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.

II. The existence of a partnership may be disputed by an interested party. The issue as to whether a partnership exists is a factual

matter to be decided on the basis of all circumstances. No single factor usually is controlling. Where circumstances taken singly

may be inadequate to prove the intent to form a partnership, nevertheless the collective effect of these circumstances may be such

as to support a finding of the existence of the parties’ intent.

• Statement I is true, Statement II is false.

• Statement I is false, Statement II is true.
• Both statements are true. (correct answer, your response)
• Both statements are false.
• Answer not given.

It means that it is a contract that is perfected by mere consent because all the partners had a meeting of the minds to enter into a

contract of partnership.

• Consensual (correct answer, your response)

• Principal
• Preparatory
• Commutative

In partnership, proof is necessary that there be contribution of money, property, or industry to a common fund with the

intention of dividing the income or profits obtained therefrom.

II. If the partnership agreement provides simply that one of the parties is to give and the other is to receive a half interest

in the profits of an enterprise started by the former, without anything being promised by the latter toward the

accomplishment of its object, no enforceable contract exists, but if the latter takes part in carrying on the enterprise, and

thus subjects himself to partnership liability to outsiders, he furnishes sufficient consideration for the former’s promise and

acquires all the rights of a co-partner.

III. Clearly, under the law on estoppel, on behalf of a corporation and those benefited by it, knowing it to be those acting

on behalf of a corporation and those benefited by it, knowing it to be without valid existence, are held liable as general

partners.

• False, True, False

• True, False, True
• True, True, True (correct answer, your response)
• False, False, False
• Answer not given.

There are two (2) tests to determine the existence of a partnership:

I. First Test: Determine whether or not there is an agreement to contribute money, property, or industry to a common fund.

II. Second Test: Determine whether or not there is an intent of the contracting parties to divide the profits among themselves.

• Only I is True.
• Only II is True.
• Both statements are true. (correct answer, your response)
• Both statements are false.
• Answer not given.
A partnership may be constituted in any form, save when immovable property or real right are contributed thereto or when the

partnership has a capital of below P3,000, in which case a public instrument shall be necessary.

• True
• False (correct answer, your response)

Since partnership is fundamentally contractual, all the essentials of a valid contract must be present. Under the law, the

following requisites must concur:

1) Consent and capacity of the contracting parties; 2) Object which is the subject matter of the contract; and 3) Cause

which is established.

II. Unless otherwise provided in the partnership agreement, no one can become a member of the partnership association

without the consent of all the other associates. The fiduciary nature of the partnership relation and the liability of each

partner for the acts of the others within the scope of the partnership business require that each person be granted the

right to choose with whom he will be associated in the firm.

III. Among partners, mutual agency arises and the doctrine of delectus personae allows them to have the power, although

not necessarily the right, to dissolve the partnership. Verily, any one of the partners may, at his sole pleasure, dictate a

dissolution of the partnership at will. He must, however, act in good faith, not that the attendance of bad faith can prevent

the dissolution of the partnership but that it can result in a liability for damages.

• True, True, False (your response)

• False, True, True
• True, True, True (correct answer)
• False, False, False
• Answer not given.

A group of men pursuing a learned art as a common calling in the spirit of public service.

• Business
• Service
• Profession (correct answer, your response)
• Accreditation
• Artists

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.

• True (correct answer, your response)

• False

A document prepared by a notary public in the presence of the parties who sign it before witnesses.

• Private instrument
• Public instrument (correct answer, your response)
• Commercial instrument
• Confidential instrument
• Answer not given.

The following are instances, except one, when a partnership is unlawful. Which is the exception?

• A partnership formed for the purpose of selling illegal drugs.

• A partnership formed for the purpose of buying lands. (correct answer, your response)
• A partnership formed for to create illegal gambling.
• A partnership formed for the purpose of selling smuggled cars.
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.

• True (correct answer, your response)

• False

An entity created by law and given certain legal rights and duties of a human being or a being, real or imaginary, who for the

purpose of legal reasoning is treated more or less as a human being.

• natural person
• juridical person (correct answer, your response)
• normal person
• Answer not given.

It is one where all the partners are general partners

II. It is one where there is at least one general partner and one limited partner.

• I. General partnership, II. Limited Partnership (correct answer, your response)

• I. De jure partnership, II. De facto partnership
• I. Limited partnership, II. De jure partnership
• I. Limited partnership, II. General partnership
• I. General partnership, II. De jure partnership

It means that each partner must contribute money, property, or industry. Of course, a partner can contribute one, some or all of

these.

• Consensual
• Nominate
• Onerous (correct answer, your response)
• Preparatory

The right to practice law is not a natural or constitutional right but is in the nature of a privilege or franchise. A partnership

for the practice of law cannot be likened to partnerships formed by other professionals or for business.

II. The practice of law is intimately and peculiarly related to the administration of justice and should not be considered like

an ordinary “money-making trade.’’

III. A profession has been defined as “a group of men pursuing a learned art as a common calling in the spirit of public

service — no less a public service because it may incidentally be a means of livelihood.”

• True, False, True

• False, True, False
• True, True, True (correct answer, your response)
• False, False, False
• Answer not given.

It means that it is a contract which has a name in law.

• Consensual
• Nominate (correct answer, your response)
• Preparatory
• Onerous

A partnership may be constituted in any form.

• True (correct answer, your response)

• False
 The contribution of a partner may be in the three forms of money, property and industry, or any two or one of them. A

partnership may, therefore, exist even if it is shown that the partners have not contributed any capital of their own to a

“common fund’’ for the contribution may be in the form of credit or industry not necessarily cash or fixed assets.

II. The law does not specify the kind of industry that a partner may contribute.

III. A limited partner in a limited partnership, however, cannot contribute mere industry or services.

• False, True, False

• True, False, True
• True, True, True (correct answer, your response)
• False, False, False
• Answer not given.

X and Y orally agreed to form a partnership. Each contributed cash worth P15,000 to a common fund. But they did not register the

partnership with the Securities and Exchange Commission.

• The partnership is void.

• The partnership is viodable.
• The partnership is still valid. (correct answer, your response)
• The partnership is valid and unenforceable.

May contribute money, property, or industry to a common fund.

• Limited partner
• General partner (correct answer, your response)
• Both limited and general partner
• Both limited and industrial partner

Where a partnership not duly organized has been recognized as such in its dealings with certain persons.

• ordinary partnership
• de jure partnership
• de facto partnership
• partnership by estoppel (correct answer, your response)

The right to choose with whom a person wishes to associate himself is the very foundation and essence of that partnership.

• True (correct answer, your response)

• False

The birth and life of a partnership is predicated on the mutual desire and consent of the partners.

• partnership at will (correct answer)

• partnership for a particular undertaking (your response)
• partnership for a fixed term
• Answer not given.

The following are the effects of unlawful partnership, except:

• The partnership is voidable from the very beginning. (correct answer, your response)
• The profits shall be confiscated in favor of the government.
• The instruments or tolls and proceeds of the crime shall be forfeited in favor of the government.
• The contributions of the partners shall not be confiscated.

When 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.

• Corporation
• Cooperative
 • Solo proprietorship
• Partnership (correct answer, your response)

Any external thing over which the rights of possession, use and enjoyment are exercised.

• money
• property (correct answer, your response)
• industry
• Answer not given.

A partnership may be created without any definite intention to create it. It is the substance and not the name of the

arrangement, which determines the legal relationship, although the designation adopted by the parties should be

considered as indicative of their intention.

II. In case there is no written agreement between the parties, the existence or non-existence of a partnership must be

determined from the conduct of the parties, any documentary evidence bearing thereon, and the testimony of the parties.

III. A partnership liability may be imposed upon a person under principles of estoppel where he holds himself out, or

permits himself to be held out, as a partner in an enterprise. In such cases, there is no actual or legal partnership relation

but merely a partnership liability imposed by law in favor of third persons.

• True, True, False (your response)

• False, False, True
• True, True, True (correct answer)
• False, False, False
• Answer not given.

It comprises all that the partners may acquire by their industry or work during the existence of the partnership.

• universal partnership of all profits (correct answer)

• universal partnership of all present property (your response)
• particular partnership
• limited partnership

An inventory is still required if aside from real property, personal property is contributed.

• True (correct answer, your response)

• False

Partnership with a capital of P3,000 or more must register with the SEC. Registration requirement is mandatory.

• True
• False (correct answer, your response)
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.

• universal partnership of all profits (your response)

• universal partnership of all present property (correct answer)
• particular partnership
• limited partnership

An unjustified dissolution by a partner can subject him to action for damages.

II. When an unlawful partnership is dissolved by a judicial decree, the profits shall not be confiscated in favor of the State.

• Statement I is true, Statement II is false. (correct answer, your response)

• Statement I is false, Statement II is true.
• Both statements are true.
• Both statements are false.
• Answer not given.

The partners must have a proprietary interest in the business or undertaking, that is, they must contribute capital which

may be money or property, or their services, or both, to the common business. The very definition of partnership provides

for this element.

II. Without the element of mutual contribution to a common fund there can be no partnership, although its presence is not

necessarily a conclusive evidence of the existence of partnership.

III. In the absence of money or property, or in concurrence with these two, the law permits the contribution of industry.

The word “industry” has been interpreted to mean the active cooperation, the work of the party associated, which may be

either personal manual efforts or intellectual, and for which he receives a share in the profits (not merely salary) of the

business.

• True, True, False

• True, False, True
• True, True, True (correct answer, your response)
• False, False, False
• Answer not given.

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 juridical personality.

• True
• False (correct answer, your response)

A general partner is liable only to the extent of his contribution while a limited partner is liable beyond beyond his contribution.

• True
• False (correct answer, your response)

It is one which has not complied with all the legal requirements for its creation.

• De facto partnership (correct answer, your response)

• De jure partnership
• Real partnership
• Ordinary partnership
 A partnership must have a lawful object or purpose and must be established for the common benefit or interest of the

partners.

II. Where an immovable property is contributed in a partnership a private instrument shall be necessary.

• Statement I is true, Statement II is false. (correct answer, your response)

• Statement I is false, Statement II is true.
• Both statements are true.
• Both statements are false.
• Answer not given.

Articles of universal partnership entered into without specification of its nature, only constitute a universal partnership of

all present property.

II. Persons who are prohibited from giving each other any donation or advantage cannot enter into universal partnership.

• Statement I is true, Statement II is false.

• Statement I is false, Statement II is true. (correct answer, your response)
• Both statements are true.
• Both statements are false.
• Answer not given.

It means that the contribution of each partner, whether money, property or industry, is considered as the equivalent of the

contribution of the other partners.

• Consensual
• Principal
• Preparatory
• Commutative (correct answer, your response)

The following are disqualified to form a universal partnership, except one:

• Brother and sister (correct answer, your response)

• Husband and wife
• Those guilty of adultery and concubinage.
• Those guilty of the same offense, if the partnership is entered into in consideration of the same.

There are two requirements where the capital of the partnership is P3,000.00 or more, in money or property, namely:

(a) The contract must appear in a public instrument; and

(b) It must be recorded or registered with the Securities and Exchange Commission.

However, failure to comply with the above requirements does not prevent the formation of the partnership or affect its liability and

that of the partners to third persons.

• True (correct answer, your response)

• False

The latin phrase "delectus personae" means

• choice of the person (correct answer, your response)

• choice of the people
• choice of the public
• choice of the new generation
• Answer not given.

It is one where the persons, by words spoken or written or by conduct, represents themselves, or consents to another representing

them to anyone, as partners in an existing partnership or with one or more persons not actual partners.

• Partnership by estoppel (correct answer, your response)

 • Partnership by prescription
• Closed partnership
• Partnership sole

A partnership which has for its object determinate things, their use or fruits, or specific undertaking, or the exercise of a profession

or vocation.

• universal partnership of all profits

• universal partnership of all present property
• particular partnership (correct answer, your response)
• limited partnership

An oral contract of partnership is as good as a written one.

• True (correct answer, your response)

• False

X and Y verbally entered into a partnership with each of them contributing P2,000 each and some personal properties in the

amount of P500 each. The partnership contract is:

• unenforceable because the amount involved exceeds P500.

• void because it is not in public instrument.
• valid. (correct answer, your response)
• void, because it is not registered with the SEC.

Any immovable property to be acquired must be in the partnership name but if conveyed, it is not necessary that it be in the

partnership name.

• True
• False (correct answer, your response)

The following are requisites of partnership, except:

• There must be a valid contract.

There must be a contribution of money, property, and industry to a common fund. (correct
•
answer, your response)
• The partnership must be organized for gain or profit.
The partnership should have a lawful object or purpose, and must be established for the
•
common benefit or interest of the partners.

It is one where the life or period of existence of the partnership has been agreed upon by the partners.

II. It is one where it will exist until the purpose is accomplished.

I. Partnership with a fixed term, II. Partnership for a particular undertaking (correct answer, your
•
response)
• I. Partnership for a particular undertaking, II. Partnership with a fixed term
• I. Partnership at will, II. Partnership for a particular undertaking
• I. Partnership with a fixed term, II. Partnership at will
• I. Partnership with a fixed term, II. De facto partnership

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.

• True (correct answer, your response)

• False
Which of the following is not a requisite prescribed by law in order that the partnership may be held liable to a third party for the

acts of one of the partners?

The partners bind the partnership by consenting for obligations he may have contracted in good
• faith.

• The partner must have the authority to bind the partnership. (correct answer, your response)

• The contract must be in the name of the partnership.

• The partner must act on behalf of the partnership.

Capitalist partners are not bound to contribute additional capital.

II. Every partner is responsible to the partnership for damages suffered by it through its fault.

• Statement I is true, Statement II is false.

• Statement I is false, Statement II is true.

• Both statements are true. (correct answer, your response)

• Both statements are false.

• Answer not given.

The partnership cannot use an identical or deceptively confusingly similar to that of any existing partnership or

corporation or to any other name already protected by law.

II. All partners shall be liable pro-rata with all their property and after all the partnership assets have been exhausted, for

the contracts which may be entered into in the name and for the account of the partnership.

• Statement I is true, Statement II is false.

• Statement I is false, Statement II is true.

• Both statements are true. (correct answer, your response)

• Both statements are false.

• Answer not given.

A conveyance by a partner of his whole interest in the partnership dissolves the partnership.

