No. 125 Brgy.

San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

REGULATORY FRAMEWORK FOR BUSINESS TRANSACTIONS

Law on Partnership

1. Contract of Partnership is a contract of two or more persons who bind themselves to

contribute money, property, or industry to a common fund, with the intention of dividing the
profits among themselves. It may also be formed by two or more persons for the exercise of a
common profession.

2. Characteristics of a contract of partnership

a. Consensual – It is generally perfected by mere consent except if real property is
contributed wherein it becomes a formal or solemn contract that requires the contract of
partnership to be notarized and inventory of real property must be attached to the said
public instrument.
b. Principal – It does not depend upon any other contract for its validity or existence.
c. Bilateral or Multilateral – It is entered into by two or more persons whose rights and
obligations are reciprocal.
d. Nominate – It has a special name given to it by law.
e. Preparatory – It is a means by which other contracts will be entered into as the
partnership pursues its business.
f. Onerous – The partners contribute money, property or industry to a common fund with
the intention of dividing the profits among themselves except in case of universal
partnership which is actually considered an indirect donation classified as gratuitous
contract.

3. Essential requisites of partnership as form of business organization

a. It must have a valid partnership contract.
b. It must have a lawful object or purpose.
c. It must have a mutual contribution of money, property or industry to a common fund.
d. It must be established for the common benefit or interest of the partners which is to
obtain profits and then to divide the profits among the partners.

4. Delectus Personae means that a partner has a right to choose those whom he wants to be
associated with the partnership because it is based on trust and confidence. Admission of a third
person as a partner requires unanimous consent of all the partners because being a partner is
purely personal. Thus, a purchaser or assignee of an interest of an existing partner does not
automatically become a partner in an existing partnership without the unanimous consent of all
the partners. As a consequence, partnership as a form of business organization has no right of
succession.

5. Formality of contract of partnership

a. As a general rule, it may be in any form because it is perfected by mere consent.
b. If immovable or real property is contributed, the contract of partnership must be
notarized and inventory of the said real property must be attached to the notarized
contract of partnership for the contract to be valid. It must also be registered to SEC to
affect and bind third persons.
c. If the contributed capital is at least P3,000 in money or personal property, the contract of
partnership must be notarized and registered for SEC in order to prejudice and affect
third persons but not for validity of the contract. Noncompliance with this formality will
not affect the liability of the partners to third persons as to the obligations of the
partnership.
d. If the partnership is a limited partnership, a certificate of limited co-partnership must be
signed under oath by the partners and must be recorded with the SEC, otherwise the
partnership will be considered as a general partnership. Noncompliance with this
formality will make the limited partners as general partners to partnership creditors but
they will remain to be limited partners to the partners themselves.

1|P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

6. Cases that do not establish a partnership

a. Persons who are not partners to each other.
b. Co-ownership whether such co-owners do or do not share any profits made by the use of
the property.
c. Co-possession whether co-possessors do or do not share any profits made by the use of
the property.
d. Sharing of gross returns, whether or not the persons sharing them have a joint or
common right or interest in any property from which the returns are derived.

7. Generally, receipt by a person of share of the profits of a business is a prima facie

evidence that he is a partner. However, these are exceptional instances when the receipt by a
person of a share of the profits of a business shall not be considered a prima facie evidence that
he is a partner in a business:
a. As a debt by installment or otherwise
b. As wages of an employee
c. As rent to a landlord.
d. As an annuity to a widow or representative of a deceased partner.
e. As interest on a loan, though the amounts of payment vary with the profits of the
business.
f. As the consideration for the sale of a goodwill of a business or other property by
installment or otherwise.

8. Universal partnership of all present property is a type of universal partnership wherein all
the partners contribute all the property which actually belonged to them to the common fund,
with the intention of dividing the same among themselves, as well as the profits which they
acquire therewith.

9. Properties that shall belong to the common fund in a universal partnership of all
present property
a. Property belonging to the partners at the time of the constitution or perfection of the
partnership.
b. Profits that may be acquired from the present property.
c. Property acquired by each partner after the formation of the partnership if stipulated.
d. Profits and fruits from property acquired by each partner, even those from property
acquired by inheritance, legacy or donation after the formation of the partnership if
stipulated.

10. Universal partnership of profits is a type of universal partnership whereby the common fund
comprises all that the partners may acquire by their work or industry during the existence of the
partnership.

11. Properties that shall belong to the common fund in a universal partnership of profits
a. Profits obtained by the partners by their work or industry during the existence of the
partnership.
b. The usufruct or use of the property belonging to each partner at the time of the
constitution of the partnership.
c. The profits and fruits from the properties mentioned in letter a and b.
d. The profits and fruits, if stipulated, of the property acquired by each partner after the
constitution of the partnership.

12. Persons who cannot enter into a universal partnership but can enter into a particular
partnership
a. Husband and wife
b. Persons who were guilty of adultery or concubinage at the time of formation
c. Persons who were guilty of the same criminal offense
d. Public officer or his wife, descendants or ascendants and another person by reason of the
public officer’s position

13. In case Universal Partnership is entered into without specification of the type of
Universal Partnership, it shall be presumed to be a Universal Partnership of Profits.
Since Universal Partnership is a gratuitous contract of donation, the ambiguity shall be
interpreted in favor of least transmission of rights because Universal Partnership of Profits
involves lesser transmission of rights as compared to Universal Partnership of All Present
Property.

2|P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

14. Particular partnership is a partnership which has for its object determinate things, their use or
fruits, or a specified undertaking, or the exercise of a profession. Example of particular
partnership is General Professional Partnership.

15. Kinds of partnership

a. General partnership is a partnership where all the partners are liable up to the extent
of their separate property after the partnership assets have been exhausted.
b. Limited partnership is a partnership where there is at least one general partner who is
liable up to the extent of his separate property and at least one limited partner who is
liable up to the extent of his investment in the partnership.
c. Ordinary partnership is a partnership which actually exists among the partners as well
as to third persons.
d. Partnership by estoppel or nominal partnership is a partnership which in reality is
not partnership but is considered as one with respect to those who, by reason of their
conduct or admission, are precluded from denying its existence.
e. Partnership by prescription is a partnership which is established by the lapsing of
time.
f. De jure partnership is a partnership that exists both in fact and in law.
g. De facto partnership is a partnership that exists in fact but not in law.
h. Partnership with a fixed term is one for which a period for its duration is fixed by the
partners.
i. Partnership for a particular undertaking is one which is organized for a certain
undertaking which, when attained, will cause the termination of the partnership.
j. Partnership at will is one where no period is fixed by the parties for its duration.
k. Commercial Partnership or Business Partnership is a partnership formed by two or
more persons who bind themselves to contribute money, property, or industry to a
common fund, with the intention of dividing the profits among themselves. It is a taxable
corporation in so far as Income Tax is concern.
l. General Professional Partnership is a partnership formed for the exercise of a
common profession. It is a tax exempt entity in so far as Income Tax is concern because
it will be the practitioner partners who will be liable to pay income tax in their separate
income tax returns for their share in net income of general professional partnership.

16. Kinds of partners

a. General partner is one who is liable for partnership debts to the extent of his separate
property after all the assets of the partnership have been exhausted. He is present in
every type of partnership.
b. Limited partner is one who is liable for partnership debts to the extent of his capital
contribution only. He may only contribute money and property but not industry.
c. General-limited partner is one who has all the rights and powers and is subject to all
the restrictions of a general partner, except that, in respect to his contribution, he shall
have the rights against the other members which he would have had if he were not also
a general partner.
d. Capitalist partner is one who contributes money or property to the common fund.
e. Industrial partner is one who contributes his services or industry to the partnership.
He is classified as a general partner.
f. Capitalist industrial partner is one who contributes not only money or property but
also his services to the partnership.
g. Managing partner manages the business or affairs of the partnership.
h. Liquidating partner takes charge of the winding up of the affairs of the partnership
after it is dissolved.
i. Nominal partner or partner by estoppel is not actually a partner but who may
become liable as such to third persons.
j. Ostensible partner is one who is active in management of partnership business and
known to the public as a partner, such as by allowing his name to be included in the firm
name.
k. Secret partner is one whose connection with the partnership is kept from the public.
l. Silent partner is one who has no voice in the management of the business.
m. Dormant partner is who does not participate in the management of the business and
not known to the public as a partner.
n. Quasi-partner is one who is no longer a partner of business but has left his capital in
the business as loan. He receives interest on such as long as the loan is not paid off.

3|P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

o. Retiring partner is one who decided to leave the partnership after reaching the age of
retirement.
p. Withdrawing partner is one who decided to leave the partnership before reaching the
age of retirement for whatever reason.
q. Newly admitted partner refers to a partner accepted by the present partners in an
existing partnership. He is a liable like a limited partner for liabilities of the existing
partnership prior to his admission but he is liable like a general partner for liabilities of
the existing partnership after his admission.
r. Substituted limited partner is a person admitted to all the rights of a limited partner
who has died or has assigned his interest in a partnership.

17. Commencement of Juridical Personality of a Partnership

a. From the date stipulated by the partners
b. In the absence of agreement, from the moment of the execution of the contract of
partnership

18. Rules on Division of partnership profits

a. It should be divided based on a valid profit agreement.
b. In the absence of a valid profit agreement:
i. The industrial partner shall first receive a just and equitable share in the profits
before distribution to capitalist partners. (Old Civil Code: Share of the least
capitalist partner)
ii. The remaining profits after distribution to industrial partners of his just and
reasonable share in profits shall be distributed to the capitalist partners based on
the following by order of priority:
1. Capital contribution ratio of capitalist partners
2. Equally on the presumption that the contribution of capitalist partners is
equal
iii. In case of capitalist-industrial partner, he shall receive a just and equitable share
in the profit for being an industrial partner and then he shall also share in the
remaining profits as a capitalist partner on the basis of (1) capital contribution
ratio of capitalist partners or (2) equally with the capitalist partners.

19. Rules on Division of partnership losses

a. It should be divided based on a valid loss agreement.
b. In the absence of a valid loss agreement:
i. The industrial partner shall be exempted from sharing in losses.
ii. The losses shall be distributed to the capitalist partners based on the following
by order of priority:
1. Profit agreement of capitalist partners
2. Capital contribution ratio of capitalist partners
3. Equally on the presumption that the contribution of capitalist partners is
equal
iii. In case of capitalist-industrial partner, for being an industrial partner, he shall
not share in losses but for being capitalist partner he shall share in the losses on
the basis of (1) profit ratio of capitalist partners; (2) capital contribution ratio of
capitalist partners; or (3) equally with the capitalist partners.

20. Rules on Designation of Profits or Losses of Partnership by the Partners

a. The agreement as to the division of profits or losses must be mutually agreed upon by all
partners.
b. The unilateral designation of profits or losses by a single partner without the consent or
approval by all the partners is void because it is violative of the concept of mutuality of
contract.

21. Status of Stipulation excluding a partner from share in partnership profit or

partnership loss
a. Stipulation excluding any partner from share in partnership profit is void.
b. Stipulation excluding a capitalist partner from share in partnership loss is void.
c. Stipulation excluding an industrial partner from share in partnership loss is valid.

4|P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

22. Rules in case of designation of profits or losses by a third person as agreed by the
partners
a. If entrusted by the partners to a third person, it is binding upon the partners and may be
impugned only when it is manifestly inequitable.
b. If the designation by a third person is manifestly inequitable, it can no longer be
impugned by a partner who has begun to execute it.
c. If the designation by a third person is manifestly inequitable, it can no longer be
impugned by any partner if three months had already lapsed from the time he obtained
knowledge thereof.

23. Prescriptive period to file an action to impugn or question the manifestly inequitable
sharing of partnership profits or losses designated by a third person
a. Within 3 months from the knowledge of such designation but it must be before the said
partner executes it.

24. Rules on partnership management when a partner has been appointed manager in
the articles of co-partnership or at the time of execution of articles of co-partnership
a. The managing partner may execute all acts of administration despite the opposition of
his partners unless he acts in bad faith.
b. With just or lawful cause, the revocation of the power of the managing partner can be
made by the vote of the partners representing the controlling interest.
c. Without just or lawful cause, the revocation of the power of the managing partner can be
made only with the consent of all the partners including the managing partner.

25. Rules on partnership management when a partner has been appointed manager after
the partnership has been constituted or when the managing partners has been
appointed in a separate document other than articles of co-partnership
a. The managing partner may execute all acts of administration.
b. In case of opposition to the decision of the managing partner on acts of administration,
the partners representing the controlling interest may resort to voting for his removal as
manager.
c. He may be removed with or without just cause by the vote of the partners representing
the controlling interest.

26. Rules of management when two or more partners have been appointed as managers
a. When there is a specification of their respective duties, each managing partner shall
perform only the duties specified in his appointment.
b. When there is no specification of their respective duties and there is no stipulation that
one shall not act without the consent of the others, each one may separately execute all
acts of administration.
c. When there is no specification of their respective duties and there is no stipulation that
one shall not act without the consent of the others, the decision of the majority of the
managing partners shall prevail in case of opposition.
d. When there is no specification of their respective duties and there is no stipulation that
one shall not act without the consent of the others, the decision of the partner owning
the controlling interest (managing or nonmanaging) shall prevail in case of tie in voting.
e. When there is a stipulation that none of the managing partners shall act without the
consent of the others, the unanimous vote of all managing partners shall be necessary
for the validity of the acts. However, if there is imminent danger to the partnership
involving an act of administration, the absence of any of the managing partners may be
alleged by the present partners to justify the approval of act of administration despite the
absence of one of the managing partners.

27. Rules of management when the manner of management has not been agreed upon
a. All the partners shall be considered agents of the partnership or all of them are
managers.
b. Whatever any of the partners may do alone shall bind the partnership.
c. In case of opposition of the other partners, the decision of the majority shall prevail and
the decision of the partners owning the controlling interest shall prevail in case of tie.

28. Sale or alteration of real or immovable property not classified as inventory of the
partnership

5|P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

a. As a general rule the sale of real or immovable property not classified as inventory of the
partnership cannot be validly done by the managing partner alone even if it is favorable
to the partnership unless such transaction created estoppel against the partnership.
29. Acts of the partner that bind the partnership
a. Any act of a partner (managing or nonmanaging) for the purpose of the partnership
business provided the other person acted in good faith.
b. Any act of a partner (managing or nonmanaging) 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 provided the other person acted in
good faith.
c. Any act of a partner (managing or nonmanaging) which is not apparently for the carrying
on of business of the partnership in the usual way but authorized by the other partners

30. Acts of the partner that do not bind the partnership

a. Any act of partner (managing or nonmanaging) which is in the ordinary course of
business of the partnership wherein the managing partner exceeded his authority or
acted in bad faith and the third person acted in bad faith because he has knowledge that
the managing partner exceeded his authority.
b. Any act of a partner (managing or nonmanaging) which is not in the ordinary course of
business of the partnership whether or not the third person has knowledge of lack of
authority of the nonmanaging partner

31. Acts that are not considered for apparently carrying on in the usual way of business
of the partnership and may not be performed by a partner unless he is authorized by all the
other partners or these are acts which require unanimous vote of the partners because they
are considered acts of strict ownership or acts of strict dominion
a. Assignment of partnership property in trust for creditors or on the assignee’s promise to
pay the debts of the partnership.
b. Disposition of the goodwill of the business.
c. Acts which would make it impossible to carry on the ordinary business of the partnership.
d. Confession of judgment.
e. Entering into a compromise concerning a partnership’s claim or liability.
f. Submission of a partnership claim or liability to arbitration.
g. Renunciation of a claim of the partnership.

32. Right of industrial partner to engage in another business

a. An industrial partner cannot engage in any business for himself, unless the partnership
expressly permits him to do so.
b. Alternative remedies of the capitalist partner if the industrial partner engages in business
for himself without the express permission of the partnership
i. Exclude the industrial partner from the partnership with a right to damages; or
ii. Avail themselves of the benefits obtained from the business he engaged in with a
right to damages

33. Right of capitalist partner to engage in another business

a. The capitalist partner can engage in a business of different kind even without stipulation
allowing him to do so and in a business of the same kind if there is a stipulation allowing
him to do so.
b. Remedies available to injured partners when a capitalist partner engages in the same
kind of business without stipulation allowing him to engage in that business
i. To ask the guilty capitalist partner to bring to the common fund any profits
accruing to him from the said transaction; and
ii. To ask the guilty capitalist partner to bear all the losses from the said
transaction.

34. Nature of liability of a general partner, whether capitalist or industrial, for the
partnership debts
a. They shall be liable pro rata and subsidiarily with all their separate property and after all
the partnership assets have been exhausted.

35. Nature of liabilities of newly admitted partner for partnership debts

a. He is liable for all the obligations of the partnership arising before his admission as
though he had been a partner when such obligations were incurred, except that this

6|P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

liability shall be satisfied only out of partnership property, unless there is a stipulation to
the contrary. (Limited Partner for Partnership Obligation arising before his admission)
b. He is liable pro-rata and subsidiarily for all obligations incurred after his admission as a
partner. (General Partners for Partnership Obligation arising after his admission)

36. Exceptional cases wherein the partnership shall be liable directly and solidarily with
all the partners and wherein all partners are liable directly and solidarily with the
partnership for everything chargeable to the partnership
a. For loss or injury caused to a third person or any penalty incurred by reason of the
wrongful act or omission of any partner acting in the ordinary course of business of the
partnership or with the authority of his co-partners.
b. Where one partner acting within the scope of his apparent authority receives money or
property of a third person and misapplies it.
c. Where the partnership in the course of business receives money or property of a third
person and such money or property is misapplied by any partner while it is in custody of
the partnership.

37. Effects of assignment or conveyance of partner’s interest to a third person

a. The associate or assignee or purchaser of partner's interest does not become an
automatic partner of the partnership without the consent of the other partners.
b. The partnership is not dissolved by the assignment of the said interest.
c. The associate or assignee is entitled only to the share of the assigning partner in the
partnership profits and share of the assigning partner in the net assets of the partnership
at the date of liquidation.

38. General Obligations of a partner

a. In the absence of contrary agreement, to make equal contribution to the capital of the
partnership.
b. Every partner shall render on demand true and full information of all things affecting the
partnership to any partner or the legal representative of any deceased partner or of any
partner under legal disability.
c. Every partner must account to the partnership for any benefit, and hold as trustee for it
any profits derived by him without the consent of the other partners from any transaction
connected with the formation, conduct, or liquidation of the partnership or from any use
by him of its property.
d. To reimburse to the partnership the amount that he has taken from the partnership
coffers with interest from the time of conversion plus damages suffered by partnership
by reason of the conversion.
e. In case of imminent loss of the business of partnership, a partner has the obligation: (1)
to contribute additional share of capital to the partnership to save the venture unless: (a)
he is an industrial partner or (b) he is a capitalist partner exempted by stipulation of
partners or (2) to sell his interest to the other partners if he refuses to contribute such
additional capital.
f. To bring to the partnership capital his share of a partnership credit which he has received
in whole or in part even he may have given his receipt if the other partners have not
collected their shares and the debtor becomes insolvent after the partner has received
the payment.
g. To pay to the partnership for damages suffered by it through his fault but he cannot
compensate them with the profits and benefits which he may have earned for the
partnership by his industry. The court may equitably reduce or offset the liability for
damages of the said partner to the partnership if unusual profit has been realized by the
partnership from his extraordinary effort.

39. Obligations of a partner involving delivery of specific property he promises to

contribute
a. To take care of the specific property before its delivery to the partnership with the
diligence of a good father of a family.
b. To deliver to the partnership specific property at the time it was constituted or on the
date stipulated the property he has promised to contribute.
c. To be liable for the fruits of the specific thing from the time they should have been
delivered without the need of any demand.
d. To be liable for damages in case of default or delay in the delivery of specific property.

7|P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

e. To answer for eviction in case the partnership is deprived of the specific or determinate
thing he has contributed to the partnership in the same manner as the vendor is bound
with respect to the vendee.

40. Obligations of a partner involving delivery of money he promises to contribute

a. To deliver to the partnership at the time it was constituted or on the date stipulated the
money he has promised to contribute.
b. To pay interest on the amount he had promised to contribute from the time he should
have complied with his obligation without need of any demand.
c. To pay damages suffered by the partnership by reason of the default in the contribution
of money.

41. Rights of a general partner

a. Right to have the partnership books kept at the principal place of business of the
partnership
b. Right at a reasonable hour to inspect and copy any of the partnership books
c. Right to have on demand true and full information of all things affecting the partnership
d. Right to a formal account of partnership affairs whenever circumstances render it just
and reasonable
e. Right to have dissolution and winding up by decree of court in cases provided by law.
f. Right to convert the partnership into a corporation.
g. Right to receive his share in net income of the partnership.
h. Right to receive his share in net assets of the partnership after the liquidation.

42. Instances wherein any partner shall have the right to a formal account of the
partnership affairs
a. If the partner is wrongfully excluded from the partnership business or possession of its
property by his co-partners.
b. If the right for formal accounting is provided under the terms of articles of co-
partnership.
c. If the other partner derived profits without the consent of other partners from any
transaction connected with the formation, conduct, or liquidation of the partnership or
from any use by him of its property.
d. Whenever the circumstances render formal accounting just and reasonable.

43. The partnership shall bear the risk of loss for the following contributions of partners
a. Fungible things or those that cannot be kept without deteriorating.
b. Things contributed to be sold.
c. Things brought and appraised in the inventory unless there is a stipulation to the
contrary but the liability of the partnership is limited only to the value of the things at
which they were appraised.

44. Liabilities or obligations of the partnership to the partners

a. The partnership shall be responsible to every partner for the amounts he may have
disbursed on behalf of the partnership and for the corresponding interest, from the time
the expense are made.
b. The partnership shall answer to each partner for the obligations he may have contracted
in good faith in the interest of the partnership business.
c. The partnership shall answer to each partner the risks as a consequence of its
management.

8|P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

45. Distinctions between partner’s right to specific partnership property and partner’s
interest in the partnership
a. As to nature of right, a partner’s right to specific partnership property pertains to
his right to a limited co-ownership over partnership property but a partner’s interest in
the partnership pertains to his share in the net income and net asset of the
partnership
b. As to assignment of right, a partner cannot assign his partner’s right to specific
partnership property but he can assign his partner’s interest in the partnership.
c. As to beint subject to attachment, a partner’s personal creditor cannot attach a
partner’s right to specific partnership property but such creditor can attach the
partner’s interest in the partnership. Only the creditors of the partnership can
attach the properties of the partnership.

46. Rules for application of payment when a person owes separate demandable debts to
the partnership and to the partner authorized to receive also known as managing
partner
a. If the claim of the partnership is not yet due but the claim of the managing partner is
already due, the payment shall be applied to the partner’s credit in its entirety.
b. If the debt owed to the managing partner is more onerous than the claim of the
partnership, the selection by the debtor of the more onerous debt as to the application of
payment shall be followed.
c. If both debts are due and demandable and the managing partner issues the receipt for
the partnership claim, payment shall be applied to the partnership credit in its entirety.
d. If both debts are due and demandable and the managing partner issues his own
personal receipt, payment shall be applied to the partnership credit and partner’s credit
proportionately.

Note: The provisions of this article are understood to be without prejudice to the right granted
to the other debtor by article 1252 as regards to application of payment, but only if the personal
credit of the partner should be more onerous to him.

47. Rules for application of payment when a person owes separate demandable debts to
the partnership and to a partner not authorized to receive credit also known as non-
managing partner
a. If both debts are due and demandable and the nonmanaging partner issues his own
personal receipt, payment shall be applied to the nonmanaging partner's claim in its
entirety.
b. If both debts are due and demandable and the nonmanaging partner issues the receipt
for the partnership claim, payment shall be applied to the partnership credit in its
entirety.

48. An admission or representation made by any partner concerning partnership affairs

within the scope of his authority is evidence against the partnership. The following
are the requisites in order for an admission or representation of a partner to be used
as evidence against the partnership
a. The admission or representation must concern partnership affairs.
b. The admission must be made within the scope of the authority of the partner making the
admission.
c. The admission must be made during the existence of the partnership.

49. As a general rule, notice to any partner of any matter relating to partnership affairs
binds the partnership. The following knowledge of a partner binds the partnership
a. The knowledge of a partner acting in the particular matter if he acquires the same while
already a partner.
b. The knowledge of a partner acting on a particular matter if he acquires it before his
admission to the partnership provided the same was still present on his mind.
c. The knowledge of any other partner not acting on a particular matter if he acquired the
same while already a partner and he could and should have reasonably communicated
the same to the partner acting on a particular matter.

