1. Which of the following statements is TRUE:

1. A partnership is a contract of two persons who bind themselves to contribute money, property or industry to a common fund, with the intention of dividing the profits among themselves.
2. A partnership is a contract of two persons or more persons who bind themselves to donate money, property or industry to a common fund, with the intention of dividing the profits among themselves.
3. A partnership is a contract of two persons or more persons who bind themselves to contribute money, property or industry to a common fund, with the intention of dividing the profits among themselves.
4. A partnership is an agreement of two persons who bind themselves to contribute money, property or industry to a common fund, with the intention of dividing the profits to one of the partners.
5. A partnership is an agreement of two persons or more persons who bind themselves to contribute money, property or industry to a common fund, with the intention of dividing the profits among themselves.

2. Which of the following statements is FALSE:

1. In order for a partnership to exist, there must be a voluntary agreement among the parties to carry on the business partners as business as business partners.
2. Its formation cannot be imposed or a person cannot be coerced to join a partnership.
3. The property that may be contributed may be real or persona but all contributions must be tangible.
4. Partnership must always have a legitimate object.
5. The partnership must be established for the common benefit and interest of the partners which is to obtain profits and to divide the profits among the partners.

3. All partnerships should be registered in a public instrument because it will affect the rights of third persons. How would you describe this statement.

1. False
2. True
3. It can be true if the partnerships referred to in this statement have capital contributions below PhP 2,000.
4. It can be true if the partnerships referred to in this statement have capital contributions which involve personal properties only.
5. It can be true is both the conditions of C and D are present.

4. Which of the statements are FALSE:

1. Persons who are not partners as to each other are not partners as to third persons except when a person represents himself or consents to another representing him to anyone, as a partner in an existing partnership or with one or more persons not actual partners.
2. Existence of co-ownership or co-possession is a presumption that a partnership has been formed, whether such co-owners or co-possessors do or do not share any profits made by the use of the property.
3. The sharing of gross returns does not of itself establish a partnership, whether or not the persons sharing them have a joint or common right or interest in any property from which the returns are derived.
4. The receipt by a person of a share of the profits or a business is a prima facie evidence that he is a partners in a business.
5. The receipt by a person of a share of the profits or a business is a prima facie evidence that he is a partners in a business except when it was done as payment for a debt by installments or otherwise.

5. Which of the statements about general partnership is FALSE :

1. Property belonging to the partners at the time of the constitution of the partnership shall belong exclusively to the partners and will not be affected by the liabilities incurred by the partnership.
2. Profits that may be acquired from the present property of the partnership shall belong to the common fund of the partnership.
3. Property acquired by each partner after the formation of the partnership but only if stipulated.
4. A universal partnership may either be a universal partnership of all present property or a universal partnership of profits.
5. Properties acquire through inheritance, legacy or donation shall not form part of the common fund.

6. Bonbon, Lani, ,Manuel, Inggo and Pong entered into a universal partnership of present property to establish an agricultural business. At the time of the creation of the partnership the partners owned the following:

• Bonbon owned agricultural equipment in the amount of PhP 30 million and gold in the amount of PhP 23 billion which he inherited from his father
• Lani owned an agricultural lot in the amount of PhP 14 million and pile of agricultural paraphernalia worth PhP 1 millon which she received from her friends
• Manuel owned a warehouse worth PhP 3.6 million which he won from his bet in a boxing match
• Inggo own a herd of carabaosworth PhP 1.8 million which he bought after being a barangay chairman for 3 years
• Pong contributed cash in the amount of PhP 800,000.00 which he saved from his earning as a baranggay tanod in their locality.

Which of the following statements is TRUE:

1. All the properties mentioned above belong to the partnership.
2. Bonbon's gold in the amount of PhP 23 billion belongs to him alone.
3. Lani's agricultural paraphernalia worth PhP 1 million belong to her alone.
4. Manuel's warehouse is not part of the partnership property.
5. The contribution of Inggo and Pong cannot included from the partnership property because these are coming from government salaries.

7. Coco, Kara, Toto, Lita and Wally established an management consultancy partnership to offer human resource management of companies providing services to buying and selling boats. They agreed that Kara will be in charge of managing the partnership and profits shall be divided equally among the partners.

The overall capital was PhP 1 million pesos coming from the following individual contributions:

• Kara contributed PhP 300,000.00
• Coco contributed PhP 250,000.00
• Toto contributed PhP 250,000.00
• Lita contributed PhP 150,000.00
• Wally contribute PhP 50,000.00

Which of the profit distribution below is correct:

1. The property should be distributed equally.
2. The property should be distributed equally but Kara should have an extra share.
3. The property should be distributed proportionately.
4. The property should be distributed proportionately but Kara should have an extra share.
5. None of the above.

