Multiple-choice Tests: 1. One of the following is not a characteristic of contract of partnership. a. Real, in that partners must deliver their contributions in order for the partnership contract to be perfected. b. Principal because it can stand by itself. c. Preparatory, because it is a means by which other contracts will be entered into. d. Onerous, because the parties contribute money, property or industry to the common fund. 2. One of the following is not a requisite of a contract of partnership. Which is it? a. There must be a valid contract. b. There must be a mutual contribution of money, property or industry to a common fund. c. It is established for the common benefit of the partners which is to obtain profits and divide the same among themselves. d. The articles of partnership are kept secret among the partners. 3. The minimum capital in money or property except when immovable property or real rights thereto are contributed , that will require the contract of partnership to be in a public instrument and be registered with the Securities and Exchange Commission (SEC). a. P5,000.00 b. P10,000.00 c. P3,000.00 d. P30,000.00 4. If the partnership has the minimum capital mentioned in No. 3 but the contract is not in a public instrument or the same is not recorded with SEC, the partnership: a. Is void b. Is voidable c. Does not acquire juridical personality d. Still acquire juridical personality. 5. A partnership formed for the exercise of a profession which is duly registered is an example of: a. Universal partnership of profits b. Universal partnership of all present property c. Particular Partnership d. Partnership by estoppel 6. John, Albert and Wilfred are partners in JAW Enterprises Company. Not having established yet their credit standing, the three partners requested Simon, a well-known businessman, to help them negotiate a loan from Carlos, a money lender. With the consent of John, Albert and Wilfred, Simon represented himself as a partner of Jaw Enterprises Company. Thereafter, Carlos granted a loan of P150,000 to Jaw Enterprises Company. What kind of partner is Simon? a. Managing partner b. Liquidating partner c. Ostensible partner d. Partner by estoppel 7. A contract where two or more persons bind themselves to contribute money, property or industry to a common fund with the intention of dividing the profits among themselves. a. Voluntary association b. Corporation c. Partnership d. Sole Proprietorship 8. In a limited partnership where there are four partners: a. All the partners must be limited partners b. The number of the limited partners must be equal to the number of general partners , that is, 2:2. c.The number of limited partners must be greater than the number of general partners, that is 3:1 d. It is enough that there is one limited partner, the rest may all be general partners. 9. A limited partner may contribute a. Money and/or property b. Money and/or services c. Property and/or services d. Services only. 10. It is a partnership where all the partners are general partners who are liable to the extent of their separate property after the partnership assets have been exhausted. a. Limited Partnership b. General Partnership c. Partnership by estoppel d. De facto partnership 11. One which is organized for a certain undertaking which, when attained , will cause the termination of the partnership. a. Partnership for a particular undertaking b. Partnership at will c. Limited partnership d. Ordinary partnership 12. One who contributes his services or industry to the partnership. Such industry may be physical or intellectual industry. a. Capitalist Partner b..Industrial Partner c. Ostensible partners d. General Partner 13. One who manages the business or affairs of the partnership. a. Liquidating partner b. Managing partner c. Secret partner d. Dormant partner 14. A partnership which requires that the word "Limited" or abbreviation Ltd as part of the partnership name is: a. Limited Partnership b. General Partnership c. Universal Partnership d. Particular Partnership 15. The following statements are correct except: a. The idea of obtaining pecuniary profit or gain directly as a result of the business to be carried on is the very reason for the existence of a partnership. b. The object of the partnership is unlawful when it is contrary to law, morals, good customs, public order, or public policy. c. A limited partner in a limited partnership cannot contribute industry or services. d. There is prohibition against a partnership being a partner in another partnership. 