PRELIMINARY EXAMINATION (preliminary Examination Coverage: Law on Partnership) yuLTIPLE CHOICE |, Acorporation cannot * express authorizatio II, Aspouse can enter in Moreover, a spouse can enter int spouse. a. Bothare true b. Both are false c. Only lis true d. Only Il is true t becomea member ofa partnership in the absence n by statute or charter. to a universal partnership with the other spouse. to a limited partnership with the other st contribute additional capital to save the imminent loss of the business. se of imminent loss, the 2. |. A capitalist partner mus partnership in case there is j Il. Ifa capitalist partner fails to contribute in ca partnership will be dissolved. a. Bothare true b. Both are false Only Lis true d. Only ITis true where X is the managing partner. 0,000. Z paid X P10,000. the debt of Z to the 3. Xand Y are partners in XY partnership Z owes X P40,000 and XY partnership P6 a, Xshould only collect P4,000 and apply the P6,000 to partnership. b. X should collect the entire P10,000 so that Z is no longer indebted to Z c. X should apply the entire P10,000 to the debt of Z to XY partnership so that the balance would be P50,000. d. X should apply it equally so that P5,000 would be deducted to the debt Of Z to X and another P5,000 would be deducted to the debt of Zto XY partnership. 4. Xand ¥ entered into a partnership to engage m the operation of a car wash shop (XY Guapo car wash). X is the capitalist partner while Y is the industrial partner. Adjoining the car wash ‘shop, X opened a carinderia (X Busog Here), while on the other side, Y opened a convenience store (Y 24/7 sari sari store). . a. X cannot engage in a carinderia business but Y may engage in a convenience store.’ b. X may engage in a carinderia business but Y cannot engage in a convenience store. ness and Y may engage in a c. X may engage in a carinderia busi convenience store. 813Preliminary Examination d. 5, 6. 7. 8. pose 9. a b. © d. 10, pao geoe ao gpoge X and Y are prohibited from having separate business, they must form ience a partnership again for the carinderia business and the convenien store, Dissolution may be: Judicial Extrajudicial Only lis correct Only Il is correct Both of a and b are correct None of a and bare correct An insolvent partner is liable in the following order: Those owing to separate creditors. Those owing to partnership creditors. Those owing to partners by way of contribution. 1,011 110,01 M1, 11,1 1,111 A partnership is one formed by two or more persons having as members one or more general partners and one or more limited partners. General Limited Universal Particular A is a person admitted to all the rights of a limited partner who has died or has assigned his interest in a partnership. Substituted general partner Substituted limited partner Substituted capitalist partner Substituted industrial partner 1. partnership is a preparatory contract. IL A partnership has no juridical personality. Both are true Both are false Only lis true Only His true ‘The following are the effects if the purpose of the partnership is unlawfur except: 814imi Examination : nership is voidable. ‘The part 5 the profits of the partnership shall be confiscated in favor of the government. ire instrument and proceeds shall be forfeited in favor of the government. 4, answer not given. 11. L Apartnership begins from the moment of the execution of the contract, unless it is otherwise stipulated. IL Asarule, a partnership is unlimited as to its duration. a. Both are true b, Bothare false Only lis true d. Only Ilis true 12. Which of the following is prohibited from entering into a universal partnership? a, Husband and wife b. Those guilty of adultery or concubinage c Those guilty of the same criminal offense, if the partnership was entered in consideration of the same d. All of the above 13. I. Articles of universal partnership, entered into without specification of its nature, only constitute universal partnership of profits. rtners as such shall be bound Il, Ina limited partnership, the limited pal by the obligations of the partnership. a. Both are true b. Both are false c. Only lis true d. Only His true 14. The following are the causes of extrajudicial dissolution of a partnership, except: a. By the termination of the definite term or particular unde specified in the agreement. b. By the express will of any partner, who must act in good faith, when no definite term or particular undertaking is specified. \dicial proceeding. ‘A partner has been declared insane