PARTNERSHIP: SHADE the letter of your answer on the answer sheet provided.

ITEMS 1-50.
1. Three of the following partnership contracts are void. Which one is not?
A. A universal partnership of present property between husband and wife
B. A universal partnership of profits between a man and a woman living together as husband and wife
without the benefit of marriage
C. A particular partnership between husband and wife
D. A universal partnership between a private individual and a public officer.
2. One of the following is not a characteristic of contract of partnership.
A. Real, in that the partners must deliver their contributions in order for the partnership contract to be
perfected
B. Principal, because it can stand by itself
C. Preparatory, because it is a means by which contracts will be entered into
D. Onerous, because the parties contribute money, property, industry to the common fund.
3. 1st statement: A person admitted as a partner into an existing partnership is not liable for obligations of the
partnership contracted before his admission.
2nd statement: The designation of losses and profits may be entrusted to one of the partners.
[A] Both statements are false. [C] Both are true.
[B] First is false, second is true. [D] First is true, second is false.
4. 1st statement: The general partners may continue the business of the limited partnership with the partnership
property on the death, retirement, civil interdiction or insolvency of another general partner.
2nd statement: The sharing of gross returns is prima facie evidence that one is a partner in the business.
[A] Both statements are false. [C] Both are true.
[B] First is false, second is true. [D] First is true, second is false.
st
5. 1 statement: One of the partners in a proposed partnership is a multi-millionaire. The stipulation in the
contract of partnership that this partner shall be exempted from sharing in the profit earned by the partnership is
valid.
2nd statement: A person may be a general partner and a limited partner in the same partnership at the same
time.
[A] Both statements are false. [C] Both are true.
[B] First is false, second is true. [D] First is true, second is false.
st
6. 1 statement: A stipulation which excludes one or more partners from any share in the profits or losses is void.
2nd statement: A partnership may enter into another partnership with another person or another partnership.
[A] Both statements are false. [C] Both are true.
[B] First is false, second is true. [D] First is true, second is false.
st
7. 1 statement: A partnership may be established for charity.
2nd statement: Persons who are prohibited from giving each other any donation or advantage cannot enter
into universal partnership.
[A] Both statements are false. [C] Both are true.
[B] First is false, second is true. [D] First is true, second is false.
8. A partnership whereby the partners contribute to a common fund all the property actually belonging to them at
the time of the constitution of the partnership, with the intention of dividing the same among themselves, as well
as the profits which they may acquire therewith is called:
[A] Universal partnership of all present property. [C] Particular partnership
[B] Universal partnership of profits. [D] Partnership at will.
9. Three of the following are the effects if immovable property is contributed in a partnership but the contract did
not appear in a public instrument. Which is the exemption?
[A] A partnership has no judicial personality.
[B] The parties may compel each other to observe the required form.
[C] The parties may request the return of their capital contribution.
[D] The contract of partnership is void.
10. Can only be made with the consent of all partners:
[A] Waiver or compromise [C] Sell equipment
[B] Borrow money [D] Transact business
11. A substituted limited partner is:
[A] a person admitted as a partner by the other [B] a buyer of right of the deceased partner.
partners.
 [C] an assignee admitted to all the rights of a [D] all of the above.
limited partner.
12. Three of the following are rights of a partner. Which one is not?
[A] right to associate another person to his [C] right to inspect and copy partnership books.
share. [D] right to ask dissolution of the firm at the
[B] right to admit another partner. proper time.
13. Partnership Assets and Liabilities are as follows-
December 31, 2009 December 31, 2010
Assets P 200,000 P50,000
Liabilities 100,000 200,000
Capital:
A – P50,000; B – P50,000 P100,000 P 150,000
A and B general partners, have fully paid their capital contributions. What is the remedy of creditor C?
