REGULATORY FRAMEWORK FOR BUSINESS TRANSACTIONS

CPALE (II - BSA/BSAIS) Calingasan, LLB, MPA, REB

PARNTERSHIP 6. The receipt by a person of a share of the profits

of a business is prima facie evidence that he is a
1. A contract whereby two or more persons bind partner in the business, but no such inference
themselves to contribute money, property or shall be drawn if such profits were received in
industry to a common fund, with the intention of payment (choose the exception):
dividing the profits among themselves, or in order A. As wages of an employee or rent to a
to exercise a profession. landlord.
A. Sale C. Corporation B. As an annuity to a widow or representative of
B. Partnership D. Cooperative a deceased partner.
C. As interest on a loan, though the amount of
2. The following are characteristics of a contract of payment vary with the profits of the business.
partnership, except: D. None of the above is an exception
A. Consensual C. Onerous
B. Unilateral D. Preparatory 7. Which of the following is false?
A. A partnership is generally perfected by mere
3. A partnership is different from a corporation in all consent.
of the following, except: B. When immovable property is contributed
A. It is created by the voluntary agreement of thereto a public instrument shall be
the parties. necessary.
B. The liability of partners may extend to their C. If the capital is more than P3,000, the
personal property. contract of partnership must be in a public
C. Death of a partner dissolves the partnership. instrument and registered with the SEC.
D. It has a separate juridical personality D. If immovable property is contributed
from the partners. into the partnership but no inventory
was made the partnership remains valid
4. The consequences of a partnership having a among the partners but not against
separate personality include the following, third parties.
except:
A. The partnership can acquire assets in its 8. The partners contribute all the property which
name. actually belongs to them to a common fund, with
B. The partnership can incur obligations in its the intention of dividing the same among
name. themselves, as well as all the profits which they
C. The partnership can bring civil and criminal may acquire therewith.
actions in its name. A. Universal partnership of all present
D. The partnership will be adjudged property
insolvent if the individual partners are B. Universal partnership of all profits
insolvent. C. Limited partnership
D. Particular partnership
5. Which of the following is false?
A. Except for silent partnerships, persons 9. In a universal partnership of all present property,
who are not partners as to each other all of the following becomes common property,
are not partners as to third persons. except:
B. Co-ownership or co-possession does not of A. Properties which belong to the partners at the
itself establish a partnership, whether such- time of the constitution of the partnership.
co-owners or co-possessors do or do not B. Any profits derive from properties belonging
share any profits made by the use of the to each partner at the time of the constitution
property. of the partnership.
C. The sharing of gross returns does not of itself C. Any after-acquired property from a
establish a partnership, whether or not the donation, legacy, inheritance including
persons sharing them have a joint or common the profits thereof.
right or interest in any property from which D. All of the above are included in the
the returns are derived. partnership.
D. All of the above are true statements.
10. In a universal partnership of all profits, all of the
following becomes common property, except:

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CPALE (II - BSA/BSAIS) Calingasan, LLB, MPA, REB

