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Midterm Examination

Law on Business Organization


Atty. Yaye Domocmat Lares
Name:___________________________
Year&Course:_____________________
I.

Date:___________________________
Score:__________________________

True or False. Write True if the statement is correct. Write False if the statement is incorrect.

______1. A corporation can enter into a partnership but cannot enter joint venture agreements.
______2. The Contract of Partnership can be entered only by TWO persons.
______3.An industrial partner can never be a limited partner but can be a general partner.
______4. Industrial partner contributes money and property in the partnership.
______5. Limited partner contributes money or property.
______6. The partners intend to divide the profits among themselves in a contract of partnership.
______7. Partnership has a juridical personality separate and distinct from that of each of the partners, even in
case of failure to comply with the requirements of Article 1772, first paragraph.
______8. A partnership cannot be dissolved by a judicial decree when the object or purpose is unlawful.
______9. Public instrument is necessary when immovable property or real rights are contributed in a
partnership.
______10. A contract of partnership having a capital of P3,000.00 or more need not appear in a public
instrument.
______11. A contract of partnership is void whenever immovable property is contributed thereto, if an inventory
of said property is not made, signed by the parties, and attached to the public instrument.
______12. Spouses can enter into a limited partnership or be members thereof.
______13. Each partner has the duty to contribute money, property or industry in the partnership.
______14. An industrial partner cannot engage in any kind of business for himself, unless the partnership
expressly permits him to do so.
______15. The capitalist partners cannot engage for their own account in any operation which is of the kind of
business in which the partnership is engaged, unless there is a stipulation to the contrary.
______16. A partner cannot be debtor to the partnership.
______17. A partner is not a co-owner with his partners of specific partnership property.
______18. A partner has no interest in the partnerships profits and surplus.
______19. Winding up of a partnership is the change in the relation of the partners caused by any partner
ceasing to be associated in the carrying on as distinguished from the dissolution of partnership.
______20. Partnership is terminated when it is dissolved.
II. Enumeration.
1-5. Give at least five (5) causes of dissolution of a partnership.
6-10. Requisites of a contract of partnership.
III. Multiple Choice Question. Encircle the letter of the correct answer.
1.

Which of the following governs the contract of partnership?

a)
b)
c)
d)

Civil Code of the Philippines


Batas Pambansa Blg. 68
Partnership Act
Commercial law of the Philippines

2. It is one of the classification of partnership in which the term of its existence has been agreed upon
EXPRESSLY or IMPLIEDLY.
a)
b)
c)
d)

Partnership for a fixed term


Partnership for a particular undertaking
Partnership at will
NOTA

3. It is a partnership formed by two or more persons having as members one or more general partners and one or
more limited partners.

a)
b)
c)
d)

General partnership
Limited partnership
Universal partnership
Definite partnership

4. What can be contributed in a limited partnership?


a)
b)
c)
d)

Money, property and industry


Money and property
Services
Property alone

5. It comprises all that the partners may acquire by their industry or work during the existence of the
partnership.
a)
b)
c)
d)

Universal partnership of all present property


Universal partnership of profits
Universal partnership
Limited partnership

6. It comprises all the property which belonged to each of the partners at the time of the constitution of the
partnership, becomes the common property of all the partners, as well as all the profits which they may acquire
therewith.
a)
b)
c)
d)

Universal partnership of all present property


Universal partnership of profits
Universal partnership
Limited partnership

7. 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 exempting an industrial partner from losses.
d. A stipulation excluding an industrial partner from profits.
8. The change in the relation of partners caused by any ceasing to be associated in the carrying on
the business is known as:
a. Termination of the partnership
b. Winding up of partnership affairs
c. Liquidation of the partnership business
d. Dissolution of the partnership
9. Which of the following will not cause the automatic dissolution of a limited partnership?
a. Death of a general partner
b. Death of a limited partner
c. Insolvency of a general partner
d. Insanity of a general partner
10. A limited partner shall be liable as a general partner in three of the following cases. Which one is the
exception?
a. When he is a general-limited partner as stated in the certificate.
b. When he takes part in the control of the business.
c. When he participates in the management of the business.
d. When his surname which appears in the partnership name is also the surname of a general partner.

11. The partnership will bear the risk of the loss of three of the following things. Which is the exception?
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 fruits will be for the common benefit.
d. Things brought and appraised in the inventory.
12. 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
13. One of the following is not a requisite of a contract of partnership. Which is it?
a. There must be 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 are kept secret among the members.

14. 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
d. May exist for an indefinite period
15. Which of the following will not cause the automatic dissolution of a general partnership?
a. Death of a partner
b. Insolvency of a partner
c. When the partnership business becomes unlawful
d. Insanity of a partner
16. In a limited partnership where there are four (4) partners:
a. All the partners must be limited partners.
b. The number of 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.