AMA EDUCATION SYSTEM

ACLC College
Tacloban City

ACCOUNTANCY & BUSINESS DEPARTMENT

1ST Semester SY 2019-2020

LAW ON BUSINESS ORGANIZATION-PARTNERSHIP

Name: ______________________Course & Year Level: _______Date:______________

Part I: Multiple Choices.

Direction: Encircle the correct answer. Strictly no erasure allowed.

1. 1. In general, to show the existence of a partnership, three of the

following characteristics must be proved. Which is the exception?
a. There was an agreement in writing.
b. There was a common or joint fund obtained from contributions.
c. There was a joint interest in the profits.
d. There was an intention to create a partnership.
2. On February 14, 2016, a partnership was entered into between Steve and
Joshua to operate a fishpond. Neither partner contributed a fishpond or
a real right to any fishpond. Their contributions were limited to the
sum of P10,000 each. The partnership contract was in a public
instrument, but an inventory of the fishpond to be operated was not
attached to said instrument.
a. The contract is valid only if the inventory of the fishpond was made
and attached to public instrument.
b. The contract is valid despite the lack of inventory because the
purpose of the partnership was not to engage in a fishpond business
but to operate a fishpond.
c. The contract of partnership is void because there is no inventory of
the fishpond and attached to public instrument.
d. The contract is void because the requisites of the law for perfection
of contract is not complied with.
3. X, Y and Z are partners in XYZ & Co. to which W is indebted in the
amount of P600,000. X, Y and Z agreed that they will just divide equally
the partnership credit if P600,000. X and Y were able to collect
P200,000 each from W, but when Z was collecting W had already become
insolvent.
a. X and Y will just be allowed to retain what they had collected.
b. X and Y will share with Z the P400,000 already collected.
c. X and Y will return to the partnership capital the P400,000.
d. To equalize the situation Z will be allowed to withdraw P100,000 from
the partnership funds.
4. Which of the following is not correct about partners’ right over
specific partnership property?
a. A partner is co-owner with his partners of specific partnership
property.
b. A partners right in specific partnership property is not assignable.
c. A partners right in specific partnership property is not subject to
legal support.
d. A partners right in specific partnership property is not subject to
attachment or execution even on a claim against the partnership
5. General partner shall have all the rights and powers and be subject to
all the restrictions and liabilities of a partner in a partnership
without limited partners. However, without the written consent or
ratification of the specific act by all the limited partners, a general

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Rey S. Perosa, CPA

 partner or all of the general partners have no authority to act on the
following, except:
a. Confess a judgment against the partnership.
b. Do any act which would make it possible to carry on the ordinary
business of the partnership.
c. Do any act in contravention of the certificate.
d. Admit a person as a general partner

6. Which one of the following is not a requisite prescribed by law in order

that a partnership may be held liable to a third party for the acts of
one of its partners?
a. The partner must have the authority to bind the partnership.
b. The partner must have the authority to bind the partnership.
c. The partner must act on behalf of the partnership.
d. The partner binds the partnership by acquiescence for obligations he
may have contracted in good faith.
7. X, Y, Z are partners where X was appointed manager with authority to
collect. D is indebted to XYZ Partnership in the amount of P100,000
which is already due and demandable and is also indebted to X personally
and likewise due and demandable in the amount of P50,000. X collected
from D P45,000. Which of these is not a correct statement?
a. If X gave a receipt in the name of the partnership he has to give the
P45,000 to XYZ partnership.
b. If Xs credit to D carries an interest of 18% and XYZ partnerships
credit to D has an interest of 14% only, when X collects from D
P45,000 and gives a receipt in his own name he also has to share the
collection with the partnership in proportion.
c. None of the answers are correct.
d. If X gave a receipt in his own name, he is bound to give XYZ
Partnership a proportionate which is P30,000.
8. The following are the effects of unlawful partnership except:
a. Partners forfeit their capital whether or not it becomes an
instrument or effect of the crime.
b. Unlawful partnership has no legal personality.
c. Partners forfeit their share in the profit.
d. Judicial decree is no longer required.

9. A general professional partnership must

a. pay corporate income tax.
b. provide for apportionment of liability for partnership debts.
c. have written articles of partnership.
d. have two or more partners.
10. Which of the following statement is correct concerning the
similarities between a limited partnership and a corporation?
a. Each is created under the statute and must file a copy of its
certificate with the SEC.
b. Both are allowed statutorily to have a perpetual existence.
c. Both are allowed statutorily to have a perpetual existence.
d. Both are allowed to have juridical existence by the consent of all
the members.

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Rey S. Perosa, CPA

 Part II. True or False

Direction: Write T if the statement is True, F if the statement is

False. Write your answer beside each item.

1. An artificial being like corporation, may be a partner in a

partnership.
2. A partnership has a personality separate and distinct from each of
the partners.
3. A partnership begins from the moment of the execution of the
contract, unless different date is stipulated.
4. A partnership whose capital or property amounts to P3,000 or more
does not acquire juridical personality if the contract is not recorded
with SEC.
5. In partnership, a limited partner can contribute money, property, or
industry without affected his liability to third person.
6. In general partnership, there should be at least general partner.
T 7. In limited partnership, to make it valid, it should be registered
with SEC.
F 8. Immovable properties contributed in partnership will not invalidate
its formation even not registered with SEC.
T 9. The right of a partner in a partnership is to demand full
accounting of business affairs at a reasonable time.
T 10. In universal partnership, if there is no specification whether
universal partnership with all present property nor universal
partnership of profits, it is deemed universal partnership of profits.

Part III: Identification

Direction: Supply the space provided for an item it describes.

____________________1. He contributes his service to the partnership.

____________________2. The principle that a person is free to choose
whom he wants to associate with.
____________________3. Two or more persons bind themselves to contribute
money, property or industry to a common fund and dividing the profits
among themselves.
____________________4. A partnership where there is at least one general
partner and at least one limited partner.
____________________5. A partnership where all must be general partners.
____________________6. It is a contribution made by any partner that a
partnership must register with SEC including its inventory to make it
valid.
____________________7. This is a kind of contribution where a limited
partner cannot contribute otherwise he is bound to be general partner.
____________________8. This a partner who is bound up to the extent of
his personal asset or property.
____________________9. This is the motive why two or more persons form a
partnership.
____________________10. The least amount of contribution which any
partnership is bound to register with SEC; failure to comply does not
invalidate the partnership provided that no immovable property is
contributed therein.

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Rey S. Perosa, CPA