A. Usufruct of the properties which belong to the 16. A partnership at will is:
partners at the time of the constitution of the A. One where there is no fixed term
partnership. B. One without a particular undertaking
B. Any profits derive from properties belonging C. One with a fixed term or with a particular
to each partner at the time of the constitution undertaking after expiration of said term or
of the partnership. fulfillment of said undertaking
C. Any after-acquired property from a D. All of the above
donation, legacy, inheritance including
the profits thereof. 17. Which of the following is not a duty of a partner:
D. All of the above are included in the A. To give his contribution
partnership B. To warrant the thing delivered
C. To convert partnership fund/property
11. Articles of Universal Partnership which does not for his own use and deliver the profits
specify the nature is considered a: thereof
A. Universal partnership of all present property D. Not to engage in unfair competition
B. Universal partnership of all profits
C. Limited partnership 18. On June 15, 2018, A, B and C agreed to form a
D. Particular partnership partnership where C promised to contribute
machinery to be delivered on June 30, 2018. C
12. In a universal partnership of all profits, the failed to deliver the said machinery and B made a
usufruct of the properties and the naked title of demand therefor on July 15, 2018. C was only
the properties is with the: able to make the delivery on July 31, 2018. C
would:
Usufruct Naked Title A. Not be liable for damages since he is not yet
A Partner Partner in delay.
B Partnership Partnership B. Be liable for damages from June 30,
C Partner Partnership 2018
D Partnershi Partner C. Be liable for damages from July 15, 2018
p D. Not be liable for damages since there was no
judicial demand made
13. The following are not allowed to enter into a
universal partnership: 19. In the preceding number, if B died on July 1,
A. Husband and wife. 2018, what is the remedy of the partners?
B. Those guilty of adultery and/or concubinage. A. Collect what is owed and damages
C. Those guilty of the adultery and concubinage, B. Specific performance
if the partnership was entered into in C. Rescission
consideration of the same. D. There is no more remedy available
D. All of the above
20. If the partner is in bad faith in failing to deliver
14. First statement: A husband and wife can enter what has been promised on time, he shall be
into a general professional partnership. liable for:
Second statement: A husband and his concubine A. The fruits actually produced by the promised
can enter into a partnership for a specific contribution.
undertaking. B. The fruits that could have been produced by
A. Both statements are correct the promised contribution.
B. Both statements are incorrect C. Both A and B.
C. Only the first statement is correct D. Neither A nor B unless there is demand.
D. Only the second statement is incorrect
21. The loss of the thing contributed to the
15. As to liability of partners, a partnership can be partnership shall be borne by the partner if:
classified as: A. The thing contributed is specific and
A. Universal and particular determinate which is not fungible and only
B. General and limited the use and fruits was contributed for the
C. With a fixed term and at will common benefit.
D. All present property and all profits B. There is stipulation that he shall bear the loss
of the thing brought and appraised in the

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CPALE (II - BSA/BSAIS) Calingasan, LLB, MPA, REB

inventory. 27. A, B and C are partners of ABC Partnership, A

C. Even if there is no stipulation that the conveyed his whole “interest” in the partnership
partner will bear the loss but the thing to X. As a result,
was appraised in the inventory. A. The partnership is deemed dissolved unless
D. All of the above. there is stipulation to the contrary.
B. X becomes a partner
22. The loss of the thing contributed to the C. X is entitled to receive A’s share in the
partnership shall be borne by the partnership if profits
(choose the exception): D. There is no effect since the conveyance is
A. The thing contributed is fungible. void
B. The thing contributed cannot be kept without
deteriorating. 28. The assignee-conveyee of a partner’s interest is
C. The thing was contributed to be sold. entitled to:
D. There was an appraisal in the inventory A. Demand accounting and settlement
and there is a stipulation that the B. Interfere in the management or
partner will bear the loss thereof. administration of the partnership business
C. Demand information, accounting and
23. First statement: a partner is deemed to be a co- inspection of the partnership books
owner of his co-partners of specific partnership D. Receive the partner-conveyor’s interest
property. in the event of a dissolution
Second statement: A partner’s right in specific
partnership property is assignable provided there 29. First statement: A partner’s interest may be the
is consent from the other partners. subject of a charge or attachment by the court.
A. Both statements are correct Second statement: In case of conflict, priority is
B. Both statements are incorrect given to the attaching creditor over the creditor
C. Only the first statement is correct of the partnership.
D. Only the second statement is correct A. Both statements are correct
B. Both statements are incorrect
24. First statement: A partner has an equal right with C. Only the first statement is correct
his partners to possess specific partnership D. Only the second statement is correct
property for partnership purposes.
Second statement: He can likewise possess the 30. According to contributions, partners may be
property for other purposes provided there is classified as:
consent from the other partners. A. General and Limited
A. Both statements are correct B. Universal and Particular
B. Both statements are incorrect C. Capitalist and Industrial
C. Only the first statement is correct D. At will and with a fixed term
D. Only the second statement is correct
31. An industrial partner:
25. First statement: A partner’s right in specific A. Cannot engage in business for himself of
partnership property is not subject to attachment whatever industry except if with
or execution except on a claim against the consent of the partners
partnership. B. Cannot engage in business of the same
Second statement: A partner’s right to specific industry as that of the partnership except if
partnership property can be subject to legal with consent of the partners
support. C. Can engage in business for himself of
A. Both statements are correct whatever industry even without the consent
B. Both statements are incorrect of the partners
C. Only the first statement is correct D. Can engage in business in an industry
D. Only the second statement is correct different from that of the partnership even
without the consent of the partners
26. A partner’s share in the profits and surplus of the
partnership is called: 32. A capitalist partner:
A. Profit-share C. Bonus A. Cannot engage in business for himself of
B. Interest D. Dividend whatever industry except if with consent of
the partners.

