1. A.

In a contract of partnership, two or more persons bind themselves to contribute money,

property, or industry to a common fund, with the intention of dividing the profit among themselves.
Two or more persons may also form a partnership for the exercise of a profession (Civil Code of
the Philippines, Article 1767).
B. An association of two or more persons to carry on, as coOwners, a business for profit
(Uniform Partnership Act, Section 6).
C. The partnership has a juridical personality separate and distinct from that of each of the
partners (Civil Code of the Philippines, Article 1768).

2. It means that two people create or form a partnership in order to perform or offer services to
clients according to their profession. (Law, Medicine, etc.)

3. Mutual Contribution, Division of Profits or Losses, Co-ownership of Contributed Assets, Mutual

Agency, Unlimited Liability, Limited Life, Income taxes, and Partners’ Equity Accounts.

4. Yes, any partner can bind the other partners to an external purchase as long as the purchase is
within the interests of the partnership.

5. Mutual Agency means that any partner can bind the other partners to a contract, while Unlimited
Liability means that all partners (except for limited partners) are liable to the debts incurred by the
partnership.

6. A. Brings greater financial capability to the business.

B. Combines special skills, expertise and experience of the partners.
C. Offers relative freedom and flexibility of action in decisionmaking.

7. A. Easier and less expensive to organize.

B. More personal and informal.

8.
A. Easily dissolved and thus unstable compared to a corporation.
B. Mutual agency and unlimited liability may create personal obligations to partners.
C. Less effective than a corporation in raising large amounts of capital

9. They differ in their Manner of creation,Number of Persons, Commencement of Juridical

Personality, Management, Extent of Liability,Right of Succession, and their Terms of Existence.

10.
1. According to Object:
a. Universal partnership of all present property.
b. Universal partnership of profits.
c. Particular partnerships

2. According to Liability:
a. General
b. Limited

3. According to Duration:
a. Partnership with a fixed term or for a particular undertaking.
b. Partnership at will. One in which no term is specified and is not formed for any particular
undertaking.
4. According to Purpose:
a. Commercial or trading partnership. One formed for the business.
b. Professional or non-trading profession. One formed for the exercise of profession.

5. According to Legality of Existence:

a. De jure partnership. One which has complied with all the legal requirements.
b. De facto partnership. One which has failed to comply with all the legal requirements for its
establishment.

11. A General Partner is one who is liable to the extent of his separate property after all the
assets of the partnership are exhausted. While a Limited Partner is one who is liable only to the
extent of his capital contribution industry or services only.

12. A Capitalist Partner is one who contributes money or property to the of the partnership, while
an Industrial Partner is one who contributes his knowledge or personal service to the partnership.

13. A Dormant Partner is one who does not take active part in the partnership and is not known
as a partner; while a Secret Partner is one who takes active part in the business but is not known
to be partner by outside parties. And lastly, a Silent Partner is one who does not take active part
in the business but is known as a partner.

14. The Articles of a Partnership is a contract that forms an agreement among business partners
to pool labor and capital and share in profit, loss, and liability. In simpler words, partnership
agreements are embodied in the Articles of Partnership. These are the important provisions that
should be included within the articles:
1. The partnership name, nature, purpose and location;
2. The names, citizenship and residences of the partners;
3. The date of formation and the duration of the partnership;
4. The capital contribution of each partner, the procedure for valuing non-cash investments,
treatment of excess contribution (as capital or as loan) and the penalties for a partner's failure to
invest and maintain the agreed capital;
5. The rights and duties of each partner;
6. The accounting period to be adopted, the nature of accounting records, financial statements
and audits by independent public accountants;
7. The method of sharing profit or and loss, frequency of income measurement distribution,
including any provisions for the recognition of differences in contributions;
8. The drawings or salaries to be allowed to partners;
9. The provision for arbitration of disputes, dissolution, and liquidation.

15. These are the steps in the SEC registration for partnerships:
1. Have your proposed business name verified in the verification unit of SEC; The partnership
name shall bear the word "Company" or "Co." and if it's a limited partnership, the word "Limited" or
"Ltd" A professional partnership may bear the word "Company" "Associates" or "Partners" or other
similar descriptions (SEC Memorandum Circular 5, Series 2008).
2. Submit the following documents:
- Articles of Partnership Verification Slip for the Business Name.
- Written undertaking to change business name if required
- Tax identification number of each partner and/or that of the partnership Registration data sheet
for partnership duly accomplished in six copies
- Other documents that may be required: endorsement from other government agencies if the
proposed partnership will engage in an industry regulated by the government.
3. For partnership with foreign partners: SEC Form F-105, bank certificate on the capital
contribution of partners, proof of remittance of contribution of foreign partners;
 - Pay the registration/filing and miscellaneous fees: filing fee equivalent to 1/5 of 1%. of the
partnership capital but not less than P1,000 and legal research fee which is 1% of the filing
fee; - Forward documents to the SEC Commissioner for signature.

16. Debit: Permanent Withdrawals, and the Debit balance of the Drawing account at the end of
the period.
Credit: Original Investment, Additional Investments, and the Credit Balance of the Drawing
Account at the end of the period.

17. Permanent withdrawals are made with the intention of permanently decreasing the partner's
capital while temporary withdrawals are regular advances made by the partners in anticipation of
their share in profit.

18. It shall be treated normally as a receivable or liability. For Loans Receivable incurred by a
partner from the partnership, we shall utilize the account title Loans Receivable - Partner, while
Loans Payable shall utilize the account title Loans Payable - Partner account.

19. The basis of recording the value of non-cash assets contributed by a partner(s) in the business
is through its fair market value.

20. An asset’s fair market value refers to its price in which it was bought from a buyer, having a
price or value that both buyer and the seller have agreed upon.

21. The first step is to identify the accounts available to the partner with the sole proprietorship
within its post-closing trial balance. Next is to create any adjustments and debit or credit it to the
partner’s capital in their books. Next is to transfer all accounts (exceptions include liabilities that
will not be assumed by the partnership as well as assets that are not to be transferred as agreed
upon by the partners) to the the new books of the partnership to create an opening entry. The
partner that has no prior business before forming the partnership may contribute to the common
fund of the business, in which case, it will also need to be recorded in the partnership’s new
books.

22. A limited liability company (LLC) is a hybrid form of business for it combines the best features
of a partnership and a corporation. LLC is a form of legal entity that provides limited liability to its
owners. In 1988, the Internal Revenue Service (IRS) of the United States of America ruled that
LLC may be treated as a partnership for tax purposes subject to conditions. As a result of this
ruling, all 50 U.S. states allow, LLCs. The owners of an LLC are called members. These owners
may be individuals, partnerships, corporations or other entities. Many states even allow one-
person LLCS. The members have limited liability even if they are active in the company. This type
of entity is attractive for professional service firms because the owners will not have personal
liability for the other owners' malpractice.The accounting for LLCs is the similar to partnerships.
The terms "member" and "member's equity" are used instead of "partner" and "partner's equity.