Since 1977

BUSINESS LAW ATTY. ONG/LOPEZ

1. A, B, C and D were partners. A assigned his interest in the their separate property after the exhaustion
partnership to his son S. S now wanted to join in the of partnership assets.
management of the enterprise. B, C and D refused. Is the c. The partnership will be considered a limited partnership
partnership necessarily dissolved? as indicated in its name. Only Wilma and Olga will be
a. The partnership is dissolved because of the conveyance liable with their separate property after the exhaustion of
by A. partnership assets.
b. The mere assignment did not dissolve the firm. This is so d. Wilma, Olga and Wynona will be considered separate as
even if B, C and D did not allow S to participate in the sole proprietors with each one having a capita
firm’s business conduct. equivalent to their respective contributions.
c. The partnership is not dissolve provided B, C and D will
allow S to join the management of the enterprise. 8. As regards a limited partner, which statement is correct?
d. The conveyance of interest by A automatically dissolved a. He cannot be allowed to transact business directly with
the partnership. the partnership of which he is a member as this would
result into conflict of interest;
2. The certificate shall be cancelled when: b. He is automatically the agent of the partnership with
a. There is change in the name of the partnership general authority to bind the partnership to contracts
b. Additional limited partner is admitted with third persons;
c. All limited partner cease to be such. c. He can only contribute money and property but not
services;
d. There is a false or erroneous statement in the certificate. d. He has no liability to partnership creditors even if he
3. A substituted limited partner is: takes part in the management of the partnership.
a. a person admitted as a partner by the other partners.
b. a buyer of right of the deceased partner. 9. Unless otherwise provided in a general partnership
c. An assignee admitted to all the rights of a limited agreement which of the following statements is correct when
partner. a partner dies?
d. All of the above. The decreased
The deceased partner’s estate
4. In a limited partnership, the creditor of a limited partner may partner’s would be free The partnership
charge the interest of the indebted limited partner, the executor would from any would be
interest so charged may be redeemed with: automatically partnership dissolve
a. Partnership property become a partner liabilities automatically
b. Separate property of any general partner a. Yes Yes Yes
c. Both partnership property and separate property of the b. Yes No No
general partner cumulatively c. No Yes No
d. Both partnership property and separate property of the d. No No Yes
general partner alternatively
10. B and C formed a limited partnership, with A as a general
5. In three of the following instances, the certificate of a limited partner, while B and C as limited partners, with the following
partnership may be amended. Which is the exception? contributions:
a. Change in the character of the business 1 A contribute a specific parcel of land
b. There is a false or erroneous statement in the certificate. 2 B to contribute P10,000, the first P5,000 upon formation,
c. Death of a general partner and the last P5,000, 10 days after formation.
d. A person is substituted as a limited partner. 3. C contributed a specific car as was stated in the article of
partnership, when in fact it was not contributed.
6. A, B and C wish to go into the business together to bottle If the partnership was dispossessed of the land contributed
mineral water. Each contributed P50,000, but C wanted to by A after delivery to the partnership by the real owner, the
limit his liability to the extent of his contribution, and his effect will be:
name to appear in the partnership name. Which form of a. A is considered a debtor of the partnership
partnership as business organization should they choose? b. A is considered a trustee of the land for and in behalf of
a. General partnership the partnership
b. Limited partnership c. The partnership will dissolved
c. No partnership organization is available d. A is to answer for warranty against eviction.
d. Limited
11. As regards a limited partner, which statement is correct?
7. Wilma, Olga and Wynona agreed to form a limited a. He cannot be allowed to transact business directly with
partnership with Wilma and Olga as general partners the partnership of which he is a member as this would
contributing P50,000.00 each, and Wynona as limited partner result into conflict of interest;
contributing P100,000.00. The partnership which is to engage b. He is automatically the agent of the partnership with
in the trading of garments was named "WOW Garments Co., general authority to bind the partnership to contracts
Limited" as indicated in the certificate signed and sworn to by with third persons;
the partners before a notary public. However, the certificate c. He can only contribute money and property but not
was not filed with the Securities and Exchange Commission. services;
In the meantime, the partners already begun operating the d. He has no liability to partnership creditors even if he
business and transacting with third persons. takes part in the management of the partnership.
a. The partnership entered into by the Wilma, Olga and
Wynona is void. 12. A partnership is automatically dissolved, except:
b. The partnership will be considered a general a. By the death of any partner
partnership. Accordingly, all partners will be liable with b. By the insolvency of any partner or of the partnership
c. By the civil interdiction of any partner