II. In case of a dissolution of the partnership, the assignee is entitled to receive his assignor's interest and may require an

account from the date only of the last account agreed to by all the partners.

• Statement I is true, Statement II is false.

• Statement I is false, Statement II is true. (correct answer, your response)

• Both statements are true.

• Both statements are false.

• Answer not given.

Those partner in an existing legal partnership.

 • Secret partner

• Partner by estoppel

• De facto partner

• Real partner (correct answer, your response)

The partnership books shall be at the principal place of business of the partnership, and every partner shall at any

reasonable hour have access to and may inspect and copy any of them.

II. Partnership books are examples of partnership property and every partner is a co-owner of specific partnership

property.

• Statement I is true, Statement II is false.

• Statement I is false, Statement II is true.

• Both statements are true. (correct answer, your response)

• Both statements are false.

• Answer not given.

A, B, and C are partners. They contributed the following: A- P6,000; B-P4,000, and C- industry. They agreed that the profit and loss

ratio shall be A-35%, B- 25%, and C-40% (35:25:40). How shall the loss of P10,000 be distributed?

• A-P6,000, B-P4,000, C- none

• A-P3,500, B-P2,500, C-P4,000 (correct answer, your response)

• A-P3,333, B-P3,333, C-P3,333

• A-P5,000, B-P2,500, C- none

If the things contributed are fungible or if they were contributed to be sold, the risk shall be borne by the partnership.

II. A stipulation which excludes one or more partners from any share in the profits or losses is voidable.

• Statement I is true, Statement II is false. (correct answer, your response)

• Statement I is false, Statement II is true.

• Both statements are true.

• Both statements are false.

• Answer not given.

In case it should have been stipulated that none of the managing partners shall act without the consent of the others, the

concurrence of the majority shall be necessary for the validity of the acts.

II. Every partner may associate another person with him in his share, and the associate shall be admitted into the

partnership without the consent of all the other partners.

 • Statement I is true, Statement II is false.

• Statement I is false, Statement II is true.

• Both statements are true.

• Both statements are false. (correct answer, your response)

• Answer not given.

The partner who has been appointed manager in the articles of partnership may execute all acts of ownership.

II. If two or more partners have been intrusted with the management of the partnership without specification of their

respective duties, each one may separately execute all acts of administration.

• Statement I is true, Statement II is false.

• Statement I is false, Statement II is true. (correct answer, your response)

• Both statements are true.

• Both statements are false.

• Answer not given.

The partners are governed by fiduciary relationship, that is, mutual trust and confidence.

II. As a rule, the capitalist partners can engage for their own account in any operation which is of the kind of business in

which the partnership is engaged.

• Statement I is true, Statement II is false. (correct answer, your response)

• Statement I is false, Statement II is true.

• Both statements are true.

• Both statements are false.

• Answer not given.

Those who does not take active part in the business and is not known to the public as partner. Thus, they are both a secret and

silent partner.

• Dormant partner (correct answer, your response)

• Ostensible partner

• Secret partner

• Liquidating partner

Those who cannot be held liable to third persons for partnership obligations.

• Limited partner (correct answer, your response)

• Capitalist partner

• Industrial partner
 • General partner

Those who became members of the partnership after its establishment.

• Secret partner

• Partner by estoppel

• De facto partner

• Incoming partner (correct answer, your response)

Those who are not really partners but represent themselves, or consent to another or others representing them to anyone as

partners in an existing partnership or in one that is fictitious or apparent.

• Real partner

• Partner by estoppel (correct answer, your response)

• Secret partner

• De facto partner

Every partner is a creditor of the partnership for whatever he may have promised to contribute thereto.

II. The mutual contribution to a common fund is the first test in order to have a contract of partnership.

• Statement I is true, Statement II is false.

• Statement I is false, Statement II is true. (correct answer, your response)

• Both statements are true.

• Both statements are false.

• Answer not given.

The birth and life of a partnership at will is predicated on the mutual desire and consent of the partners.

II. The right to choose with whom a person wishes to associate himself is the very foundation and essence of that

partnership.

• Statement I is true, Statement II is false.

• Statement I is false, Statement II is true.

• Both statements are true. (correct answer, your response)

• Both statements are false.

• Answer not given.

The following are the legal relations created by a contract of partnership, except:

• Relations between third persons. (correct answer, your response)

 • Relations between the partners on one hand and the partnership on the other hand.

• Relations between the partners on one hand and the third persons on the other hand.

• Relations between the partnership and the third persons.

Those who do not take active part in the business or affairs of the partnership though they share in the profits or losses.

• Managing partner

• Ostensible partner

• Dormant partner

• Silent partner (correct answer, your response)

Those who takes active part and known to the public as a partner in the partnership.

• Ostensible partner (correct answer, your response)

• Secret partner

• Liquidating partner

• Dormant partner

Those whose connection with the partnership is not known to the public.

• Ostensible partner

• Liquidating partner

• Secret partner (correct answer, your response)

• Dormant partner

The partners shall contribute equal shares to the capital of the partnership, unless there is a stipulation to the contrary.

II. The risk of specific and determinate things contributed to the partnership so that only their use and fruits may be for the

common benefit, shall be borne by the partner who owns them.

• Statement I is true, Statement II is false.

• Statement I is false, Statement II is true.

• Both statements are true. (correct answer, your response)

• Both statements are false.

• Answer not given.

Every partnership shall operate under a firm name, which may or may not include the name of one or more of the

partners.

II. 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 of which he is a member binds the partnership.
 • Statement I is true, Statement II is false.

• Statement I is false, Statement II is true.

• Both statements are true. (correct answer, your response)

• Both statements are false.

• Answer not given.

X, Y, and Z are partners who contributed P10,000 each to the capital of the partnership. D owes the partnership P3,000. Z

collected from D P1,000 before X and Y could receive anything from D, who later became insolvent and therefore, they could not

collect their shares.

• Z cannot be required to share what he already received from D.

• X and Y should first exhaust all remedies to collect from D.

• Z shall share the P1,000 with his co-partners X and Y. (correct answer, your response)

X and Y can automatically deduct from the capital contribution of Z in the partnership their
•
respective shares of P333.33.

A, B, and C are partners. They contributed the following: A- P6,000; B-P4,000, and C- industry. They agreed that the profit and loss

ratio shall be A-35%, B- 25%, and C-40% (35:25:40). How shall the profit of P10,000 be distributed?

• A-P5,000, B-P5,000, C- none

• A-P3,333, B-P3,333, C-P3,333

• A-P3,500, B-P2,500, C-P4,000 (correct answer, your response)

• A-P6,000, B-P4,000, C- none

Those who manage actively the business or affairs of the partnership.

• Silent partner

• Ostensible partner

• Managing partner (correct answer, your response)

• Dormant partner

A is the managing partner of A & B partnership. X is indebted to A for P25,000 and the partnership for P75,000. When both debts

matured, X paid A P10,000 and the latter issued a receipt for his personal credit.

The payment for P10,000 shall be applied

• To the whole debt owing to A

• 1/4 in favor of A and 3/4 in favor of the partnership (correct answer, your response)

• debt owing to the partnership

• 1/2 in favor of A and 1/2 in favor of the partnership

A partnership begins from the moment of meeting of the minds.

II. Limited partners have absolute right to participate in the management.

• Statement I is true, Statement II is false.

• Statement I is false, Statement II is true.

• Both statements are true.

• Both statements are false. (correct answer, your response)

• Answer not given.

A partner who has received his share of a partnership credit, when the other partners have not collected theirs, shall be

obliged, if the debtor should thereafter become insolvent, to bring to the partnership capital what he received even though

he may have given receipt for his share only.

II. Partners shall render on demand true and full information of all things affecting the partnership to any partner.

• Statement I is true, Statement II is false.

• Statement I is false, Statement II is true.

• Both statements are true. (correct answer, your response)

• Both statements are false.

• Answer not given.

Being a contract of partnership, each partner must share in the profits and losses of the venture. That is the essence of a

partnership.

II. An industrial partner can engage in business for himself, unless the partnership expressly permits him to do so.

• Statement I is true, Statement II is false. (correct answer, your response)

• Statement I is false, Statement II is true.

• Both statements are true.

• Both statements are false.

• Answer not given.

A partnership is a separate juridical entity, the shares to be paid out to the partners is necessarily limited only to its total

resources.

II. Before the partners can be paid their shares, the creditors of the partnership must first be compensated. After all, the

creditors have been paid, whatever is left of the partnership assets becomes available for the payment of the partners

shares.
 • Statement I is true, Statement II is false.
• Statement I is false, Statement II is true.
• Both statements are true. (correct answer, your response)
• Both statements are false.
• Answer not given.

The certificate of limited partnership shall state the following, except:

The time, if agreed upon, when the contribution of each general partner is to be returned.
•
(correct answer, your response)
The additional contributions, if any, to be made by each limited partners and the times at which
•
events on the happening of which they shall be made.
• The term by which the partnership is to exist.
The amount of cash and a description of and the agreed value of the other property contributed
•
by each limited partner.

The surname of a limited partner shall not appear in the partnership name unless:

I. It is also the surname of a limited partner.

II. Prior to the time when the limited partner became such, the business has been carried out on under a name in which his

surname appeared.

• Statement I is true, Statement II is false.

• Statement I is false, Statement II is true. (correct answer, your response)
• Both statements are true.
• Both statements are false.
• Answer not given.

A limited partner whose name appears in a partnership name is liable as a general partner to partnership creditors, as a

rule.

II. A limited partner whose name appears in a partnership name shall become a general partner, as a rule.

• Statement I is true, Statement II is false. (correct answer, your response)

• Statement I is false, Statement II is true.
• Both statements are true.
• Both statements are false.
• Answer not given.

A partnership is dissolved, except:

• Death of a partner
• Insolvency of a partner or of the partnership
• Partnership business can only be carried on at a loss. (correct answer, your response)
• Partnership business has become unlawful

A person who is a general, and also at the same time a limited partner, shall have all the rights and powers be subject to

all the restrictions of a general partner.

 II. A limited partner's interest is not assignable.

• Statement I is true, Statement II is false. (correct answer, your response)

• Statement I is false, Statement II is true.
• Both statements are true.
• Both statements are false.
• Answer not given.

A limited partner's surname cannot appear in the partnership name, as a rule.

II. After the formation of a limited partnership, additional limited partners may be admitted upon filing of an amendment to

the original certificate.

• Statement I is true, Statement II is false.

• Statement I is false, Statement II is true.
• Both statements are true. (correct answer, your response)
• Both statements are false.
• Answer not given.

In the ordinary course of events, the legal personality of the expiring partnership persists for the limited purpose of

winding up and closing of the affairs of the partnership.

II. A withdrawing partner is no longer liable to a third party creditor of the old partnership.

• Statement I is false, Statement II is true.

• Statement I is true, Statement II is false. (correct answer, your response)
• Both statements are true.
• Both statements are false.
• Answer not given.

It means the dissociation by a partner, inclusive of resignation or withdrawal, from the partnership that thereby dissolves it.

• Dissolution
• Liquidation
• Termination
• Retirement (correct answer, your response)

Generally, in the pursuit of a partnership business, its capital is either increased by profits earned or decreased by losses

sustained.

II. As a general rule, upon the dissolution of a commercial partnership, the succeeding partners or parties have the right

to carry on the business under the old name.

• Statement I is true, Statement II is false.

• Statement I is false, Statement II is true.
• Both statements are true. (correct answer, your response)
• Both statements are false.
 • Answer not given.

The requisites for the return of contributions of a limited partner are the following, except:

The consent of only limited partners, unless the return of the contribution may be rightfully
•
demanded. (correct answer, your response)
All liabilities of the partnership, except liabilities to general partners and to limited partners on
• account of their contributions, have been paid or there remains property of the partnership
sufficient to pay them.
• The consent of all members, unless the return of the contribution may be rightfully demanded.
The certificate is cancelled or so amended as to set forth the withdrawal or reduction of the
•
contribution.

The following are rights of a partner who has not caused dissolution wrongfully, except:

• To have the partnership property applied to discharge the liabilities of the partnership.
To have the surplus, if any, applied to pay in cash the net amount owing to the respective
•
partners.
To continue the business in the same name either by themselves or jointly with others during
•
the agreed term of the partnership and for that purpose may possess the partnership property.
To be indemnified for damages caused by the partner who did not caused the dissolution
•
wrongfully. (correct answer, your response)

In a limited partnership, a general partner shall have all the rights and powers and be subject to all the restrictions and

liabilities of a partner in a partnership without limited partners.

II. As a rule, the general partners in a limited partnership can do only acts of ownership.

• Statement I is true, Statement II is false. (correct answer, your response)

• Statement I is false, Statement II is true.
• Both statements are true.
• Both statements are false.
• Answer not given.

A partnership transacting business with third persons is disputably presumed to be a limited partnership.

II. The contributions of a limited partner may be cash or property, but not services.

• Statement I is true, Statement II is false.

• Statement I is false, Statement II is true. (correct answer, your response)
• Both statements are true.
• Both statements are false.
• Answer not given.

If a partner is insolvent, the first in the order of preference in the distribution of his asset is:

• Partnership creditors
• Partner's contribution to the partnership
• Separate creditors of the partner-debtor (correct answer, your response)
• Pro rata between the separate creditors and the partnership creditors
 An assignee acquires all the rights of the limited partner regardless when he becomes a substituted limited partner.

II. Under a statute which provides that the membership of a limited partnership consists of specified “persons”, a

partnership cannot become a limited partner. An existing general partnership may be changed into a limited one, and a

partner in the former general partnership may become a limited partner in the limited partnership thus formed.

• Statement I is true, Statement II is false.

• Statement I is false, Statement II is true. (correct answer, your response)
• Both statements are true.
• Both statements are false.
• Answer not given.

A limited partnership is dissolved by the insanity of a limited partner.

II. A universal partnership entered into without designation is considered one of profits.

• Statement I is true, Statement II is false.

• Statement I is false, Statement II is true. (correct answer, your response)
• Both statements are true.
• Both statements are false.
• Answer not given.

The essential requisites in the formation of a limited partnership are the following:

I. The certificate of a limited partnership.

II. The certificate of a limited partnership must be filed in the Office of the Securities and Exchange Commission.

• Statement I is true, Statement II is false.