in any ju : By the express will of all the partners who have not assigned their Fy rests or suffered them to be charged for their separate debts, either before or after the termination of any specified term or particular undertaking. rtaking ao 815Preliminary Examination 15. Which of the following is not correct? In a limited partnership composed of A, B and C, the contribution may be as follows: a. A-services (limited partner); B-cash (general partner); C-services (general partner). b. A-cash (limited partner); B-cash (general partner); C-services (general partner) cc. A-property (limited partner); B-services (general partner); C-services (general partner). d. A-cash (limited partner); B-property (general partner): C-services (general partner). 16. A and B are capitalist partners with C as industrial partner. A and B contributed P13,500 each to the capital of the partnership. A contractual liability of P49,950 was incurred by the partnership in favor of X. The assets of the partnership have been exhausted still leaving an unpaid liability of P8,825. What are the rights and the obligation of the partners, ifany? a. A, B and C are liable to X, and C after giving his share may ask reimbursement from A and B, unless otherwise stipulated, b. AandBonly Conly d. A,Band Cand C has no right for reimbursement from A and B unless expressly stipulated. 17. XY and Z are partners. X is an industrial partner. During the first year of operation (2019), the firm realized a profit of P60,000. During the second year (2020), the firm sustained a loss of P30,000. So, the net profit for the two years of operation was only P30,000. In the articles of partnership, it was agreed that X the industrial partner would get 1/3 of the profit but would not share in the losses. How much will X, the industrial partner, yet? a. "x will get only P20,000 which is 1/3 of the profit of the 1st year of operation. b. X will get only P20,000 in the first year and none in the second year. X will get only P10,000 which is 1/3 of the net profit. d, Xwill share in the loss in the second year. 18. A Band C, capitalist partners, each contributed P30,000, P20,000 and 10,000, respectively and D, the industrial partner, contributed his services, Suppose X, a customer, is the creditor of the firm to the amount of P180,000. How can X recover the P180,000? a. Xcan recover from the firm P60,000. X can still recover the balance of P120,000 from the capitalist partners only. b. X can recover from the firm P60,000. X can recover the balance of P120,000 from any of the partners solidarily. 816preliminary Examination e of X can recover from the firm P60,000 and consider the balanc 120,000 as loss. Xan recover from the firm P60,000. X can still recover the balance of 4 p120,000 from the four partners jointly. 19. X,YandZare equal partner to XYZ Partnership. A owes XYZ Partnership for P9,000. Z, a partner collected from A P3,000 before X and Y received anything, Z issued a receipt on the 3,000 as his share of what A owes. When X and Y collected from A, A was insolvent. Partner Z shall share partners X and Y with the P3,000. Zcannot be required to share X and Y with the P3,000. Xand Y should first exhaust all remedies to collect from A X and Y can automatically deduct from the capital contribut the partnership their respective share in the 3,000. Hon of Zin ship. The partnership owns 20. Aand Bare partners in a real estate partne! ntacted A and informed him a piece of land which C desired to buy. € co! of his desire to buy the land and A did not tll B about it A bought B out of the partnership and afterwards sold the Jand to C with a big profit. a. Ais liable to B for the latter's share in the profits. . The partnership is dissolved when ‘Abecame the sole owner. ¢. The sale ofthe land to Cis votd because it was without the knowledge of B. 4. Ais not-liable to B for the latter's share in the profits. in ABC Partnership. A, the managing pusiness that is the same as business f the partnership without the consent 21. A, B and C are general partners partner engaged personally ina that is the same as the business o! of BandC. a. If there are losses, the partnership wil b. If there are profits, they will be Partnership. c. The profits or losses will be s d. Ifthere are profits, A will give ill bear the losses. shared by partner A and ABC hhared equally by Aand the Partnership. the profits to the partnership. 