SOURCE: ReSA – THE REVIEW SCHOOL OF ACCOUNTANCY

1. What is an essential difference between a partnership and a corporation?

a. A partnership is created by voluntary agreement of the partners,
whereas a corporation is always created by some express legislative
authority either in the form of a special law or of a general law.
b. Stockholders are usually liable to the corporation's creditors not only to the
extent of their contribution but even with their own private property,
whereas the partners, after they have paid for their contributions, are not
subject to any further liability, unless otherwise provided by law.
c. The third person to whom a stockholder has transferred his interest does not
become a stockholder without the consent of all other stockholders,
whereas the third person to whom a partner has transferred his interest
becomes automatically a partner even without the consent of the other
partners.
d. The death or bankruptcy of a stockholder usually causes the dissolution of
the corporation, whereas the death or bankruptcy of a partner does not result
in such dissolution.

2. First Statement: As a general rule, the partners are the agents of the partnership;
hence, acts of the partners for the account of the partnership are binding not only on
the partnership but also on the partners.
Second Statement: Whatever acts the stockholders might execute for the
account of the corporation, either individually or collectively, are not binding on the
corporation.
a. Only the first statement is true.
b. Only the second statement is true.
c. Both statements are true.
d. None of the statements is true.

3. As to object, a partnership may be:

a. General or limited
b. Universal or particular
c. Capitalist or industrial
d. Managing or silent

4. It refers to a partnership which comprises all that the partners may acquire by their
industry or work during the existence of the partnership.
a. Universal partnership of profits
b. Particular partnership of profits
c. Partnership of all present property
d. Partnership of all present profits

5. It refers to partners who can be held liable for partnership obligations even to the
extent of their private property.
a. General
b. Limited
c. Capitalist
 d. Industrial
e.
6. It refers to partners who contribute only their skill or industry to the common fund.
a. Capitalist
b. Managing
c. Silent
d. Industrial
e.
7. It refers to partners who manage or administer partnership affairs.
a. Silent
b. Ostensible
c. Secret
d. Managing
e.
8. It refers to partners whose connection with the partnership is not known.
a. Secret
b. Ostensible
c. Managing
d. Silent
e.
9. It refers to partners who represent themselves, or consent to another or others
representing them to anyone as partners either in an existing partnership or in one
that is fictitious or apparent.
a. Partners by estoppel
b. Secret
c. Ostensible
d. Managing
e.
10. First Statement: If the partnership is general, it may be constituted in any
form, except where immovable property or real rights are contributed to the
common fund, in which case a public instrument, to which is attached an inventory of
said property, signed by any of the partners, shall be necessary for validity.

Second Statement: If the general partnership has a capital of P3,000 or

more, it must appear in a public instrument, which shall be recorded in the office
of the SEC. However, it is not necessary for its validity.

a. Only the first statement is true.

b. Only the second statement is true.
c. Both statements are true.
d. None of the statements is true.
e.
11. First Statement: If the partnership is limited, it is required that the contracting
parties, in addition to the formalities prescribed for the organization of a general
partnership, shall execute a certificate of limited partnership which must be recorded
in the office of the SEC.

Second Statement: The formalities for a limited partnership must be complied with,
otherwise, the partnership is not limited but general.
 a. Only the first statement is true.
b. Only the second statement is true.
c. Both statements are true.
d. None of the statements is true.
e.
12. If there is agreement only with respect to the profits, how shall the losses be
distributed?
a. Same proportion as their share in the capital
b. Same proportion as their share in the profits
c. Partners shall meet and determine the shares.
d. No loss shall be distributed.

13. If there is no agreement as to the distribution of profits and losses, how are the profits
distributed to the capitalist partner?
a. Just and equitable under the circumstances
b. No entitlement
c. Profits go to the reserve fund.
d. In proportion to what he may have contributed to the common fund

14. If there is no agreement as to the distribution of profits and losses, how shall the
losses be distributed to the industrial partner?
a. In proportion to what he may have contributed to the common fund
b. Just and equitable under the circumstances
c. No liability
d. Profits go to the reserve fund

15. What is the status of an agreement whereby one or more partners shall not share in
the profits and losses?
a. Void
b. Valid
c. Voidable
d. Unenforceable

16. When can an industrial partner engage in business for himself?

a. When the partnership expressly permits him to do so.
b. When the partnership impliedly permits him to do so.
c. When the industrial partner still has available time to engage in another
business.
d. When the industrial partner engages in another business with one of the
capitalist partners

17. Can a capitalist partner engage in a business similar to the kind of business in which
the partnership is engaged?
a. Yes, if he has extra available capital.
b. Yes, if he brings with him another capitalist partner.
c. No, unless there is a stipulation to the contrary.
d. Never, as the prohibition is absolute.
18. Jean and John are partners in a certain business, Jean being the managing partner.
Ruth owes Jean P50,000 and the partnership P100,000, and both credits are
demandable. Ruth pays Jean P30,000 and Jean issues a receipt in her name. How
much is Jean entitled to apply to her credit?
a. P10,000
b. P20,000
c. P30,000
d. Nothing

19. Jean and John are partners in a certain business, Jean being the managing partner.
Ruth owes Jean P50,000 and the partnership P100,000, and both credits are
demandable. Ruth pays Jean P30,000 and Jean issues a receipt in the partnership’s
name. How much should Jean apply to the partnership’s credit?
a. Nothing
b. P30,000
c. P20,000
d. P10,000

20. Jean and John are partners in a certain business, Jean being the managing partner.
Ruth owes Jean P50,000 (more onerous) and the partnership P100,000, and both
credits are demandable. Ruth pays Jean P30,000 and Jean issues a receipt in the
partnership’s name. How much should Jean apply to the partnership’s credit?
a. Nothing
b. P30,000
c. P20,000
d. P10,000

21. The management of the partnership may be vested (1) in the articles of the
partnership and/or (2) after the partnership had already been constituted.
a. 1 only
b. 2 only
c. Neither of 2
d. Either of 2

22. If there is no agreement on who will manage the partnership, it is vested in:
a. The partner with highest contribution
b. The partners with majority stake
c. All of the partners
d. The oldest partner

23. Ruth, Carlo, Maricel, and Dustin organized a general partnership, with Ruth and
Carlo as industrial partners and Maricel, who contributed P30,000 to the
common fund, and Dustin, who contributed P10,000 to the common fund as
capitalist partners. Ruth and Carlo were both appointed managing partners
without any specification of their respective duties. When the firm commenced
business operations, the 2 appointed Olive as accountant of the firm. A year later,
Ruth decided to dismiss Olive, but this was opposed by Carlo. How can the conflict
between Ruth and Carlo be resolved?
 a. Dustin and Maricel will decide.
b. Ruth and Carlo will decide.
c. Maricel will decide.
d. Ruth prevails.

24. Ruth, Carlo, Maricel, and Dustin organized a general partnership, with Ruth and
Carlo as industrial partners and Maricel, who contributed P30,000 to the common
fund, and Dustin, who contributed P10,000 to the common fund as capitalist partners.
Nobody was appointed managing partner. When the firm commenced business
operations, Ruth and Carlo appointed Olive as accountant of the firm. A year later,
Ruth decided to dismiss Olive, but this was opposed by Carlo. How can the conflict
between Ruth and Carlo be resolved in case of a tie?
a. Majority of the partners will decide.
b. Dustin and Maricel will decide.
c. Maricel will decide.
d. Ruth prevails.

25. Gem, Mondy and Maddie formed a general partnership with the following
contributions to the common fund: Gem, P20,000; Mondy, P40,000; Maddie,
P60,000. There was agreement on the division of profits and apportionment of losses
proportionate to their capital contributions. After some years of business operations,
the assets of the partnership dwindled to P30,000, so the partners agreed to stop
their business. The partnership is indebted to Sansa for a loan of P120,000. Under
the circumstances, how much can Sansa collect from the partners?
a. Gem, P15,000; Mondy, P30,000; Maddie, P45,000
b. Gem, P20,000; Mondy, P40,000; Maddie, P60,000
c. Gem, P30,000; Mondy, P30,000; Maddie, P30,000
d. Gem, P40,000; Mondy, P40,000; Maddie, P40,000

26. Rosh, Juju and Anna formed a partnership where Rosh’s participation is 40%; Juju,
40%; and Anna, 20%. Rosh and Juju would supply the entire capital. Anna would
contribute her management expertise and be manager for the first 5 years without
compensation. They also agreed that Anna shall not be liable for losses.
Unfortunately, the partnership became bankrupt. Who can remove Anna as
manager?
a. Rosh
b. Juju
c. None
d. The partner/s with controlling interest

27. Rosh, Juju and Anna formed a partnership where Rosh’s participation is 40%; Juju,
40%; and Anna, 20%. Rosh and Juju would supply the entire capital. Anna would
contribute her management expertise and be manager for the first 5 years without
compensation. They also agreed that Anna shall not be liable for losses.
Unfortunately, the partnership became bankrupt. What is the status of the agreement
exempting Anna from losses?
a. Valid
b. Void
 c. Voidable
d. Unenforceable