• Statement I is false, Statement II is true.
• Both statements are true. (correct answer, your response)
• Both statements are false.
• Answer not given.

The transfer by a partner of his partnership interest does not make the assigneen of such interest a partner of the firm,

nor entitle the assignee to interfere in the management of the partnership of the business or to receive anything except

the assignee's profits.

II. Generally understood to mean an organization formed for some temporary purpose, a joint venture is likened to a

particular partnership.

• Statement I is true, Statement II is false.

• Statement I is false, Statement II is true.
• Both statements are true. (correct answer, your response)
• Both statements are false.
• Answer not given.
 In a limited partnership, the general partners need not secure the written consent or ratification by all of the limited

partners.

II. 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.

• Statement I is true, Statement II is false.

• Statement I is false, Statement II is true. (correct answer, your response)
• Both statements are true.
• Both statements are false.
• Answer not given.

As a rule, when a partnership is dissolved, any of the partners can bind the partnership.

II. Where the dissolution is caused by act, death, or insolvency of a partner, each partner is liable to his co-partners for

his share of any liability created by any partner acting for the partnership as if the partnership have not been dissolved.

• Statement I is true, Statement II is false.

• Statement I is false, Statement II is true. (correct answer, your response)
• Both statements are true.
• Both statements are false.
• Answer not given.

Inasmuch as the word “assets” in the law of partnership is not to be confined to assets at law, but includes all assets

applicable to the payment of the partnership debts, the goodwill of the partnership, if of money value, is usually

considered part of the property and assets of the firm, in the absence of a contract, express or implied, to the contrary.

II. The name of a firm is an important part of the goodwill and its use may be protected accordingly. The firm name of the

partnership, as distinguished from the name of an individual, is an element of the partnership enterprise, a substantial

asset thereof, and passes with a sale of the partnership property and goodwill.

III. The goodwill of a business is a proper subject of sale. However, a saleable goodwill can exist only in a commercial

partnership. It cannot arise in a professional partnership, such as partnership of attorneys or physicians, the reputation of

which depends on the individual skill or personal qualifications of its members.

• True, False, True

• False, True, False
• All statements are true. (correct answer, your response)
• All statements are false.
• Answer not given.

A certificate shall be amended when, except:

• A person is substituted as a general partner. (correct answer, your response)

There is a change in the name of the partnership or in the amount or character of the
•
contribution of any limited partner.
• An additional limited partner is admitted.
 • A person is admitted as a general partner.

The dissolution of the partnership discharges the existing liability of any partner.

II. 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 payments of his separate debts.

• Statement I is true, Statement II is false.

• Statement I is false, Statement II is true. (correct answer, your response)
• Both statements are true.
• Both statements are false.
• Answer not given.

The dissolution of the partnership means that the juridical entity was immediately terminated and that the distribution of

the assets to its partners should perfunctorily follow.

II. The partnership, although dissolved, continues to exist until its termination, at which time the winding up of its affairs

should have been completed and ther net partnership assets are partitioned and distributed to the partners.

• Statement I is true, Statement II is false.

• Statement I is false, Statement II is true. (correct answer, your response)
• Both statements are true.
• Both statements are false.
• Answer not given.

A limited partner shall be liable as general partner, unless:

He renounces his share in the profits after knowledge of the error that he was made a general
•
partner. (correct answer, your response)
• He takes part in the control of the business.
• His surname appears in the firm name.
• His contribution is industry.

The legal personality of the expiring partnership persists for the limited purpose of winding up and closing of the affairs of

the partnership.

II. After dissolution, all the transactions of the partnership should only pertain to liquidation which will happen over a

period of time.

• Statement I is true, Statement II is false.

• Statement I is false, Statement II is true.
• Both statements are true. (correct answer, your response)
• Both statements are false.
• Answer not given.

The use by the person or partnership continuing the business of the partnership name, or the name of a deceased

partner as part thereof, shall make the individual property of the deceased partner liable for any debts contracted by such
 person or partnership.

II. The liability of a third person becoming a partner in the partnership continuing the business to the creditors of the

dissolved partnership shall be satisfied out of the partnership property only, unless there is a stipulation to the contrary.

• Statement I is true, Statement II is false.

• Statement I is false, Statement II is true. (correct answer, your response)
• Both statements are true.
• Both statements are false.
• Answer not given.

A, B, and C are partners in ABC Partnership. A and B contributed P10,000 each while C contributed service. After payment of the

partnership liabilities to creditors, only P15,000 remains. In the absence of stipulation to the contrary, the share of C shall be

• Zero (correct answer, your response)

• P5,000
• P10,000
• P15,000

A universal partnership of present property shall include the profits which the partners may acquire therewith such as

properties to be acquired through legacy, donation or inheritance.

II. After dissolution, the partners may still enter into contracts in the name of the dissolved partnership if it is for the

purpose of winding up.

• Statement I is true, Statement II is false.

• Statement I is false, Statement II is true. (correct answer, your response)
• Both statements are true.
• Both statements are false.
• Answer not given.

Since it is the partnership, as a separate and distinct entity, that must refund the shares of the partners, the amount to be

refunded is necessarily limited to its total resources.

II. In other words, the partnership can only pay out what it has in its coffers, which consists of all its assets.

• Statement I is true, Statement II is false.

• Statement I is false, Statement II is true.
• Both statements are true. (correct answer, your response)
• Both statements are false.
• Answer not given.

The certificate of limited partnership shall state the following, except:

The right, if given, of a general partner to demand and receive property other than cash in
•
return for his contribution.
• The right, if given, of the partners to admit additional limited partners.
 The right, if given, of one or more of the limited partners to priority over other limited partners,
• as to contributions or as to compensation by way of income, and the nature of such priority.
(your response)
The right, if given, of the remaining general partner or partners to continue the business on the
•
death, retirement, civil interdiction, insanity or insolvency of a general partner.

The requisites for an assignee to become a substituted limited partner are the following, except:

The certificate of limited partnership must be registered with the Department of Trade and
•
Industry or the Cooperative Development Authority. (correct answer, your response)
All the partners must consent of if the limited partner-assignor, being empowered in the
•
certificate of limited partnership, gives the assignee that right.
• The certificate of limited partnership must be amended.
The certificate of limited partnership must be registered with the Securities and Exchange
•
Commission.

The certificate of limited partnership shall state the following, except:

The right, if given, of one or more of the general partners to priority over other general partners,
•
as to contributions or as to compensation by way of income. (correct answer, your response)
The share of the profits or the other compensation by way of income which each limited partner
•
shall receive by reason of his contribution.
• The right, if given, of a limited partner to substitute an assignee as contributor in his place.
• The right, if given, of the partners to admit additional limited partners.

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

• substituted limited partner (correct answer, your response)

• very special partner
• sub-partner
• ostensible partner

In extra-judicial liquidation, the following will wind-up the partnership, except:

• The managing partner who has the controlling interest. (correct answer, your response)
• The liquidating partner or partners as agreed upon by all of the partners.
• The partners who have not wrongfully dissolved the partnership.
• The legal representative of the last surviving partner who is not insolvent.

The change in the relation of the parties caused by any partner ceasing to be associated in the carrying on, as might be

distinguished from the winding up of the business.

• Liquidation
• Termination
• Winding up
• Dissolution (correct answer, your response)

As a rule, the liability of that limited partner is up to the extent of his contribution.

II. An assignee 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.

 • Statement I is true, Statement II is false.
• Statement I is false, Statement II is true.
• Both statements are true. (correct answer, your response)
• Both statements are false.
• Answer not given.

Where a partnership contract is rescinded on the ground of fraud or misrepresentation of one of the parties thereto, the party

entitled to rescind is entitled to, except:

• right of lien or right of retention

• right of dissolution (correct answer, your response)
• right of subrogation
• right of indemnification

A general partner is always the capitalist partner in a limited partnership.

II. A general partnership is dissolved by the insanity of the partner.

• Statement I is true, Statement II is false.

• Statement I is false, Statement II is true.
• Both statements are true.
• Both statements are false. (correct answer, your response)
• Answer not given.

A partnership is dissolved, except:

• Death of a partner
• Insolvency of a partner or of the partnership
• Partnership business can only be carried on at a loss. (correct answer, your response)
• Partnership business has become unlawful

It means the dissociation by a partner, inclusive of resignation or withdrawal, from the partnership that thereby dissolves it.

• Dissolution
• Liquidation
• Termination
• Retirement (correct answer, your response)

The following are rights of a partner who has not caused dissolution wrongfully, except:

• To have the partnership property applied to discharge the liabilities of the partnership.
To have the surplus, if any, applied to pay in cash the net amount owing to the respective
•
partners.
To continue the business in the same name either by themselves or jointly with others during
•
the agreed term of the partnership and for that purpose may possess the partnership property.
To be indemnified for damages caused by the partner who did not caused the dissolution
•
wrongfully. (correct answer, your response)

In extra-judicial liquidation, the following will wind-up the partnership, except:

• The managing partner who has the controlling interest. (correct answer, your response)
 • The liquidating partner or partners as agreed upon by all of the partners.
• The partners who have not wrongfully dissolved the partnership.
• The legal representative of the last surviving partner who is not insolvent.

The change in the relation of the parties caused by any partner ceasing to be associated in the carrying on, as might be

distinguished from the winding up of the business.

• Liquidation
• Termination
• Winding up
• Dissolution (correct answer, your response)

Where a partnership contract is rescinded on the ground of fraud or misrepresentation of one of the parties thereto, the party

entitled to rescind is entitled to, except:

• right of lien or right of retention

• right of dissolution (correct answer, your response)
• right of subrogation
• right of indemnification

As a rule, when a partnership is dissolved, any of the partners can bind the partnership.

II. Where the dissolution is caused by act, death, or insolvency of a partner, each partner is liable to his co-

partners for his share of any liability created by any partner acting for the partnership as if the partnership

have not been dissolved.

• Statement I is true, Statement II is false.

• Statement I is false, Statement II is true. (correct answer, your response)
• Both statements are true.
• Both statements are false.
• Answer not given.

A, B, and C are partners in ABC Partnership. A and B contributed P10,000 each while C contributed service. After payment of the

partnership liabilities to creditors, only P15,000 remains. In the absence of stipulation to the contrary, the share of C shall be

• Zero (correct answer, your response)

• P5,000
• P10,000
• P15,000

Since it is the partnership, as a separate and distinct entity, that must refund the shares of the partners, the

amount to be refunded is necessarily limited to its total resources.

II. In other words, the partnership can only pay out what it has in its coffers, which consists of all its assets.

• Statement I is true, Statement II is false.

• Statement I is false, Statement II is true.
• Both statements are true. (correct answer, your response)
• Both statements are false.
• Answer not given.

In the ordinary course of events, the legal personality of the expiring partnership persists for the limited

purpose of winding up and closing of the affairs of the partnership.

II. A withdrawing partner is no longer liable to a third party creditor of the old partnership.

• Statement I is false, Statement II is true.

• Statement I is true, Statement II is false. (correct answer, your response)
• Both statements are true.
• Both statements are false.
• Answer not given.

Inasmuch as the word “assets” in the law of partnership is not to be confined to assets at law, but includes all

assets applicable to the payment of the partnership debts, the goodwill of the partnership, if of money value, is

usually considered part of the property and assets of the firm, in the absence of a contract, express or implied,

to the contrary.

II. The name of a firm is an important part of the goodwill and its use may be protected accordingly. The firm

name of the partnership, as distinguished from the name of an individual, is an element of the partnership

enterprise, a substantial asset thereof, and passes with a sale of the partnership property and goodwill.

III. The goodwill of a business is a proper subject of sale. However, a saleable goodwill can exist only in a

commercial partnership. It cannot arise in a professional partnership, such as partnership of attorneys or

physicians, the reputation of which depends on the individual skill or personal qualifications of its members.

• True, False, True

• False, True, False
• All statements are true. (correct answer, your response)
• All statements are false.
• Answer not given.

The dissolution of the partnership discharges the existing liability of any partner.

II. 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 payments of his separate debts.

• Statement I is true, Statement II is false.

• Statement I is false, Statement II is true. (correct answer, your response)
• Both statements are true.
• Both statements are false.
• Answer not given.
 The dissolution of the partnership means that the juridical entity was immediately terminated and that the

distribution of the assets to its partners should perfunctorily follow.

II. The partnership, although dissolved, continues to exist until its termination, at which time the winding up of

its affairs should have been completed and ther net partnership assets are partitioned and distributed to the

partners.

• Statement I is true, Statement II is false.

• Statement I is false, Statement II is true. (correct answer, your response)
• Both statements are true.
• Both statements are false.
• Answer not given.

The legal personality of the expiring partnership persists for the limited purpose of winding up and closing of

the affairs of the partnership.

II. After dissolution, all the transactions of the partnership should only pertain to liquidation which will happen

over a period of time.

• Statement I is true, Statement II is false.

• Statement I is false, Statement II is true.
• Both statements are true. (correct answer, your response)
• Both statements are false.
• Answer not given.

If a partner is insolvent, the first in the order of preference in the distribution of his asset is:

• Partnership creditors
• Partner's contribution to the partnership
• Separate creditors of the partner-debtor (correct answer, your response)
• Pro rata between the separate creditors and the partnership creditors

A partnership is a separate juridical entity, the shares to be paid out to the partners is necessarily limited only

to its total resources.

II. Before the partners can be paid their shares, the creditors of the partnership must first be compensated.

After all, the creditors have been paid, whatever is left of the partnership assets becomes available for the

payment of the partners shares.

• Statement I is true, Statement II is false.

• Statement I is false, Statement II is true.
• Both statements are true. (correct answer, your response)
• Both statements are false.
• Answer not given.
 A universal partnership of present property shall include the profits which the partners may acquire therewith

such as properties to be acquired through legacy, donation or inheritance.

II. After dissolution, the partners may still enter into contracts in the name of the dissolved partnership if it is

for the purpose of winding up.

• Statement I is true, Statement II is false.

• Statement I is false, Statement II is true. (correct answer, your response)
• Both statements are true.
• Both statements are false.
• Answer not given.

The use by the person or partnership continuing the business of the partnership name, or the name of a

deceased partner as part thereof, shall make the individual property of the deceased partner liable for any

debts contracted by such person or partnership.