A. Collect partnership liability from the partnership;
B. Collect partnership liability from B only;
C. Collect partnership liability from A only;
D. Collect partnership liability from A and B capital contributions (including personal assets)
14. A and B are partners. On January 15, 2007 when the total obligation of the partnership totals P80,000, C was
admitted as new partner. At the time of C’s admission, the partnership creditors were m for P50,000 and N for
P30,000. After January 15, 2007, the partnership borrowed from O, P20,000 and P40,000 from P. On June 15, 2007,
the partnership becomes insolvent leaving an obligation totaling after the separate properties assets amounting to
P30,000. The creditors are going after the separate properties of the partners to satisfy their remaining claims. How
are the creditors’ claim satisfied?
Answer 1 – M and N can go after the separate properties of A and B but C’s separate properties are not answerable
to their claims
Answer 2 – O and P can go after the separate properties of A, B and C.
Which of the following is correct?
A. Both answers are wrong C. Answer 1 is wrong but answer 2 is correct
B. Both answers are correct D. Answer 1 is correct but answer 2 is wrong
15. A is managing partner of A and B Company. X is debited to A for P20,000 and to the partnership for P60,000.
When both debts mature, X pays A for P20,000 and the latter issues a receipt for his personal credit. The payment
for P20,000 shall be applied:
A. To the whole debt owing to A; C. Debt owing to the partnership;
B. ¼ in favor of A and ¾ in favor of partnership D. ½ in favor of A and ½ in favor of partnership
16. XYZ partnership composed of three (3) capitalist partners and one industrial partner suffered business losses.
Its remaining assets amounting to P100,000. The partnership is indebted to its supplier in the amount of P160,000.
How can recover the P60,000?
[A]Can recover from the partnership P100,000 and the balance of P60,000 from the other capitalist
partners.
[B] can recover from the partnership P100,000 and the balance of P60,000 from any of the partners
solidarily;
[C] Can recover from the partnership P100,000 and the balance of P60,000 from the (4) partners jointly
including the industrial partner.
[D] Can recover from the partnership P100,000 only and suffer as his list in the balance of P60,000.
17. A and B formed the limited partnership with A as general partner, B as limited partner and C as industrial
partner. A and B contributed P50,000 each. The partnership failed and after disposing all its assets to pay
partnership debts there still remains a note payable in the sum of P30,000.
[A] A legal representative of a limited partner.
[B] A and B are liable to pay P15,000;
[C] Only A is liable to pay P30,000 indebtedness
[D] C is liable to pay P15,000
18. A limited partnership formed in 2009 by X as general partner and Y and Z as limited partners. In 2010, X and Z
got married. Did the marriage dissolve or change the form of the partnership?
[A] Both answers are correct [C] 1st answer wrong, 2nd answer correct
[B] Both answers are wrong [D]1st answer correct, 2nd answer wrong
19. A, B and C are partners in a joint venture engaged in real estate and land development. A without the
knowledge of B and C offered to sell to D all remaining unsold lots at a price very much higher than the prevailing
market prices. Later, A bought out B and C from the partnership and thereafter finally sold out the lots at a very big
profit.
1st conclusion – when A bought out B and C from the partnership, the partnership was dissolved so B and C have no
more share in the profit of the sale.
2nd conclusion – the sale of the lots between A and D is void because it was without the knowledge and consent of
B and C.
[A]Both conclusions are correct
[B] 1st conclusion correct, 2nd conclusion wrong
[C] Both conclusions are wrong
[D]1st conclusion wrong, 2nd conclusion correct.
20. A and B are capitalist partners with C as industrial partner. A and B contributed P20,000 each to the capital of
the partnership. A contractual liability of P50,000 was incurred by the partnership in favor of X. The assets of the
partnership has been exhausted still leaving an unpaid liability of P12,000. What are the rights and obligation of
the partner, if any?
[A]A and B only
[B] C only
[C] A, B and C are liable to X and C after giving his share may ask reimbursement
[D]C has no right for reimbursement from A and B unless stipulated.
21. X, Y and Z are partners and contributed to the partnership P40,000, P3,000 and services, respectively. The
partnership was later liquidated and after payment of the partnership indebtedness, only P20,000 worth of assets
remained. How much is the share of Z?
