PARTNERSHIPS & COOPERATIVES MCQs

PUP AY 2018-2019 SECOND SEMESTER

A. PARTNERSHIPS

1. What is the nature of the relationship between the partners?

a. there must be a valid contract and contribution of money, property or industry
to a common fund;
b. it is fiduciary, i.e. the parties must have trust and confidence in each other;
c. it must be organized for profit with the intention to divide the profits among
themselves;
d. its purpose must be lawful and must be established for the common benefit or
interest of the partners.
2. A partnership begins:
a. from the execution of a written contract;
b. from the payment or delivery of contribution;
c. from the moment of the execution of the contract;
d. from the approval of registration by the Securities and Exchange Commission.
3. Garry wanted to sell his house but it needed a repair. So Garry asked Henry,
a contractor, to repair the house and promised to give him (Henry) half of the
profit. However, Henry failed to fix Garry’s house. Garry then hired Barry to
repair the house and sold it at a profit. Can Henry ask for a share of the said profit?
a. Yes, because a partnership was created;
b. No, because there was no meeting of minds as to the period given to Henry
within which to repair the house;
c. No, because there was no consideration for Garry’s promise;
d. None of the above.
4. It is neither a business undertaking nor an exercise for profit but a joint pursuit thereof, for
mutual help, by two or more persons is considered by law a partnership:
a. de facto;
b. de jure;
c. professional;
d. secret;
5. A partnership, in contrast to a corporation, is:
a. created by law;
b. one wherein its members are generally not personally liable for its obligations;
c. one wherein death or insolvency of one of its members causes its dissolution;
d. one wherein an act of its member for its account is not binding to it.
6. Statement A: Partnership is a form of agency.
Statement B: A partner is both a principal and an agent.
a. only A is correct;
b. only B is correct;
c. both are correct;
d. both are wrong.
7. Delectus personarum is a principle applicable to partnership contracts and refers to:
a. the right to select other persons he can trust to become his partners;
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b. the privilege of forming a partnership;