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CPALE (II - BSA/BSAIS) Calingasan, LLB, MPA, REB

B. Can engage in business of the same industry of A?

as that of the partnership even against the A. P7,500 C. P10,000
will of the other partners. B. P5,000 D. A share which is equitable
C. Can engage in business for himself in an
industry different from that of the 37. In relation to no. 36, if the partnership suffered a
partnership even without the consent of loss of (P30,000), how much is the share of B?
the partners A. (P7,500) C. (P10,000)
D. Can engage in business of whatever industry B. (P5,000) D. A share which is equitable
even without the consent of the partners.
38. In relation to no. 36, assuming there was no
33. A capitalist partner can engage in a business of profit agreement, how much is the share of C?
the same industry as that of the partnership in all A. P7,500 C. P10,000
of the following cases, except: B. P5,000 D. A share which is equitable
A. When it is expressly stipulated.
B. When the other partners expressly allow him 39. In relation to no. 36, if the partnership suffered a
to do so. loss of (P30,000) and there was no agreement as
C. When the general-capitalist partner becomes to sharing of losses, how much is the share of D?
a limited partner in a competitive enterprise. A. (P7,500) C. (P10,000)
D. None of the above. B. (P5,000) D. A share which is equitable

34. ABC partnership is in danger of an imminent loss. 40. A, B, C and D contributed P25,000 each to the
In order to save the partnership, additional partnership and E was admitted as an industrial
contributions from the partners is necessary. partner, it was agreed that 20% is the reasonable
Which of the following is incorrect? share of E in the profits. For the year, the
A. A, a capitalist partner, is required to partnership earned P30,000. How much is the
contribute, otherwise he shall be share of A?
deemed removed from the partnership. A. P7,500 C. P6,000
B. B, a capitalist partner, is required to B. P5,000 D. P10,000
contribute, otherwise, he shall be required to
sell his interest to the other partners. 41. In relation to no. 40, if the partnership instead,
C. C, an industrial partner, is not required to suffered a loss of (P30,000). How much would be
make any contributions, except if there is the share of B?
stipulation to the contrary. A. (P7,500) D. (P6,000)
D. D, a capitalist partner, is not required to make B. (P5,000) E. (P10,000)
a contribution if there is stipulation to that
effect. 42. X, Y and Z are partners of XYZ partnership where
X is the managing partner. Which of the following
35. D owed ABC partnership and A, the managing is correct?
partner of ABC partnership, P7,000 and P3,000 A. If X was appointed in the Articles of
respectively. A was able to collect from D, Partnership, he can be removed for any cause
P5,000. Which of the following is incorrect? with the vote of the partners representing the
A. If A issued a receipt in his name, P3,500 will controlling interest.
be applied to the partnership credit. B. If X was appointed in the Articles of
B. If A issued a receipt in his name, P1,500 will Partnership, he can be removed only with just
be applied to his credit. cause with a vote of the majority of the
C. If A issued a receipt in ABC Partnership’s partners.
name, the whole P5,000 applies to the C. If X was appointed after the partnership has
partnership credit. been constituted, he can be removed only for
D. If A issued a receipt in ABC Partnership’s just cause with the vote of the majority of the
name, the P3,500 will apply to his partners.
credit. D. If X was appointed after the partnership
has been constituted, he can be
36. A, B, C and D contributed P25,000 each to the removed even without just cause with a
partnership. They agreed to divide profits 1:1:2:2 vote of the controlling interest.
and losses 2:2:1:1 The company earned P30,000
profit for the year. How much would be the share 43. V, W, X, Y and Z are partners with the following

