Instructions:

1. Choose the correct answer (1%).

2. Explain with legal basis (3%).
3. Explain why the other 3 are incorrect (1%).

1. One who does not participate in the management of the business of the partnership and is not known to
the public as partner.
a. Silent partner
b. Secret partner
c. Dormant partner
d. Liquidation partner

2. Jannie and Alexie want to put up an internet café business. Jannie is an expert in information technology
and computers but has no funds or property to invest. Alexie knows nothing about internet and
computers but she is willing to contribute the funds and property needed. If Jannie and Alexie decide to
enter into a limited partnership, who between the two of them will be the limited partner?
a. Jannie only.
b. Alexie only.
C. Both Jannie and Alexie.
d. Neither Jannie nor Alexie; hence, they cannot enter into a limited partnership.

Explaination: Alexie only, because she is the one who contributed the funds and property that
may incur liabilities

3. Refer to the preceding number. Suppose Jannie and Alexie are sisters and they decide to put up a general
partnership, who between the two of them may be the general partner?
a. Jannie only.
b. Alexie only.1
c. Both Jannie and Alexie.
d. Neither Jannie nor Alexie, they being sisters; hence, they cannot put up a general partnership.

4. A partnership which has for its object determinate things, their use of fruits, or specific undertaking, or
the exercise of a profession.
a. Universal partnership of all present property.
b. Universal partnership of profits
c. Particular partnership
d. None of the foregoing

Explanation:

2. Article 1783 of the Civil Code defines a “particular partnership [to be one that]
has for its object determinate things, their use or fruits, or a specific undertaking, or the
exercise of a profession.

3. On the other hand, a universal partnership of profits “all that the partners may
acquire by their industry or work during the existence of the partnership,” as well as the
usufruct of all “[m]ovable or immovable property which each of the partner may possess at
the time of the celebration of the contract. In a universal partnership of all present property
is one where “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 they may acquire therewith.
5. These statements are presented to you:
I. As a rule, a limited partner is not a proper party to proceedings by or against a partnership
II. A limited partner may, however, be a proper party if the object of the proceeding is to enforce a
limited partner's right against the partnership or a limited partner's liability to the partnership.

In your evaluation of the foregoing statements:

a. Both statements are true
b. Both statements are false
c. Only Statement I is true
d. Only Statement Il is true

6. Without the written consent or the ratification by all the limited partners, a general partner or all the
general partners, have no authority to perform any of the following acts, except to:
a. Admit a person as a general partner.
b Continue the business with partnership property on the death, retirement, insanity, civil
interdiction or insolvency of a general partner.
c. Admit a person as a limited partner.
d. Continue the business with partnership property on the death, retirement, insanity, civil
interdiction or insolvency of a limited partner.
7. Mark, Bryan and Franck are partners in MBF Company. Mark is a general partner, Bryan a limited partner, and
Franck, a general-limited partner. The partnership has liabilities of and assets of P40,0()0,00. In the
payment of liabilities:
a. The assets of the partnership amounting to shall first be exhausted. Thereafter, Mark
and Franck shall pay from their separate assets the balance at PI 5,000.00 each to the creditors.
b. The assets of the partnership amounting to P40,000.00 shall first be exhausted. Thereafter, Mark and
Franck shall pay from their separate assets the balance at each to the creditors but Franck can
recover the amount of PI 5,000.00 from Bryan.
c. The assets of the partnership amounting to shall first be exhausted. Thereafter, the three
partners shall pay from their separate assets the balance at P 10,000.00 each to the creditors, but Bryan
and Franck can recover PI 0,000.00 each from Mark.
d. Mark and Franck will pay the liabilities from their separate assets. Thereafter, Franck can recover
P35,000.00 from Bryan.

8. FORM Enterprises is a partnership engaged in the construction business with Fernandez, Oraiz, Ramos
and Mendoza as partners. Fernandez was appointed manager. On August 31, 2008, the five year term of
the partnership expired thereby resulting in its automatic dissolution. On September 5, 2008, Fernandez,
without knowledge of the expiration of the firm's term, purchased on credit gravel and sand worth
from Perolina, a creditor who had granted charge sales to FORM before August 31, 2008.
Perolina was not aware of the expiration of the term of the partnership.
a. The authority of Fernandez was not terminated among the partners and with respect to Perolina
b. The authority of Fernandez was not terminated among the partners but terminated with respect to
Perolina
c. The authority of Fernandez was terminated among the partners and with respect to Perolina
d. The authority of Fernandez was terminated among the partners but not with respect to Perolina

9. Ferny owes Gina P4, 000.00. He also owes to ATP Company, a partnership of which Gina is the partner
authorized to collect the credits of the partnership. Both debts are due. Ferny gives Gina
informing Gina that the amount is in payment of her debt to the latter. Accordingly, Gina issues her own
receipt. To which credit will be the payment applied?
a. To the credit of Gina.
b. To the credit of ATP Company.
c. To the credit of Gina and that of ATP Company proportionately at PI,600.00 and P2,400.00
respectively.
 d. To the credit of Gina and that of ATP Company equally at P2,000.00 each.

10. The following are obligations of a partner who has promised to contribute specific property to the
partnership, except:
a. To deliver to the partnership at the time it was constituted or on the date stipulated the property
he has promised to contribute.
b. To take care of the property before its delivery to the partnership with the diligence of a good father of a
family.
c. To answer for eviction in case the partnership is deprived of the property he has contributed.
d. TO be liable for damages only after he fails to deliver the property upon demand by the other
partners.

