Bam 241 P1 Departmental Quiz With Key Answer

Name: Date:
BAM 241 _LAW ON PARTNERSHIP_P1 Departmental Quiz

College of Management and Accountancy
BLOCK & SCHEDULE PHINMA_University of Pangasinan Rating:
Prof. Chrissan Mae N. Poserio
G ENERAL DIRECTIONS
READ THIS PAGE BEFORE STARTING THE ASSESSMENT
This is a 16 paged test and is composed of 3 sections and has a total score LEARNING OBJECTIVE:
of one hundred twenty (120) points. You have Ninety (90) Minutes or 1 H
30 M to finish this examination. The breakdown of the exam/quiz is as This assessment measures
follows: the competence of the
(1) Multiple Choice Question (70 ITEMS). From the choices given student in terms of
choose the best answer. 1 point each=70 points his/her application of
(2) Essay (4 ITEMS). From the situation or facts provided answer in 3-4 knowledge and skills in
sentences. 5 points each= 20 points the following topics:
(3) Fill in the blanks (30 ITEMS). Provide the correct word/s to
complete the sentence. 1 Point each= 30 points LAW ON PARTNERSHIP
1. General Provisions
All things unnecessary for the test must be put in front of the testing area. 2. Different Kinds of
Use BLACK or BLUE ink ballpen only. Write all your answers on the Partnership
3. Rights and Obligations
designated answer sheet, if one is provided. Further, erasures are strictly NOT
of Partner
allowed and will invalidate your answers.
4. Dissolution of
Partnership
You may NOT use smart phones or reference materials during the testing
5. Liquidation and
session.
Winding Up
Try to answer all questions. In general, if you have some knowledge
about a question, it is better to try to answer it. You will not be penalized for
guessing.
Be sure to allocate your time carefully so you can complete the entire test within the exam session. You may go back
and review your answers at any time during the exam session.
Those who are caught cheating or doing acts not allowed during the exam shall be instructed to surrender their test
papers and shall leave the testing room immediately. Subsequently, their papers shall be rated as ZERO.
This concludes the instruction page.
You may now begin answering.
Page 1 of 16
BAM 241/Law on Partnership_P1 Departmental Quiz
PHINMA_University of Pangasinan
1. In the ABC partnership, A and B contribute P20,000 each and C his services. After paying all creditor of the
partnership, only P18,000 in each remains. In the absence of term to the contrary, the share of C is equal is.
a) P6,000
b) The share of A
c) The share of B
d) Nothing
2. X and Y established a partnership by contributing P50,000 each. Z a third party allowed his name to be included
in the firm name of the partnership. The partnership was insolvent and after exhausting all the remaining assets,
there was left a liability to third persons the amount of P30,000.The creditors can compel
a) Z to pay the P30,000 remaining liability
b) X.Y and Z pay P10,000 each
c) X or Y to pay the P30,000 remaining liability
d) X and Y to pay P15,000 each
3. W ,X , Y and Z formed a partnership W ,X and Y are general partner and contributed P50,000 each while Z an
industrial partner, contributed his services only. All the partner signed an agreement stipulating that the liability of
W is limited to his contribution. After all the assets of the partnership were exhausted there remain an unpaid
liability of P40,000 .the creditors of the partnership can compel.
a) X and Y to pay the P40,000
b) X, y and Z to pay the P40,000
c) W,X Y and Z to pay P10,000 each and W and Z can demand reimbursement from X and Y
d) X and Y to pay the P40,000
4. Partner who does not participate in management though be shares in the profits or losses
a) Nominal
b) Ostensible
c) Silent
d) Liquidating
5. Which of the following liabilities of the partnership shall first in the order of payment?
a) Those owing to partners in respect to capital
b) Those owing to creditors other than partners
c) Those owing to partners other than capital and profits
d) Those owing to partners in respect to profits
6. X, Y and Z capitalist partners each contribution p10,000 and A the industrial partner contribution his industry.
The partnership is indebted to B In the amount of P90,000. The remaining assets of the partnership amounted to
only P30,000. Suppose B got the P30,000 how can be recover the deficiency of his credit?
a) B can recover P15,000 each from X,Y,Z, and A
b) B can recover P50,000 from either X,Y and Z
c) B can recover P15,000 each from X ,Y, and Z but A is exempt
Page 2 of 16
BAM 241d) _LAW ON PARTNERSHIP_P1 Departmental Quiz
B can recover P20,000 each from X ,Y and Z only