16. Statement I - Since partnership is fundamentally contractual, all the essentials of a valid contract must be present. Statement II - A person cannot enter into a contract of partnership solely with himself; there must be at least two competent parties. a. Statement I is correct, and Statement II is incorrect. b. Statement I is incorrect, and Statement II is correct. c. Both Statements I and II are correct. d. Both Statements I and II are incorrect 17. The following are the consequences of a partnership formed for an unlawful purpose except: a. The contract is void ab initio and the partnership never existed in the eyes of the law. b. The profits shall be confiscated in favor of the government . c. The instruments or tools and proceeds of the crime shall also be forfeited in favor of the government, and d. All of the foregoing statements are correct. 18. The following statements are correct except: a. Where immovable property, regardless of its value, is contributed, the following must be complied with: (a) the contract must be in a public instrument; and (b) An inventory of property contributed must be made, signed by the parties, and attached to the public instrument. b. Since a partnership has juridical personality separate from an independent of that of the persons or members composing it, it is but logical and natural that immovable property may be acquired in the partnership name. c. General Partnership is one consisting of general partners who are liable pro-rata and subsidiarily. d. All of the foregoing statements are correct. 19. Vincent and James entered into a universal partnership of profits. At the time of the execution of the articles of partnership, Vincent had a two-door apartment which he inherited from his father 3 years earlier. James on the other hand , had a fleet of taxis which he purchased 2 years before. In the first year of the partnership , Vincent earned P500,000 as a radio talent while James won P1,000,000.00 in the lotto. During the same period, rentals of P120,000 were collected from the apartment , while fare revenues of P200,000 were realized from the operation of the fleet of taxis. Which of the following belongs to the partnership? a. Two-door apartment b. Lotto winnings of P1,000,000.00 c. Salary of P500,000.00 d. Fleet of taxis 20. Three of the following partnership contracts are void. Which one is not? a. A universal partnership of all present property between husband and wife. b. A universal partnership of profits between a man and a woman living together as husband and wife without the benefit of marriage. c. A particular partnership between husband and wife. d. A universal partnership of profits between a private individual and a public officer 21. Paragraph I - Where the articles of partnership do not specify the nature of the partnership , whether it is one of "present property" or of "profits" only, it will be presumed that the parties intended merely a partnership of profits. Paragraph II - Persons who are prohibited by law to give donations cannot enter into a universal partnership for the reason that each of the partners virtually makes a donation. To allow persons who are prohibited by law to give each other any donation or advantage to form a universal partnership will be like permitting them to do indirectly what the law expressly prohibits. a. Paragraph I is accurate, but paragraph II is inaccurate. b. Paragraph I is inaccurate, but paragraph II is accurate. c. Both paragraphs I and II are accurate. d. Both paragraphs I and II are inaccurate. 22. Braganza, Ortiz and Nevado want to form a partnership with Braganza contributing P500,000.00. Ortiz, office equipment; and Nevado, his services, If the three were to form a limited partnership, who among them will be the limited partner/s? a. Either Braganza or Ortiz or both of them. b. Either Ortiz or Nevado or both of them. c. Either Braganza or Nevado of both of them d. All the three must be limited partners, 23. Which of the following economic activity cannot be carried on in partnership form of business? a. Lending Company b. Trading Company c. Construction Company d. Manufacturing Company 24. Statement I - A partnership begins from the moment of the execution of the contract unless a different date is stipulated. Statement II - The sharing of the gross returns does not of itself establish a partnership even if the persons sharing them have a joint or common interest in the property from which the returns are derived. a. Statement I is correct, and Statement II is incorrect. b. Statement I is incorrect, and Statement II is correct. c. Both Statements I and II are incorrect. d. Both Statements I and II are correct. 25. The following statements are correct except: a. A particular partnership for a fixed term or a particular undertaking which is continued after the expiration of the term or the attainment of the undertaking becomes a partnership at will. b. A man and a woman living together as husband and wife without the benefit of marriage may enter into a universal partnership. c. In a universal partnership of profits, property belonging to each partner at the time of the establishment of the partnership shall continue to pertain to each partner with only the usufruct passing on to the partnership