CHAPTER 1-GENERAL PROVISIONS

TRUE OR FALSE
T 1. A partnership maybe constituted in any form.
F 2. A partnership may be constituted in any form, save when immovable property or
real rights are contributed thereto or when the partnership has a capital of below
P3,000, in which case a public instrument shall be necessary.
F 3.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 also have juridical personality.
F 4.Immovable property to be acquired must be in the name of the partnership but if
conveyed, it is not necessary that it be in the partnership name.
T 5.An inventory is still required if aside from real property,personal property is
contributed.
T 6.The sharing of gross returns does not of itself establish a partnership, except when
the persons sharing them have a joint or common right or interest in any property
from which the returns are derived.
T 7. If a person receives a share in the profits of a business, he is a prima facie
presumed to be a partner in business.
T 8. In partnership, there is co-ownership and co-possession of partnership property.
F 9.Partnerships with a capital of P3,000.00 or more must register with the
SEC.Registration requirement is mandatory.
F 10.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.
F 11. A general partner is liable only to the extent of his contribution while a limited
partner is liable beyond his contribution.
T 12. An oral contract of partnership is as good as a written one.
T 13. The right to choose with whom a person wishes to associate himself is the very
foundation and essence of that partnership.
T. 14. An unjustified dissolution by a partner can subject him to action for damages.
F 15. When an unlawful partnership is dissolved by a judicial decree,the profits shall
not be confiscated in favor of the State.
T. 16.A partnership must have a lawful object or purpose, and must be established for
the common benefit or interest of the partners.
F 17. Where an immovable property is contributed in a partnership a private
instrument shall be necessary.
F 18. Articles of universal partnership, entered into without specification of its nature,
only constitute a universal partnership of all present property.
T 19. Persons who are prohibited from giving each other any donation or advantage
cannot enter into universal partnership.
T 20.Co-ownership or co-possession does not in itself establisha partnership.except
when such co-owners or co-possession share in the profits made by the use of the
property.

Multiple Choice Part I

1. It means that it is a contract which has a name in law.
a. Consensual
b. Nominate
C. Preparatory
d. Onerous
2. It means that each partner must contribute money,property, or industry Of course, a
partner can contribute one,some or all of these.
a. Consensual
b. Nominate
c. Onerous
d. Preparatory
3. Any external thing over which the rights of possession, use, and enjoyment are
exercised.
a. Money
b. Property
c. Industry
d. None of the above
4. The latin phrase "delectus personae"means
a. Choice of the person
b. Choice of the people
c. Choice of the public
d. None of the above
5. The birth and life of a partnership at will is predicated on the mutual desire and
consent of the partners.
a. Partnership at will
b. Partnership for a particular undertaking
c. Partnership for a fixed term
d. None of the above
6. An entity created by law and given certain legal rights and duties ofa human being
or a being, real or imaginary, who for the purpose of legal reasoning is treated more or
less as a human being.
a. Natural person
b. Juridical person
c. Normal person
d. None of the above
7. Where a partnership not duly organized has been recognized as such in its dealings
with certain persons.
a. Ordinary partnership
b. De jure partnership
c. De facto partnership
d. Partnership by estoppel
8.The following are the effects of unlawful partnership, except:
a. The contract is voidable from the very beginning.
b. The profits shall be confiscated in favor of the government.
c. The instruments or tools and proceeds of the crime shall be forfeited in favor of the
government.
d. The contributions of the partners shall not be confiscated.
9. A document prepared by a notary public in the presence of the parties who sign it
before witnesses.
a. Private instrument
b. Public instrument
c. Commercial instrument
d. None of the above
10.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.
a. Corporation
b. Partnership
c. Sole proprietorship
d. Cooperative
11. A group of men pursuing a learned art as a common calling in the spirit of public
service.
a. Business
b. Service
c. Profession
d. Artists
12.The following are requisites of partnership,except:
a. There must be a valid contract;
b. There must be a contribution of money, property, and industry to a common fund;
c. The partnership must be organized for gain or profit; and
d. The partnership should have a lawful object or purpose, and must be established for
the common benefit or interest of the partners.