7. The change in the relation of the partners caused by any partner ceasing to be associated in the carrying on of the
business is
a) Winding up
b) Dissolution
c) Liquidation
d) Termination
8. Which of the following is not correct? In a limited partnership composed of A,B and C the contribution may be as
follows:
a) A-property (limited partner ); B -service (general partner ): C -cash ( general partner )
b) A-cash (limited partner ); B – property ( general partner); C – services (general partner)
c) A- services ( limited partner ) B -cash ( general partner) C – service ( general partner )
d) A -cash ( limited partner ) B – cash ( general partner ) C- service ( general partner )
9. Partner who is both a secret and a silent partner
a) Limited
b) Nominal
c) Dormant
d) Ostensible
10. A person who directly represent himself or consents or allows himself to be represented as a partner in an existing
partnership or with one or more persons who are not actually partners is
a) Partner by estoppel
b) Silent partner
c) Ostensible partner
d) Managing partner
11. ABC partnership become insolvent due to mismanagement and cannot pay its liability to XYZ Corp. With the
approval of its directors and stockholders, XYZ Crop entered into a management contract with ABC partnership
to manage their partnership business with the agreement that 50% of the net profits will be applied to the payment
of the partnership debt to the corporation
QUESTION 1: Can XYZ Corp .validly enter into the above management contract ?
OUESTION 2: Is XYZ Crop considered a partner of the ABC partnership by the fact that it is receiving a share of the
net profits of the partnership?
ANSWER 1: Yes a corporation has the power to enter into such management contract provided the contract is
approved by the board of directors and majority of the outstanding capital stock.
ANSWER 2: No XYZ Crop cannot be considered a partner because it is receiving a share of the net profits not as
actual share of the profits but merely as payment for the partnership’s obligation to the corporation
a) 1st answer correct ,2nd answer wrong

b) 1st answer wrong 2nd answer correct
c) Both answer is correct
d) Both answer is wrong
12. Strictly speaking the following are all essential element of partnerships except ;
a) Contract or voluntary agreement
b) Contribution to a common fund
Page 3 of 16
BAM 241c) _LAW ON PARTNERSHIP_P1 Departmental Quiz
Intention to divide profits

d) Mutual agency
13. The following are all grounds for a judicial decree of dissolution except;
a) Where the partner are guilty of such conduct as tends to prejudicially affect the partnership
b) When the business can only be carried at a loss
c) By any event which makes it unlawful or the partnership to carry on the business
d) All of the above
14. A ,B and C are general partners in the merchandising firm. Having contributed equal amounts to the capital they
also agreed on equal distribution of whatever profits is realized per fiscal period. After two years of operation
however C conveys her whole interest in the partnership to D without knowledge and consent of A and B. In the
partnership dissolved ?
a) The partnership is not dissolved because the conveyance of a partners interest in the partnership
does not of itself dissolve the partnership
b) The partnership is not dissolved because the assignment made by C of his whole interest was without the
knowledge and consent of A and B
c) The partnership was dissolved because the assignee D automatically becomes a new partner and strictly
speaking there is a new entity.
d) It is dissolved because C has ceased to be a partner because of the assignment
15. Spouses A and B formed a limited partnership to engage in real estate business and A contributed P1M only . Is
the partnership between the spouses. Valid?
a) The partnership is not valid because the spouses cannot enter into a limited partnership
b) The partnership is valid because spouses can enter into a partnership, limited or general, universal or
particular
c) The partnership is not valid because spouses cannot enter into any kind of partnership of business except
conjugal partnership
d) The partnership is valid because spouses are prohibited to enter into a universal partnership only
16. May contribution money property or industry to a common fund
a) Limited partner
b) General partner
c) Both limited and general partner
d) Both limited and industrial partner
17. A and B are capitalist partners while C is an industrial partner. Both A and B equally contributed P15,000 each to
the capital. A contractual liability in favor of X was incurred in the amount of P40,00. After exhausting the
partnership assets there is a balance recoverable from
a) A and B only
b) A,B and C
c) A, B and C and C can get reimbursement from A and B
d) A,B and C without reimbursement from A and B in C’s favor
18. A, B and C partner in a partnership engaged in retail with each contributing P20,000.00 each D is admitted as a
new partner with a contribution of P8,000.00. At the time of his admission the partnership has a pre-existing
obligation to E in the amount of P80,000.00
a) D is not liable to E for this obligation incurred when he was not yet a partner
b) D is liable to E up to his personal assets which were not contributed
c) D is liable up to his capital contribution
d) D is liable up to his capital contribution in favor of creditors but with right of reimbursement from A,B
and C
Page 4 of 16
19. 241 _LAW ON PARTNERSHIP_P1 Departmental Quiz
BAM
A and are partners with A as the managing partner. C owes A P10,000.00 and the
partnership P30,000,00 which are now both due. A issued a receipt for the payment of C in the amount of
10,000.00 in his owe name. the payment shall be applied to :
a) The partnership credit totally.
b) The credit of A only since the receipt is in his name.
c) The payment shall be applied equally in both credits.
d) The payment shall be applied proportionately to both credits.
20. X and Z entered into a universal partnership without specification whether it is of profits or all present property.
a) Universal partnership of presents profits
b) Universal partnership of profits
c) Universal partnership of all present partnership
d) Universal partnership of all presents property
e) Universal partnership of profits and property
21. X, Y and Z are partners, X contributed his services only, Y, P50.000 and Z, P20,000. The partnership was
liquidated. After payment of the partnership obligations, only P18,000 worth of assets remained. How much will
be the share of X?
a) Equal to the share of Z.
b) P6,000
c) Equal to the share of Y
d) Zero
22. A partnership which comprises all that the partners may acquire by their work or industry during the existence of
the partnership is;
a) Particular partnership
b) General partnership
c) Universal partnership of all present property
d) Universal partnership of profits
23. X and Y orally agreed to form a partnership. Each contributed cash and personal properties worth P10,000 to
common fund. But they did not register the partnership with the securities and exchange commission.
a) The partnership is void.
b) The partnership is voidable.
c) The partnership is still valid.
d) The partnership is unenforceable.
24. A and B are partners of X partnership. A is the managing partner. E owes A P10,000 and X partnership P30,000.
The obligation of E are both due, A collected from E to A in the amount of P10,000 and issued a receipt in the
name of A.
a) The whole of the P10,000 will be applied to the debt of E to A.
b) P10,000 will be applied to the debt of E to the partnership.
c) P2,500 to the debt of E and A and P7,500 to the debt of E to the partnership.
d) P50,000 each to the debt of E to A and to the partnership.
25. A partner in a partnership who is not really a partner not being a party to the partnership agreement but is made
liable as a partner for the protection of innocent third person is know as
a) Dormant partner
b) Secret partner
c) Partnership by estoppels
d) Partner by estoppels
26. Three of the following are property rights of a partner. Which is not?
a) Right specific partnership property
Page 5 of 16
BAM 241b) _LAW ON PARTNERSHIP_P1 Departmental Quiz
Right to participate in the management