28. It refers to that moment when partnership affairs are wound up.
a. Winding up
b. Dissolution
c. Termination
d. Liquidation

29. When does the right of a partner to demand an accounting of the partnership
business be prescribed?
a. 4 years upon the dissolution of the partnership when the final
accounting is done.
b. 4 years upon the dissolution of the partnership before the final accounting is
done.
c. 5 years upon the dissolution of the partnership when the final accounting is
done.
d. 5 years upon the dissolution of the partnership before the final accounting is
done.
30. Distinguish between a general partner and a limited partner.
a. A. A general partner can be held personally liable for partnership
obligations after all of the assets of the partnership have been
exhausted, where a limited partner cannot be held liable.
b. B. A general partner may not participate in the management of the
partnership, whereas a limited partner may.
c. C. A general partner may contribute money or other property only to the
common fund, whereas a limited partner may contribute money, property, or
industry.
d. D. The name of a general partner may not appear in the firm name, whereas
that of a limited partner may.
31. First Statement: The interest of a limited partner is assignable.
Second Statement: An assignee of a limited partner has the right to become a
substituted limited partner if all the members consent thereto or if the assignor, being
thereunto empowered by the certificate of limited partnership, gives the assignee that
right.
a. Only the first statement is true.
b. Only the second statement is true.
c. Both statements are true.
d. None of the statements is true.
32. If the partnership is a general partnership, the order of payment is as follows, those
owing to:
(1) creditors other than partners,
(2) partners other than for capital and profits,
(3) partners in respect of capital, and
(4) partners in respect of profits.
a. 1, 2, 3, 4
b. 1, 2, 4, 3
c. 1, 3, 2, 4
 d. 1, 3, 4, 2

33. If the partnership is a limited partnership, the order of payment is as follows, those to:
(1) creditors, in the order of priority as provided by law, except those to limited
partners on account of their contributions, and to general partners,
(2) limited partners in respect to their share of the profits and other compensation by
way of income on their contributions,
(3) limited partners in respect to the capital of their contributions,
(4) general partners other than for capital and profits,
(5) general partners in respect to profits, and
(6) general partners in respect to capital.
a. 1, 2, 3, 4, 5, 6
b. 1, 2, 3, 4, 6, 5
c. 1, 2, 4, 3, 5, 6
d. 1, 2, 3, 5, 4, 6

34. Dissolution is caused when a specific thing, which had promised to contribute to the
partnership, perishes __.
a. Upon the delivery
b. Before the delivery
c. After the delivery
d. After the partnership acquires ownership thereof

35. On application by or for a partner, the court shall decree a dissolution whenever:
a. A partner becomes in any other way capable of performing his part of the
partnership contract.
b. A partner has been innocent of such conduct as it tends to prejudicially
affect the carrying on of the business.
c. A partner has been declared insane in any judicial proceeding or is
shown to be of unsound mind.
d. A partner unwillfully or persistently commits breach of the partnership
agreement, or otherwise conducts himself in matters relating to the
partnership business that it is not reasonably practicable to carry on the
business in partnership with him.

36. First Statement: The court can decree a dissolution if the business of the
partnership can only be carried on at a loss.
Second Statement: The court can decree a dissolution if the circumstances render a
dissolution equitable.
a. Only the first statement is true.
b. Only the second statement is true.
 c. Both statements are true.
d. None of the statements is true.

37. On the application of the purchaser of a partner’s interest, dissolution is caused

(1) at the termination of the specific term or particular undertaking, or
(2) at any time if the partnership was a partnership at will when the interest was
assigned or when the charging order was issued.
a. 1 only
b. 2 only
c. None of them
d. Both of them

38. The dissolution of the partnership terminates all authority of the managing partner or
of any partner, as the case may be, to act for the partnership, except
(1) acts necessary to wind up partnership affairs,
(2) acts necessary to complete transactions begun but not then finished, and
(3) acts or transactions which would bind the partnership if dissolution had not taken
place.
a. 1 and 2 only
b. 1 and 3 only
c. 2 and 3 only
d. All three

39. If the winding up or liquidation of partnership affairs is judicial, who has the right or
duty to wind up or liquidate partnership affairs?
a. Partner or legal representative or assignee designated by the partners
b. Partner or legal representative or assignee designated by the court
c. Managing partner
d. Notary public

40. When there is no managing partner, or even when there is, he dies, the right or duty
to wind up or liquidate partnership affairs devolves upon the
(1) partners who have not wrongfully dissolved the partnership, or
(2) legal representative of the last surviving partner, not insolvent.
a. 1 only
b. 2 only
c. Any of the two
d. None of the two
SOURCE: Questions and Answers in Partnership by Atty. Christopher R. Hernandez

1. A contract whereby 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 is a:
a. Partnership
b. Corporation
c. Sole Proprietorship
d. Joint Stock Company

2. A partnership is:
a. a contract
b. a business organization
c. both (a) and (b)
d. neither (a) nor (b)

3. A partnership is a consensual, principal and bilateral/multilateral contract. It is also

the following, except that it is not:
a. a preparatory contract
b. a nominate contract
c. an onerous contract
d. an aleatory contract

4. When, as a rule, does a partnership begin to exist?

a. On the date of the recording of the partnership agreement with the Securities
andExchange Commission.
b. Upon the execution of the partnership agreement by the partners.
c. On the date when all the capitalist partners have delivered their contributions to the
partnership.
d. On the date when the partnership agreement is acknowledged before a notary
public.

5. Which of the following is not an essential requisite of a partnership contract?

a. It must be established for the common benefit of the members which is to earn
profits and divide the profits among the members.
b. The articles are kept secret among the members.
c. There must be a mutual contribution of money, property or industry to a common
fund.
d. It must have a lawful object or purpose.

6. Who/which of the following may not be a partner in a partnership?

a. Natural Person
b. Partnership
c. Corporation
d. None of the foregoing
7. The doctrine of delectus personae/personarum refers to the right of a person to
choose:
a. The persons whom he wants to be associated in partnership.
b. The business in which he wishes to engage with another person or other persons.
c. Both (a) and (b)
d. Neither (a) nor (b)

8. The following may be contributed by a partner to a partnership, except:

a. Money
b. Tangible property such as a piece of land
c. Intellectual industry, such as that of a chemist, or manual industry such as that of a
mechanic.
d. Political connection or credit.

9. In which of the following cases is there a prima facie evidence that one is a partner in
a business?
a. His receipt of a share in the gross returns derived from a property where he has a
joint or common interest with another.
b. His receipt of a share of the profits realized from the use of property that he
co-owns with another.
c. His receipt of a share of the net profits of a business.
d. His receipt of share of the profits realized from the use of a property that he
co-possesses with another.

10. A voluntary association or society whose articles are kept secret among its members
and where any one of the members may transact in his own name possesses which
of the following characteristics?
a. It is governed by the rules on co-ownership.
b. It has a juridical personality.
c. The members are treated as partners.
d. It shall be governed by the provisions on partnership.

11. A, B, C, D, E, F, G, H, I and J are members of “Alpha Association '' whose articles

are kept among themselves and wherein any one of the members may transact in his
own name.
a. The association may sue under the name “Alpha Association”.
b. The association may be sued under the name “Alpha Association”
c. Both (a) and (b).
d. Neither (a) nor (b).

12. Three years ago, Benjamin and Bienvenido, brothers, inherited a five-floor
commercial building and the lot on which it was constructed, from Facundo, their
father, who died without a will. For the past three years, the brothers have divided
between the two of them the profit on the rental of the property. Are Benjamin and
Bienvenido partners?
a. Yes, because of their receipt of the profit from the use of the property.
b. No, they are merely co-owners of the whole property.
c. No, each one is a sole proprietor of one-half of the whole property.
 d. No, they are considered as stockholders of the whole property.

13. Sanchez and Suarez are both real estate brokers. The two have not entered into
any partnership agreement, but to save on costs, they share at the Avenue Twin
Towers the same office space on the front door of which is the signage “Sanchez and
Suarez, Real Estate Brokers”. They also use the same stationery showing the name
appearing on the signage and one telephone number, and share the services of the
same secretary. Sanchez,using the stationery, ordered a laptop computer
worth P100, 000.00 from Cyber Computers owned by Camarino, who
himself delivered the computer to the office.Camarino also issued a receipt
acknowledging the down payment of P40, 000.00 from“Sanchez and Suarez'' without
any objection from Suarez. Sanchez later failed to pay the balance of P60, 000.00.
Camarino now seeks to recover the amount of P60, 000.00 from both Sanchez and
Suarez as partners.

a.Only Sanchez can be held liable by Camarino since the purchase of the laptop
computer is the personal transaction of Sanchez.
b. Only Sanchez can be held liable by Camarino since Sanchez and Suarez did not
enter into any partnership.
c. Both Sanchez and Suarez can be held liable by Camarino since the two are
considered as partners in so far as Camarino is concerned.
d. Only “Sanchez and Suarez, Real Estate Brokers”, as a juridical entity is liable to
Camarino since an actual partnership exists.