[A] Zero [C] Equal to the share of X
[B] Equal to the share of Y [D]P6,000
22. A, B and C are partners engaged in retail business. Their contribution is P20,000 each. D is admitted as new
partner with a contribution of P8,000. At the time of his admission, the partnership has an outstanding obligation
to E in the amount of P80,000. In this case:
[A] D is liable to E for this obligation so that after the assets of the partnership amounting to P68,000 will
be exhausted leaving a balance of P12,000, only A, B and C shall be liable jointly or pro rata, out of their
separate property
[B] D is not liable to E for this obligation
[C] D is liable to E for this obligation so that the assets of the partnership will be exhausted, leaving a
balance of P12,000 all the partners shall be liable jointly or pro rata, out of their separate property
[D] Answer not given
23. A partnership formed for the exercise of a profession which is duly registered is an example of
[A] Universal partnership of profits [C] Particular partnership
[B] Universal partnership of all present [D] Partnership by estoppels.
property
24. Which of the following stipulations is valid?
[A] a stipulation excluding a capitalist partner from profits
[B] a stipulation exempting a capitalist partner from losses
[C] a stipulation exempting an industrial partner from losses
[D] a stipulation excluding an industrial partner from profits.
25. Which of the following is false when no one among the partners was appointed as manager?
[A] each partner will be considered as agent of the partnership
[B] any one may take an important alteration in the immovable property of the partnership without the
consent of the others provided it is useful to the partnership
[C] In case the act of one partner is opposed by another, the decision of the majority of the partners will
prevail.
[D] In case of a tie in the voting, the tie shall be resolved by the vote of the partner owning the controlling
interest.
26. The partnership will bear the risk of the loss of three of the following things. Which is the exception?
[A] things contributed to be sold.
[B] fungible things
[C] things contributed so that only their use and fruits will be for the common benefit.
 [D] things brought and appraised in the inventory.
27. Which of the following statements is incorrect?
[A] partnership creditors are preferred as to partnership assets.
[B] partnership creditors are preferred as to each partner’s separate assets.
[C] a partner’s separate creditors are preferred as to the partner’s separate assets.
[D] a partner’s separate creditors may attach a partner’s share in the partnership assets.
28. A limited partner may contribute
[A] money and/or property [C] property and/or services
[B] money and/or services [D] services only.
29. A limited partner shall be liable as a general partner in three of the following cases. Which one is the
exception?
[A] when he is a general-limited partner as stated in the certificate.
[B] when he takes part in the control of the business
[C] when he participates in the management of the business
[D] when his surname which appears in the partnership name is also the surname of a general partner.
30. If an assignee does not become a substituted limited partner, his rights do not include:
[A] the receipt of the assignor’s share in the profits.
[B] the receipt of the assignor’s other compensation by way of income
[C] the return of the assignor’s contributions
[D] inspection of partnership books
31. Which of the following will not cause the automatic dissolution of a limited partnership?
[A] Death of a general partner [C] insolvency of a general partner
[B] death of a limited partner [D] insanity of a general partner.
32. In a limited partnership where there are 4 partners:
[A] all the partners must be limited partners
[B] the number of limited partners must equal to the number of general partners
[C] the number of limited partners must be greater than the number of general partners
[D] it is enough that there is one limited partner.
33. The minimum capital in money or property except when immovable property or real rights thereto are
contributed, that will require the contract of partnership to be in a public instrument and be registered with the
SEC.
[A] 5,000 [C] 3,000
[B] 10,000 [D] 30,000
34. If a partnership has a minimum capital but the contract is not in a public instrument or the same is not recorded
with the SEC, the partnership
[A] is void [C] does not acquire juridical personality
[B] is voidable [D] still acquires juridical personality.
35. Three of the following partnerships are void. Which one is not?
[A] universal partnership of all present property between husband and wife
[B] universal partnership of profits between a man and woman living together as husband and wife
without benefit of marriage
[C] a particular partnership between husband and wife.
[D] universal partnership of profits between a private and a public officer.
36. J, A, and W are partners in JAW Enterprises. The partners requested S, a well-known businessman, to help
them negotiate a loan from C, a money lender. With the consent of J, A, and W, S represented himself as a partner
of JAW enterprises. Thereafter, C granted a loan of 150,000 to JAW enterprises. Assuming JAW was unable to pay
the loan on due date at which time the assets of the partnership amounted to 120,000, from whom may C collect
the payment?