50. Effects of misrepresenting as a partner but not in public

a. The nominal partner is liable pro-rata and subsidiarily like a general partner only to
persons to whom such representation has been made, who has, on the faith of such
representation, given credit to the actual or apparent partnership.

9|P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

51. Effects of misrepresenting as a partner in public

a. The nominal partner is liable pro-rata and subsidiarily like a general partner to persons
giving credit whether the representation has or has not been communicated to the latter.

52. Effects of Estoppel to the Partners and Partnership

a. When a person has been thus represented to be a partner in an existing partnership, or
with one or more persons not actual partners, he is an agent of the persons consenting
to such representation to bind them to the same extent and in the same manner as
though he were a partner in fact, with respect to persons who rely upon the
representation.
b. When all the members of the existing partnership consent to the representation, a
partnership act or obligation results; but in all other cases it is the joint act or obligation
of the person acting and the persons consenting to the representation.

53. Preference of credits of partnership creditors and partner’s creditors

a. The partner’s personal creditors have preference over the partner’s personal assets.
Partner’s separate creditors shall be paid out of the share of the partner owing him if
there is an excess in the partnership’s assets over partnership’s liabilities.
b. The partnership’s creditors have preference over the partnership’s assets. Partnership’s
creditors shall be paid out of separate assets of the partners if there is an excess in the
partner’s separate assets over partner’s separate liabilities.

54. Partnership Dissolution vs. Partnership Liquidation vs. Partnership Termination

a. Partnership Dissolution is the change in the relation of the partners caused by any
partner ceasing to be associated in the carrying on of the business. It does not
automatically result to the partnership liquidation and partnership termination.
b. Partnership Liquidation is the process of settling the disputes or affairs of the partnership
after dissolution or winding up of the partnership business.
c. Partnership Termination refers to the point when all the business or affairs of the
partnership are completely wound up.

55. Causes of dissolution of a partnership without violation of the agreement of the

parties
a. By the termination of the definite term of the partnership.
b. By the attainment of the particular undertaking specified in the agreement.
c. By the express will of all the partners who have not assigned their interests or suffered
them to be charged for their separate debts, either before or after the termination of any
specified term or undertaking.
d. By the expulsion of any partner bona fide or in good faith from the business in
accordance with such power conferred by the agreement of the parties.

56. Automatic causes of dissolution of general partnership

a. In contravention of the agreement between the partners, by the express will of any
partner at anytime such as withdrawing from the partnership.
b. 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.
c. Loss before delivery of property where the partner contributed only its use or enjoyment
or in case of universal partnership of profits.
d. Loss after delivery of property where the partner contributed only its use or enjoyment or
in case of universal partnership of profits.
e. Loss before delivery of specific thing, which a partner has promised to contribute to the
partnership or in case of universal partnership of all present property.
f. By the death of any partner.
g. By the insolvency of any partner.
h. By the insolvency of the partnership.
i. By the civil interdiction of any partner.

10 | P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

57. Grounds for court-ordered dissolution of general partnership also known as non-
automatic causes of dissolution of general partnership
a. A partner has been declared insane in any judicial proceeding or is shown to be of
unsound mind.
b. A partner becomes in any way incapable of performing his part in the partnership
contract.
c. A partner has been guilty of such conduct as tend to affect prejudicially the carrying on
of the business.
d. A partner willfully or persistently commits a breach of the partnership contracts
e. The business of the partnership can be carried only at a loss.
f. Other circumstances that render dissolution equitable.

58. Grounds for dissolution that will terminate all authority of any partner to act for the
partnership in so far as the partners themselves are concern but not as to third
person
a. When the cause of dissolution is not by the act, insolvency or death of a partner.
b. When the cause of dissolution is by the act, insolvency or death of a partner, the person
acting had knowledge of dissolution, death or insolvency of a partner.

59. Ground for dissolution that will not terminate the authority of any partner to act for
the partnership
a. When the cause of dissolution is by the act, insolvency or death of a partner, the person
acting had no knowledge of dissolution, death or insolvency of a partner.

60. Proper order of payment of partnership liabilities and equity in General Partnership in
Liquidation
I. Those owing to the creditors other than partners.
II. Those owing to partners other than for capital and profits.
III. Those owing to partners in respect of capital.
IV. Those owing to partners in respect of profits.

61. Proper order of payment of liabilities and equity of Limited Partnership in Liquidation.
I. Those owing to creditors, including limited partners for advances made to partnership.
II. Those owing to limited partners by way of their share of the profits and other compensation
by way of income on their contribution.
III. Those owing to limited partners in respect to the capital or their contributions.
IV. Those owing to general partners other than for capital and profits.
V. Those owing to general partners in respect to profits.
VI. Those owing to general partners in respect to capital.

62. Form of Return of capital to limited partner

a. In the absence of agreement to the contrary, the limited partner has the right to demand
and receive cash in return for his contribution irrespective of the property he contributed.

63. Period for limited partner to demand from the limited partnership the return of his
capital contribution
a. On the dissolution of limited partnership
b. When the date specified in the certificate for the return of limited partner's capital
contribution has arrived
c. After the limited partner has six months' notice in writing to all other members, if no time
is specified.

64. Order on priority of claims against the separate property of a partner who is insolvent
or whose estate is insolvent.
I. Those owing to separate creditors of the partner.
II. Those owing to partnership creditors.
III. Those owing to partners by way of contribution.

65. Persons who have right or authority to liquidate or wind up the partnership affairs
a. The liquidating partner agreed upon by the partners.
b. The partners who have not wrongfully dissolved the partnership.
c. The legal representative of the last surviving partner, not insolvent

11 | P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

66. Limited Partnership is a partnership where there is at least one general partner, who is liable
up to the extent of his separate assets after the exhaustion of partnership assets, and there is at
least one limited partner, who is liable only up to the extent his capital contribution.

67. Formality of Limited Partnership - A certificate of limited co-partnership must be signed

under oath by the partners and must be recorded with the SEC for it to be considered a limited
partnership.

68. Effect if there is no substantial compliance with the registration of certificate of

limited co-partnership with the SEC
a. The partnership will be considered a general partnership as to third persons. However,
the actual limited partners may ask for reimbursement from the actual general partners
after payment of liabilities of partnership to third persons.

69. Allowed contribution to be made by a pure limited partner

a. Cash
b. Personal property
c. Real property
Note: A limited partner is not allowed to contribute an industry or labor or service because an
industrial partner is always a general partner in so far as the creditors of the partnership are
concern.

70. As a general rule, the surname of a limited partner shall not appear in the limited
partnership name. Instances when the limited partner’s name appear in the
partnership name without increasing the liability of such limited partner to a general
partner:
a. If the name of limited partner is also the surname of a general partner.
b. If prior to the time when the limited partner became such, the business has been carried
on under a name in which his surname appeared.

71. Effect if a limited partner’s name appears in the limited partnership name contrary to
allowed instances provided by law
a. The limited partner is liable pro-rata and subsidiarily like a general partner to partnership
creditors who extend credit to the partnership without actual knowledge that he is not a
general partner but he can ask for reimbursement from actual general partners.

72. Instances when a limited partner is liable pro-rata and subsidiarily like a general
partner to the partnership creditors although he can ask for reimbursement from
actual general partners
a. If he allows his name to be included in the partnership name contrary to allowed
instances of law.
b. If he takes part in the control or management of the business.

73. 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.
However, the following acts can only be made by a general partner if there is written
consent or ratification by all the limited partners
a. Do any act in contravention of the certificate of limited co-partnership
b. Do any act which would make it impossible to carry on the ordinary business of the
partnership
c. Confess a judgment against the partnership
d. Possess partnership property, or assign their rights in specific partnership property, for
other than a partnership purpose
e. Admit a person as a general partner
f. Admit a person as a limited partner, unless the right so to do is given in the certificate of
limited co-partnership
g. Continue the business with partnership property on the death, retirement, insanity, civil
interdiction or insolvency of a general partner, unless the right so to do is given in the
certificate

12 | P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

74. Rights enjoyed by a limited partner which are also enjoyed by a general partner
a. Right to have the partnership books kept at the principal place of business of the
partnership
b. Right at a reasonable hour to inspect and copy any of them any partnership book
c. Right to have on demand true and full information of all things affecting the partnership
d. Right to a formal account of partnership affairs whenever circumstances render it just
and reasonable
e. Right to have dissolution and winding up by decree of court.
f. Right to receive his share in net income.
g. Right to receive his share in net assets after the liquidation.

75. Nature of Limited Partner's Interest - Limited partner's interest is assignable.

76. Substituted Limited Partner refers to the person admitted to all the rights of a limited partner
who has died or has assigned his interest in a partnership.

77. As a general rule, assignee of a limited partner is not a substituted limited partner.
The following are the instances when an assignee of a limited partner may become a
substituted limited partner
a. If all the members of the partnership consent thereto.
b. If the assigning limited partner or assignor is empowered to admit the assignee as
substituted limited partner as provided in the certificate of limited co-partnership and
gives the assignee that right.
c. When the articles of certificate of co-partnership is appropriately amended in accordance
with law.

78. Principles in Limited Partnership

a. 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 of limited co-
partnership.
b. A person who is a general, and also at the same time a limited partner, shall have all the
rights and powers and be subject to all the restrictions of a general partner; except that,
in respect to his contribution, he shall have the rights against the other members which
he would have had if he were not also a general partner.
c. A limited partner may also loan money to and transact other business with the
partnership, and, unless he is also a general partner, receive on account of resulting
claims against the partnership, with general creditors, a pro rata share of the assets.
d. A limited partner who has made a loan to the partnership may not receive or hold as
collateral security any partnership property for his claim to the partnership
e. A limited partner may not receive from a general partner or the partnership any
payment, conveyance, or release from liability if at the time the assets of the partnership
are not sufficient to discharge partnership liabilities to persons not claiming as general or
limited partners.

79. Instances when a certificate of articles of limited co-partnership must be cancelled

a. When the limited partnership is dissolved.
b. When all limited partners cease to be such.

80. Instances when certificate of limited co-partnership may be amended only but not
cancelled
a. There is a change in the name of the partnership or in the amount or character of the
contribution of any limited partner
b. A person is substituted as a limited partner
c. An additional limited partner is admitted
d. A person is admitted as a general partner
e. A general partner retires, dies, becomes insolvent or insane, or is sentenced to civil
interdiction and the business is continued despite the death, retirement, insanity, civil
interdiction or insolvency of a general partner based on the authority given in the articles
of limited co-partnership
f. There is a change in the character of the business of the partnership
g. There is a false or erroneous statement in the certificate
h. There is a change in the time as stated in the certificate for the dissolution of the
partnership or for the return of a contribution

13 | P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

i. A time is fixed for the dissolution of the partnership, or the return of a contribution, no
time having been specified in the certificate
j. The members desire to make a change in any other statement in the certificate in order
that it shall accurately represent the agreement among them

81. Liquidation of a Limited Partnership

a. Limited partners are liable to the limited partnership’s liabilities but only up to the extent
of their capital contribution.
b. General partners are liable pro-rata and subsidiarily to limited partnership’s liabilities up
to the extent of their separate assets after the exhaustion of partnership’s assets.

82. Distinctions between general partnership and private corporation

a. General partnership is created by mere consent while a private corporation is created by
operation of law.
b. General partners are generally liable up to the extent of their separate properties while
stockholders are generally liable only up to the extent of their capital contribution.
c. General partnership is generally managed by the partners themselves while private
corporation is managed by the Board of Directors.
d. Dissolution of a general partnership is a change in the relationship among the partners
while dissolution of a private corporation is the end of the life of a corporation.
e. Dissolution of a general partnership does not automatically result to partnership
liquidation while dissolution of a private corporation generally results to corporate
liquidation.
f. General partnership has no right of succession while private corporation has right of
succession.

Quizzer on Law on Partnership

1. It is a contract of two or more persons who bind themselves to contribute money, property, or
industry to a common fund, with the intention of dividing the profits among themselves. It may
also be formed by two or more persons for the exercise of a common profession.
a. Contract of Agency
b. Contract of Partnership
c. Contract of Co-ownership
d. Contract of Sale

2. Which partnership is a taxable corporation for purposes of income taxation under NIRC?
a. General Professional Partnership
b. Commercial or Business Partnership
c. Both A and B
d. Neither A nor B

3. The following are the characteristics of a contract of partnership, except

a. Consensual – It is perfected mere consent except in case real property is contributed that
requires certain formality for validity.
b. Principal – It does not depend upon any other contract for its validity or existence.
c. Bilateral or Multilateral – It is entered into by two or more persons whose rights and
obligations are reciprocal.
d. Nominate – It has a special name given to it by law.
e. Preparatory – It is a means by which other contracts will be entered into as the
partnership pursues its business.
f. Onerous – The partners contribute money, property or industry to a common fund with
the intention of dividing profits among themselves except in case of universal partnership
which is a gratuitous contract.
g. Accessory – Its existence is dependent upon a principal contract.

4. The following are the essential requisites of partnership, except

a. There must be a valid partnership contract.
b. There must be a mutual contribution of money, property or industry to a common fund.
c. It must have a lawful object or purpose.
d. The partnership must be established for the common benefit or interest of the partners
which is to obtain profits and to divide the profits among the partners.
e. The partnership must be registered in the SEC.

14 | P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

5. When an unlawful partnership is dissolved by a judicial decree, to whom shall the partnership
profits go?
a. To the innocent partner.
b. To the guilty partner.
c. To all the partners pro-rata.
d. To the state.

6. Which of the following statements concerning 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 is correct?
a. They shall have separate juridical personality.
b. They shall be treated as a corporation.
c. They shall be treated as a partnership.
d. They shall be governed by the rules on co-ownership.

7. The following statements concerning partnership are correct, except

a. Partnership is a juridical entity which has a personality separate and distinct from that of
each of the partners.
b. There must be intent to form a partnership.
c. There is fiduciary relation among partners.
d. All partnership contracts are consensual.

8. It is a principle which means that a partner has a right to choose those whom he wants to be
associated with the partnership.
a. Delectus personae
b. Deletus militus
c. Dilitus trustus
d. Deletos fructus

9. The following statements pertaining to the forms of contract of partnership are correct, except
a. As a general rule, a partnership contract may be constituted in any form, whether written
or oral, to be valid because it is perfected by mere consent.
b. Where immovable property or real rights are contributed to the partnership, regardless of
the amount thereof, the partnership contract must be in a public instrument and an
inventory of the said real property or real rights must be made, signed by the partners
and attached to the public instrument, in order for it to be valid. It must also be
registered to SEC for regulatory purposes.
c. Where the capital of the partnership is P3,000 or more, in money or property, the
partnership contract must be in a public instrument and registered with the SEC, in order
for it to be valid.
d. If the partnership is a limited partnership, a certificate of limited co-partnership must be
signed under oath by the partners and must be registered with SEC, otherwise the
partnership will be considered as a general partnership as to third persons but continue
to be limited partnership among the partners.

10. What is the effect if a contract of partnership with a capital of at least P3,000 in money and/or
personal property is not in a notarized document and not registered with SEC?
a. The contract of partnership is null and void.
b. The partnership shall be classified as a corporation.
c. The partnership shall be classified as a sole proprietorship.
d. The liability of the partnership and the partners thereof to third persons will not be
affected.

15 | P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

11. A and B orally entered into a contract of partnership whereby A contributed building while B
contributed land. The partnership business is being operated by the partners for almost 10 years
already. A and B divided equally the profits for 10 years. What is the status of the contract of
partnership after 10 years of operation?
a. It is void both as to the contracting parties and to third persons because the contract of
partnership is not in a public instrument and an inventory of the immovable property is
not signed and attached to the public instrument.
b. It may be considered valid as to the contracting parties on the basis of doctrine of
estoppel but it may be considered void as to third persons for failure to comply with the
formality required by law. Only third persons directly affected by this void contract may
ask for declaration of nullity of the contract of partnership but not the partners because
they are guilty of estoppel.
c. It is rescissible both as to the contracting parties and to third person because it is
intended to defraud third person.
d. It is unenforceable both as to the contracting parties and to third person because it
violates status of fraud.

12. A and B orally agreed to form a partnership business. A will contribute P1M cash while B will
contribute a car. They will deliver the agreed contribution to the partnership three years from the
date of oral agreement. What is the status of the agreement to form a partnership business?
a. Voidable
b. Unenforceable
c. Void
d. Rescissible

13. An insane and a capacitated person orally entered into a contract of partnership. The insane
contributed a car while the capacitated person contributed P1M cash. What is the status of
contract of partnership?
a. Voidable on the part of the insane partner
b. Unenforeceable
c. Void
d. Rescissible

14. An insane and a demented person orally entered into a contract of partnership. The insane
contributed a car while the demented person contributed P1M cash. What is the status of
contract of partnership?
a. Voidable
b. Unenforeceable
c. Void
d. Rescissible

15. Which of the following is not allowed to enter into a contract of partnership?
a. Any natural person who is capacitated
b. Another partnership
c. A corporation
d. None of the above

16. The following cases on their own do not necessarily establish a partnership, except
a. Persons who are not partners to each other.
b. Co-ownership whether such co-owners do or do not share any profits made by the use of
the co-owned property.
c. Co-possession, whether such co-possessors do or do not share any profits made by the
use of the co-possessed property.
d. Sharing of gross returns, whether or not the persons sharing them have a joint or
common right or interest in any property from which the returns are derived.
e. Receipt by a person of a share of the profits of a business.

17. Which of the following is a prima facie evidence that a person is a partner in a partnership
business?
a. Receipt by such person of a share of the profits of a partnership business
b. Being co-owner in a co-owned property
c. Sharing of gross returns in a co-owned property
d. Being a co-possessor of a co-possessed property

16 | P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

18. As a general rule, the receipt by a person of a share of the profits of a partnership business is a
prima facie evidence that he is a partner in said partnership business. However, the following are
the exceptional cases wherein the receipt by a person of a share of the profits of a business shall
not be considered a prima facie evidence that he is a partner in such business, except
a. As a debt by installment or otherwise.
b. As wages of an employee.
c. As rent to a landlord.
d. As an annuity to a widow or representative of a deceased partner.
e. As interest on a loan, though the amounts of payment vary with the profits of the
business.
f. As the consideration for the sale of a goodwill of a business or other property by
installment or otherwise.
g. As a return of the contribution or a return on investment in the business.

19. This is a type of partnership in which the partners contribute all the property which actually
belonged to them at the time of perfection to the common fund, with the intention of dividing the
same among themselves, as well as the profits which they may acquire therewith.
a. Universal partnership of all present property.
b. Universal partnership of profits.
c. Particular partnership
d. General professional partnership

20. The following properties shall belong to the common fund in a universal partnership of all present
property, except
a. Property belonging to the partners at the time of the constitution of the partnership.
b. Profits that may be acquired from the present property.
c. Property acquired by each partner after the formation of the partnership if stipulated.
d. Profits and fruits from property acquired by each partner, even those from property
acquired by inheritance, legacy or donation after the formation of the partnership if
stipulated.
e. Property acquired by inheritance, legacy or donation after the formation by the
partnership if stipulated.

21. This is a type partnership whereby the common fund comprises only all that the partners may
acquire by their work or industry during the existence of the partnership.
a. Universal partnership of all present property.
b. Universal partnership of profits.
c. Particular partnership
d. General professional partnership

22. The following properties shall belong to the common fund in a universal partnership of profits,
except
a. Profits obtained by the partners by their work or industry during the existence of the
partnership.
b. The usufruct or use of the property belonging to each partner at the time of the
constitution of the partnership.
c. The profits and fruits from the properties mentioned in letter a and b.
d. The profits and fruits, if stipulated, of the property acquired by each partner after the
constitution of the partnership.
e. Profits acquired by the partners without the exertion of physical or intellectual efforts,
such as those acquired by chance or lucrative title if stipulated.

23. The articles of universal partnership is entered into without specification as to its nature. What
shall be its construction or interpretation?
a. It is a particular partnership.
b. It is a universal partnership of all present property.
c. It is a universal partnership of profits.
d. It is a general professional partnership.

17 | P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

24. The following persons cannot enter into a universal partnership but can enter into a particular
partnership, except
a. Husband and wife
b. Persons who were guilty of adultery or concubinage at the time of formation
c. Persons who were guilty of the same criminal offense
d. Public officer or his wife, descendants or ascendants and another person by reason of the
public officer’s position
e. Sisters and Brothers

25. It is a type partnership which has for its object determinate things, their use or fruits, or a
specified undertaking, or the exercise of a profession such as General Professional Partnership.
a. Universal partnership of all present property.
b. Universal partnership of profits.
c. Particular partnership
d. Ordinary partnership

26. Which of the following statements pertains to partnership by estoppel?

a. It is a partnership where all the partners are liable to the extent of their separate
property after the partnership assets have been exhausted.
b. It is a partnership where there is at least one general partner who is liable up to the
extent of his separate assets and at least one limited partner who is liable up to the
extent of his investment in the partnership.
c. It is a partnership which actually exists among the partners as well as to third persons.
d. It is a partnership which in reality is not partnership but is considered as one with respect
to those who, by reason of their conduct or admission, are precluded from denying its
existence.

27. Which of the following statements pertains to general professional partnership?

a. It is a partnership which is established by the lapsing of time.
b. It is a partnership that exists both in fact and in law.
c. It is a partnership that exists in fact but not in law.
d. It is a partnership that is taxable like a corporation in so far as income tax is concern. It
is a partnership organized for the operation of a business or commercial enterprise.
e. It is a partnership that is exempted from income tax. It is a partnership organized for the
practice of common profession.

28. Which of the following statements pertains to partnership at will?

a. It is one for which a period for its duration is fixed by the partners.
b. It is one which is organized for a certain undertaking which, when attained, will cause
the termination of the partnership.
c. It is one where no period is fixed by the parties for its duration.

29. Which of the following statements pertains to a general-limited partner?

a. He is one who is liable for partnership debts to the extent of his separate property after
all the assets of the partnership have been exhausted. He is a partner present in every
type of partnership.
b. He his one who is liable for partnership debts to the extent of his capital contribution
only. He is only allowed to contribute money and/or property but neither industry nor
service.
c. He is one who has all the rights and powers and is subject to all the restrictions of a
general partner, except that, in respect to his contribution, he shall have the rights
against the other members which he would have had if he were not also a general
partner.

30. Which of the following statements pertains to a capitalist-industrial partner?

a. He is one who contributes money or property to the common fund.
b. He is one who contributes his services or industry to the partnership. He is classified as a
general partner.
c. He is one who contributes not only money or property but also his services to the
partnership.

18 | P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

31. Which of the following statements pertains to an ostensible partner?

a. He manages the business or affairs of the partnership.
b. He takes charge of the winding up of the affairs of the partnership after it is dissolved.
c. He is not actually a partner but who may become liable as such to third persons.
d. He is one who is active in management of partnership business and known to the public
as a partner, such as by allowing his name to be included in the firm name.

32. Which of the following statements pertains to dormant partner?

a. He is one whose connection with the partnership is kept from the public.
b. He is one who has no voice in the management of the business.
c. He is who does not participate in the management of the business and not known to the
public as a partner.
d. He is one who is no longer a partner of business but has left his capital in the business as
loan. He receives interest on such as long as the loan is not paid off.

33. Which of the following statements pertains to substituted limited partner?

a. He is one who decided to leave the partnership after reaching the age of retirement.
b. He is a partner who is admitted to an existing partnership and who is liable as a limited
partner to existing liabilities of partnership before his admission and who is liable as a
general partner to new liabilities of the partnership after his admission.
c. He is a person admitted to all the rights of a limited partner who has died or has
assigned his interest in a partnership.

34. How shall the profits and losses of the partnership be distributed among the partners?
a. It should be divided equally.
b. It should be divided according to their profits and losses sharing agreement.
c. It should be divided proportionately in accordance to the capital contribution.

35. In the absence of agreement as to the sharing of profits, how shall industrial partner share with
it?
a. The industrial partner shall share on the basis of loss agreement ratio.
b. The industrial partner shall receive an equal share in profit.
c. The industrial partner shall receive the lowest share received by a capitalist partner.
d. The industrial partner shall first receive a just and equitable share in the profits before
distribution to capitalist partners.

