitled to receive the share of the profits or other compensation by way of income, or the return of
his contribution, to which his assignor would otherwise be entitled.

An assignee shall have the right to become a substituted limited partner if all the members consent
thereto or if the assignor, being thereunto empowered by the certificate, gives the assignee that right.

An assignee becomes a substituted limited partner when the certificate is appropriately amended in
accordance with Article 1865.

The substituted limited partner has all the rights and powers, and is subject to all the restrictions and
liabilities of his assignor, except those liabilities of which he was ignorant at the time he became a
limited partner and which could not be ascertained from the certificate.

The substitution of the assignee as a limited partner does not release the assignor from liability to
the partnership under Articles 1847 and 1848.

Art. 1860. The retirement, death, insolvency, insanity or civil interdiction of a general partner
dissolves the partnership, unless the business is continued by the remaining general partners:

(1) Under a right so to do stated in the certificate, or

(2) With the consent of all members.

ATTY. IVAN YANNICK S. BAGAYAO CPA, MBA 9

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55. As a rule, the retirement, death, insolvency, insanity or civil interdiction of a general partner
dissolves the partnership, except?
A. The business is continued by the remaining general partners under a right to do so
stated in the certificate
B. The business is continued by the remaining general partners with the consent of all
members
C. The business is continued by the remaining general partners with the consent of majority
of the members
D. Both A and B

56. What is the effect of the death of a limited partner?

A. The executor or administrator shall have all the rights of a limited partner for the
purpose of setting his estate
B. The estate of a deceased limited partner shall be liable for all his liabilities as a limited
partner.
C. The executor or administrator shall have the power as the deceased had to constitute
his assignee a substituted limited partner.
D. All of the above

57. In setting accounts after dissolution the liabilities of the partnership shall be entitled to payment
in which correct order?
A. Those to creditors, in the order of priority as provided by law, except those to limited
partners on account of their contributions, and to general partners
B. Those to limited partners in respect to their share of the profits and other compensation
by way of income on their contributions after settling capital contributions
C. Those to limited partners in respect to the capital of their contributions after settling
general partners capital and profits
D. Those to general partners other than capital and profit preceded by those to general
partners in respect to profits

Art. 1863. In setting accounts after dissolution the liabilities of the partnership shall be entitled to
payment in the following order:

(1) Those to creditors, in the order of priority as provided by law, except those to limited
partners on account of their contributions, and to general partners;

(2) Those to limited partners in respect to their share of the profits and other compensation
by way of income on their contributions;

(3) Those to limited partners in respect to the capital of their contributions;

(4) Those to general partners other than for capital and profits;

(5) Those to general partners in respect to profits;

(6) Those to general partners in respect to capital.

58. This is a contract whereby a person binds himself to render some service or to do something
in representation or on behalf of another, with the consent or authority of the latter?
A. Partnership
B. Mutual trust and Confidence
C. Agency
D. Service Contract

ATTY. IVAN YANNICK S. BAGAYAO CPA, MBA 10