14. Belinda purchased Cut-N-Curl, a beauty salon owned by Sophia, for P100, 000.00.
To Finance the acquisition of the business, Belinda obtained from Cristina a loan of
P60,000.00 (at 12% interest per annum) which the parties agreed would be paid by
Belinda in an amount equivalent to 20% of the monthly net profits of the salon until
the loan and the interest thereon are fully paid. Belinda then gave the P60, 000.00 to
Sophia as down payment, promising to pay the balance of P40, 000.00 at an amount
equivalent to 10% of the monthly net profits until it is fully paid.
a. Cristina is a partner of Belinda until Belinda has paid in full her loan obligation
ofP60, 000.00 and the interest thereon to Cristina.
b. Sophia is a partner of Belinda until Belinda has paid in full her balance of
P40,000.00 on the purchase price of the beauty salon.
c. Both Cristina and Sophia who receive a share of the net profits are the partners
ofBelinda until the latter has fully paid her obligations to them.
d. No partnership exists between Belinda, Cristina and Sophia whether before
or after the payment of Belinda’s obligations to Cristina and Sophia

15. Buds and Blossoms is a partnership engaged in the flower shop business which is
operated by friends Beatriz and Bethliz. The flower shop is located on a lot which
Beatriz and Bethliz leased from Oprah at 10% of the yearly gross revenues of the
business. Amalia was hired as an accountant at a monthly salary of P10, 000.00 plus
5% of the yearly net profits as bonus. Who are the partners in the business?
a. Beatriz and Bethliz only.
b. Beatriz, Bethliz and Oprah.
c. Beatriz, Bethliz and Amalia.
 d. Beatriz, Bethliz, Oprah and Amalia, since all of them receive a share in the net
Profits.
16. Olivia is the owner of a commercial space. She leased the premises to Teresa, a
dealer of motorcycles and bicycles using Trikes and Bikes as trade name. Their
contract provides that Teresa shall pay Olivia 10% of the net profits as rent. Teresa
has a loan obligation to Carmela amounting to P500, 000.00 which Teresa used in
expanding the business. The loan was not paid on due date, so Carmela now seeks
to recover the amount.
a. Carmela can go after the assets of Trikes and Bikes. If such assets are not
enough, Carmela can go after the separate assets not only of Teresa, but also those
of Olivia who is considered as Teresa’s partner by reason of Olivia’s receiving a
share of the profits.
b. Carmela can go after Teresa alone since the latter is a mere sole proprietor.
c. Carmela can go after Trikes and Bikes which is considered a partnership and the
only one liable.
d. Carmela can go after Teresa and Olivia as partners who will be liable jointly, but
not against Trikes and Bikes.

17. An unlawful partnership which constitutes a crime procedure. Which of the following
effects?
a. The partnership is void.
b. The proceeds of the crime and instruments or tools through which it was
committed shall be confiscated in favour of the government.
c. The partners will be criminally prosecuted.
d. All of the foregoing.

18. Where an immovable property or real rights are contributed to a

partnership, the partnership contract must be in a public instrument to
which shall be attached an inventory of the immovable property contributed and
signed by the parties. Failure to comply with the said requirements:
a. makes the partnership void
b. makes the partnership unenforceable
c. makes the partnership voidable
d. does not affect the acquisition by the partnership of a juridical personality

19. If the capital of the partnership is P3, 000.00 or more, in money or property, the
partnership must be a public instrument which must be recorded in the office of the
Securities and Exchange Commission. Failure to comply with such requirements:
a. makes the partnership void
b. makes the partnership voidable
c. makes the partnership rescissible
d. does not affect the acquisition by the partnership of a juridical personality

20. If the partnership intended to be formed is a limited partnership, a certificate must be

signed and sworn to by the partners, which certificate must be recorded in the office
of the Securities and Exchange Commission. Failure to comply with such
requirements:
a. makes the partnership void
 b. makes the partnership voidable
c. makes the partnership a general partnership
d. precludes the acquisition by the partnership of a juridical personality

21. Which of the following partnership agreements is required to be in a public instrument

and an inventory of the property contributed must be made, signed by the parties and
attached to the public instruments?
a. A general partnership where the capital amounts to P80, 000.00 consisting of
P30,000.00 cash and P50, 000.00 worth of computers.
b. A general partnership where the capital amounts to P150, 000.00 consisting
of cash of P100, 000.00 and a vacant lot worth P50, 000.00
c. A general partnership where the capital amounts to P1, 000, 000.00 in cash.
d. A general partnership where the capital amounts to P500, 000.00 in cash.

22. A partnership in which all the partners contribute all the properties which actually
belong to them to a common fund with the intention of dividing the same among
themselves, as well as the profits which they may acquire therewith.
a. Particular partnership
b. Universal partnership of all present property
c. Universal partnership of profits
d. General partnership

23. A and B formed a universal partnership of all present property. The partners agreed
that property acquired by each partner after the formation of the partnership shall
belong to the partnership. Which of the following does not belong to the partnership?
a. Agricultural lot inherited by A before the formation of the partnership.
b. Crops harvested from the agricultural lot during the first year of the partnership.
c. Fishpond donated to B during the first year of the partnership.
d. Fish harvested from the fishpond during the first year of the partnership.

24. A partnership that comprises all that the partners may acquire by their work or
industry during the existence of the partnership.
a. Industrial partnership
b. Particular partnership
c. Universal partnership of profits
d. Universal partnership of all present partnership

25. X and Y formed a universal partnership of profits. Which of the following properties
belong to the partnership?
a. Coconut plantation inherited by X before the formation of the partnership.
b. Salary received by Y as professor of a college in Manila during the first year
of the partnership.
c. Lotto prize won by X during the first year of the partnership.
d. Agricultural lot donated to Y during the first year of the partnership

26. What kind of universal partnership is entered into by the partners if there is no
specification as to its nature?
a. Universal partnership of all present property.
 b. Universal partnership of profits.
c. Either of the two at the option of the partners.
d. None, because the partnership is void since there is no meeting of minds among
the partners.

27. The following are disqualified to form a universal partnership, except:

a. Husband and wife.
b. Man and woman living together as husband and wife without the benefit of
marriage.
c. Brother and sister.
d. Those guilty of adultery or concubinage.

28. Which of the following partnership contracts is valid?

a. A partnership between a husband and wife for the exercise of a profession.
b. A universal partnership of all present property between a public officer and a
private individual.
c. A universal partnership of profits between a public official and a third person.
d. A universal partnership of all present property between a man and woman living
together as husband and wife without the benefit of marriage.

29. Hubert and Wendy formed a partnership. Two years after the formation of the
partnership,the two got married. The marriage between Hubert and Wendy dissolved
the partnership they earlier formed if it were:
a. A universal partnership
b. A particular partnership
c. Either (a) or (b)
d. Neither (a) nor (b) because their marriage has no bearing on the partnership they
had earlier formed

30. A partnership which has for its object determinate things, their use of fruits, or
specific undertaking, or the exercise of a profession.
a. Universal partnership of all present property.
b. Universal partnership of profits
c. Particular partnership
d. None of the foregoing

31. Which of the following is a particular partnership?

a. An auditing firm composed of Certified Public Accountants.
b. A partnership formed for the purpose of selling all the lots in a certain subdivision.
c. Both (a) and (b)
d. Neither (a) nor (b)

32. A partnership where all the partners are general partners who are liable to the extent
of their separate property.
a. General partnership
b. Limited partnership
c. Particular partnership
d. Universal partnership
33. If a partnership composed of six (6) partners is formed as a limited partnership:
a. All the partners must be limited partners.
b. Three must be limited partners and three (3) must be general partners.
c. Five must be limited partners while one (1) must be a general partner.
d. It is enough that there is at least one (1) limited partner and at least one (1)
general partner.

34. Which of the following statements is false?

a. A general partner may contribute money, property and/or services.
b. A limited partner may contribute money and/or property, but not services.
c. A partner may not be a general and limited partner at the same time.
d. A general partner may either be a capitalist or industrial partner.