2. Article 1786, which declares every partner to be a debtor of the partnership for whatever he
may have promised to contribute;

3. The other option give positive facts.

ll. Gabriel and Hans put up a partnership to engage in the computer repair business. Gabriel contributed P20(),
000.00, while Hans his services. On the vacant stall on the left side of the computer repair shop, Gabriel
intends to put up his own eatery business, while on the vacant stall on its right side, Hans plans to establish
a bakery. Who of the two may validly establish his own business without the consent of the other partner?
a. Gabriel
b. Hans
c. Both Gabriel and Hans
d. Neither Gabriel nor Hans
12. These statement are presented to you:
1. A newly-admitted partner shall be liable for partnership debts incurred before his admission only if there
was a stipulation to that effect.
11. A newly admitted partner shall be liable for partnership debts incurred before his admission even if
there was no stipulation to that effect.
111. A newly-admitted partner shall be liable for partnership debts incurred after his admission if there
was a stipulation to that effect.
IV. A newly-admitted partner shall be liable for partnership debts incurred after his admission even if
there was no stipulation to that effect.

\Which of the foregoing Statements are true?

a. l and 11.
b. IT and IV.
c. l and IV.
d. 11 and 111.

13. JD701 Enterprises, a partnership engaged in the trading of video films is composed of the following
partners with their capital contributions: JC, P20,OOO.OO; Rudy. P40,OOO.OO; Arren, P50,OOO.OO;
Noriel, P60,OOO.OO; Maria,
Nil Jay, and Stephen, There was no agreement among the partners as to
who shall be the manager.
a. Stephen shall be the manager because he owns the controlling interest.
b. Nil Jay and Stephen will be the managers because the two of them own the controlling interest.
c. All of the partners will be managers.
d. The partners will have to agree as to who shall be the manager.
14. Refer to No. 13. Assume that JC desires to buy video films from RD Distributors Company, but Maria
opposes it. A voting took place and Rudy, Arren and Noriel sided with JC, while Nil Jay and Stephen sided
with Maria,
a. The Group of JC, Rudy, Arren and Noriel will prevail because they constitute the majority.
b. The group of Maria, Nil Jay and Stephen will prevail because they own the controlling interest.
c. None will prevail because no one was appointed as manager.
d. The conflict should be resolved by a unanimous vote among the partners.

15. The assignee of a partner's interest is not entitled to any right, except the right to :
a. Participate in the management of the partnership.
b. Require any information of partnership transaction.
c. Inspect partnership books.
d. Receive his assignor's share of the profits.

2. Article 1831 of the Civil Code recognizes the standing of the assignee of a partner’s interest to seek judicial
dissolution of the partnership when:

(a) Termination of the period upon which the partnership is expressly constituted;

(b) Termination of the particular undertaking upon which the partnership is expressly constituted; or

(c) At any time, in a partnership at will.

16. These statements are presented to you:

I. A partner, being a co-owner of specific partnership property, has an equal right to
possess such property for other than the partnership purpose.
II. A partner’s right in specific partnership property is subject to legal
support.
In your evaluation of the foregoing statements:
a. Both statements are true.
b. Only statement I is true.
c. Only statement Il is true.
d. Both statements are false.

17. If a partnership is formed to exist for a period of five (5) years, such partnership, if its business is
continued upon the expiration of the period:
a. Remains to be a partnership for a fixed term until another five (5) years.
b. Becomes a partnership at will.
c. Becomes a partnership for a particular undertaking.
d. Is deemed dissolved, notwithstanding the continuation of its business.

2. it is clear under Article 1829 that the partnership is not terminated on dissolution, and that the partnership
continues to exist “until the winding up of the partnership affairs is completed.” During winding-up stage,
every partner authorized to wind-up partnership affairs has full authority to enter into any contract or
transaction that is consistent with the winding-up of partnership affairs, and such contracts and transactions
shall be valid and binding upon the partnership and those of the partners.

18. Who of the following may engage in business even without the consent of the other partners?
a, a capitalist partner if the business he will engage in is of the same line as the partnership business. b, A
capitalist partner if the business he will engage in is of a kind different from the partnership business. c. An
industrial partner if the business he will engage in is of the same line as the partnership business.
d. An industrial partner if the business he will engage in is of a kind different from the partnership
business,

19. In which of the following cases is there a prima facie evidence that one is a partner in a business?
 a. His receipt of a share in the gross returns derived from a property where he has 'A joint or common
interest with another.
b. His receipt of a share of the profits realized from the use of property that he co-owns With another.
c. His receipt of a share of the net profits of a business.
d. His receipt of share of the profits realized from the use of a property that he co-possesses with
another.

2. Art. 1769. In determining whether a partnership exists, these rules shall apply:
(1) Except as provided by Article 1825, persons who are not partners as to each other are not
partners as to third persons;
(2) Co-ownership or co-possession does not of itself establish a partnership, whether such co-
owners or co-possessors do or do not share any profits made by the use of the property;
(3) The sharing of gross returns does not of itself establish a partnership, whether or not the persons
sharing them have a joint or common right or interest in any property from which the returns are derived;
(4) The receipt by a person of a share of the profits of a business is prima facie evidence that he is a
partner in the business, but no such inference shall be drawn if such profits were received in payment:
(a) As a debt by installments or otherwise;
(b) As wages of an employee or rent to a landlord;
(c) As an annuity to a widow or representative of a deceased partner;
(d) As interest on a loan, though the amount of payment vary with the profits of the business;
(e) As the consideration for the sale of a goodwill of a business or other property by installments or
otherwise. (n)

20. When, as a rule, does a partnership begin to exist?

a. On the date of the recording of the partnership agreement with the Securities and Exchange
Commission.
b. Upon the execution of the partnership agreement by the partners.
c. On the date when all the capitalist partners have delivered their contributions to the partnership.
d. On the date when the partnership agreement is acknowledged before a notary public.