MIDTERM EXAM

SUBJECT CODE: BLAW 231 Date:

Description: Law on Business Organization Time:
QUESTIONS: SCORE:
TEST I MULTIPLE CHOICE. Select the best answer by writing the letter of
your choice.
. 1. A contract where two or more persons bind
themselves to contribute money, property or industry to a common 4%
fund with the intention of dividing the profits among themselves.
a. Voluntary association
b. Corporation
c. Partnership
d. Sole Proprietorship
2. A partnership formed for exercise of a
profession which is duly registered in an example of: 4%
a. Universal partnership of profits.
b. Universal partnership of all present property.
c. Particular Partnership
d. Partnership by stopped.
3. The partnership will bear the risk of the loss of
three of the following things. Which is the exception? 4%
a. Things contributed to be sold.
b. Fungible things or those that cannot be kept without deteriorating.
c. Things contributed so that only their use and fruit will be for the
common benefit.
d. Things brought and appraised in the inventory.
4. The change in the relation of the partners
caused by any ceasing to be associated in the carrying on the 4%
business is known as:
a. termination of partnership.
b. winding up of partnership affairs.
c, liquidation of the partnership business.
d. dissolution of the partnership.
5. A person admitted to all the rights of a limited
partner who has died or has assigned his interest in the partnership is
known as:
a. An ostensible partner
b. A liquidating partner 4%
c. A substituted limited partner
d. A general-limited partner.
6. If the assignee does not become the partner
referred to in the preceding number, his rights do not include:
A The receipts of the assignor’s share of the profits.
b. The receipt of the assignor’s other compensation by way of income. 4%
c. The return of the assignor’s contribution.
d. The inspection of the partnership books or account of the
partnership transactions.
7. Which of the following will not cause the
automatic dissolution of a general partnership?
a. Death of a partner
b. Insolvency of a partner. 4%
c. When the partnership business becomes unlawful
d. Insanity of a partner.
8. A person admitted as a partner into an existing
partnership shall be liable up to the extent of his separate assets for
what obligations?
a. Obligations of the partnership existing at the same time of his
admission only if there was a stipulation.
b. Obligations of the partnership incurred after his admission only if
there is a stipulation. 4%
c. Obligation of the partnership incurred before and after his
admission even there is no stipulation.
d. Obligations of the partnership incurred before his admission if there
is no stipulation, and those incurred after his admission even if there
was no stipulation.
9. Which of the following stipulations is valid?
a. A stipulation excluding a capitalist partner from profits. 4%
b. A stipulation exempting a capitalist partner from losses.
c. A stipulation exempting an industrial partner from losses.
d. A stipulation exempting an industrial t partner from profits.
10. One of the distinctions between a partnership
and a corporation is that a partnership:
a. May be formed by one person.
b. Is created by operation of law.
c. Acts through a board of directors. 4%
d. May exists for an indefinite period.
11. One of the following is not a characteristic of
contract of partnership.
a. Real, in that the partners must deliver their contributions in order for
the partnership contract to be perfected.
b. Principal, because it can stand by itself. 4%
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 in a common fund.
12. One of the following is not a requisite of a
contract of partnership. What is it? 4%
a. There must be a valid contract.
b. There must be s mutual contribution of money, property or industry
to a common fund.
c. It is established for the common benefits of the partners which are
to obtained profits and divide the same among themselves.
d. The articles are kept secret among the members.
13. In a limited partnership where there are 4
partners:
a. All the partners must be limited partners.
b. The number of limited partners must be equal to the number of
general partner, that is, 2:2. 4%
c. The number of limited partners must be greater than the number of
general partner, that is, 3:1.
d. It is enough that there is one limited partner, the rest may all be
general partners.
14. Their names are mentioned in the articles of
incorporation as originally forming the corporation and are signatories 4%
thereof.
a. Corporators.
b. Stockholders.
c. Incorporators.
d. Members.
15. A stock that is issued without consideration or
below par value or the issued price is known as:
a. watered stock.
b. delinquent stock.
c. redeemable stock. 4%
d. preferred stock.
16. The right of a stockholder to demand payment of
the fair value of his shares when he dissents from certain corporate 4%
acts is known as:
a. pre-emptive right.
b. appraisal right.
c. redemption right.
d. appreciation right.
 17. A non-voting stock may vote in the following
corporate acts, except in case of: 4%
a. approval of the compensation of directors.
b. merger of consolidation.
c. increase or decrease in capital stock.
d. sales, lease, exchange, mortgage, pledge or other disposition of all
or substantially all of corporate property.
18. One of the distinctions between a
partnership and a corporation is that a partnership: 4%
a. is managed by a board of directors.
b. is characterized by the principle of delectus personae.
c. has the right of succession.
d. may be dissolved only with the consent of the State.
19. Which of the following right is the subscriber
of shares not fully paid who is not delinquent not entitled to: 4%
a. Right to dividends.
b. Right to vote in stockholders’ meeting.
c. Right to a stock certificate.
d. Right to inspection of corporate books and records.
20.What may be the composition of the executive
committee of a corporation?
a. Directors.
b. Stockholders who are neither officers nor directors. 4%
c. Officers who are neither stockholders nor directors.
d. A combination of (a), (b) and (c).
21. Which shares may be issued with or without
par value? 4%
a. Common shares.
b. Preferred shares.
c. Both common and preferred shares.
d. Neither common nor preferred shares.
22. No-par shares may not be issued for a price
lower than 4%
a. stock exchange quotation price.
b. issued price.
c. market price.
d. fair market value.
23. Which of the following provisions in the
articles of incorporation may be amended? 4%
a. Name of corporation.
b. Number and name of incorporators.
c. Term of existence.
d. Primary purpose.
24. A stock corporation in general, is taxed in the
same manner as: 4%
a. general professional partnership.
b. non-general professional partnership.
c. sole proprietorship.
d. cooperative.
25. Shares that may be issued at a price lower
than P5.00 per share are: 4%
a. par value shares.
b. no-par value shares.
c. both (a) and (b).
d. neither (a) nor (b).
TOTAL SCORE 100 %