II. The liability of a third person becoming a partner in the partnership continuing the business to the creditors

of the dissolved partnership shall be satisfied out of the partnership property only, unless there is a stipulation

to the contrary.

• Statement I is true, Statement II is false.

• Statement I is false, Statement II is true. (correct answer, your response)
• Both statements are true.
• Both statements are false.
• Answer not given.

The transfer by a partner of his partnership interest does not make the assigneen of such interest a partner of

the firm, nor entitle the assignee to interfere in the management of the partnership of the business or to

receive anything except the assignee's profits.

II. Generally understood to mean an organization formed for some temporary purpose, a joint venture is

likened to a particular partnership.

• Statement I is true, Statement II is false.

• Statement I is false, Statement II is true. (your response)
• Both statements are true. (correct answer)
• Both statements are false.
• Answer not given.

Generally, in the pursuit of a partnership business, its capital is either increased by profits earned or

decreased by losses sustained.

II. As a general rule, upon the dissolution of a commercial partnership, the succeeding partners or parties

have the right to carry on the business under the old name.

• Statement I is true, Statement II is false.

• Statement I is false, Statement II is true.
 • Both statements are true. (correct answer, your response)
• Both statements are false.
• Answer not given.

Fernando, Filoteo, Foretunato and Fulgencio are partners in the firm F4 Enterprises which is engaged in the trading of fertilizers.

Fernando contributed P50,000.00; Filoteo, P30,000.00; and Fortunato, P20,000.00. Fulgencio is an industrial partner and manage

the partnership. Based on the foregoing facts, which of the following is incorrect?

a. Fernando may engage in the business of trading car spare parts without the consent of the
•
other partners.
b. Filoteo may be validly exempted from losses incurred by the partnership by agreement of
•
the partners. (correct answer, your response)
• c. Fulgencio may not engage in the car repair business without the consent of his co-partners.
• d. Fulgencio is exempt from losses although there is no agreement among the partners.

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

• a. An ostensible partner.
• b. A liquidating partner.
• c. A substituted limited partner. (correct answer, your response)
• d. A general-limited partner

A partnership for a fixed term or a particular undertaking which is continued after the expiration of the term or the attainment of the

undertaking becomes a partnership at will.

• True (correct answer, your response)

• False

John, Albert and Wilbert are partners in JAW Enterprises. Not having established yet their credit standing, three partners

requested Simon, a well-known businessman, to help them negotiate a loan from Carlos, a money lender. With the consent of

John, Albert and Wilfred, Simon represented himself as a partner of JAW Enterprises.

Assuming that JAW Enterprises was unable to pay the loan on due date at which time the assets of the partnership amounted

only to P120,000.00. From whom may Carlos collect the payment?

• a. Simon only for the whole amount of P120,000.00

• b. John, Albert and Wilfred who are liable jointly for P50,000.00 each. (your response)
c. JAW Enterprises for its assets of P120,000.00; thereafter John , Albert and Wilfred from
•
their separate property at P10,000.00 each.
d. JAW enterprises for its assets of P120,000.00; thereafter, John, Albert, Wilfred and Simon
•
from their separate assets at P7,500.00 each.

Ornussa, the owner of a vacant lot, leased the same to Florida under an agreement that the rental shall be paid by Florida at the

rate of 10% of the annual net income of the flower business that she would put up on the lot. A private agreement was signed by

the parties. In the first year of operations, Ornussa received from Florida the amount of P20,000.00 representing 10% of the net

income of the flower shop business.

 a. Ornussa is a partner of Florida by her mere receipt of a share of the net profits of the flower
•
business of Florida.
b. The relationship of Ornussa and Florida is only that of a lessor and lessee. (correct answer,
•
your response)
• c. Ornussa and Florida have a dual contract: partnership and lease.
d. Ornussa and Florida are not partners; neither are they lessor and lessee because their
•
agreement was not in a public instrument.

Assuming that no fraud is committed by or consented to by the partner concerned, which of the following statements is false?

A by-law which provides that one need not be the owner of a share of stock to become a director of the corporation.

a. Notice to any partner relating to partnership affairs while already a partner is notice to the
•
partnership.
b. Knowledge of a partner acting on the particular matter acquired by him while already a
•
partner is knowledge of the partnership.
c. Knowledge of a partner acting on the particular matter obtained by him before he became a
•
partner is knowledge of the partnership provided, he still remembers the same.
d. Knowledge of partner not acting on the particular matter obtained by him before he became
•
a partner is knowledge of the partnership. (correct answer, your response)

The sharing of gross returns does not of itself establish a partnership even if the persons sharing them have a joint or common

interest in the property from which the returns are derived.

• True (correct answer, your response)

• False

The minimum capital in money or property except when immovable property or real rights thereto are contributed, that will require

the contract of partnership to be in a public instrument and be registered with the Securities and Exchange Commission (SEC).

• a. P5,000.00
• b. P10,000.00
• c. P3,000.00 (correct answer, your response)
• d. P30,000.00

Articles of the universal partnership entered into without specification of its nature, only constitute a universal partnership of all

present property.

• True
• False (correct answer, your response)

A limited partner may assign his interest to another person.

• True (correct answer, your response)

• False

MARK Company, is a partnership engaged in the trading business, with Marquez, Alconcer, Ramos and Kanapi as partners.

Marquez, Alconcer and Ramos are capitalist partners, contributing P100,000.00, P60,000.00 and P40,000.00 respectively. Kanapi

is an industrial partner. The partners have a stipulation that Marquez shall not be liable for partnership liabilities. After three years
of continued losses, the partnership incurred liabilities of P200,000.00 at which time its assets had dwindled to P140,000.00. After

partnership assets have been exhausted, partnership creditors may go after separate assets of:

• a. All the partners. (correct answer, your response)

• b. Marquez, Alconcer, and Ramos, but not those Kanapi.
• c. Alconcer, Ramos and Kanapi, but not those of Marquez.
• d. Alconcer and Ramos only.

When a partner is not authorized to act for the partnership and the act of the partner is not for apparently carrying on the

business, the partnership shall be bound by the act is such partner if the third person was not aware of the partner’s lack of

authority.

• True (your response)

• False

Bettina, Erlinda, Amanda, Ursula, Teresa and Yolanda are partners in BEAUTY Enterprises, a dealer in cosmetics and other

beauty products, with contribution of P60,000.00, P50,000.00, P40,000.00, P30,000.00, P20,000.00 and P10,000.00 respectively.

No one was appointed as manager in the articles of partnership. Which is the operative act that will give juridical personality upon

a corporation?

• a. Bettina is the manager because she made the biggest investment.

b. Every act in the ordinary course of the business will have to be decided by the majority
•
determined on a per head basis.
c. Every act in the ordinary course of the business will have to be decided by the controlling
•
interest ( biggest investment) although the partners owning them do not constitute the majority.
All the partners are agents or managers of the partnership and any one of them may perform
•
acts of administration. (correct answer, your response)

Which of the following losses will not cause the dissolution of a partnership?

a. Loss before delivery of a specific thing which a partner has promised to contribute to the
•
partnership.
b. Loss of a specific thing after its delivery to and acquisition of its ownership by the
•
partnership from the partner who contributed the same. (correct answer, your response)
c. Loss after delivery of a specific thing where the partner contributed only its use and
•
enjoyment, He has reserved the ownership thereof.
d. Loss before delivery of a specific thing where the partner promised to contribute only use
•
and enjoyment, reserving the ownership thereof.

Daoang and Depante have been partners for more than 5 years in the purified water business. At the start of the sixth year,

Daoang assigned his interest in the partnership to Trinidad, but Depante objected on the ground that he did not want Trinidad to

be his partner.

a. Trinidad automatically became a partner of Depante when Daoang conveyed his interest to
•
him.
b. Daoang and Depante continue to be partners despite Daoang’s conveyance of his interest
•
to Trinidad. (correct answer, your response)
c. The partnership between Daoang and Depante was automatically dissolved when Daoang
•
conveyed his interest to Trinidad.
d. The conveyance by Daoang of his interest in the partnership to Trinidad entitled the latter to
•
inspect the books, and participate in the management, of the partnership.
John Solanda and Sons is a partnership composed of three partners, namely: Robert Solanda, Simon Solanda, and Theodore

Solanda. The partners are the sons of John Solanda who has retired from business but who suggested that they include his name

in the firm to give them an advantage since he is well-known in the business community.

I. John Solanda shall have all the rights of a general partner.

II. John Solanda shall have all the liabilities of general partner.

Based on the foregoing facts:

• a. Both statements are true.

• b. Both statements are false.
• c. Statement I is true; Statement II is false.
• d. Statement I is false; Statement II is true. (correct answer, your response)

The change in the relation of the partners caused by any ceasing to be associated in the carrying on the business is known as:

• a. Termination of the partnership.

• b. Winding up of partnership affairs.
• c. Liquidation of the partnership business.
• d. Dissolution of the partnership. (correct answer, your response)

An artificial person like a corporation, may be a partner in a partnership.

• True
• False (correct answer, your response)

Gregory, Edmond and Mark are partners in GEM Company with contributions of P10,000.00, P40,000.00 and P50,000.00,

respectively. Their agreement shows that they will share in the profits in the ratio of 2:3:4. During the year, the partnership

sustained a loss of P9,000.00. How shall this loss be divided among the partners?

• a. Equally at P3,000.00 each.

• b. Gregory, P900.00; Edmond P3,600.00; and Mark P4,500.00.
c. Gregory, P2,000.00; Edmond P3,000.00; and Mark P4,000.00 (correct answer, your
•
response)
d. The partners must establish first a loss sharing agreement before loss may be divided
•
because they failed to have an agreement on the division of loss.

Torres is indebted for P5,000.00 to MACE Trading Company, a partnership managed by Mendoza to whom Torres also owes

P10,000.00. The two debts which are both demandable are unsecured. Torres remits P4,500.00 to Mendoza in payment of his

debts to him. Accordingly, Mendoza issues a receipt for his own credit. To which credit should the payment be applied?

a. To Mendoza’s credit because the payment made by Torres is intended for his debt to
•
Mendoza who issues his own receipt.
b. To both the partnership credit and Mendoza’s credit proportionately at P1,500.00 and
•
P3,000.00, respectively. (correct answer, your response)
• c. To Mendoza’s credit because its amount is greater than that of the partnership credit.
d. To the partnership credit because the managing partner should not prefer his own interest to
•
that of the partnership.
The profits and losses of the partnership shall be divided equally among the partners if they have no profit and loss sharing

agreement.

• True
• False (correct answer, your response)

GREAT Company, a partnership engaged in the distribution of generators, is composed of George, Roland, Edmond, Albert and

Troy. George is managing partner. During the month of April, the following transactions were entered into by the following

partners on behalf of the partnership without any authority:

I. The sale of a generator by Roland to Juan Torres who was not aware that Roland had no authority. Juan Torres has paid for the

generator which is due for delivery.

II. The purchases of a car by Edmond from Intrepid Motors whose owner was not aware of Edmond’s lack of authority. The car

and the price are due for delivery and payment, respectively.

Based on the foregoing, the partnership is bound by:

• a. Transaction I only. (correct answer, your response)

• b. Transaction II only.
• c. Both Transaction I and II.
• d. Neither transaction I nor II.

A partner is a co-owner with his partners of specific partnership property. Such co-ownership:

• a. Allows a partner to assign his right such property.

b. Allows a partner to use such property for partnership purposes. (correct answer, your
•
response)
c. Entitles the spouse, children and other relatives of the partner to claim support from such
•
property.
• d. Gives private creditors of a partner to attach his right in such property.

Which of the following will not caused the automatic dissolution of a limited partnership?

• a. Death of a general partner.

• b. Death of a limited partner. (correct answer, your response)
• c. Insolvency of a general partner.
• d. Insanity of a general partner

Barranda wrote Salvador a letter wherein he placed an order for a laptop computer worth P80,000.00. In writing the letter,

Barranda used a stationery which had for its letterhead “Barranda and Bermudez, Real Estate Agents.” Bermudez is not really a

partner of Barranda, but they agreed to use the said letterhead to give a semblance of bigness by making it appear that the two of

them are partners. Salvador delivered the laptop computer but Barranda defaulted in his payment of its price. Against whom may

Salvador proceed?

• a. Barranda only since Bermudez is not his partner.

• b. Barranda only since the purchase of the laptop computer is his personal transaction
 c. Barranda and Bermudez since they are partners in so far as Salvador is concerned. (correct
•
answer, your response)
d. “Barranda and Bermudez, Real Estate Brokers,” only since an actual partnership was
• created between Barranda and Bermudez and it has a personality separate and distinct from
the two.

The partnership will bear the risk of the loss of three of the following things. Which is the exemption?

• a. Things contributed to be sold.

• b. Fungible thing or those that cannot be kept without deteriorating.
c. Things contributed so that only their use and fruits will be for the common benefits. (correct
•
answer, your response)
• d. Thing brought and appraised in the inventory.

A general partnership is automatically dissolved by reason of the insanity of a partner.

• True
• False (correct answer, your response)

The partnership shall be solidarily liable with all the partners If one partner acting within the scope of his apparent authority

receives money or property of a third person and misapplies it.

• True (correct answer, your response)

• False

A contract where 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.

• a. Voluntary association
• b. Corporation
• c. Partnership (correct answer, your response)
• d. Sole proprietorship

The private creditors of a partner shall have preference over such partner’s separate property.

• True (correct answer, your response)

• False

Palacios, Atienza, Tablante, Elamparo, Robledo, Ocampo and Sajenes are partners in PATEROS Poultry Farms. Palacios,

Atienza and Tablente have been appointed as managers of the firm with the stipulation that none shall act without consent of the

other two. On the date of the scheduled delivery of 500 kilos of frozen dressed chickens ordered by Caintacky Restaurant, heavy

rains caused a power failure and made transport difficult due to landslides. A local resident offered to purchase the dressed

chickens (which were already thawing) at 80% of the contract price. However, only Palacios and Atienza were around to decide

as Tablante, who was on business trip for the firm, could not be contacted due to poor communication signals.

a. Palacios and Atienza cannot decide by themselves because the managing partners must
•
act with unanimity.
b. Palacios and Atienza may decide by themselves since any further delay would result in
•
more losses to the firm. (correct answer, your response)
 c. Palacios and Atienza can decide by themselves since they constitute the majority among
• the managing partners, which is the required vote notwithstanding a stipulation that one cannot
act without the consent of the other managers.
d. The absence of Tablante cannot be alleged since there was a stipulation that none of the
•
managing partners shall act without the consent of the others.