8. Which of the following statements about limited partnership is TRUE:

1. A limited partnership is a kind of partnership where all the partners a general partners who are liable to the extent of their separate property after the partnership assets have been exhausted
2. A limited partner is liable only to the extent of his/her investment in the partnership except when the common fund is not sufficient to cover a liability to third persons. In this case, the limited partner's separate property shall be charged with the excess liability to third person.
3. A limited partner where the is at least one general partner and at lest one limited partner.
4. Statements A, B and C are all TRUE
5. Statements A, B, and C are all FALSE

9. Which of the following statements with respect to the duration of partnership is not TRUE:

1. A partnership with a fixed term has a fixed duration which should be stipulated anytime after the beginning of the partnership contract.
2. A partnership for a specific undertaking is organized for a certain undertaking which, when attained, will cause the termination of the partnership.
3. A partnership where there is no period or a specific undertaking is a partnership at will.
4. A partnership with a fixed term becomes a partnership at will when parties continue the partners even after the stipulated end of the term of the partnership.
5. A partnership at will may be terminated at will by the partners.

___ 10. Read the following statements carefully.

Statement 1: A general partner is one who is laible for partnership debts to the extent of his separate property after all the assets of the partnership have been exhausted.

Statement 2: A limited partner is one who is liable for partnership debts to the extent of his capital contributions only.

Statement 3: A general-limited partner is one who has all the rights an powers and is subject to all the restrictions of a general partner, except that, in respect to contribution, he shall have the rights against the other members which he would have had if he were not also a partner.

Which of the following statements below is not FALSE:

1. All of the statements are TRUE
2. All of the statements are FALSE
3. Statements A and B are FALSE
4. Statements B and C are FALSE
5. Statements A and C are FALSE

11. Mark, Robin and Harry formed a business partnership and named it Tahimik Lang Enterprises. The partnership is engaged in sound proofing technology for recording studios. Robin, a singer, contributed PhP 200,000.00 and Harry, a dancer, contributed PhP 150,000.00. Mark, on the other hand, contributed PhP 75,000.00. During the formation of the partnership, Robin and Harry thought it best to assign Mark to be the managing partner of the partnership being the only one who has engineering expertise. Mark wanted to accept the project of building a sound proof garden for Mr. Fernando, a son of a deceased wealthy gold trader known to have defrauded other traders, having complained that while he was camping one night he heard people singing Bed of Roses in Diosdado Macapagal Avenue. The Project cost is 28 billion pesos. Robin did not want to accept the project because it will have reputational risks as Mr. Fernando is suspected to be a druglord. Harry, on other hand, thinks that the engagement is profitable sides with Mark.

Can Robin overturn the decision of Mark?

A. Yes, Robin can overturn the decision of Mark. Robin has the highest capital contribution and therefore has more to lose than both Mark and Robin.

1. Yes, Robin may overturn the decision of Mark if he is able to convince Harry to vote against the business decision of Mark. Having the controlling shares of the partnership Harry and Robin can overturn the decision of Mark.
2. No, Robin cannot overturn the decision of Mark because his justification feeble. Only when there is reasonable cause can Robin overturn the decision of Mark on his own.
3. No, Robin cannot overturn the decision of Mark because the latter was appointed as the Managing Director.
4. None of the statements represent the correct advice to Mark.

12. Which of the following obligations below is not included among the lawful obligations of a partner to the partnership with respect to contribution of property:

1. To deliver to the partnership at the time it was constituted or on the date stipulated the property he has promised to contribute.
2. To be liable in case of default
3. To be liable for the fruits of the thing from the time they should have been delivered without the need of any demand.
4. To take care of the property before its delivery to the partnership with extra ordinary care as a rule.
5. To answer for eviction in case the partnership is deprived of the specific or determinate thing he has contributed to the partneship.

13. Which of the statements below with respect to obligations of partners with respect to the amount appropriated is not FALSE:

1. The partner has the obligation to return to the partner with the controlling share the amount that he has taken from the common fund.
2. The partner has the obligation to pay the interest on the amount he had converted for his own use from the time he is to return the appropriated amount.
3. The partner has the obligation not to pay damages suffered by the partnership by reason of the conversion.
4. The partner has the obligation to reimburse to the partnership the amount that he has taken from the partnership coffers.
5. All the statements above are not FALSE.

14. Which of the following statements below with respect to obligations of partners with to contribution of money is TRUE:

1. The partner has the obligation to deliver to the partnership 30 days from the time it was constituted or on the date stipulated the money he has promised to contribute.
2. The partner has the obligation to deliver to the partnership 15 days from the time it was constituted or on the date stipulated the money he has promised to contribute.
3. The partner has the obligation to deliver to the partnership within reasonable time from the time it was constituted or on the date stipulated the money he has promised to contribute.
4. The partners has the obligation to deliver at the time it was constituted or on the date stipulated the money he has promised to contribute.
5. All of the statements are TRUE.