22. The partnership is insolvent. They are preferred as regards to the partnership property. a. Partners’ separate creditors b. Partners with respect to their capital c. Partners with respect to their profits d._ Partnership creditors 23. A partnership is not dissolved on the death of a a. General partner b. Industrial partner 817Preliminary Examination c. Limited partner 4. General limited partner 24. A as partner contributed P30,000; B as partner, P15,000; and C industrial partner, his services in the partnership. After payment of all liabilities and expenses, only P18,000.00 remain as partnership assets. The distribution of the P18,000 cash shalll be: a. _A,P12,000; B, 6,000; C, None b. A, P6,000; B, P6,000; C, 6,000 c. A,P9,000; B, P9,000; C, None d. A. P8,000; B, P4,000; C, P6,000 25. Mand O are partners in M & 0 Partnership. M is the managing partner. N owes M P10,000 and M & 0 Partnership P30,000. The obligations of N are both due. M collected from N the debt of N to M in the amount of P 10,000 and issued a receipt in the name of M. To which obligation will the P10,000 be applied? a. 2,500 to debt of N to M and P7,500 to debt of N to the partnership. b. The whole of the P10,000 will be applied to debt of N to M. ¢. The P10,000 will be applied to debt of N to the partnership. d. 5,000 each to the debt of N to M and the partnership. 26. F, G, H and I are partners. They contributed capital as follows: F, P50,000; G, P30,000; H P20,000 and I, as the industrial partner, his services. The partnership's obligation to outsiders exceeds the total net assets by P18,000. Who and by how much will the partners be liable for the payment of the P18,000? a. F,P9,000 ; G, 5,400; H, P3,600; I, nothing b. F,P6,000; G, 6,000; H, P6,000; I, nothing c. F,P4,500; G, 4,500; H, 4,500; 1, P4500 d. F,nothing; G, 4,500; H, P4,500; I, P9,000 27. Aand B are equal partners in AB Partnership by contributing P50,000 each on July1, 2020. On July 2, 2020, the partnership contracted an obligation to pay Z the amount of P180,000 on August 15, 2020. On ‘August 1, 2020, C was admitted asa new partner, C contributed P50,000. How will the obligation be paid? a. A, P60,000; B, P60,000; C, P60,000 b. A, P65,000; B, P65,000; C, P50,000 c. A,P90,000; B, P90,000; C, none d. A,none; B, P180,000 and C, none 28. X,Yand Zare partners. X contributed his services only; Y, P40,000; and Z, P20,000. The partnership was liquidated. After payment of the 818ry Examination ship obligations, only P18,000 worth il be the share of X? he share of Z prelimina! partne! much wi Equal tot b 6,000 Equal to the share of Y of assets remained. How d. Zero 29. The elements of partnership are: |, Two or more persons bound themselves to contribute money, property, or industry to a common fund. Il. They intend to divide the pro! Both are true Both are false Only | is true Only I is true fits among themselves. pose 30. The contract of partnership is hence, itis perfected by mere consent, that is, by the meeting of minds with respect to the object and consideration of the contract. a. Consensual b, Real c. Formal d. Solemn ed to conduct business using its own firm name ade the name or names of the partners. an action involving a s the real 31. I. The partnership is entitl which name may or may not incl Il. The partners should be impleaded in case in property registered in the name of the partnership because itis party-in-interest therein. Both are true Both are false Only lis true Only I is true pose 32. 1. If there is no agreement, all of the partners will manage the partnership. IL. If there is agreement, one, the partnership. a. Bothare true b. Bothare false c. a. or some, or all of the partners will manage Only Lis true Only IL is true jointing a manager are: tnership, the two modes of app’ ‘anager in the articles of incorporation. 819 33. Ina pai 1. Appointment as m:Preliminary Examination Il. Appointment as manager made in an instrument other than articles of partnership. a. Both are true b. Both are false c. Only lis true d. Only His true 34. The following are the important duties of every partner with regard to the contribution of property, except: Duty to contribute what had been promised. Duty to deliver the fruits of what should have been delivered. Duty to bound for warranty in case of eviction. Duty to pay the interest, if he fails to pay his contribution on time. pose 35. |. An industrial partner cannot engage in any business for himself, unless the partnership expressly permits him to do so. Il. A Capitalist partner cannot engage for their own account in any operation which is of the kind of business in which the partnership is engaged, unless there is a stipulation to the contrary. a. Both are true b. Bothare false c. Only lis true d. Only lis true 36. The partners choose with whom they will enter into a partnership agreement, who will be accepted in their partnership and whether they will remain to be partners. Delectus Personae Bona Fide Accion Pauliana Mora Solvendi pose 37. 