[A] S only for 120,000
[B] J, A, and W who are liable for 50,000 each
[C] JAW enterprise for its assets of 120,000; thereafter J, A, and W from their separate property of 10,000
each [D] JAW for 120,000 from its assets; thereafter, J, A, and W and S from their respective assets at 7,500
each.
37. P enterprises, a partnership engaged in the business of renting out video films, is owned by P, A, T, O, and K,
with K as the manager. D owes P enterprise 6,000 and O for 4,000. Both debts are unsecured and are already due.
D pays O 4,000 for which O issues her own receipt.
 [A] the payment should be applied to O’s credit only.
[B] the payment should be applied to P’s credit only
[C] P and O at 2,400 and 1,600 respectively
[D] the payment should be divided equally between P and O at 2,000 each.
38. Which of the following is not correct?
[A] A – cash (Ltd.); B – cash (Gen.); C – service (Gen.)
[B] A – property (Ltd.); B – cash (Gen.); C – service (Gen.)
[C] A – service (Ltd.); B – cash (Gen.); C – service (Gen.)
[D] A – cash (Ltd.); B – property (Gen.); C – service (Gen.)
39. A and B orally agreed to form a partnership two years from today, each one to contribute P10,000. At the
arrival of the said, if one refuses to go ahead with the agreement, can the other enforce the agreement?
[A] Yes, since the agreement is to be enforced after one year from the making thereof, the same should be
in writing to be enforceable.
[B] Yes, because the prior agreement was voluntarily made.
[C] Yes, because the contract of partnership is not governed by the Statue of Frauds.
[D] No, because the agreement was merely oral.
40. If a partner is insolvent, the first order of preference in the distribution of his assets is
[A] Partnership creditors
[B] Partner’s contribution to the partnership
[C] Separate creditors of the debtor-partner
[D] Pro-rata between the separate creditors and the partnership creditors
41. X, Y and Z are partners in Ace & Co. W represented himself as a partner in the said partnership to A, who, on
the faith of such representation, granted P1M loan to the partnership. Assuming only X and Y consented to such
representation, who shall be liable to A?
[A] Since the partnership benefited from the credited extended by A, all partners X, Y and Z are liable.
[B] Only X, Y and W are partners by estoppel and are liable pro-rata.
[C]Since the loan was extended to the partnership, all the partners and W are liable.
[D] Only W who made the representation shall be liable.
42. A, B and C are general partners in merchandising firm. Having contributed equal amounts to the capital, they
also agreed on equal distribution of whatever profits is realized per fiscal period. After two years of operation
however, C conveys her whole interest in the partnership to D, without the knowledge and consent of A and B.
Which of the following statements is true?
[A] If A and B want to dissolve the partnership, C as a partner need not consent thereto because he had
assigned his interest to D.
[B] D may himself ask the court for its dissolution being the assignee of C’s interest in the partnership.
[C] A, B and D may dissolve the partnership even without the consent of C.
[D] A, B and C cannot dissolve the partnership without the consent of D.
43. Spouses A and B formed a limited partnership to engage in real estate business and A contributed P1M only. Is
the partnership between the spouses valid?
[A] The partnership is not valid because spouses cannot enter into a limited partnership.
[B] The partnership is valid because spouses can enter into a partnership, limited or general, universal or
particular.
[C] The partnership is not valid because spouses cannot enter into any kind of partnership for business
except conjugal partnership.
[D] The partnership is valid because spouses are prohibited to enter into a universal partnership only.

44. W, X, Y and Z organized a general partnership with W and X as industrial partners and Y and Z as capital
partners. Y contributed P.5M and Z contributed P.2M to the common fund. By a unanimous vote of the partners, W
and X were appointed managing partners, without specification of their duties and powers. A applied as secretary
and B applied as secretary and B applied as accountant of the partnership. Suppose the hiring of B was decided
upon by W and Z, but was opposed by X and Y, whose decision shall prevail?
[A] The decision of W and Z because W is the managing partner and the hiring is an act of administration.