36. In the absence of agreement as to the sharing of profits, how shall the remaining profits after
distribution to industrial partners of his just and reasonable share in profits be distributed to the
capitalist partners?
a. It should be divided equally.
b. It should be divided according to loss sharing agreement.
c. It should be divided proportionately in accordance to the capital contribution ratio.

37. In the absence of agreement as to the sharing of profits, how shall a capitalist-industrial partner
share in partnership profits?
a. He shall share on the basis of loss agreement ratio.
b. He shall receive an equal share in profit.
c. He shall receive the lowest share received by a capitalist partner.
d. He shall receive a just and equitable share in the profit for being an industrial partner
and then he shall also share in the remaining profits as a capitalist partner on the basis
of capital contribution ratio.

38. In the absence of agreement as to the sharing of losses, how shall industrial partner share with
it?
a. The industrial partner shall not share in the losses.
b. The losses shall share on the basis of profit agreement ratio.
c. The industrial partner shall receive the lowest share received by a capitalist partner.
d. The industrial partner shall first receive a just and equitable share in the losses.

39. In the absence of agreement as to the sharing of losses, how shall the losses be distributed to
capitalist partners?
a. It should be divided equally.
b. It should be divided in accordance with the profit agreement.
c. It should be divided proportionately in accordance to the capital contribution ratio.

19 | P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

40. In the absence of agreement as to the sharing of profits and losses, how shall the losses be
distributed to capitalist partners?
a. It should be divided equally.
b. It should be divided in accordance with time spent in working for the partnership.
c. It should be divided proportionately in accordance to the capital contribution ratio.

41. In the absence of agreement as to the sharing of losses, how shall a capitalist-industrial partner
share in partnership losses?
a. He shall share on the basis of profit agreement ratio.
b. He shall receive an equal share in losses.
c. He shall receive the lowest share received by a capitalist partner.
d. For being an industrial partner, he shall not share in losses but for being capitalist
partner he shall share in the losses on the basis of profit ratio.

42. Which of the following stipulations in the sharing of profit or losses is valid?
a. A stipulation excluding a capitalist partner in the share of profits.
b. A stipulation excluding a capitalist partner in the share of losses.
c. A stipulation excluding an industrial partner in the share of profits.
d. A stipulation excluding an industrial partner in the share of losses.

43. C and I entered into a contract of partnership for a fixed term of two years. C, a capitalist partner
and I, an industrial partner agreed with the following profit or loss sharing terms. I will share
equally in the profit and there is no agreement as to losses. On 2010, the partnership had
P10,000 net loss. On 2011, the partnership had P20,000 net income. Upon examination of the
contract, it was determined that the word profit is really intended by the partners as cumulative
profit. How much shall be received by I as his share for the two years of partnership operation?
a. P10,000 because industrial partner do not share in the losses.
b. P5,000 because the year-2010 P10,000 net loss shall be netted from year-2011 P20,000
net income before distribution.
c. zero because industrial partner has no investment.
d. P20,000 because he is an industrial partner.

44. The following statements concerning the designation of share in the profits and losses by a third
person or by a partner are correct, except
a. If entrusted by the partners to a third person, it is binding upon the partners and may be
impugned only when it is manifestly inequitable.
b. If the designation by a third person is manifestly inequitable, it can no longer be
impugned by a partner who has begun to execute it.
c. If the designation by a third person is manifestly inequitable, it can no longer be
impugned by any partner if three months had already lapsed from the time he obtained
knowledge thereof.
d. If entrusted to one of the partners, the designation is valid.

45. What is the prescriptive period for a partner to file an action to impugn or question the manifestly
inequitable sharing of partnership profits or losses designated by a third person?
a. Within 3 months from the knowledge of such designation but it must be before the said
partner executes it.
b. Within 2 months from the knowledge of such designation but it must be before the said
partner executes it.
c. Within 1 month from the knowledge of such designation but it must be before the said
partner executes it.
d. Within 6 months from the knowledge of such designation but it must be before the said
partner executes it.

20 | P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

46. When a partner has been appointed manager in the articles of co-partnership, the following are
the rules of partnership management to be observed, except
a. The managing partner may execute all acts of administration despite the opposition of
his partners unless he acts in bad faith.
b. With just or lawful cause or if the managing partner acts in bad faith, the revocation of
the power of the managing partner can be made by the vote of the partners representing
the controlling interest.
c. Without just or lawful cause or if the managing partner acts in good faith, the revocation
of the power of the managing partner can be made only with the consent of all the
partners including the managing partner.
d. The managing partner’s decision on acts of administration may be reversed by the vote
of majority of the partners.

47. When a partner has been appointed manager after the partnership has been constituted or has
been appointed in a separate document other than articles of co-partnership, the following are
the rules of partnership management to be observed, except
a. The managing partner may execute all acts of administration.
b. In case of opposition to the decision of the managing partner on acts of administration,
the partners representing the controlling interest may resort to voting for his removal as
manager.
c. He may be removed with just cause by the vote of the partners representing the
controlling interest.
d. He can only be removed without just cause by the vote of all partners including the
managing partner.

48. The following are the rules of partnership management when two or more partners have been
appointed as managers, except
a. When there is a specification of their respective duties, each managing partner shall
perform only the duties specified in his appointment.
b. When there is no specification of their respective duties and there is no stipulation that
one shall not act without the consent of the others, each one may separately execute all
acts of administration.
c. When there is no specification of their respective duties and there is no stipulation that
one shall not act without the consent of the others, the decision of the majority of the
managing partners shall prevail in case of opposition.
d. When there is no specification of their respective duties and there is no stipulation that
one shall not act without the consent of the others, the decision of partner owning the
controlling interest shall prevail in case of tie in voting.
e. When there is a stipulation that none of the managing partners shall act without the
consent of the others, the vote of the majority of managing partners shall be sufficient
for the validity of the acts.

49. In case it should have been stipulated that none of the managing partners shall administratively
act without the consent of the others, the concurrence of all managing partners shall be
necessary for the validity of the administrative act. When may the present managing partners
administratively act validly by alleging the absence or disability of the other managing partners?
a. When the present partners represent the majority of the partnership.
b. When the present partners represent the controlling interest in the partnership.
c. When there is imminent danger of grave or irreparable injury to the partnership.

50. When the manner of management has not been agreed upon, the following are the rules of
partnership management to be observed, except
a. All the partners shall be considered agents of the partnership or all of them are
managers.
b. Whatever any of the partners may do alone shall bind the partnership.
c. In case of opposition of the other partners, the decision of the majority shall prevail and
the decision of the partners owning the controlling interest shall prevail in case of tie.
d. Any of the partners may make any important alteration in the immovable property of the
partnership without the consent of the others if it may be useful to the partnership.

21 | P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

51. Which of the following partners is not allowed to participate in the management of a partnership?
a. Capitalist partner
b. Industrial partner
c. Nominal partner
d. Managing partner

52. The following acts of a partner binds the partnership, except

a. Any act of a partner for the purpose of the partnership business.
b. Any act of a 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.
c. Any act of a partner which is not apparently for the carrying on of business of the
partnership in the usual way but authorized by the other partners.
d. Any act of a partner who has in fact no authority to act for the partnership in the
particular matter, and the person with whom he is dealing has knowledge of the fact that
he has no such authority.

53. In which of the following instances shall the partnership be bound by the acts of the partners?
I. If the partner is authorized to act for the partnership whether or not the act is for apparently
carrying on in the usual way the business of the partnership.
II. If the partner is not authorized to act for the partnership but the act is for apparently carrying
on in the usual way the business of the partnership and the third person has no knowledge of
the partner’s lack of authority.
III. When although the act is for the apparently carrying on in the usual way the business of the
partnership, the partner is not authorized to act for the partnership and the third person has
knowledge of the partner’s lack of authority.
IV. When the partner is not authorized to act for the partnership and the act is not for apparently
carrying on in the usual way the business of the partnership whether or not the third person has
knowledge of the partner’s lack of authority.
V. Any act in contravention of a restriction on authority of a partner to persons having knowledge
of the restriction.
a. I and II
b. III and IV
c. I and III
d. II and IV

54. The following acts are not considered administrative acts or acts for apparently carrying on in the
usual way of business of the partnership and may not be performed by a single partner without
authorization from all the other partners or these are acts which require unanimous vote of the
partners because they are considered acts of strict ownership or acts of strict dominion, except
a. Assignment of partnership property in trust for creditors or on the assignee’s promise to
pay the debts of the partnership.
b. Disposition of the goodwill of the business.
c. Acts which would make it impossible to carry on the ordinary business of the partnership.
d. Confession of judgment.
e. Entering into a compromise concerning a partnership’s claim or liability.
f. Submission of a partnership claim or liability to arbitration.
g. Renunciation of a claim of the partnership.
h. Payment of the salary of partnership’s employees.

55. Which of the following acts is considered an act of administration that may be done by the
managing partner alone?
a. Disposition of the goodwill of the business of the partnership.
b. Selection of the major supplier of the partnership.
c. Renunciation of a claim of the partnership.
d. Submission of a partnership claim or liability to arbitration.

22 | P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

56. Which of the following statements is true as regards to the right of industrial partner to engage in
another business?
a. An industrial partner is only prohibited to engage in a business of the same kind but not
to business of different kind.
b. An industrial partner cannot engage in any business for himself, unless the partnership
expressly permits him to do so.
c. An industrial partner may engage in business of different kind for himself, unless the
partnership expressly prohibits him to do so.
d. An industrial partner may engage in a business of the same kind for himself, unless the
partnership expressly prohibits him to do so.

57. What is the remedy of the capitalist partner if the industrial partner engages in business for
himself without the express permission of the partnership?
I. Exclude him from the partnership with a right to damages
II. Avail themselves of the benefits obtained from the business he engaged in with a right to
damages
a. Either I or II
b. Neither I nor II
c. I only
d. II only

58. Which of the following statements is true as regards to the right of capitalist partner to engage in
another business?
a. The capitalist partner cannot engage in any kind of business without permission of the
other partners.
b. The capitalist partner can only engage in a business of different kind if there is stipulation
allowing him to do so.
c. The capitalist partner can engage in a business of the same kind even without stipulation
allowing him to do so.
d. The capitalist partner can engage in a business of different kind even without stipulation
allowing him to do so and in a business of the same kind if there is a stipulation allowing
him to do so.

59. What are the remedies available to injured partners when a capitalist partner engages in the
same kind of business without stipulation allowing him to engage in that business?
I. To ask the guilty capitalist partner to bring to the common fund any profits accruing to him
from the said transaction.
II. To ask the guilty capitalist partner to bear all the losses from the said transaction.
a. I only
b. II only
c. Neither I nor II
d. Both I and II

60. As a general rule, what is the nature of liability of a general partner, whether capitalist or
industrial, for partnerships debts and for the contracts which may be entered into in the name
and for the account of the partnership, under its signature and by a person authorized to act for
the partnership?
a. They shall be liable pro rata and subsidiarily with all their separate property and after all
the partnership assets have been exhausted.
b. They shall be liable solidarily with all their separate property and after all the partnership
assets have been exhausted.
c. They shall be liable equally with all their separate property and after all the partnership
assets have been exhausted.
d. They shall be liable pro rata and directly even the partnership assets have not been fully
exhausted.

23 | P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

61. The following are the exceptional cases wherein the partnership shall be solidarily liable with all
the partners and wherein all partners are liable solidarily with the partnership for everything
chargeable to the partnership, except
a. For loss or injury caused to a third person or any penalty is incurred by reason of the
wrongful act or omission of any partner acting in the ordinary course of business of the
partnership or with the authority of his co-partners.
b. Where one partner acting within the scope of his apparent authority receives money or
property of a third person and misapplies it.
c. Where the partnership in the course of business receives money or property of a third
person and such money or property is misapplied by any partner while it is in custody of
the partnership.
d. Where the unpaid partnership liabilities pertain to electric and water bills.

62. The following are the rules on sharing of partnership liabilities to third persons as regards to
general partners, whether capitalist or industrial, except
a. The liability of the partnership shall be divided pro-rata among the partners.
b. Each general partner, whether capitalist or industrial, shall be liable with his separate
property after all the assets of the partnership have been exhausted.
c. A stipulation exempting a general partner from pro rata and subsidiary liability after the
exhaustion of partnership asset is valid among the partners.
d. A stipulation exempting a general partner from pro rata and subsidiary liability after the
exhaustion of partnership asset is valid as to third persons.

63. If there is stipulation exempting a general partner from pro rata and subsidiary liability, the
following are the rules to be observed, except
a. The assets of the partnership shall first be used to pay the partnership liabilities.
b. If the partnership assets are not sufficient, the liability shall be paid pro-rata from the
separate assets of the general partners, including industrial partner.
c. The general partners not exempted from pro rata and subsidiary liability shall reimburse
according to the partner’s profit or loss sharing agreement or in the ratio of their capital
contribution, whichever is applicable, the industrial partner and general partner
exempted from pro rata and subsidiary liability.
d. The industrial partner is not required to share in the excess of liability of partnership over
the assets.

64. Which partner is not liable up to the extent of his separate assets for payment of partnership
debts?
a. Industrial partner
b. Limited partner
c. Managing partner
d. General partner

65. What is the extent of liability of a person admitted as a general partner into an existing
partnership also known as newly-admitted general partner?
a. He is liable for all the obligations of the partnership arising before his admission as
though he had been a partner when such obligations were incurred, except that this
liability shall be satisfied only out of partnership property, unless there is a stipulation
that he is assuming the existing liability of the partnership. (Limited Partner for
Partnership Obligation arising before his admission)
b. He is liable pro-rata and subsidiarily up to the extent of his separate assets for all
obligations incurred after his admission as a partner. (General Partners for Partnership
Obligation arising after his admission)
c. Both A and B.
d. Neither A nor B.

66. In the absence of agreement among the partners, where shall the partnership’s books be kept?
a. At the residence of the managing partner.
b. At the residence of the controlling partner.
c. At the residence of the majority partner.
d. At the principal place of business of the partnership.

24 | P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

67. Which of the following statements concerning the obligations and rights of a partner is incorrect?
a. Every partner shall at any reasonable hour have access to and may inspect and copy any
of the partnership books.
b. Every partner shall render on demand true and full information of all things affecting the
partnership to any partner or the legal representative of any deceased partner or of any
partner under legal disability.
c. Every partner must account to the partnership for any benefit, and hold as trustee for it
any profits derived by him without the consent of the other partners from any transaction
connected with the formation, conduct, or liquidation of the partnership or from any use
by him of its property.
d. Every capitalist partner can engage for their own account in any operation which is of the
same kind of business in which the partnership is engaged.

68. Which type of partner is not allowed to engage in a business of different kind of the partnership
business without the express permission of the partnership?
a. Capitalist partner
b. Industrial partner
c. Managing partner
d. All of them

69. The following are the instances wherein any partner shall have the right to a formal account of
the partnership affairs, except
a. If the partner is wrongfully excluded from the partnership business or possession of its
property by his co-partners.
b. If the right for formal accounting is provided under the terms of articles of co-
partnership.
c. If the other partner derived profits without the consent of other partners from any
transaction connected with the formation, conduct, or liquidation of the partnership or
from any use by him of its property.
d. Whenever the circumstances render formal accounting just and reasonable.
e. If a capitalist partner intends to engage in another business which is of different kind of
that of the partnership.

70. A partnership shall operate under a firm name, which may or may not include the name of one or
more of the partner. If a third person, not being a member of the partnership, includes his name
in a firm name, what shall be the effect?
a. The third person shall not be liable as a partner.
b. The third person shall be entitled to all rights of a partner.
c. The third person shall be liable pro-rata and subsidiarily and will be treated as nominal
partner.
d. The third person shall be solidary liable with all the partners.

71. In the absence of partnership agreement, when shall the juridical personality of the partnership
begin?
a. From the moment the partners have completed their contributions.
b. From the moment of the execution of the contract of partnership.
c. From the moment of submission with the SEC of the Articles of Co-Partnership.
d. From the moment the SEC issues the Certificate of Registration

72. In the absence of stipulation to the contrary, what is the obligation of the partners as to the
contribution of capital?
a. To contribute equally to the capital of the partnership.
b. To ask the court for the amount of contribution.
c. To ask third party to designate the amount of contribution.
d. To contribute in accordance with their respective age ratio.

25 | P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

73. Which of the following statements concerning the obligations of a partner to deliver a specific
thing is incorrect?
a. To deliver the specific thing to the partnership at the time it was constituted or on the
date stipulated that the property should be contributed.
b. To take care of the specific things before its delivery to the partnership with the diligence
of a good father of a family.
c. To be liable for damages in case of default.
d. To answer for eviction in case the partnership is deprived of the specific or determinate
thing he has contributed to the partnership in the same manner as the vendor is bound
with respect to the vendee.
e. To be liable for the fruits of the specific thing from the time they should have been
delivered with the need of any demand.

74. The following are the obligations of the partners with respect to the contribution of money,
except
a. To deliver to the partnership at the time it was constituted or on the date stipulated the
money he has promised to contribute.
b. To pay interest on the amount he had promised to contribute from the time he should
have complied with his obligation even without demand.
c. To pay damages suffered by the partnership by reason of the default.
d. To answer for eviction.

75. The following are the obligations of the partner with respect to partnership fund
misappropriated, except
a. To reimburse to the partnership the amount that he has taken from the partnership
coffers.
b. To pay interest on the amount he had converted for his own use from the time of
conversion.
c. To pay the damages suffered by the partnership by reason of the conversion.
d. To disclose the misappropriation done to trial court judge for purposes of conviction.

76. In the absence of agreement to the contrary, what is the obligation of a partner in case of
imminent loss of the business of the partnership?
a. (1) To contribute additional share of capital to the partnership to save the venture unless
he is an industrial partner or capitalist partner exempted by stipulation or (2) To sell his
capital interest to the other partners if he refuses to contribute such additional capital
b. To sell his interest to the other partners even if he wants to contribute.
c. To dissolve the partnership.
d. To convert the partnership into a corporation.

77. Who are the partners not required to contribute additional share of capital to the partnership to
save the venture in case of imminent loss of the business of the partnership?
a. Industrial partner
b. Capitalist partner exempted by agreement
c. Both A and B
d. Neither A nor B

78. The following are obligations of a partner to the partnership, except

a. To bring to the partnership capital his share of a partnership credit which he has received
in whole or in part even he may have given his receipt if the other partners have not
collected their shares and the debtor becomes insolvent after the partner has received
the payment.
b. To pay to the partnership for damages suffered by it through his fault but he cannot
compensate them with the profits and benefits which he may have earned for the
partnership by his industry.
c. To render on demand true and full information of all things affecting the partnership to
any partner, legal representative of any deceased partner or legal representative
of any partner under disability.
d. To account to the partnership for any benefit and hold as trustee for it any profits,
derived by him without the consent of the partners from any transaction connected with
the formation, conduct or liquidation of the partnership or from use by him of its
property.
e. To bear the risk of specific and determinate things owned by the partnership.

26 | P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

79. If the partnership suffered damages through the fault of a partner, which of the following is
correct?
a. The guilty partner can compensate his liability to the partnership with the profits and
benefits which he may have earned for the partnership by his industry.
b. The partner guilty of fault will be solely liable to third person.
c. The court may equitably reduce his responsibility to the partnership if through the
partner's extraordinary efforts in other activities of the partnership, unusual profits have
been realized.
d. The guilty partner shall not reimburse the innocent partners for the damages suffered.

80. What is the nature of liability of partners for quasi-delict committed by a partner in the
performance of the business of the partnership?
a. Jointly
b. Equally
c. Solidarily
d. Proportionately

81. The partnership shall bear the risk of loss for the following contributions of partners, except
a. Fungible things or those that cannot be kept without deteriorating.
b. Things contributed to the partnership to be sold.
c. Things brought and appraised in the inventory of partnership unless there is a stipulation
to the contrary but the amount of partnership obligation will be limited to the value at
which they were appraised.
d. Specific and determinate things owned by a partner which are not fungible, contributed
to the partnership so that only their use and fruits may be for the common benefit such
as property brought by partners in case of universal partnership of profits.

82. The following are the liabilities or obligations of the partnership to the partners, except
a. The partnership shall be responsible to every partner for the amounts he may have
disbursed on behalf of the partnership and for the corresponding interest, from the time
the expense are made.
b. The partnership shall answer to each partner for the obligations he may have contracted
in good faith in the interest of the partnership business.
c. The partnership shall answer to each partner the risks as a consequence of its
management.
d. The partnership shall answer for the personal liabilities and debts of the partners.

83. The following are the rights of a partner in a partnership, except

a. To associate another person with him in his share.
b. To admit another person into the partnership without the consent of all the partners.
c. To have access to and inspect and copy the partnership books at reasonable hours.
d. To have formal account of partnership affairs.

84. The following are the property rights of a partner, except

a. His rights in specific partnership property.
b. His interest in the partnership.
c. His right to participate in the management.
d. His right to admit another partner without the consent of other partners.

85. A partner is considered a co-owner with his partners of specific partnership property. Which of
the following statements considering the co-ownership implications is incorrect?
a. A partner has an equal right with his partners to possess specific partnership property for
partnership purposes but he has no right to possess such property for any other purpose
without the consent of his partners.
b. A partner's right in specific partnership property is not assignable except in connection
with the assignment of rights of all the partners in the same property
c. A partner’s right in specific partnership property is not subject to attachment or
execution, except on a claim against the partnership.
d. A partner’s right in specific partnership property is subject to legal support under the
Family Code.

27 | P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

86. What is the partner’s interest in the partnership?

a. It is his share in the profits in the partnership.
b. It is his share in the surplus (net assets) of the partnership.
c. It is his share in both the profits and surplus (net assets) of the partnership.
d. It is his share in the assets of the partnership.

87. The following statements are true as regards to the right of a partner on his interest in the
partnership, except
a. The partner’s interest in the partnership is his share of the profit and surplus.
b. The partner may convey or assign his whole interest in the partnership.
c. The partner’s interest in the partnership may be attached for his separate or personal
debts subject to the preferential right of partnership creditors.
d. The partner’s decision to convey or assign his partner’s interest in the partnership will
result to admission of the assignee even without the consent of other partners.

88. What is the effect if a partner associates or assigns/conveys his share or interest in the
partnership to another person?
a. The associate or assignee becomes a partner of the partnership even without the
consent of the other partners.
b. The associate or assignee becomes a partner of the partnership if the assigning partner
is a managing partner even without the consent of the other partners.
c. The partnership is dissolved by the assignment of the said interest.
d. The associate or assignee does not become a partner but shall be entitled only to the
share of the assigning partner in the partnership profits and net assets at the date of
liquidation.

89. The following are the rights of an assignee of partner’s interest, except
a. To receive the profits to which the assigning partner would otherwise be entitled.
b. To avail himself of the usual remedies in case of fraud in management.
c. In case the partnership is dissolved, he is entitled to receive his assignor's interest
(surplus) and may require an account from the date only of the last account agreed to by
all the partners.
d. To interfere in the management of the business and to inspect partnership books at a
reasonable hours of a business day.

90. In case the partner’s interest is attached or charged by a partner’s separate or personal creditor
for the payment of his personal debt, who has the right to redeem the said interest before
foreclosure to prevent the dissolution of the partnership?
a. By any one or more of the partners using their separate property.
b. By any one or more of the partners with the consent of all the partners whose interest
are not so charged or sold using partnership property.
c. Either A or B.
d. Neither A nor B.

91. The following are the rules for application of payment when a debtor owes separate demandable
debts to the partnership and to the partner authorized to receive credit also known as managing
partner, except
a. If the managing partner issues the receipt of the partnership, the payment shall be
applied to the partnership credit.
b. If the managing partner issues his own personal receipt, the payment shall be applied to
the partnership’s credit and managing partner’s personal credit, proportionately.
c. If the claim of the partnership is not yet due, the payment shall be applied to the
managing partner’s credit in its entirety.
d. If the personal claim of the managing the partner is more onerous, the selection by the
debtor of the more onerous debt as to the application of payment shall be followed.
e. The payment shall always be applied to the claim of the partnership.

28 | P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

92. If a debtor owes separate demandable debts to the partnership and to the partner not authorized
to receive credit also known as non-managing partner, how shall the payment by the debtor be
applied if the non-managing partner issued his own personal receipt for the payment made by
the debtor?
a. It shall be applied fully to the non-managing partner’s receivable.
b. It shall be applied fully to the partnership’s receivable.
c. It shall be applied proportionately to both receivables.
d. It shall be applied equally to both receivables.