13.There are two tests to determine the existence of a partnership:
1. 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 intentof b, contracting parties to
divide the profits among themselves.
a. Onlylis true
b. Only II is true
C.Both are true
d. Both are false
14. It means that it is a contract that is perfected by mere consent becaus, all the
partners had a meeting of the minds to enter into a contractu partnership.
a. Consensual
b. Principal
c. Preparatory
d. Commutative
15. It means that the contribution of each partner,whether money,propert) or industry,
is considered as the equivalent of the contribution of the other partners.
a. Consensual
b. Principal
c. Preparatory
d. Commutative

Multiple Choice Part II

1. It is one where 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 mor persons not actual partners.
a. Partnership by estoppel
b. Partnership by prescription
c. Closed partnership
d. Partnership sole
2. It is one which has not complied with all the legal requirements for its creation.
a. De facto partnership
b. De jure partnership
c. Real partnership
d. Ordinary partnership
3. I.Q was an accountant in a partnership, with a yearly salary amounting to 10% of
the net profits for the year. Thus, he is a partner in the said partnership.
II.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.
a. Onlyl is true
b. Only Il is true
c. Both are true
d. Both are false
4.May contribute money, property or industry to a common fund.
a. Limited partner
b. General partner
c. Both limited and general partner
d. Both limited and industrial partner
5. The following are disqualified to form a universal partnership,except one:
a. Brother and sister
b. Husband and wife
c. Those guilty of adultery or concubinage
d. Those guilty of the same offense, if the partnership is entered into in consideration
of the same
6. 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:
a. Unenforceable because the amount involved exceeds P500.00.
b. Void because it is not in public instrument.
c. Valid
d. Void,because it is not registered with the SEC.
7. The following are instances, except one, when a partnership is unlawful.Which is
the exception?
a. A partnership formed for the purpose of selling illegal drugs.
b. A partnership formed for the purpose of buying lands.
c. A partnership formed to create illegal gambling.
d. A partnership formed for selling smuggled cars.
8. X and Y orally agreed to form a partnership. Each contributed cash worth P15,000
to common fund. But they did not register the partnership with the Securities and
Exchange Commission.
a. The partnership is void
b. The partnership is voidable
c. The partnership is still valid
d.The partnership is valid and unenforceable
9. 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.
a. Universal partnership of all profits
b. Universal partnership of all present property
c. Particular partnership
d. None of the above
10. It comprises all that the partners may acquire by their industry or wON during the
existence of the partnership.
a. Universal partnership of all profits
b. Universal partnership of all present property
c. Particular partnership
d. -None of the above
11. A particular partnership has for its object determinate things, their use or fruits, or
specific undertaking, or the exercise of a profession a vocation.
a. Universal partnership of all profits
b. Universal partnership of all present property
c. Particular partnership
d. None of the above
12.It is one where alI the partners are general partners.
a. De jure partnership
b. De facto partnership
c. Limited partnership
d. General partnership
13. It is one where there is at least one general partner and one limitel partner.
a. De jure partnership
b. De facto partnership
c. Limited partnership
d. General partnership
14. It is one where the life or period of existence of the partnership has beet agreed
upon by the partners.
a. Partnership with a fixed term
b. Partnership for a particular undertaking
c. Partnership at will
d. De facto partnership
15. It is one where it will exist until the purpose is accomplished.
a. Partnership with a fixed term
b. Partnership for a particular undertaking
c. Partnership at will
d. De facto partnership
 CHAPTER 2-OBLIGATIONS OF THE PARTNERS
TRUE OR FALSE PART I
T 1. Being a contract of partnership, each partner must share in the profits and losses
of the venture. That is the essence of a partnership.
F 2. An industral partner can engage in business for himself, unless the partnership
expressly permits him to do so.
T 3. The partners shall contribute equal shares to the capital of the partnership,unless
there is a stipulation to the contrary.