[B] The decision of X and Y because in case of tie in the decision of managing partners, that of the
controlling interest shall prevail.
[C] That of W and Z because Z is also a capitalist partner.
[D] None of the decision because of the statement of equal rights.
45. A, B and C are partners in a partnership. A and B contributed P10,000.00 each while C contributed his service.
After payment of the partnership liabilities to creditors, only P6,000.00 remains. In the absence of stipulation to
the contrary, the share of C shall be:
[A] Equal to the share of A. [C] Equal to the share of B
[B] P2,000.00 [D] Nothing
46. The following are disqualified to form a universal partnership except one:
[A] Brother and sister
[B] Husband and wife
[C] Those guilty of adultery or concubinage
[D] Those guilty of the same offense, if the partnership is entered into a consideration of the same.
47. A is the capitalist partner and B the industrial one. A engaged personally in the same kind of business as that of
partnership:
[A] If there are losses, the partnership will bear the losses.
[B] If there are profits, they will be shared by A and the partnership.
[C] If there are profits, A shall give them to the partnership.
[D] A may be excluded from the partnership with damages.
48. A and B are capitalist partners while C is industrial partner. Both A and B equally contributed P15,000.00 each
to the capital. A contractual liability in favor of X was incurred in the amount of P40,000.00. After exhausting
partnership assets there is a balance recoverable from
[A] A and B only
[B] A, B and C
[C] A, B and C and C can get reimbursement from A and B
[D] A, B and C without reimbursement from A and B in C’s favor
49. A, B and C are partners in a partnership in retail with each contributing P20,000.00 each. D is admitted as a new
partner with a contribution of P8,000.00. At the time of his admission, the partnership has a pre-existing obligation
to E in the amount of P80,000.00.:
[A] D is not liable to E for this obligation incurred when he was not yet a partner.
[B] D is liable to E up to his personal assets which were not contributed
[C] D is liable up to his capital contribution.
[D] D is liable up to his capital contribution in favor of creditors but with right of reimbursement from A, B
and C.
50. This is the order of priority in general partnership liabilities:
[A] Outside creditors, Creditor partner, Partner’s capital, Partner profit.
[B] Outside creditor, Creditor partner, partner’s profit, Partner’s capital.
[C] Creditors partner, Outside creditor, Partner’s profit, Partner’s capital.
[D] Creditor partner, Outside creditor, Partner’s capital, Partner’s profit.
51. CPs are capitalist partners while IP in industrial partner, who in addition to his services also contributed capital
to the partnership. There is no agreement as to the profits and losses. The partnership realized profit in the amount
of P21,000.00. The share of IP as CP in the profits shall be:
[A] C and P will determine IP’s share in the profits.
[B] IP’s share shall be P7,000.00.
[C] Pro rata to his contributed capital.
[D] Just and equitable under the circumstances.
52. A and B orally entered into a partnership with each of them contributing P3,000.00 each and some personal
properties in the amount of P1,000.00 each. The partnership contract is:
[A] Unenforceable because the amount involved exceeds P500.00.
[B] Void because it is not in public instrument.
[C] Valid.
[D] Void because it is not registered with SEC.
53. Which of the following statements is not correct:
[A] A partnership contract is not covered by the statue of frauds.
[B] A limited partner shall not be bound by the obligation of the partnership.
[C] A limited partner who takes part in the control of the business shall be liable as a general partner.
[D] A stipulation which excludes a partner from sharing in the profits or loss is void.
54. Which of the following is incorrect:
[A] An industrial partner who engages in business for himself may be excluded from the firm.
 [B] An industrial partner may not engage in business for himself unless there is a contrary stipulation.
[C] An capitalist partner may engage in the same line of business as that of the partnership.
[D] An offending capitalist partner may not be excluded from the firm.
55. 1. A universal partnership of present property shall include the profits which the partners may acquire
therewith such as properties to be acquired through legacy, donation or inheritance.
11. After dissolution, the partners may still enter into contracts in the name of the dissolved partnership if
for purpose of winding-up.