c. the right to contribute anything of value;
d. the right of a partner to expect something in return from his contribution.
8. Affectio societatis means:
a. intention or desire to formulate an active union among persons who share the
same idea and commit themselves to achieving the purpose of the
partnership;
b. the object must be for profit and not merely for common enjoyment;
c. a partnership acquires a juridical personality separate and distinct from that of
each of the partners;
d. articles of partnership must not be kept secret.
9. One of the following instances creates a prima facie presumption that a person is a partner in
the business:
a. profits received as an annuity to a widow or representative of a deceased
partner;
b. payment of interest on a loan, which interest is dependent on the profits of the
partnership business;
c. rent received based on certain percentage of the monthly net profits of the
partnership business;
d. receipt of a share of the profits of a business;
e. profits received as consideration for the sale of goodwill or other property by
instalment.
10. Evidence of a partnership:
a. co-ownership or co-possession where co-owners or co-possessors
share profits made by the use of the property;
b. sharing of gross returns by persons who have a joint or common
interest in the property from which the returns were derived;
c. demand for periodic accounting;
d. receipt of salary based on the net profits of the business.
11. Grande Ltd., an insolvent partnership, entered into an agreement with its creditors, Mr.
Yangco and Mrs. Zerudo, wherein the business of the partnership should be continued under the
management of a businessman appointed by the creditors until all the partnership’s obligations,
including the additional interests imposed by the creditors, have been settled. Did Mr. Yangco
and Mrs. Zerudo enter into a contract of partnership?
a. Yes, there was joint effort to share in the profits;
b. No, the creditors were only interested to recover their credits;
c. Yes, the creditors impliedly contributed industry for profits;
d. No, the agreement of creditors with the partnership was a contract of agency.
12. A partnership may be established despite non-compliance
with the formalities required by law, except:
a. where personal property is contributed;
b. where the capital required is P3,000.00 or more, in cash;
c. where the parties intend to create a limited partnership;
d. where immovables or real rights are contributed.
13. Legal consequences of partnership being a juridical entity, except:
a. it can acquire and possess property of all kinds;
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b. it can be adjudged insolvent as long as the partners are all likewise insolvent;
c. it can bring actions;
d. it can incur liabilities.
14. What is the effect when an unlawful partnership is judicially dissolved?
a. the profits of the partnership shall be confiscated in favor of the State;
b. its profits and contribution shall be confiscated in favor of the State;
c. its personality is dissolved;
d. none of the above.
15. Mr. Smith and Mr. Cruz verbally agreed to form a partnership two years from now. Each
future partner will contribute P20,000.00. Upon arrival of the period to form a partnership, Mr.
Smith refused to carry the agreement, can Mr. Cruz enforce the agreement?
a. Yes, the contract of partnership is not covered by the statute of frauds;
b. Yes, the obligation of Mr. Smith is an obligation to give his contribution;
c. No, to compel Mr. Smith is an act of violence because his obligation is
one of to do;
d. No, because no partnership was constituted.
16. Which of the following is not a characteristic of a universal partnership of profits?
a. persons who are prohibited from giving each other any
donation or advantage cannot enter into this partnership;
b. the partners contribute to a common fund all the properties belonging
to them at the time of the constitution of the partnership;
c. one which comprises all that the partners may acquire by
their industry or work during the existence of the partnership;
d. properties owned at the time of the celebration of the contract are
retained by the partners but their usufruct passes to the
partnership.
17. Which of the following properties is not included in a universal partnership
of all present property with a stipulation that all properties subsequently
acquired shall belong to the partnership?
a. properties at the time of the constitution of the partnership;
b. land acquired by donation during the existence of the partnership;
c. fruits of the donated land described in letter (b);
d. commission received by the partners during the existence of
the partnership .
18. Persons prohibited to enter into universal partnership;
a. husband and wife;
b. parties guilty of adultery and concubinage in a civil action;
c. criminals convicted of adultery or concubinage and in consideration of the
same;
d. all of the above;
e. none of the above.
19. What contract is implied in a universal partnership?
a. contract of donation;
b. contract of usufruct;
c. contract of pledge;
c. contract of commodatum.
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20. A partnership that has for its objects determinate things, their use or fruits, or a specific
undertaking, or the exercise of a profession or vocation:
a. partnership at will;
b. partnership for a fixed term;
c. particular partnership;
d. ostensible partnership.
21. A partnership at will exists:
a. when there is no term, express or implied;
b. when it is continued by the habitual managers although the period has ended, or
the purpose has been accomplished;
c. when the partners agree to a specific undertaking;
d. all of the above;
e. a and b only.
22. When two or more persons attempt to create a partnership which failed to comply with the
legal formalities essential for juridical personality, and they represent themselves as partners to
strangers, it results to:
a. partnership by estoppel;
b. de facto partnership;
c. de jure partnership;
d. co-ownership.
23. A partner whose liability to third persons extends to his separate property:
a. capitalist;
b. industrial;
c. general;
d. limited.
24. A partner who is both a secret and silent partner:
a. ostensible;
b. dormant;
c. nominal;
d. liquidating.
25. Andok, Bebot and Coco formed a partnership that would engage in chicken business. Andok
already contributed his equipment appraised at P10 Million while Bebot and Coco would
contribute cash in the same amount. However, Bebot and Coco failed to give their contribution
within the stipulated time. What is the remedy of Andok?
a. action for rescission plus damages because of fundamental and substantial
breach of contract committed by Bebot and Coco;
b. action to collect contribution plus interest and damages because Bebot and
Coco are deemed debtors of the partnership;
c. action for annulment and damages due to fraud in the performance of
obligation;
d. action to declare the contract null and void because of lack of consideration.
26. Every partner who promises to contribute to the partnership:
a. becomes a creditor of the partnership;
b. becomes a debtor of the partnership;
c. is not liable for there is no partnership until delivery of the object that has been
promised;
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d. is liable only to the partnership for damages.