PATOK Enterprises, a partnership engages in the business of renting out video films, is own by Patricia ,Alice, Tina, Olga and

Kaye, with Kaye as the manager. Diana owes PATOK Enterprises P6,000.00 and Olga, P4,000.00. Both debts are unsecured and

are already due. Diana pays Olga P4,000.00 for which Olga issues for her own receipt.

• a. The payment should be applied to Olga’s credit only. (correct answer, your response)
• b. The payment should be applied to PATOK’s credit only.
c. The payment should be divided proportionately between PATOK and Olga, at P2,400.00
•
and P1,600.00, respectively.
• d. The payment should be divided equally between PATOK and Olga at P2,000.00 each.

Campos, Urbano, Tamesis, and Encanto are partners in CUTE Company each one contributing P300,000.00 except for Encanto

who is an industrial partner. The partners agreed that Campos shall be exempted from the liability to third persons. Three years

continued losses after the formation of the partnership resulted in unpaid partnership liabilities to third persons amounting to

P500,000.00. Partnership assets have also been reduced to P200,000.00. From whom may third persons collect the partnership

debts?

a. From the partnership assets of P200,000.00; thereafter , from the partners for their separate
• assets at P100,000.00 each except Campos who was exempted from liability to the third
persons by agreement.
b. From the partnership assets of P200,000.00; thereafter from the partners for their separate
• assets P100,000.00 each except for Encanto since an industrial partner does not share in the
losses.
c. From the partnership of P200,000.00; thereafter from all the partners for their separate
•
assets at P75,000.00 each including Campos and Encanto. (correct answer, your response)
d. From the partnership assets of P200,000.00; thereafter, from Urbano and Tamesis only for
• their separate assets at P150,000.00 since Campos was exempted from liability by agreement
, while Encant, being an industrial partner is not liable in losses.

A newly admitted partner is liable for the partnership debts contracted before his admission to the extent of his contribution,

unless there is a contrary stipulation.

• True (correct answer, your response)

• False

In a limited partnership where there are 4 partners:

• a. All the partners must be limited partners.

• b. The number of limited partners must be equal to the number of general partners, that is, 2:2.
c. The number of limited partners must be greater than the number of general partners, that
•
is,3:1.
d. It is enough that there is one limited partner ,the rest may all be general partners. (correct
•
answer, your response)

TRIUMPH Company, a partnership engaged in the buying and selling of car spare parts, has for its partners and their respective

contributions the following: Tomas, P10,000.00; Ramon, P20,000.00; Ignacio, P30,000.00; Urbano, P40,000.00; Marcos,

P100,000.00; Pablo, P200,000.00; and Hilario, P300,000.00. No one was appointed as manager of the partnership. In the course
of the operation of the partnership, Tomas proposed to buy car spare parts from Dominion Motors, but his proposal was opposed

by Ramon.

Assuming that when voting took place, Marcos abstained, Ignacio and Urbano sided with Tomas, while Pablo and Hilario sided

with Ramon.

• a. None will prevail because the voting was equal.

b. The group of Ramon, Pablo and Hilario will prevail because they own the controlling
•
interest. (correct answer, your response)
• c. None will prevail because no one was appointed as manager of the partnership.
• d. The partners will have to appoint a manager in order to resolve the conflict.

In three of the following wrongful acts of partners, the partnership is solidarily liable with all the partners to third persons. Which

one is the exception?

a. For loss or injury caused to a third person by reason of the wrongful act or omission of a
•
partner acting in the ordinary course of business.
b. Where a partner acting within the scope of his apparent authority receives money or
•
property of a third person and misapplies it.
c. Where the partnership receives money or property of a third person in the ordinary course of
• business and such money or property is misapplied by a partner while it is in the custody of the
partnership.
d. For loss or injury caused to a third person by reason of the use of partnership property by a
•
partner for personal purpose. (correct answer, your response)

The partnership shall bear the loss of things which are contributed to the partnership to be sold.

• True (correct answer, your response)

• False

One of the following is not a characteristic of contract of partnership.

a. Real, in that the partners must deliver their contributions in order for the partnership contract
•
to be perfected. (correct answer, your response)
• b. Principal, because it can stand by itself.
• c. Preparatory, because it is a means by which other contracts will be entered into.
• d. Onerous, because the parties contribute money, property or industry to the common fund.

CROWN Enterprises is composed of partners Chuck who contributed P50,000.00; Rainier, P20,000.00; Oscar, P40,000.00;

Waldorf, P10,000.00; and Nelson, P5,000.00. No one was appointed as manager. Two proposed contracts were voted upon by

the partners during a meeting which took place as follows:

Contract I- Voting for approval of the contract were Chuck and Rainier; voting for rejection were Oscar, Waldorf and Nelson.

Contract II- voting for approval were Chuck and Rainier; voting for rejection were Oscar and Waldorf; Nelson abstained.

Which of the foregoing contracts are considered approved?

• a. Both contracts.
 • b. Neither of two contracts.
• c. Contract I only.
• d. Contract II only. (correct answer, your response)

A partner can engage in a business for himself without the consent of his co-partners if he is:

a. A capitalist partner whether or not the business he will engage in is of the same kind as or
•
different from the partnership business.
b. An industrial partner whether or not the business he will engage in is of the same kind as or
•
different from the partnership business.
c. A capitalist partner and business he will engage in is of a kind different from the partnership
•
business. (correct answer, your response)
d. An industrial partner and the business he will engage in is of a kind different from the
•
partnership business.

A man and a woman living together as husband and wife without the benefit of marriage may enter into a universal partnership.

• True
• False (correct answer, your response)

Federico, Alberto, Sofronio and Teodoro are partners in FAST Motorparts Company, a dealer of car spare parts. Federico, Alberto

and Sofronio invested P500,000.00, P200,000.00 and P300,000.00, respectively. Teodoro is an industrial partner who manages

the partnership. The partners have stipulated that Federico shall be exempt from liability to third persons. At the end of three

years, the assets of partnership have dwindled to P220,000.00 while its liabilities to third persons have a balance of P340,000.00.

How much ultimately will be the share of each partner after payment to third persons and the settlement among the partners?

• a. P30,000.00 for each partner.

• b. Federico, P60,000.00; Alberto P24,000.00; Sofronio P36,000.00 and Teodoro none.
c. Federico, none; Alberto P48,000.00; Sofronio P72,000.00 and Teodoro, none. (correct
•
answer, your response)
• d. Federico, none; Alberto, Sofronio and Teodoro, P40,000.00 each.

Spouses can validly enter into a particular partnership with each other.

• True (correct answer, your response)

• False

Which of the following will not cause the automatic dissolution of a general partnership?

• a. Death of a capitalist partner.

• b. Insolvency of a capitalist partner.
• c. Insanity of an industrial partner. (correct answer, your response)
• d. Civil interdiction of an industrial partner.

Donna, Emma, Alma and Rona are partners in DEAR Company with Donna as manager. Tricia owes DEAR Company P5,500.00

and Donna, in Donna’s personal capacity, P4,500.00. Tricia’s debt to Donna is secured by a pledge of her diamond ring. Both

debts are already due. Tricia pays P4,500.00 to Donna and tells her that the same is in payment of her debt to Donna. Donna,

thus, issues her personal receipt.

 a. The payment of P4,500.00 will be applied proportionately to the two credit; to the
• partnership credit as P2,475.00; to Donna’s credit at P2,025.00. This is so because Donna
should not place the interest before that of DEAR Company.
b. The payment of P4,500.00 will be applied entirely to Donna’s credit. (correct answer, your
•
response)
c. The payment will be applied in partial payment of the partnership credit of P5,500.00; hence,
•
there will be a balance of P1,000.00
d. Tricia, Donna and DEAR Company will have agreed as to which credit the payment shall
•
apply.

A partner may be limited and general partner at the same time.

• True (correct answer, your response)

• False

Benito, Ignacio, Gregorio, Artemio and Servando are partners in BIGAS Company which is engaged in the buying and selling of

rice. Benito is the manager. Ignacio was also given a special power of attorney by the partnership to buy a van for the company.

No other power was given to all the partners. In which of the following acts or contracts is the partnership not bound by the act of

the partner?

a. Ignacio buying rice for the partnership from Teodoro who has no knowledge of Ignacio’s
•
lack of authority.
• b. Ignacio buying a van for the partnership from Teresa.
c. Gregorio buying a van for the partnership from Thelma who has no knowledge of Gregorio’s
•
lack of authority. (correct answer, your response)
• d. Benito selling rice for the partnership.

What is the order of payment of liabilities of a dissolved limited partnership using the code number representing each liability?

“Summit Corporation” is liable only up to P30,000.00, its remaining assets, since it is different from A, B, C, D and E who are not

liable in their individual capacities.

I. Those owing to general partners other than for capital or for profit.

II. Those owing to creditors including limited partners, except those to limited partners on account of their contributions and

general partners.

III. Those owing to limited partners by way of their share in the profits and other compensation by way of income.

IV. Those owing to limited partners in respect to the capital of their contributions.

V. Those owing general partnership in respect of capital.

VI. Those owing general partnership in respect of profits.

• a. I,II,III,IV,V,VI.
• b. II,I,III,IV,V,VI
• c. II,I,III,IV,VI,V.
• d. II,III,IV,I,VI,V. (correct answer, your response)

Which of the following statements concerning the name of a partnership is false?

• a. The partnership name may include the name of only one of the partners.
• b. The partnership name may include the names of two or more, but not all of the partners.
• c. The partnership name may include the names of all the partners.
 d. The partnership cannot adopt a name which does not include the name of at least one of
•
the partners. (correct answer, your response)

Trevor owes P3,000.00 to CHAMP Company, a partnership composed of Charles, Harry, Albert, Mark and Prince, with Mark as

the manager who is authorized to collect all credits of the firm. He also owes Charles the amount of P6,000.00. Both debts are

already due. Trevor gives P3,000.00 to Charles in payment of his debt to the latter. Charles thus issues his own receipt.

a. Payment will be applied proportionately to the two credits at P1,000.00 for Charles’ credit
•
and P2,000.00 for CHAMP’s credit.
• b. Payment will be applied equally to the two credits.
• c. Payment will be applied in its entirety to Charles’ credit. (correct answer, your response)
• d. Payment will be applied in its entirety to CHAMP’s credit.

The following partnership contacts were presented to you for evaluation:

I. A partnership engaged in the sale of office supplies with a capital of P100,000.00 broken down into cash: P30,000.00; office

supplies for sale, P50,000.00; and office equipment P20,000.00. the agreement is in a private instrument.

II. A partnership engaged in the lease of office spaces with a capital of P700,000.00 broken down into: land, P100,000.00;

building, P500,000.00;cash P80,000.00; and office equipment P20,000.00. The agreement was both general and limited partners.

The agreement is not recorded with the Securities and Exchange Commission.

III. A partnership engaged in the trading of computers whose name is “Lamont Enterprises, Ltd.” It has a total capital of

P500,000.00 broken down into P100,000.00 cash and computers worth P400,000.00, contributed by both general and limited

partners. The agreement was subscribed and sworn to by all the partners before a notary public but not recorded with the

Securities and Exchange Commission.

Based on the following foregoing:

• a. Each partnership has a separate juridical personality. (correct answer, your response)
• b. I and II have separate juridical personality.
• c. II and III have separate juridical personality.
• d. None of the partnership has a separate juridical personality.

Which of the following statements is false when no one among the partners was appointed as manager?

• a. Each partner will be considered as agent of the partnership.

b. Anyone may make an important alteration in the immovable property of the partnership
• without the consent of the others provided it is useful to the partnership. (correct answer, your
response)
c. In case the act of one partner is opposed by another, the decision of the majority of the
•
partners will prevail.
d. In case of tie in the voting, the tie shall be resolved by the partner owning the controlling
•
interest.

In a universal partnership of profits, property belonging to each partner at the time of the establishments of the partnership shall

continue pertain to each partner with only the usufruct passing on to partnership.

• True (correct answer, your response)

• False
Which of the following statements is incorrect?

• a. Partnership creditors are preferred as to partnership assets.

b. Partnership creditors are preferred as to each partner’s separate assets. (correct answer,
•
your response)
• c. A partner’s separate creditors are preferred as to the partner’s separate assets.
• d. A partner’s separate creditors may attach a partner’s share in the partnership assets.

A person admitted as a partner into an existing partnership shall be liable up to the extent of his separate assets for what

obligations?

a. Obligations of the partnership existing at the time of his admission only if there was a
•
stipulation.
• b. Obligations of the partnership incurred after his admission only if there was a stipulation.
c. Obligations of the partnership incurred before and after his admission even if there was no
•
stipulation.
d. Obligations of the partnership incurred before his admission if there was a stipulation, and
• those incurred after his admission even if there was no stipulation. (correct answer, your
response)

Aseron, the managing partner of ACE Company, was driving the delivery truck of the firm when he rammed it into an electric post

resulting in damages to the vehicle amounting to P50,000.00. to make up for accident, Aseron worked long hours for the firm and

was able to increase its sales from P5,000,000.00 to P15,000,000.00.

a. Aseron will no longer be liable for damages to ACE because he was able to generate
•
unusual revenues for the firm through his extraordinary efforts.
b. Aseron will still be liable to the firm for damages but the amount will equitably be reduced
• since he was able to generate unusual profits for the firm through his extraordinary efforts.
(correct answer, your response)
c. Aseron’s obligation to the firm for damages will be extinguished by compensation since ACE
•
is also liable to him for the extraordinary efforts, he exerted to increase its sales.
• d. Aseron and ACE will share equally in the damages of P50,000.00.

John, Albert and Wilbert are partners in JAW Enterprises. Not having established yet their credit standing, three partners

requested Simon, a well-known businessman, to help them negotiate a loan from Carlos, a money lender. With the consent of

John, Albert and Wilfred, Simon represented himself as a partner of JAW Enterprises. What kind of partner is Simon?

• a. Managing partner.
• b. Liquidating partner.
• c. Ostensible partner.
• d. Partner by estoppel. (correct answer, your response)

All partners including industrial one shall be liable pro-rata with all their separate property after the partnership assets have been

exhausted.