15. Which of the following statements is FALSE:

1. To have a formal account of partnership affairs at any point in time of the business.
2. The partnership book shall be kept at the principal place of business of the partnership.
3. The partners may agree or stipulate to have the partnership book at a place other than the principal place of business.
4. If a partner is wrongfullyh excluded from the partnership business or possession of its property, the partner has the right to have a formal account of the partnership affairs.
5. All of the above statements are FALSE.

16. Kokoy, Elijah, and Paolo agreed to establish a partnership for a coffee shop they name Kokoy Bean Leaf or Kokoy BL Enterprise. Kokoy was assigned as the Managing Partner. They contributed PhP 1 million each as a start up budget. The Kokoy Bean Leaf became a huge success in Malate Manila. They decided to expand and establish a branch in Bonificio High Street.

In January 2022, in order to support the expansion, Kokoy took up a loan for the partnership in the amount of PhP 5 million from Bottoms Up Bank, bank know to provide small loans to start up business.

In February 2022, seeing that Kokoy Bean Leaf was again poised to succeed. Royce talked to Kokoy BL Enterprise and convinced them to allow him to join the partnership. The partners agreed and as a result Royce contributed PhP 1 million to the partnership.

In March 2022, in light of the growing numbers of COVID cases in the Philippines, the government decided to mandate a complete lockdown which meant closing all establishment for 15 days. As a result, Kokoy BL suffered loses and was unable to pay their loan to Bottoms Up Bank. In April 2022, Kokoy BL Enterprise decided to close down. With all the partnership funds exhausted, the partnership still owes Bottom Up Bank in the amount of PhP 1 million pesos.

In this case, who among the partners are liable to Bottoms Up Bank in so far as their separate properties are concerned?

1. None of them because the partnership has a separate legal personality. The loans of the partnership is not considered as the loan of the individual partners.
2. All of them except Royce. Royce only joined the partnership in February and as newly-admitted partner, he is only liable to the extent of his contribution.
3. All of them are liable. Any liability incurred for the benefits of the partnership redounds to the benefit of the individual partners.
4. All of them are liable but Kokoy has a proportionately bigger liability compared to the other partners.
5. Only Kokoy is responsible since he made the loan as a managing partner. As a rule, managing partners bear the sole responsibility of entering the partnership to onerous contracts.

17. In 2022, Krissy and Greta entered into a business partnership that provides loan to sari-sari store owners. Krissy assigned Greta to receive all loans from their client. Sweety, a personal amiga of Greta from way back, applied for a loan in the partnership in the amount of PhP 500,000.00. This loan was approved.

Sweety, after a month, decided to handover PhP 500,000.00 as payment to the loan she had from the partnership. Greta reminded Sweety of the money she borrowed from her in 2019 in the amount of PhP 500,000.00 that remained unpaid. Both debts are demandable. Instead of issuing the partnership receipt, Greta issued a personal receipt to represent as payment to the personal loan of Sweety to her.

Krissy questioned the act of Greta and said that payment should be applied fully to satisfy the partnership debts. Is Krissy correct?

1. No, Krissy is not entirely correct. If a partner authorized to receive payment issues her own receipt, payment shall be applied to the two credits proportionately only.
2. No, Krissy is not correct. The debt is owed to a partner not authorized to receive payment.
3. Yes, Krissy is correct. If the partner authorized to receive payment issues the receipt for the partnership, payment shall be applied to the partnership credit.
4. Yes, Krissy is correct. If the partner authorized to receive payment issues a personal receipt, payment shall be applied to the partnership-credit
5. None of the statements is correct.

___18. Which of the statements is TRUE.

1. Dissolution is the change in the relation of the partners caused by any partner ceasing to be associate in the carrying of the business
2. Dissolution is the process of settling the business affairs of the partnership after closing of partnerhsip.
3. Dissolution refers to the point when all the business or affairs of the partnership are completely wound up.
4. All of the statements are TRUE.
5. All of the statements are FALSE.

___ 19. Which is the correct order of payment of partnership liabilities.

1. Those owing to partners in respect of profits.
2. Those owing to partners in respect to capital.
3. Those owning to partners other than for capital and profits.
4. Those owing to creditors other than partners.

1. Statement 4; Statement 3; Statement 2; then Statement 1
2. Statement 1; Statement 2; Statement 3; then Statement 4
3. Statement 2; Statement 3; Statement4; then Statement 1
4. Statement 1 Statement 2; Statement4; then Statement 3
5. Statement 4; Statement 2 Statement 3; then Statement 1

___ 20. The following are conditions that results to the dissolution of partnership except:

1. Death
2. Civil Interdiction
3. Insanity
4. Election
5. Insolvency