93. If an existing partnership is sold by the incumbent partners to another persons, what is the effect
of the sale to the liability of the partnership to the third persons if the sale is without the consent
of the partnership creditors?
a. The previous partners are still liable to the old partnership creditors in addition to the
liability of the new owners of the partnership.
b. The new partners will become solely liable to the old partnership creditors even if the
latter did not give consent to the sale.
c. The old partnership creditors can no longer go after the old partners.
d. The previous partners are already free from any partnership liability by reason of the
sale.

94. Where title to real property is in the partnership name, what is the effect of the conveyance of
such property by any partner in the partnership name?
a. The conveyance will transfer title of the real property to the buyer.
b. The partnership can always recover such real property from buyer.
c. The conveyance will bind only the partnership if such partner has special power of
attorney.
d. The conveyance will not transfer title of the real property to the buyer.

95. Where title to real property is in the partnership name, any partner may convey title to such
property by a conveyance executed in the partnership name but the partnership may recover
such real property. When is the partnership barred from recovering the said real property?
a. When the conveyance is for apparently carrying on in the usual way the business of the
partnership of which he is a member.
b. When the conveyance was made by the grantee or of a person claiming through such
grantee to a holder for value without knowledge that the partner, in making the
conveyance, has exceeded his authority.
c. Either A or B.
d. Neither A nor B.

96. Where title to real property is in the name of the partnership, what is the effect of the
conveyance executed by a partner in his own name instead in the partnership’s name?
a. The conveyance passes the equitable interest of the partnership provided the act is one
within the authority of the partner and for apparently carrying on in the usual way the
business of the partnership of which he is a member.
b. The conveyance passes the equitable interest of the partnership regardless of the lack of
authority of the partner selling the property.
c. The conveyance will pass the equitable interest of the partnership only if the other
partners ratify the sale.
d. The conveyance will pass the equitable interest of the partnership only if the partner
owning the controlling interest will approve the sale.

97. Where title to real property is in the name of one or more but not all the partners, and the record
does not disclose the right of the partnership, what is the effect of conveyance by the partners in
whose name the title stands?
a. The conveyance will transfer title of the property to the buyer.
b. The partnership can never recover such property from the buyer.
c. The partnership can always recover such property from the buyer.
d. The conveyance will never bind the partnership.

29 | P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

98. Where title to real property is in the name of one or more but not all the partners, and the record
does not disclose the right of the partnership, the partnership may not recover such real
property. When may the partnership recover such real property?
a. If the partners’ act is not for apparently carrying on in the usual way the business of the
partnership of which he is a member
b. If the purchaser or assignee is a holder for value without knowledge of the lack of
authority of the selling partner.
c. Either A or B.
d. Neither A nor B.

99. Where the title to real property is in the name of one or more or all the partners, or in a third
person in trust for the partnership, what is the effect of the conveyance executed by a partner in
the partnership name, or in his own name?
a. The conveyance passes the equitable interest of the partnership, provided the act is one
within the authority of the partner and for apparently carrying on in the usual way the
business of the partnership of which he is a member.
b. The conveyance passes the equitable interest of the partnership regardless of the lack of
authority of the partner selling the property.
c. The conveyance will pass the equitable interest of the partnership only if the other
partners ratify the sale.
d. The conveyance will pass the equitable interest of the partnership only if the partner
owning the controlling interest will approve the sale.

100. Where the title to real property is in the name of all the partners, what is the effect of
conveyance executed by all the partners?
a. The conveyance passes all the rights of the partners in said real property.
b. The conveyance passes all the rights of the partners in said real property only if
authorized by the SEC.
c. The conveyance will not bind the partnership if the partnership in reality owns the
property.
d. The conveyance will bind the partnership only if it is for apparently carrying on in the
usual way the business of the partnership of which he is a member.

101. An admission or representation made by any partner concerning partnership affairs

within the scope of his authority is evidence against the partnership. The following are the
requisites in order for an admission or representation of a partner to be used as evidence against
the partnership, except
a. The admission or representation must concern partnership affairs.
b. The admission must be in a public instrument.
c. The admission must be made within the scope of the authority of the partner making the
admission.
d. The admission must be made during the existence of the partnership

102. As a general rule, notice to any partner of any matter relating to partnership affairs binds
the partnership. The following knowledge of a partner binds the partnership, except
a. The knowledge of a partner acting in the particular matter if he acquires the same while
already a partner.
b. The knowledge of a partner acting on a particular matter if he acquires it before his
admission to the partnership provided the same was still present on his mind.
c. The knowledge of any other partner not acting on a particular matter if he acquired the
same while already a partner and he could and should have reasonably communicated
the same to the partner acting on a particular matter.
d. Notice or knowledge of a partner in case of fraud committed on or against the
partnership by the partner having notice or knowledge.

30 | P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

103. What is the effect if a person, by words spoken or written or by conduct, represents
himself to specific persons, or consents to another representing him to anyone, as a partner in an
existing partnership or with one or more persons who are not actual partners?
a. The nominal partner is liable pro-rata and subsidiarily like a general partner only to
persons to whom such representation has been made, who has, on the faith of such
representation, given credit to the actual or apparent partnership.
b. The nominal partner is liable like a limited partner only to persons to whom such
representation has been made, who has, on the faith of such representation, given credit
to the actual or apparent partnership.
c. The nominal partner is not liable as a partner because he does not become a partner in
the partnership.
d. The nominal partner is liable as partner only if the other persons or partners consented
to such representation.

104. What is the effect if a person, by words spoken or written or by conduct, represents
himself in public, or consented in public to another representing him to anyone, as a partner in
an existing partnership or with one or more persons not actual partners?
a. The nominal partner is liable pro-rata and subsidiarily like a general partner to persons
giving credit only if the representation has been communicated to the latter.
b. The nominal partner is liable like a limited partner to persons giving credit only if the
representation has been communicated to the latter.
c. The nominal partner is liable pro-rata and subsidiarily like a general partner to persons
giving credit whether the representation has or has not been communicated to the latter.
d. The nominal partner is liable pro-rata and subsidiarily like a general partner to persons
giving credit if the other partners consented to the admission of the nominal partner.

105. Which of the following statements concerning nominal partner and partnership by
estoppels is/are correct?
a. When a person has been thus represented to be a partner in an existing partnership, or
with one or more persons not actual partners, he is an agent of the persons consenting
to such representation to bind them to the same extent and in the same manner as
though he were a partner in fact, with respect to persons who rely upon the
representation.
b. When all the members of the existing partnership consent to the representation, a
partnership act or obligation results; but in all other cases it is the joint act or obligation
of the person acting and the persons consenting to the representation.
c. Both A and B.
d. Neither A nor B.

106. The following are the rules in preference of credits of partnership creditors and partner’s
creditors, except
a. The partner’s personal creditors have preference over the partner’s personal assets.
b. The partnership’s creditors have preference over the partnership’s assets.
c. Partner’s separate creditor shall be paid out of the share of the partner owing him if
there is an excess in the partnership’s assets over partnership’s liabilities.
d. Partnership creditors shall be paid out first using partner’s separate assets while the
partner’s personal creditors shall be paid out first using the partnership’s assets.

107. Which of the following assets shall be used first for the payment of partnership’s
liabilities?
a. Partnership’s property
b. Partner’s separate property
c. Partner’s conjugal or community property
d. Partner’s exclusive property

108. Which of the following statements pertains to partnership dissolution?

a. It is the change in the relation of the partners caused by any partner ceasing to be
associated in the carrying on of the business.
b. It is the process of settling the disputes or affairs of the partnership after dissolution or
winding up of the partnership business.
c. It refers to the point when all the business or affairs of the partnership are completely
wound up.

31 | P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

109. The following are the automatic causes of dissolution of general partnership even without
a need of court order, except
a. In contravention of the agreement between the partners, by the express will of any
partner at anytime such as withdrawing from the partnership.
b. 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.
c. Loss before delivery of property where the partner contributed only its use or enjoyment
in a Universal Partnership of Profits.
d. Loss after delivery of property where the partner contributed only its use or enjoyment in
a Universal Partnership of Profits.
e. Loss before delivery of specific thing, which a partner has promised to contribute to the
Universal Partnership of All Present Property.
f. Loss after delivery of specific thing, which a partner has promised to contribute to the
Universal Partnership of All Present Property.
g. By the death of any partner.
h. By the insolvency of any partner
i. By the insolvency of the partnership.
j. By the civil interdiction of any partner.

110. The following are the instances wherein a general partnership may be dissolved by a
decree of court upon application by a partner also known as non-automatic causes of dissolution,
except
a. A partner has been declared insane in any judicial proceeding or is shown to be of
unsound mind.
b. A partner becomes in any way incapable of performing his part in the partnership
contract.
c. A partner has been guilty of such conduct as tend to affect prejudicially the carrying on
of the business.
d. A partner wilfully or persistently commits a breach of the partnership contracts
e. The business of the partnership can be carried only at a loss.
f. Other circumstances that render a dissolution equitable.
g. Death of any partner.

111. The following are the causes of dissolution of a partnership without violation of the
agreement of the partners, except
a. By the termination of the definite term specified in the agreement.
b. By the achievement of particular undertaking specified in the agreement.
c. By the express will of all the partners who have not assigned their interests or suffered
them to be charged for their separate debts, either before or after the termination of any
specified term or undertaking.
d. By the expulsion of any partner bona fide or in good faith from the business in
accordance with such power conferred by the agreement of the parties.
e. By the express will of any partner who acts in bad faith when no definite term or
particular undertaking is specified.

112. When a partnership for a fixed term or particular undertaking is continued after the
termination of such term or particular undertaking without any express agreement, what shall
govern the rights and duties of the partners?
a. The rights and duties of the partners remain the same as they were at such termination,
so far as they are consistent with a partnership at will.
b. The partnership shall be liquidated because there is dissolution of the partnership.
c. The partnership shall not be continued.
d. The partnership shall be governed by the rules on co-ownership.

113. What are the instances when the partnership may be dissolved by a decree of court upon
the application of the assignee or purchaser of a partner’s interest?
a. After the termination of the specified term or particular undertaking.
b. At any time if the partnership was a partnership at will when the interest was assigned or
when the charging order was issued.
c. Either A or B.
d. Neither A nor B.

32 | P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

114. The following are the instances when the act of a partner after dissolution binds the
partnership to the third persons and the partners shall be pro-rata and subsidiarily liable, except
a. When the act is necessary for winding up of partnership affairs.
b. When the act is necessary to complete partnership transactions begun but not finished
before dissolution.
c. If the other party to a new transaction had extended credit to the partnership before
dissolution and he had no knowledge of dissolution.
d. If the other party to the new transaction even though not extending credit but
nevertheless known of the partnership before dissolution, and having no knowledge of
dissolution because the fact of dissolution had not been advertised in a newspaper of
general circulation in the place at which the partnership business is regularly carried on.
e. By any transaction which is not for the usual carrying on of the partnership affairs and
the acting partner has no authority.

115. For acts enumerated in the preceding number which would make the partners liable pro-
rata and subsidiarily, when may a partner be liable pro-rata but not subsidiarily, meaning, up to
the extent of partnership’s assets only?
a. When such partner is unknown as a partner to the person with whom the contract is
made.
b. When such partner is so far unknown and inactive in partnership affairs that the business
reputation of the partnership could not be said to have been in any degree due to his
connection with it.
c. Both A and B.
d. Neither A nor B.

116. With respect to the partners themselves alone but not as to third persons, when will
dissolution terminates all authority of any partner to act for the partnership?
a. When the cause of dissolution is not by the act, insolvency or death of a partner.
b. When the cause of dissolution is by the act, insolvency or death of a partner, the person
acting had knowledge of dissolution, death or insolvency of a partner.
c. Either A or B.
d. Neither A nor B.

117. What is the nature of responsibility of the general partners to third persons for any
liability created by any partner acting for the partnership after dissolution where dissolution is
caused by the act, death or insolvency of a partner if the acting partner has no knowledge of the
dissolution, death or insolvency?
a. They shall be liable pro-rata and subsidiarily for the obligation created after the
dissolution.
b. They shall not be liable.
c. They shall be liable solidarily and subsidiarily for the obligation created after the
dissolution.
d. They shall be liable pro-rata but limited only up to the extent of capital contribution.

118. The following are the instances when the act of a partner after dissolution does not bind
the partnership with third persons, except
a. Where the partnership is dissolved because it is unlawful to carry on the business.
b. Where the partner acting has become insolvent.
c. Where the partner had no authority to wind up partnership affairs.
d. Where the act is necessary for winding up partnership affairs.

33 | P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

119. Which of the following statements concerning the dissolution of a partnership is

incorrect?
a. The dissolution of the partnership does not of itself discharge the existing liability of any
partner.
b. A partner is discharged from any existing liability upon dissolution of the partnership by
an agreement to that effect between himself, the partnership creditor and the person or
partnership continuing the business; and such agreement may be inferred from the
course of dealing between the creditor having knowledge of the dissolution and the
person or partnership continuing the business.
c. 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.
d. The dissolution of the partnership automatically results to the liquidation of the
partnership’s affairs.

120. Who shall have the right or authority to liquidate or wind up the partnership affairs?
a. The liquidating partner agreed upon by the partners.
b. The partners who have not wrongfully dissolved the partnership.
c. The legal representative of the last surviving partner, not insolvent
d. Any of the above.

121. When may a partner, his legal representative or assignee ask for liquidation or winding
up of partnership affairs by the court?
a. When there is no agreement as to who shall wind up the partnership affairs.
b. When there is no violation of articles of co-partnership.
c. When said partner violated the articles of co-partnership.
d. When said partner or legal representative or assignee shows valid cause for liquidation.

122. Without prejudice to other remedies and rights available under the law, where a
partnership contract is rescinded on the ground of the fraud or misrepresentation of one of the
parties thereto, the party entitled to rescind is entitled to the following rights, except
a. To a lien on, or right of retention of, the surplus of the partnership property after
satisfying the partnership liabilities to third persons for any sum of money paid by him for
the purchase of an interest in the partnership and for any capital or advances contributed
by him;
b. To stand, after all liabilities to third persons have been satisfied, in the place of the
creditors of the partnership for any payments made by him in respect of the partnership
liabilities;
c. To be indemnified by the person guilty of the fraud or making the representation against
all debts and liabilities of the partnership.
d. To be exempted from pro-rata and subsidiary liability to third persons.

123. In the liquidation of the general partnership, indicate the proper order of payment of
partnership liabilities and equity.
I. Those owing to the creditors other than partners.
II. Those owing to partners other than for capital and profits such as loan payable to partners.
III. Those owing to partners in respect of capital contribution.
IV. Those owing to partners in respect of profit share.
a. I – II – III – IV
b. I – II – IV – III
c. II – I – III – IV
d. II – I – IV – III

34 | P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

124. Indicate the proper order of payment of liabilities of limited partnership in liquidation.
I. Those owing to creditors, including limited partners.
II. Those owing to limited partners by way of their share of the profits and other compensation
by way of income on their contribution.
III. Those owing to limited partners in respect to their capital contributions.
IV. Those owing to general partners other than for capital and profits such as loan payable to
partners.
V. Those owing to general partners in respect to profit share.
VI. Those owing to general partners in respect to capital contribution.
a. I – II – III – IV – V – VI
b. I – II – IV – III – V – VI
c. I – II – III – IV – VI – V
d. I – II – IV – III – VI – V

125. Indicate the property order on priority of claims against the separate property of a
partner who is insolvent or whose estate is insolvent.
I. Those owing to separate or personal creditors of the partners.
II. Those owing to creditors of the partnership.
III. Those owing to partners by way of his unpaid capital contribution to the partnership.
a. I – II – III
b. II – I – III
c. III – II – I
d. I – III – II

126. In the absence of stipulation to the contrary, what is the nature of liability of a third
person becoming a partner in the partnership continuing the business of the dissolved
partnership?
a. For creditors prior to dissolution, his liability is only pro-rata but not subsidiarily but when
it comes to creditors of the new partnership, his liability shall be pro-rata and subsidiarily.
b. His liability shall be pro-rata and subsidiarily to all creditors either before or after the
dissolution.
c. His liability shall be solidary and subsidiarily to all creditors either before or after the
dissolution.
d. His liability is pro-rata but not subsidiarily to all creditors either before or after the
dissolution.

127. In case of dissolution of partnership which resulted to continuance of partnership

business, what is the effect on the nature of liability of the deceased partner by the use by the
person or partnership continuing the business of the partnership name, or the name of a
deceased partner as part thereof?
a. It shall make the individual or separate property of the deceased partner liable pro-rata
and subsidiarily for any debts contracted by such person or partnership in the new
partnership.
b. It shall make the individual or separate property of the deceased partner liable solidarily
and subsidiarily for any debts contracted by such person or partnership in the new
partnership.
c. It shall make the individual or separate property of the deceased partner liable pro-rata
but not subsidiarily for any debts contracted by such person or partnership in the new
partnership.
d. It shall not of itself make the individual property of the deceased partner liable for any
debts contracted by such person or partnership in the new partnership.

128. In the absence of agreement to the contrary, when shall the right to an account of his
interest accrue to any partner, or his legal representative as against the winding up partners or
the surviving partners or the person or partnership continuing the business?
a. At the date of the start of operation of the new business.
b. At the date of dissolution.
c. 3 months from the date of dissolution.
d. 1 month from the date of dissolution.

35 | P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

129. What is the minimum composition in a limited partnership?

a. At least one nominal partner and at least one general partner
b. All must be limited partners.
c. At least one limited partner and at least one general partner
d. All must be general partners.

130. He is a partner in a limited partnership who is liable for partnership’s debts up to the
extent of his separate assets after the exhaustion of limited partnership’s assets.
a. Limited partner
b. General partner
c. Silent partner
d. Dormant partner

131. He is a partner in a limited partnership who is liable for partnership’s debts up to the
extent of his capital contribution only.
a. Limited partner
b. General partner
c. Nominal partner
d. Managing partner

132. What is the effect if there is no substantial compliance with the registration of certificate
of limited co-partnership with the SEC?
a. The partnership contract is null and void.
b. The limited partnership exists.
c. The partnership does not obtain juridical personality.
d. The partnership will be considered a general partnership as to third persons but continue
to be a limited partnership among the partners.

133. Which of the following may not be contributed by a pure limited partner?
a. Cash
b. Personal property
c. Real property
d. Services, industry or labor

134. As a general rule, the surname of a limited partner shall not appear in the limited
partnership name. When may the limited partner’s name appear in the partnership name without
increasing the liability of such limited partner to a general partner?
a. If the name of limited partner is also the surname of a general partner.
b. If prior to the time when the limited partner became such, the business has been carried
on under a name in which his surname appeared.
c. Either A or B.
d. Neither A nor B.

135. What is the effect if a limited partner’s name appears in the limited partnership name
contrary to allowed instances provided by law?
a. The limited partner is liable pro-rata and subsidiarily to partnership creditors who extend
credit to the partnership without actual knowledge that he is not a general partner.
b. The limited partner is liable pro-rata but not subsidiarily to partnership creditors who
extend credit to the partnership without actual knowledge that he is not a general
partner.
c. The limited partner is liable solidarily and subsidiarily to partnership creditors who extend
credit to the partnership without actual knowledge that he is not a general partner.
d. The limited partner is liable pro-rata and subsidiarily to all partnership creditors
regardless of the actual knowledge that he is not a general partner.

136. When may a limited partner be liable pro-rata and subsidiarily like a general partner to
the partnership creditors?
a. If he allows his name to be included in the partnership name contrary to allowed
instances of law.
b. If he takes part in the control or management of the business.
c. Either A or B.
d. Neither A nor B.

36 | P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

137. 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. However, the
following acts can only be made by a general partner if there is written consent or ratification by
all the limited partners, except
a. Do any act in contravention of the certificate of limited co-partnership
b. Do any act which would make it impossible to carry on the ordinary business of the
partnership
c. Confess a judgment against the partnership
d. Possess partnership property, or assign their rights in specific partnership property, for
other than a partnership purpose
e. Admit a person as a general partner
f. Admit a person as a limited partner, unless the right so to do is given in the certificate of
limited co-partnership
g. Continue the business with partnership property on the death, retirement, insanity, civil
interdiction or insolvency of a general partner, unless the right so to do is given in the
certificate
h. Do any act of administration

138. A limited partner shall have the following rights enjoyed by a general partner, except
a. Have the partnership books kept at the principal place of business of the partnership,
and at a reasonable hour to inspect and copy any of them;
b. Have on demand true and full information of all things affecting the partnership, and a
formal account of partnership affairs whenever circumstances render it just and
reasonable; and
c. Have dissolution and winding up by decree of court.
d. Have the power to participate in the control and management of the partnership
business.

139. When a person contributed a capital to a business conducted by a person or partnership

erroneously believing that he has become a limited partner in a limited partnership, what will be
the nature of his liability to third person if he exercises the rights of a limited partner?
a. He is always liable like a general partner with that partnership.
b. He will not be liable as a general partner with that partnership if upon ascertainment of
the mistake he promptly renounces his interest in the profits of the business, or other
compensation by way of income.
c. He will not be liable as general partner in all instances.
d. He will not be liable like a limited partner.

140. Which of the following statements concerning limited partnership is incorrect?

a. 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 of limited co-
partnership.
b. A person who is a general, and also at the same time a limited partner, shall have all the
rights and powers and be subject to all the restrictions of a general partner; except that,
in respect to his contribution, he shall have the rights against the other members which
he would have had if he were not also a general partner.
c. A limited partner also may loan money to and transact other business with the
partnership, and, unless he is also a general partner, receive on account of resulting
claims against the partnership, with general creditors, a pro rata share of the assets.
d. A limited partner who has made a loan to the partnership may receive or hold as
collateral security any partnership property for his claim to the partnership or receive
from a general partner or the partnership any payment, conveyance, or release from
liability if at the time the assets of the partnership are not sufficient to discharge
partnership liabilities to persons not claiming as general or limited partners.

141. What is the status of the contract of security when a limited partner who has made a
loan to the partnership receive or hold as collateral security any partnership property for his claim
to the partnership?
a. Voidable
b. Rescissible
c. Unenforceable
d. Null and Void

37 | P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

142. Where there are several limited partners the members may agree that one or more of
the limited partners shall have a priority over other limited partners as to the return of their
contributions, as to their compensation by way of income, or as to any other matter. What is the
formality required by law for this agreement to be binding among the partners?
a. It shall be stated in the certificate of limited co-partnership.
b. The agreement must be notarized.
c. The agreement must be in writing.
d. The agreement must be registered in the Registry of Property.

143. What is the proper classification of an industrial partner in a limited partnership?

a. General partner
b. Limited partner
c. Either general partner or limited partner
d. Nominal partner

144. What is the requirement or precondition before a limited partner may receive from the
partnership the share of the profits or the compensation by way of income stipulated for in the
certificate of limited co-partnership during the lifetime of the partnership?
a. There is net income during the period although successive net loss in prior periods.
b. The partnership’s total assets are in excess of the partnership’s total liabilities to third
persons.
c. There is net loss during the period.
d. The partnership’s total liabilities to third persons are more than the total partnership’s
assets.

145. What are the essential requisites before a limited partner may receive from a general
partner or out of partnership property any part of his capital contribution during the lifetime of
the partnership?
a. 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;
b. The consent of all members is had, unless the return of the contribution may be rightfully
demanded under the provisions of the second paragraph; and
c. The certificate is cancelled or so amended as to set forth the withdrawal or reduction.
d. All of the above.

146. When may the limited partner demand from the partnership the return of his capital
contribution?
a. On the dissolution of a partnership
b. When the date specified in the certificate for its return has arrived
c. After he has six months' notice in writing to all other members, if no time is specified.
d. Any of the above.

147. In the absence of any statement in the certificate to the contrary or the consent of all
members, what form of return of capital contributed should be received by a limited partner?
a. He has the right to demand and receive cash in return for his contribution irrespective of
the property contributed.
b. He has the right to demand and receive particular property contributed in return for his
contribution.
c. He has the right to demand and receive inventory in return for his contribution
irrespective of the property contributed.
d. He has the right to demand and receive land in return for his contribution irrespective of
the property contributed.

