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.
5. Statement 4; Statement 3; Statement 2; then Statement 1
6. Statement 1; Statement 2; Statement 3; then Statement 4
7. Statement 2; Statement 3; Statement4; then Statement 1
8. Statement 1 Statement 2; Statement4; then Statement 3
9. 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