F 4. 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.
F 5. If the things contribute are fungible or if they were contributed to be sold the risk
shall be borne by the partnership.
6. A stipulation which excludes one or more partners from any share in the profits or
losses is voidable.
7. A partnership begins from the moment of meeting of the minds.
8. Limited partners have absolute right to participate in the management
9.The birth and life of a partnership at will is predicated on the mutual desire and
consent of the partners.
10.The right to choose with whom a person wishes to associate himself is the very
foundation and essence of that partnership.
11.Every partner is a creditor of the partnership for whatever he may have promised
to contribute thereto.
12 The mutual contribution to a common fund is the first test in order to have a
contract of partnership.
13 Capitalist partners are not bound to contribute additional capital.
14. Every partner is responsible to the partnership for damages suffered by it through
his fault.
15. 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.

TRUE OR FALSE PART II

1. Partners shall render on demand true and full information of all things affecting the
partnership to any partner.
2.The partners are governed by fiduciary relationship,that is,mutual trust and
confidence.
3.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.
4. A conveyance by a partner of his whole interest in the partnership dissolves the
partnership.
5. In case of a dissolution of the partnership, the assignee is entitled to receive his
assignor's interest and mayrequire an account from the date only of the last account
agreed to by all the partners.
6. Every partnership shall operate under a firm name, which may or may not include
the name of one or more of the partners.
7. 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.
8. The partner who has been appointed manager in the articles of partnership
may execute all acts of ownership.
9. 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.
10. 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.
11. 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.
12. The partnership books shall be kept 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.
13. Partnership books are examples of partnership property and every partner is a co-
owner of specific partnership property.
14. 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.
15. 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.

MULTIPLE CHOICE PART I

1. A, B and C are partners contributed the following: A-P6,000.00;B-P4, 000.00;and
C-industry.They agreed that the profits and losses shall be distributed as follows to
wit: A-35%; B-25% and C-40%.How shall the loss of P10,000 be distributed?
a. A-P6,000;B-P4,000;C-none
b. A-P3,500;B-P2,500;C-P4,000
c.A-P3,333;B-P3,333;C-P3,333
d. A-P5,000; B- P2, 500;C-none
2. In the same problem in the preceding number, suppose it is a profit of P10,000,how
shall it be distributed?
a. A-P5,000;B-P5,000;C-none
b.A-P3,333;B-P3,333;C-P3,333
C.A-P3,500;B-P2,500;C-P4,000
d. A-P6,000;B-P4,000;C-none
3. Those who cannot be held liable to third persons for partnership obligations.
a. Limited partner
b. Capitalist partner
C Industnial partner
d. General partner
4. A is the managing partner of A and B partnership. X is indebted to A for P25,000
and the partnership for P75, 000. When both debts mature,X pays A P10,000 and the
latter issues a receipt for his personal credit The payment for P10,000 shall be applied:
a. To the whole debt owing to A.
b. 1/4 in favor of A and 3/4 in favor of partnership.
C. Debt owing to the partnership.
d. 1/4 in favour of A and 1/ in favour of the partnership.
5. Those who manage actively the business or affairs of the partnership.
2. Silent partner
b. Ostensible partner
C. Managing partner
d. Dormant partner
6. 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.
a. The partners bind the partnership by consenting for obligations he may have
contracted in good faith.
b. The partner must have the authority to bind the partnership.
C. The contract must be in the name of the partnership.
d. The partner must act on behalf of the partnership.