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CPALE (II - BSA/BSAIS) Calingasan, LLB, MPA, REB

interests: partner from sharing on any losses including that

from creditors after exhaustion of partnership
V 5% assets.
W 10%
X 15% Total Assets of the partnership eventually
Y 30% dwindled to P200,000 while the liabilities
Z 40% ballooned to P800,000. In this case, which of the
following is correct?
V, W and Y were appointed as managing partners A. The P800,000 liabilities can be directly
without specification as to their duties. V wanted charged by the creditors to the partners,
to purchase from a particular supplier to which Y including C.
opposed. Which of the following is correct? B. The stipulation exempting C from liability is
A. Y’s opposition would prevail since he has void.
more interest than that of V. C. If C is made to pay, he can seek
B. Y’s opposition would prevail even if W agrees reimbursement of whatever he paid
with V, since their combined interest is still from the partners.
smaller than that of Y. D. The creditors can only go after A, B and D.
C. If W agrees with V, V’s decision would
prevail, notwithstanding the fact that 47. Which of the following is incorrect with regards
the interest of Y is higher than that of the authority of the partners to act in behalf of
theirs. the partnership?
D. X and Z would have to intervene and vote A. It may be express or implied.
also, to determine whose decision will prevail. B. The authority is implied when he apparently
carries on the usual business of the
44. Assuming, in number 43, that it was only V and partnership.
W that were appointed as managing partners C. Acts done under an implied authority will bind
without specification of their duties, and V the partnership even if he has in fact no
wanted to purchase from a particular supplier to authority to act in behalf of the partnership if
which W opposed. Which of the following is the person to whom he transacts with has no
correct? knowledge that he has no authority.
A. W’s opposition would prevail since he has a D. Acts done under an implied authority
larger interest compared to V. which are not on the usual business of
B. If X and Y agrees with V, the decision of V the partnership are binding if the person
would prevail because they represent the to whom the partner transacts has no
majority of the number of partners. knowledge of the lack of authority.
C. If X and Y agree with W, the decision of
W would prevail because they represent 48. Unless authorized by the other partners, or unless
the vote of the controlling interest. they have abandoned the business, one or more
D. The decision of whomever Z agrees with but less than all the partners have no authority to
would prevail since Z has the highest interest conduct the following, except:
in the partnership. A. Dispose of the inventories of the
business
45. First statement: A stranger who includes his B. Do an act which would make it impossible to
name in the partnership name shall be liable as a carry on the ordinary business of a
partner but without any rights as such. partnership
Second statement: A limited partner who included C. Confess a judgment
his name in the firm name shall be generally D. Enter into a compromise concerning a
liable as a general partner. partnership claim or liability
A. Both statements are correct
B. Both statements are incorrect 49. If the partner conveys partnership property in a
C. Only the first statement is correct conveyance in the partnership’s name, which of
D. Only the second statement is correct the following is incorrect?
A. As a rule, the partnership may recover the
46. A, B, C and D are partners of ABCD Partnership. property.
They have agreed to exempt C, an industrial B. The partnership cannot recover if it is within
the usual business of the partnership and