27. An obligation of an industrial partner:
a. not to engage in any other business for himself;
b. to contribute the money or property he promised to contribute;
c. to answer to the partnership for the fruits of the property the
contribution of which he delayed without any demand;
d. to indemnify the partnership for any damage caused to it by
the retention of promised contribution of money.
28. When may a partner be obliged to sell his interest to the other partners?
a. if an industrial partner refuses to contribute an additional capital due imminent
loss of the business of the partnership;
b. if a capitalist partner refuses to contribute an additional capital due imminent
loss of the partnership business;
c. if any partner refuses to contribute an additional capital due to imminent loss of
the business of the partnership;
d. none of the above.
29. What is the rule when a managing partner collects a demandable sum, which
was owed to him in his own name, from a person who owed the partnership
another sum also demandable and issues a receipt for his own credit only?
a. the sum collected shall be fully applied to the credit of the partner;
b. the sum collected shall be fully applied to the credit of the partnership;
c. the sum collected shall be applied to the two credits in proportion to
their amounts;
d. none of the above.
30. Milo is the managing partner of LMNO Partnership. Mr. Quasha owes Milo and LMNO
P100,000.00 and P50,000.00, respectively, which are already due and demandable. Mr. Quasha,
who only has P50,000.00, wants to pay LMNOP first because of its high interest rate. However,
Milo refuses to accept the payment if such will not be applied to the two credits in proportion to
their amounts. Is the demand of Milo proper?
a. Yes, both creditors have the right to be paid and the decision which loan to be
paid first belongs to the managing partner;
b. No, Mr. Quasha has the right of application of payment because the partnership
credit is more onerous;
c. Yes, the law allows a managing partner to apply the two credits in proportion to
their amounts;
d. No, Milo’s demand is an act prejudicial to the partnership’s interest.
31. Assuming that in preceding question there was only one debt of P100,000.00 and Milo was
able to collect P25,000.00 or ¼ of the of the debt. Milo’s three partners allowed him to retain the
P25,000.00 as his share in the partnership credit. Subsequently, however, Mr. Quasha became
insolvent and the balance of the debt was not collected by the partnership. Is Milo mandated to
share the P25,000.00 with the other partners?
a. Yes, equity demands that partners proportionately share in the benefits and
losses;
b. No, there is no more trust relations among the partners when Milo’s co-partners
allowed him to retain the P25,000.00;
c. No, the other partners are in estoppel;
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d. Yes, as managing partner, his duty is to render an accounting to the other

partners.
32. May a partner responsible to the partnership for damages incurred by it through his fault
compensate the damages with profits and benefits which he may earned for the partnership by
his industry?
a. No, every partner has a duty to secure benefits for the partnership and to
exercise diligence of a good father of a family;
b. No, compensation may only be availed by the partnership;
c. Yes, because they are reciprocally debtors and creditors of each other;
d. Yes, only if through the partner’s extraordinary efforts in other partnership
activities, unusual profits have been realized.
33. The partnership is responsible to every partner for the amounts he disbursed on behalf of the
partnership, including the corresponding interest from the time the expenses are made, and for
obligations contracted in good faith, but which of the following expenses the partnership is not
liable?
a. debts incurred by a partner to pay the operating expenses of the partnership;
b. money advanced by a partner to pay the tax liability of the partnership;
c. disbursement made by a partner in a partnership enterprise that failed;
d. advances made by a partner in excess of his authority.
34. How are losses distributed?
a. per agreement - if none, per profits - if none, per contribution;
b. per agreement which may include exclusion from share in the losses –
if none, per profits – if none, per contribution;
c. per articles of partnership – if none, per contribution;
d. none of the above.
35. Mr. Ang, Mr. Bero and Mr. Cruz formed ABC Partnership. Mr. Ang and Mr. Bero
contributed P10,000.00 each while Mr. Cruz is an industrial partner. ABC incurred contractual
liability of P32,000.00 in favor of Mr. Douglas. Assuming Mr. Douglas already collected the
contributions made by the partners, how much can he still recover from the partners?
a. none;
b. P4,000.00 each;
c. P6,000.00 each from Mr. Ang and Mr. Bero;
d. P11,000.00 each from Mr. Ang and Mr. Bero.
36. What is the effect when there is a stipulation exempting the industrial partners and some of
the capitalist partners from liability to third persons?
a. the stipulation is valid;
b. the stipulation is void;
c. the stipulation is only valid among the partners;
d. none of the above.
37. A partner who has been appointed manager in the articles of partnership may be removed by:
a. majority partners for any reason;
b. majority partners for a just cause;
c. partners with controlling financial interest for any ground;
d. partners with controlling financial interest for a just cause.
38. In case there are two or more partners intrusted with the management, when may the partners
with controlling financial interest intervene in the management?
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a. any time;
b. where one managing partners opposes the acts of the others;
c. where no decision of the majority managing partners can be had and there is tie;
d. controlling partners can not intervene in the management unless sought by the
managers.
39. A partnership formed between a member of a partnership and a third person for a division of
the profits coming to the former from the partnership business:
a. delectus personae;
b. sub-partnership;
c. association;
d. joint venture.
40. Which of the following rights of a partner is not generally available to him during the
existence of the partnership?
a. to demand from his co-partners true and full information of all
things affecting the partnership;
b. to have access to, inspect and copy, at any reasonable hour,
partnership books;
c. to ask for dissolution of the partnership;
d. to demand formal account of partnership affairs.
41. Every partner must account to the partnership for any benefit, and hold as trustee for it any
profits derived by him without the consent of the other partners. This obligation of a partner
pertains to transactions:
a. the partner is authorized by the other partners to enter into;
b. connected with the business of the partnership, whether authorized or not;
c. connected with the formation, conduct, or liquidation of the partnership or from
any use by him of its property;
d. of all partners, whether connected with the partnership business or not.
42. A characteristic of a partner’s right to specific partnership property:
a. a partner has inchoate right over such property;
b. it is subject to the existing obligations of the partnership;
c. a partner is a co-owner with his partners of specific property;
d. the partner’s right is based on mutual agency.
43. A partner’s interest in the partnership:
a. partnership’s property;
b. partner’s contribution;
c. partner’s share of the profits and surplus;
d. partnership’s net income.
44. Atong, Bana, and Kardo are partners of ABaKa & Associates. While acting within the scope
of the partnership’s business, Atong committed quasi-delict against Dario. Are the partners and
the partnership liable to Dario?
a. no, only Atong is liable for he alone committed the tort;
b. yes, all partners and the partnership are solidarily liable to Dario;
c. no, only the partnership is liable;
d. yes, the partnership is principally liable and the partners are
subsidiarily liable.
45. Nature of liability of partners to third persons for partnership contracts:
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a. it is joint and subsidiary;