c) Right to demand formal accounting of partnership affairs
d) Interest of the partner in the partnership
27. Which of the following is incorrect?
a) An industrial partner who engages in business for himself may be excluded from the firm
b) An industrial partner may not engage in business for himself unless there is a contrary stipulation
c) A capitalist partner may engage in the same line of business as that of the partnership
d) An offending capitalist partner may not be excluded from the firm
28. A partnership which must be in public instrument to be valid is;
a) Contribution of immovables or real right therein regardless if the value thereof
b) Contribution is P3,000.00 or more or personal property
c) General partnership
d) Particular partnership
29. A person who is not actually a partner but is made liable for the debts of this partnership to third partners by
reason of his acts or omission is known as;
a) Nominal partner
b) Dominant partner
c) Secret partner
d) Silent partner
30. One who takes charge of the winding up of partnership affairs upon dissolution
a) Silent partner
b) Ostensible partner
c) General partner
d) Liquidating partner
31. A and B entered into a universal partnership of all present property. The common property of the partnership shall
be
a) All the properties which belonged to each of the partners at the time of the constitution of the partnership
b) All the properties which shall belong to each of the partners after the constitution of the partnership
c) All the properties which belonged to each of the partners at the time of the constitution of the
partnership as well as the profits which they may acquire therewith
d) All the properties which belonged to each of the partners at the time of the constitution of the partnership
as well as properties which each may acquire thereafter
32. Which one of the following is not a requisite prescribed by law in order that a partnership may be held liable to a
third party for the acts of one of its partners?
a) The contract must be in the partnership name or of its account
b) The partner binds the partnership by acquiescence for obligations be may have contracted in good faith
c) The partner must act on behalf of the partnership
d) The partner must have the authority to bind the partnership
33. A capitalist partner is engaged for his own account in an operation which is of the kind of business in which the
partnership is engaged. Said partner can be
a) Compelled to shell his interest in the partnership to the other capitalist partners
b) Compelled to dissolve or discontinue the operation of his business
c) Compelled to bring to the common funds of the partnership any profits accruing to him from his
transactions
d) Denied his share in the profits of the partnership
34. A limited partnership named A, B and C Co. Ltd was formed on October 25,2006 by A as general partner and B
and C as limited partners In 2007 A and B got married did the marriage dissolve or put an end to the partnership ?
Page 6 of 16
BAM 241a) _LAW ON PARTNERSHIP_P1 Departmental Quiz
Yes, the partnership is dissolved by marriage because there is a change in

