SOUTHERN PHILIPPINES INSTITUTE OF SCIENCE & TECHNOLOGY

BUSINESS LAWS & REGULATIONS

TRUE OR FALSE: Write the word ‘TRUE’ if the statement is true, and the word ‘FALSE’ if the
statement is false.

F1. An artificial person like a corporation, may be a partner in a partnership.

T3. A partnership has a personality separate and distinct from each of the partners.

T4. A partnership begins from the moment of the execution of the contract unless a different date is
stipulated.

F5. A partnership whose capital in money or property amounts to P3,000.00 or more does not acquire
juridical personality if the contract is not recorded with the Securities and Exchange
Commission.

T6. The sharing of gross returns does not of itself establish a partnership even if the persons sharing
them have a joint or common interest in the property from which the returns are derived.

T7. In a universal partnership of all present property, the partners may stipulate that future property
shall belong to the partnership but the stipulation cannot include property acquired by
inheritance, legacy, or donation.

T8. In a universal partnership of profits, property belonging to each partner at the time of the
establishment of the partnership shall continue to pertain to each partner with only the usufruct
passing on to the partnership.

F9. Articles of universal partnership entered into without specification of its nature, only constitute a
universal : partnership of all present property.

T10. A man and a woman living together as husband and wife without the benefit of marriage
may enter into a universal partnership.

BUSINESS LAWS & REGULATIONS

TRUE OR FALSE: Select the correct answer

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T1. Articles of Universal Partnership entered into without specification of its nature is presumed to
constitute only a universal partnership of all profits.
F2. The partnership suffered damages in a particular undertaking through the fault of a partner.
However, through the efforts of the partner at fault in other activities, the partnership realized
unusual profits. He can compensate the damages suffered by the partnership through his fault
with the unusual profits earned by the partnership through his industry.
F3. 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 profits of the
partnership is valid.
T4. Unless there is a stipulation to the contrary, the partners shall contribute equal shares to the
capital of the partnership.
T5. Partners 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.
T6. If it becomes apparent that the business of the partnership has become unprofitable and can
only be carried on at a loss, the partnership may be dissolved.
T7. The partnership is dissolved when a specific thing which a partner had promised to contribute
to the partnership is lost before its delivery to the partnership.
T8. Two or more persons may form a partnership for the exercise of a profession.
T9. The surname of a limited partner shall not appear in the partnership name, otherwise he is liable
as a general partner.
F10. The receipt by a person of a share of the profits of a business does not of itself establish a
partnership.
F11. The sharing of gross returns is prima facie evidence that one is a partner in the business.
T12. The partner who has been appointed manager in the Articles of Partnership may exercise all
acts of administration despite the opposition of his partners and his power is irrevocable without
just or lawful cause.
F13. The creditors of each partner shall be preferred to those of the partnership as regards the
partnership property.
T14. A partnership may be dissolved at any time by any of the partners.
T15. An industrial partner is not entitled to any share in firm capital on dissolution, but is limited to
his share in profit as compensation for his services.
T16. A partnership must have a lawful object or purpose, and must be established for the common
benefit or interest of the partners.
T17. A partnership may be established for charity.
F18. Articles of Universal Partnership, executed without specification of its nature, constitutes a
universal partnership of all present property.
T19. Persons who are prohibited from giving each other any donation or advantage cannot enter into
universal partnership.
F20. A partnership begins from the time the partnership contract is registered with the SEC

MULTIPLE CHOICE: Select the correct answer

A1. A and B are partners engaged in the real estate business. A learned that C was interested in
buying a certain parcel of land owned by the partnership, even for a higher price. Without
informing B, A was able to make B sell to him (A) his (B's) share in the partnership. Then A
sold the land at a big profit.

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 a. A is not liable to B for the latter's share in the profit.
b. C is liable to B for the latter's share in the profit.
c. The partnership is dissolved when A became the sole owner.
d. The sale of the land to C is void' since it was without the knowledge of B.
C2.If a partner is insolvent, the first order of preference in the distribution of his assets is:
a. Partner's contribution to the partnership
b. Partnership creditor
c. Separate creditor of the partner
d. Pro-rata between the separate creditors and partnership creditors
B3. May contribute money, property, or industry to the common fund:
a. Limited partner
b. General partner
c. Both limited and general partners
d. None of them
A4. May be required additional contribution in case of imminent loss:
a. Capitalist partner
b. Limited partner d.
c. Industrial Partner
d. None of the above
B5. One who takes charge of the winding up of partnership affairs upon dissolution:
a. Silent partner
b. Liquidating partner
c. Ostensible partner
d. None of the above
B6. Which of the following may be a cause for involuntary dissolution?
a. Express will of any partner
b. Insolvency of any partner
c. Termination of the term
d. Expulsion of any partner
D7. The remedy of capitalist partners against an industrial partner who engaged in business for
himself without the expressed permission from the partnership is:
a. To compel the industrial partner to sell his interest to the said capitalist partners.
b. To exclude him from sharing in the profits of the partnership.
c. To remove him as manager if he is appointed as manager of the partnership.
d. To expel him from the partnership and claim for damages.
C8. A substituted limited partner is:
a. a person admitted as a partner by the other partners.
b. a buyer of right of the deceased partner.
c. An assignee admitted to all the rights of a limited partner.
d. all of the above
A9. Management of a partnership is usually conferred upon the:
a. Manager c. Partners
b. President d. None of the above
C10. Sometimes termed dormant partner:
a. Limited partner d. None of the above
b. Capitalist partner
c. Secret partner
E11. Which of the following is not an element of a partnership?
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 a. There must be a valid contract.
b. There must be a mutual contribution of money, property, or industry to a common fund.
c. There must be an intent to engage in lawful business, trade or profession.
d. The purpose must be to secure profits and to divide the same among the partners.
e. None of the above
E12. The receipt by a person of a share of the profits of a business is prima facie evidence that
he is a partner in the business, except where such profits were received in payment:
a. As a debt by installments
b. As wages of an employee or rent to a landlord
c. As an annuity to a widow or representative of a deceased partner
d. As interest on a loan
e. All of the above
C13. Which of the following contracts of partnership may not affect its validity even if not in a
public instrument?
a. Limited partnership
b. Partnership where immovables are contributed
c. Partnership having a capital of P3,000.00 or more
d. None of the above
e. All of the above
B14. A partnership which comprises all the profits that the partners may acquire by their work
or industry during the existence of the partnership is called:
a. Universal partnership of all present property
b. Universal partnership of profits
c. Particular partnership
d. Partnership at will
e. None of the above
A15. 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
b. Universal partnership of profits
c. Particular partnership
d. Partnership at will
e. None of the above
D16. A partnership without a definite period of existence and which can be dissolved at any
time by any of the partners is called:
a. Universal partnership of all present property
b. Universal partnership of profits
c. Particular partnership
d. Partnership at will
e. None of the above
B17. A partner whose liability for partnership debts is limited to his capital contribution is
called:
a. General Partner d. Secret Partner
b. Limited Partners e. None of the above
c. General-limited partner

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 E18. A partner who has all the rights, power and subject to all the restrictions of a general
partner but whose liability is, among themselves, limited to his capital contribution is
called:
a. General partner
b. Limited partner
c. General-limited partner
d. Dormant partner
e. None of the above
A19. Bears the risk of things contributed to the partnership:
a. Contributing partner
b. Limited partner
c. Partner contributing usufructuary rights
d. All of the above
C20. Refers to persons who represent themselves, or consent to another or others to represent
them to anyone that they are partners:
a. General partnership
b. Limited partnership
c. Partnership by estoppel
d. None of the above

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