7. Those who do not take active part in the business or affairs of the partnership
though they share in the profits or losses.
a. Managing partner
b. Ostensible partner
c. Dormant partner
d. Silent partner
8. Those whe takes active part and known to the public as a partner in the partnership
a. Ostensible partner
b. Secret partner
c. Liquidating partner
d. Dormant partner
9.Those whose connection with the partnership is not known to the public.
a. Ostensible partner
b. Liquidating partner
c. Secret partner
d. Dormant partner
10. 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.
a. Dormant partner
b. Ostensible partner
c. Secret partner
d. Liquidating partner
11. Those partner in an existing legal partnership.
a. Secret partner
b. Partner by estoppel
C. De facto partner
d. Real partner
12. 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.
a. Real partner
b. Partner by estoppel
c. Secret partner
d. De facto partner
13. 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.
a. Z cannot be required to share what he already received from D.
b. Xand Y should first exhaust all remedies to collect from D.
c. Z shall share the P1, 000 with his co-partners X and Y.
d. X and Y can automatically deduct from the capital contribution of Z in the
partnership their respective shares of P333.33.
14. Those who became members of the partnership after its establishment.
a. Secret partner
b. Partner by estoppel
c. De facto partner
d. Incoming partner
15.The following are the legal relations created by a contract of partnership,except:
a. Relations between third persons.
b. Relations between the partners on one hand and the partnership on the other hand.
c. Relations between the partners on one hand and third persons on the other hand.
d.Relations between the partnership and the third persons.
16.Those who contribute money or property or both money and property to the
common fund.
a. Industrial partner
b.Capitalist partner
C.GeneralI partner
d. Limited partner
17. A. B, C, and D organized a general partnership with A and B as industrial
partners.C contributed P800,000 and D contributed P600,00 to the common fund.A
and B were appointed managing partners. It applied as office assistant and K applied
as accountant untant of the partnership.The hiring of J was decided upon by A and B
but was opposed by C and D.Whose decision shall prevail?
a. The decision of A and B shall prevail because they are the managers.
b.The decision decision of C and D shall prevail because they are the capitalist
partners.
c.The decision of Cand D because they have the controlling interest.
d The decision of A and B because it is an act of ownership.

18.In the preceding problem,suppose the hiring of K was decided upon by A and
D.but was opposed by B and C,whose decision shall prevail?
a. The decmanaging partner and the hiring is an act of administration.
b. That of A and D because is also a capitalist partner.
c. The decision of B and C because in case of tie in the decision of managing partners,
that of the controlling interest shall prevail.
d.The decision of A and B because they are the managing partners.
19. Those who contribute money or property and industry or both money, property the
common fund. Industrial partner
b.Capitalist partner
c. General-limited partne
d. Capitalist-industrial partner
20. X and Y verbally agreed read to form a contract of partnership 18 months from
today,each one to contribute P15,000.At the arrival of the said date,if one refuses to
go ahead with the agreement, can the other enforce the agreement?
a. Yes,since the agreement is to be enforced after one year from the
making thereof. To be enforceable.
b. Yes,because the prior agreement was voluntarily made.
c .No,because the agreement was merely verbal.
d.Yes,because the contract of partnership is not governed by the Statute of Frauds.
21.Those who contribute only their industry or labor to the common fund.
a. Capitalist partner
b. General partner
c. Industrial partner
d. Limited partner
22.Those who takes charge of the winding up or liquidation of the partnership affas
after dissolution.
a.Ostensible partner
b. Liquidating partner
C.Secret partner
d.Dormant partner
23.A,B,and C formed a partnership.They contributed P250,000 each.They also agreed
on equal distribution of profit. After 5 years of operation however,C conveys her
whole interest in the partnership to D,without knowledge and consent of A and B. Is
the partnership dissolved?
a. The partnership is not dissolved because the assignment made by C of his whole
interest was with terest was without the knowledge and consent of A nd B.
b.The partnership was dissolved because the assignee, D automatically becomes a
new partner.
C.It is dissolved since C has ceased to be a partner because of the whole interest to D.
d. The partnership is not dissolved because the conveyance of a partner's interest in
the partnership does not of itself dissolve the partnership.
24. Based on the preceding problem:
a. D can participate in the management of the partnership.
b. D can inspect the books because he is a partner and therefore thereis a fiduciary
relationship.
C.D cannot inspect the books.
d.D can take part in the control of the business.