148. When may a limited partner demand the dissolution of the partnership and its
subsequent winding up of partnership affairs?
a. When he rightfully but unsuccessfully demands the return of his contribution.
b. When other liabilities of the partnership have not been paid, or the partnership property
is insufficient for their payment, and the limited partner would otherwise be entitled to
the return of his contribution.
c. Either A or B.
d. Neither A nor B.

38 | P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

149. What are the liabilities of a limited partner to the partnership?

a. He is liable for the difference between his contribution as actually made and that stated
in the certificate as having been made
b. He is liable for any unpaid contribution which he agreed in the certificate to make in the
future at the time and on the conditions stated in the certificate.
c. Both A and B.
d. Neither A nor B.

150. What is the nature of limited partner’s interest?

a. Assignable
b. Waivable
c. Non-transferrable
d. Irreplaceable

151. What is the term used to the person admitted to all the rights of a limited partner who
has died or has assigned his interest in a partnership?
a. Assignee of limited partner
b. Transferee of limited partner
c. Trustee of limited partner
d. Substituted limited partner

152. What is the right of an assignee of a limited partner who does not become a substituted
limited partner?
a. He has a right to require any information or account of the partnership transactions.
b. He has a right to inspect the partnership books.
c. He has a right to manage and control the partnership.
d. He 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.

153. What are the instances when an assignee of a limited partner may become a substituted
limited partner?
a. If all the members of the partnership consent thereto.
b. If the assigning limited partner or assignor is empowered to admit the assignee as
substituted limited partner as provided in the certificate of limited co-partnership and
gives the assignee that right.
c. When the articles of certificate of co-partnership is appropriately amended in accordance
with law.
d. Any of the above.

154. Which of the following statements concerning the substitution of assignee as substituted
limited partner is incorrect?
a. The substituted limited partner has all the rights and powers, and is subject to all the
restrictions and liabilities of his assignor.
b. The substituted limited partner is liable to liabilities of which he was ignorant at the time
he became a limited partner and which could not be ascertained from the certificate.
c. The substitution of the assignee as a limited partner does not release the assignor from
liability to the partnership under certificate of limited co-partnership.
d. On the death of a limited partner his executor or administrator shall have all the rights of
a limited partner for the purpose of setting his estate, and such power as the deceased
had to constitute his assignee a substituted limited partner.

155. When is the certificate of limited co-partnership required to be cancelled?

a. When the partnership is dissolved.
b. When all limited partners cease to be such.
c. Either A or B.
d. Neither A nor B.

39 | P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

156. The following are the instances when certificate of limited co-partnership may be
amended only but not cancelled, except
a. There is a change in the name of the partnership or in the amount or character of the
contribution of any limited partner
b. A person is substituted as a limited partner
c. An additional limited partner is admitted
d. A person is admitted as a general partner
e. A general partner retires, dies, becomes insolvent or insane, or is sentenced to civil
interdiction and the business is continued under article 1860
f. There is a change in the character of the business of the partnership
g. There is a false or erroneous statement in the certificate
h. There is a change in the time as stated in the certificate for the dissolution of the
partnership or for the return of a contribution
i. A time is fixed for the dissolution of the partnership, or the return of a contribution, no
time having been specified in the certificate
j. The members desire to make a change in any other statement in the certificate in order
that it shall accurately represent the agreement among them
k. When all limited partners die

157. Which of the following statements concerning a limited partnership is incorrect?

a. Additional limited partners may be admitted after the formation by filing an amendment
to the original certificate without dissolving the limited partnership.
b. The retirement, death, civil interdiction, insanity or insolvency of a general partner
dissolves the limited partnership unless the business is continued by the remaining
general partners under a right to do so in articles of partnership or with the consent of all
members.
c. An industrial partner may become a general partner but is not allowed to become a
limited partner.
d. The retirement, death, civil interdiction, insanity or insolvency of a limited partner always
dissolves the limited partnership.

158. The following are the differences of a general partnership from a private corporation,
except
g. General partnership is created by mere consent while a private corporation is created by
operation of law.
h. General partners are generally liable up to the extent of their separate properties while
stockholders are generally liable only up to the extent of their capital contribution.
i. General partnership is generally managed by the partners themselves while private
corporation is managed by the Board of Directors.
j. Dissolution of a general partnership is a change in the relationship among the partners
while dissolution of a private corporation is the end of the life of a corporation.
k. General partnership has no right of succession while private corporation has right of
succession.
l. General partnership has no separate personality from the partners while private
corporation has a separate personality distinct from the shareholders.

159. Which of the following has no right to inspect the partnership books?
a. Nominal partner
b. Silent partner
c. Secret partner
d. Dormant partner

160. What is the proper classification of an industrial partner?

a. General partner
b. Limited partner
c. Dormant partner
d. Nominal partner

161. Which of the following is not considered a partner?

a. Assignee of a partner
b. Substituted limited partner
c. Silent partner
d. Secret partner

40 | P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

162. Which of the following partners may be validly removed by virtue of provisions of Civil
Code for engaging in another business without the permission of the other partners?
a. Managing partner
b. Industrial partner
c. Capitalist partner
d. Silent partner

163. Which managing partner may be validly removed by partners having controlling interests
despite the absence of valid cause for removal?
a. Managing partner appointed in articles of co-partnership
b. Managing partner appointed in a separate document other than articles of co-partnership
c. Either A or B
d. Neither A nor B

164. How is a contract of partnership wherein the contribution involves personal property with
value of at least P3,000 perfected?
a. By mere consent
b. By delivery of the contribution
c. By notarization of the articles of co-partnership
d. By registration of the notarized articles of co-partnership to SEC

165. Which of the following causes is not an automatic ground for dissolution of general
partnership?
a. Death of a partner
b. Insolvency of a partner
c. Civil interdiction of a partner
d. Insanity of a partner

166. Which partner is exempted from making additional capital contribution to the partnership
in order to save the venture from imminent loss?
a. Industrial partner
b. Managing partner
c. Silent partner
d. Secret partner

167. If no one is appointed as managing partner, who shall be considered the administrator of
the partnership?
a. The oldest partner
b. The partner with the largest capital contribution
c. The industrial partner
d. All the partners

168. In case more than one partner is appointed as managing partners, how shall act of
management be settled in case of objection by any of the managing partners?
a. The decision of majority of the managing partners shall prevail.
b. The decision of the controlling partners shall prevail.
c. The decision of the controlling managing partners shall prevail.
d. The decision of the oldest partner shall prevail.

169. A, B and C are partners in TEN General Partnership. A and B are capitalist partners while
C is an industrial partner. After exhaustion of partnership assets, partnership liabilities amounting
to P30,000 remained unpaid. From whom may the partnership creditors collect?
a. C only
b. A, B and C
c. A and B only
d. None of the partners

41 | P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

170. A, B, C and D are partners in FIX General Partnership. A, B and C are capitalist partners
while D is an industrial partner. The Articles of Co-Partnership provides that C is exempted from
liability of the partnership to third persons. After exhaustion of partnership assets, partnership
liabilities amounting to P60,000 remained unpaid. Among the partners, who ultimately shoulder
the unpaid partnership's liabilities?
a. A and B only
b. A, B and D only
c. A, B, C and D
d. None of the partners

171. A, B and C are partners in ABC Parking General Partnership. D deposited his car to the
parking lot of the partnership for a fee while A is managing the parking lot. After seeing D's
parked car, B borrowed the said car. Unfortunately, the car was crushed by an accident. Who will
be liable for the value of the car to D?
a. ABC Partnership only
b. ABC Partnership or B only
c. ABC Partnership or A or B or C
d. ABC Partnership or A or B only

172. A, B and C are partners in AB Ltd. Partnership. A and B are general partners while C is a
limited partner. After exhaustion of partnership assets, partnership liabilities amounting to
P30,000 remained unpaid. From whom may the partnership creditors collect?
a. C only
b. A, B and C
c. A and B only
d. None of the partners

173. A, B, C, D, E and F are partners in ABC Ltd. Partnership. A, B and F are general capitalist
partners while E is an industrial partner. The Articles of Co-Partnership provides that F is
exempted from liability of the partnership to third persons. C and D are limited partners but D is
appointed as managing partner. Among the partners, who ultimately shoulder the unpaid
partnership's liabilities?
a. A and B only
b. A, B, E and F only
c. A, B and F only
d. A, B, C, D, E and F

174. A and B are general partners in AB Partnership with outstanding liabilities of P6,000
before the admission of C. C is admitted to the existing partnership of A and B. After several
years of operation, the total liabilities of the partnership increased to P12,000 while the total
assets of the partnership are fully exhausted. How much may the unpaid creditor of the
partnership validly collect from C?
a. P2,000
b. P3,000
c. P4,000
d. P6,000

176. D has two outstanding and matured obligations to ABC Partnership and A, managing
partner of ABC Partnership in the amount of P4,000 and P1,000, respectively. D paid P1,000 to A
who issued his personal receipt. How shall the P1,000 be applied to the credits?
a. P1,000 to A's credit only
b. P1,000 to ABC Partnership's credit only
c. P800 to ABC Partnership and P200 to A's credit
d. P500 to ABC Partnership and P500 to A's credit

177. Using the same data in the preceding number but assuming A issued the receipt of the
partnership, how shall the P1,000 be applied to the credits?
a. P1,000 to A's credit only
b. P1,000 to ABC Partnership's credit only
c. P800 to ABC Partnership and P200 to A's credit
d. P500 to ABC Partnership and P500 to A's credit

42 | P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

178. D has two outstanding and matured obligations to ABC Partnership and B, a non-
managing partner of ABC Partnership in the amount of P4,000 and P1,000, respectively. D paid
P1,000 to B who issued his personal receipt. How shall the P1,000 be applied to the credits?
a. P1,000 to B's credit only
b. P1,000 to ABC Partnership's credit only
c. P800 to ABC Partnership and P200 to B's credit
d. P500 to ABC Partnership and P500 to B's credit

179. Which of the following credits shall be settled last in a general partnership?
a. Those owing to the creditors other than the partners
b. Those owing to partners other than for capital and profits
c. Those owing to partners with respect to capital contribution
d. Those owing to partners with respect to profit share

180. Which of the following credits shall be settled last in a limited partnership?
a. Those owing to the limited partners
b. Those owing to the general partners other than for capital and profits
c. Those owing to the general partners with respect to profit share
d. Those owing to the general partners with respect to capital contribution

181. It is a contract of two or more persons who bind themselves to contribute money, property, or
industry to a common fund, with the intention of dividing the profits among themselves. It may also
be formed by two or more persons for the exercise of a common profession.
a) Contract of sales
b) Contract of partnership
c) Contract of mortgage
d) Contract of pledge

182. Which of the following is a general characteristic of a contract of partnership?

a) Consensual contract
b) Accessory contract
c) Gratuitous contract
d) Innominate contract

183. This principle means that a partner has a right to choose those whom he wants to be associated
with the partnership because it is based on trust and confidence.
a) Delectus Personae
b) Pactum Commissorium
c) Res Perit Domino
d) Genum Nunquam Peruit

184. Which of the following statements about formality of contract of partnership is incorrect?
a) As a general rule, contract of partnership may be in any form because it is perfected by mere
consent.
b) If real property is contributed to the partnership, the contract of partnership must be notarized
and an inventory of the said real property must be attached to the notarized contract of
partnership for the contract to be valid.
c) If the contributed capital to the partnership is at least P3,000 in money or personal property,
the contract of partnership must be notarized and registered with SEC in order for the contract
of partnership to be valid.
d) If the partnership is a limited partnership, a certificate of limited co-partnership must be signed
under oath by the partners and must be recorded with the SEC, otherwise the partnership will
be considered as a general partnership as to creditors but will remain to be limited partnership
to the partners themselves.

185. If the contributed capital to the partnership is at least P3,000 in money or personal property, what is
the effect if the contract of partnership is not notarized and/or not registered with Securities and
Exchange Commission (SEC)?
a) The partnership will be classified as a limited partnership.
b) The contract of partnership is considered void ab initio.
c) The partnership will be considered a de jure partnership.
d) The liabilities of the partners to the creditors of the partnership will not be affected.

43 | P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

186. Who among the following is allowed to become a partner in a commercial or business partnership?
a) Natural person
b) Corporation
c) Both a and b
d) Neither a nor b

187. Who among the following may join together to establish a general professional partnership?
a) Doctors and Engineers
b) CPAs and CPA-Lawyers
c) Architects and Nurses
d) Lawyers and CPAs

188. Which of the following is a prima facie evidence that a person is a partner in a partnership?
a) Co-ownership when a co-owner share in the profit of a co-owned property
b) Co-possession when a co-possessor share in the profit of a co-possessed property
c) Sharing or gross return when he is a joint operator of a jointly controlled property
d) None of the above

189. Which of the following receipts by a person of a share of the profits of a business is a prima
evidence that the recipient is a partner in the partnership business?
a) As a rent to a landlord
b) As a wage of an employee
c) As interest on a loan
d) As a return on investment

190. A, a minor and B, an insane person orally entered into a contract of partnership at the lucid interval
of the latter. At the time of oral agreement, A invested and delivered half of cash contribution
amounting to P2,000. The partners agreed that the complete contribution will happen two (2) years
from the date of oral agreement. The articles of co-partnership was not registered with the
Securities and Exchange Commission. What is the status of the contract of partnership?
a) Perfectly valid contract
b) Voidable contract
c) Unenforceable contract
d) Void contract

191. It is a partnership wherein all the partners contribute all the property which actually belonged to
them to the common fund, with the intention of dividing the same among themselves, as well as the
profits which they acquire therewith.
a) Universal partnership of all present property
b) Universal partnership of profits
c) Particular partnership
d) General professional partnership

192. Which of the following will never form part of common fund in a universal partnership of all present
property?
a) Property belonging to the partners at the time of the constitution or perfection of the
partnership.
b) Profits that may be acquired from the present property.
c) Property acquired by each partner after the formation of the partnership if stipulated.
d) Profits and fruits from property acquired by each partner, even those from property acquired by
inheritance, legacy or donation after the formation of the partnership if stipulated.
e) Property acquired by each partner by inheritance, legacy or donation after the formation of the
partnership if stipulated.

193. It is a partnership whereby the common fund comprises all that the partners may acquire by their
work or industry during the existence of the partnership.
a) Universal partnership of all present property
b) Universal partnership of profits
c) Particular partnership
d) General professional partnership

44 | P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

194. Which of the following will never form part of common fund in a universal partnership of all profits?
a) Profits obtained by the partners by their work or industry during the existence of the
partnership.
b) The usufruct or use of the property belonging to each partner at the time of the constitution of
the partnership.
c) The profits and fruits from the properties mentioned in letter a and b.
d) The profits and fruits, if stipulated, of the property acquired by each partner after the
constitution of the partnership
e) The profits and fruits arising from chance or lucrative title after formation of partnership if
stipulated

195. Who among the following is allowed to enter into a universal partnership?
a) Husband and wife
b) Persons who were guilty of adultery or concubinage at the time of formation
c) Persons who were guilty of the same criminal offense
d) Public officer or his wife, descendants or ascendants and another person by reason of the public
officer’s position
e) Brothers and sisters

196. In case Universal Partnership is entered into by the partners without specification as to its type,
what is the disputable presumption of law as to its classification?
a) Universal partnership of all present property
b) Universal partnership of profits
c) Particular partnership
d) General professional partnership

197. Which of the following is properly classified as a gratuitous contract?

a) Universal partnership of all present property
b) Universal partnership of profits
c) Particular partnership
d) Both a and b

198. Which of the following statements pertains to a partnership by prescription?

a) It is a partnership is a partnership where all the partners are liable up to the extent of their
separate property after the partnership assets have been exhausted.
b) It is a partnership where there is at least one general partner who is liable up to the extent of
his separate property after the partnership assets have been exhausted and at least one limited
partner who is liable up to the extent of his investment in the partnership.
c) It is a partnership which in reality is not partnership but is considered as one with respect to
those who, by reason of their conduct or admission, are precluded from denying its existence.
d) It is a partnership which is established by the lapsing of time.

199. It is a partnership that exists both in fact and in law.

a) De facto partnership
b) De jure partnership
c) Partnership by estoppel
d) Partnership by prescription

200. It is a type of partnership whereby a period is established for its existence and will be dissolved upon
the arrival of such period.
a) Partnership with a fixed term
b) Partnership for a particular undertaking
c) Partnership at will
d) None of the above

201. Which of the following partnerships is exempted from corporate income tax?
a) Commercial or Business Partnership
b) General Professional Partnership
c) Both a and b
d) Neither a nor b

45 | P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

202. He refers to a partner who has all the rights and powers and is subject to all the restrictions of a
general partner, except that, in respect to his contribution, he shall have the rights against the other
members which he would have had if he were not also a general partner.
a) General partner
b) Limited partner
c) General-Limited partner
d) Nominal partner

203. He refers to a partner one who contributes only money and property to the partnership.
a) Capitalist partner
b) Industrial partner
c) Capitalist-Industrial partner
d) Assignee of a limited partner

204. He refers to a partner who will be liable up to the extent of his separate assets but is not entitled to
the right of a partner.
a) Managing partner
b) Liquidating partner
c) Nominal partner
d) Substituted limited partner

205. He refers to a partner who is active in management of partnership business and known to the public
as a partner, such as by allowing his name to be included in the firm name.
a) Ostensible partner
b) Secret partner
c) Silent partner
d) Dormant partner

206. He refers to one who is no longer a partner of business but has left his capital in the business as
loan. He receives interest on such as long as the loan is not paid off.
a) Nominal partner
b) Quasi-partner
c) Newly-admitted partner
d) Retiring partner

207. In the absence of date mutually agreed or stipulated by the partners, what is the date of
commencement of juridical personality of the partnership?
a) From the moment of submission of articles of co-partnership to SEC
b) From the moment of execution of articles of co-partnership by the partners
c) From the moment of issuance by SEC of certificate of registration
d) From the moment of receipt by the partner of certificate of registration from SEC

208. How shall the partnership profit of a partnership be divided?

a) It shall be divided based on any partnership profit agreement.
b) It shall be divided based on any loss agreement.
c) It shall be divided based on a valid partnership profit agreement.
d) It shall be divided equally.

209. In the absence of a valid partnership profit agreement, which of the following legal rules of the
division of partnership profit is incorrect?
a) The industrial partner shall first receive a just and equitable share in the profits before
distribution to capitalist partners.
b) The remaining profits after distribution to industrial partners of his just and reasonable share in
profits shall be distributed to the capitalist partners based on the following by order of priority:
(1) Capital contribution ratio of capitalist partners and (2) Equally on the presumption that the
contribution of capitalist partners is equal.
c) In case of capitalist-industrial partner, he shall receive a just and equitable share in the profit
for being an industrial partner and then he shall also share in the remaining profits as a
capitalist partner on the basis of (1) capital contribution ratio of capitalist partners or (2) equally
with the capitalist partners.
d) The profits shall be divided equally among all the partners including industrial partners.

46 | P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

210. How shall the partnership loss of a partnership be divided?

a) It shall be divided based on any partnership loss agreement.
b) It shall be divided based on any partnership profit agreement.
c) It shall be divided based on a valid partnership loss agreement.
d) It shall be divided equally.

211. In the absence of a valid partnership loss agreement, which of the following legal rules of the
division of partnership loss is incorrect?
a) The industrial partner shall first receive a just and equitable share in the loss before distribution
to capitalist partners.
b) The industrial partner shall be exempted from partnership losses.
c) The partnership losses shall be distributed to the capitalist partners only based on the following
by order of priority: (1) Valid partnership profit agreement among capitalist partners; (2) Capital
contribution ratio of capitalist partners; and (3) Equally on the presumption that the contribution
of capitalist partners is equal.
d) In case of capitalist-industrial partner, for being an industrial partner, he shall not share in
losses but for being capitalist partner he shall share in the losses on the basis of (1) valid profit
ratio agreement among capitalist partners; (2) capital contribution ratio of capitalist partners; or
(3) equally with the capitalist partners.

212. Which of the following partnership profit/loss stipulation is valid?

a) Stipulation excluding any capitalist partner from share in partnership profit
b) Stipulation excluding any industrial partner from share in partnership profit
c) Stipulation excluding a capitalist partner from share in partnership loss
d) Stipulation excluding an industrial partner from share in partnership loss

213. Which of the following designations of partnership profit or loss is void?

a) Unilateral designation of partnership profits or losses by a single partner without the consent or
approval by all the partners
b) Designation of partnership profits or losses by a third person unanimously agreed by all the
partners
c) Both a and b
d) Neither a nor b

214. If the designation of partnership profits or losses by a third person chosen by all the partners is
manifestly inequitable, what is the prescriptive period available to the injured partner to impugn or
question such unjust division of partnership profits or losses?
a) Within 3 months from the knowledge of such designation but it must be before the said injured
partner executes it
b) Within 6 months from the knowledge of such designation but it must be before the said injured
partner executes it
c) Within 12 months from the knowledge of such designation but it must be before the said
injured partner executes it
d) Within 1 month from the knowledge of such designation but it must be before the said injured
partner executes it

215. Which managing partner may not be validly removed by the partner owning controlling interests
without justifiable cause or if the managing partner acted in good faith?
a) Managing partner appointed in the articles of co-partnership
b) Managing partner appointed in a separate document other than the articles of co-partnership
c) Both a and b
d) Neither a nor b

216. A, B, C and D formed a partnership with A and B contributing P10,000 cash and P20,000 cash,
respectively, while C and D contributing services. C and D are appointed as managing partners. C
and D hired E as chief accountant who was opposed by A and B. A and C hired F as internal auditor
who was opposed by B and D. Who between E and F is/are validly hired in the ABCD Partnership?
a) E
b) F
c) Both E and F
d) Neither E nor B

47 | P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

217. A, B, C, D and E formed a partnership with capital contribution of 1:2:3:4:5. No one is appointed as
managing partner. A, B and C preferred BDO as its depositary bank while D and E preferred BPI.
Which is the proper depositary bank of ABCDE Partnership?
a) BDO
b) BPI
c) Both BDO and BPI
d) Neither BDO nor BPI

218. ABC Partnership is engaged in the buy and sell of fruits and vegetables with A appointed as
managing partner. Which of the following acts by a partner is not binding against ABC Partnership?
a) Sale by Partner B of fruits at a minimal gross profit to a customer who does not have knowledge
of B’s lack of authority.
b) Sale by Partner A of vegetables at break-even to a customer who acted in good faith.
c) Acquisition by Partner C of a brand new delivery truck at a huge historical cost which is
unanimously approved by all the partners.
d) Acquisition by Partner B of an old delivery truck below its book value without the knowledge
and consent by the other partners.

219. Which of the following acts may be validly done by the managing partner alone?
a) Disposition of the goodwill of the business
b) Confession of judgment
c) Obtaining a regular loan from an accredited lender
d) Submission of a partnership claim or liability to arbitration
e) Entering into a compromise concerning a partnership’s claim or liability

220. Which of the following acts requires unanimous consent by all the partners?
a) Renunciation of a claim of the partnership
b) Availing of volume discount and purchase discount from a major supplier
c) Payment and release of salaries of employees
d) Issuance of check for payment of utilities payable of the business

221. Which of the following statements about the right of industrial partner to engage in a business other
than the partnership business is correct?
a) An industrial partner can engage in any business for himself unless expressly prohibited by the
partnership.
b) An industrial partner can engage in a business of different kind even without stipulation allowing
him to do so and in a business of the same kind of the partnership if there is a stipulation
allowing him to do so.
c) The industrial partner cannot only engage in a business of the same kind with the partnership
but he is allowed to engage in a business of different kind of that of the partnership.
d) An industrial partner cannot engage in any business for himself, unless the partnership
expressly permits him to do so.

222. What is/are the remedies available to injured partners if the industrial partner engages in any
business for himself without the express permission of the partnership?
a) Exclude the industrial partner from the partnership with a right to damages
b) Avail themselves of the benefits obtained from the business the industrial engaged in with a
right to damages
c) Either a or b
d) Both a and b

223. Which of the following statements about the right of capitalist partner to engage in a business other
than the partnership business is correct?
a) A capitalist partner can engage in any business for himself unless expressly prohibited by the
partnership.
b) A capitalist partner can engage in a business of different kind even without stipulation allowing
him to do so and in a business of the same kind of the partnership if there is a stipulation
allowing him to do so.
c) A capitalist partner cannot only engage in a business of different kind with the partnership but
he is allowed to engage in a business of the same kind of that of the partnership.
d) A capitalist partner cannot engage in any business for himself unless the partnership expressly
permits him to do so.

