Business Law and Regulations (PARTNERSHIP) d.

Partnership by Estoppel
QUIZ Reviewer 6. Generally, a contract of partnership:
a. Can be entered into in any form
1. As distinguished from a corporation, a b. Is required to be in writing
partnership: c. Is required to be in a public instrument
a. Is created by agreement of the parties and d. Requires delivery of the money and property
not by operation of law
to be contributed for its perfection
b. Is created by operation of law and not by
agreement of the parties.
7. A, B, C, D, E, F, G, H, I and J are members of
c. Distributes its profits to those who
"Stay Safe Association" whose articles are
contributed capital to the business
kept secret among themselves and wherein
d. Does not distribute its profits to those who
any one of the members may transact in his
contributed capital to the business
own name.
2. In a universal partnership of all profits, which a. The association may sue under the name "Stay
Safe Association"
of the following is contributed?
b. The association may be sued under the name
I. Ownership of all the property
"Stay Safe Association"
II. All that may be acquired by the
c. Both (a) and (b) are true
partners by their industry or work
d. Neither (a) nor (b) is true
III. Usufruct over the property of the
partners
8. The following are the effects of unlawful
a. I and III only
partnership, except:
b. II only
c. I and II only a. The contract is void ab initio and the
d. II and III only partnership never existed in the eyes of the
law
3. The following statements concerning b. The profits shall be confiscated in favor of the
government
partnership are correct, except:
a. Partnership is a juridical entity which has a c. The instruments, or tools and proceeds of the
personality separate and distinct from that of crime shall be forfeited in favor of the
each of the partners government
b. There must be intent to form a partnership d. The contributions of the partners shall be
c. There is fiduciary relation among partners confiscated in favor of the government
d. All partnerships contracts are consensual
9. What is the primary purpose of establishing a
4. In which of the following cases is receipt by a partnership?
person of a share in the profits a prima facie a. To contribute money, property, or industry
evidence that he is a partner? b. To establish a common fund
a. Receipt as payment of debt by installment c. To obtain profits and divide the same among
b. Receipt by way of rent to a landlord the parties
c. Receipt of wages of an employee d. To conduct a business and practice a
d. Receipt as one of the managing profession
professionals of a professional firm
5. Partnership organized without specification of 10. Which of the following is prima facie evidence
its nature is a: that a person is a partner in a partnership
a. Partnership at will business?
b. Universal Partnership of all Present Property a. Receipt by such person of a share of the
c. Universal Partnership of Profits profits of a partnership business
b. Being co-owner in a co-owned property
 c. Sharing of gross returns in co-owned property conduct or admission, are precluded from
d. Being a co-possessor of a co-possessed denying its existence.
property d. It is a partnership which is established by the
lapsing of time.
11. When an unlawful partnership is dissolved by
a judicial decree, to whom shall the 14. Who may legally and ethically form a general
partnership profits go? professional partnership?
a. To the innocent partner a. CPAs and Doctors for practice of medical
b. To the guilty partner profession
c. To all the partners pro-rata b. CPAs and Lawyers for practice of legal
d. To the State profession
c. CPAs and CPA-Lawyers for practice of
accountancy profession
12. A, B, and C formed ABC Partnership. They are
d. Engineers and Nurses for practice of
also the major stockholders of ABC
engineering profession
Corporation. Which of the following
