PARTNERSHIP LAW B.

All the properties which belonged to

each of the partners after the
1. All present properties are contributed constitution of the partnership.
A. Universal partnership C. All the properties which belonged to
B. General partnership each of the partners at the time of the
C. Limited partnership constitution of the partnership as well as
D. None of the above the profits which they may acquire
therewith.
2. Composed of capitalist and industrial D. All the properties which belonged to
partners each of the partners at the time of the
A. Universal partnership constitution of the partnership as well as
B. General partnership the profits which they may acquire
C. Limited partnership thereafter.
D. None of the above
10. A capitalist partner engaged for his own
3. Partners shall enjoy practically all the profits: account in an operation which is of the kind of
A. Universal partnership business in which the partnership is engaged. Said
B. General partnership partner can be
C. Limited partnership A. Compelled to sell his interest in the
D. None of the above partnership to the other capitalist
partners.
4. They have no voice in the management of B. Compelled to dissolve or discontinue the
partnership affairs: operation of his business
A. Managing partners C. Compelled to bring to the common
B. Silent partners funds of the partnership any profits
C. Both A and B accruing to him from his transactions.
D. None of the above D. Denied his share in the profits of the
5. They have priority if the partnership is partnership.
insolvent:
A. Separate creditors 11. If a partner in a partnership is insolvent, the
B. Partnership creditors first order of preference in the distribution of his
C. Both A and B assets are:
D. None of the above A. Partnership creditors
B. Partners contribution to the partnership
6. May contribute money, property or industry C. Separate creditors of the debtor
to the common fund: D. Pro-rata between the separate creditors
A. Both general and limited partners of the debtor and the partnership
B. Limited partner creditor
C. General partners
D. Capitalist partners 12. A, B and C are partners in a partnership. C
contributed his industry. After payments of the
7. One who takes charge of the winding up to partnership’s obligations, only P6,000 cash remains.
partnership affairs upon dissolution: No other assets. In the absence of terms to the
A. Silent partner contrary, the share of C in the remaining assets is:
B. General partner A. Equal to share of A
C. Ostensible partner B. Equal to the share of B
D. Liquidating partner C. P2,000
D. Nothing
8. A, B and C are partners. A contributed his
services only; B, P20,000; and C, P10,000. 13. X, Y and Z are equal partners of XYZ
The partnership was liquidated. After Partnership. A owes the XYZ Partnership for P9,000.
payment of the partnership’s obligation, only Z, a partner collected from A, P3,000 before X and Y
P9,000 worth of assets remained. The share received anything. Z issued a receipt on the P3,000
of A will equal to: as his share of what A owes. When X and Y collected
A. P3,000 from A, A was insolvent.
B. Equal of share of B A. Partner Z shall share partners X and Y
C. Equal of share of C with the P3,000
D. Nothing B. Z cannot be required to share X and Y
with the P3,000
9. A and B entered into a universal partnership C. X and Y should first exhaust all
of all present property. The common remedies to collect from A.
property of D. X and Y can automatically deduct from
the partnership shall be: the capital contributions of Z in the
A. All the properties which belonged to partnership their respective share in the
each of the partners at the time of the P3,000
constitution of the partnership.
14. A and B are partners in a real estate
partnership. The partnership owns a piece of land
which C desired to buy. C contacted A and inform him
of his desire to buy the land and A did not tell to B 19. The following persons are disqualified to form
about it. A bought B out of the partnership and a universal partnership, except
afterwards sold the land to C with a big profit. A. Brother and sister
A. The partnership is dissolved when A B. Husband and wife
became the sole owner C. Those guilty of adultery and
B. The sale of the land to C is void because concubinage
it was without the knowledge of B. D. Those guilty of the same criminal
C. A is not liable to B for the latter’s share in offense, if the partnership is entered into
the profits a consideration of the same.
D. A is liable to B for the latter’s share in the
profits 20. A is the capitalist partner and B the industrial
partner. A is engaged personally in the same kind of