25.Still based on the said problem:
a. If A and B want to dissolve the partnership. C as a partner need not
consent thereto because he had assigned his interest to D.
b. D may ask the court for its dissolution being the assignee of c
interest in the partnership.
c.A. B and C may dissolve the partnership even without the consentel
d. A.Band C can ask for judicial dissolution of the partnership.
MULTIPLE CHOICE PART II
1. A,B,C and E are partners. They contributed to the capital as follows: A -P50,000;B-
P100,000;C-P150,000;and E as the industrial partner, his services. The partnership
obligation tooutsiders exceeds the total net assets by P200,000.Who and by how much
will the partners be liable for the payment of the P200,000?
a. A-zero;B-zero;C-zero;E-zero
b. A-P33,333;B-P 66,666;C-P100,000;E-zero
c. A-P45,000; B-P 45, 000; C-P55,000;E-55,000
d. A-P50,000;B-P 50,000;C-P50,500;E P50,000
2. A is a capitalist partner and B the industrial one. A engaged personallyin the same
kind of business as that of the partnership:
a. If there are losses, the partnership will bear the losses.
b. If there are profits, they will be shared by A and the partnership.
C. If there are profits, A shall give them to the partnership.
d. A may be excluded from the partnership with liability for damages.
3. Suppose in the preceding problem, B engages in business on his own account but
different from that of the partnership.
a. If there are profits, B and the partnership shall share equally.
b. B may be excluded from the partnership with damages.
c. If there are losses, B and the partnership shall equally share.
d B may be excluded from the partnership but without damages.
4. Those who contribute money or property and industry or both money property and
industry to the common fund.
a. Industrial partners
b. General partners
C. Limited partners
d. Capitalist-industrial partners
5. Those who contribute only their industry or labor to the common fund
a. Industrial partners
b. Capitalist-industrial partners
c. General partners
d. Limited partners
6. A and B are capitalist partners while C is an industrial partner.Both A and B
equally contributed P50, 000. A contractual liability in favor of X was incurred in the
amount of P150, 000. After exhausting partnership assets,there is a balance
recoverable from:
a. Aand Bonly
b. A,Band C
c. A,B and C and C can get reimbursement from A and B.
d. Band Conly.
7. The following are the remedies of capitalist partners against an industrial partner
who engaged in business for himself:
I. The capitalist partners may exclude the industrial partner from the partnership plus
damages.
II.The capitalist partners may avail themselves of the benefits which the industrial
partner may have obtained plus damages.
a. Only I is correct
b. Only II is correct
c. Both are true
d. Both are false
8. A, B and C are partners in a partnership with each contributing P100, 000 each. D
is admitted as a new partner with a contribution of P50, 000. At the time of his
admission, the partnership has a pre-existing obligation to E in the amount of P150,
000.
a. D is not liable to E for this obligation incurred when he was not yet a partner.
b. D is liable up to P50,000.
c. D is liable up to P25,000.
d. D is liable up to P16,667.
9. Who can demand true and full information?
a. Any partner
b. Legal representative of any deceased partner
C. Legal representative of any partner under legal disability
d. All of the above
10. A and B are capitalist partners while C is an industrial partner. There is no
agreement as to the profits and losses.The partnership realized profit in the amount of
P150, 000. The share of C in the profits shall be:
a. Aand B will determine C's share in the profits.
b. Just and equitable under the circumstances.
c. C's share shall be P150,000.
d. Pro rata to his contributed capital.
11. Suppose instead of profit, the partnership suffered loss in the same amount of
P150,000, the share of the capitalist partners in the loss shall be:
a. In accordance to their profit sharing agreement.
b. In accordance with their loss sharing agreement.
c. In proportion to their capital contribution.
d. Equally among them.
12. With still the same facts, as industrial partner, the share of C in the los shall be:
a. Just and equitable under the circumstances.
b. As agreed upon by the partners before the loss was realized.
c. In proportion to his capital contribution.
d. None,he being an industrial partner.