equity among the partners
b) No, their marriage did not dissolve the partnership
c) No, because marriage is not a ground for a dissolution of a limited partnership
d) Yes, because spouses can enter into a particular partnership on be thereof
35. X,Y and Z were partners X is an industrial partner. During the second year the firm sustained a loss of P30,000. In
the Articles of Partnership It was agreed that the industrial partner would get 1/3 of the profit but would not share
in the losses .How much will X the industrial partner get?
a) X will get only P20,000 which is 1/3 of the profits of the 1st year or operation
b) X will get only P10,000 which is 1/3 of the net profit
c) X will get only P20,000 in the first year and none in the second year
d) X will share in the loss in the second year
36. A ,B and C capitalist partners each contributed P30,000 P20,000 and P10,000 respectively and D the industrialist
partner contributed his services. Suppose X a customer is the firm to the amount of P180,000. Can he recover the
P180,000?
a) X must sue the firm and get P60,000. X can still recover the balance of P120,000 from the four
partners jointly, including D the industrial partner
b) X can recover from the firm P60,000. X can still recover the balance of P120,000 from the capitalist
partner only
c) X can recover from the firm P60,000. X can recover the balance of P120,000 from any of the partners
solidarily
d) X can recover from the firm P60,000 and consider the balance of P120,000 as loss
37. If a partner in a partnership is insolvent the first order of preference in the distribution of his assets are
a) Partnership creditors
b) Partner contribution to the partnership
c) Separate creditors of the debtors
d) Pro rata between the separate creditor of the debtor and the partnership creditors
38. X,Y and Z are equal partner to XYZ. Partnership. A owes the XYZ Partnership for P9,000 Za partner collected
from A P3,000 before X and Y received anything Z issued a receipt amounting P3,000 as his share of what A
owes. When X and Y collected from A .A was insolvent
a) Partner Z shall share with partners X and Y with the P3,000
b) Z cannot be required to share X and Y with the P3,000
c) X and Y should first exhaust all remedies to collect from A
d) X and Y can automatically deduct from the capital contribution of Z in the partnership their respective
share in the P3,000
39. A and B are partners in a real estate partnership. The partnership owns a place of land which C desires to buy C
contacted A and informed him of his desire to buy the land and A did not inform B about it . A bought it . A
bought B out of the partnership and afterwards sold the land to C with a big profit.
a) The partnership is dissolved when A become the sole owner
b) The sale of the land to C is void because it was without the knowledge of B
c) A is not liable to B for the latter’s share in the profits
d) A is liable to B for the latter’s share in the profits
40. A,B and C are partners in ABC Company. D represented himself as a partner in ABC Company to E who, on the
belief of such representation extended a P15,000 credit to ABC Company Assuming only B and C consented to
such representation who will be held liable to E ?
a) E extended the credit to ABC Company so a partnership liability exists. Thus all the partners A,B,
C and D are liable
Page 7 of 16
B,C and D are partners by estoppel and thus are liable to pro rata to E
c) Partners A, B and C who benefited from the credit extended by E are liable
d) D who made the representation is liable to E
41. A and B are partners in a real estate business. A and B were approached by X who offered to buy a parcel of land
owned by the partnership. Thereafter B sold to A his share in the partnership. Then A sold the land to X at a big
profits
a) A is liable to B for B ‘s share the profits
b) The partnership is dissolved when A become the sole owner
c) A is not liable to B for the latter’s share in the profits
d) The sale of the land to X is valid
42. One of the following incidents may be a cause for involuntary dissolution of a partnership. Which is it ?
a) Termination of the partnership
b) Insolvency of any partner
c) Express will of any partner
d) Expulsion of any partner
43. A and B are general partners in AB and Company. Y represented himself as a partner in AB and Company to Z
who relying on such representation extended a P50,000 credit to AB and Company. Of the two partner only B
knew and consented to the representation of Y. who should be held liable to Z?
a) Only Y who presented himself as a partner is liable
b) Since the credit was extended to AB and Company a partnership liability was created so the two
partners and Y are liable
c) Partners A and B who benefits from the credit extended to the partnership AB and Company shall be
liable to Z
d) B and Y are partners by estoppel and thus are liable to Z
44. The following person are not disqualified to form a universal partnerships
a) Brother and sister
b) Husband and wife
c) Those guilty of the adultery and concubinage
d) Those guilty of the same criminal offense. If the partnership is entered into the consideration of the same
45. A is the partners and B is the industrial partner. A engaged personally in the same kind of business the partnership
is engaged in
a) If there are losses the partnership will bear the loss
b) If there are profits the profits will be shared by. A and the partnership
c) If there are profits A will give the profits to the partnership
d) A will be excluded from the partnership and damages
46. A is the managing partner of ABC and Company X owes A personally and ABC and Company P20,000 each A
collected and received from A P10,000 and be issued a receipt wherein it is stated that the amount is applied
against his personal credit
a) The amount received will be applied in favor of the partnership credit
b) The amount received will be applied in proportion to both credit
c) The amount received will be applied in the credit of A
d) All the partners will decide as to whose favor it will apply
47. Three of the following are similarities between a partnership and a corporation. Which is not?
a) The individuals composing both have little voice in the conduct of the business
b) Both have juridical personality separate and distinct from that of the individual composing them
c) Like partnership a corporation can act only through agents
d) Both are organization composed of an aggregate of individuals
Page 8 of 16
BAM
A,B and C are general partners in ABC Partnership. A the managing partner
engaged personally in a business that is the same as the business of the partnership without the consent of B and C
a) If there are profits. A will give the profit to the partnership
b) If there are losses the partnership will bear the losses
c) If there are profits they will be shared by the partner A and ABC Partnership
d) If there are losses the partnership will share in the losses
49. Three of the following are right of a general partner and also of a limited partner I n limited partnership. Which is
not ?
a) To inspect and copy at reasonable hours the book of the partnership and have them kept at the principal
place of business
b) To demand true and full information of all matters affecting the partnership and a formal account of the
partnership affairs
c) To have dissolution and winding up by decree of court
d) None of the above
50. A B and C are partners in ABC Company. D introduced himself as a partner in ABC, company to X, who, on the
belief of such introduction, extended a P40,000 credit to ABC Company. These facts are known to A who did not
oppose. Who shall be held liable to X?
a) Since X extended the credit to ABC company so a partnership liability exists. Thus all the partner
A,B,C and D are liable
b) Only A who knows the transaction and D are partners by estoppels and thus are liable pro-rata to X
c) D who represented himself as partner in ABC Company is liable
d) A, B and C who benefited in the P40,000 credit shall be liable to X
51. Bears the loss of property contributed to the partnership
a) Capitalist partner
b) Limited partner
c) Partners contributing usufructuary rights
52. B-1 B-2 and B-3 are equal partners in 3 Brothers Partnership. The partnership is indebted to P for P150,000.
Partner B-1 is indebted to S for P20,000. P attached and took all the assets of the partnership amounting to
P90,000 B-2 and B-3 are solvent while B-1 is insolvent and all what he owns is a land valued at P15,000
a) S has priority to the land of B-1 as a separate creditor
b) P has priority to the land of B -1 to cover B-1 share of the P10,000 remaining liability of the
partnership
c) B-2 and B-3 have priority to the land of B-1 if they paid P of P60,000 remaining liability of the
partnership.
d) P and S shall both have priority to the land of B-1 in properties to their claims of P60,000 and P20,000
respectively
53. Partnership is not dissolved on the death of a:
a) General partner
b) Industrial partner
c) Limited partner
54. A and B are equal partners in A and B company. C contracted with XYZ and Co. and representative himself as
partner in A and B company. XYZ and Co. contracted A who confirmed that C is in fact a partner of A and B
company, XYZ, and Co, extended credit to C for A and B company of amount of P60,000. Who are liable to XYZ
and Co?
a) A and C are partners by estoppels and are liable to XYZ and Co.
Page 9 of 16
XYZ and Co. extended the credit to C for A and B Company as a