b the partners are solidarily liable with the partnership;
c. the partners are jointly liable even before the exhaustion of partnership assets;
d. it is subsidiary only.
46. Nature of liability of the partners and the partnership to third persons for partner’s wrongful
act or omission or breach of trust:
a. it is joint and subsidiary;
b the partners are solidarily liable with the partnership;
c. the partners are jointly liable even before the exhaustion of
partnership assets;
d. it is joint only.
47. A partner’s act of administration:
a. lease of partnership property;
b. renunciation of a claim of the partnership;
c. compromise concerning a partnership claim or liability;
d. disposal of goodwill.
48. In what instance the act of a partner will not bind the partnership?
a. when, although for apparently carrying on in the usual way of business of the
partnership, the partner has no authority and the 3rd party is in good faith;
b. when the act of a partner is not for apparently carrying on in the usual way
and the partner has no authority;
c. when the other partners did not give authority but did not object;
d. none of the above.
49. Estoppel does not create a partnership as between the alleged partners, but who
is liable to third persons acting in good faith when a person is falsely represented as
a partner in an existing or apparent partnership?
a. partners by estoppel;
b. an existing partnership whose partners consented to the false representation;
c. partners who consented to such representation;
d. all of the above.
50. A person admitted as a partner into an existing partnership is liable for all the obligations of
the partnership arising before his admission and his liability extends to:
a. his separate properties;
b. his share in the partnership properties only;
c. his contribution only, if any;
d. none of the above.
51. It is a change in the relation of the partners caused by any partner ceasing to be associated in
the carrying on the business:
a. dissolution;
b. winding up;
c. termination;
d. all of the above.
52. Dissolution of a partnership in contravention of the agreement:
a. generally, by express will of any partner at any time;
b. by termination of the particular undertaking stated in the agreement;
c. by expulsion of any partner bona fide;
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d. by express will of any partner in good faith when no definite term is specified.
53. A partner who may not wind up the partnership affairs unless allowed by the court:
a. a partner designated in the articles of partnership;
b. a partner who has not wrongfully caused the dissolution of the partnership;
c. any partner, his legal representative or his assignee, upon cause shown;
d. the legal representative of the last surviving partner, not insolvent.
54. Where a partnership contract is rescinded on the ground of fraud, the injured partner has the
following rights, except:
a. to continue with the business of the partnership;
b. to have a lien, or retention of, the surplus of partnership property after
satisfying partnership liabilities for any sum of money paid or
contributed by him;
c. to be subrogated in place of partnership creditors after payment of
partnership liabilities;
d. to be indemnified against all debts and liabilities of the partnership.
55. The liabilities of the partnership shall rank in order of payment as follows:
a. owing to partners in respect of profits; owing to partners in respect of capital;
owing to partners other than capital and profits; and owing to third party
creditors;
b. owing to third party creditors; owing to partners other than capital and profits;
owing to partners in respect of profits; and owing to partners in respect
of capital;
c. owing to partners other than capital and profits; owing to third party creditors;
owing to partners in respect of profits; and owing to partners in respect
of capital;
d. owing to third party creditors; owing to partners other than capital and profits;
owing to partners in respect of capital; and owing to partners in respect of
profits.
56. Which of the following statement is correct regarding the formation of a limited partnership?
a. limited partners must sign and swear to a certificate or articles of partnership
and file for record the same with the SEC;
b. limited partners must contribute money, property or industry;
c. limited partners must participate in the management of the partnership;
d. a limited partner may use his surname in the firm name.
57. A limited partner, who is not a general partner, is prohibited from:
a. granting loans to the partnership;
b. transacting other business with the partnership;
c. receiving a pro rata share of the partnership assets with general creditors;
d. receiving or holding as collateral security any partnership property.
58. Liability of limited partner, except:
a. he is a debtor of the partnership for any unpaid contribution;
b. he is personally liable for partnership obligations;
c. he is a trustee of properties wrongfully paid or conveyed to him on account of
his contribution;
d. to give back to the partnership any contribution lawfully returned to him to
pay the creditors who extended credit before such return;
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59. A preferred limited partner:

a. is one who has the right to receive the return of his contribution even
though the partnership liabilities are in excess of its assets;
b. is one who has preference over other partners as to return of contribution
and compensation;
c. is one given preference over other limited partners as to return of
contribution and share of the profits;
d. is one who has the right to manage the partnership but his liability is
limited only to his contribution.
60. A substituted limited partner is a person who:
a. is an assignee of another’s limited partner’s interest in a partnership;
b. is admitted to all the rights of a limited partner who has died or has
assigned his interest in a partnership;
c. is stranger to the partnership but allowed by all the partners to take
over the rights and powers of a limited partner who retired from
from the partnership;
d. is empowered by the certificate to assign his right to another.
61. One of the limitations against a limited partner as a contributor:
a. he is prohibited from engaging in business for himself in competition
with that conducted by the partnership;
b. he may not transact business with the partnership;
c. he has no right to participate in the management and control of the business;
d. he has no right of action against whom the partnership has any
enforceable claim.

True or False:

a. There can be a future partnership which at the moment has no existence yet under the
law.
b. There is partnership even if the articles of an association or a society are kept secret
among the members and anyone of the latter may contract in his own name with third persons.
c. Carrying on a business of a continuing nature is not essential to constitute a
partnership.
d. Unlawful partnership is a voidable contract.
e. Partnership at will may be terminated at any time by the will of any partners.
f. A capitalist partner cannot engage, for his own account, any business operation which
is not the same or similar to that engaged in by the partnership.
g. A partner appointed as manager in the articles of partnership may execute all acts of
administration despite opposition of his co-partners even if he acted in bad faith.
h. The appointment of a managing partner in an instrument other than the articles of
partnership may be revoked any time with or without cause.
i. An industrial partner is exempted from partnership losses but he is liable to third
persons.
j. A partner may be excluded from any share in the profits or losses.
k. Lotto prizes won by a partner of a universal partnership of profits belong to the said
partnership.
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l. Usufruct of all properties owned by partners in a universal partnership of profits