• True (correct answer, your response)

• False

A stipulation exempting a capitalist partner from losses is valid.

 • True
• False (correct answer, your response)

As a rule, a limited partner shall be liable as a general partner if he allows the use of his surname to be included in the partnership

name.

• True (correct answer, your response)

• False

CLEAN Laundry Services Company is a partnership composed of Carpio, Legaspi, Encinas, Alzate and Noval. Without the

knowledge of the other partners, Carpio used a coat brought to the shop by a customer for dry-cleaning in a party he attended.

The coat was accidentally stained with food sauce during the said party. Who will be liable to the customer for damages?

• a. Carpio only since he used the coat without the knowledge of the other partners.
• b. CLEAN Laundry Services Company and Carpio solidarity.
• c. CLEAN Laundry Services Company and all the partners jointly.
d. CLEAN Laundry Services Company and all the partners solidarity. (correct answer, your
•
response)

Notice to any partner relating to partnership affairs is notice to the partnership.

• True (correct answer, your response)

• False

Which of the following stipulations is valid?

• a. A stipulation excluding a capitalist partner from profits.

• b. A stipulation exempting a capitalist partner from losses.
• c. A stipulation exempting an industrial partner from losses. (correct answer, your response)
• d. A stipulation excluding an industrial partner from profits.

Three of the following partnership contracts are void. Which one is not?

• a. A universal partnership of all present property between husband and wife.

b. A universal partnership of profits between a man and a woman living together as husband
•
and wife without the benefit of marriage.
• c. A particular partnership between husband and wife. (correct answer, your response)
• d. A universal partnership of profits between a private individual and public officer.

A limited partner shall be liable as general partner in three of the following cases. Which one is the exception?

• a. When he is a general- limited partner as stated in the certificate.

• b. When he takes part in the control of the business.
• c. When he participates in the management of the business.
d. When his surname which appears in the partnership name is also the surname of a general
•
partner. (correct answer, your response)

When is the partnership not bound by the act/s of a partner after dissolution in the following cases?
 • a. Acts necessary to wind up partnership affairs.
• b. Acts to complete transactions begun before dissolution.
c. New transactions where the third person is a previous creditor and there was a publication
• of the dissolution in a newspaper of general circulation in the place or places where the
business had been carried o but such third person has no read it.
d. New transactions where the third person is a new creditor and there was publication of the
• dissolution in a newspaper of general circulation in the place or places where the business had
been carried on, but such creditors has not read it. (correct answer, your response)

Joseph and Edward entered into a universal partnership of all present property. At the time of their agreement, Joseph had a four-

door apartment which he inherited from his father 3 years earlier. Edward, on the other hand, had a fishpond which he acquired

by dacion en pago from Robert. During the first year of the partnership, rentals collected on the four-door apartment amounted to

P480,000.00; while fish harvested from the fishpond were sold for P300,000.00. During the same period, Edward received by way

of donation a vacant lot from an uncle. Partners had a stipulation that future property shall belong to the common fund of the

partnership. Which of the following does not belong to the common fund of the partnership?

• a. Fishpond.
• b. Rental of P480,000.00
• c. Apartment.
• d. Vacant land. (correct answer, your response)

The partnership is not bound by the acts of a partner after dissolution. However, it is bound in one. Which is it?

• a. Where the partner acting is insolvent.

• b. When it is unlawful to carry on the business.
c. When the partner has no authority to wind up partnership affairs and the person is a
• previous creditor who had no knowledge of the partner’s lack of authority. (correct answer,
your response)
d. When a partner has no authority to wind up partnership affairs and the third person is a new
• creditor who has not read the publication of the lack of authority of the partner in a newspaper
of general circulation in the place or places where the partnership business is carried on.

PARAGON Enterprises, a partnership engaged in the garments manufacturing business, is composed of partners Pacis, Ramas

and Gonzales. During the year, PARAGON bought a computerized embroidering machine amounting to P300,000.00 from

Tadena with the following stipulation: down payment of P50,000.00; balance to be paid in amount equal to 20% of the monthly net

profits of PARAGON until the full amount is paid.

a. Tadena is an actual partner of Pacis, Ramas and Gonzales during the time that he receives
•
a share of profits of PARAGON as payment of the purchase price of the machine.
b. Tadena is only a partner by estoppels of Pacis, Ramas and Gonzales during the time that
• he receives a share of the profits of PARAGON as payment of the purchase price of the
machine.
c. Tadena is not a partner of Pacis, Ramas and Gonzales whether before or after he has
• received the full payment of the purchase price of the machine from PARAGON. (correct
answer, your response)
d. Tadena is only a nominal partner of Pacis, Ramas and Gonzales during the time that he
•
receives a share of the profits of PARAGON as payment of the purchase price of the machine.

A partnership intended to be formed as a limited partnership but without the word “Limited” or “Ltd.,” appended to its name shall

be considered as a general partnership.

• True (correct answer, your response)

• False
TRIUMPH Company, a partnership engaged in the buying and selling of car spare parts, has for its partners and their respective

contributions the following: Tomas, P10,000.00; Ramon, P20,000.00; Ignacio, P30,000.00; Urbano, P40,000.00; Marcos,

P100,000.00; Pablo, P200,000.00; and Hilario, P300,000.00.

In the articles of partnership, Tomas, Ramon, Ignacio, Urbano and Marcos were appointed managers. In the course of operation

of the partnership. Tomas proposed to buy car spare parts from Dominion Motors, but his proposal was opposed by Ramon. A

voting among the managing partners took place and Ignacio and Urbano sided with Tomas, while Marcos sided with Ramon.

a. The group of Tomas, Ignacio, and Urbano will prevail because they constitute the majority of
•
the managing partners. (correct answer, your response)
b. The group of Ramon and Marcos will prevail because they own the controlling interest
•
among the managing partners.
c. The conflict will have to be referred to Pablo and Hilario because they represent the
•
controlling interest among all the partners.
d. The partners will have to agree that all of them must be managers in order to resolve the
•
conflict.

Teresa, Olga, Pamela and Sonia, partners in TOPS Company Limited , a trading company, have contributions of P50,000.00

each. Teresa and Olga are general partners; Pamela, a limited partner; and Sonia , a general- limited partner. TOPS Company

limited purchased merchandise on credit from Moret Sales Co. amounting to P180,00.00. On due date, however TOPS Company

Limited was unable to pay. Accordingly, Moret Sales Co. filed a case of collection against the partnership which by then had

assets amounting to P150,000.00. From whom may Moret Sales Co. collect the sum of P180,000.00?

a. The partnership for its assets of P150,000.00; thereafter, Teresa and Olga at P15,000.00
•
each from their separate assets.
• b. Teresa and Olga only at P90,000.00 each from their separate assets.
c. The partnership for its assets of P150,000.00; thereafter, from Teresa, Olga and Sonia at
• P10,000.00 each from their separate property. However, Sonia can recover P5,000.00 each
from Teresa and Olga. (correct answer, your response)
d. Teresa, Olga and Sonia at P60,000.00 each. Thereafter Sonia can recover from Teresa and
•
Olga P30,000.00 each.

After dissolution, a partnership is still bound by the act of a partner authorized to act for the partnership with respect to the

completion of transactions begun before dissolution.

• True (correct answer, your response)

• False

MAGIC Company is a partnership composed of Martha, Agnes, Glenda, Irene and Candice, with Martha as manager who is

authorized to collect the credits of the partnership. Theresa owes Martha P4,000.00 which is due on December 10. She also owes

MAGIC Company P6,000.00 which is due on December 20. On December 15, Theresa tended payment in the amount of

P4,000.00 to Martha in payment of her debt to the latter. Martha issued her own receipt acknowledging the payment.

a. The payment will be applied proportionately to the credits of MAGIC and Martha in the
•
amount of P1,600.00 and P2,400.00, respectively. (correct answer, your response)
• b. The payment will be applied in its entirety to Martha’s credit.
• c. The payment will be applied in its entirety to MAGIC’s credit.
• d. The payment will be applied equally to the two debts of Theresa.
LIFE Company, a partnership engaged in the water distribution business, is composed of partners Larredo, Ingles, Filler and

Encanto. One day, Lorredo was driving the firm’s delivery truck beyond the speed limit in order to serve its customers, when he

rammed into and caused extensive damage on the parked car of Tertullo.

• a. Only Lorredo can be held liable for damages by Tertullo.

• b. LIFE Company and Larredo are solidarily liable for damages to Tertullo.
c. LIFE Company and the four partners are solidarily liable for damages to Tertullo. (correct
•
answer, your response)
• d. LIFE Company and the four partners are jointly liable for damages to Tertullo.

Sibal, Untalan, Pareno, Eusebio, and Rances are partners in SUPER Enterprises whose business is car painting repairs. All

partners are capitalist partners with Sibal as manager. After five years of operations, Rances resigned from the partnership.

Although Sibal was aware if resignations of Rances, he still bought 50 gallons of car paint from Masterpaint owned by Marcelo

who had been dealing with SUPER for the past 5 years, and car spare parts from Supremeparts, owned by Salviejo who was

transacting for the first time with SUPER. The dissolution of SUPER was published in the Manila Bulletin buy neither Marcelo nor

Salviejo read it. Neither one knew at the time they transacted with Sibal that the partnership had been dissolved.

• a. SUPER is liable to both Masterpaint and Supremeparts.

• b. SUPER is liable to Masterpaint only. (correct answer, your response)
• c. SUPER is liable to Supremeparts only.
• d. SUPER is not liable to both masterpaint and Supremeparts.

A partnership whose capital in money or property amounts to P3,000.00 or more does not acquire juridical personality if the

contract is not recorded with the Securities and Exchange Commission.

• True
• False (correct answer, your response)

The following statements pertain either to a partner appointed as manager in the articles of partnership or through a document

after the formation of the partnership.

I. He may be removed as manager only for a just or lawful cause by the vote of the partners owning the controlling interest.

II. He may be removed as manager with or without just or lawful cause by the vote of the partner owning the controlling interest.

III. He may perform all acts of administrator despite the opposite of his partners provided he is in good faith.

IV. He may perform all acts of administrator in good faith but opposing partners may resort to his removal if the persists.

Both on the foregoing:

a. I and III pertain to a partner appointed as manager in the articles of partnership. (correct
•
answer, your response)
b. I and II pertain to a partner appointed as manager through a document after the formation of
•
the partnership.
c. II and III pertain to a partner appointed through a document after the formation of the
•
partnership.
• d. I and IV pertain to a partner appointed as partner manager in the articles of partnership.
Belinda, Ara , Rica and Klaudia are partners in BARK Enterprises, a pet shop, with Belinda contributing P50,000.00;Ara,

P20,000.00; and Rica P30,000.00. Klaudia is an industrial partner and manages the partnership. Based on the foregoing

information, which of the following statements is false?

a. Belinda may engage in the buying and selling of rice without the consent of the other
•
partners.
b. Klaudia may engage in the buying and selling of rice without the consent of other partners.
•
(correct answer, your response)
• c. Klaudia is not liable for the losses of the partnership.
• d. Klaudia may be held liable by third persons for partnership debts with her separate property.

MACK’s Restaurant is a partnership composed of Manalo, Alferez, Cancio and Kilayco, with Manalo as the manager whose

contribution is 80% of the firms of the capital Manalo made Ongpauco his associate by assigning one-half of his share in the firm

to the letter. Did Ongpauco become a partner in the firm?

• a. Yes, because Manalo is the manager.

b. No, because the other partners must give their consent in order that Ongpauco may be
•
admitted to the partnership. (correct answer, your response)
c. Yes, because the assignment by Manalo of his share in the firm did not affect his ownership
•
of the controlling interest.
d. No, because the assignment by Manalo of his share in the firm diminished his interest in the
•
partnership.

What is the order of payment of liabilities if a dissolved general partnership using the code number representing each liability?

I. Those owing the partners other than for capital or for profits.

II. Those owing to creditors other then partners.

III. Those owing to partners in respect of profits.

IV. Those owing to partners in respect of capital.

• a. I,II,III,IV
• b. II,I,IV,III
• c. II,I,III,IV
• d. I,II,IV,III

Which of the following will not cause the automatic dissolution of the general partnership?

• a. death of the partner

• b. insolvency of a partner.
• c. When the partnership business becomes unlawful.
• d. Insanity of a partner. (correct answer, your response)

A partner may associate another person with him in share, but the person admitted shall not be admitted to the partnership

without the consent of mall the partners.

• True (correct answer, your response)

• False
Josephine, Ellen, Wilma, Edith and Lydia are partners in JEWEL Company, Ltd. Josephine, Ellen and Wilma are general partners,

Edith is a general-limited partner, while Lydia is a limited partner. Based on the foregoing information, which of the following

statements is false?

a. Josephine, Ellen and Wilma may be held liable with their separate property after the
•
exhaustion of partnership assets.
• b. Edith may participate in the management of the partnership. (your response)
c. Edith may not be held liable with her separate property for partnership debts after the
•
exhaustion of partnership assets.
d. Lydia may not be held liable with her separate property for partnership debts after the
•
exhaustion of partnership assets.

An industrial partner can engage in business for himself if it if of a kind different from the partnership business even without the

consent of the other partners.

• True
• False (correct answer, your response)

Three of the following will cause the automatic dissolution of a general partnership. Which one will not?

a. When any event makes it unlawful for the business of the partnership to be carried on or for
•
the members to carry it on in partnership.
b. Expulsion of any partner from the business bona fide in accordance with such a power
•
conferred by the agreement between the partners.
c. A partner becomes in any way incapable of performing his part of the partnership contract.
•
(correct answer, your response)
• d. The insolvency of a partner or of the partnership.

A partnership formed for the exercise of a profession which is duly registered is an example of:

• a. Universal partnership of profits.

• b. Universal partnership of all present property.
• c. Particular partnership. (correct answer, your response)
• d. Partnership by estoppel.

Vincent and James entered into a universal partnership of profits. At the time of the execution of the articles of partnership,

Vincent had a two-door apartment which he inherited from his father 3 years earlier. James, on the other hand, had a fleet of taxis

which he purchased 2 years before. In the first year of the partnership, Vincent earned P500,000.00 as a radio talent, while James

won P1,000,000.00 in the lotto. During the same period, rentals of P120,000.00 were realized from the operation of the fleet of

taxis. Which of the following belongs to the partnership?