statements is true?
15. A partnership is:
a. ABC Partnership is a person separate and
a. a contract
distinct from A, B, and C. This is not true with
b. a business organization
ABC Corporation
c. both (a) and (b)
b. ABC Corporation is a person separate and
distinct from A, B, and C. This is not true with d. neither (a) nor (b)
ABC Partnership.
c. ABC Corporation and ABC Partnership are 16. One of the following is not a characteristic of
considered as a person separate and distinct contract of partnership
from A, B, and C, but the law treats ABC a. Real, in that the partners must deliver their
Corporation and ABC Partnership as one contributions in order for the partnership
entity. contract to be perfected
d. ABC Corporation and ABC Partnership are b. Principal, because it can stand by itself
considered as a person separate and c. Preparatory, because it is a means by which
distinct from A, B, and C. Further, the law other contracts will be entered into
treats ABC Corporation and ABC d. Onerous, because the parties contribute
Partnership as separate from each other. money, property or industry to a common
fund
13. Which of the following statements pertains to
a nominal partnership? 17. How is a contract of partnership wherein the
a. It is a partnership is a partnership where all contribution involves personal property with
the partners are liable to the extent of their value of at least P3,000 perfected?
separate property after the partnership assets a. By mere consent
have been exhausted.  b. By delivery of the contribution
b. It is a partnership where there is at least one c. By notarization of the articles of co-
general partner who is liable up to the extent partnership
of his separate property after the partnership
d. By registration of the notarized articles of co-
assets have been exhausted and at least one
partnership to SEC
limited partner who is liable up to the extent
of his investment in the partnership.
18. It is a partner who does not take active part in
c. It is a partnership which in reality is not
partnership but is considered as one with
the business of the partnership, but may be
respect to those who, by reason of their known to be a partner by third person.
a. Secret partner
 b. Silent partner thereof to third person.
c. Dormant partner
d. Ostensible partner 2nd Statement: Whenever immovable
property is contributed, an inventory of said
property is needed, signed by the parties and
attached to the public instrument, otherwise
the contract of partnership is void.
19. Three of the following partnership contracts a. Both statements are true
are void. Which one is not? b. Both statements are false
a. A universal partnership of all present property c. Only the 1st Statement is true
between husband and wife. d. Only the 2nd Statement is true
b. A universal partnership of profits between a
man and a woman living together as husband 23. Statement No. 1: The partnership can exist
and wife without the benefit of marriage. even before the existence of a common fund.
c. A particular partnership between husband Statement No. 2: In order to constitute a
and wife. partnership, there must be an actual profit to
d. A universal partnership of profits between a be divided.
private individual and a public officer. a. Only Statement 1 is true
b. Only Statement 2 is true
20. One of the following is not a requisite of a c. Both Statements are true
contract of partnership. Which is it d. Both Statements are false
a. There must be a valid contract
b. There must be mutual contribution of money, 24. Which of the following is not allowed to enter
property or industry to a common fund
into a contract of partnership?
c. It is established for the common benefit of the
a. Any natural person who is capacitated
partners which is to obtain profits and divide
b. Another partnership
the same among themselves
c. A corporation
d. The articles are kept secret among the
members
d. None of the above