belongs to partnership.
m. Generally, a partner has an equal right with his partners to possess specific property
for partnership purposes even without the consent of the other partners.
n. A conveyance by a partner of his whole interest in the partnership does not of itself
dissolve the partnership.
o. Every partnership shall operate under a firm name, which may or may not include the
name of one or more of the partners.
p. Partners may stipulate to exclude industrial partner from liability, after all the
partnership assets have been exhausted, arising from partnership contracts with third persons.
q. A person admitted as a partner into an existing partnership is liable for all the
obligations of the partnership arising before his admission as though he had been a partner when
such obligations were incurred.
r. The dissolution of a partnership discharges the existing liability of any partner;
s. One of the characteristics of a limited partnership is: one or more limited partners
contribute to the capital and share in the profits but do not participate in the management of the
business and are not personally liable for partnership obligations beyond their capital
contributions.
t. As a general rule, the surname of a limited partner may appear in the partnership name.
u. A person may be a general partner and limited partner in the same partnership at the
same time.
v. A limited partner, irrespective of the nature of his contribution, has only the right to
demand and receive cash in return for his contribution.
w. Limited partners are not principals in the transaction of a partnership, their liability is
to the partnership, not to the creditors of the partnership.
x. A partner as an agent of the other partners may validly perform an act of
administration even if such act is not in the usual way of business.
y. A partner may be both a capitalist and industrial partner.
z. No partner, including the managing partner, can perform acts of ownership without the
consent of all the partners.
aa. The juridical personality of the partnership is weak when compared with that of the
corporation.

B. COOPERATIVES:

1. A cooperative may be organized and registered for any or all of the following
purposes, except:
a. to encourage thrift and savings mobilization among the members;
b. to generate funds and extend credit to the members for productive and
provident purposes;
c. to acquire lands and provide housing benefits for the members;
d. to insure against losses of the members;
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e. to establish, own, lease or operate rural banks, wholesale and retail complexes,
insurance and agricultural/industrial processing enterprises, and public markets.
2. In general, the primary objective of every cooperative is:
a. to help improve the quality of life of its members;
b. to provide goods and services to its members;
c. to provide optimum social and economic benefits to its members;
d. to allow the lower income and less privileged groups to increase their
ownership in the wealth of the nation;
e. to cooperate with the government, other cooperatives and people-oriented
organizations.
3. Which of the following powers is not available to a registered cooperative?
a. power of succession;
b. power to amend its articles of cooperation and bylaws;
c. power to organize and operate schools;
d. power to sell treasury stocks;
e. power to form subsidiary cooperatives and join federations or unions.
4. Who may organize a primary cooperative?
a. 15 or more natural persons who are Filipino citizens, of legal age, having a
common bond of interest and are actually residing or working in the
intended area of operation and must have completed a Pre-Membership
Education Seminar (PMES);
b. at least 15 but not more than 30 natural persons, Filipinos, of legal age, with
PMES, having a common bond of interest and are actually residing or
working in the intended area of operation;
c. at least 5 but not more than 15 natural persons who are Filipino citizens, of
legal age, with PMES, having a common bond of interest and are actually
residing or working in the intended area of operation;
d. 15 or more natural persons, majority of whom must be Filipino citizens, of
legal age, having a common bond of interest and are actually residing or
working in the intended area of operation and must have completed a
PMES.
5. No cooperative shall be registered unless the articles of cooperation is accompanied with the
bonds of the accountable officers and a sworn statements of the treasurer elected by the
subscribers showing that at least twenty-five per centum (25%) of the authorized share capital
has been subscribed and at least twenty-five per centum (25%) of the total subscription has been
paid and that in no case shall the paid-up share capital be less than Fifteen thousand pesos
(P15,000.00), which is the exception:
a. multi-purpose cooperative;
b. cooperative union;
c. credit cooperative;
d. marketing cooperative;
e. advocacy cooperative.
6. A cooperative formed and organized under the law acquires juridical personality from
the date:
a. of filing the articles of cooperation and bylaws;
b. the Cooperative Development Authority issues a certificate of registration
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under its official seal;