1. Ina stock corporation, shares are freely transferable without the consent of other stockholders, while interest in the partnership cannot be transferred without the consent of the other partners. IL, In both partnership and stock corporation, it has juridical personality distinct from their partners and stockholders, respectively. Both are true a b. Both are false c. Only lis true d. Only lis true 36. |. Ina general partnership, there are limited and general partners. Il, Ina limited partnership, there are limited and general partners. a, Both are true 820preliminary Examination b. Both are false c Only lis true d. Only His true 39. He is not liable for losses but he is liable to third persons for partnership obligation. a. General partner b. Industrial partner c. Liquidating partner d. Sub-partner 40, If there is no agreement to the contrary, in case ofan imminent loss: of the business of the partnership, any partner who refuses to contribute an additional share to the capital, except an industrial partner, to save the venture, shall be obliged: a. To pay damages b. To sell his interest to the other partners c. To pay interest and penalty d. To be excluded from the partnership plus damages 41. 1. The risk of specific and determinate things which are not fungible, contributed to the partnership so that only their use and fruits may befor the common benefit, shall be borne by the partner who owns them. IL. If the things contributed are fungible or cannot be kept without deteriorating, the risk shall be borne by the partnership. IIL, If the thing contributed is to be sold, the risk shall be borne by the partner. IV. If the thing is brought and api be borne by the partnership. a. 1,1, Mland IVare true b. Only, Hand ill are true c. Only |, Hand IV are true d. Only 1, Ill and IV are true praised in the inventory, the risk shall 42. The responsibilities of the partnership to the partners are the following, except one: a. To refund amounts disbursed on behalf of the firm plus interest from the time of demand. alf of the firm plus interest from b. To refund amounts disbursed on beh: the time expenses were made. cc. To answer to each partner for good faith in the interest of the d._ To answer for risks in consequence of obligations he may have entered into in partnership. its management. ules as to profit distribution are: 43. Ina partnership, ther 821Preliminary Examination a. Profits are distributed according to agreement. b. If there is no agreement as to profit, according to contribution. a. Both are true b. Both are false Only istrue d. Only His true 44, A and B orally agreed to form a partnership two years from today, each one to contribute P10,000. Ifat the arrival of the period, one refuses to go ahead with the agreement, can the other enforce the agreement? a. No, because the agreement was merely oral. Thus, governed by the Statute of Frauds. b. Yes, since the agreement is to be enforced after one year from the making thereof, the same should be in writing to be enforceable. c. Yes, because the prior agreement was voluntarily made. d. Yes, because the partnership contract is not governed by the Statute of Frauds. 45. A limited partnership was formed in 2019 by X as general partner and Y and Zas limited partners. In 2020, X and Z got married. Did the marriage dissolve or change the form of the partnership? 1 Answer: Yes, partnership is dissolved by the marriage because there is a change in equity and status among the partners. 2n4 Answer: No, because spouses can enter into a universal partnership. a. Both answers are correct b. Both answers are wrong c. 18 answer wrong, 24 answer correct 4. 