15. A, B and C are partners in ABC Partnership. business the partnership is engaged in.
D represented himself as a partner in ABC A. If there are losses, the partnership will
Partnership to E, who, on the belief of such bear the losses
representation, extended P50,000 credit to ABC B. If there are profits, the profits will be
Partnership. Assuming only B and C consented to shares by A and the partnership
such representation, who will be held liable to E? C. If there are profits, A will give the profits
A. E extended the credit to ABC to the partnership
Partnership, so a partnership liability D. A will be excluded from the partnership
exists, thus, all the partners, A, B and C and pay damages.
are liable 21. A is the managing partner of ABC
B. B, C and D are partners by estoppels Partnership. X owes A personally and ABC
and thus, are liable prorate to E Partnership P20,000 each. A collected and receive
C. Partners A, B and C who benefited from from X, P10,000 and he issued a receipt wherein it is
the credit extended by E are liable. stated that the amount is applied against his personal
D. D who made the representation is liable credit.
to E A. The amount received will be applied in
favor the partnership credit
16. A and B are partners in a real estate B. The amount will be applied in proportion
business. A and B were approached by X who offered to both credits
to buy a parcel of land owned by the partnership. C. The amount received will be applied in
Thereafter, B sold to A, B’s share in the partnership. the credit of A
Then, A sold the land to X at a big profit. D. All the partners will decide as to whose
A. A is liable to B for B’s share in the profits favor it will apply
B. The partnership is dissolved when A 22. Three (3) of the following are similarities between
became the sole owner a partnership and a corporation. Which is not?
C. A is not liable to B for the latter’s share A. The individuals composing both have
in the profits little voice in the conduct of the business
D. The sale of the land to X is void. B. Both have juridical personality separate
and distinct from that of the individuals
17. One of the following incidents may be a composing them.
cause for involuntary dissolution of a partnership. C. Like a partnership, a corporation can act
Which is? only through agents
A. Termination of the term of the D. Both are organizations composed of an
partnership aggregate of individuals
B. Insolvency of any partner
C. Express will of any partner 23. A, B and C are general partners in ABC
D. Expulsion of any partner Partnership. A, the managing partner engaged
personally in a business that is the same as the
18. A and B are equal partners in AB Partnership. business of the partnership without the consent of B
Y presented himself as a partner in AB Partnership to and C.
Z, who relying on such representation, extended A. If there are profits, A will give the profits
P50,000 credit to AB Partnership. Of the two (2) to the partnership
partners only B knew and consented to the B. If there are losses, the partnership will
representation of Y. Who should be held liable to Z? bear the losses
A. Only Y, who presented himself as C. If there are profits, they will be shared
partner is liable. by partner A and the ABC Partnership
B. Since the credit was extended to AB D. The profits or losses will be shared
Partnership, a partnership liability was equally by A and the ABC Partnership
created, so the two (2) partners and Y
are liable. 24. Three (3) of the following are rights of a
C. Partners A and B who benefited from general partner and also of a limited partner in a
the credit extended to the partnership limited partnership. Which is not?
AB Partnership shall be liable to Z. A. To inspect and copy at reasonable
D. B and Y are partners by estoppel and, hours the books of the partnership and
thus, are liable to Z.
 have them kept at the principal place of Partnership XYZ and Co. extended credit to C for AB
business Partnership in the amount of P60,000. Who is liable
B. To demand true and full information of to XYZ and Co.?
all matters affecting the partnership and A. A and C are partners by estoppels and
a formal account of partnership affairs are liable to XYZ and Co.
C. To have dissolution and winding up by B. XYZ and Co. extended the credit to C
decree of court for AB Partnership, so a partnership
D. None of the above liability exists, so both partners, A and B
together with C are liable.
25. The partnership is insolvent. These are C. The AB Partnership benefited, so it is
preferred as regards to the partnership property. liable
A. Partnership creditors D. Only C who made the representation is