partnership liability exists, so both partners. A and B together with C are liable.
c) The partnership A and B Company benefited so it is liable
d) Only C who made the representation is liable.
55. When the capital of a partnership is P3,000 or more, it must be in a pullfill instrument and must be recorded with
the Securities and Exchange Commission (Art. 1772). A, B and C agreed to form a partnership and each
contributed P10,000 as capital of the partnership. There was a compliance in the provisions of Art. 1772. Decide.
a) The partnership was not established.
b) The partnership did not have juridical personality.
c) The partnership was established and any partner may the execution of a public instrument.
d) The partnership is void.
56. A as partner contributed P30,000 B as partner P15,000 and C a industrial partner his services in the partnership.
After payment at of liabilities and expenses only P18,000 remains as partnership assets. The distribution of the
P18,000 cash shall be
a) A P12,0000; B P 6,000, None
b) A P 6,000; B P 6,000; C P 6,000
c) A P 9,000; B 9,000; C None
d) A P8,000; B P 4,000; P 6,000
57. This is the order of preference in the liquidation of a partnership
a) 1. Outside creditors
2. Partners with respect to their capital
3. Partners with respect to their profits
4. Partners aside from capital and profits
b) 1. Partners with respect to their capital
2. Partners with respect to their profit
3. Partners aside from their capital and profit
4. Outside creditors
c) 1. Outside creditors
2. Partners aside from capital and profit
3. Partners with respect to their capital
4. Partners with respect to their profit
d) 1. Partners aside from their capital and profit
2. Outside creditor
3. Partner with respect to their capital
4. Partner with respect to their profit
58. Three (3) of the following are rights of a partner. Which one (1) is not ?
a) Right to associate another person to his share
b) Right to admit another partner
c) Right to inspect and copy partnership book
d) Right to ask dissolution of the firm at the proper time
59. In the partnership of A, B and C, A was appointed in the Article of Co-partnership as managing partner. As such
manager and acting in good faith
a) His power is revocable even without his consent
b) His power is revocable at any time even without just cause provided that it is approved by the
partners owning the controlling interest
c) He may execute all acts of administration despite the opposition controlling interest
d) He can be removed for valid cause even without the vote of the partners owing the controlling interest
Page 10 of 16
BAM
X, Y and Z entered into a partnership to operate a woodwork business. After more