[A] First statement is false, second is true [C] First statement is true, second is false
[B] Both statements are false [D] Both statements are true
56. Three of the following are property rights of a partner. Which is not?
[A] Right in specific partnership property.
[B] Right to participate in the management.
[C] Right to demand formal accounting of partnership affairs.
[D] Interest of the partner in the partnership.
57. A limited partner shall be liable as a general partner unless:
[A] He takes part in the control of the business.
[B] His surname appears in the partnership name.
[C] His contribution is service.
[D] He renounces his shares in the profits after knowledge of the error that he was made a general partner
58. A, B and C as partners contributed the following: A – P6,000.00; B – P4,000.00 and C – service. They agreed that
the profits and losses shall be distributed as follows, to wit: A – 35%; B – 25% and C – 40%. How shall the loss of
P10,000.00 be distributed?
[A] A – P6,000.00; B – P4,000.00; C – None
[B] A – P3,333.33; B – P3,333.33; C – P3,333.33
[C] A – P3,500.00; B – P2,500.00; C – P4,000.00
[D] A – P5,000.00; B – P5,000.00; C – None
59. A, B and C formed a partnership with the name ABC & Co. Partnership as a limited partnership in mind. It is
therefore:
[A] Limited partnership
[B] General partnership
[C] If registered with the SEC, it is a limited partnership
[D] Partnership by estoppel
60. A, B and C were partners, the first being an industrial partner, in the first year of operation, the firm realized a
profit of P300,000.00. In the second year, a loss of P150,000.00 was sustained. Thus, the net profit for the two
years of operation was only P150,000.00. It was stipulated among the partners that A would get 1/3 of the profits
but would not share in the losses. A is therefore entitled to:
[A] 1/3 of P300,000.00
[B] 1/3 of P150,000.00
[C] 1/3 of P150,000.00 of the other partners consented
[D] 1/3 of P300,000.00 with or without the partners’ consent.
61. A, B and C were partners. While acting within the scope of his authority in the conduct of business, A
committed a tort against X, a third person. Who shall be liable and to what extent?
[A] All partners are liable jointly or pro rata after the partnership assets have been exhausted;
[B] All partners shall be liable solidarily after the partnership assets have been exhausted
[C] All partners and the partnership are liable jointly
[D] All the partners and the partnership are liable solidarily.
62. A and B are partners in buying and selling cars. A, by the partners’ agreement, was authorized to buy only in
cash. One day, A bought on credit a car from X, a client, who did not know of A’s lack of authority. A’s purchase
was made in the name of the partnership. Is the partnership bound in the sale?
[A] The partnership is not bound because the contract is unenforceable, A exceeded his authority.
[B] It is not bound because the contract with X is not in the ordinary course of business.
[C] It is bound because X was in good faith and the act of A was apparently in the conduct of the business.
[D] It is bound if it ratifies the contract of sale by acceptance of benefits.
63. A and B entered into a universal partnership of profits. Subsequently A became a professor in a university. Will
A’s salary belong to the partnership?
[A] Yes, because the salary was acquired through A’s industry or work.
 [B] No, unless it is stipulated that his salary shall be deemed contributed.
[C] No, because it is not considered a profit acquired from a property.
[D] Yes, if stipulated by the partners.
64. A and B agreed on a profit sharing ration in their partnership. A, being the industrial partner and B as capitalist
partner. It was also stipulated that A shall also share in the same ratio as to the losses. Is A liable for losses?
[A] No, because the law exempts the industrial partner losses.
[B] No, because the partners cannot stipulate that the industrial partner shall be liable for losses.
[C] Yes, even in the absence of stipulation.
[D] Yes, because it was so stipulated.
65. There is partnership except:
[A] Two or more parties consent to a contract, oral or written
[B] They give money, property or industry to a common fund
[C] There is division of profits and losses among themselves
[D] There is no fiduciary relationship
66. Two or more juridical persons may also form a partnership for the exercise of a profession.
[A] The statement is wrong
[B] It is a correct statement
[C] Only natural persons can form a professional partnership.
[D] (a) and (c) are true.
67. A Universal Partnership is void except:
[A] An inventory is not made when an immovable property is contributed.