35. Jessica and Sienna want to put up an internet café business. Jessica is an
expert in information technology and computers but has no funds or property to
invest. Sienna knows nothing about the internet and computers but she is willing to
contribute the funds and property needed. If Jessica and Sienna decide to enter into
a limited partnership, who between the two of them will be the limited partner?
a. Jessica only.
b. Sienna only.
c. Both Jessica and Sienna.
d. Neither Jessica nor Sienna; hence, they cannot enter into a limited partnership

36. A partner who is active and known to the public as a partner, such as by allowing
his name to be included in the firm name.
a. Nominal partner
b. Ostensible partner
c. Managing partner
d. Partner by estoppels

37. One who is not actually a partner but may become liable as such to third person
a. Ostensible partner
b. Nominal partner
c. Silent partner
d. Secret partner

38. One who has no voice or active part in the management of the business of the
partnership(though he shares in the profits and losses and may be known to the
public as a partner).
a. Dormant partner
b. Secret partner
c. Silent partner
d. Ostensible partner

39. One who does not participate in the management of the business of the partnership
and is not known to the public as partner.
a. Silent partner
 b. Secret partner
c. Dormant partner
d. Liquidation partner

40. A general partnership may, at the same time, be any of the following partnerships,
except:
a. Particular partnership
b. Limited partnership
c. Universal partnership
d. None of the foregoing

41. If a partnership is formed to exist for a period of five (5) years, such partnership, if its
business is continued upon the expiration of the five-year period:
a. Remains to be a partnership for a fixed term until another five (5) years.
b. Becomes a partnership at will.
c. Becomes a partnership for a particular undertaking.
d. Is deemed dissolved, notwithstanding the continuation of its business.

42. In which of the following instances is a partnership considered to be a partnership at

will?
a. One where the partners did not agree on a definite term or a specific undertaking.
b. One where the partners agreed on a definite term for the partnership, but the
business is continued by the partners after the expiration of such term.
c. One where the partners agreed on a specific undertaking, but the business
is continued after the attainment of such undertaking.
d. All of the foregoing.

43. The following are obligations of a partner who has promised to

contribute specific property to the partnership, except:
a. To deliver to the partnership at the time it was constituted or on the date stipulated
the property he has promised to contribute.
b. To take care of the property before its delivery to the partnership
with the diligence of a good father of a family.
c. To answer for eviction in case the partnership is deprived of the property he has
contributed.
d. To be liable for damages only after he fails to deliver the property upon
demand by the other partners.

44. Who of the following may engage in business even without the consent of the other
partners?
a. a capitalist partner if the business he will engage in is of the same line as the
partnership business.
b. A capitalist partner if the business he will engage in is of a kind different
from the partnership business.
c. An industrial partner if the business he will engage in is of the same line as the
partnership business.
d. An industrial partner if the business he will engage in is of a kind different from the
partnership business.
45. Herbert and Wanda are husband and wife. They intend to put up a coffee shop
business as partners. Based on the foregoing, which of the following statements is
incorrect?
a. Herbert and Wanda may validly put up a coffee shop business as partners.
b. Herbert and Wanda may adopt a firm name “Wanda’s Waffles and Coffee
Shop”which includes the name of only one of them
c. If the capital of the partnership is P400,000.00, Herbert and Wanda
must contribute equally the amount of P200,000.00, unless they agree otherwise.
d. Herbert shall be the manager, he being the husband and head of the family.

46. D owes X P4, 000.00. He also owes P6,000.00 to XYZ Company, a partnership of
whichX is the partner authorized to collect the credits of the partnership. Both debts
are due. Dgives X P4,000.00 informing X that the amount is in payment of his debt to
the latter.Accordingly, X issues his own receipt. To which credit will be the payment
applied?
a. To the credit of X.
b. To the credit of XYZ Company.
c. To the credit of X and that of XYZ Company proportionately at P1,600.00and
P2,400.00 respectively.
d. To the credit of X and that of XYZ Company equally at P2,000.00 each.

47. D owes X P4,000.00. He also owes P6,000.00 to XYZ Company, a partnership.

Both Debts are due. D gives X P4,000.00 informing X that the amount is in payment
of his debt to the latter. However, X issues a receipt of XYZ Company in partial
payment of its credit. To which credit will the payment be applied?
a. To the credit of X.
b. To the credit of XYZ Company.
c. To the credit of X and that of XYZ Company proportionately at P1,600.00
andP2,400.00 respectively.
d. To the credit of X and that of XYZ Company equally at P2,000.00 each.

48. D owes X, P4,000.00. He also owes P6,000.00 to XYZ Company, a

partnership composed of X, Y and Z, of which Z is the partner authorized to collect
the credits of the partnership. Both debts are due. D gives X P4, 000.00 informing X
that the amount is inpayment of his debt to the latter. Accordingly, X issues his own
receipt. To which credit will be payment be applied?
a. To the credit of X.
b. To the credit of XYZ Company.
c. To the credit of X and that of XYZ Company proportionately at P1,600.00
andP2,400.00 respectively.
d. To the credit of X and that of XYZ Company equally at P2,000.00 each.

49. Demetrio owned HOT Company, a partnership composed of partners Hornilla,

Ortalezaand Tanchangco, the sum of P6, 000.00. The partners agreed that each one
may collect individually his share of P2,000.00 of the credit from Demetrio. Hornilla
was able to collect his share of P2,000.00. When Ortaleza and Tanchangco were
demanding payment of their respective shares, Demetrio was already insolvent. In
this case:
 a. Hornilla must bring to the partnership the amount of P2,000.00
that he collected from Demetrio so that Ortaleza and Tanchangco may be able
to share in it.
b. Hornilla is not obliged to bring to the partnership the amount he
collected because the partners had an agreement that each one must each bear his
loss.
c. Ortaleza and Tanchangco must each bear his loss.
d. The amount collected by Hornilla shall be considered as an advance return of his
capital contribution by the partnership.

50. These statement are presented to you:

I. A newly-admitted partner shall be liable for partnership debts incurred before his
admission only if there was a stipulation to that effect.
II. A newly-admitted partner shall be liable for partnership debts incurred before his
admission even if there was no stipulation to that effect.
III. A newly-admitted partner shall be liable for partnership debts incurred after his
admission if there was a stipulation to that effect.
IV. A newly-admitted partner shall be liable for partnership debts incurred after his
admission even if there was no stipulation to that effect.

Which of the foregoing Statements are true?

a. I and II.
b. II and IV.
c. I and IV.
d. II and III.

51. Which loss of the following properties will be borne by the partner concerned?
a. Fungible things or those that cannot be kept without deteriorating.
b. Things brought and appraised in the inventory.
c. Things contribute to be sold.
d. Things only the use and fruits of which were contributed by a partner for the
common benefit.

52. FINE Company is a partnership composed of Felisa, Irmina, Nerissa and Eloisa. The
Partners have capital contributions of P10,000.00, P20,000.00, P30,000.00
andP40,000.00, respectively, and share in the profits in the ratio of 2:1:2:5. In 2008,
the partnership sustained a loss of P12,000.00. the share of each partner in the
losses shall be:
a. Equal for each partner at P3,000.00 since the partners do not have a loss sharing
agreement.
b. Felisa, P1, 200.00; Irmina, P2,400.00; Nerissa, P3,600.00; and Eloisa, P4,
800.00,based on their capital contributions of the partners.
c. based on their profit sharing ratio.
d. The partners need to have an agreement on the sharing of the loss before it can
be divided among the partners.

53. Which of the following stipulations is valid?

a. A stipulation excluding a capitalist partner from profits.
 b. A stipulation exempting a capitalist partner from losses.
c. A stipulation excluding an industrial partner from profits.
d. A stipulation exempting an industrial partner from losses.

54. STARBOX Enterprises, a partnership engaged in the trading of video films is

composed of the following partners with their capital contributions: Simon,
P20,000.00; Troy.P40,000.00; Ariel, P50,000.00; Roger, P60,000.00; Benny,
P80,000.00; Oscar,P300,000.00; and Xavier, P700,000.00. There was no
agreement among the partners as to who shall be the manager.
a. Xavier shall be the manager because he owns the controlling interest.
b. Oscar and Xavier will be the managers because the two of them
own the controlling interest.
c. All of the partners will be managers.
d. The partners will have to agree as to who shall be the manager.

55. These statements are presented to you:

I. A partner may associate another person with him in his share with or without the
consent of the other partners.
II. If the partner having an associate is the manager, the associate
automatically becomes a partner even without the consent of the other partners.

In your evaluation of the foregoing statements:

a. Both statements are true.
b. Both statements are false.
c. Only statement I is true.
d. Only statement II is true

56. The assignee of a partner’s interest is not entitled to any right, except the right to
a. Participate in the management of the partnership.
b. Require any information of partnership transaction.
c. Inspect partnership books.
d. Receive his assignor’s share of the profits.

57. The conveyance such as by assignment by a partner of his whole

interest in thepartnership produces the following effects, except:
a. The partnership still remains.
b. The assignee becomes a partner.
c. The assignee is entitled to receive the assignor-partner’s interest in the profits.
d. The assignee cannot participate in the management of the partnership.

58. These statements are presented to you:

I. A partner, being a co-owner of specific partnership property, has an equal right to
possess such property for other than the partnership purpose.
II. A partner’s right in specific partnership property is subject to legal support.