48 | P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

224. What is/are the remedies available to injured partners if the capitalist partner engages in a business
of the same kind of the partnership without the express permission of the partnership?
a) To ask the guilty capitalist partner to bring to the common fund any profits accruing to him
from the said transaction
b) To ask the guilty capitalist partner to bear all the losses from the said transaction.
c) Both a and b
d) Neither a nor b

225. ABC General Partnership was formed by A, B, C, D and E contributed P1M; P2M; P3M; P4M; and
services respectively. It was agreed by all the partners that D is exempted from liability to third
persons. ABC Partnership became bankrupt and it reported total assets amounting to P20M and total
liabilities to third persons amounting to P50M. How much may the creditors validly collect from the
separate assets of partner A, B, C, D and E, respectivelty, assuming all them are personally solvent?
a) P6M; P6M; P6M; P6M; P6M
b) P7.5M; P7.5M; P7.5M; P7.5M; P0
c) P10M; P10M; P10M; P0; P0
d) P3M; P6M; P9M; P12M; P0

226. Using the same data in number 45, ultimately, how much will be shouldered by the partners after
reimbursement among themselves?
a) P6M; P6M; P6M; P6M; P6M
b) P7.5M; P7.5M; P7.5M; P7.5M; P0
c) P10M; P10M; P10M; P0; P0
d) P5M; P10M; P15M; P0M; P0

227. A and B are partners in AB General Partnership with total liabilities to third persons amounting to
P12M. C is admitted to the said partnership as a general partner. After several years of operation
from the admission of C, the new partnership became bankrupt with total assets at P0 and total
liabilities to third persons at P27M including the above mentioned P12M liabilities. Assuming all
partners are personally solvent, how much may the creditors of the partnership collect from the
separate assets of partners A, B and C, respectively?
a) P9M; P9M; P9M
b) P11M; P11M; P5M
c) P6M; P6M; P15M
d) P13.5M; P13.5M; P0

228. A, B and C formed ABC General Partnership which is engaging in Laundry Business. A customer
brought a coat to A, a managing partner, for dry cleaning. While the said coat is in the possession of
the partnership, B, a managing partner, borrowed it and used it for wedding event. Due to the
negligence of B’s friend, the said coat was stained by a dessert while it is worn by B resulting to
damages to the customer amounting to P30,000. How much may the customer validly collect from
ABC Partnership, A, B and C, respectively?
a) P10,000 and P10,000 and P10,00 and P0
b) P15,000 and P0 and P15,000 and P0
c) P30,000 or P30,000 or P30,000 or P0
d) P30,000 or P30,000 or P30,000 or P30,000

229. Using the same data in preceding number, which is incorrect?

a) B has the obligation pay to ABC partnership for damages it suffered through his fault.
b) B can compensate the damages suffered by the ABC Partnership with the profits and benefits
which he may have earned for the partnership by his industry.
c) The court may equitably reduce or offset B’s liability for damages to the partnership if unusual
profit has been realized by the partnership from B’s extraordinary effort.
d) None of the above.

49 | P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

230. Which is correct about the assignment of partner’s interest in the partnership to a third person?
a) The associate or assignee or purchaser of partner's interest becomes an automatic partner of
the partnership even without the consent of the other partners.
b) The partnership is automatically dissolved by operation of law due to the assignment of the
partner’s interest to a third person.
c) The associate or assignee or purchase of partner’s interest is entitled only to the share of the
assigning partner in the partnership profits and share of the assigning partner in the net assets
of the partnership at the date of liquidation.
d) The assignment of partner’s interest still requires the consent of all the partners in order for it
to be considered valid between the assignor and the assignee.

231. In the absence of agreement to the contrary, what is the ratio of capital contribution of capitalist
partners?
a) Equally
b) 1:2:3:4
c) 25:25:50
d) 2:3:5

232. In the absence of partnership agreement, which partner is exempted from making additional share
of capital to the partnership to save the venture in case of imminent loss of the business of
partnership?
a) Capitalist partner
b) Industrial partner
c) Capitalist-industrial partner
d) None of the above

233. Which of the following statements about the obligations of a partner to the partnership is incorrect?
a) A capitalist partner has the obligation to answer for eviction in case the partnership is deprived
of the specific or determinate thing he has contributed to the partnership in the same manner
as the vendor is bound with respect to the vendee.
b) A capitalist partner is liable for the fruits of the specific thing he promised to contribute from the
time they should have been delivered without the need of any demand.
c) A capitalist partner has the obligation to deliver to the partnership at the time it was constituted
or on the date stipulated the money he has promised to contribute.
d) A capitalist partner has to pay interest on the amount (money) he had promised to contribute
from the time he should have complied with his obligation but with a need for demand.

234. Which of the following is not a right of a general partner?

a) Right to have the partnership books kept at the principal place of business of the partnership
and to inspect and copy any of them at a reasonable hour on a business day
b) Right to misappropriate funds from the partnership coffers
c) Right to have on demand true and full information of all things affecting the partnership
d) Right to a formal account of partnership affairs whenever circumstances render it just and
reasonable
e) Right to receive his share in net income and his share in net asset at the proper time

235. In which of the following is formal accounting of the partnership affairs not available to a partner?
a) If the partner is wrongfully excluded from the partnership business or possession of its property
by his co-partners.
b) If the right for formal accounting is provided under the terms of articles of co-partnership.
c) If the other partner derived profits without the consent of other partners from any transaction
connected with the formation, conduct, or liquidation of the partnership or from any use by him
of its property.
d) If the capitalist partner engages in a business of different kind of that of the partnership without
the express permission from the partnership

236. In which of the following assets will the partnership not bear the risk of loss?
a) Fungible things or those that cannot be kept without deteriorating.
b) Things contributed to be sold.
c) Things brought and appraised in the inventory unless there is a stipulation to the contrary but
the liability of the partnership is limited only to the value of the things at which they were
appraised.
d) Things contributed by the partners in the universal partnership of profits at the time of
constitution of the partnership

50 | P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

237. Which of the following is not an obligation by the partnership to the partners?
a) The partnership shall be responsible to every partner for the amounts he may have disbursed
on behalf of the partnership and for the corresponding interest, from the time the expense are
made.
b) The partnership shall answer to each partner for the obligations he may have contracted in
good faith in the interest of the partnership business.
c) The partnership shall answer to each partner the risks as a consequence of its management.
d) The partnership shall answer obligation for support of its partners to their family.

238. Which of the following can be validly assigned or conveyed by a partner?

a) Partner’s interest on a specific partnership property
b) Partner’s co-ownership right to a specific partnership property
c) Partner’s interest as to the share in net income and as to the share in net asset of the
partnership
d) None of the above

239. D has matured obligations to ABC Partnership and to A, the managing partner of ABC Partnership, in
the amount of P300,000 and P200,000, respectively. D paid P50,000 cash to A who issued the
receipt of ABC Partnership for the whole P50,000. How shall such P50,000 payment be applied to
the above mentioned debts?
a) P50,000 to ABC Partnership only
b) P50,000 to managing partner A’s claim only
c) P30,000 to ABC Partnership’s claim and P20,000 to managing partner A’s claim
d) P20,000 to ABC Partnership’s claim and P30,000 to managing partner A’s claim

240. Using the same data in number 59, but assuming A issued his own personal receipt for the whole
P50,000, how shall such P50,000 payment be applied to the debts?
a) P50,000 to ABC Partnership’s claim only
b) P50,000 to managing partner A’s claim only
c) P30,000 to ABC Partnership’s claim and P20,000 to managing partner A’s claim
d) P20,000 to ABC Partnership’s claim and P30,000 to managing partner A’s claim

241. D has matured obligations to ABC Partnership and to B, a nonmanaging partner of ABC Partnership,
in the amount of P300,000 and P200,000, respectively. D paid P50,000 cash to B who issued his own
personal receipt for the whole P50,000. How shall such P50,000 payment be applied to the above
mentioned debts?
a) P50,000 to ABC Partnership’s claim only
b) P50,000 to nonmanaging partner B’s claim only
c) P30,000 to ABC Partnership’s claim and P20,000 to nonmanaging partner B’s claim
d) P20,000 to ABC Partnership’s claim and P30,000 to nonmanaging partner B’s claim

242. Which is not a requirement for a partner’s admission or representation to be considered as an

evidence against the partnership?
a) The admission must concern partnership affairs.
b) The admission must be made within the scope of the authority of the partner making the
admission.
c) The admission must be made during the existence of the partnership
d) The admission must be made in judicial proceedings.

243. It refers to the change in the relation of the partners caused by any partner ceasing to be associated
in the carrying on of the business.
a) Partnership dissolution
b) Partnership liquidation
c) Partnership termination
d) Partnership formation

51 | P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

244. Which of the following is a ground for dissolution of a general partnership with violation of the
agreement of the partners?
a) By the termination of the definite term of the partnership
b) By the attainment of the particular undertaking specified in the agreement
c) By the expulsion of any partner bona fide or in good faith from the business in accordance with
such power conferred by the agreement of the parties
d) By the express will of all the partners who have not assigned their interests or suffered them to
be charged for their separate debts, either before or after the termination of any specified term
or undertaking
e) By the withdrawal of a capitalist partner of his capital contribution in bad faith before the arrival
of the term or before the attainment of the purpose of the partnership

245. Which of the following is not an automatic ground for dissolution of a general partnership?
a) Loss before delivery of property where the partner contributed only its use or enjoyment or in
case of universal partnership of profits.
b) Loss after delivery of property where the partner contributed only its use or enjoyment or in
case of universal partnership of profits.
c) Loss before delivery of specific thing, which a partner has promised to contribute to the
partnership or in case of universal partnership of all present property.
d) Loss after delivery of specific thing, which a partner has promised to contribute to the
partnership or in case of universal partnership of all present property.

246. Which of the following is not an automatic ground for dissolution of a general partnership?
a) Death of any partner
b) Insolvency of any partner
c) Insanity of any partner
d) Civil interdiction of any partner

247. Which is an automatic ground for dissolution of a general partnership?

a) A partner becomes in any way incapable of performing his part in the partnership contract.
b) 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.
c) The business of the partnership can be carried only at a loss.
d) A partner wilfully or persistently commits a breach of the partnership contracts.

248. It refers to the process of settling the disputes or affairs of the partnership after dissolution or
winding up of the partnership business.
a) Partnership dissolution
b) Partnership liquidation
c) Partnership termination
d) Partnership formation

249. Who among the following is not allowed to liquidate or wind up the partnership affairs?
a) The liquidating partner agreed upon by the partners.
b) The partners who have not wrongfully dissolved the partnership.
c) The legal representative of the last surviving partner, not insolvent
d) The nominal partner who misrepresented in public as a partner

250. Which of the following claims shall be settled last in a general partnership?
a) Those owing to the creditors other than partners.
b) Those owing to partners other than for capital and profits.
c) Those owing to partners in respect of capital.
d) Those owing to partners in respect of profits.

251. Which of the following claims shall be settled last in a limited partnership?
a) Those owing to creditors, including limited partners for advances made to partnership.
b) Those owing to limited partners by way of their share of the profits and other compensation by
way of income on their contribution.
c) Those owing to limited partners in respect to the capital or their contributions.
d) Those owing to general partners other than for capital and profits.
e) Those owing to general partners in respect to profits.
f) Those owing to general partners in respect to capital.

52 | P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

252. In the absence of agreement to the contrary, what form of return of capital contribution must be
received by a limited partner?
a) Cash
b) Receivable
c) Intangible asset
d) The same asset he actually contributed

253. Which of the following may not be contributed by a pure limited partner?
a) Cash
b) Personal property
c) Real property
d) Service

254. When may a limited partner become liable up to the extent of his separate assets for the obligations
of the partnership?
a) If he allows his name to be included in the partnership name contrary to allowed instances of
law.
b) If he takes part in the control or management of the business.
c) Either a or b
d) Neither a nor b

255. When may the limited partner’s surname or name appear in the limited partnership name without
increasing the liability of such limited partner to a general partner?
a) If the surname or name of limited partner is also the surname or name of a general partner.
b) If prior to the time when the limited partner became such, the business has been carried on
under a name in which limited partner’s surname or name appeared.
c) Either a or b
d) Neither a nor b

256. AB Ltd. is a limited partnership composing of A and B as general partners and C as a limited partner.
The said partnership become bankrupt and reported total assets amounting to P100,000 and total
liabilities to third persons amounting to P130,000. How much may the creditors of the partnership
validly collect from partners A, B and C, respectively, assuming they are all personally solvent?
a) P10,000; P10,000; P10,000
b) P15;000; P15,000; P0
c) P30,000 or P30,000 or P30,000
d) P30,000 or P30,000 or P0

257. ABC Ltd. is a limited partnership composing of A, B, D, E as general partners and C, F and G as
limited partners. F is appointed as managing partner while D is an industrial partner. All partners
agreed that E is exempted from liability to third persons. The said partnership become bankrupt and
reported total assets amounting to P100,000 and total liabilities to third persons amounting to
P142,000. How much may the creditors of the partnership validly collect from partners A, B, C, D, E,
F and G, respectively, assuming they are all personally solvent?
a) P6,000; P6,000; P6,000; P6,000; P6,000; P6,000; P6,000
b) P7,000; P7,000; P7,000; P7,000; P7,000; P7,000; P0
c) P10,500; P10,500; P0; P10,500; P10,500; P0; P0
d) P21,000; P21,000; P0; P0; P0; P0; P0

258. Using the same data in number 75, how much is ultimately shouldered by the partners from the said
unpaid obligations of the partnership after the reimbursement among themselves?
a) P6,000; P6,000; P6,000; P6,000; P6,000; P6,000; P6,000
b) P7,000; P7,000; P7,000; P7,000; P7,000; P7,000; P0
c) P10,500; P10,500; P0; P10,500; P10,500; P0; P0
d) P21,000; P21,000; P0; P0; P0; P0; P0

259. What is the nature of limited partner’s interest?

a) Assignable
b) Waivable
c) Non-transferable
d) Purely personal

53 | P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

260. He refers to to the person admitted to all the rights of a limited partner who has died or has
assigned his interest in a partnership.
a) Assignee of a limited partner
b) Substituted limited partner
c) Purchaser of a limited partner’s interest
d) Nominal limited partner

261. In which of the following instances may the articles of limited co-partnership be amended only
instead of being cancelled?
a) When the limited partnership is dissolved.
b) When all limited partners cease to be such.
c) When a person is substituted as a limited partner
d) None of the above

262. A, B and C formed ABC Partnership with capital contribution of P1M, P3M and P6M, respectively. In
the first year of operation, ABC Partnership reported net income of P30,000. The Articles of Co-
Partnership of ABC Partnership provides that net loss shall be divided in the ratio of 5:3:2 to A, B
and C, respectively. How much is the share of Partner A in the net income of ABC Partnership during
the first year?
a) P3,000
b) P15,000
c) P10,000
d) Cannot be determined

263. Ana, Bea and Carla formed a limited partnership with a name “ABC Ltd”. Ana and Bea are general
partners while Carla is a limited partner. Ana was appointed as a managing partner. Unfortunately,
ABC Ltd. Partnership became bankrupt due to Ana’s mismanagement. Who will be personally liable
up to the extent of his separate assets as to the unpaid obligations of ABC Ltd. Partnership?
a) Ana only
b) Ana and Bea only
c) Ana, Bea and Carla
d) None of them

264. Who among the following has the right to participate in the management of a partnership?
a) Assignee of general partner’s interest
b) Assignee of limited partner’s interest
c) Nominal partner
d) None of the above

265. In case of imminent loss of the venture of the partnership, which partner is exempted by law from
making additional capital contribution in order to save the venture?
a) Capitalist partner
b) Capitalist-industrial partner
c) Industrial partner
d) All of the above

266. Which of the following is not an automatic ground for dissolution of general partnership?
a) Loss before delivery of property where the partner contributed only its use or enjoyment
b) Loss after delivery of property where the partner contributed only its use or enjoyment
c) Loss before delivery of specific thing, which a partner has promised to contribute to the
partnership
d) Loss after delivery of specific thing, which a partner has promised to contribute to the
partnership

267. In the liquidation of a general partnership, which of the following claims shall be settled last by the
liquidating partner?
a) Share of the partners in profit
b) Advances from partners
c) Capital contribution of partners
d) Salaries payable to employees of partnership

54 | P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

268. FAZE General Partnership consists of partners F, A, Z and E who contributed P3M, P2M, P5M and
industry, respectively. The Articles of Co-Partnership provides that Z is exempted from the unpaid
obligations of the partnership to its creditors in case of insolvency of the partnership. After several
years of operation, FAZE General Partnership became bankrupt. At this moment, the partnership
reported total assets amounting to P300,000 while its total liabilities amounted to P400,000.
Assuming all partners are personally solvent, how much may the unpaid creditors of FAZE General
Partnership collect from the separate assets of partners F, A, Z and E, respectively?
a) P30,000 – P20,000 – P50,000 – P0
b) P60,000 – P40,000 – P0 – P0
c) P33,333.33 – P33,333.33 – P33,333.33 – P0
d) P25,000 – P25,000 – P25,000 – P25,000

269. Using the same data from the preceding number, how much will be ultimately shouldered by the
partners, personally, after the reimbursement among themselves?
a) P30,000 – P20,000 – P50,000 – P0
b) P60,000 – P40,000 – P0 – P0
c) P33,333.33 – P33,333.33 – P33,333.33 – P0
d) P25,000 – P25,000 – P25,000 – P25,000

270. Which managing partner cannot be removed without justifiable cause by the partner owning the
controlling interests?
a) Managing partner appointed by the partner owning the controlling interests
b) Managing partner appointed after the execution of the Articles of Co-Partnership
c) Managing partner appointed in the Articles of Co-Partnership
d) Managing partner appointed in a document separate from Articles of Co-Partnership

271. Which of the following may not be contributed by a pure limited partner?
a) Intangible assets
b) Personal property
c) Service
d) Real property

272. In the absence of partnership agreement, what is the share of the industrial partner in the net loss
of the partnership?
a) Equal to the share of the least capitalist partner
b) Just and equitable share
c) Equally with all the partners whether capitalist partners or industrial partners
d) None

273. Which of the following is a prima facie evidence of being a partner?

a) Receipt by a co-owner of profit share in a co-owned property
b) Receipt by a co-possessor of profit share in a co-possessed property
c) Receipt by a joint operator of share in gross returns in jointly controlled asset
d) None of the above

274. In case Universal Partnership is entered into without specification, what is the disputable
presumption of law as to the classification of this partnership?
a) Particular Partnership
b) Universal Partnership of All Present Property
c) General Professional Partnership
d) Universal Partnership of Profits

275. Which type of partner is present in every type of partnership?

a) Industrial partner
b) Limited partner
c) General partner
d) Capitalist-industrial partner

55 | P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

276. In the absence of partnership agreement, what is the commencement of the juridical personality of
the partnership?
a) On the date of actual contribution by the partners
b) On the date of issuance by Securities and Exchange Commission (SEC) of Certificate of
Registration
c) On the date of receipt by the partnership of Certificate of Registration from Securities and
Exchange Commission (SEC)
d) On the date of execution of Articles of Co-Partnership by the partners

277. In the absence of contrary agreement, what is the form of return of capital contribution to a limited
partner?
a) Cash
b) Land
c) Inventory
d) Specific property actually contributed by such limited partner

278. Which of the following is not an automatic cause of dissolution of general partnership?
a) Death of a partner
b) Insanity of a partner
c) Civil interdiction of a partner
d) Insolvency of a partner

279. Which of the following rights is available to an assignee of an interest in the partnership?
a) Right to participate in the management of the partnership
b) Right to vote in the decision-making of the partnership
c) Right to share in net income of his assignor
d) Right to inspect the books of partnership at anytime

280. In the absence of provision in the Articles of Co-Partnership, which partner may not be removed by
the injured partners for engaging in another business without permission of the partnership?
a) Capitalist partner
b) Industrial partner
c) Both a and b
d) Neither a nor b

281. Which of the following acts may be done by the managing partner alone?
a) Disposition of goodwill of the business
b) Renunciation of a claim of the partnership
c) Selection of major supplier of the partnership
d) Assignment of partnership’s property in trust for creditors

282. A, B and C are partners in ABC Partnership. D was admitted to ABC Partnership by the existing
partners. Before the admission of D, ABC Partnership reported total liabilities amounting to
P120,000. Several years after the admission of D, the partnership became bankrupt and reported
unpaid obligations to partnership creditors amounting to P160,000 including the above mentioned
obligation of P120,000. Assuming there are no remaining partnership assets, how much may the
creditors collect from the separate assets of Partner A?
a) P10,000
b) P50,000
c) P40,000
d) P30,000

283. A, B and C are the partners of ABC Parking Space General Partnership. Managing Partner A received
a deposited car from a customer with book value of P400,000. While the said car is deposited in the
parking lot of the partnership, nonmanaging Partner B borrowed it without the consent of managing
partner A. Unfortunately, the said car was damaged in an accident while being driven by
nonmanaging partner A. How much may the customer-depositor-owner of the car collect from ABC
Partnership, A, B and/or C, respectively?
a) P100,000 and P100,000 and P100,000 and P100,000
b) P400,000 or P0 or P400,000 or P0
c) P400,000 or P400,000 or P400,000 or P400,000
d) P200,000 and P0 and P200,000 and P0

56 | P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

284. ABC Partnership is engaged in the business of buy and sell of laptops. A is the managing partner of
ABC Partnership while B and C are nonmanaging partners. Which of the following acts is not binding
against ABC Partnership?
a) B sold laptop to a student at a discounted price whereby the buyer has no knowledge of lack of
authority of B.
b) A purchased laptop from a VAT-registered supplier without the consent partner B and partner C.
c) C bought a land from a nonVAT-registered supplier whereby the seller has no knowledge of lack
of authority of C.
d) B acquired a delivery van from a VAT-registered supplier and the acquisition is approved by
partner A and partner C.