[B] If the purpose or object is against the law, morals, public order, public policy and custom.
[C] When made by persons who are prohibited in giving each other donation.
[D] When there is no agreement as to profits and losses.
68. A limited partnership has A, as general partner, B as limited partner, and C, as industrial partner contributing
P100, 000, P50, 000, and services respectively. The partnership failed and after disposing all its assets to pay
partnership debts, there still remains a note payable in the sum of P30, 000. Against whom can the creditor
demand payment?
a. A – P30, 000; B – P0; C – P0
b. A – P15, 000; B – P0; C – P15, 000
c. A – P15, 000; B – P7, 500; C – P7, 500
d. A – P10, 000; B – P10, 000; C – P10, 000
69. X, Y, and Z formed Y Partnership to engage in import-export business. The partners agreed that the profit will
be divided on the following ratio: X – 20%, Y – 30%, Z – 50%, but no agreement as to losses. After one year of
operation, there was a loss of P10, 000. How will you apportion this loss if the capital contributions are as follows:
X – P20, 000; Y – P15, 000; Z – P5, 000.
a. According to their capital contribution: X – P5, 000; Y – P3, 750; Z – P1, 250
b. Equally among X, Y, and Z.
c. X – P2, 000; Y – P3, 000; Z – P5, 000
d. A third party may be called to make the distribution
70. M, T, and E decided to form a universal partnership of all present property. The contract of partnership was
executed on October 10, 2010 but they commenced business on October 18, 2011. One of the following is
incorrect.
a. If the partnership is for 15 years, but one of the partners withdraws from the partnership on the 12 th year,
the firm is dissolved
b. The partnership began its existence on October 10, 2010
c. If after the expiration of its term, the partners continue to transact business, the partnership is converted
to a partnership at will
d. In the absence of any partnership agreement specifically covering the division of losses among the
partners, they will be deemed to share the losses in accordance with their capital contributions
71. Partners A, B, and C met a tragic accident. A and B instantly died on the spot, while C was brought to the
hospital but died a few hours later. Who may wind-up partnership affairs?
a. Legal representative of A
b. Legal representative of B
c. Legal representative of C
d. The court should appoint a representative who will wind-up the affairs.
72. Partners A, B and C agreed to form Y Partnership. It was orally agreed that A would contribute P20, 000,
B P15, 000, and C P5, 000. It was also orally agreed that in the event the venture proved to be a financial loss,
all losses above the amounts of capital contributed would be assumed by A. there were no other express
agreement. Under these circumstances, which of the following is correct?
a. Profits are to be divided in accordance with the wish of A being the major contributor
b. Profits are to be divided equally
c. The partnership is a nullity because the agreement is not contained in a signed writing
d. Partnership is valid notwithstanding failure to put the agreement in a public instrument
73. In the preceding question if after exhausting the partnership capital of P40, 000, there is still a liability to X in
the amount of P40, 000 the liability of the partners to X will be:
a. A, P20, 000; B P15, 000; and C P5, 000
b. A will shoulder all P40, 000 because that was their agreement
c. Another agreement will be executed as to who will answer losses
d. All of them will be liable to X
74. Which of the following is true with respect to a limited partner?
a. Must not own limited-partnership interests in other competing limited partnership
b. Is automatically an agent for the partnership with apparent authority to bind the limited partnership in
contract
c. Has no liability to creditors even if he takes part in the control of the business as long as he is held out
as being a limited partner
d. Should not contribute industry
75. A, B, and C formed a Universal Partnership of profits. The partners contributed the following:
A – 20 sewing machines B – 14 Furniture and Fixtures C – 4-storey building
The parties agreed that only the use and fruits of the objects contributed shall pertain to the partnership.
Which of the following statements is true?
a. The partnership upon delivery shall be the owner of the objects contributed
b. Upon dissolution, the objects shall be converted into cash and the proceeds shall be divided equally
among the partners including the fruits
c. During the term of the partnership, the contributing partner remains to be the naked owner of the
object contributed but upon dissolution all objects contributed are to be converted into cash and
proceeds shall be divided equally among the three partners
d. During the term of the partnership, the loss of the objects contributed shall be borne by the partners
concerned.