• a. Two-door apartment.
• b. Lotto winnings of P1,000,000.00
• c. Salary of P500,000.00. (correct answer, your response)
• d. Fleet of taxis.
Braganza, Ortiz and Nevado want to form a partnership with Braganza contributing P500,000.00; Ortiz, office equipment; and

Nevado, his services. If the three were to form a limited partnership, who among them will be the limited partner/s?

• a. Either Braganza or Ortiz or both of them. (correct answer, your response)

• b. Either Ortiz or Nevado or both of them.
• c. Either Braganza or Nevado or both of them.
• d. All the three must be limited partners.

A limited partner may contribute money and/or property to a partnership but not the services.

• True (correct answer, your response)

• False

In a universal partnership of all present property, the partners may stipulate that future property shall belong to the partnership but

cannot include property acquired by inheritance, legacy or donation.

• True (correct answer, your response)

• False

If the partnership has the minimum capital mentioned in No.4, but the contract is not in a public instrument or the same is not

recorded with the SEC, the partnership:

• a. Is void.
• b. Is voidable.
• c. Does not acquire juridical personality.
• d. Still acquires juridical personality. (correct answer, your response)

A decree by the court is necessary to dissolve a general partnership based on three of the following grounds. Which one will not

require such decree but will cause the automatic dissolution of the partnership?

• a. The business of the partnership can only be carried on at a loss.

• b. A partner is shown to be of unsound mind.
c. A partner has been guilty of such conduct as tends to affect prejudicially the carrying on of
•
the business.
• d. A partner is civilly interdicted. (correct answer, your response)

Braganza, Ortiz and Nevado want to form a partnership with Braganza contributing P500,000.00; Ortiz, office equipment; and

Nevado, his services.

Assume that the three decide to form a general partnership. As a result, which of the following is incorrect?

• a. Any of the three may be appointed as manager.

• b. All of them may be appointed as managers.
c. Only Nevado may be appointed as manager because he only contributes his services.
•
(correct answer, your response)
• d. Any two of them may be appointed as managers.

One of the following is not a requisite of a contract of partnership. Which is it?

 • a. There must be a valid contract.
• b. There must be a mutual contribution of money, property or industry to a common fund.
c. It is established for the common benefit of the partners which is to obtain profits and divide
•
the same among themselves.
• d. The articles are kept secret among the members. (correct answer, your response)

Wilma, Olga and Wynona agreed to form a limited partnership with Wilma and Olga as a general partner contributing P50,000.00.

the partnership which is to engage in the trading garments was named “WOW Garments Co., Limited” as indicated in the

certificate signed and sworn to by the partners before a notary public. However, the certificate was not filed with the Securities

and Exchange Commission. In the meantime, the partners already begun operating the business and transacting with third

person. Alpine Corporation and P are one and the same person.

• a. The partnership entered into by the Wilma, Olga and Wynona is void.
b. The partnership will be considered a general partnership. Accordingly, all partners will be
• liable with their separate property after the exhaustion of partnership assets. (correct answer,
your response)
c. The partnership will be considered a limited partnership as indicated it is name. Only Wilma
•
and Olga will be liable with their separate property after the exhaustion of partnership assets.
d. Wilma, Olga and Wynona will be considered separately as sole proprietors with each one
•
having a capital equivalent to their respective contributions.

A partnership begins from the moment of execution of the contract, unless a different date is stipulated.

• True (correct answer, your response)

• False

If the assignee does not become the partner referred to in preceding number , his rights do not include:

• a. The receipt of the assignor’s share of the profits.

• b. The receipt of the assignor’s other compensation by way of income.
• c. The return of the assignor’s contribution.
d. The inspection of partnership books or account of partnerships transactions. (correct
•
answer, your response)

TRIUMPH Company, a partnership engaged in the buying and selling of car spare parts, has for its partners and their respective

contributions the following: Tomas, P10,000.00; Ramon, P20,000.00; Ignacio, P30,000.00; Urbano, P40,000.00; Marcos,

P100,000.00; Pablo, P200,000.00; and Hilario, P300,000.00.

In the articles of partnership, Tomas, Ramon, Ignacio, Urbano and Marcos were appointed managers. In the course of operation

of the partnership. Tomas proposed to buy car spare parts from Dominion Motors, but his proposal was opposed by Ramon.

Supposing that when the voting among the managing partners took place, Ignacio sided with Tomas, Urbano abstained, while

Marcos sided with Ramon.

• a. None will prevail because the voting was equal.

b. The group of Ramon and Marcos will prevail because they own the controlling interest
•
among the managing partners. (correct answer, your response)
c. The conflict will have to be referred to Pablo and Hilario because they represent the
•
controlling interest among all the partners.
• d. The conflict will have to be referred to an arbiter for its resolution.
Which of the following omissions will make a partnership formed as a limited partnership liable as a general partnership?

I. The certificate is not signed and sworn to buy all the partners.

II. The certificate is not registered with the Securities and Exchange Commission.

III. The partnership name does not include the word “Limited” or “Ltd.” ,its abbreviation , in the certificate.

• a. I and II
• b. II and III
• c. I and III
• d. I, II and III (correct answer, your response)

Querubin, Roces and Solis are partners in a law firm. Querubin was appointed as judge of the Regional Trial Court. Such

appointment:

a. Suspends the participation of Querubin in the management of the firm without causing the
•
dissolution of the partnership.
b. Prohibits the inclusion of the name of Querubin in the firm name without dissolving the
•
partnership.
• c. Results in the dissolution of the partnership. (correct answer, your response)
d. Merely requires the disclosure of Querubin’s appointment to the court without dissolving the
•
partnership.

TRIUMPH Company, a partnership engaged in the buying and selling of car spare parts, has for its partners and their respective

contributions the following: Tomas, P10,000.00; Ramon, P20,000.00; Ignacio, P30,000.00; Urbano, P40,000.00; Marcos,

P100,000.00; Pablo, P200,000.00; and Hilario, P300,000.00. No one was appointed as manager of the partnership. In the course

of the operation of the partnership, Tomas proposed to buy car spare parts from Dominion Motors, but his proposal was opposed

by Ramon. A voting among the partners took place and Ignacio, Urbano and Marcos sided with Tomas, while Pablo and Hilario

sided with Ramon.

a. The group of Tomas, Ignacio, Urbano and Marcos will prevail because they constitute the
•
majority. (correct answer, your response)
b. The group of Ramon, Pablo and Hilario will prevail because they own the controlling
•
interest.
• c. None will prevail because no one was appointed as manager of the partnership.
• d. The partners will have to appoint a manager in order to resolve the conflict.

One of the distinctions between partnership and a corporation is that a partnership:

• a. May be formed by one person.

• b. Is created by operation of law.
• c. Acts through a board of directors.
• d. May exist for an indefinite period. (correct answer, your response)

Lazarte, a limited partner in Bellevue Company, Ltd., received the amount of P100,000.00 representing his contribution which was

being returned on the date stipulated in the certificate. Partnership records, however, showed that the firm had liabilities of
P220,000.00 which arose before Lazarte received the return of his contribution, and assets of only P90,000.00 after such return of

contribution.

a. Lazarte is bound to bring back to the partnership the amount of P100,000.00 plus interest
•
thereon. (correct answer, your response)
• b. Lazarte is bound to give the partnership P220,000.00 plus interest thereon.
• c. Lazarte is bound to give the partnership P130,000.00 plus interest.
d. Lazarte is not bound to return to the partnership any amount because he received the return
•
of his contribution pursuant to a contractual stipulation.

A limited partner is prohibited on account of his claim against the partnership from performing the following acts, except:

• a. To receive or hold as collateral security any partnership property.

b. To receive from a general partner or the partnership any payment, conveyance or release
• from liability, if partnership assets are not sufficient to discharge partnership liabilities to
outside creditors.
• c. Transact business with the partnership. (correct answer, your response)
• d. None of the foregoing

A partner’s interest in the partnership is his share of the profits and surplus which he may assign to a third person. Which of the

following statements concerning such rights is correct?

• a. The conveyance of a partner’s interest will cause the dissolution of the partnership.
• b. The assignee becomes a partner.
• c. The assignee has a right to interfere in the management of the partnership business.
d. The assignee has the right to receive the profits which the assigning partner would
•
otherwise be entitled to. (correct answer, your response)

A limited partner may contribute:

• a. Money and/or property. (correct answer, your response)

• b. Money and/or services.
• c. Property and/or services.
• d. Services only.

When a partner has been appointed manager in the articles of partnership, he may be removed without just cause by the vote of

the partner owning the controlling interest.

• True
• False (correct answer, your response)

A partnership has a personality separate a distinct from each of the partners.

• True (correct answer, your response)

• False

I. There shall always be a class or series of shares which have complete voting rights.
II. The right to vote is inherent in and incidental to the ownership of corporate stock.

• Only I is true
• Only II is true
• Both are true (correct answer, your response)
• Both are false

The due incorporation of any corporation claiming in good faith to be a corporation, and its right to exercise corporate powers,

shall not be inquired into collaterally in any private suit to which such corporation may be a party.

• Government-owned or controlled corporation

• Quasi-public corporation
• De jure corporation
• De facto corporation (correct answer, your response)

A corporation is formed, organized or existing under any laws other than those of the Philippines and whose laws allow Filipino

citizens and corporations to do business in its own country or State.

• Foreign corporation
• Domestic corporation (your response)
• Corporation by prescription
• Corporation by estoppel

I. A corporation is juridical entity vested with a legal personality separate and distinct from those acting for and in its behalf and, in

general, from the people comprising it.

II. Not every stockholder or officer can bind the corporation considering the existence of a corporate entity separate from those

who compose it.

• Only I is true
• Only II is true
• Both are true (correct answer, your response)
• Both are false

A corporation consisting of more than one member.

• Open corporation
• Close corporation
• Corporation aggregate (correct answer, your response)
• Corporation sole

I. In non-stock corporations, the voting rights does not attach to membership.

II. Members vote as a persons, in accordance with the law and the by-laws of the corporation.

• Only I is true (your response)

• Only II is true
• Both are true
• Both are false

A corporation incorporated under the laws of the Philippines.

• Foreign corporation
• Domestic corporation (correct answer, your response)
• Corporation by prescription
• Corporation by estoppel

Are shares usually preferred, which by their terms are redeemable at a fixed date, or at the option of their issuing corporation, or

the stockholder, or both at a certain redemption price.

• Over-issued stock
• Redeemable share (correct answer, your response)
• Convertible share
• Founder’s share

I. It is settled that unissued stocks may not be voted or considered in determining whether a quorum is present in a stockholder’s

meeting.

II. Only stock actually issued and outstanding may be voted.

• Only I is true
• Only II is true
• Both are true (correct answer, your response)
• Both are false

I. It requires a juridical personality either by special law or a general law.

II. The general law under which a private corporation may be formed or organized is the Revised Corporation Code.

• Only I is true
• Only II is true (correct answer, your response)
• Both are true
• Both are false

Shares without a right to vote.

• Preferred stock
• Common stock
 • Both are true
• Both are false (correct answer, your response)

I. The provisions governing stock corporation, when pertinent, shall be applicable to non-stock corporations.

II. A non-stock corporation must have shareholders.

• Only I is true (correct answer, your response)

• Only II is true
• Both are true
• Both are false

Is one where no part of its income is distributable as dividends to its members, trustees, or officers.

• Non-stock corporations (correct answer, your response)

• Stock corporations
• Corporation aggregate
• Corporation by prescription

The continuation of a corporation’s legal status despite changes in ownership or management.

• Succession (correct answer, your response)

• Inheritance
• Dissolution
• Liquidation

The following are limitations on no par value shares, except:

• It can be issued for a consideration of at least P3.00. (correct answer, your response)
• It is deemed fully paid and non-assessable.
The entire consideration for its issuance constitutes capital so that n part of it should be
•
distributed as dividends.
• It cannot be issued as preferred shares.

Is the governing body in a stock corporation.

• Corporators
• Board of directors
• Board of trustees (your response)
• Incorporators

Is one which entitles the holder thereof to certain preferences over the holders of common stock.

• Common stock
• Preferred stock (correct answer, your response)
• Treasury stock
• Watered stock
I. The law provides that shares classified and issued as preferred or redeemable shares may be deprived of voting right.

II. Each member shall be entitled to one vote unless so limited, broadened, or denied in the articles of incorporation or bylaws.

• Only I is true
• Only II is true
• Both are true (correct answer, your response)
• Both are false

The following are the characteristics of a corporation, except:

• It is an artificial being
• Created by meeting of the minds (correct answer, your response)
• It has the right of succession
It has the powers, attributes and properties expressly authorized by law or incident to its
•
existence.

Shares with value fixed in the articles of incorporation and the certificate of stock.

• Par value stock (correct answer, your response)

• No par value stock
• Redeemable stock
• Class A stock

A corporation consisting of only one member for the purpose of administering and managing, as trustee, the affairs, property and

temporalities of any religious denomination, sect or church.

• Open corporation
• Close corporation
• Corporation aggregate
• Corporation sole (correct answer, your response)

I. Well-settled is the principle that the corporate mask may be removed or the corporate veil pierced when the corporation is just

an alter ego of a person or of another corporation.

II. It is a basic principle in Corporation Law that a corporation has a personality which is the same as the officers or members who

compose it.

• Only I is true (correct answer, your response)

• Only II is true
• Both are true
• Both are false
The stockholders or members mentioned in the articles of incorporation as originally forming and composing the corporation and

who are signatories thereof.

• Corporators
• Board of directors
• Board of trustees
• Incorporators (correct answer, your response)

I. One of the rights of a stockholder is the right to participate in the control and management of the corporation and management

of the corporation that is exercised through his vote.

II. The right to vote is a right inherent in and incidental to the ownership of corporate stock, but as such is not a property right.

• Only I is true (correct answer, your response)

• Only II is true
• Both are true
• Both are false

They may be purchased or taken up by the corporation upon the expiration of a fixed period, regardless of the existence of

unrestricted retained earnings in the books of the corporation, and upon such other terms and conditions must also be stated in

the certificate of stock representing said shares.