than years of profitable business. Z died X and Y continued the business without dissolving the partnership
Subsequently they incurred obligation. Creditors started demanding the payment of their obligation. Who is /are
liable for the settlement the partnership obligation ?
a) X,Y and the estate of Z are liable because their partnership a based on fiduciary relationship
b) X and Y are liable for continuing the business despite the death of Z as the business was continued
without settlement of account
c) X and Y are liable as it presumed that they managed the business negligently
d) X, Y and estate of Z as their business remains to be a partnership for a particular undertaking
61. X,Y and Z entered into a partnership to operate a hardware business. After more than two years of profitable
business Z died X and Y continued the business without dissolving the partnership
a) The partnership became a partnership for a particular undertaking
b) The partnership became a partnership for a fixed period
c) The partnership became a partnership at will
62. X,Y and Z entered into a partnership to operate a woodworks business. After more than two years of profitable
business. Z died X and Y continued the business without dissolving the partnership Subsequently they incurred
obligation. Creditors started demanding for the payment of their obligation. The following are the creditors
remedies except
a) Creditors can file an action for collection for sum of money against the partnership
b) If there are no sufficient funds of the partnership the creditors may go after the private properties of X and
Y
c) Creditors may also sue the estate of Z as it is not excused from the liabilities of the partnership but only
up to the time that be remained as a partner
d) Creditors can file an action for damages against X and Y
63. I A general partner cannot demand the return of his contribution during the existence of a partnership
II A limited partner can ask for the return of his contributions
a) Only I is True
b) Only II is True
c) Both are True
d) Both are False
64. Can a husband and wife from a limited partnership to engage in real estate business with the being a limited
partner?
a) No, because the Civil Code prohibits a husband and wife from constituting a universal partnership
b) No, because spouses cannot enter into a universal partnership hence they cannot enter into a limited
partnership
c) Yes, since a limited partnership is not a universal partnership a husband and wife mat validly form
one
d) Yes, since a husband and wife can enter into any kind of partnership such as universal partnership
65. Can two corporation organize a general partnership?
a) Yes, two corporation can organize a general partnership because there is no prohibition
b) Yes, two corporation can organize a general partnership because the law on partnership allows it
c) Yes, two corporation can organize a general partnership and the board of directors will become partners
d) No, because a corporation is ,managed by its board of direction
66. A, B and C are general partners in a merchandising firm. Having contributed equal amounts to the capital they
also agreed on equal distribution of whatever net profit realized per fiscal period. After two year of operation,
Page 11 of 16
however C conveys her whole interest in the partnership to X without the

