A silent partner takes an active part in the business of the partnership and is not known by

outsiders to be a partner.
FALSE

A secret partner is one who does not take an active part in the partnership business and is not
known as a partner.
FALSE

A partner by estoppel is one who is actually not a partner but who represents himself as one.
TRUE

The partner’s capital account is debited for the debit balance of the drawing accounts at
the end of the period.
TRUE

One of the disadvantages of having a partnership is the risk of joint responsibility

TRUE

The basis of valuation for non-cash investments should be at fair market values in
absence of agreed values.
TRUE

A partnership has a limited life because any change in the relationship of partners
dissolves the partnerships.
TRUE

A partnership is an organization whereby two or more persons bind themselves to

contribute money, property and industry to a common fund with the intention of dividing
the profits or losses between them.
FALSE

A partnership usually retains title to assets contributed to a partnership, so that certain

assets may be identified as belonging to a given partner.
TRUE/FALSE

Only natural person can enter into a contract of partnership

FALSE

A limited partnership must have at least one general partner.

TRUE

A partnership with a capital of less than P 3,000 is void if it is unregistered with the
Securities and Exchange Commissions.
FALSE

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 All partnerships are subject to tax at the rate of 30% of taxable income.
FALSE

A dormant partner is one who does not take an active part in the partnership business
though may be known as a partner.
FALSE

In a general partnership, each partner's liability for losses is limited to his investment in
the firm.
FALSE

The essence of partnership is that each partner must share in the profits or losses of the
venture.
TRUE

Each partner is personally liable for all debts of the partnership.

TRUE

One advantage of a partnership over a corporate form of organization is the unlimited

liability of partners.
FALSE

In a limited partnership, none of the partners has unlimited liability for the business all debts.
FALSE

All partnerships have a limited life and assets are co-owned by the partners.
TRUE

There is no income tax imposed on a partnership

FALSE

Mutual agency means that each partner has the right to bind the partnership to contracts.
TRUE

There can never be a partnership without the contribution of money, property, or industry to a
common fund
TRUE

Work or services that may either be personal manual efforts or intellectual may also be
contributed to a partnership
TRUE

A proprietorship has a limited life whereas a partnership may have an unlimited life.
FALSE

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 A dormant partner is one who does not take active part in the partnership business and is known
as a partner.
TRUE

A partnership involves mutual agency, unlimited liability for general partners, and limited life.
TRUE

A de jure partnership is one that has complied with all the legal requirements for its
establishment.
TRUE

The limited partners are liable only to the extent of their personal contributions.
TRUE

Differentiate Partnership and Corporation as to Juridical Personality

 PARTNERSHIP: Commences from the execution of the articles of partnership.
 CORPORATION: From the issuance of certificate of incorporation by the SEC

Differentiate Partnership and Corporation AS TO NUMBER

 Partnership: Two or more persons
 Corporation: Not exceeding, fifteen (15)

Classification of Partners as to Contribution

1. Capitalist partner
2. Industrial partner
3. Capitalist Industrial Partner

Kinds of Partnership according to the Legality of Existence

1. A de jure partnership
2. A de facto partnership

What are the essential requisites of Partnership

• There must be a valid contract
• There must be two or more persons involved
• There must be contribution of either money, property or industry
• There must be the intention of dividing the profit or loss
• There must be a lawful purpose

Differentiate Partnership and Corporation AS TO CREATION

 Partnership: By mere agreement or partners
 Corporation: Created by operation of law

Differentiate Partnership and Corporation AS TO SUCCESSION

 Partnership: Has no right of succession

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  Corporation: There is a right of succession. Corporation has the capacity to continue
existing.

Kinds of Partnership according to the Activities or Purpose

1. Commercial or trading partnership
2. Professional or non-trading partnership

Kinds of Partnership according to the Liabilities of the Partners

1. general partnership
2. limited partnership

Kinds of Partnership according to the Manner of Creation

1. Orally agreed upon
2. Written in a public or private instrument

Classification of Partners
1. General Partner
2. Limited partner.
3. General-Limited partner

1,026,000

74,000

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