In your evaluation of the foregoing statements:

a. Both statements are true.
b. Only statement I is true.
 c. Only statement II is true.
d. Both statements are false.

59. These statements are presented to you:

I. A partner’s right in specific partnership property may be attached by his separate
creditors.
II. A partner’s right in specific partnership property may be assigned by him for his
separate debts.

In your evaluation of the foregoing statements:

a. Both statements are true.
b. Both statements are false.
c. Only statement I is true.
d. Only statement II is true

60. These statements are presented to you:

I. An industrial partner cannot be held liable by partnership creditors
after the partnership assets have been exhausted because the law exempts him
from sharing in the losses of the partnership.
II. A stipulation exempting a capitalist partner from liability to third persons shall be
valid among the partners, but void as to third persons.

In your evaluation of the foregoing statements:

a. Statement I is true; Statement II is false.
b. Statement I is false; Statement II is true.
c. Both statements are true.
d. Both statements are false.

61. Canuto, Ambrosio, Romualdo, and Egmidio are partners in CARE Company, whose
business is trading of herbal products. Canuto contributed P60,000.00,
Ambrosio,P30,000.00, Romualdo,P20,000.00 and Egmidio,P10,000.00. The partners
failed to agree on who shall manage the partnership.

a. Canuto shall be the manager because he owns the controlling interest.

b. Canuto and Ambrosio will be the managers because they own the controlling
interest and there should be at least two managers who can discuss and decide for
the partnership.
c. All the partners will be considered the managers or agents of the
partnership.
d. No one among the partners can manage the partnership because it is void when
the partners failed to designate the manager

62. Which of the following is an act that is not for apparently carrying n in the usual way
the business of the partnership?
a. Assigning the partnership property in trust for creditors or on the assignee’s
promise to pay the debts of the partnership.
b. Entering into a compromise concerning a partnership claim or liability.
c. Renouncing a claim of the partnership.
 d. All of the foregoing.

63. A parcel of land in the name of Comptech Company, a partnership engaged in the
sale and service of computers, was sold by A, one of the partners, in the name of
Comptech Company, without express authority, to X, who was not aware of A’s lack
of authority.
a. The conveyance by A to X passed the title to the parcel of land to X.
b. Comptech Company cannot recover the parcel of land from X.
c. Both (a) and (b) are incorrect.
d. The conveyance by A to X passed only the equitable interest in the property to X.

64. The following statements concerning notice and knowledge of a partner:

I. Notice to any partner.
II. Knowledge of a partner acting on a particular matter obtained by him while already
a partner.
III. Knowledge of a partner not acting on the particular matter obtained by him before
he became a partner.

Which of the above notice/knowledge is also notice to or knowledge of the

partnership?
a. I and II.
b. I and III.
c. II and III.
d. I, II and III.

65. DOW Enterprises is a partnership composed of Damortiz, Ortega, and Wenceslao.

Damortiz was driving the firm’s van beyond the speed limit to deliver some goods to
customers when it hit and damaged the car of Campos.
a. DOW Enterprises and the three partners may be held solidarily liable by
Campos for damages.
b. Only Damortiz may be held liable by Campos for damages because of the former’s
negligence for driving beyond the speed limit.
c. Only DOW Enterprises may be held liable by Campos because the damage was
sustained by Campos while Damortiz was performing an act in the course of
business.
d. Only DOW Enterprises and Damortiz may be held solidarily liable by Campos.

66. Which of the following is a partnership by estoppel?

a. When a person represents himself, or consents to another representing him to
anyone, as a partner in an existing partnership, and all the partners gave their
consent to such misrepresentation.
b. When a person represents himself, or consents to another representing him to
anyone, as a partner in an existing partnership, and not all the partners gave their
consent to such misrepresentation.
c. When a person represents himself as a partner in a non-existing partnership.
d. All of the foregoing.
67. A, B and C are partners in X Enterprises. They want to obtain a loan from Z, but Z
does not know any of them, so they asked D, who is known to Z, to represent himself
as a partner in X Enterprises. Z, believing that D is a partner in X enterprises, thus
grants the loan of P90,000.00 to X Enterprises. Later, however, X Enterprises is
unable to pay the loan as its assets amount only to P60,000.00. In payment of the
loan:

a. The assets of X Enterprises shall first be exhausted. Thereafter, A, B and C may

be held liable by Z from their separate assets at P10,000.00 each.
b. The assets of X Enterprises shall first be exhausted. Thereafter, A, B, C and
D may be held liable by Z from their separate assets at P7,500.00 each.
c. A, B, C and D shall share in the payment of P90,000.00 from their separate assets
at P22,500.00 each.
d. A, B and C shall share in the payment of P90,000.00 from their separate assets at
P30,000.00 each.

68. Which of the following statements is true?

a. Partnership creditors shall be preferred to those of each partner as regards
the partnership property regardless of the amounts of claims.
b. Partnership creditors shall be preferred to those of each partner as regards the
partnership property if the partnership debt is more than the amount of claims of the
separate creditors of the partners.
c. The separate creditors of a partner shall be preferred to those of partnership
creditors as regards the partnership property if the former obtained an order of
attachment and public sale of the share of the debtor partner.
d. The separate creditors of a partner shall be preferred to those of partnership
creditors as regards the partnership property if the former’s claims are more than the
amount of the claim of partnership creditors.

69. It refers to the change in the relation of the partners caused by a partner ceasing to
be associated in the carrying on the business.
a. Winding up
b. Liquidation
c. Termination
d. Dissolution

70. Which of the following losses of properties will not cause the dissolution of the
partnership?
a. Loss before delivery to the partnership of property wherein only the use of which
was contributed by the partner who owned it.
b. Loss after its delivery to the partnership of property only the use of which was
contributed by the partner who owned it.
c. Loss before its delivery to the partnership of property which a partner had
promised to contribute to the partnership.
d. Loss after its delivery to the partnership of property which a partner had
promised to contribute to the partnership.
71. Which of the following will not cause the automatic dissolution of a general
partnership?
a. Insolvency of the partnership
b. Insanity of a partner
c. Civil interdiction of a partner
d. Termination of the definite term of the partnership

72. Three of the following may be used as a ground for the filling of a petition by a
partner for the dissolution of a partnership by court decree, while one automatically
results in its automatic dissolution. Which one refers to the latter?
a. incapacity of a partner to perform his part of the partnership contract
b. partner’s conduct affects prejudicially the carrying on of the partnership business
c. the partnership business cannot be carried on except at a loss
d. insolvency of a partner

73. Who may file the petition for the dissolution of a partnership?
a. the partners themselves
b. the purchaser of a partners’ interest
c. either (a) or (b)
d. any person, whether or not he has an interest in the partnership.

74. In which of the following cases is a partner’s authority to act after dissolution
terminated among the partners although the acting partner had no notice of the
cause of dissolution?
a. When the partnership is dissolved by reason of the expiration of its term
b. When the partnership is dissolved because of the insolvency of a general partner
c. When the partnership is dissolved because of the death of a general partner
d. When the partnership is dissolved because of the resignation of a general partner

75. In which of the following cases is the partnership not bound by any act of a partner
after dissolution?
a. Where the partnership is dissolved because it is unlawful to carry on the business
b. Where the acting partner has become insolvent
c. Where the acting partner has no authority to wind up partnership affairs
d. All of the above

76. A partnership is dissolved by reason of the death of a partner. The dissolution of the
partnership was published in a newspaper of general circulation. PC, a previous
creditor, and NC, a new creditor, both transacted new business with the partnership
after dissolution, but neither of them read the publication of the firm’s dissolution nor
learned of it in some other way. Who is deemed to have knowledge of the dissolution
of the partnership?
a. PC only
b. NC only
c. Both PC and NC
d. Neither PC nor NC because neither one has come to learn of the dissolution of the
partnership
77. FORT Enterprises is a partnership engaged in the construction business with Flores,
Orlina, Rubio and Tallo as partners. Flores was appointed manager. On August 31,
2008, the five year term of the partnership expired thereby resulting in its automatic
dissolution. On September 5, 2008, Flores, without knowledge of the expiration of the
firm’s term, purchased on credit gravel and sand worth P50,000.00 from Palanza, a
creditor who had granted charge sales to FORT before August 31, 2008. Palanza
was not aware of the expiration of the term of the partnership.
a. The authority of Flores was not terminated among the partners and with respect to
Palanza
b. The authority of Flores was not terminated among the partners but terminated with
respect to Palanza
c. The authority of Flores was terminated among the partners and with respect to
Palanza
d. The authority of Flores was terminated among the partners but not with
respect to Palanza

78. A limited partner is liable as a general partner:

I. If he is also a general partner.
II. If he participates in the management of the partnership.
III. If he allows his surname to be included in the partnership name.