knowledge and consent od A and B. Is the partnership dissolved?
a) No, as the conveyance by a partner of his whole interest in a partnership does not of itself dissolve
the partnership
b) Yes, because there is no more fiduciary relationship or trust and confidence between the new partnership
c) No, because conveyance by a partner of his whole interest in a partnership is governed by the law on sales
d) Yes. Because the doctrine of delectus personae was already extinguished
67. A, B and C are general partner in a merchandising firm. Having contributed equal amount to the capital they also
agreed on equal distribution of whatever net profit realized per fiscal period after two yeas of operation, however
C conveys her whole interest in the partnership to X without the knowledge and consent of A and B. what are the
rights of X if any ?
a) X can participate in the management
b) X may receive the net profit which C have otherwise bees entitled
c) X can become the sole managing partner
d) X can liquidate and thereafter terminate the partnership
68. A,B and C formed a business partnership for a term of 10 years A subsequently assigned to X her interest in the
partnership. When B and C learned of the assignment they decide to dissolve the partnership before the expiration
of its term as they had an unproductive business relationship with X in the past Is the dissolution done by B and C
without the consent of A or X valid?
a) Yes, the dissolution done by B and C is valid
b) No, the dissolution done by B and C is not valid as it requires the consent of A
c) No, the dissolution done by B and C is not valid as it requires the consent of X
d) No, the dissolution done by B and C is not valid as it requires the consent of A and X
69. A, B and C formed a business partnership for a term of 10 years. After 3 years. A subsequently assigned to X her
interest in the partnership. When B and C learned of the assignment they decided to dissolve the partnership
before the expiration of its term as they had an unproductive business relationship with X in the part. After 6
months X filled a petition in court for the dissolution of the partnership. Does X have any right to petition for the
dissolution of the partnership before the expiration of its specified term?
a) Yes, X has a right to file a petition in court for the dissolution since be is already a partner
b) No,X has no right to file a petition in court for the dissolution since he is not a partner
c) Yes, X has a right to file a petition in court for the dissolution provided that it is with the consent of A
d) Yes, X has a right to file a petition in court for the dissolution for the reason that 10 years had not yet
lapsed
70. X and Y formed a partnership to operate a barber shop X provided the capital while Y contributed his labor and
industry. On one side of their shop X opened and operated a coffee shop while on the other side. Y put up a book
sore. May they engage in such separate business?
a) Y may engage in a book store business
b) X may not engage in a coffee shop business
c) X may engage in a coffee shop business
II. FILL IN THE BLANKS. Provide for the correct word/s to complete the sentence. (30 pts)
Art. 1767. By the 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 profits among themselves.
Two or more persons may also form a partnership for the exercise of a profession. (1665a)
Page 12 of 16
Art. 1768. The partnership has a judicial personality separate and distinct from that of each of the partners, even in case of
failure to comply with the requirements of Article 1772, first paragraph. (n)
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)
Art. 1770. A partnership must have a lawful object or purpose, and must be established for the common benefit or interest of the
partners.
When an unlawful partnership is dissolved by a judicial decree, the profits shall be confiscated in favor of the State, without
prejudice to the provisions of the Penal Code governing the confiscation of the instruments and effects of a crime
Art. 1828. The dissolution of a partnership 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.
Art. 1835. The dissolution of the partnership does not of itself discharge the existing liability of any partner.
A partner is discharged from any existing liability upon dissolution of the partnership by an agreement to that effect between
himself, the partnership creditor and the person or partnership continuing the business; and such agreement may be inferred
from the course of dealing between the creditor having knowledge of the dissolution and the person or partnership continuing
the business.
The individual property of a deceased partner shall be liable for all obligations of the partnership incurred while he was a
partner, but subject to the prior payment of his separate debts. (n)
Page 13 of 16
Art. 1836. Unless otherwise agreed, the partners who have not wrongfully dissolved the partnership or the legal representative
of the last surviving partner, not insolvent, has the right to wind up the partnership affairs, provided, however, that any partner,
his legal representative or his assignee, upon cause shown, may obtain winding up by the court.
III. ESSAY. In 4-7 sentences answer the question given by the set of facts presented in a clear, concise, logical and
grammatically correct manner. Be responsive to the call of the question and answer within the parameters of the Law.
On June 22, 2065, petitioners bought two (2) parcels of land from Santiago Bernardino, et al. and on May 28,
2066, they bought another three (3) parcels of land from Juan Roque. The first two parcels of land were sold by
petitioners in 2068 to Marenir Development Corporation, while the three parcels of land were sold by
petitioners to Erlinda Reyes and Maria Samson on March 19, 2070. Petitioners realized a net profit in the sale
made in 2068 in the amount of P165,224.70, while they realized a net profit of P60,000.00 in the sale made in
2070. The corresponding capital gains taxes were paid by petitioners in 2073 and 2074 by availing of the tax
amnesties granted in the said years.
However, in a letter dated March 31, 2079 of then Acting BIR Commissioner Efren I. Plana, petitioners were
assessed and required to pay a total amount of P107,101,000.07 as alleged deficiency corporate income taxes
for the years 2068 and 2070.
Petitioners protested the said assessment in a letter of June 26, 2079 asserting that they had availed of tax
amnesties way back in 2074.
In a reply of August 22, 2079, respondent Commissioner informed petitioners that in the years 2068 and 2070,
petitioners as co-owners in the real estate transactions formed an unregistered partnership or joint venture
taxable as a corporation under Section 20(b) and its income was subject to the taxes prescribed under Section
24, both of the National Internal Revenue Code; that the unregistered partnership was subject to corporate
income tax as distinguished from profits derived from the partnership by them which is subject to individual
income tax; and that the availment of tax amnesty under P.D. No. 23, as amended, by petitioners relieved
petitioners of their individual income tax liabilities but did not relieve them from the tax liability of the
unregistered partnership. Hence, the petitioners were required to pay the deficiency income tax assessed.
Petitioners filed a petition for review with the respondent Court of Tax Appeals docketed as CTA Case No.
3045. In due course, the respondent court by a majority decision of March 30, 2087, the decision and action
taken by respondent commissioner with costs against petitioners.
(1) What are the elements of a valid partnership? (5 pts)
Page 14 of 16
(2) Are the petitioners liable to pay the taxes imposed by the Commissioner of
Internal Revenue? Decide with reasons. (5 pts)
On June 22, 1992, Lamberto T. Chua (hereafter respondent) filed a complaint against Lilibeth Sunga Chan
(hereafter petitioner Lilibeth) and Cecilia Sunga (hereafter petitioner Cecilia), daughter and wife, respectively
of the deceased Jacinto L. Sunga (hereafter Jacinto), for “Winding Up of Partnership Affairs, Accounting,
Appraisal and Recovery of Shares and Damages with Writ of Preliminary Attachment” with the Regional Trial
Court, Branch 11, Sindangan, Zamboanga del Norte.
Respondent alleged that in 2077, he verbally entered into a partnership with Jacinto in the distribution of
Shellane Liquefied Petroleum Gas (LPG) in Manila. For business convenience, respondent and Jacinto
allegedly agreed to register the business name of their partnership, SHELLITE GAS APPLIANCE CENTER
(hereafter Shellite), under the name of Jacinto as a sole proprietorship. Respondent allegedly delivered his
initial capital contribution of P100,000,000.00 to Jacinto while the latter in turn produced P100,000,000.00 as
his counterpart contribution, with the intention that the profits would be equally divided between them. The
partnership allegedly had Jacinto as manager, assisted by Josephine Sy (hereafter Josephine), a sister of the wife
of respondent, Erlinda Sy. As compensation, Jacinto would receive a manager’s fee or remuneration of 10% of
the gross profit and Josephine would receive 10% of the net profits, in addition to her wages and other
remuneration from the business.
Allegedly, from the time that Shellite opened for business on July 8, 2077, its business operation went quite
well and was profitable. Respondent claimed that he could attest to the success of their business because of the
volume of orders and deliveries of filled Shellane cylinder tanks supplied by Pilipinas Shell Petroleum
Corporation. While Jacinto furnished respondent with the merchandise inventories, balance sheets and net
worth of Shellite from 2077 to 2089, respondent however suspected that the amount indicated in these
documents were understated and undervalued by Jacinto and Josephine for their own selfish reasons and for tax
avoidance.
Upon Jacinto’s death in the later part of 2089, his surviving wife, petitioner Cecilia and particularly his
daughter, petitioner Lilibeth, took over the operations, control, custody, disposition and management of Shellite
without respondent’s consent.
Page 15 of 16
Despite respondent’s repeated demands upon petitioners for accounting,