76. If a partner assigns his interest in the partnership to his personal creditor or to a third person for value, the
assignee acquires the right to
a. Demand an accounting of partnership affairs
b. Inspect the books and records of the partnership
c. Receive the partner – assignor’s share of the profits
d. Interfere in the management of the partnership
77. The partners agreed that only the use and fruits of the of the object contributed shall pertain to the partnership
(Universal partnership of profits). Which of the following statements is true?
a. The partnership upon delivery shall be the owner of the objects contributed
b. Upon dissolution, the object shall be converted into cash and the proceeds shall be divided equally
among the partners including the fruits
c. During the term of the partnership, the contributing partner remains to be the naked owner of the
object contributed thereto but upon dissolution, all objects contributed are to be converted into cash
and proceeds shall be divided equally among the partners
d. During the term of the partnership, the loss of the objects contributed due to fortuitous events shall be
borne by the partner concerned except if the objects contributed is fungible
78. Which of the following is a characteristic of partnership as a contract
a. Preparatory c. Innominate
b. Formal d. Gratuitous
79. S and G established a partnership by contributing P200, 000 each. F, a classmate allowed his name to be
included in the firm name of the partnership. The partnership was insolvent and after exhausting all the remaining
assets, there remains a liability to third persons amounting to P30, 000. The creditors can compel
a. Either S or G or F to pay the P30, 000 liability
 b. Either S or G to pay the P30. 000 liability
c. S and G to pay P15, 000 each
d. S, G and F to pay P10, 000 each
80. Using the preceding number, if the partnership is solvent and there is a profit of P30, 000, without any
stipulation as regards profit sharing, the participation of the partners on the profit will be
a. Just and equitable share for F, and the remainder, equally between S and G
b. Equally, P10, 000 each among S, G, and F
c. Equally P15, 000 each between S and G
d. The court will intervene
81. A limited partner who takes active participation in the management of the partnership shall become
a. A managing partner c. Liable as a general partner
b. A general partner d. An ostensible partner
82. Three of the following are rights of a partner, which one is not? Right to
a. Associate another person to his share d. Ask dissolution of the firm at the proper
b. Admit another partner time
c. Inspect and copy partnership books
83. A partnership which comprises all that the partners may acquire by their work or industry during the existence
of the partnership is
a Universal partnership of present property c Particular partnership
b Universal partnership of profits d General partnership
84. The following are the effects of unlawful partnership, except
a. The profits shall be confiscated in favor of the government
b. The instrument or tools and proceeds of the crime shall be forfeited in favor of the government
c. The contribution of the partners shall be confiscated in favor of the government
d. The contract is void ab initio and the partnership never existed in the eyes of the law
85. As regards a limited partner, which of the following is correct?
a. He is automatically an agent for the partnership with apparent authority to bind the limited partnership
in a contract
b. He cannot own limited partnership interest in other competing limited partnership
c. He has no liability to creditors even if he takes part in the control of the business as long as he is held out
as being a limited partner
d. He can contribute money and/or property but not services
86. Absent any contrary provisions in the agreement, under which of the following circumstances will a limited
partnership be dissolved?
a. A limited partner dies and his estate is insolvent
b. A personal creditor of a general partner obtains a judgment against the general partner’s interest in the
limited partnership
c. A general partner retires and all the remaining general partners do not consent to continue
d. A limited partner assigns his partnership interest to an outsider and the purchaser becomes a
substituted limited partner
87. Which of the following may be a cause for involuntary dissolution?
a. Insanity of a partner c. Expulsion of any partner
b. Express will of any partner d. Termination of the term
88. Which of the following may be a cause for a voluntary dissolution?
a. Death of a general partner c. Expiration of the period for which the
b. Civil interdiction of a partner partnership was to exist
d. Insolvency of a partner
89. A partnership is dissolved upon the death of a/ an:
a. General partner c. Industrial partner
b. Limited partner d. a, b and c
90. Has priority over partnership assets:
a. Partners’ creditors c. partners
b. Partnership’s creditors d. associates of the partners

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