The statement is true with respect to:

a. I and II
b. I and III
c. II and III
d. I, II and III

79. Without the written consent or the ratification by all the limited partners, a general
partner or all the general partners, have no authority to perform any of the following
acts, except to:
a. Admit a person as a general partner.
b. Continue the business with partnership property on the death, retirement, insanity,
civil interdiction or insolvency of a general partner.
c. Admit a person as a limited partner.
d. Continue the business with partnership property on the death, retirement,
insanity, civil interdiction or insolvency of a limited partner.

80. Which of the following rights of a general partner is/are also the rights of a limited
partner?
a. Right to inspect and copy partnership books at a reasonable hour
b. Right to have on demand true and full information of all things affecting the
partnership
c. Right to have dissolution and winding up by decree of court
d. All of the foregoing

81. Which of the following rights is a limited partner entitled to?

a. Grant a loan to the partnership
b. Transact business with the partnership
 c. Either (a) or (b), or both (a) and (b)
d. Neither (a) nor (b) because a limited partner is prohibited from any business
dealing with the partnership except as regards the return of his contribution or the
payment of compensation to him by way of income

82. Who between a limited partner and a general partner may receive on account of
resulting claims against the partnership, with general creditors, a pro rata share of
the partnership assets?
a. Both limited partner and general partner
b. Limited partner only
c. General partner only
d. Neither general partner nor limited partner

83. Which of the following will not cause the automatic dissolution of a limited
partnership?
a. Insanity of a general partner
b. Civil interdiction of a limited partner
c. Death of a general partner
d. Insolvency of a general partner

84. If there are several limited partners, which of the following may be agreed upon by
the members of the partnership?
a. Priority of one or some of the limited partners over the other limited partners as to
the return of their contributions
b. Priority of one or some of the limited partners over the other limited partners as to
their compensation by way of income
c. Either (a) or (b), or both (a) and (b) or any other priority
d. None of the foregoing since any agreement as to any priority is void because the
limited partners must have equal rights and privileges.

85. These statements are presented to you:

I. As a rule, a limited partner is not a proper party to proceedings by or against a
partnership
II. A limited partner may, however, be a proper party if the object of the proceeding is
to enforce a limited partner’s right against the partnership or a limited partner’s
liability to the partnership.

In your evaluation of the foregoing statements:

a. Both statements are true
b. Both statements are false
c. Only Statement I is true
d. Only Statement II is true
SOURCE: PRTC- RFBT by Atty. Cesar Soriano (Partnership)

1. The following are characteristics of a contract of partnership, except:

a. Consensual
b. Unilateral
c. Onerous
d. Preparatory

2. Which of the following is false?

a. A partnership is generally perfected by mere consent.
b. When immovable property is contributed thereto a public instrument shall be
necessary.
c. If the capital is more than P3,000, the contract of partnership must be in a
public instrument and registered with the SEC.
d. If immovable property is contributed into the partnership but no
inventory was made the partnership remains valid among the partners
but not against third parties.

3. Which of the following is false?

a. Except for silent partnerships, persons who are not partners as to each
other are not partners as to third persons.
b. Co-ownership or co-possession does not of itself establish a partnership,
whether such-co-owners or co-possessors do or do not share any profits
made by the use of the property.
c. 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.
d. All of the above are true statements.

4. In a universal partnership of all present property, all of the following becomes

common property, except:
a. Properties which belong to the partners at the time of the constitution of the
partnership.
b. Any profits derive from properties belonging to each partner at the time of the
constitution of the partnership.
c. Any after-acquired property from a donation, legacy, inheritance
including the profits thereof.
d. All of the above are included in the partnership.

5. First statement: A husband and wife can enter into a general professional
partnership.
Second statement: A husband and his concubine can enter into a partnership for a
specific undertaking.
a. Both statements are correct
b. Both statements are incorrect
c. Only the first statement is correct
d. Only the second statement is incorrect
6. On June 15, 2018, A, B and C agreed to form a partnership where C promised to
contribute machinery to be delivered on June 30, 2018. C failed to deliver the said
machinery and B made a demand therefore on July 15, 2018. C was only able to
make the delivery on July 31, 2018. C would:
a. Not be liable for damages since he is not yet in delay.
b. Be liable for damages from June 30, 2018
c. Be liable for damages from July 15, 2018
d. Not be liable for damages since there was no judicial demand made

7. A, B, C and D contributed P25,000 each to the partnership. They agreed to divide

profits 1:1:2:2 and losses 2:2:1:1 The company earned P30,000 profit for the year.
How much would be the share of A?
a. P7,500
b. P10,000
c. P5,000
d. A share which is equitable

8. In relation to the preceding question, if the partnership suffered a loss of (P30,000),

how much is the share of B?
a. (P7,500)
b. (P10,000)
c. (P5,000)
d. A share which is equitable

9. Assuming there was no profit agreement, how much is the share of C?

a. P7,500
b. P10,000
c. P5,000
d. A share which is equitable

10. If the partnership suffered a loss of (P30,000) and there was no agreement as to
sharing of losses, how much is the share of D?
a. (P7,500)
b. (P10,000)
c. (P5,000)
d. A share which is equitable

11. First statement: A partner is deemed to be a co-owner of his co-partners of specific

partnership property.
Second statement: A partner’s right in specific partnership property is assignable
provided there is consent from the other partners.
a. Both statements are correct
b. Both statements are incorrect
c. Only the first statement is correct
d. Only the second statement is correct

12. First statement: A partner’s right in specific partnership property is not subject to
attachment or execution except on a claim against the partnership.
 Second statement: A partner’s right to specific partnership property can be subject to
legal support.
a. Both statements are correct
b. Both statements are incorrect
c. Only the first statement is correct
d. Only the second statement is correct

13. A partner’s share in the profits and surplus of the partnership is called:
a. Profit-share
b. Bonus
c. Interest
d. Dividend

14. A, B and C are partners of ABC Partnership, A conveyed his whole “interest” in the
partnership to X. As a result,
a. The partnership is deemed dissolved unless there is stipulation to the
contrary.
b. X becomes a partner
c. X is entitled to receive A’s share in the profits
d. There is no effect since the conveyance is void

15. X, Y and Z are partners of XYZ partnership where X is the managing partner. Which
of the following is correct?
a. If X was appointed in the Articles of Partnership, he can be removed for any
cause with the vote of the partners representing the controlling interest.
b. If X was appointed in the Articles of Partnership, he can be removed only with
just cause with a vote of the majority of the partners.
c. If X was appointed after the partnership has been constituted, he can be
removed only for just cause with the vote of the majority of the partners.
d. If X was appointed after the partnership has been constituted, he can be
removed even without just cause with a vote of the controlling interest.

16. The partners of the firm (and their respective interests in the capital) are: V (5%), W
(10%), X (15%), Y (30%), Z (40%).

V, W and Y were appointed as managing partners without specification as to their

duties. V wanted to purchase from a particular supplier to which Y opposed. Which of
the following is correct?
a. Y’s opposition would prevail since he has more interest than that of V.
b. Y’s opposition would prevail even if W agrees with V, since their combined
interest is still smaller than that of Y.
c. If W agrees with V, V’s decision would prevail, notwithstanding the fact
that the interest of Y is higher than that of theirs.
d. X and Z would have to intervene and vote also, to determine whose decision
will prevail.

17. A, B, C and D are partners of ABCD Partnership. They have agreed to exempt C, an
industrial partner from sharing on any losses including that from creditors after
 exhaustion of partnership assets. Total Assets of the partnership eventually dwindled
to P200,000 while the liabilities ballooned to P800,000. In this case, which of the
following is correct?
a. The P800,000 liabilities can be directly charged by the creditors to the
partners, including C.
b. The stipulation exempting C from liability is void.
c. If C is made to pay, he can seek reimbursement of whatever he paid
from the partners.
d. The creditors can only go after A, B and D.

SOURCE: PRTC- RFBT by Atty. Cesar Soriano (Corporation)

1. An ultra vires act is an act which is:

a. Considered illegal
b. Contrary to morals, public policy, good customs
c. Not within the express, implied or incidental powers of the corporation
d. All of the above

2. Mr. X invested his property in exchange for shares in ABC Corporation. Later on, the
same property was mortgaged as security for the loan of ABC Corporation from M
Bank. For failure to pay, the mortgage was foreclosed and proceeds was less than
the amount of the outstanding balance of the loan which M Bank sought from Mr. X
contending that the property was invested by him. Mr. X cannot be made liable under
which principle:
a. Corporate Entity Theory
b. Piercing the Veil of Corporate Entity
c. Limited Liability Principle
d. All of the above.

3. Rustan Corp., through Tantoco, its general manager and president, entered into a
contract of sale with Lluch Corp., which was later on stopped by Rustan Corp. Lluch
then sued for breach of contract against Rustan Corp and Tantoco. In this case,
a. Both Rustan Corp and Tantoco can be held liable.
b. Only Rustan Corp can be made liable
c. Only Tantoco can be made liable
d. None of the above.