c. the Authority approves the articles of cooperation and bylaws;
d. of organization of the cooperative.
7. Articles of Cooperation and By-laws may be amended by:
a. majority of all the members without prejudice to the right of the dissenting
members to exercise their right to withdraw their membership;
b. two-thirds (2/3) vote of all the members with voting rights, without prejudice to
the right of the dissenting members to exercise their right to withdraw
their membership;
c. two-thirds (2/3) vote of all the members;
d. three-fourths (3/4) vote of all the members with voting rights, without prejudice
to the right of the dissenting members to exercise their right to withdraw
their membership.
8. What is the status of contracts executed between private persons and cooperatives prior to the
registration of the cooperative?
a. valid and binding between the parties and upon registration of the cooperative;
b. inexistent for lack of personality to enter into a contract;
c. voidable for lack of capacity to enter into contracts;
d. unenforceable but may be ratified by a formal written contract adopted and
made in the cooperative's name or on its behalf after its registration.
9. A power of cooperatives the exercise of which requires a resolution approved by a vote of
three-fourths (3/4) of all the members with voting rights, present and constituting a quorum:
a. division of a cooperative;
b. merger;
c. consolidation;
d. all of the above.
10. A cooperative that promotes and undertakes savings and lending services among its
members. It generates a common pool of funds in order to provide financial assistance to its
members for productive and provident purposes:
a. credit;
b. consumers;
c. producers;
d. marketing.
11. A cooperative that engages in medical and dental care, hospitalization, transportation,
insurance, housing, labor, electric light and power, communication, professional and other
services:
a. service;
b. multipurpose;
c. advocacy;
d. agrarian reform.
12. A cooperative that is organized for the primary purpose of providing a wide range of
financial services to cooperatives and their members:
a. cooperative bank;
b. dairy cooperative;
c. education cooperative;
d. electric cooperative;
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13. A cooperative organized for the primary purpose of engaging in savings and credit services
and other financial services:
a. financial service;
b. fishermen;
c. health services;
d. housing.
14. A cooperative engaged in the business of insuring life and property of cooperatives and their
members:
a. transport;
b. insurance;
c. water service;
d. workers.
15. It is organized by registered cooperatives and federations at the appropriate levels to
represent the interest and welfare of all types of cooperatives at the provincial, city, regional, and
national levels, the purpose of which, among others, is to promote the knowledge of cooperative
principles and practices:
a. advocacy cooperative;
b. education cooperative;
c. cooperative union;
d. laboratory cooperative.
16. A cooperative principle where members contribute equitably to, and democratically control,
the capital of their cooperatives, and at least part of that capital is the common property of the
cooperative:
a. voluntary and open membership;
b. democrative member control;
c. member economic participation;
d. autonomy and independence;
e. education, training and information.
17. It is the highest policy-making body of the cooperative which exercises such powers as are
stated by law, in the articles of cooperation and in the bylaws of the cooperative:
a. general assembly;
b. board of directors;
c. executive committee;
d. representative assembly.
18. A quorum required for a general assembly meeting shall consist of:
a. at least twenty-five per centum (25%) of all the members entitled to vote;
b. five per centum (5%) of all the members entitled to vote;
c. one half (1/2) plus one (1) of the number of voting shares of all the members in
good standing;
d. at least twenty per centum (20%) of all the members entitled to vote.
19. Unless otherwise provided in the bylaws, the direction and management of the affairs of a
cooperative shall be vested in a board of directors which shall be composed of:
a. at least five (5) members elected by the general assembly for a term of two (20
years;
b. not less than five (5) nor more than fifteen (15) members elected by the general
assembly for a term of two (2) years;
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c. not less than five (5) nor more than fifteen (15) members elected by the general
assembly for a term of three (3) years;
d. not more than fifteen (15) members elected by the general assembly for a term
of three (3) years.
20. Cooperatives may derive their capital from the following sources, except:
a. member’s share capital;
b. loans and barrowings including deposits;
c. revolving capital which consists of the deferred payment of patronage refunds,
or interest on share capital;
d. subsidies, donations, legacies, grants, aids and such other assistance from any
local or foreign institution whether public or private;
e. none of the above.
21. A requirement before a member may transfer his shares or interest in the cooperative or any
part thereof:
a. he has held such share capital contribution or interest for not less than two (2)
year.
b. the assignment is made to the cooperative or to a member of the cooperative or
to a person who falls within the field of membership of the cooperative;
c. the board of directors does not oppose the assignment;
d. all of the above.
22. It refers to a unit of capital in a primary cooperative the par value of which may be fixed to
any figure not more than One thousand pesos (P1,000.00):
a. share;
b. common share;
c. preferred share;
d. capital stock.
23. A cooperative may invest its capital in any of the following, except:
a. in shares or debentures or securities of any other cooperative;
b. in any reputable bank in the locality, or any cooperative;
c. in securities issued or guaranteed by the Government;
d. in real state which may be used by the cooperative or its members.
24. Cooperatives are subject to:
a. financial audit;
b. performance audit;
c. social audit;
d. all of the above;
e. a and b only.
25. It is not to be construed as profit but as an excess of payments made by the members for the
loans borrowed, or the goods and services availed by them from the cooperative or the difference
of the rightful amount due to the members for their products sold or services rendered to the
cooperative including other inflows of assets resulting from its other operating activities and
which shall be deemed to have been returned to them if the same is distributed as prescribed:
a. share capital;
b. net surplus;
c. net income;
d. retained earnings.
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26. A fund used for the stability of the cooperative and to meet net losses in its operations. It
shall not be utilized for investment, other than those allowed under the law, and shall not be
distributed among the members upon dissolution of the cooperative:
a. education and training fund;
b. community development fund;
c. reserve fund;
d. optional fund.
27. The CDA may suspend or revoke, after due notice and hearing, the certificate of registration
of a cooperative on this ground:
a. having obtained its registration by fraud or existing for an illegal purpose;
b. willful violation, despite notice by CDA, of the provisions of the Cooperative
Code or its bylaws;
c. willful failure to operate on a cooperative basis;
d. failure to meet the required minimum number of members in the cooperative.
e. all of the above.
28. In this case, failure of the cooperative to promptly provide justifiable cause upon notice shall
warrant the CDA to delete its name from the roster of registered cooperatives and it shall be
deemed dissolved:
a. if a cooperative has not commenced business and its operation within two (2)
years after the issuance of its certificate of registration;
b. if a cooperative has not carried on its business for two (2) consecutive years;
c. if a cooperative has not filed its bylaws;
d. all of the above;
e. a and b only.