B. Partners separate creditors liable
C. Partners with respect to their capital
D. Partners with respect to their profits 32. A, B and C are partners in a trucking and
freight business. B and C without the knowledge
27. Bears the loss of property contributed to the of A approached X and offered to sell to X
partnership all the trucks of the partnership at a price very
A. Capitalist partner much higher than their book value. Then B
B. Limited partner and C bought-out A from the partnership and
C. None of the above thereafter X bought all the trucks with a big
D. Partners contributing usufructory rights profit of B and C.
A. The sale of the trucks to X is void
28. When cash or property worth P3,000 or because it is without the knowledge and
more is contributed as capital. The Articles of Co- consent of A.
Partnership shall be in a public instrument B. B and C are not liable to A whatsoever
and be registered with the Securities and C. B and C are liable to A for his share in
Exchange commission. If the said the profits in the sale.
requirements are not complied with: D. When A was bought-out of the
A. It will render the partnership void. partnership, the partnership was
B. It will not affect the liability of the dissolved so A has no more share in the
partnership and the partners to third profits in the sale.
parties.
C. It will not give a legal personality to the 33. When the capital (of a partnership) is P3,000
partnership. or more, it must be in a public instrument and must be
D. It will give the partnership a de-facto recorded with the Securities and Exchange
existence. Commission (Article 1772). A, B and C agreed to form
a partnership and each contributed P10,000 as
29. A, B and C are equal partners in Santos capital of the partnership. There was no compliance
Brothers Partnership. The partnership is indebted to in the provisions of Article 1772.
PC for P150,000. Partner A is indebted to SC for A. The partnership was not established
P20,000 PC attached and took all the assets of the B. The partnership did not have juridical
partnership amounting to P90,000. B and C are personality
solvent while A is insolvent and all what he owns is a C. The partnership was established and
land valued at P15,000. any partner may compel the execution
A. SC has the priority to the land of A as a of a public instrument
separate creditor. D. The partnership is void
B. PC has priority to the land of A to cover
A’s share of the P60,000 remaining 34. A, as a partner contributed P30,000; B as
liability of the partnership partner, P15,000; and C as industrial partner, his
C. B and C have priority to the land of A if services in the partnership. After payment of all
they paid PC the 60,000 remaining liabilities and expenses, only P18,000
liability of the partnership. remain as partnership assets.
D. PC and AC shall have priority to the A. A, P12,000; B, P6,000; C, None
land o A in proportion to their claim of B. A, P6,000; B, P6,000; C, P6,000
P60,000 and P20,000 respectively C. A, P9,000; B, P9,000; C, None
D. A, P8,000; B, P4,000; C, P6,000
30. A partnership is not dissolved upon the death
of a: 35. This is the order of preference in the
A. General partner liquidation of a partnership:
B. Industrial partner A. 1.Outside creditors
C. Limited partner 2.Partners with respect to their capital
D. General limited partner 3.Partners with respect to their profit
4.Partners aside from capital and profit
31. A and B are equal partners in AB Partnership
C contacted XYZ and Co. and represented himself as B. 1. Partners with respect to their capital
partner in AB Partnership. XYZ and Co. contacted A 2.Partners with respect to their profit
who confirmed that C is in fact a partner of AB 3.Partners aside from capital and profit
 4. Outside creditors A. Z to pay P30,000 remaining liability
B. X, Y and Z to pay P10,000 each
C. 1. Outside creditors C. X or Y to pay P30,000 remaining liability
2. Partners aside from capital and profit D. X and Y to pay P15,000 each
3. Partners with respect to their capital
4.Partners with respect to their profit 41. W, X, Y and Z formed a partnership. W, X and
Y are general partners and contributed P50,000 each
D. 1. Partners aside from capital and profit while Z, an industrial partner contributed his services
2. Outside creditors only. All the partners signed an agreement stipulating
3.Partners with respect to their capital that the liability of W is limited to its contribution After
4.Partners with respect to their profit all the assets of the partnership were exhausted there
remains an unpaid liability of P40,000. The creditors
36. Three (3) of the following are rights of a of the partnership can compel:
partners. Which one is not? A. X and Y to pay the P40,000
A. Right to associate another person to B. X, Y and Z to pay the P40,000
his share C. W, X, Y and Z to pay P10,000 each and
B. Right to admit another partner W and Z can demand reimbursement
C. Right to inspect and copy from X and Y.
partnership book D. X and Y to pay P40,000
D. Right to ask dissolution of the firm at
the proper time 42. A partner in a partnership who is not really a
partner, not being a party to the partnership
37 The following are similarities between agreement, but is made liable as a partner for the
partnership and a corporation. Which is the protection of innocent third persons is known as
exception? A. Secret partner
A. Both have juridical personalities B. Dormant partner
separate and distinct from that of the C. Nominal partner or partner by estoppel
individuals D. Answer not given
composing them.
B. Like a partnership, a corporation can act 43. A and B are capitalist partners, with C as
only through agents industrial partner. A and B contributed P15,000 each
C. Both are organization of an aggregate of to the capital of the partnership. A contractual liability
individuals of P40,000 was incurred by the partnership in favor of
D. The individuals composing both have X. The capital assets of P30,000 shall first be
little voice in the conduct of the exhausted thereby leaving an unsatisfied liability of
business. P10,000. X can recover the amount from:
A. A and B only
38. In the partnership of A, B and C, A was B. A, B and C
appointed in the Articles of Co-Partnership as C. A, B and C and C can recover for
managing partner. As such manager in good faith: reimbursement from A and B
A. His power is revocable even without D. Answer not given
consent
B. His power can be revocable at any time 44. A, B and C are partners engaged in a retail
even without just cause provided business. Their contribution is P20,000 each. D is
C. He may execute all acts of admitted as a new partner with a contribution of
administration despite the opposition of P8,000. At the time of his admission, the partnership
B and C has an outstanding obligation to E in the amount of
D. He can be removed for valid cause even P80,000. In this case:
without the vote of the partners owning A. D is not liable to E for this obligation
the controlling interest B. D is liable to E for this obligation so that
amounting to P68,000 will be exhausted
39. In the ABC Partnership, A and B contributed leaving a balance of P12,000. Only A, B
P20,000 each and C, his services. After paying all the and C shall be liable jointly or pro-rata,
creditors of the partnership, only P18,000 in cash out of their separate property.
remains. In the absence of terms to the contrary, the C. D is liable to E for this obligation so that
share of C is equal to: after the assets of the partnership will be
A. P6,000 exhausted, leaving a balance of
B. The share of A P12,000, all the partners shall be liable
C. The share of B jointly or pro-rata, out of their separate
D. Nothing property.
D. Answer not given.
40 . X and Y established a partnership by
contributing, each at P50,000. Z, a third party allowed 45. A, B and C are general partners in ABC
his name to be included in the firm name of the Partnership. D is a debtor to the partnership in the
partnership. The partnership was insolvent and after amount of P15,000. A received from Debtor D the
exhausting all the remaining asset, there was left a sum of P5,000 and issued a receipt identifying the
liability to third persons the amount of P30,000. The amount as his share. Then D became insolvent, B
creditors can compel: and C cannot collect the P10,000.
 A. A cannot be compelled to share the B. P4,500 P4,500 P4,500 P4,500
P5,000 with B and C C. P6,000 P6,000 P6,000 P6,000
B. B and C can charge the capital of A with D. P4,500 P2,700 P1,800 P9,000
their share of the P5,000
C. A can be compelled to share B and C 51. Which of the following is a characteristic of
the P5,000 partnership as a contract?
D. B and C automatically sue D to collect A. Formal
the P10,000 B. Innominate
C. Gratuitous
46. M and O are partners of M & O Partnership. D. Preparatory
M is the managing partner. N owes M P10,000 and M
& O partnership P30,000. The obligations of N are 52. One who takes active part in the business,
both due. M collected from N the debt of N to M in the but is not known to be a partner by outside parties is:
amount of P10,000 and issued a receipt in the name A. Silent partner
of M. To which obligation will the P10,000 be applied? B. Dormant partner
A. The whole of the P10,000 be applied to C. Nominal partner
debt of N to M D. Secret partner
B. The P10,000 be applied to debt of N to