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d. By the insanity of any partner 19. Three of the following enumerations are rights of a general
13. Allan, Beth and Chris are partners with capital contribution of .partner in a limited partnership that are also enjoyed by a
P15.000, P10.000 and P5,000, respectively. Supposed on limited partner. Which among them does a limited partner
dissolution, the assets of their partnership amount to only not enjoy?
P46.000 and it owed Delia the amount of P50.000. Chris a. To have the books of the partnership kept at the
owes Polly on his personal account P6.000. The partners principal place of business of the partnership, and at a
have no separate personal property except Chris whose reasonable hour to inspect and copy any of them;
separate property amounts to P7.000. Which is correct? b. To have on demand true and full information of all
a. Delia and Polly shall divide Chris separate property things affecting the partnership and a formal
equally. account of partnership affairs whenever
b. Delia and Polly shall divide Chris property pro-rata. circumstances render it just and reasonable;
c. Delia shall be preferred as regards Chris separate c. To have dissolution and winding up by decree of court;
property d. To have all the rights and be subject to all the
d. Polly shall be preferred as regards Chris separate restrictions and liabilities of a partner in a partnership
property without limited partners.

14. Without the written consent or ratification of the specific act 20. On application by or for partner the court shall decree a
by all the limited partners, a general partner or all of the dissolution whenever:
general partners have no authority to: a. A partner becomes in any other way incapable of
a. Do any act in contravention of the certificate. performing his part of the partnership contract.
b. Do any act that would make it impossible to carry on the b. A partner has been guilty of such conduct as it tends to
ordinary business of the partnership. affect prejudicially the carrying on of the business.
c. Confess a judgment against the partnership. c. A partner willfully or persistently commits a breach of the
d. All of the above. partnership agreement that it is not reasonably
practicable to carry on the business in partnership with
15. A, B and C, capitalist partners, each contributed P30,000, him.
P20.000 and P10,000 respectively; and D, the industrial d. All of the above
partner contributed his services. Suppose X, a customer, is
the creditor of the firm to the amount of P180,000. How can 21. A substituted limited partner is:
X recover the P180,000? a. a person admitted as a partner by the other partners.
a. X must sue the firm and get P60.000 from all the b. a buyer of right of the deceased partner.
partners including D, the industrial partner. X can still c. An assignee admitted to all the rights of a limited
recover the balance of P120,000 from the four partners partner.
jointly. d. All of the above.
b. X can recover from the firm P60.000. X can still recover
the balance of P120,000 from the capitalist partners 22. In a limited partnership where there are 4 partners:
only. a. All the partners must be limited partners.
c. X can recover from the firm P60.000. X can still recover b. The number of limited partners must be equal to the
the balance of P120.000 from any of the partners number of general partner, that is, 2:2.
solidarity. c. The number of limited partners must be greater than the
d. X can recover from the firm P60.000 and consider the number of general partners, that is, 3:1.
balance of P120,000 as a loss. d. It is enough that there is one limited partner; the rest
may all be general partners.
16. A partner whose liability for partnership debts is limited to his
capital contribution is called: 23. General partners shall have no right to perform the following
a. General partner acts without the written consent or ratification by all the
b. Limited partner limited partners, except:
c. General-limited partner a. Admit a person as a general partner.
d. Secret partner b. Admit a person as a limited partner, unless the right to
do so is given in the certificate.
17. A decree by the court is necessary to dissolve a general c. Continue the business with partnership property on the
partnership based on three of the following grounds. Which death, retirement, insanity, civil interdiction or
one will not require such decree but will cause the automatic insolvency of a general partner, unless the right to do so
dissolution of the partnership? is given in the certificate.
a. The business of the partnership can only be carried on at d. To have the partnership books kept at the principal place
a loss. of business of the partnership, and at a reasonable hour
b. A partner is shown to be of unsound mind. to inspect and copy any of them.
c. A partner has been guilty of such conduct as tends to
affect prejudicially the carrying on of the business. 24. As a general rule, a partner cannot ask for a formal
d. A partner is civilly interdicted. accounting of the affairs of the partnership during its
existence and before it is dissolved, except:
18. Which of the following is not a requisite prescribed by law in a. When he is wrongfully excluded from the partnership
order that a partnership may be held liable to a third patty business
for the acts of one of its partners? b. When the right exists under the terms of any agreement
a. The partner binds the partnership by acquiescence for c. Whenever other circumstances render it just and
obligations he may have contracted in good faith. reasonable
b. The partner must have the authority to bind the d. All of the above
partnership.
c. The contract must be in the partnership name or for its
account.
d. The partner must act on behalf of the partnership.

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