285. A, B and C orally formed ABC Partnership with original capital contribution of P3,000 cash, car worth
P100,000 and services, respectively on the date of oral agreement. Unfortunately, the articles of co-
partnership was not registered before the Securities and Exchange Commission. What is the status
of the contract of partnership?
a) Valid and binding
b) Unenforceable
c) Void
d) Rescissible

286. A, B, C and D formed ABCD General Partnership. A and B contributed P20,000 and P30,000 cash
respectively while C and D contributed services and industry. C and D were appointed as managing
partners. C and D hired E as an accountant but such action was opposed by A and B. A and C hired
F as an internal auditor but such action was opposed by B and D. Who between E and F is/are
validly hired?
a) E only
b) F only
c) Both E and F
d) Neither E nor F

287. On January 1, 2020, D was admitted to ABC Partnership. It was agreed that D must invest
P1,000,000 cash on July 1, 2020. D failed to make the agreed capital contribution to ABC
Partnership. This prompted ABC Partnership to send a demand letter on August 1, 2020. D ignored
the demand letter which prompted ABC Partnership to file the necessary civil action on October 1,
2020. When will the legal interest start to accrue on D’s defaulted capital contribution?
a) January 1, 2020
b) July 1, 2020
c) August 1, 2020
d) October 1, 2020

288. Which of the following stipulations is valid in a contract of partnership?

a) Stipulation excluding an industrial partner from share in partnership profit
b) Stipulation excluding a capitalist partner from share in partnership profit
c) Stipulation excluding an industrial partner from share in partnership loss
d) Stipulation excluding a capitalist partner from share in partnership loss

289. In which of the following instances shall the articles of limited co-partnership required to be
cancelled?
a) When a person is substituted as a limited partner
b) When all limited partners cease to be such
c) When there is a false or erroneous statement in the certificate
d) When there is change in the character of the business of the partnership

290. What is the nature of limited partner’s interest?

a) Waivable
b) Intransmissible
c) Assignable
d) Taxable

57 | P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

291. Which of the following claims shall be preferred by the liquidator in the liquidation of limited
partnership?
a) Those owing to general partners for their advances to limited partnership
b) Those owing to limited partners for their profit shares
c) Those owing to general partners for their capital contribution
d) Those owing to general partners for their profit shares

292. What is the proper classification of an industrial partner?

a) Limited partner
b) General partner
c) Managing partner
d) Nominal partner

293. As a general rule, how is a contract of partnership perfected?

a) By mere consent
b) By delivery of capital contribution to the partnership
c) By registration to Securities and Exchange Commission
d) By operation of law

294. Which receipt by a person of share of the profits of a business will be considered prima facie
evidence that such person is a partner in the business?
a) As wages of an employee
b) As rent to a landlord
c) As an annuity to a widow of a deceased partner
d) As a return on investment

295. Who among the following is allowed to enter into a universal partnership?
a) Husband and wife
b) Persons who were guilty of adultery or concubinage at the time of formation
c) Father and son
d) Public officer or his wife, descendants or ascendants and another person by reason of the public
officer’s position

296. Which type of partnership is subject to corporate income tax?

a) General Professional Partnership
b) Commercial Partnership
c) Both a and b
d) Neither a nor b

297. In the absence of contrary agreement, what is the capital contribution to be made by capitalist
partner?
a) Equal capital contribution
b) Based on provision of GAAP
c) In accordance with the instruction by SEC
d) Based on provision of Tax Code

298. D is indebted to ABC Partnership and A, managing partner of ABC Partnership, in the amount of
P30,000 and P20,000, respectively. Both debts are unsecured and demandable. D paid P5,000 to A
who issued his personal receipt for the payment. How shall the P5,000 be applied to the two debts?
a) All P5,000 to ABC Partnership’s claim only
b) All P5,000 to A’s claim only
c) P3,000 to ABC Partnership and P2,000 to A’s claim
d) P2,000 to ABC Partnership and P3,000 to A’s claim

299. Using the same data from preceding number except that A issued the receipt of ABC Partnership for
the P5,000 payment of D, how shall the P5,000 be applied to the two debts?
a) All P5,000 to ABC Partnership’s claim only
b) All P5,000 to A’s claim only
c) P3,000 to ABC Partnership and P2,000 to A’s claim
d) P2,000 to ABC Partnership and P3,000 to A’s claim

58 | P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

300. D is indebted to ABC Partnership and B, nonmanaging partner of ABC Partnership, in the amount of
P30,000 and P20,000, respectively. Both debts are unsecured and demandable. D paid P5,000 to B
who issued his personal receipt for the payment. How shall the P5,000 be applied to the two debts?
a) All P5,000 to ABC Partnership’s claim only
b) All P5,000 to B’s claim only
c) P3,000 to ABC Partnership and P2,000 to B’s claim
d) P2,000 to ABC Partnership and P3,000 to B’s claim

301. A, B, C and D are general partners of ABCD Partnership with contribution of P6M, P2M, P1M and
service respectively. Due to Covid-19 Pandemic, ABCD Partnership decided to liquidate its business.
At the time of liquidation, ABCD Partnership reported total assets at P50M with total liabilities to
creditors amounting to P40M. How much will be received by Partner D at the time of liquidation?
a) P1M
b) P2M
c) P6M
d) P2.5M

302. Using the same data in preceding number except that the total liabilities to creditors of the ABCD
partnership are reported at P49.1M, how much will be received by partner A at the time of
liquidation?
a) P100,000
b) P200,000
c) P600,000
d) P300,000

303. Which of the following may be validly assigned by a partner despite the absence of approval by all
the partners?
a) Partner’s capital interest in the partnership
b) Partner’s right as a co-owner of partnership’s assets
c) Partner’s interest in specific partnership property
d) None of the above

304. It is the change in the relation of the partners caused by any partner ceasing to be associated in the
carrying on of the business.
a) Partnership Formation
b) Partnership Dissolution
c) Partnership Operation
d) Partnership Liquidation

305. Which of the following is an automatic ground for dissolution of general partnership?
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) A partner becomes in any way incapable of performing his part in the partnership contract.
c) A partner has been guilty of such conduct as tend to affect prejudicially the carrying on of the
business.
d) The business of the partnership can be carried only at a loss.

306. If not time is specified for the return of capital contribution of a limited partner, what is the grace
period granted by law to the limited partnership to return such contribution?
a) One (1) month
b) Two (2) months
c) Three (3) months
d) Six (6) months

307. What is the prescriptive period available to an injured party to question a manifestly unjust
distribution of partnership profit (loss) designated by a third person selected by the partners?
a) Within one (1) month from his knowledge but before he executes it
b) Within two (2) months from his knowledge but before he executes it
c) Within three (3) months from his knowledge but before he executes it
d) Within six (6) months from his knowledge but before he executes it

59 | P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

308. What is the minimum composition of limited partnership?

a) At least one general partner and at least one nominal partner
b) At least one capitalist partner and at least one industrial partner
c) At least one ostensible partner and at least one dormant partner
d) At least one general partner and at least one limited partner

309. Which of the following is not an essential requisite in order for an admission of a partner to be used
as evidence against the partnership?
a) The admission or representation must concern partnership affairs.
b) The admission must be made judicially or in court proceedings
c) The admission must be made within the scope of the authority of the partner making the
admission.
d) The admission must be made during the existence of the partnership

310. Which of the following contributions of partners will not be subject to the risk of loss on the part of
the partnership?
a) Fungible things or those that cannot be kept without deteriorating.
b) Things contributed by a partner in universal partnership of profits.
c) Things contributed to be sold.
d) Things brought and appraised in the inventory unless there is a stipulation to the contrary but
the liability of the partnership is limited only to the value of the things at which they were
appraised.

311. In case an unlawful partnership is dissolved by judicial decree, to whom shall the profits of the
partnership go?
a) Innocent partner
b) Injured partner
c) Guilty partner
d) State

312. Which of the following shall not form part of common fund in universal partnership of all present
property?
a) Property belonging to the partners at the time of the constitution or perfection of the
partnership.
b) Profits that may be acquired from the present property.
c) Property acquired by each partner after the formation of partnership by inheritance, legacy or
donation if stipulated.
d) Profits and fruits from property acquired by each partner, even those from property acquired by
inheritance, legacy or donation after the formation of the partnership if stipulated.

313. Which of the following shall not form part of common fund in universal partnership of profits?
a) Profits obtained by the partners by their work or industry during the existence of the
partnership.
b) Profits and fruits by the partners by chance or lucrative title during the existence of the
partnership
c) The usufruct or use of the property belonging to each partner at the time of the constitution of
the partnership..
d) The profits and fruits, if stipulated, of the property acquired by each partner after the
constitution of the partnership.

314. Which of the following is a cause of dissolution of general partnership with violation of rights of the
partners or third persons?
a) By the arrival of the definite term or period of the partnership.
b) By the attainment of the particular undertaking or purpose specified in the agreement.
c) By the express will of all the partners who have assigned their interests or suffered them to be
charged for their separate debts, either before or after the termination of any specified term or
undertaking.
d) By the expulsion of any partner bona fide or in good faith from the business in accordance with
such power conferred by the agreement of the parties.

60 | P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

315. A, B and C are partners in ABC General Partnership with A appointed as managing partner. On June
30, 2020, B died with the knowledge of A and C. On July 1, 2020, A borrowed P3M cash in behalf of
the partnership from BDO. How much may the BDO collect from the separate assets of partner A,
estate of partner B and partner C, respectively, assuming the partnership assets are fully exhausted?
a) P1M and P1M and P1M
b) P3M and P0 and P0
c) P3M or P3M or P3M
d) P1.5M and P0 and P1.5M

316. Using the same data from preceding number, how much will be ultimately shouldered by partner A,
estate of partner B and partner C after reimbursement among the partners as regards to the claim of
BDO?
a) P1M and P1M and P1M
b) P3M and P0 and P0
c) P3M or P3M or P3M
d) P1.5M and P0 and P1.5M

317. A, B and C are partners in ABC General Partnership with A appointed as managing partner. On June
30, 2020, B died without the knowledge of A and C. On July 1, 2020,A borrowed P3M cash in behalf
of the partnership from BDO. How much may the BDO collect from the separate assets of partner A,
estate of partner B and partner C, respectively, assuming the partnership assets are fully exhausted?
a) P1M and P1M and P1M
b) P3M and P0 and P0
c) P3M or P3M or P3M
d) P1.5M and P0 and P1.5M

318. Using the same data from preceding number, how much will be ultimately shouldered by partner A,
estate of partner B and partner C after reimbursement among the partners as regards to the claim of
BDO?
a) P1M and P1M and P1M
b) P3M and P0 and P0
c) P3M or P3M or P3M
d) P1.5M and P0 and P1.5M

319. What assets shall be used first for the satisfaction of the claims of creditors of partnership?
a) Exclusive property of a partner
b) Property of the partnership
c) Separate assets of the partnership
d) Conjugal property of a partner

320. Which of the following claims shall be settled first when the separate assets of a partner are
insufficient to cover all his indebtedness?
a) Those owing to partnership creditors.
b) Those owing to partners by way of capital contribution.
c) Those owing to separate creditors of the partner.
d) Those owing to partners by way of profit share

321. Who among the following creditors may attach the partner’s right to a specific property of the
partnership?
a) Claimants for legal support
b) Creditors of partnership
c) Separate creditors of partners
d) All of the above

322. He is a person admitted to all the rights of a limited partner who has died or has assigned his
interest in a partnership.
a) Assignee of limited partner
b) Substituted limited partner
c) Newly admitted partner
d) Quasi-partner

61 | P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

323. Which of the following statements is true as regards to the right of industrial partner to engage in
another business?
a) An industrial partner is only prohibited to engage in a business of the same kind but not to
business of different kind.
b) An industrial partner cannot engage in any business for himself, unless the partnership
expressly permits him to do so.
c) An industrial partner may engage in business of different kind for himself, unless the
partnership expressly prohibits him to do so.
d) An industrial partner may engage in a business of the same kind for himself, unless the
partnership expressly prohibits him to do so.

324. Which of the following statements is true as regards to the right of capitalist partner to engage in
another business?
a) The capitalist partner cannot engage in any kind of business without permission of the other
partners.
b) The capitalist partner can only engage in a business of different kind if there is stipulation
allowing him to do so.
c) The capitalist partner can engage in a business of the same kind even without stipulation
allowing him to do so.
d) The capitalist partner can engage in a business of different kind even without stipulation
allowing him to do so and in a business of the same kind if there is a stipulation allowing him to
do so.

325. A, B and C are partners in TEN General Partnership. A and B are capitalist partners while C is an
industrial partner. After exhaustion of partnership assets, partnership liabilities amounting to
P30,000 remained unpaid. Assuming all partners are personally solvent, from whom may the unpaid
partnership creditors collect?
a) C only
b) A, B and C
c) A and B only
d) None of the partners

326. A, B and C are partners in AB Ltd. Partnership. A and B are general partners while C is a limited
partner. After exhaustion of partnership assets, partnership liabilities amounting to P30,000
remained unpaid. Assuming all partners are personally solvent, from whom may the unpaid
partnership creditors collect?
a) C only
b) A, B and C
c) A and B only
d) None of the partners

327. A, B, C, D, E, F and G are partners in ABC Ltd. Partnership. A, B and F are general capitalist partners
while E is an industrial partner. The Articles of Co-Partnership provides that F is exempted from
liability of the partnership to third persons. C, D and G are limited partners but D is appointed as
managing partner. Assuming all partners are personally solvent, from whom may the unpaid
partnership creditors collect?
a) A and B only
b) A, B, E and F only
c) A, B and F only
d) A, B, C, D, E and F

328. What is the effect if a partner associates or assigns/conveys his share or interest in the partnership
to another person?
a) The associate or assignee becomes a partner of the partnership even without the consent of the
other partners.
b) The associate or assignee becomes a partner of the partnership if the assigning partner is a
managing partner even without the consent of the other partners.
c) The partnership is dissolved by the assignment of the said interest to third persons.
d) The associate or assignee does not become a partner but shall be entitled only to the share of
the assigning partner in the partnership profits and net assets at the date of liquidation.

62 | P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

329. If no one is appointed as managing partner, who shall be considered as the administrator of the
partnership?
a) The limited partner
b) The partner with the largest capital contribution
c) The industrial partner
d) All the partners

330. In case more than one partner is appointed as managing partners, how shall act of management be
settled in case of objection by any of the managing partners?
a) The decision of majority of the managing partners shall prevail.
b) The decision of the controlling partners shall prevail.
c) The decision of the controlling managing partners shall prevail.
d) The decision of the oldest partner shall prevail.

331. Who among the following is not allowed to become a partner in a commercial partnership?
a) Corporation
b) Natural person
c) Both a and b
d) Neither a nor b

332. Who among the following is allowed to become a partner in a general professional partnership?
a) Corporation
b) Natural person
c) Both a and b
d) Neither a nor b

333. Where shall the Articles of Limited Co-Partnership in order for the limited partnership to be
considered a de jure limited partnership as to partnership creditors?
a) Department of Trade and Industry (DTI)
b) Securities and Exchange Commission (SEC)
c) Cooperative Development Authority (CDA)
d) Insurance Commission (IC)

334. What is the proper classification of general professional partnership?

a) Universal partnership of all present property
b) Universal partnership of profit
c) Particular partnership
d) Partnership by estoppel

335. Who among the following is allowed to participate in management of partnership?

a) Assignee of general partner’s interest
b) Assignee of limited partner’s interest
c) Nominal partner
d) None of the above

336. He refers to a partner who contributed not only money and property but also service or industry.
a) Capitalist partner
b) Industrial partner
c) Capitalist industrial partner
d) Nominal partner

337. Who among the following shall be preferred to liquidate a partnership?

a) The guilty partner who caused the dissolution of partnership.
b) The partners who have not wrongfully dissolved the partnership.
c) The legal representative of the last surviving partner, not insolvent
d) The liquidating partner agreed upon by the partners.

338. What document is necessary for the perfection of contract of partnership?

a) Articles of co-partnership
b) Certificate of registration
c) By-laws
d) None of the above

63 | P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

339. An assignee of a partner’s interest does not become an automatic partner without the consent of all
partners is an application of what concept?
a) Res perit domino
b) Delectus personae
c) Genum nun quam peruit
d) Negotiorum gestio

340. A, a minor and B, an insane entered into a written contract of partnership for the operation of a
computer shop during the lucid interval of the latter. What is the status of contract of partnership?
a) Void
b) Unenforceable
c) Voidable
d) Rescissible

341. Which of the following statements is incorrect about a limited partnership?

a) 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 of limited co-partnership.
b) A limited partner may also loan money to and transact other business with the partnership, and,
unless he is also a general partner, receive on account of resulting claims against the
partnership, with general creditors, a pro rata share of the assets.
c) A limited partner who has made a loan to the partnership may validly receive or hold as
collateral security any partnership property for his claim to the partnership
d) A limited partner may not receive from a general partner or the partnership any payment,
conveyance, or release from liability if at the time the assets of the partnership are not
sufficient to discharge partnership liabilities to persons not claiming as general or limited
partners.

342. Which of the following is a characteristic of contract of partnership?

a) Innominate contract
b) Preparatory contract
c) Accessory contract
d) Real contract

343. It is a partnership which is established by the lapsing of time.

a) De jure partnership
b) De facto partnership
c) Partnership by prescription
d) Nominal partnership

344. He refers to a partner who does not participate in the management of the business and not known
to the public as a partner.
a) Secret partner
b) Silent partner
c) Ostensible partner
d) Dormant partner

345. Who among the following is properly classified as a partner?

a) Assignee of a general partner
b) Substituted limited partner
c) Nominal partner
d) Quasi-partner

346. How shall the partnership loss be divided among the partners?
a) It shall be divided equally.
b) It shall be divided based on capital contribution ratio.
c) It shall be divided based on valid partnership profit distribution ratio.
d) It shall be divided based on valid partnership loss distribution ratio.

347. If silent, in which of the following is an industrial partner exempted?

a) Liabilities of partnership to creditors
b) Net loss of the partnership
c) Both a and b
d) Neither a nor b

64 | P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

348. What is the required vote for submission of partnership’s claim or liability to arbitration?
a) At least majority vote of all managing partners
b) At least majority vote of all partners
c) At least majority vote of controlling partners
d) Unanimous vote by all partners

349. What is/are the remedies of the injured capitalist partner if the industrial partner engages in
business for himself without the express permission of the partnership?
a) Exclude the industrial partner from the partnership with a right to damages
b) Avail themselves of the benefits obtained from the business he engaged in with a right to
damages
c) Either a or b
d) Neither a nor b

350. When is a right to formal accounting not available to a partner?

a) If the partner is wrongfully excluded from the partnership business or possession of its property
by his co-partners.
b) If the capitalist partner engages in a business which is of different kind to the venture of the
partnership without permission of the partnership
c) If the right for formal accounting is provided under the terms of articles of co-partnership.
d) If the other partner derived profits without the consent of other partners from any transaction
connected with the formation, conduct, or liquidation of the partnership or from any use by him
of its property.

351. Which of the following is not considered an obligation of the partnership to the partners?
a) The partnership shall be responsible to every partner for the amounts he may have disbursed
on behalf of the partnership and for the corresponding interest, from the time the expense are
made.
b) The partnership shall answer to each partner for the obligations he may have contracted in
good faith in the interest of the partnership business.
c) The partnership shall be liable for the legal support of the partners to their family members.
d) The partnership shall answer to each partner the risks as a consequence of its management.

352. What is the effect if a third person misrepresented that he is a partner in an existing partnership in
public?
a) The nominal partner is liable pro-rata and subsidiarily like a general partner to persons giving
credit to the partnership whether the representation has or has not been communicated to the
latter.
b) The nominal partner is liable pro-rata only like a limited partner to persons giving credit to the
partnership whether the representation has or has not been communicated to the latter.
c) The nominal partner is liable pro-rata and subsidiarily like a general partner to persons giving
credit to the partnership when the misrepresentation has been communicated to the latter.
d) The nominal partner is liable pro-rata like a limited partner to persons giving credit to the
partnership when the misrepresentation has been communicated to the latter.

353. Which of the following will nullify the contract of partnership?

a) Nonregistration of articles of limited co-partnership to Securities and Exchange Commission
(SEC)
b) Nonregistration of articles of co-partnership to Securities and Exchange Commission when the
capital contribution is at least P3,000 in cash or personal property
c) Inclusion of name of a limited partner in the Limited Partnership’s name
d) None of the above

354. What is the proper classification of a limited partner?

a) Industrial partner
b) Capitalist partner
c) Managing partner
d) Nominal partner

65 | P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

355. Which designation of partnership profit or loss is valid?

a) Unilateral designation of profit or loss by a controlling partner without the consent of all
partners
b) Unilateral designation of profit or loss majority partners without the consent of all partners
c) Unilateral designation of profit or loss majority of managing partners without the consent of all
partners
d) None of the above

356. In the absence of provision in the Articles of Co-Partnership, who has the legal authority to remove a
managing partner appointed after the execution of articles of co-partnership for acting in bad faith?
a) Majority of the partners
b) Majority of the managing partners
c) Partner owning controlling interest
d) Managing partner

357. Which of the following statements about the obligations of a partner is incorrect?
a) Every partner shall render on demand true and full information of all things affecting the
partnership to any partner or the legal representative of any deceased partner or of any partner
under legal disability.
b) Every partner must account to the partnership for any benefit, and hold as trustee for it any
profits derived by him without the consent of the other partners from any transaction connected
with the formation, conduct, or liquidation of the partnership or from any use by him of its
property.
c) To bring to the partnership capital his share of a partnership credit which he has received in
whole or in part even he may have given his receipt if the other partners have not collected
their shares and the debtor becomes insolvent after the partner has received the payment.
d) To pay to the partnership for damages suffered by it through his fault and compensate them
with the profits and benefits which he may have earned for the partnership by his industry.

358. What degree of diligence shall be observed by a managing partner in the administration of the
partnership?
a) Diligence of a father of good family
b) Extraordinary diligence
c) Diligence of a reasonably prudent person
d) Utmost diligence of a very cautious person

359. What is the minimum capital contribution required by law in the organization of a partnership?
a) At least P3,000
b) At least P5,000
c) At least P50,000
d) None of the above

360. Who may legally and ethically form a general professional partnership?
a) CPAs and Doctors for practice of medical profession
b) CPAs and Lawyers for practice of legal profession
c) CPAs and CPA-Lawyers for practice of accountancy profession
d) Engineers and Nurses for practice of engineering profession

361. Which of the following right is available to a partnership?

a) Right of succession
b) Right to declare dividends
c) Right to acquire and reissue treasury shares
d) None of the above

362. It is a contract of two or more persons who bind themselves to contribute money, property, or
industry to a common fund, with the intention of dividing the profits among themselves. It may also
be formed by two or more persons for the exercise of a common profession.
a) Contract of sales
b) Contract of partnership
c) Contract of mortgage
d) Contract of pledge

66 | P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

363. Which of the following is not a general characteristic of contract of partnership?

a) Consensual contract
b) Preparatory contract
c) Gratuitous contract
d) Nominate contract

364. This principle means that a partner has a right to choose those whom he wants to be associated
with the partnership because it is based on trust and confidence.
a) Delectus Personae
b) Pactum Commissorium
c) Res Perit Domino
d) Genum Nunquam Peruit

365. Which of the following statements about formality of contract of partnership is incorrect?
a) As a general rule, contract of partnership may be in any form because it is perfected by mere
consent.
b) If real property is contributed to the partnership, the contract of partnership must be notarized
and an inventory of the said real property must be attached to the notarized contract of
partnership for the contract to be valid.
c) If the contributed capital to the partnership is at least P3,000 in money or personal property,
the contract of partnership must be notarized and registered with SEC in order for the contract
of partnership to be valid.
d) If the partnership is a limited partnership, a certificate of limited co-partnership must be signed
under oath by the partners and must be recorded with the SEC, otherwise the partnership will
be considered as a general partnership as to creditors but will remain to be limited partnership
to the partners themselves.

366. If the contributed capital to the partnership is at least P3,000 in money or personal property, what is
the effect if the contract of partnership is not notarized and/or not registered with Securities and
Exchange Commission (SEC)?
a) The partnership will be classified as a limited partnership.
b) The contract of partnership is considered void ab ignition.
c) The partnership will be considered a de jure partnership.
d) The partners will still be liable prorata and subsidiarily to the creditors of the partnership.

367. Who among the following is not allowed to become a partner in a commercial or business
partnership?
a) Natural person
b) Corporation
c) Both a and b
d) Neither a nor b

368. Which of the following is a prima facie evidence that a person is a partner in a partnership?
a) Co-ownership when a co-owner share in the profit of a co-owned property
b) Co-possession when a co-possessor share in the profit of a co-possessed property
c) Sharing or gross return when he is a joint operator of a jointly controlled property
d) None of the above

369. Which of the following receipts by a person of a share of the profits of a business is a prima
evidence that the recipient is a partner in the partnership business?
a) As a rent to a landlord
b) As a wage of an employee
c) As interest on a loan
d) As a return on investment

370. A, a minor and B, a demented person orally entered into a contract of partnership at the lucid
interval of the former. At the time of oral agreement, A invested and delivered half of cash
contribution amounting to P2,000. The partners agreed that the complete contribution will happen
two (2) years from the date of oral agreement. The articles of co-partnership was not registered
with the Securities and Exchange Commission. What is the status of the contract of partnership?
a) Perfectly valid contract
b) Voidable contract
c) Unenforceable contract
d) Void contract

67 | P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

371. It is a partnership wherein all the partners contribute all the property which actually belonged to
them to the common fund, with the intention of dividing the same among themselves, as well as the
profits which they acquire therewith.
a) Universal partnership of all present property
b) Universal partnership of profits
c) Particular partnership
d) General professional partnership

372. Which of the following will never form part of common fund in a universal partnership of all present
property?
a) Property belonging to the partners at the time of the constitution or perfection of the
partnership.
b) Profits that may be acquired from the present property.
c) Property acquired by each partner after the formation of the partnership if stipulated.
d) Profits and fruits from property acquired by each partner, even those from property acquired by
inheritance, legacy or donation after the formation of the partnership if stipulated.
e) Property acquired by each partner by inheritance, legacy or donation after the formation of the
partnership if stipulated.