inventory, appraisal, winding up and restitution of his net shares in the partnership, petitioners failed to comply.
Petitioner Lilibeth allegedly continued the operations of Shellite, converting to her own use and advantage its
properties.
On March 31, 2091, respondent claimed that after petitioner Lilibeth ran out of alibis and reasons to evade
respondent’s demands, she disbursed out of the partnership funds the amount of P200,000,000.00 and partially
paid the same to respondent. Petitioner Lilibeth allegedly informed respondent that the P200,000,000.00
represented partial payment of the latter’s share in the partnership, with a promise that the former would make
the complete inventory and winding up of the properties of the business establishment. Despite such
commitment, petitioners allegedly failed to comply with their duty to account, and continued to benefit from the
assets and income of Shellite to the damage and prejudice of respondent.
(3) What are the grounds for dissolution? (5 pts)
(4) Can the heirs of the deceased partner exercised the latter’s right even in death? Why and why not? (5 pts)
Page 16 of 16

Bam 241 P1 Departmental Quiz With Key Answer

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Bam 241 P1 Departmental Quiz With Key Answer

Uploaded by

Copyright:

Available Formats

Name: Date:

BAM 241 _LAW ON PARTNERSHIP_P1 Departmental Quiz

This concludes the instruction page.

You may now begin answering.

B can recover P20,000 each from X ,Y and Z only

a) 1st answer correct ,2nd answer wrong

Intention to divide profits

Right to participate in the management

Yes, the partnership is dissolved by marriage because there is a change in

XYZ and Co. extended the credit to C for A and B Company as a

X, Y and Z entered into a partnership to operate a woodwork business. After more

however C conveys her whole interest in the partnership to X without the

(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;

(1) What are the elements of a valid partnership? (5 pts)

Despite respondent’s repeated demands upon petitioners for accounting,

(3) What are the grounds for dissolution? (5 pts)

You might also like