True or false:

a. A member shall be liable for the debts of the cooperative to the extent of his contribution
to the share capital of the cooperative.
b. A member of a cooperative may, for any reason, withdraw his membership from the
cooperative by giving a sixty (60) day notice to the board of directors.
c. As a matter of absolute right, the withdrawing member shall be entitled to a refund of his
share capital contribution and all other interests in the cooperative;
d. The death or insanity of a member in a primary cooperative, and the insolvency or
dissolution of a member in a secondary or tertiary cooperative may be considered valid
grounds for termination of membership.
e. Membership in the cooperative may be terminated by a vote of the majority of all the
members of the board of directors for any cause.
f. Each member of a primary cooperative shall have only one (1) vote. In the case of
members of secondary or tertiary cooperatives, they shall have one (1) basic vote and as
many incentive votes as provided for in the bylaws but not exceed five (5) votes. The
votes cast by the delegates shall be deemed as votes cast by the members thereof.
g. Voting by proxy if provided by bylaws is only allowed to a cooperative other than a
primary.
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h. The members of the board of directors may hold any other position directly involved in
the day to day operation and management of the cooperative.
i. Subject to the provision of any law to the contrary, a cooperative shall have primary lien
upon the capital, deposits or interest of a member for any debt due to the cooperative
from such a member.
j. Cooperatives transacting business with both members and non-members shall not be
subjected to tax on their transactions with members.
k. Transactions of members with the cooperative shall not be subject to any taxes and fees,
including not limited to final taxes on members' deposits and documentary tax.
l. Cooperatives dealing with non-members with accumulated reserves and undivided net
savings of not more than Ten million pesos (P10,000,000.00) shall be exempt from all
national, city, provincial, municipal or barangay taxes of whatever name and nature.
m. All cooperatives, regardless of the amount of accumulated reserves and undivided net
savings shall be exempt from payment of local taxes and taxes on transactions with banks
and insurance companies.
n. Capital coming from subsides, donations, legacies, grants, aids and other assistance shall
be divided into individual share capital holdings at any time and may form part of the
donated capital or fund of the cooperative.
o. Upon dissolution, such donated capital shall be subject to escheat.
p. No member of primary cooperative other than cooperative itself shall own or hold more
than ten per centum (10%) of the share capital of the cooperative.
q. The general assembly of any cooperative may authorize the board of directors to raise a
revolving capital to strengthen its capital structure by deferring the payment of patronage
refunds and interest on share capital or by the authorized deduction of a percentage from
the proceeds of products sold or services rendered, or per unit of product or services
handled.
r. The auditor is not liable to any person in an action for defamation based on any act, done,
or any statement made by him in good faith in connection with any matter he is
authorized or required to do.