1stanswer correct, 24 answer wrong 46. A, Band C formed a limited partnership with A as general partner, B as limited partner and C as industrial partner. A and B contributed PS0,000 each. The partnership failed and after disposing all its assets to pay partnership debts there still remains a note payable in the sum of 30,000. Against whom can the creditor demand payment of the note of 30,000? a. Aand Care liable to pay P15,000 each b. Alegal representative of a limited partner c. Aand Bare liable to pay P15,000 each d. Only Ais liable to pay the P30,000 indebtedness 47. A partner owes a duty to inform his or her co-partners of all information regarding partnership affairs. a. Duty of loyalty b. Duty of obedience c. Duty of diligence 822ary Examination preliminaty Bxal puty to inform , Asa rule, each partner may separately execute all acts of ministration. j1, Notice to the part Both are true Both are false Only lis true Only Il is true ner is notice to the partnership. a b 4 4, The following are the rules in profit sharing in a partnership: | The share based on their agreement. I. irthere is no agreement, in proportion to the partners) capital contribution. Both are true a b. Both are false c. Only lis true d. Only INis true 50. The property rights of a partner includes: a. His rights in specific partnership property: His interest in the partnership. His right to participate in the management. All of the above. aos 51. A,B and C are partners in ABC Company. D represented himself as @ partner in ABC Company to X, who, on the belief of such representation, extended a P150,000 credit to ABC Company. ‘Assuming only B and C consented to such representation, who willbe held liable toX? B, Cand D are partners by estoppel and thus, are liable pro-rata to x Partners A, B and C who benefited from the credit extended by X are liable. c. D.who made the represent d. X extended the credit to ABC Company Thus, all the partners A, B, Cand D are liable. oe tation is liable to X. ‘so a partnership liability exists. 52. A and B are equal partners in AB and Company. C represented himself as a partner in AB and Company to Z, who relying on such representation. Extended a P50,000 credit © 'AB and Company. Of the two partners, only B knew and consented tothe representation of C. who should be held liable to Z? a. Only C, who presented himself as partners liable. b. Partners A and B who benefited from the credit extended to the partnership AB and Company shall be liable to 2. 823Preliminary Examination © Since the credit was extended to AB and Company, a partnership liability was created so the two partners and C are liable. 4. Band Care partners by estoppel and, thus, are liable to Z. 53. Ais the managing partner of ABC and Company. X owes A personally and ABC and Company P20,000 each. A collected and received from x P10,000 and he issued a receipt wherein it is stated that the amount is applied against his personal credit. a. The amount received will be applied in favor of the partnership credit. b. The amount received will be applied in the credit of A. c. The amount received will be applied in proportion to both credits. d._Allthe partners will decide as to whose favor it will apply. 54. There can be a partner by estoppel when: a. He represents himself as a partner or consents himself to be represented as a partner of an existing partnership with or without the consent of the partnership. He represents himself as a partner of a non-existent partnership. Only I is correct Only Il is correct Both a and bare correct None of a and b are correct poeges 55. The following are the remedies if an industrial partner who engages in business for himself. I. The capitalist partners may either exclude him from the firm with damages. Il. Avail themselves of the benefits which he may have obtained in violation of this provision with damages. a. Bothare true b. Bothare false c. Only lis true d. Only Ilis true 56. The following are the remedies if a capitalist partner who engages in business for himself. |. The capitalist partners may either exclude him from the firm with damages. IL. The capitalist partner shall bring to the common fund any profits accruing to him from his transactions and shall personally bear all the losses. Both are true Both are false Only Lis true Only Il is true pose 824Y gxamination rin a partnership ‘cannot be assigned. ership is dissolved. ii sign his interest, the part terest of a partnel a partner will as case goth are true goth are false only lis true only His true hip. After three years, X assigned his W. Upon having knowledge of the «gu y,and Z formed XYZ partners ve the partnership without the e partnership to interest in thi and Z decided to dissol assignment, Y consent of X and W. ‘and Z cannot dissolve the partnership a5 they need the con’ sent of X and 2. b, Yand Z cannot dissolve the partnership a5 they need the consent of X the original partner. < Yand Z can dissolve tof X and W are not necessary. 