373. It is a partnership whereby the common fund comprises all that the partners may acquire by their
work or industry during the existence of the partnership.
a) Universal partnership of all present property
b) Universal partnership of profits
c) Particular partnership
d) General professional partnership

374. Which of the following will never form part of common fund in a universal partnership of all profits?
a) Profits obtained by the partners by their work or industry during the existence of the
partnership.
b) The usufruct or use of the property belonging to each partner at the time of the constitution of
the partnership.
c) The profits and fruits from the properties mentioned in letter a and b.
d) The profits and fruits, if stipulated, of the property acquired by each partner after the
constitution of the partnership
e) The profits and fruits arising from chance or lucrative title after formation of partnership if
stipulated

375. Who among the following is allowed to enter into a universal partnership?
a) Husband and wife
b) Persons who were guilty of adultery or concubinage at the time of formation
c) Persons who were guilty of the same criminal offense
d) Public officer or his wife, descendants or ascendants and another person by reason of the public
officer’s position
e) Brothers and sisters

376. In case Universal Partnership is entered into by the partners without specification as to its type,
what is the disputable presumption of law as to its classification?
a) Universal partnership of all present property
b) Universal partnership of profits
c) Particular partnership
d) General professional partnership

377. Which of the following is properly classified as an onerous contract?

a) Universal partnership of all present property
b) Universal partnership of profits
c) Particular partnership
d) All of the above

68 | P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

378. Which of the following statements pertains to a nominal partnership?

a) It is a partnership is a partnership where all the partners are liable to the extent of their
separate property after the partnership assets have been exhausted.
b) It is a partnership where there is at least one general partner who is liable up to the extent of
his separate property after the partnership assets have been exhausted and at least one limited
partner who is liable up to the extent of his investment in the partnership.
c) It is a partnership which in reality is not partnership but is considered as one with respect to
those who, by reason of their conduct or admission, are precluded from denying its existence.
d) It is a partnership which is established by the lapsing of time.

379. It is a partnership that exists only in fact but not in law.

a) De facto partnership
b) De jure partnership
c) Partnership by estoppel
d) Partnership by prescription

380. It is a type of partnership whereby no term or period or particular undertaking is established in the
articles of co-partnership.
a) Partnership with a fixed term
b) Partnership for a particular undertaking
c) Partnership at will
d) None of the above

381. Which of the following partnerships is subject to corporate income tax?

a) Commercial or Business Partnership
b) General Professional Partnership
c) Both a and b
d) Neither a nor b

382. He refers to a partner who has all the rights and powers and is subject to all the restrictions of a
general partner, except that, in respect to his contribution, he shall have the rights against the other
members which he would have had if he were not also a general partner.
a) General partner
b) Limited partner
c) General-Limited partner
d) Nominal partner

383. He refers to a partner one who contributes not only money or property but also his services to the
partnership.
a) Capitalist partner
b) Industrial partner
c) Capitalist-Industrial partner
d) Assignee of a limited partner

384. He refers to a partner in charge of the winding up of the affairs of the partnership after it is
dissolved.
a) Managing partner
b) Liquidating partner
c) Nominal partner
d) Substituted limited partner

385. He refers to a partner who is active in management of partnership business and known to the public
as a partner, such as by allowing his name to be included in the firm name.
a) Ostensible partner
b) Secret partner
c) Silent partner
d) Dormant partner

386. He refers to one who is no longer a partner of business but has left his capital in the business as
loan. He receives interest on such as long as the loan is not paid off.
a) Nominal partner
b) Quasi-partner
c) Newly-admitted partner
d) Retiring partner

69 | P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

387. In the absence of date mutually agreed or stipulated by the partners, what is the date of
commencement of juridical personality of the partnership?
a) From the moment of submission of articles of co-partnership to SEC
b) From the moment of execution of articles of co-partnership by the partners
c) From the moment of issuance by SEC of certificate of registration
d) From the moment of receipt by the partner of certificate of registration from SEC

388. How shall the partnership profit of a partnership be divided?

a) It shall be divided based on any partnership profit agreement.
b) It shall be divided based on any loss agreement.
c) It shall be divided based on a valid partnership profit agreement.
d) It shall be divided equally.

389. In the absence of a valid partnership profit agreement, which of the following legal rules of the
division of partnership profit is incorrect?
a) The industrial partner shall first receive a just and equitable share in the profits before
distribution to capitalist partners.
b) The remaining profits after distribution to industrial partners of his just and reasonable share in
profits shall be distributed to the capitalist partners based on the following by order of priority:
(1) Capital contribution ratio of capitalist partners and (2) Equally on the presumption that the
contribution of capitalist partners is equal.
c) In case of capitalist-industrial partner, he shall receive a just and equitable share in the profit
for being an industrial partner and then he shall also share in the remaining profits as a
capitalist partner on the basis of (1) capital contribution ratio of capitalist partners or (2) equally
with the capitalist partners.
d) The profits shall be divided equally among all the partners including industrial partners.

390. How shall the partnership loss of a partnership be divided?

a) It shall be divided based on any partnership loss agreement.
b) It shall be divided based on any partnership profit agreement.
c) It shall be divided based on a valid partnership loss agreement.
d) It shall be divided equally.

391. In the absence of a valid partnership loss agreement, which of the following legal rules of the
division of partnership loss is incorrect?
a) The industrial partner shall first receive a just and equitable share in the loss before distribution
to capitalist partners.
b) The industrial partner shall be exempted from partnership losses.
c) The partnership losses shall be distributed to the capitalist partners only based on the following
by order of priority: (1) Valid partnership profit agreement among capitalist partners; (2) Capital
contribution ratio of capitalist partners; and (3) Equally on the presumption that the contribution
of capitalist partners is equal.
d) In case of capitalist-industrial partner, for being an industrial partner, he shall not share in
losses but for being capitalist partner he shall share in the losses on the basis of (1) valid profit
ratio agreement among capitalist partners; (2) capital contribution ratio of capitalist partners; or
(3) equally with the capitalist partners.

392. Which of the following partnership profit/loss stipulation is valid?

a) Stipulation excluding any capitalist partner from share in partnership profit
b) Stipulation excluding any industrial partner from share in partnership profit
c) Stipulation excluding a capitalist partner from share in partnership loss
d) Stipulation excluding an industrial partner from share in partnership loss

393. Which of the following designations of partnership profit or loss is valid?

a) Unilateral designation of partnership profits or losses by a single partner without the consent or
approval by all the partners
b) Designation of partnership profits or losses by a third person unanimously agreed by all the
partners
c) Both a and b
d) Neither a nor b

70 | P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

394. If the designation of partnership profits or losses by a third person chosen by all the partners is
manifestly inequitable, what is the prescriptive period available to the injured partner to impugn or
question such unjust division of partnership profits or losses?
a) Within 3 months from the knowledge of such designation but it must be before the said injured
partner executes it
b) Within 6 months from the knowledge of such designation but it must be before the said injured
partner executes it
c) Within 12 months from the knowledge of such designation but it must be before the said
injured partner executes it
d) Within 1 month from the knowledge of such designation but it must be before the said injured
partner executes it

395. Which managing partner may be validly removed by the partner owning controlling interests with or
without valid cause (bad faith or good faith)?
a) Managing partner appointed in the articles of co-partnership
b) Managing partner appointed in a separate document other than the articles of co-partnership
c) Both a and b
d) Neither a nor b

396. A, B, C and D formed a partnership with A and B contributing P10,000 cash and P20,000 cash,
respectively, while C and D contributing services. C and D are appointed as managing partners. C
and D hired E as chief accountant who was opposed by A and B. A and C hired F as internal auditor
who was opposed by B and D. Who between E and F is/are validly hired in the ABCD Partnership?
a) E
b) F
c) Both E and F
d) Neither E nor B

397. A, B, C, D and E formed a partnership with capital contribution of 1:2:3:4:5. No one is appointed as
managing partner. A, B and C preferred BDO as its depositary bank while D and E preferred BPI.
Which is the proper depositary bank of ABCDE Partnership?
a) BDO
b) BPI
c) Both BDO and BPI
d) Neither BDO nor BPI

398. ABC Partnership is engaged in the buy and sell of fruits and vegetables with A appointed as
managing partner. Which of the following acts by a partner is not binding against ABC Partnership?
a) Sale by Partner B of fruits at a minimal gross profit to a customer who does not have knowledge
of B’s lack of authority.
b) Sale by Partner A of vegetables at break-even to a customer who acted in good faith.
c) Acquisition by Partner C of a brand new delivery truck at a huge historical cost which is
unanimously approved by all the partners.
d) Acquisition by Partner B of an old delivery truck below its book value without the knowledge
and consent by the other partners.

399. Which of the following acts may be validly done by the managing partner alone?
a) Disposition of the goodwill of the business
b) Confession of judgment
c) Obtaining a regular loan from an accredited lender
d) Submission of a partnership claim or liability to arbitration
e) Entering into a compromise concerning a partnership’s claim or liability

400. Which of the following acts requires unanimous consent by all the partners?
a) Renunciation of a claim of the partnership
b) Availing of volume discount and purchase discount from a major supplier
c) Payment and release of salaries of employees
d) Issuance of check for payment of utilities payable of the business

71 | P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

401. Which of the following statements about the right of industrial partner to engage in a business other
than the partnership business is correct?
a) An industrial partner can engage in any business for himself unless expressly prohibited by the
partnership.
b) An industrial partner can engage in a business of different kind even without stipulation allowing
him to do so and in a business of the same kind of the partnership if there is a stipulation
allowing him to do so.
c) The industrial partner cannot only engage in a business of the same kind with the partnership
but he is allowed to engage in a business of different kind of that of the partnership.
d) An industrial partner cannot engage in any business for himself, unless the partnership
expressly permits him to do so.

402. What is/are the remedies available to injured partners if the industrial partner engages in any
business for himself without the express permission of the partnership?
a) Exclude the industrial partner from the partnership with a right to damages
b) Avail themselves of the benefits obtained from the business the industrial engaged in with a
right to damages
c) Either a or b
d) Both a and b

403. Which of the following statements about the right of capitalist partner to engage in a business other
than the partnership business is correct?
a) A capitalist partner can engage in any business for himself unless expressly prohibited by the
partnership.
b) A capitalist partner can engage in a business of different kind even without stipulation allowing
him to do so and in a business of the same kind of the partnership if there is a stipulation
allowing him to do so.
c) A capitalist partner cannot only engage in a business of different kind with the partnership but
he is allowed to engage in a business of the same kind of that of the partnership.
d) A capitalist partner cannot engage in any business for himself unless the partnership expressly
permits him to do so.

404. What is/are the remedies available to injured partners if the capitalist partner engages in a business
of the same kind of the partnership without the express permission of the partnership?
a) To ask the guilty capitalist partner to bring to the common fund any profits accruing to him
from the said transaction
b) To ask the guilty capitalist partner to bear all the losses from the said transaction.
c) Both a and b
d) Neither a nor b

405. ABC General Partnership was formed by A, B, C, D and E contributed P1M; P2M; P3M; P4M; and
services respectively. It was agreed by all the partners that D is exempted from liability to third
persons. ABC Partnership became bankrupt and it reported total assets amounting to P20M and total
liabilities to third persons amounting to P50M. How much may the creditors validly collect from the
separate assets of partner A, B, C, D and E, respectivelty, assuming all them are personally solvent?
a) P6M; P6M; P6M; P6M; P6M
b) P7.5M; P7.5M; P7.5M; P7.5M; P0
c) P10M; P10M; P10M; P0; P0
d) P3M; P6M; P9M; P12M; P0

406. Using the same data in number 44, ultimately, how much will be shouldered by the partners after
reimbursement among themselves?
a) P6M; P6M; P6M; P6M; P6M
b) P7.5M; P7.5M; P7.5M; P7.5M; P0
c) P10M; P10M; P10M; P0; P0
d) P5M; P10M; P15M; P0M; P0

72 | P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

407. A and B are partners in AB General Partnership with total liabilities to third persons amounting to
P12M. C is admitted to the said partnership as a general partner. After several years of operation
from the admission of C, the new partnership became bankrupt with total assets at P0 and total
liabilities to third persons at P27M including the above mentioned P12M liabilities. Assuming all
partners are personally solvent, how much may the creditors of the partnership collect from the
separate assets of partners A, B and C, respectively?
a) P9M; P9M; P9M
b) P11M; P11M; P5M
c) P6M; P6M; P15M
d) P13.5M; P13.5M; P0

408. A, B and C formed ABC General Partnership which is engaging in Laundry Business. A customer
brought a coat to A, a managing partner, for dry cleaning. While the said coat is in the possession of
the partnership, B, a managing partner, borrowed it and used it for wedding event. Due to the
negligence of B’s friend, the said coat was stained by a dessert while it is worn by B resulting to
damages to the customer amounting to P30,000. How much may the customer validly collect from
ABC Partnership, A, B and C, respectively?
a) P10,000 and P10,000 and P10,00 and P0
b) P15,000 and P0 and P15,000 and P0
c) P30,000 or P30,000 or P30,000 or P0
d) P30,000 or P30,000 or P30,000 or P30,000

409. Using the same data in preceding number, which is incorrect?

a) B has the obligation pay to ABC partnership for damages it suffered through his fault.
b) B can compensate the damages suffered by the ABC Partnership with the profits and benefits
which he may have earned for the partnership by his industry.
c) The court may equitably reduce or offset B’s liability for damages to the partnership if unusual
profit has been realized by the partnership from B’s extraordinary effort.
d) None of the above.

410. Which is correct about the assignment of partner’s interest in the partnership to a third person?
a) The associate or assignee or purchaser of partner's interest becomes an automatic partner of
the partnership even without the consent of the other partners.
b) The partnership is automatically dissolved by operation of law due to the assignment of the
partner’s interest to a third person.
c) The associate or assignee or purchase of partner’s interest is entitled only to the share of the
assigning partner in the partnership profits and share of the assigning partner in the net assets
of the partnership at the date of liquidation.
d) The assignment of partner’s interest still requires the consent of all the partners in order for it
to be considered valid between the assignor and the assignee.

411. In the absence of agreement to the contrary, what is the ratio of capital contribution of capitalist
partners?
a) Equally
b) 1:2:3:4
c) 25:25:50
d) 2:3:5

412. In the absence of partnership agreement, which partner is exempted from making additional share
of capital to the partnership to save the venture in case of imminent loss of the business of
partnership?
a) Capitalist partner
b) Industrial partner
c) Capitalist-industrial partner
d) None of the above

73 | P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

413. Which of the following statements about the obligations of a partner to the partnership is incorrect?
a) A capitalist partner has the obligation to answer for eviction in case the partnership is deprived
of the specific or determinate thing he has contributed to the partnership in the same manner
as the vendor is bound with respect to the vendee.
b) A capitalist partner is liable for the fruits of the specific thing he promised to contribute from the
time they should have been delivered without the need of any demand.
c) A capitalist partner has the obligation to deliver to the partnership at the time it was constituted
or on the date stipulated the money he has promised to contribute.
d) A capitalist partner has to pay interest on the amount (money) he had promised to contribute
from the time he should have complied with his obligation but with a need for demand.

414. Which of the following is not a right of a general partner?

a) Right to have the partnership books kept at the principal place of business of the partnership
and to inspect and copy any of them at a reasonable hour on a business day
b) Right to misappropriate funds from the partnership coffers
c) Right to have on demand true and full information of all things affecting the partnership
d) Right to a formal account of partnership affairs whenever circumstances render it just and
reasonable
e) Right to receive his share in net income and his share in net asset at the proper time

415. In which of the following is formal accounting of the partnership affairs not available to a partner?
a) If the partner is wrongfully excluded from the partnership business or possession of its property
by his co-partners.
b) If the right for formal accounting is provided under the terms of articles of co-partnership.
c) If the other partner derived profits without the consent of other partners from any transaction
connected with the formation, conduct, or liquidation of the partnership or from any use by him
of its property.
d) If the capitalist partner engages in a business of different kind of that of the partnership without
the express permission from the partnership

416. In which of the following assets will the partnership not bear the risk of loss?
a) Fungible things or those that cannot be kept without deteriorating.
b) Things contributed to be sold.
c) Things brought and appraised in the inventory unless there is a stipulation to the contrary but
the liability of the partnership is limited only to the value of the things at which they were
appraised.
d) Things contributed by the partners in the universal partnership of profits at the time of
constitution of the partnership

417. Which of the following is not an obligation by the partnership to the partners?
a) The partnership shall be responsible to every partner for the amounts he may have disbursed
on behalf of the partnership and for the corresponding interest, from the time the expense are
made.
b) The partnership shall answer to each partner for the obligations he may have contracted in
good faith in the interest of the partnership business.
c) The partnership shall answer to each partner the risks as a consequence of its management.
d) The partnership shall answer obligation for support of its partners to their family.

418. Which of the following can be validly assigned or conveyed by a partner?

a) Partner’s interest on a specific partnership property
b) Partner’s co-ownership right to a specific partnership property
c) Partner’s interest as to the share in net income and as to the share in net asset of the
partnership
d) None of the above

419. D has matured obligations to ABC Partnership and to A, the managing partner of ABC Partnership, in
the amount of P300,000 and P200,000, respectively. D paid P50,000 cash to A who issued the
receipt of ABC Partnership for the whole P50,000. How shall such P50,000 payment be applied to
the above mentioned debts?
a) P50,000 to ABC Partnership only
b) P50,000 to managing partner A’s claim only
c) P30,000 to ABC Partnership’s claim and P20,000 to managing partner A’s claim
d) P20,000 to ABC Partnership’s claim and P30,000 to managing partner A’s claim

74 | P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

420. Using the same data in number 58, but assuming A issued his own personal receipt for the whole
P50,000, how shall such P50,000 payment be applied to the debts?
a) P50,000 to ABC Partnership’s claim only
b) P50,000 to managing partner A’s claim only
c) P30,000 to ABC Partnership’s claim and P20,000 to managing partner A’s claim
d) P20,000 to ABC Partnership’s claim and P30,000 to managing partner A’s claim

421. D has matured obligations to ABC Partnership and to B, a nonmanaging partner of ABC Partnership,
in the amount of P300,000 and P200,000, respectively. D paid P50,000 cash to B who issued his own
personal receipt for the whole P50,000. How shall such P50,000 payment be applied to the above
mentioned debts?
a) P50,000 to ABC Partnership’s claim only
b) P50,000 to nonmanaging partner B’s claim only
c) P30,000 to ABC Partnership’s claim and P20,000 to nonmanaging partner B’s claim
d) P20,000 to ABC Partnership’s claim and P30,000 to nonmanaging partner B’s claim

422. Which is not a requirement for a partner’s admission or representation to be considered as an

evidence against the partnership?
a) The admission must concern partnership affairs.
b) The admission must be made within the scope of the authority of the partner making the
admission.
c) The admission must be made during the existence of the partnership
d) The admission must be made in judicial proceedings.

423. It refers to the change in the relation of the partners caused by any partner ceasing to be associated
in the carrying on of the business.
a) Partnership dissolution
b) Partnership liquidation
c) Partnership termination
d) Partnership formation

424. Which of the following is a ground for dissolution of a general partnership with violation of the
agreement of the partners?
a) By the termination of the definite term of the partnership
b) By the attainment of the particular undertaking specified in the agreement
c) By the expulsion of any partner bona fide or in good faith from the business in accordance with
such power conferred by the agreement of the parties
d) By the express will of all the partners who have not assigned their interests or suffered them to
be charged for their separate debts, either before or after the termination of any specified term
or undertaking
e) By the withdrawal of a capitalist partner of his capital contribution in bad faith before the arrival
of the term or before the attainment of the purpose of the partnership

425. Which of the following is not an automatic ground for dissolution of a general partnership?
a) Loss before delivery of property where the partner contributed only its use or enjoyment or in
case of universal partnership of profits.
b) Loss after delivery of property where the partner contributed only its use or enjoyment or in
case of universal partnership of profits.
c) Loss before delivery of specific thing, which a partner has promised to contribute to the
partnership or in case of universal partnership of all present property.
d) Loss after delivery of specific thing, which a partner has promised to contribute to the
partnership or in case of universal partnership of all present property.

426. Which of the following is not an automatic ground for dissolution of a general partnership?
a) Death of any partner
b) Insolvency of any partner
c) Insanity of any partner
d) Civil interdiction of any partner

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 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
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Telephone : (043) 723 8412
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427. Which is an automatic ground for dissolution of a general partnership?

a) A partner becomes in any way incapable of performing his part in the partnership contract.
b) 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.
c) The business of the partnership can be carried only at a loss.
d) A partner wilfully or persistently commits a breach of the partnership contracts.

428. It refers to the process of settling the disputes or affairs of the partnership after dissolution or
winding up of the partnership business.
a) Partnership dissolution
b) Partnership liquidation
c) Partnership termination
d) Partnership formation

429. Who among the following is not allowed to liquidate or wind up the partnership affairs?
a) The liquidating partner agreed upon by the partners.
b) The partners who have not wrongfully dissolved the partnership.
c) The legal representative of the last surviving partner, not insolvent
d) The nominal partner who misrepresented in public as a partner

430. Which of the following claims shall be settled last in a general partnership?
a) Those owing to the creditors other than partners.
b) Those owing to partners other than for capital and profits.
c) Those owing to partners in respect of capital.
d) Those owing to partners in respect of profits.

431. Which of the following claims shall be settled last in a limited partnership?
a) Those owing to creditors, including limited partners for advances made to partnership.
b) Those owing to limited partners by way of their share of the profits and other compensation by
way of income on their contribution.
c) Those owing to limited partners in respect to the capital or their contributions.
d) Those owing to general partners other than for capital and profits.
e) Those owing to general partners in respect to profits.
f) Those owing to general partners in respect to capital.

432. In the absence of agreement to the contrary, what form of return of capital contribution must be
received by a limited partner?
a) Cash
b) Receivable
c) Intangible asset
d) The same asset he actually contributed

433. Which of the following may not be contributed by a pure limited partner?
a) Cash
b) Personal property
c) Real property
d) Service

434. When may a limited partner become liable up to the extent of his separate assets for the obligations
of the partnership?
a) If he allows his name to be included in the partnership name contrary to allowed instances of
law.
b) If he takes part in the control or management of the business.
c) Either a or b
d) Neither a nor b

435. When may the limited partner’s surname or name appear in the limited partnership name without
increasing the liability of such limited partner to a general partner?
a) If the surname or name of limited partner is also the surname or name of a general partner.
b) If prior to the time when the limited partner became such, the business has been carried on
under a name in which limited partner’s surname or name appeared.
c) Either a or b
d) Neither a nor b

76 | P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

436. AB Ltd. is a limited partnership composing of A and B as general partners and C as a limited partner.
The said partnership become bankrupt and reported total assets amounting to P100,000 and total
liabilities to third persons amounting to P130,000. How much may the creditors of the partnership
validly collect from partners A, B and C, respectively, assuming they are all personally solvent?
a) P10,000; P10,000; P10,000
b) P15;000; P15,000; P0
c) P30,000 or P30,000 or P30,000
d) P30,000 or P30,000 or P0

437. ABC Ltd. is a limited partnership composing of A, B, D, E as general partners and C, F and G as
limited partners. F is appointed as managing partner while D is an industrial partner. All partners
agreed that E is exempted from liability to third persons. The said partnership become bankrupt and
reported total assets amounting to P100,000 and total liabilities to third persons amounting to
P142,000. How much may the creditors of the partnership validly collect from partners A, B, C, D, E,
F and G, respectively, assuming they are all personally solvent?
a) P6,000; P6,000; P6,000; P6,000; P6,000; P6,000; P6,000
b) P7,000; P7,000; P7,000; P7,000; P7,000; P7,000; P0
c) P10,500; P10,500; P0; P10,500; P10,500; P0; P0
d) P21,000; P21,000; P0; P0; P0; P0; P0

438. Using the same data in number 74, how much is ultimately shouldered by the partners from the said
unpaid obligations of the partnership after the reimbursement among themselves?
a) P6,000; P6,000; P6,000; P6,000; P6,000; P6,000; P6,000
b) P7,000; P7,000; P7,000; P7,000; P7,000; P7,000; P0
c) P10,500; P10,500; P0; P10,500; P10,500; P0; P0
d) P21,000; P21,000; P0; P0; P0; P0; P0

439. What is the nature of limited partner’s interest?

a) Assignable
b) Waivable
c) Non-transferable
d) Purely personal

440. He refers to to the person admitted to all the rights of a limited partner who has died or has
assigned his interest in a partnership.
a) Assignee of a limited partner
b) Substituted limited partner
c) Purchaser of a limited partner’s interest
d) Nominal limited partner

441. In which of the following instances may the articles of limited co-partnership be amended only
instead of being cancelled?
a) When the limited partnership is dissolved.
b) When all limited partners cease to be such.
c) When a person is substituted as a limited partner
d) None of the above

For the Glory of God

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