13. The following are the rights of an assignee, except:
a. To receive the profits to which the assigning partner would otherwise be entitled;
b. In case of dissolution, the assignee may require an account from the date of
liquidation.
C.In case of fraud in the management of the partnership, the assignee may avail
himself of the usual remedies provided by law;
d. In case of dissolution, to receive the assignor's interest; and
14. A and B are partners with A as the managing partner.C owes A P100,000 and the
partnership P300, 000 which are now both due. A issued a receipt for the payment of
C in the amount of P100,000 in his own name. The payment shall be applied to:
a. The partnership credit totally.
b. The credit of A only since the receipt is in his name.
c. The payments shall be applied proportionately to both credits.
d. The payment shall be applied equally in both credits.
15. Arises if all the partners consented to the misrepresentation of a third person who
is not a real partner. This creates a partnership obligation.
a. General partnership
b. Limited partnership
c. Partnership by estoppel
d. None of the above
16. This is the order of priority in general partnership liabilities:
a.Outside creditors, creditor partner, partner's capital, partner' proft.
b. Outside creditors, creditor partner, partner's profit,partner' capital.
c. Creditor partner, Outside creditor, partner's profit, partner's capital
d. Creditor partner, Outside creditor, partner's capital, partner's profit
17. The following are obligations of partners, except:
a .To give their promised contribution.
b. To account and hold as trustee for any profits derived without the consent of the
other partners.
c. To engage in any business which is of the kind in which the partnership is engaged.
d. Not to convert partnership money to their own use.
18.The following are obligations of partners,except:
a.Obligation to share with the other partners the share of the partnership credit which
they have received from an insolvent partnership debtor.
b. Obligation of a managing partner to credit to the partnership the payment made by
a debtor who owes them and the partnership.
c. Not to engage in any business which is of the kind in which the partnership is
engaged.
d. Pay for damages suffered by the partnership without their fault.
19. The following are the rights of partners.except:
a. Right to ask for the dissolution of the partnership at the proper time.
b. Right to have access to and inspect and copy partnership books on Sundays and
holidays.
c. Right to demand a formal account.
d. Right to associate with another person in their share.
20.The following are the rights of partners,except:
a. Appraisal right
b. Rights in specific partnership property
c. Interest in the partnership
d. Right to participate in the management
21. A,B and C formed a commercial partnership. D represented himself as a partner in
the partnership to E who, on the belief of such representation, extended credit of P50,
000 to the partnership. Assuming only B and C consented to such representation, who
shall be liable to E?
a. B,C and D are partners by estoppels and thus, are liable to E.
b. Only partners A. B and C are liable to E for the benefit extended to them.
c. Only D who made the representation is liable to E.
d. All of A, B.C,and D are liable because of partnership liability for the credit
extended to the partnership by E.
22. A,B and C are general partners in ABC partnership.X is a debtor to the partnership
in the amount of P180,000.A received from the debtor X the sum of P60, 000 and
issued a receipt identifying the amount collected as P60.000.
a. A cannot be compelled to share the P60,000 with Band C.
b. A can be compelled to share with Band C their P60,000.
c. B and C should automatically sue X to collect the P120,000.
d. B and C can deduct from the capital of A their share of P60,000.
23. It is one where it will exist until the purpose is accomplished.
a. Partnership with a fixed term
b. Partnership at will
C.Partnership for a particular undertaking
d. None of the above
24.Three of the following are property rights of a partner.Which is not?
a. Right to specific partnership property.
b. Right to participate in the management.
c. Right to demand formal accounting of partnership affairs.
d. Interest of the partner in the partnership
25.A partnership that does not fix its term.
a. Partnership with a fixed term
b. Partnership for a particular undertaking
C. Partnership at will
d. None of the above
 CHAPTER 3-DISSOLUTION AND WINDING UP

MULTIPLE CHOICE

1. A partnership is dissolved.except:
a. Death of a partner
b. Insolvency of a partner or of the partnership
C. Partnership business can only be carried on at a loss.
d. Partnership business has become unlawful.