21. The following cases on their own do not 25. What is the effect of contract of partnership
necessarily establish a partnership, except: with a capital of Php3,000 in money or
a. Persons who are not partners to each other. personal property is not registered with SEC?
b. Co-ownership whether such co-owners do or a. The contract of partnership is null and void.
do not share any profits made by the use of b. The partnership shall be classified as a
the co-owned property corporation.
c. Sharing of gross returns, whether or not the c. The partnership shall be classified as a sole
persons sharing them have a joint or common proprietorship.
right or interest in any property from which d. The liability of the partnership and the
the returns are derived. partners thereof to third persons will not
d. Receipt by a person of a share of the be affected.
profits of a business.
26. When real property is contributed to the
22. 1st Statement: Partnership with a capital of partnership
three thousand pesos or more, in money or a. A real contract is perfected
property, shall appear in a public instrument, b. A written instrument is required
and recorded at SEC. Failure shall not affect c. A public instrument complete with
the liability of the partnership and members inventory is required
 d. A partner can make important alteration if c. Yes. The fact there is sharing of profits is the
beneficial to the partnership hallmark of a partnership
d. No. Such is not registered with the Securities
and Exchange and Commission

27. In the absence of stipulation to the contrary,

when shall the juridical personality of the 31. Generally, a contract of partnership is:
partnership begin? a. A preparatory and a consensual contract
a. From the moment the partners have b. An aleatory and a consensual contract
completed their contributions. c. A preparatory and a formal contract
b. From the moment of the execution of the d. An aleatory and a formal contract
contract of partnership.
c. From the moment of submission with the SEC 32. Jomel and Paul entered into a universal
of the Articles of Co-Partnership. partnership of profits. At the time of the
d. From the moment the SEC issues the execution of the Articles of Partnership, Jomel
Certificate of Registration had a two-door apartment which he inherited
from his father 3 years earlier. Paul, on the
28. A document prepared by a notary public in other hand, had a fleet of taxis which he
the presence of the parties who sign it before purchased 2 years before. In the first year of
witnesses the partnership, Jomel earned Php500,000.00
a. Private instrument as a radio talent, while Paul won
b. Public instrument Php1,000,000.00 in the lotto. During the same
c. Commercial instrument period, rentals of Php120,000.00 were
d. None of the above collected from the apartment, while fare
revenues of Php200,000.00 were realized from
29. The minimum capital in money or property the operation of fleet taxis. Which of the
except when immovable property or real following belongs to the partnership? 
rights thereto are contributed, that will a. Two-door apartment
require the contract of partnership to be in b. Lotto winnings of Php1,000,000.00
public instrument and be registered with SEC c. Salary of Php500,000.00
a. Php33,000 d. Fleet of taxis
b. Php3,001
c. Php3,000 33. He refers to a partner who is active in
d. Php31,000 management of partnership business and
known to the public as a partner, such as by
30. XIAO and MI are the heirs of MAC. MAC allowing his name to be included in the firm
passed on to both XIAO and MI an undivided name.
parcel of land. Pending the settlement of the a. Ostensible partner
estate, the parcel of land earned an income b. Secret partner
amounting to Php1 million, which XIAO and c. Silent partner
MI split in half amongst themselves. Is there a d. Dormant partner
partnership between XIAO and MI.
a. Yes. Co-ownership is a form of partnership 34. Which of the following partnership has
b. No. Co-ownership does not of itself complied with all the requisites for its lawful
establish a partnership establishment?
a. De Facto Partnership
 b. De Jure Partnership status of the contract of partnership after 10
c. Open Partnership years of operation?
d. Universal partnership 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. 
35. An insane and a capacited persons personally
b. It may be considered valid as to the
entered into a contract of partnership. The
contracting parties on the basis of doctrine
insane contributed a car while the capacitated
of estoppel but it may be considered void
person contributed P1M cash. What is the as to third persons for failure to comply
status of contract of partnership? with the formality required by law. Only
a. Voidable on the part of the insane partner third persons directly affected by this void
b. Unenforceable contract may ask for declaration of nullity
c. Void of the contract of partnership but not the
d. Rescissible partners because they are guilty of
estoppel.
36. What is the proper classification of an c. It is rescissible both as to the contracting
industrial partner? parties and to third person because it
is intended to defraud third person.
a. General partner
d. It is unenforceable both as to the contracting
b. Limited partner
parties and to third person because it violates
c. Dormant partner
status of fraud
d. Nominal partner
39. What is the proper classification of general
37. A, a minor and B, an insane person orally
professional partnership?
entered into a contract of partnership at the
a. Universal partnership of all present property
lucid interval of the latter. At the time of oral
b. Universal partnership of profit
agreement, A invested and delivered half of
c. Particular partnership
cash contribution amounting to P2,000. The
d. Partnership by estoppel
partners agreed that the complete
contribution will happen two (2) years from
40. An insane and a demented person orally
the date of oral agreement. The articles of co-
entered into a contract of partnership. The
partnership was not registered with the
insane contributed a car while the demented
Securities and Exchange Commission. What is
person contributed PI M cash. What is the
the status of the contract of partnership? 
status of contract of partnership?
a. Perfectly valid contract
a. Voidable
b. Voidable contract
b. Unenforceable
c. Unenforceable contract
c. Void
d. Void contract
d. Rescissible

38. 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