M and to the partnership 53. Can the partners stipulate that the newly
C. P5,000 each of debt of N to M and to admitted partner shall not be held liable for the
the partnership obligations of the partnership arising before his
D. P2,500 to debt of N to M and P7,500 admission? Which of the following statement is not
debt of N to the partnership correct?
A. No, because the newly admitted partner
47. A, B and C are partners in D-3 Partnership. should be deemed to have assumed all
On April 29,2010, partner C died. Not knowing that C the debts of the partnership upon his
died, on May 1, 2010, A contracted a liability to D who voluntary participation in the
also do not know the death of C. The partnership debt partnership.
is in the amount of P30,000, he can collect B. No, because newly admitted partner is
A. P30,000 from A liable with respect to his capital
B. P15,000 from A and P15,000 from B contribution which forms part of the
C. P10,000 from estate of C; P10,000 from partnership
A; P10,000 from B C. No, because the third person are always
D. P20,000 from A and P10,000 from B protected by law.
D. No, because the subject of the
48. This the order of preference in the liquidation stipulation is that the liability of the new
of a general partnership: partner should not be satisfied out of the
A. Outside creditors; Partner as creditors; partnership property.
Partners capital; Partners profit
B. Partner as creditors; Outside creditors; 54. I. The arrival of the term of a
Partners capital; Partners profit partnership with a fixed term or period shall not
C. Partners capital; Outside creditors; dissolve the partnership if the partners continue with
Partner as creditors; Partners profit the business of the partnership but such partnership
D. Outside creditors; Partner capital; may be terminated anytime dependent on the will of
Partners profit; Partners as creditors the continuing partners.
II. The general rule is that the loss of the
49. R, S and T are partners. T is the industrial specific thing contributed to the partnership when only
partner who in addition to his services, he also the use of the thing is contributed by the partner and
contributed capital to the partnership. There is no such thing after its transfer to the partnership which
stipulation as to sharing of profits and losses. The used the same or sometime was subsequently lost,
partnership realized profits of P21,000. The share of the partnership is not dissolved.
T in the profits:
A. R and S will determine T’s share I, in the A. True; False
profits B. True; True
B. T’s share is P7,000 C. False; False
C. Pro-rata to his contributed capital D. False; True
D. Nothing, because he is an industrial
partner 55. May contribute money, property or industry
to the common fund:
50. W, X, Y and Z are partners. They contributed A. General partner
capital as follows: W, P50,000; X, P30,000; Y, B. Industrial partner
P20,000 and Z, is an industrial partner, his services. C. Limited partner
The partnership’s obligation to outsiders exceed the D. Managing partner
total net assets by P18,000. Who and by how much
will the partners be liable for the payment of the 56. A limited partner who takes active part in the
P18,000? management of the firm becomes:
W X Y Z A. A managing partner
A. P9,000 P5,400 P3,600 0 B. Liable as a general partner
 C. A general partner B. Answer 2 is wrong but answer 1 is
D. A general partner and a limited partner correct
at the same time C. Both answers are correct
D. Answer 2 is correct but answer 1 is
57. Which of the following statements is not wrong
correct?
A. A general partner in a limited 61. A and B are capitalist partners with C as
partnership manages the business of industrial partner. A and B contributed P20,000 each
the partnership but cannot perform acts to the capital of the partnership. A contractual liability
of ownership without the consent of the of P50,000 was incurred by the partnership in favor of
limited partners X. The assets of the partnership had been exhausted
B. Valid contributions of a limited partner still leaving an unpaid liability of P10,000. X can
are money and property but not recover the amount from:
services. A. A, B and C and C can recover by way of
C. Additional limited partners may be reimbursement from A and B unless
admitted into the limited partnership with stipulated otherwise.
the consent of all the partners. B. A and B only
D. A person who is both a general partner C. C only
and a limited partner is deemed a D. A, B and C and C has no right for
limited partner only with respect to the reimbursement from A and B unless
return of his contribution. expressly stipulated.