4. Isabelo Calingasan, the employer of Alfredo Carillo, was held subsidiarily liable when
Carillo, driving the jeepney of Calingasan, ran over a child. Later on, Calingasan
transferred said jeep to Fely Transport Corporation, where the incorporators are
Calingasan, his wife, his son, Dr. Calingasan and his two daughters and the only
asset thereof was the same jeepney. In this case,
a. Fely Transport Corporation has sole liability since the jeepney was already
transferred to it.
b. Isabelo Calingasan can no longer be held liable since he no longer owns the
jeepney.
 c. Both Fely Transport Corporation and Isabelo Calingasan can be held
liable since the transfer was only made to escape liability.
d. All incorporators of Fely Transport Corporation can be made Liable.

5. Mr. X was invited by his friends to invest in XYZ Corp., a newly organized firm where
he was appointed president. He entered into a contract of sale with ABC Corp. to
purchase equipment, in accordance with the primary purpose of the corporation.
Later on, however, it was discovered that the Articles of Incorporation had not been
filed by his friends. He hurriedly attended to the matter and when the SEC issued the
Certificate of Registration, the corporation became bankrupt and Mr. X is now being
sued by ABC Corp. in his personal capacity. In this case,
a. Mr. X cannot be made liable since XYZ Corp. is considered a de facto
corporation which has a separate personality.
b. Mr. X cannot be made liable since the de facto status of the corporation has
not been attacked by the State.
c. Mr. X can be made liable up to his personal assets since he is the president
of XYZ Corporation which is a corporation by estoppel.
d. Mr. X can be made liable only up to his investment since he had no
knowledge that the corporation was not validly incorporated.

6. X Co. has P10M Authorized Capital Stock divided into: (1) 5M shares at P1.00 par
value; and (2) 1M no par value shares with issued value at P5.00. A acquired 1M of
the par value shares for P0.80. In this case,
a. There is no issuance of watered stocks
b. A and the directors of X Co. are solidarily liable for the P0.20 per share
difference.
c. Only A is liable for the P0.20 per share difference.
d. Only the directors of X Co. are liable for the P0.20 per share difference.

7. As a general rule, preferred shares do not give the holder the right to vote. However,
they shall have the right to vote on the following, except:
a. Amendment of the Articles of Incorporation
b. Adoption and amendment of the by-laws
c. Sale of all or substantially all of the inventories
d. Increase or decrease of capital stock

8. Which of the following is false with regards preferred shares?

a. Preferred share is a stock that gives the holder preference over the holder of
common stocks with respect to the payment of dividends and/or with respect
to distribution of capital upon liquidation.
b. A preferred share can be issued without a par value provided it is not
issued for less than P5.
c. The preference must be stated in the Articles of Incorporation and the
Certificate of Stock.
d. None of the above

9. Which of the following statements is false?

 a. The promotional stage undertaken by the organizers or promoters who bring
together persons interested in the business venture.
b. A promoter, although he may assume to act for and on behalf of a projected
corporation and not for himself, will be held personally liable on contracts
made by him for the benefit of a corporation he intends to organize.
c. The personal liability of promoters for contracts entered into on behalf
of the projected corporation ceases after the formation of the
corporation.
d. None of the above.

10. Which of the following is a false statement?

a. A bank cannot have insurance activities as its secondary purpose.
b. Educational corporations cannot include any other purpose which would
change or contradict its nature.
c. Stock brokers can have no other line of business not peculiar to them.
d. A group of CPAs can form a corporation for the purpose of practicing
their profession

11. Incorporators must not be less than 5 but not more than 15 and (choose the
exception):
a. Must be natural persons
b. Must be of legal age
c. Owns at least 1 share
d. Majority must be citizens of the Philippines

12. A, B, C, D and E is organizing a corporation whose Authorized Capital Stock is

P64,000. How much is the minimum paid-up capital requirement?
a. P4,000
b. P10,00
c. P5,000
d. P25,000

13. The following are qualifications of a Director under the Corporation Code, except:
a. They must own at least 1% share.
b. Majority must be residents of the Philippines.
c. They do not possess any of the disqualifications under the Corporation Code.
d. None of the above

14. A, B, C, D and E are directors of REALTY CORP., Z wanted to sell his property with a
fair market value of P100M for P90M. Z offered the property first to A, who acquired it
for P90M and eventually sold the same for P100M. In this case,
a. A can keep the profits provided the sale is ratified by the stockholders.
b. A can keep the profits because it was offered to him and not to REALTY
CORP.
c. The sale is not subject to ratification and A may be required to remit the
profits to REALTY CORP.
d. None of the above
 15. Any two or more corporate officer position may be held concurrently by the same
person, except in the following cases (choose which is not an exception):
a. President and Secretary
b. Treasurer and Secretary
c. President and Treasurer
d. None of the above

SOURCE: THE RFBT REVIEWER (2020 Edition) - by Atty. Reginald Laco, CPA,
Atty.Kenneth Manuel, CPA, and Atty. Nickolai Soriano, CPA

Partnership

1. Generally, a contract of partnership is:

a. A preparatory and a consensual contract
b. An aleatory and a consensual contract
c. A preparatory and a formal contract
d. An aleatory and a formal contract

2. A, B, and C formed ABC Partnership. They are also the major stockholders of ABC
Corporation. Which of the following statements is true?
a. ABC Partnership is a person separate and distinct from A, B, and C. This is
not true with ABC Corporation.
b. ABC Corporation is a person separate and distinct from A, B, and C. This is
not true with ABC Partnership.
c. ABC Corporation and ABC Partnership are considered as a person separate
and distinct from A, B, and C, but the law treats ABC Corporation and ABC
Partnership as one entity.
d. ABC Corporation and ABC Partnership are considered as a person
separate and distinct from A, B, and C. Further, the law treats ABC
Corporation and ABC Partnership as one entity.

3. As distinguished from a partnership, a joint venture:

a. Generally relates to a continuing business
b. Is usually limited to a single transaction
c. Does not allow corporations to become venturers
d. Operates with legal personality

4. As distinguished from a corporation, a partnership:

a. Is created by agreement of the parties and not by operation
b. Is created by operation of law and not agreement of the parties
c. Distributes its profits to those who contributed capital
d. Does not distribute its profits to those who contributed capital to the business

5. As distinguished from stockholders of a corporation, the partners of a partnership:

a. Have limited liability
b. Have unlimited liability
 c. Cannot generally exercise management of the partnership unless appointed
as managing partners
d. May transfer his interest without consent of the other partners

6. Statement 1: The partnership can exist even before the existence of a common fund.
Statement 2: In order to constitute a partnership, there must be an actual profit to be
divided.
a. Only Statement 1 is true.
b. Only Statement 2 is true.
c. Both statements are true.
d. Both statements are not true.

7. What is the primary purpose of establishing a partnership?

a. To contribute money, property, or industry
b. To establish a common fund
c. To obtain profits and divide the same among the parties
d. To conduct a business and practice a profession

8. Henry and Ian are the heirs of Gary. Gary passed onto both Henry and Tan an
undivided parcel of land measuring 500 square meters. Pending the settlement of the
estate, the parcel of land earned income amounting to P2,000,000, which Henry and
Ian split in half amongst themselves. Is there a partnership between Henry and lan?
a. Yes. Co-ownership is a form of partnership.
b. No. Co-ownership does not of itself establish a partnership.
c. Yes. The fact that there is sharing of profits is the hallmark of a partnership.
d. No. Such is not registered with the Securities and Exchange Commission.

9. In which of the following cases is receipt by a person of a share in the profits a prima
facie evidence that he is a partner?
a. Receipt as payment of debt by installment
b. Receipt as one of the managing professionals of a professional firm
c. Receipt by way of rent to a landlord
d. Receipt of wages of an employee

10. In a universal partnership of all profits, which of the following is contributed?

I. Ownership of all the property
II. All that may be acquired by the partners by their industry or work
III. Usufruct over the property of the partners

a. I and III only.

b. II only.
c. I and II only.
d. II and III only.

11. Bobby and Teddy entered into a universal partnership of all present property. After
the constitution of the partnership, Bobby inherited from her grandmother a parcel of
land amounting to P20,000,000. Subsequently, the parcel of land earned P2,500,000
after being inherited by Bobby. Which of the following is true?
 a. Bobby and Teddy may stipulate that the parcel of land and the income from
such property be included in the composition of the universal partnership.
b. Bobby and Teddy may stipulate that the parcel of land be included in the
composition of the universal partnership, but not the income from such.
c. Bobby and Teddy may stipulate that the income from the parcel of land
be included in the composition of the universal partnership, but not the
parcel of land itself.
d. Bobby and Teddy cannot stipulate that the parcel of land and the income from
such property be included in the composition universal partnership.