• Par value stock

• No par value stock
• Redeemable stock (correct answer, your response)
• Class A stock

One which has exercised corporate powers for an indefinite period without interference on the part of the government.

• Foreign corporation
• Domestic corporation
• Corporation by prescription (correct answer, your response)
• Corporation by estoppel

A corporation organized for charitable purposes.

• Ecclesiastical corporation
• Eleemosynary corporation (correct answer, your response)
• Civil corporation
• Lay corporation

Is a person who brings about or cause to bring about the formation and organizations of a corporation.

• Corporators (your response)

• Promoter
• Underwriter
• Incorporators
I. Redeemable shares, once redeemed are retired unless reissuance is expressly allowed in the articles of incorporation.

II. The Corporation Code allows redemption of shares only if there are unrestricted retained earnings on the books of the

corporation.

• Only I is true (correct answer, your response)

• Only II is true
• Both are true
• Both are false

Is one which has no preference and entitle the shareholder to a pro rata division of the profits, if any.

• Preferred stock (your response)

• Common stock
• Voting share
• Non-voting share

A corporation organized for religious purposes.

• Ecclesiastical corporation (correct answer, your response)

• Close corporation
• Corporation aggregate
• Corporation sole

Is the governing body in a non-stock corporation.

• Corporators
• Board of directors
• Board of trustees (correct answer, your response)
• Incorporators

A corporation created in strict or substantial conformity with the mandatory statutory requirements for its incorporation and the

right of which to its exist as a corporation cannot be successfully attacked or questioned by any party even in a direct proceeding

for that purpose by the State.

• Government-owned or controlled corporation

• Quasi-public corporation
• De jure corporation (correct answer, your response)
• De facto corporation

It is an artificial being created by operation law, having the right of succession and the powers, attributes and properties expressly

authorized by law or incidental to its existence.

• Corporation sole
• Corporation (correct answer, your response)
• Partnership
• Sole proprietorship
Corporations which have capital stock divided into shares and are authorized to distribute to the holders of such share dividends

or allotments of the surplus profits on the basis of the shares held.

• Non-stock corporation
• Stock corporation (correct answer, your response)
• Corporation aggregate
• Corporation by prescription

A private corporation which have accepted from the State the grant of franchise or contract involving the performance of public

duties but which are organized for profit.

• Government-owned or controlled corporation

• Quasi-public corporation (correct answer, your response)
• De jure corporation
• De facto corporation

I. Any application of the doctrine of piercing the corporate veil should be done with caution.

II. A corporation has its powers through its board of directors and/or its duly authorize officers and agents.

• Only I is true
• Only II is true
• Both are true (correct answer, your response)
• Both are false

Two requisites must concur before one may be classified as a stock corporation, namely:

I. That it has capital stock divided into shares.

II. That it is authorized to distribute dividends and allotments of surplus and profits to its members.

• Only I is true (correct answer, your response)

• Only II is true
• Both are true
• Both are false

The factors for the application of the doctrine of piercing the corporate veil are the following, except:

• Stock ownership by one or common ownership of both corporations.

• Identity of directors and officers.
• The manner of keeping corporate books and records.
• Identity of the stockholders. (correct answer, your response)
Are shares of stock which have been issued and fully paid for, but subsequently reacquired by the issuing corporation by

purchase, redemption, donation or through some lawful means.

• Treasury stock (correct answer, your response)

• Redeemable stock
• Convertible share
• Founder’s share

All persons who assume to act as a corporation knowing it to be without authority to do so shall be liable as general partners for all

debts, liabilities and damages incurred or arising as a result thereof.

• Foreign corporation
• Domestic corporation
• Corporation by prescription
• Corporation by estoppel (correct answer, your response)

I. The exclusive right to vote and be voted for in the election of directors must be for a limited period not to exceed 5 years subject

to the approval of the SEC.

II. Preferences granted to preferred stockholders gives them creditors of the corporation.

• Only I is true (correct answer, your response)

• Only II is true
• Both are true
• Both are false

A class of stock entitling the holder to vote on corporate matters, to receive dividends after other claims and dividends have been

paid (especially to preferred shareholders), and to share in assets upon liquidation.

• Common stock (correct answer, your response)

• Preferred stock
• Treasury stock
• Watered stock

It refers to any agency organized as a stock or non-stock corporation, vested with functions relating to public needs whether

governmental or proprietary in nature, and owned by the Government directly or through its instrumentalities either wholly, or,

where applicable as in the case of stock corporations, to the extent of at least 51per cent of its capital stock.

• Private corporation
• Closed corporation
• Government-owned or controlled corporation (correct answer, your response)
• Local government units

I. Property acquired by a corporation is the property of stockholders or members.

II. A corporation exercises said powers through its board of directors and/or its duly authorized officers and agents.

• Only I is true
• Only II is true (correct answer, your response)
• Both are true
• Both are false

Subscription to the capital stock of a corporation constitute a fund to which the creditors have a right to look for the satisfaction of

their claims.

• Trust fund doctrine (correct answer, your response)

• Doctrine of indivisibility
• Doctrine of corporate opportunity
• None of the above

Each share shall be equal in all respects to every other share except as otherwise provided in the articles of incorporation and

stated in the certificate of stock.

• Doctrine of indivisibility of shares

• Doctrine of divisibility of shares
• Doctrine of equality of shares (correct answer, your response)
• Doctrine of corporate opportunity

I. Non-stock corporations can distribute 10% of their income to their members.

II. Non-stock corporations are organized for charitable, religious, educational, professional, cultural, recreational, fraternal, literary,

scientific, social, civil service, or similar purposes.

• Only I is true
• Only II is true (correct answer, your response)
• Both are true
• Both are false

Shares classified in the articles of incorporation which may be given certain rights and privileges (e.g. dividend payments) not

enjoyed by the owners of other stocks.

• Over-issued stock
• Redeemable share
• Convertible share
• Founder’s share (correct answer, your response)

Stock issued for a consideration less than the par or issued price thereof or in any other form other than cash valued in excess of

its fair value.

• Preferred stock
• Watered stock (correct answer, your response)
 • Optional share
• Founder’s share

The following are the requirements before one can qualify as a de facto corporation, except:

• The existence of a valid law under which it may be incorporated.

• An attempt in good faith to incorporate.
• Assumption of corporate powers.
• None of the above. (correct answer, your response)

I. Any person, partnership, association or corporation, singly or jointly with others but not more than 15 in number, may organize a

corporation for any lawful purpose or purposes.

II. Natural persons who are licensed to practice a profession, and partnerships or associations organized for the purpose of

practicing a profession, shall not be allowed to organize as a corporation.

• Only I is true
• Only II is true
• Both are true (correct answer, your response)
• Both are false

The following are grounds for such disapproval, except:

The purpose or purposes of the corporation are patently unconstitutional, illegal, immoral or
•
contrary to government rules and regulations.
• The certification concerning the amount of capital stock subscribed and/or paid is false.
The required percentage of Filipino ownership of the capital stock under existing laws or the
•
Constitution has not been complied with.
The articles of incorporation or any amendment thereto is not substantially in accordance with
•
the form prescribed by the Philippine Cooperative Code. (correct answer, your response)

I. If a corporation does not formally organize and commence its business within 5 years from the date of its incorporation, its

certificate of incorporation shall be deemed revoked.

Il. If a corporation has commenced its business but subsequently becomes inoperative for a period of at least 5 consecutive years,

the SEC may, after due notice and hearing, place the corporation under delinquent status.

• Only I is true
• Only II is true
• Both are true (correct answer, your response)
• Both are false
No corporate name shall be allowed by the SEC if it is not distinguishable from that already reserved or registered for the use of

another corporation. A name is not distinguishable even if it contains one or more of the following:

I. The word "corporation", "company", "incorporated", "limited ", limited liability or an abbreviation, different tenses, spacing, or

number of the same word or phrase.

II. Punctuations, articles, conjunctions, contractions, prepositions, abbreviations, different tenses, spacing, or number of the same

word or phrase.

• Only I is true
• Only II is true
• Both are true (correct answer, your response)
• Both are false

The amendment of the articles of incorporation, requires merely that

I. The amendment is not contrary to any provision or requirement under the Corporation Code.

II. It is for a legitimate purpose.

• Only I is true
• Only II is true
• Both are true (correct answer, your response)
• Both are false

I. The number of directors shall not be more than 15.

II. The number of trustees may be more than 15.

• Only I is true
• Only II is true
• Both are true (correct answer, your response)
• Both are false

I. A corporation shall have perpetual existence unless its articles of incorporation provides otherwise.

II. The general rule as to corporations is that each corporation must have a name by which it is to sue and be sued and do all legal

acts.

• Only I is true
• Only II is true
• Both are true (correct answer, your response)
 • Both are false

The following are the reasons that a principal office of the corporation must be stated in its articles of incorporation, except:

• To fix the residence of the corporation in a definite place. (your response)

• For purposes of board of directors' meeting.
• To determine the venue of court cases involving corporation.
• To determine the place where the books and records of the corporation are ordinarily kept.

I. An unincorporated association, which represented itself to be a corporation, will be stopped from denying its corporate capacity

in a suit against it by a third person who relied in good faith on such representation.

II. A third party who, knowing an association to be unincorporated, nonetheless treated it as a corporation and received benefits

from it, may be barred from denying its corporate existence in a suit brought against the alleged corporation.

• Only I is true
• Only II is true
• Both are true (correct answer, your response)
• Both are false

I. Incorporators who are natural persons must be of legal age.

II. Each incorporator of a stock corporation must own or be a subscriber to at least 1 share of the capital stock.

• Only I is true
• Only II is true
• Both are true (correct answer, your response)
• Both are true

I. A corporation can change its name by amending its by-laws.

II. A corporation with a single stockholder is considered a One Person Corporation.

• Only I is true
• Only II is true (correct answer, your response)
• Both are true
• Both are false

I. Corporation by estoppel is founded on principles of equity and is designed to prevent injustice and unfairness.

II. Consolidation becomes effective not upon mere agreement of the members but only upon issuance of the certificate of
consolidation by the SEC.

• Only I is true
• Only II is true
• Both are true (correct answer, your response)
• Both are false

I. The contents of the articles of incorporation are binding, not only on the corporation, but also on its shareholders.

II. The general rule as to corporations is that each corporation must t have a name by which it is to sue and be sued and do all

legal acts.

• Only I is true
• Only II is true
• Both are true (correct answer, your response)
• Both are false

I. Stock corporations shall not be required to have a minimum capital

II. All corporations shall file with the Commission articles of incorporation in any of the official languages.

• Only I is true
• Only II is true
• Both are true (correct answer, your response)
• Both are false

The purpose of the principal of the corporation are the following, except:

• To fix the residence of the corporation in a definite place.

• For purposes of stockholders or members meeting.
To determine the venue of court cases involving the stockholders. (correct answer, your
•
response)
• To determine the place where the books and records of the corporation are ordinarily kept.

I. It is the certificate of incorporation that gives juridical personality to a corporation and places it under the jurisdiction of the

Securities and Exchange Commission.

II. A corporation commences its corporate existence and juridical personality and is deemed incorporated from the date the DTI

issues certificate of incorporation under its official seal.

• Only I is true (correct answer, your response)

• Only II is true
• Both are true
 • Both are false

It applies when persons assume to form a corporation and exercise corporate functions and enter into business relations with third

persons.

• De facto corporation
• Corporation by prescription
• De jure corporation
• Corporation by estoppel (correct answer, your response)

The following are limitations in the amendment of the articles of incorporation, except:

The amendment must be for legitimate purposes and must not be contrary to the Corporation
•
Code and special laws.
The amendment requires the vote or written assent of stockholders' representing majority of
• the outstanding capital stock or majority members if it be a non-stock corporation. (correct
answer, your response)
• The amendment must be approved by a majority of the board of directors or board of trustees.
The original and amended articles together shall contain all provisions required by law to be set
•
out in the articles of incorporation.

I. The filing of articles of incorporation and the issuance of the certificate of incorporation are essential for the existence of a de

facto corporation.

II. An organization not registered with the SEC cannot be considered a corporation in any concept, not even as a corporation de

facto.

• Only I is true
• Only II is true
• Both are true (correct answer, your response)
• Both are false

I. A corporation is in a metaphysical sense a resident of the place where its principal office is located as stated in the articles of

incorporation.

II. The place where the principal office of the corporation is to be located is one of the required contents of the by-laws.

• Only I is true
• Only II is true
• Both are true
• Both are false (correct answer, your response)

This is the maximum amount fixed in the articles of incorporation that may be subscribed and paid by the stockholders of the

corporation.

• Outstanding capital stock

 • Paid-up capital stock
• Authorized capital stock (correct answer, your response)
• None of the above

I. Only a natural person, trust, or an estate may form a One Person Corporation.

II. Banks and quasi-banks, preneed, trust, insurance, public and publicly-listed companies, and non-chartered government owned

and Corporations. controlled corporations may not incorporate as One Person Corporation

• Only I is true
• Only II is true
• Both are true (correct answer, your response)
• Both are false

I. A delinquent corporation shall have a period of 2 years to resume operations and comply with all requirements that the SEC

shall prescribe.

II. Upon compliance by the corporation, the SEC shall issue an order lifting the delinquent status. Failure to comply with the

requirements and resume operations within the period given by the SEC shall cause the revocation of the corporation's certificate

of incorporation.

• Only I is true
• Only II is true (correct answer, your response)
• Both are true
• Both are false

I. The articles of incorporation of a nonstock corporation may be amended by the vote or written assent of majority of the trustees

and at least 2/3 of the members.

II. The amendment of the articles of incorporation shall take effect upon their approval by the SEC or from the date of filing with

the SEC if not acted upon within 9 months from the date of filing for a cause not attributable to the corporation.

• Only I is true
• Only II is true
• Both are true (your response)
• Both are false

A written contract to purchase newly issued shares of stock.

• Sales contract
• Redemption contract
• Purchase contract
• Subscription (correct answer, your response)
The following are the three-fold nature of the articles of incorporation, except:

• A contract between the corporations inter se. (correct answer, your response)
• A contract between the State and the corporation.
• A contract between the corporation and its stockholders.
• A contract between the stockholders inter se.

Is that portion of the authorized capital stock which has been both subscribed and paid.

• Authorized capital stock

• Unissued capital
• Paid-up capital (correct answer, your response)
• Outstanding capital