4. Yand Z can dissolve the partnership; how consent of W, the assignee who became parte assignment. the partnership as the consem ever, it should be with the + by virtue of the 59. L. The receipt by a person of a share of the profits of a business is Conclusive evidence that he is a partner in the business. IL Ina partnership, itis necessary that there isan intention to di profits among the members and it is necessary ‘that in equal shares. a. Both are true b. Both are false c. Only lis true d. Only His true 60. I, A corporation can become a partner. IL. All partners in a partnership are agents of each other. a. Both are true b. Both are false c. Only Lis true a. Only His true 61. Partner by estoppel is also known as: a. Quasi-partner b. Limited partner c. Industrial partner . Dormant partner 62. A partner who does not take active part inthe business and not ed known as a partner. 825Preli a, b. c d. 63, a, b. “ 4 64. a 65. « d. 66. pose iminary Examination Dormant partner Ostensible partner Silent partner Secret partner Bears the loss of property contributed to the partnership. Capitalist partner Partners contributing usufructuary rights Limited partner None of the above When cash or property worth P3,000 or more is contributed as capital, the Articles of Partnership shall be in a public instrument and registered with the Securities and Exchange Commission. If the said requirements are not complied with: It will render the partnership void. It will not give a legal personality to the partnership. It will not affect the liability of the partnership and the partners thereof to third parties. It will give the partnership a de facto existence. X, Y and Z are equal partners in XYZ Partnership. The partnership is indebted to B for P150,000. Partner X is indebted to C for P20,000. B attached and took all the assets of the partnership amounting to P90,000. Y and Z are solvent while X is insolvent and all what he owns is aland valued at P15,000. B has priority to the land of X to cover X’s share of the P60,000 remaining liability of the partnership. Y and Z have priority to the land of X if they paid B the P60,000 remaining liability of the partnership. 4.Band C shall both have priority to the land of X in proportion to their claims of P60,000 and P20,000, respectively. Chas priority to the land of X as a separate creditor. 1 Apartner who wrongfully terminates the partnership in contravention of the agreement may be held liable for damages by the other partners who are in good faith. I. The court may dissolve the partnership upon the death of any partner. Both are true Both are false Only lis true Only His true 826preliminary Examination «| In case of dissolution, all the credits should be satisfied using the partnership properties. Those owing to partners are preferred over the claims of creditors. Il. The dissolution of the partnership does not discharge a partner from his existing liability as a partner including liability for losses. a, Both are true b. Bothare false c. Only lis true d. Only Ilis true 6 68, After liquidation, the assets of the partnership are distributed in the following order: Those owing to creditors other than partners. Those owing to partners other than for capital and profits. Those owing to partners in respect of capital. Those owing to partners in respect of profits. 1,11, 1, 1V 1 TL IL 1V IV, HL U1 UHL, 1V, 1, U1 Bo gpeanee and C. A was appointed in the Article of 69. In the partnership of A, B, “4s such manager and acting in good Partnership as managing partner. faith: a. His power is revocable even without it his b. He may execute all acts of administrations andC. c. His power can be revocable at any time even without just cause provided that it is approved by the partners owning the controlling interest. 6 ta care bve pemeed feey#¥t8 manent Courts tthe pasa ‘owning the controlling interest. consent. despite the opposition of B by contributing each at P50,000. 2, A third party allowed his name to be included in the firm name of the partnership. The partnership was insolvent and after exhausting all the remaining assets, there was left a liability to third persons the amount of P30,000. The creditors can compel: Z to pay the P30,000 remaining liability X or ¥ to pay the P30,000 remaining liability X, Y and Z to pay P10,000 each X and Y to pay P15,000 each 70. Xand Y established a partnership pose 71. A, Band Care partners with capital contribution of P15,000, P10,000 and P5,000 respectively. Suppose 0” dissolution, the assets of their 827