2.1.The transfer by a partner of his partnership interest does not make the assignee of
such interest a partner of the firm, nor entitle the assigneet: interfere in the
management of the partnership business or to receive anything except the assignee's
profits.
I1.Generally understood to mean an organization formed for somt temporary
purpase.a joint venture is likened to a particular partnership
a. Onlyl is correct
b. Only Il is correct
c. Both are true
d. Both are false
3.I.As a rule,when a partnership is dissolved,any of the partners can bind the
partnership.
II.Where the dissolution is caused by the 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 had not been dissolved.
a. Onlyl is correct
b. Only ll is correct
C Both are true
d. Both are false
4.I 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 payment of his
separate debts.
a. Onlyl is correct
b. Only ll is correct
c Both are true
d. Both are false
5. In extra-judicial liquidation,the following will wind-up the partnership. except:
a. The managing partner who has the controlling interest.
b. The liquidating partner or partners as agreed upon by all of the partners.
C. The partners who have not wrongfully dissolved the partnership.
D. The legal representative of the last surviving partner who is not insolvent.
6. The following are rights of partner who has not caused dissolution
wrongfully.except:
a .To have the partnership property applied to discharge the liabilities of the
partnership.
b. To have the surplus, if any. applied to pay in cash the net amount owing to the
respective partners.
C.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.
d. To be indemnified for damages caused by the partner who did not caused the
dissolution wrongfully.
7. If a partner is insolvent, the first in the order of preference in the distribution of his
assets is:
a. Partnership creditors
b. Partner's contribution to the partnership
c. Separate creditors of the partner-debtor
d. Pro-rata between the separate creditors and the partnership creditors.
8. I.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 the net
partnership assets are partitioned and distributed to the partners.
a. Onlyl is correct
b. Only II is correct
c. Both are true
d. Both are false
9. The three final stages of a partnership are the following,except:
a. Dissolution
b. Winding-up
c. Termination
d. None of the above
10. I.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.
a. Only l is correct
b. Only II is correct
c. Both are true
d. Both are false
11. It means the dissociation bya partner, inclusive of resignation a withdrawal,from
the partnership that thereby dissolves it.
a. Dissolution
b.Liquidation
c. Termination
d. Retirement
12.I.The legal personality of the expiring partnership persists for the limited purpose
of winding up and closing of the affairs ofthe partnership.
Il.After dissolution, all the transactions of the partnership should only pertain to
liquidation which will happen over a period of time.
a. Only l is correct
b. Only Il is correct
c. Both are true
d. Both are false
13.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:
a. Right of lien or right of retention
b. Right of dissolution
c. Right of subrogation
d. Right of indemnification
14. I. 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.
a. Only l is correct
b. Only Il is correct
c. Both are true
d. Both are false
15. I.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.
a. Onlyl is correct
b. Only Il is correct
c. Both are true
d. Both are false
16. I.In the ordinary course of events, the lepal personality of the expiring partnership
persists for the limited purpose of winding: apand closing, of the affairs of the
partnership.
II. a withdrawing partner is no longer liable to a third party creditor of the old
partnership.
a. Only l is correct
b. Only Il is correct
c. Both are true
d. Both are false
17. I.The use by the person or partnership continuing the business of the partnership
name, or the name of a deceased partner as part thereol. shall make the individual
property of the deceased partner liable lor 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.
a. Only Iis correct
b. Only Il is correct
c. Both are true
d. Both are false
18. I.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. A partnership must refund the shares of the partners, the amount to be refunded is
necessarily limited to its total resources.
III.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.
a. Only l is correct
b. Only Il is correct
c. All are true
d. All are false
19.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.
a. Liquidation
b. Termination
c. Winding up
d. Dissolution
20.A,B and Care partners in ABC partnership.Aand Bcontributed P10.000 each while
C contributed his service. After payment of the partnership liabilities to creditors, only
P15,000 remains.In the absence stipulation to the contrary the share of C shall be:
a. Zero
b. P5,000
c.P10,000
d. P5,000