58. A is the managing partner of A and Company. 62. Which of the following liabilities of the
X is indebted to A for P20,000 and to the partnership shall rank first in the order of payment?
partnership for P60,000. When both debts mature, X A. Those owing to creditors other than
pays A P20,000 and the latter issues a receipt for his partners
personal credit. The payment for P20,000 shall be B. Those owing to partners in respect to
applied: profits
A. ¼ in favor of A and ¾ in favor of the C. Those owing to partners in respect to
partnership capital
B. To the whole debt owing to A D. Those owing to partners other than for
C. ½ in favor of A and ½ in favor of the capital and profits
partnership
D. To the debt owing to the partnership 63. I. The contribution of a limited partner
may be cash, property or service.
59. Which of the following is an essential II. A limited partner who takes part in
element of partnership? the management of the business of the partnership is
A. There must be a contribution of money, not a general partner but he shall be liable as a
property, or industry to a common fund. general partner.
B. It must an association for profit with the
intention to divide the profits among A. True; True
themselves. B. True; False
C. There must be a valid and voluntary C. False; False
agreement. D. False; True
D. All of the above.
64. I. A person may be a general and a limited
60. A and B are partners. On June 15, 2009 when partner in the same partnership at the same time.
the total obligation of the partnership totaled P80,000. II. A person admitted as a partner into an
C was admitted as new partner. At the time C’s existing partnership is not liable for partnership
admission, the partnership creditors were M for obligations existing before his admission.
P50,000 and N for P30,000. After June 15, the
partnership borrowed from O P20,000 and P40,000 A. True; True
from P. On December 15, 2009, the partnership B. True; False
became insolvent leaving an obligation totaling C. False; False
P140,000 and partnership assets amounting to D. False; True
P30,000. The creditors are going after the separate
properties of the partners to satisfy their remaining 65. I. A partner cannot assign his interest in
claims. How are the creditors’ claims satisfied? the partnership to a third person without the
consent of the other partners.
Answer 1 - M and N can go after the separate II. A partner’s interest in the partnership is
properties of A and B but C’s separates properties are his personal property.
not answerable to their claims.
A. True; True
Answer 2 – O and P can go after the separate B. True; False
properties of A, B and C. C. False; False
D. False; True
A. Both answers are wrong
66. I. The creditor of each partner shall be
preferred to those of the partnership as regards the 72. I. A general partner in a limited partnership
partner’s separate property. has all the rights, powers and liabilities as though the
II. An industrial partner is exempted from partnership is not limited.
losses but not from partnership liabilities II. A general partner is personally liable for
A. True; True partnership obligations while a limited partner is not
B. True; False liable for partnership liabilities.
C. False; False
D. False; True A. True; True
B. True; False
67. I. An industrial partner with the consent of the C. False; False
other partners can engage in any business for his own D. False; True
account.
II. An industrial partner is not a general 73. I. A limited partner is simply a contributor to
partner. the partnership.
II. A limited partner has a right to the return
A. True; True of his contribution upon the dissolution of the
B. True; False partnership.
C. False; False
D. False; True A. True; True
B. True; False
68. I. A general partner not a managing partner C. False; False
can engage in a business different from the business D. False; True
of the partnership for his own account without the
consent of the other partners.
II. A general partnership can be formed
orally.

A. True; True
B. True; False
C. False; False
D. False; True

69. I. All the partners in a general partnership are

considered managing partners if there is no
stipulation as to who shall act as managing partner.
II. A partner is liable to the partnership for
whatever property he agrees to contribute without
necessity of demand.

A. True; True
B. True; False
C. False; False
D. False; True

70. I. If the capital contribution of the partners

amount to P3,000 or more the contract of partnership
must be in public a public document, otherwise the
contract is void.
II. A contract of partnership is void, whenever
immovable property is contributed thereto if an
inventory of said property is not made, signed by the
parties and attached to the public document.

A. True; True
B. True; False
C. False; False
D. False; True

71. I. Dissolution does not terminate the

partnership.
II. Insanity of a general partner in a limited
partnership dissolves the partnership.

A. True; True
B. True; False
C. False; False
D. False; True