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CPALE (II - BSA/BSAIS) Calingasan, LLB, MPA, REB

there is implied authority to dispose of the A. Death C. Civil interdiction

same. B. Insolvency D. Insanity
C. The partnership cannot recover if the
ownership was transferred to a person who 55. The distribution of assets include the following:
had no knowledge that the partner has I. Paying the partners other than for capital
exceeded his authority. or profits.
D. None of the above II. Paying the creditors other than the
partners
50. In the following cases, the partners and the III. Paying the partners in respect of profits
partnership are solidarily liable, except: IV. Paying the partners in respect of capital
A. Any wrongful act or omission of any partner
acting in the ordinary course of the business In what order?
of the partnership causing loss or injury to a A. I, II, III and IV C. II, I, IV and III
person not a partner. B. II, I, III and IV D. IV, II, I and III
B. When a partner acting within the scope of his
apparent authority receives money or 56. In case the assets of the partnership are not
property of a third person and misapplies it. sufficient to cover the liabilities, the remaining
C. Where a partner misappropriates money or claims may be satisfied against the separate
property of a third person received by, and in assets of the partners.
the custody of, the partnership.
D. None of the above. However, where a partner has become insolvent,
the claims against his separate property shall be
51. ABC is an already existing partnership. It was satisfied in the following order:
later on dissolved when D was admitted as a A. Those owing to partnership creditors; Those
partner. Which of the following is correct as to owing to separate creditors; Those owing to
the liability of D? partners by way of contribution.
A. D is liable for all debts contracted before and B. Those owing to partners by way of
after his admission but only to the extent of contribution; Those owing to partnership
his contribution. creditors; Those owing to separate creditors.
B. D is liable for all debts contracted before and C. Those owing to separate creditors;
after his admission upto his personal Those owing to partnership creditors;
properties. Those owing to partners by way of
C. D is liable for debts contracted before contribution.
his admission but only as to his D. Those owing to separate creditors; Those
contribution. owing to partners by way of contribution;
D. D is liable for debts contracted after his Those owing to partnership creditors.
admission but only as to his contribution.
57. A and B wanted to form a limited partnership,
52. The change in the relations of the partners which of the following would validly allow them to
caused by any partners ceasing to be associated do so:
in the carrying on of the partnership. A. A and B are general partners with agreement
A. Dissolution C. Termination that their liability as to third parties will be
B. Winding up D. Liquidation limited to their contributions.
B. A and B are limited partners with agreement
53. All of the following are extrajudicial causes of that their liability as to third parties will be
dissolution of the partnership, except: limited to their contributions.
A. Termination of the definite term of the C. A is a limited partner with agreement
partnership or its particular undertaking. that their liability as to third parties will
B. By express will of a partner whether in be limited to their contributions and B
violation of the articles of partnership or not. would be a general partner.
C. Any event which makes the business unlawful D. They cannot form a limited partnership if
D. When the partnership can only be there are only two of them.
carried on at a loss.
58. A limited partner’s right is limited by the following
54. The following dissolves a partnership as compared to a general partner (choose the
extrajudicially, except exception):

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CPALE (II - BSA/BSAIS) Calingasan, LLB, MPA, REB

A. He cannot be an industrial partner.

B. He cannot, generally, appear in the
partnership name.
C. He cannot take part in the active
management of the partnership.
D. He cannot have a dissolution and
winding up decreed by the court.

59. A limited partner may rightfully demand the

return of his contribution in the following cases,
except:
A. On the dissolution of a partnership.
B. When the date specified in the certificate for
its return has arrived.
C. After he has six months' notice in writing to
all other members, if no time is specified in
the certificate, either for the return of the
contribution or for the dissolution of the
partnership.
D. None of the above.

60. A person admitted to all the rights of a limited

partner who has died or has assigned his interest
in a partnership.
A. Associate C. Proxy
B. Substitute D. Admitted partner

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