12. Jane, Karen, and Lucy formed a partnership for a fixed term of two (2) years. After
two years, Jane, Karen, and Lucy continued the partnership without any express
agreement. Which of the following statements is true?
a. Any contract that the partners may enter into after the two-year period is
unenforceable for being entered into with lack of authority.
b. Any contract that the partners may enter into after the two-year period is
voidable because of the defect in the consent of the partnership.
c. Any contract that the partners may enter into after the two-year period is void
since there is no more partnership to speak of.
d. Any contract that the partners may enter into after the two-year period is
valid since the continuation after the expiration of the term constitutes
renewal.

13. Which of the following partnership has complied with all the requisites for its lawful
establishment?
a. Partnership de facto
b. Partnership de jure
c. Open partnership
d. Universal partnership

14. It is a partner who does not take active part in the business of the partnership, but
may be known to be a partner by third persons
a. Secret partner
b. Silent partner
c. Dormant partner
d. Ostensible partner

15. When immovable property or real rights are contributed, the partnership contract:
contract:
a. May be entered into orally
b. Must be in writing
c. Must appear in a public instrument
d. Must appear in a public instrument with an affidavit of good faith

16. The partnership contract must appear in a public instrument where the capital is:
a. At least P3,000
b. More than P3,000
 c. At least P5,000
d. More than P5,000

17. Generally, a contract of partnership:

a. Can be entered into in any form
b. Is required to be in writing
c. Is required to be in a public instrument
d. Requires delivery of the money and property to be contributed for its
perfection

18. Failure to comply with the requirement for a partnership contract to appear in a public
instrument where the amount of capital is at least P3,000:
a. Will result to the invalidation of the contract of partnership
b. Will not affect the liability of the partnership and the partners with third
persons
c. Will not be able to produce any legal effect with respect to the contracts of the
partnership with third persons
d. Will make the managing partner liable for damages to the partners in good
faith

19. The managing partners may be appointed:

a. Only in the articles of partnership
b. Only after constitution of the partnership
c. Either in the articles of partnership or after constitution of the
partnership
d. In the articles of partnership and after constitution of the partnership

20. Severus, Albus, and Harry entered into a contract of partnership for the
establishment of a wizardry shop. The articles of partnership did not specify who the
managing partners are. Subsequent to the constitution of the partnership, Severus
was appointed by the partners as the managing partner. Subsequently, Harry wanted
to take over the management of the business. Albus agrees. Harry and Albus hold
the controlling interest in the partnership. Can Harry and Albus remove Severus as
the managing partner?
a. No. The facts do not show in any just or lawful cause
b. Yes. The partners may do so at any time for any cause
c. No. Severus has a vested right over the management of the partnership
d. Yes. The removal is subject to approval by the Securities and Exchange
Commission

Corporation

1. Statement 1: As a general rule, a corporation is entitled to moral damages

Statement 2: A corporation is entitled to the constitutional right against
self-incrimination
a. Only Statement 1 is true
b. Only Statement 2 is true
 c. Both statements are true
d. Both statements are not true

2. ABC Corporation borrowed P3,000,000 from DEF Bank. Mr. Benito is the
controlling stockholder, owning eighty percent (80%) of the outstanding capital
stock of ABC Corporation. DEF Bank seeks to collect the P3,000,000 debt of
ABC Corporation, but it discovered that the corporation has no more assets. DEF
Bank is now going after Mr. Benito to collect the debt. Is Mr. Benito liable to pay
the P3,000,000 debt of ABC Corporation?
a. No. Mr. Benito can only be held liable for P2,400,000, or 80% of
P3,000,000.
b. No. The liability of ABC Corporation is separate from the liability of
Mr. Benito.
c. Yes. Under the doctrine of piercing the veil of corporate fiction, Mr. Benito
is liable for the debts of the corporation.
d. Yes. Under the doctrine of unlimited liability, Mr. Benito’s personal assets
serve as security for the debts of the corporation.

3. A corporation:
a. Has a non-renewable term of existence of fifty (50) years
b. Has a term of existence of fifty (50) years, renewable three times
c. Has a term of existence of fifty (50) years, renewable for an indefinite
number of times
d. Has a perpetual existence unless its articles of incorporation provide
otherwise

4. The doctrine of piercing the the veil of corporate fiction applies when the
corporate fiction is being used to do the following, except:
a. Defeat
b. Pursue a business interest
c. Protect fraud
d. Justify wrong

5. Which of the following is not an advantage of forming a corporation as

distinguished from other forms of business ownership?
a. Continuity of existence
b. Limited liability
c. Low cost of formation
d. Ease in transferability of ownership interest

6. The shares of stock of a close corporation are held by:

a. Not more than 20 persons
b. At most 20 persons
c. Not more than 50 persons
d. At most 50 persons
7. In order to determine whether a corporation is a domestic or a foreign
corporation, the main point of query is:
a. The place of incorporation
b. The nationality of incorporators
c. The nationality of the controlling shareholders
d. The nationality of majority of the members of the Board of Directors

8. An eleemosynary corporation is:

a. A lay corporation created for the benefit of persons composing it
b. A lay corporation created for charitable purposes
c. An ecclesiastical corporation created for the benefit of persons composing
it
d. An ecclesiastical corporation created for charitable purposes

9. KL, M, and N wanted to form a corporation. They signed a "contract of

incorporation” whereby all five of them obligated themselves to contribute
P2,000,000 each as share capital of the proposed corporation. All of the persons
have contributed P2,000,000 each within a month from the signing of the
"contract of incorporation”. Is there a corporation?
a. Yes, from the time of the signing of incorporation
b. Yes, from the time that J, K, L, M, and N have all contributed P2,000,000
c. No, since there is no Certificate of Incorporation
d. No, since the facts did not show that the contract of incorporation was
entered into in a public instrument

10. The corporate existence of a corporation sole commences from:

a. Filing of the verified articles.
b. Issuance of Certificate of Incorporation
c. Initial contribution
d. First transaction

11. After verifying that their name is unique and allowed, the incorporators of OPQ
Corporation filed its Articles of Incorporation and Treasurer’s Affidavit with the
Securities and Exchange Commission. The Certificate of Incorporation was
issued. However, nine months had passed and OPQ Corporation did not submit
its Corporate By-Laws with the SEC. Numerous board resolutions have been
issued and corporate transactions have been entered into. What is the status of
the corporation?
a. An inexistent corporation
b. A de facto corporation
c. A de jure corporation
d. A corporation by estoppel

12. Statement 1: The existence of a de facto corporation can be attacked collaterally

Statement 2: The existence of a corporation by estoppel can be attacked directly
 a. Only Statement 1 is true.
b. Only Statement 2 is true.
c. Both statements are true.
d. Both statements are not true.

13. Statement 1: Once an incorporator ceases to be a shareholder, an amendment of

the Articles of Incorporation is necessary.
Statement 2: Not all shareholders are incorporators.
a. Only Statement 1 is true.
b. Only Statement 2 is true.
c. Both statements are true.
d. Both statements are not true.

14. Which among the following institutions are allowed to incorporate as a

one-person corporation?
a. Quasi-banks
b. Publicly-listed companies
c. Natural persons exercising their profession
d. Export enterprises

15. Statement 1: A foreign corporation cannot make donations to partisan political

activity
Statement 2: A domestic corporation can make donations to partisan political
activity
a. Only Statement 1 is true.
b. Only Statement 2 is true.
c. Both statements are true.
d. Both statements are not true.

16. Which of the following is not an express power of a corporation under the
Corporation Code?
a. To sue in its corporate name
b. To convey and sell real and personal property
c. To hire personnel
d. To amend its articles of incorporation

17. These are powers that attaches to a corporation at the moment of its creation
without regard to its expressed powers or particular primary purpose and may be
said to necessarily arise from its being a juridical person engaged in business
a. Inherent powers
b. Express powers
c. Implied powers
d. Collateral powers

18. In the Articles of Incorporation, Blackpink Corporation’s primary purpose is the

manufacture, distribution, and sale of hammers. Blackpink Corporation wants to
 enter into the business of rendering carpentry services. The Board of Directors of
Blackpink Corporation met, and they decided to venture into the carpentry
services industry. What is the status of contracts entered into by Blackpink
Corporation involving carpentry services?
a. The contracts are voidable since it is an ultra vires act.
b. The contracts are unenforceable since they were entered into without
authority.
c. The contracts are valid since they were authorized by the Board of
Directors.
d. The contracts are void for being outside the primary purpose of the
corporation.

19. All of the following are true statements regarding the qualifications of a
incorporator, except:
a. An incorporator may be any juridical person
b. A person eighteen (18) years of age may be an incorporator
c. An incorporator must own or subscribe to at least one (1) share
d. A person who is not a resident of the Philippines may not qualify as
an incorporator.

20. Corporations vested with public interest shall have independent directors
constituting:
a. At least 10% of such Board.
b. At least 20% of such Board.
c. At least 30% of such Board.
d. At least 40% of such Board.